Financial Management and Accounting

Graduate School of Management and Technology

Announcements/News

Think Better

In today’s economic environment, financial management professionals are being called upon to improve the way they make decisions. In his book Think Better, author Tim Hurson (2009), introduces readers to his Creative Problem Solving (CPS) model and the six easy steps to generating new high-value ideas. These include:

Step 1: What's Going On? Explore and truly understand the challenge.
Step 2: What's Success? Envision the ideal outcome and establish success criteria.
Step 3: What's the Question? Pinpoint the real problem or opportunity.
Step 4: Generate Answers: List many possible solutions.
Step 5: Forge the Solution: Decide which solution is best. Then make it better.
Step 6: Align Resources: Create an action plan.

Hurson’s work touches on many of the issues covered in UMUC’s FIN 645 Behavioral Finance. Through real-world examples, he highlights the most common ways financial managers become trapped in patterns of decision-making (click this link to hear Hurson) and how easily individuals stop at the first idea showing promise and saving time, without fully exploring creative, optimal alternatives.

While models like Hurson’s can in themselves evolve into heuristic frameworks that constrain thinking, they can also be powerful reminders that to be creative thinkers we sometimes need to think critically about our own approaches to problem-solving and decision-making.

How is your thinking?

(Source: Strategic Finance, January 2009)

The Role of Financial Managers in M&A Activities

While some authors believe the current economy will bring a halt to mergers and acquisitions, others see such activity as key to recovery.  A recent article in Financial Executive magazine, entitled, The Role of Finance in Achieving M&A Results (December 2008), reminds financial managers of their roles as catalysts, strategists, stewards, and operators in helping realize the synergies in M&A activity.  Financial managers are key to the following phases of M&A activity, identified by Bailey and Thomas: blue print development, detailed planning, day-one implementation, end-state implementation, and the next move.  To learn more about these phases, and your role as a financial manager, read Financial Managers and the M&A Lifecycle.   

Financial Analysis and Modeling: Valuable Skills for the Work World

This fall, students in FIN 615 are demonstrating their skills in financial analysis and modeling.

The new course is an exploration of how financial managers use Excel financial modeling, analysis and research to build forecasts and projections, evaluate financial alternatives, and support financial decision making in both operational and strategic contexts. Topics include financial statements and ratio analysis, cash flow forecasting, operations budgeting, breakeven and leverage analysis, time value of money applications, and capital budgeting and risk assessment. 

Additionally, students will develop unique models to assist in their own work. 

Finance’s Role in the Organization
“Compliance isn’t enough for effective governance” cites Strategic Finance (September 2007).  Comprehensive corporate governance takes into account effective business policies, long-term corporate objectives, strategies for attainment, and guidelines for  monitoring performance.  Governance should be integrated with operations management and finance professionals “can play a role in providing top managers and executives with key information to foster the links between corporate governance and strategic direction” (p. 24). 

The article offers that because the CFO organization has been charged with SOX and other regulatory responsibilities, it is positioned to initiate and expand governance initiatives.  The framework of such initiatives should include regulatory compliance, rigorous performance measures, and timely and honest financial reporting.  The finance organization can implement such a framework by creating “a shared language of measurement” (p. 28), that is part of a financial accounting and reporting system that accurately collects and communicates relevant information about business performance to all stakeholders.  By serving as a link between stakeholders, finance helps all involved have the information necessary to ensure that “business operations are aligned with the vision of the board” (p. 28), and that the company as a whole can function within its governance framework.