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Programme (Spring 2008)# Date Topic Chapters F&A Additional readings Assignments1 11.02.2008
(2 hrs)IntroductionFinancial StatementsEconomic Trade Off’s
13
AtrillDrury
1 (Analyses Annual Report KPN 2006)
2 18.02.2008(4 hrs)
AccountingFinancial Ratios
4 & 56
HorngrenDrury
2 Benchmarking Annual Reports
3 25.02.2008(2 hrs)
BudgettingVariance Analyses
7 AtrillDrury
3 (Case outsourcing)
4 25.02.2008(2 hrs)
Break Even AnalysesCost Prices
8 DruryHorngren
4 (Budgetting case)
5 10.03.2008(2 hrs)
Working Capital ManagementCapital Budgetting
1011 & 12
5 (Variance Analyses)
6 17.03.2008(2 hrs)
Capital BudgettingInterest rate & Risk
12 Drury HorngrenBrigham
6 (Interest calculations)
7 31.03.2008(2 hrs)
DOSIT modelCase study
Case study 7 (Capital budget)
8 07.04.2008(2 hrs)
Case studyTest exam
Case study 8 (Investment decision)
E14.04.2008Or21.04.2008
Writte exam(2 hrs)
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Investment DecisionsInvestment Decisions
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Investment trade off (I)
Investment– Equipment
– Building
– R&D
– Environment Sustainability
– Staff / HR
– Maintenance
– Operating costs
Additional Funds– Equity
– Loans
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Investment trade off (II)
Cash Outflows– Equipment
– Building
– R&D
– Environment Sustainability
– Staff / HR
– Maintenance
– Operating costs
Cash Inflows– Sales
– Lower costs
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Components of the Capital Budget Model
Investment (Year 0) Economic Life of the Investment
– Years 1 - n Interest Rate: i = r + π + σ
r = real interest rate π = inflation σ = risk (project risk mark-up
Annual Cash Flows (During economic life)– Expenses– Revenues
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Decision Criteria
Pay Back Period (PBP) Return On Investments Discounted Pay Back Period (DPBP) Net Present Value (NPV) Profitability Index Internal Rate of Return (IRR)
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DOSIT Model
Model developed by:– TNO (Applied Research in Science)
– Chair of TQM in Networks of Organisations Prof. Gerard Berendsen
– Source: Duurzaam innoveren met de DOSIT-methodiek,
G. Berendsen cs, Sigma Kluwermanagement, June 2006
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DOSIT Model
Dutch
Duurzaam Ondernemen Selectie Innovatieve Technologie
English
Sustainable Entrepreneurial Selection Innovative Technology
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Why DOSIT?
Hot topics in business are: Innovation
– Product innovation
– Innovation of processes
Sustainability– Stewardship / Managership / Bailiff (UK)
(Dutch: Rentmeesterschap)
Investments
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SustainabilityInnovation:•Products•Process
Investing
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Sustainability & Entrepreneurship in SME’s
Company meets the requirements from the government and keeps in mind future reqyuirements
Company fulfils its social and cultural role in society
Company plays in an effective way its role in the huge changes in society & economic development for the mid and long term
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Sustainability & Entrepreneurship in SME’s
The product, the way the product is used and will be used
The production process (including resources)
The way the product is introduced on the market
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Basic assumptions: DOSIT model
1. Focus as a company on a limited number of activities connected to sustainability
2. Intrinsic motivation of staff concerning change in general and sustainability: specific
3. Communication in the company concerning sustainability: Top Down & Bottom Up
4. ‘Quick and dirty job’ in SME’s, staff wants to see immediately results
5. Aspects of sustainability have influence on the continuity of the company
6. Sound financial base is important for the continuity of the company
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Profit People
Planet
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Stages in the DOSIT methodology
1. Preparation
2. Choice of priorities in the areas of Key Success Factors
3. Selection of possible Innovations
4. Final choices of Innovations
5. Implementation of Innovations
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DOSIT Matrix (Overview Priorities)
Su
pp
ly Ch
ain ↑
& V
alue C
hain
↑
Raw
materials
Co
mp
on
ents
Bu
siness d
evelo
pm
ent
Lo
gis
tic P
rocesse
s (ITO
)
Pro
du
ction
Pac
kagin
g
Wareh
ou
sin
g &
Distrib
utio
n
Pro
du
ct & M
arket D
evelo
pm
ent
Pro
du
ct Use
/ Rev
ersed
Lo
gis
tics
Aspects ↓
Planet
People
Profit
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Constraints in the process of sustainable innovation
ROI requirement (bottom line) Requirements clients How do process interfere in the chain? Feasibility (in a technical way) Connection with future developments &
ambitions of the company What is target for the degree of
sustainability How much will be the impact of the
innovation (paradigm shift?)
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DOSIT Method: Excel tool