почетный профессор кафедры экономики МГТА,
доктор технических наук, профессор
преподаватель Рос. гуманитарного
социального университета,
кандидат экономических наук
Применение бизнес-моделей в подготовке экономистов
В статье отражён опыт Московской гуманитарно-технической академии (МГТА) по внедрению в учебный процесс студентов старших курсов, изучающих экономику, компьютерных моделей на основе использования приложений Microsoft Excel. Модели отражают процессы финансово-экономической и производственной деятельности компании в рыночных условиях. Применение их позволяет значительно активизировать и повысить эффективность занятий. Студенты совместно с преподавателем становятся участниками образовательного процесса, что позволяет не только поднять уровень получаемых профессиональных знаний, но и приобрести навыки и опыт в сфере планирования и управления деятельностью компании.
Ключевые слова: компьютерные модели, экспертные знания, бизнес-планирование, финансовый анализ, финансовый менеджмент, моделирование, балансовый отчет, отчет о движении наличности, методологическая основа, факторный анализ.
Moroshkin Viktor
honourable professor of the department of economy,
Moscow Academy of Humanities and Technology,
doctor of technical sciences, professor,
*****@***ru
Leonova Elena
lecturer of Russian University
of Humanities and Social,
candidate of economic science
Business models in the training of future economists
The article reflects the experience of Moscow Academy of Humanities and Technology (MAHT) in the application of computer models based on the Microsoft Excel software in teaching of senior Economics students. Those models depict the processes of financial, economic and business activities of companies in marketing environment. Their application makes studies more effective and encouraging. The students and their teacher become involved in learning activities which not only lead to a better level of acquired expert knowledge, but also provide for experience and expertise in business planning and management.
Key words: computer models, expert knowledge, business planning, financial analysis, financial management, modeling, balance sheet, cash flow report, methodological base, factor analysis.
To analyse the company’s financial and economic status is crucial for business management. The theory and practice of financial analysis and management is one of the main disciplines studied by senior Economics students of the Academy. The learning models are such that help students imitate managerial decision-making in real situations, thus providing them with the opportunity to develop their skills. The students take part in the development and improvement of the models and their Microsoft Excel manifestations. Moreover, while modelling a specific company within the walls of the Academy, students gain ‘field experience’ as if they were working for the company, master the basics of planning and management in a competitive environment, also dealing with extreme market cases.
The article examines the models ‘Analysis’ and ‘Manager’. Presently, both of them are widely used in the Academy while teaching the disciplines of ‘Financial Management’ and ‘Marketing’. Description of the models and their main features are given below.
1. The model ‘Analysis’, designed to analyse the financial status of a company over the period of three years preceding the analysis date.
The model ‘Analysis’ belongs to a group of descriptive models, which are fundamental in the assessment of financial performance of companies. As an informational base for the model serve company’s financial statements, including the balance sheet, statement of financial performance, capital movement report, cash flow report and balance sheet explanatory note. The modelling is based on the financial statements data for the three years preceding the date of analysis.
As a methodological base for model creation serve methods of financial analysis, such as horizontal (timing) analysis, vertical (structural) analysis, trend analysis, financial ratios analysis, comparative analysis and factor analysis. The modelling algorithm was built by methods well-known in Russian practice [1, 2, 3]. The electronic version of the model is represented in Microsoft Excel platform.
The model comprises six structural modules.
Module 1, where P&L accounts of a company are used as a database, and which includes the following indicators estimated over the period of three years:
· P&L accounts structure and variations;
· Time changes of P&L accounts components, structurally weighted;
· Property status changes;
· Liquidity analysis;
· Solvency;
· Paying capacity;
· Own financing securities;
· Liquidity ratios;
· Net assets and working assets;
· Linear trends of key indicators.
The data of this module are used as inputs to generate a chart of P&L dynamics for three years.
Module 2, where a statement of financial performance is used as a database, and which includes the following indicators estimated over the period of three years:
· Financial performance structure and changes;
· Time changes of the components of the financial performance statement, structurally weighted;
· Business activity;
· Profitability;
· Financial stability;
· Quality of profit growth.
The data of this module cast into a chart of operational cycles in three years.
Module 3, where a capital movement statement is used as a database, and which includes the following indicators estimated over the period of three years:
· Owned and loan capital changes;
· Factors underlying the change of the loan capital structure;
· Loan capital growth and structure changes;
· Renovation and stable growth ratios;
Module 4, where a cash flow statement is used as a database, and which includes the following indicators estimated over the period of three years:
· Inflow and outflow of cash structure indicators in operational, investment and financial activities;
· Cash flow quality management ratios;
The data of this module are put into a chart of cash flow dynamics in three years.
Module 5, where all types of financial statements are used as a database, and which includes assessment of the bankruptcy likelihood in the following two or three years:
· By the Altman’s five-factor model, accustomed to the Russian environment;
· By the Beaver’s five-factor model;
· By the four-factor model of Irkutsk State Academy of Economics.
