Applying Financial Decision Making in practice: case studies

This week’s topics

Applying Financial Decision Making in practice: case studies

1. Case analysis
2. Linking theory to practice
3. Evaluating evidence
4. The Mistakes CEOs Make
5. "Effective Decision Making in the Equity Markets" featuring Perry Boyle
6. Unit 11: LNG Case 2, Video 3: Initial Analysis

What you will be able to do

• 1.1 Analyse the factors that guide and drive decision making in business.
• 1.2 Assess the significance of financial factors in business decision making.
• 1.3 Evaluate the characteristics of business risk that impact on financial and business decisions.
• 2.1 Compare the accrual and cash flow approaches to accounting and financial reporting and the implications of each for business decision making.
• 2.2 Evaluate the structure and content of final accounts and their uses for business decision making.
• 3.2 Critically examine key factors affecting the choice of source of financing.
• 3.3 Evaluate various techniques used for appraising and making decisions regarding capital expenditure.
• 4.1 Critically analyse the corporate governance, legal and regulatory environments of different business ownership structures.
• 4.2 Compare and contrast stakeholder interests of owners and managers in decision making.
• 4.3 Evaluate the significance of Return on capital Employed (ROCE), Earnings Per Share (EPS) and other overall performance measures for the long-term sustainability of businesses.

Activity

Start with this week’s 3 videos, then: Case-study workshop: apply the unit’s concepts to a real or realistic case and evaluate the outcome.

Study materials

Videos

• The Mistakes CEOs Make · YouTube · Gresham College · 63 min · for registered students
• "Effective Decision Making in the Equity Markets" featuring Perry Boyle · YouTube · Columbia Business School · 83 min · for registered students
• The Mistakes CEOs Make · YouTube · Gresham College · 63 min · for registered students

Further resources

• Principles of Accounting, Volume 2: Managerial Accounting, ch. 10: Short-Term Decision Making · PDF · OpenStax, textbook chapter; pp. 471–516 · for registered students
• MIT 15.535 Business Analysis Using Financial Statements, lecture notes: Ratio Analysis and Bankruptcy Detection · PDF · Other, slides · for registered students
• Five Misunderstandings About Case-Study Research · Reading · Arxiv, article · for registered students