BUSINESS ECONOMICS II MODULE TRANSLATION

Module in Dutch: Bedrijfseconomie II

Note 1: management accounting has traditionally been included in the business economics module in the Netherlands.

Note 2: Bedrijfseconomie II was renamed Bedrijfseconomie as Bedrijfseconomie I was renamed Marketing en Organisatie during this academic program.

Business Economics/Management Accounting

The candidate can describe and interpret the following concepts:

  • Place and objective of business economics/management accounting.
  • Industry.
  • Business column.
  • Integration.
  • Differentiation.
  • Specialization.
  • Parallelization.
  • Company objectives and the business economical/management accounting meaning of the various business types.

The candidate can describe the concept of catch up depreciations.

The candidate can perform calculations of integrated issues with regards to cost types and can also analyze these:

  • Cost of raw and semi-raw materials (including costs of waste, technical and economical stock).
  • Optimizing stock size (including Camp’s formula).
  • Cost of labor (excluding Halsey, Bedeaux and Rowan’s payroll systems).
  • Cost of land.
  • Cost of third party services and taxes.
  • Cost of fixed assets.
  • Parallel and serial capacity.
  • Technical and economical wear and tear.
  • Endogen and exigent factors.
  • Complementary costs.
  • Absolute and relative technical lifetime.
  • Economical lifetime based on minimal costs (calculation may be based on simple and compound interest).
  • Economical lifetime based on maximum profit (calculation may be based on simple and compound interest).
  • Depreciation systems.
  • Ideal complex.
  • Optimal lifetime with continuous replacement and unique production processes).
  • Costs of applying equity.
  • Cost price increasing taxes.
  • Cost of waste.

The candidate can calculate the following aspects of cost allocation as well as interpret these based on integrated situations:

  • Normal and expected/real business utilization.
  • Partial calculation.
  • Equivalence number method.
  • Storage method.
  • Production centers method.
  • Activity based costing.
  • Common and combined costs.
  • Cost allocation method with circular delivery.

The candidate can apply the following aspects of cost budgeting in more complex situations:

  • Fixed.
  • Variable.
  • Flexible.
  • Business economical/management accounting analysis of the differences between pre and post calculation.
  • Activity based budgeting.
  • Marketing responsibility accounting (sales price difference, sales mix difference, sales size difference) and project monitoring.

The candidate can compute the following integrated and variable cost calculations:

  • Direct costing.
  • Stock valuation absorption costing/direct costing.
  • Difference in period results absorption costing/direct costing.
  • Break-even analysis.
  • Cash breakeven point.
  • Safety margin.
  • Utilization coefficient.
  • Profit-volume chart.
  • Differential calculation.

The candidate can interpret and calculate the cost concept of the replacement value theory based on the following concepts:

  • Net present value.
  • Manageable and non manageable costs.
  • Decision dependent and decision independent costs.
  • Incremental costs.
  • Discretionary costs.
  • Sunk costs.
  • Opportunity costs.

The candidate can analyze, compute and apply the following in integrated situations:

  • Optimal production mix.
  • Bottle neck calculation with 1 or more bottlenecks.
  • Linear programming (graphical and calculative) with primary solution respectively the dual model.
  • Shadow price.
  • Responsibility accounting.
  • Return on investment.
  • Residual income.
  • Internal costing pricing/transfer pricing systems.

The candidate can describe what is meant with decisions with insecurity in relationship to the need for funding.

The candidate can interpret and analyze the following aspects of the need for funding based on more complex situations:

  • Prognosis of the need for funding.
  • Cashflows.
  • Investment calculation.
  • Return on investment period.
  • Average accounting returns.
  • Net realize value.
  • Internal rate of return.
  • Liquidity budget.

The candidate can interpret and connect the following aspects of capital markets.

  • Supply and demand of funding.
  • Direct and indirect transfer of capital.

The candidate can apply, analyze and interpret the following aspects of finance structure in integrated situations:

  • Types of equity.
  • Claims.
  • Types of liabilities.
  • Internal financing.
  • Intensive financing.
  • Factoring.
  • Leasing.
  • The financing and investment problem.
  • Entrepreneurial and non entrepreneurial capital.
  • Financial planning on short and medium term (investment and financing plan, dividend policy, liquidity budget and cash flow overview).
  • The influence of the expected earning process on the financing structure (capacity to lend, financial ratios and their meaning).

The candidate can apply the following concepts with regards to financial reorganization and re-capitalization in more complex situations:

  • Watering down of capital.
  • Over and under capitalization.

The candidate has insight into the following special financing issues:

  • The financing of expansion.
  • Investment ratios and their meaning.
  • Direct yield relationship.
  • Diversification of investment (not the capital asset pricing model).

The candidate can apply the following concepts in relationship to results and capital determination in more complex situations:

  • Purposes of the balance sheet (monism/dualism).
  • Accounting and economic concept of profit.
  • Nominal and substantial approaches (e.g. purchase prices: first in first out).
  • Minimal valuation rule.
  • Iron stock system.
  • Collective and individual last in first out.
  • Replacement value systems.
  • Classical system inclusive of variants.
  • Influence of capital structure on profit calculation and representation of assets.
  • Asymmetric profit concept.
  • Replacement purchasing system.
  • Adjusted historical purchasing system.
  • Taxes in the annual statement (specifically deferred taxes through temporary and permanent differences between the management accounts and statutory annual statements).

The candidate can perform an analysis of the annual statement and include the following subjects:

  • Yield and leverage effect.
  • Solvability.
  • Current ratio.
  • Quick ratio.
  • Working capital.
  • Buffer capital.
  • Share price/profit ratio and share price/cash flow ratio.
  • Turnover rate of assets.
  • Turnover rate and duration of stock.
  • Given and received supplier credit.
  • Cash flow overview: divide in operational, investment and financing activities.

The candidate can interpret and explain the following types of cooperation between companies, e.g. mergers and acquisitions:

  • Forming of cartels.
  • Joint ventures.
  • Merger of stock.
  • Merger of companies.
  • Legal merger.
  • Value determination during mergers (intrinsic and yield, goodwill and bad will, stocks market price, yield value, realizable value, actual value, discounted cash flow).
  • Protective constructions.

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