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MSIT 456: Financial Management for IT Professionals



Many of the demands placed on IT professionals are driven by an organization's financial managers and their focus not only on the "bottom line," but also on various "Return on Investment" measures. This course introduces students to some of the basic terminology, concepts and tools used by financial managers in making business decisions. Topics covered include: the relationship between an organization's accounting function and the finance function; financial reporting principles and the financial statements; using financial statements in practice; determining relevant items in making short-term business decisions; the Time Value of Money principles; short- and long-term decision making; and the uses and misuses of accounting data in managing people and controlling processes.

REQUIRED TEXT:  Horngren, Sundem and Stratton.  Introduction to Management Accounting (Chapters 1 -17), 16th edition, Pearson Prentice Hall, 2014.

REFERENCE TEXT: Ross, Westerfield and Jaffe.  Corporate Finance, 10th Edition, McGraw-Hill Irwin, 2013; Hewlett Packard 2014 Annual Report and Financial Statements (see CMS); Microsoft 2014 Annual Report and Financial Statements (see CMS).

COURSE GOALS: To assist the student in (a) developing an understanding of important financial terminology and principles; (b) acquiring the ability to apply these principles to management decisions; and (c) appreciating the difficulties and pitfalls associated with applying these principles in practice


Week 1: Course Overview - Financial Reporting, Managerial Accounting and Corporate Finance; The Three Major Financial Statements
Week 2: The Income Statement, Revenue Recognition, and Analysis of Monetary Assets
Week 3: Choices within GAAP: Inventory Costing and Depreciation;The Statement of Cash Flows
Week 4: Managerial Accounting - Decision-Making: Cost Behavior
Week 5: Managerial Accounting - Decision-Making Tools
Week 6: Managerial Accounting - Responsibility Accounting:Performance Evaluation and Control
Week 7: Managerial Accounting: Relevant Cost Information and Typical Decisions
Week 8: Corporate Finance and the Time Value of Money (TVM)
Week 9: Applications of TVM to Personal and Business Decisions
Week 10: Corporate Finance: Capital Budgeting

Teaching methods:  The course will be primarily lecture format, combined with discussion of the assigned problems and cases.  To obtain the maximum benefit from each class, the student should complete the relevant reading and homework assignments prior to class.  Students should also attempt to solve the problems before the relevant session meets.  Only those marked “Turn-In” (the cases) will form the basis of your course grade.

Grading criteria:  There will be six graded case submissions. Performance on five of the six required cases will constitute 75% of the course grade (15% each). Students may choose not to submit one of the six cases, in which event the five cases submitted will determine the course grade.  On the other hand, students may submit all six cases and only the five best will be used to determine the course grade.  The remaining 25% of the course grade will be determined by class participation (5%) and evaluations of each group member’s contribution to his/her group (20%).  An unexcused absence from more than one class will cause the final grade to be lowered one letter grade.


When a student complete this course, she/he should:
a) understand and appreciate the content of financial reports and discussions
b) apply the appropriate decision rules to both short-term and long-term problems 
c) understand and design internal reports for evaluating activities and individuals. 

Faculty Profile

John Twombly, Ph.D