Module 6, where all types of financial statements are used as a database, and which includes assessment of the following groups of financial activity indicators:
· Financial leverage effect in the concept of Russian school;
· Financial and operational leverage effects and their cumulative effect in the concept of Western school.
Module 7, which concludes the whole practice, deals with the data obtained through the modelling in Modules 1 to 6, covers the rules of making a conclusion on financial and economical status of the company in the reviewed period as well as bankruptcy likelihood; sets the new directions of financial policy and creates a plan to achieve a healthier financial environment in the company.
The reviewed model allows carrying out some research work by means of playing back the different scenarios of economical activity of a given company. While modelling, the alteration of capital stock/working assets ratio and structure, owned/loan capital ratio and substance, the value of accounts payable/receivable, creditworthiness and other factors makes it possible to solve the following practical tasks:
· In case of unsatisfactory balance sheet structure and poor financial performance, to find directions to enhance the financial status of the company;
· To determine the boundary conditions of the company’s key indicators, upon the reaching of which the company goes bankrupt (we believe that the boundary conditions are specified by individual characteristics of a company, reflected in its financial statements);
· To assess the amount of required targeted government financing of the company, in case of a considerable demand drop on its production due to an economic depression;
· To develop a plan to enhance the liquidity, profitability and financial stability of the company.
Introduction of the ‘Analysis’ model into students’ practice can be made in a few steps.
Step 1. A group of students explore the structure and substance of the model, then, in accordance with financial statements of a specified company, make an electronic version of the model in a computer classroom (modules 1 to 6). The electronic board should contain a test case, which will help students to create a model correctly. The teacher acts as an adviser. Upon the completion of the study each student will have an electronic version of the model and the results of the computer modelling for the specified company.
Step 2. The teacher initiates a discussion on the results of the computer modelling, assists students in making a complex conclusion on a financial status of the given company (Module 7), and in making suggestions how to enhance the company’s financial sustainability and efficiency.
Step 3. Test. It encourages each individual student to create a computer model using financial statements of a given company with the help of the software developed in the class, and to make a conclusion on the company’s financial status. The student will master the skills and experience gained in Steps 1 and 2. The teacher checks the test results and discusses them among the group.
Step 4. The teacher may choose to provide some of the most advanced students with some of the research work mentioned above. Doing such research in real organisations is absolutely unacceptable for obvious reasons.
In contrast with the conventional ways of teaching, the given approach made it possible to increase the class activity and encouraged most of the students to get interested in doing research. The acquired experience may become quite handy later on, when students do their final papers.
2. The model ‘Manager’, designed for the better understanding of stock company management operations in real conditions.
The drawback of the model ‘Analysis’ comes from the fact that we are unaware of when and what managerial decisions led to the provided financial introducing real marketing models relevant to the company into a financial statements model we can be saved from this drawback. Let’s examine this formulation. The model was called ‘Manager’ and published in the works [3, 4]. Nevertheless, the continuing practice makes the model constantly adjust and improve itself.
The model ‘Manager’ imitates monetary and credit policy of a company, managerial, financial, operational, investment and marketing activities in goods and stock markets of a stock company under variable conditions of macro - and microenvironment. The Model can be represented electronically in the Microsoft Excel platform. The Model allows students to explore the issues of planning and company management in the market environment by means of doing selective exercises and playing business role games. The students are encouraged to get deeply absorbed in the virtual company’s business. They can temporarily act as top managers, executives, financiers, economists, marketing experts or producers; and make management decisions responsible for the financial status of the company and its standing in the marketplace. The study of an electronic version of the model can be done in two different ways: unassisted computer training at home on teacher’s instructions, or in a computer classroom under the guidance of a teacher. The model ‘Manager’ provides for the possibility to readjust the input data, external factors and boundary conditions. In case of need, this allows to adapt the company’s model, bringing it as near as possible to the real object of examination. The Model enables students to carry out a research work on financial and economic activities of the company in variable conditions, including critical conditions caused by an economic depression.
How is the model ‘Manager’ organised? Suppose there is a stock company operating in the market that produces and distributes a certain type of goods, competing with other companies producing similar goods. That company has got its own market share for their goods and a number of loyal customers. The rest of the marketplace is divided between other companies, producing similar goods, but they are of different quality. The reason for the competition between those companies comes mainly from goods differentiation by levels of quality, pricing policy and the efficiency of the marketing events, performed by each of the companies, which is very characteristic for the monopoly competition market.
The company’s marketing model can be described by the following demand curve:
Q=Qpr*Recon*Rseas*Rinfl*Rmark*RRD* (Ppr/P)E, where
Q, Qpr - market segment capacity of the company in the preceding and reference quarters;
R – ratios responsible for the influence of economic sentiment, seasonal fluctuations and inflation on demand change, as well as the effect of marketing factors and R&D[1] on quality improvement and goods competitiveness;
P, Ppr - goods price in the preceding and reference quarters;
E – elasticity of demand ratio.
