Financial strategy and financial decision-making

  • Credits: 10
  • Ending: Examination
  • Range: 16sP
  • Semester: summer
  • Year: 1
  • Faculty of Business Management

Teachers

Included in study programs

Business Economics and Management

Business Economics and Management

Teaching results

Knowledge:
• A comprehensive view of the identification, analysis, guidance and monitoring of the individual policies that make up a firm's financial strategy, followed by a causal analysis of changes in the business environment and their impact on the firm's financial performance. Doctoral students will be able to take a position, identify problems in strategic management and propose specific corrective measures (resulting from basic or applied research).
Competence:
• identify basic approaches to obtaining and analyzing input information necessary to formulate the financial strategy of an enterprise,
• detect and point out possible managerial failures in the interpretation of the acquired information,
• to propose indicators or a set of indicators to evaluate the financial performance of the enterprise and to reveal the disparity between the financial objectives of the enterprise and the financial capabilities of the enterprise,
• present and interpret the results of the interim analyses leading to the formulation of the various financial strategy policies,
• critically evaluate alternative financial strategies of the enterprise and deploy an appropriate methodological approach, leading to the identification of strategy weaknesses.
Skills:
• link methodological procedures for assessing the financial performance of an enterprise to financial strategy policies,
• assess the optimality of the process of implementing a financial strategy and evaluating its success in a real-life enterprise,
• apply advanced knowledge of financial management in the conditions of profit-making enterprises,
• apply quantitative research methods in solving a model situation of economic practice,
• understand and interpret the essential knowledge published in renowned foreign sources and transfer them to the application level of a specific enterprise.

Indicative content

1. Basic basis for the formulation of the financial strategy of the enterprise - selection of indicators and metrics for the evaluation of the financial situation "ex post". Discriminant functions and logistic regression in the prediction of creditworthiness or probability of bankruptcy. Analysis of the predictive value of indicators with respect to applied accounting standards.
2. Debt policy of the enterprise - models of formation and optimization of the capital structure of the enterprise. Agency costs of equity and foreign capital.
3. Credit policy of the enterprise - evaluation of creditworthiness of the enterprise - application of the B&S model and estimation of default probability. Testing the reliability of business partners - iTrade and SkyMinder models.
4. Liquidity policy - models for optimising financial balances and financial decision-making on short-term investments.
5. Corporate tax policy - tax optimization (payable and deferred tax) and its implications for corporate financial ratios.
6. Profit and loss distribution policy - finding the appropriate ratio between dividend payments and profit retention (passive residual policy). Assessing the implications of reinvesting profits and its impact on the value of the enterprise. Options for resolving agency conflict.
7. Financial reporting policy - deciding on the volume, structure, and frequency of corporate disclosures. Reputational management of the enterprise.
8. Financial strategy implementation methods and tools - Balanced Scorecard (BSC) financial perspective assessment and selection of appropriate agents.