Apart from commodity market, the company also operates in stock market, making profit from fluctuations of the equities value.
Due to the limits of study time, business management of the company’s model is executed over the period equivalent to one or two years with quarterly intervals. To that effect the study group is divided into subgroups, each of them managing a different company. Each subgroup selects a top manager or head of the company, financier, producer, marketing expert etc., depending on the size of the subgroup. At the beginning of the first quarter the top manager (also the leader of the subgroup) has to set up objectives and define the company’s business strategy, to be approved of by the subgroup. According to the strategy and the data from the company’s indicators analysis, the subgroup makes certain management decisions to be implemented in the following quarter. Those decisions are specified within the main directions of the company’s business by setting management parameters.
Let us look at the key directions of modelling the company’s business.
Marketing activity in commodity and stock markets is modelled by specifying the goods price, marketing budget and the scope of investment into R&D in order to improve the quality and competitiveness of the goods. The criteria of marketing efficiency are, on one hand, the amount of market share lost due to the unmet demand, and on the other hand, the amount of goods, left at the company’s warehouse. The marketing activity in the stock market is modelled by setting up the conditions beneficial for making equity transactions.
The objective of the production modelling is to make such a plan of goods production that would provide for the best demand meet in the current quarter and should take into account the amount of annual inventories in the warehouse.
The purchasing modelling of the company consists in providing it with raw materials, semi-finished goods and finished parts by the beginning of a quarter, required to produce the goods in compliance with the production plan.
The investment activity modelling should enable the company to expand its productive capacity in compliance with the plans of production increase and market competitiveness improvement of the goods.
The dividend policy modelling implies paying dividends to the shareholders. The amount of dividend payments affects the market price of the company’s shares, which in turn affects the decisions concerning the credit arrangements and share emissions - the company’s financing securities.
The objective of the monetary and credit policy modelling is to provide the company with the required funds.
The figure below shows the modelling scheme and acts as a base for the model management structure. The scheme depicts the main components of the model and the way they correlate in business management. The main module is ‘Management parameters’. The components of this module are given below. The results of the management decisions implementation comprise five individual documents: marketing report, P&L statement, cash flow statement, statement of financial performance, and a group of indicators and financial ratios reflecting quarterly results of the economic and financial activities of the company.
Management decisions will be made on available funds, input parameters, financial and economic considerations, commodity market trends and stock market trends. The latter depends on such external factors as the economic situation, inflation, competition, seasonal trends fluctuations etc. While making management decisions, the existing constraints in the house should be taken into consideration.
 |
 |
Available resources, External
starting and boundary factors
conditions
Company Commodity and
Management stock markets
parameters
Marketing report
Characteristics P&L statement
of the company Financial report
Balance sheet
Ratios
 |
Management parameters:
1. Sale price
2. Marketing budget
3. Purchasing raw materials funds
4. Investments into production capacity increase
5. Investments into R&D
6. Dividends
7. Investments into equity
8. Received credit
9. Scope of overtime work
10. Volume of share emission
11. Funds on credit payments
12. Volume of equity transactions
The given scheme of the company’s model is put into an electronic version in the Excel platform and forms a structure with three main groups of modules:
1. Business management modules:
a. Opening balance sheet (defines input data)
b. Internal factors (defines operating and economic indicators at the beginning of each quarter)
c. External factors (defines economic environment of the company at the beginning of each quarter)
d. Corporate governance (set by the manager, contains values of management parameters)
e. Corporate governance costs (planned by the manager on the available funds)
f. Operations (defines the operations scope, depending on management decisions)
g. Finished goods warehouse (reflects the volumes of unrealised goods)
h. Raw-material storage (reflects the amounts of raw materials available at the beginning and at the end of the quarter)
2. Reporting modules
a. Marketing reports
b. P&L statements
c. Cash flow statements
d. Quarter closing balance
3. Quarterly activity analysis report modules:
a. Analysis data
b. Accounted financial factors
The above model allows to arrange classes in the form of management games.
Using this model, one can do research to find optimal management conditions, to select the management strategy and to assess the external and internal factors.
For more details on the above models, one can contact MAHT.
References
1. V. V. Kovalyov. Financial analysis. (‘Finance and Statistics’, 2006).
2. A. F. Ionova, N. N. Seleznyova. Financial Management. (‘PROSPECT’, 2010).
3. A. L. Lomakin, V. A. Moroshkin. A Guide to Economics and puter management games. (‘Infra-M’, 2004).
4. E. A. Leonova. Innovative approaches in teaching would-be economists and managers. (Russian State Social University Bulletin, 2010).
5. Business models in the Future. The theory and practices. Edited by Adam Yablonski. Dabrowa Gornicza, 2010.
[1] R&D – Research and Development.