Support literature

1. ATRILL, Peter. Financial Management for Decision Makers. 9th edition. Harlow : Pearson, 2019. 736 s. ISBN 978-1-2923-1143-2.
2. ARNOLD, Glen. Corporate Financial Management. 6th Edition. Harlow : Pearson Education Limited, 2019. 1128 s. ISBN 978-1-2921-4044-5.
3. BREALEY, Richard A. – MYERS, Stewart C. – ALLEN, Franklin. Teorie a praxe firemních financí. Brno : BizBooks, 2014. 1096 s. ISBN 978-80-265-0028-5.
4. BREALEY, Richard A. – MYERS, Stewart C. – ALLEN, Franklin. ISE Principles of Corporate Finance. New York : McGraw-Hill Education Ltd, 2019. 960 s. ISBN 978-1-2605-6555-3.
5. DORČÁK, Peter – MARKOVIČ, Peter – POLLÁK, František. Multifactor analysis of online reputation as a tool for enhancing competitiveness of subjects from automotive industry. In Ekonomický časopis : časopis pre ekonomickú teóriu, hospodársku politiku, spoločensko-ekonomické prognózovanie = journal for economic theory, economic policy, social and economic forecasting. Bratislava : Ekonomický ústav SAV : Prognostický ústav SAV, 2017. ISSN 0013-3035, 2017, roč. 65, č. 2, s. 173-186.
6. KADLEČÍK, Kristián – MARKOVIČ, Peter. Hodnotenie kreditného rizika odberateľa : stanovenie limitu pre obchodný úver. 1. vyd. Bratislava : Wolters Kluwer, 2015. 123 s. ISBN 978-80-8168-251-3.
7. MACIKOVÁ, Lucia – SMORADA, Marián – DORČÁK, Peter – BEUG, Benjamin - MARKOVIČ, Peter. Financial Aspects of Sustainability: An Evidence from Slovak Companies. In Sustainability : [International Journal of Environmental, Cultural, Economic and Social Sustainability]. Basel : MDPI. ISSN 2071-1050, 2018, vol. 10, no. 7, pp. [1-15] online.
8. MARKOVIČ, Peter – DORČÁK, Peter – POLLÁK, František. Online Reputation Management. 1st Edition. Praha : Professional Publishing, 2019. 204 s. ISBN 978-80-88260-35-6.
9. POLLÁK, František – DORČÁK, Peter – MARKOVIČ, Peter. Corporate Reputation of Family-Owned Businesses: Parent Companies vs. Their Brands. In Information : [Scientific Journal of Information Science and Technology, Data, Knowledge, and Communication]. - Basel : MDPI. ISSN 2078-2489, 2021, vol. 12, no. 2, pp. 2-16 online.
10. POLLÁK, František – MARKOVIČ, Peter. Size of Business Unit as a Factor Influencing Adoption of Digital Marketing: Empirical Analysis of SMEs Operating in the Central European Market. In Administrative Sciences. Basel : MDPI. ISSN 2076-3387, 2021, vol. 11, no. 3, pp. [1-16] online.
11. WATSON, Denzil. Corporate Finance: Principles and Practice. Harlow : Pearson, 2019. 520 s. ISBN 978-1-2922-4431-0.
Internetové zdroje (Web of Science):
1. Financial Strategy Development Process – https://www.webofscience.com/wos/woscc/full-record/WOS:000588420200012
2. Financial Literacy and Financial Strategies – https://www.webofscience.com/wos/woscc/full-record/WOS:000555572900001
3. Financial Strategies for Difficult Times – https://www.webofscience.com/wos/woscc/full-record/WOS:000583466100014
4. Research on Family Financial Portfolio Strategy – https://www.webofscience.com/wos/woscc/full-record/WOS:000558656900068
5. Identification of Financial Strategy in E-commerce – https://www.webofscience.com/wos/woscc/full-record/WOS:000462948800091
6. Importance of Financial Strategy in E-commerce – https://www.webofscience.com/wos/woscc/full-record/WOS:000697124500004
7. Influence of the Financial Knowledge Index on Forming A Strategy for Financial Behavior of Financial Services Consumers – https://www.webofscience.com/wos/woscc/full-record/WOS:000561117207004
8. Russian Gas Companies' Financial Strategy Considering Sustainable Growth – https://www.webofscience.com/wos/woscc/full-record/WOS:000461754400018
9. Analysis and Evaluation of Jinfeng Wine Financial Strategy – https://www.webofscience.com/wos/woscc/full-record/WOS:000471627100011
10. Financial leverage and competitive strategy of cross-listing firms – https://www.webofscience.com/wos/woscc/full-record/WOS:000463023600006
11. The Business Strategy, Competitive Advantage and Financial Strategy: A Perspective from Corporate Maturity Mismatched Investment – https://www.webofscience.com/wos/woscc/full-record/WOS:000635705900010
12. Assessment of Financial Security of An Enterprise in the System Providing Realization of its Financial Strategy – https://www.webofscience.com/wos/woscc/full-record/WOS:000490344900010
13. The Implementation of Financial Strategy in Empowering Diversity Education Globally – https://www.webofscience.com/wos/woscc/full-record/WOS:000467634300023
14. Fighting through Credit: Financial Strategies during the Pandemic in Turkey – https://www.webofscience.com/wos/woscc/full-record/WOS:000582729900019
15. Methods for Diagnosing the Effectiveness of the Enterprise's Financial Strategy in the Strategy Controlling System – https://www.webofscience.com/wos/woscc/full-record/WOS:000447078600034
16. Cities for sale. Financial strategies and new real estate cycle in Spain – https://www.webofscience.com/wos/woscc/full-record/WOS:000522842400019
17. Designing Financial Strategies based on Artificial Neural Networks Ensembles for Stock Markets – https://www.webofscience.com/wos/woscc/full-record/WOS:000585967404101
18. Motivating Young People's Labor Behavior as an Opportunity for Implementing Financial Strategies – https://www.webofscience.com/wos/woscc/full-record/WOS:000460020700014
19. Methodical and practical aspects of development of financial strategy of the industrial enterprise – https://www.webofscience.com/wos/woscc/full-record/WOS:000561105300267
20. Capital and Financial Strategies for Private Companies: Lessons from Their Publicly Traded Brethren – https://www.webofscience.com/wos/woscc/full-record/WOS:000443328500007
Doplnková literatúra:
1. BEILECKE, Sebastian – MARKOVIČ, Peter. Chancen und Risiken der Internationalisierung von Kapitalanlagegesellschaften : Deutschland - Slowakei. 1. Aufl. Bratislava : Wolters Kluwer, 2015. 204 s. ISBN 978-80-8168-253-7.
2. BEUG, Benjamin – MARKOVIČ, Peter. Die Auswirkungen der Finanzkrisen auf Repurchase Agreements : theoretische Modifikationen und praktische Anwendung im Interbankenverkehr. 1. Aufl. Bratislava : KARTPRINT, 2014. 167 s. ISBN 978-80-89553-29-7.
3. CZAKER, Marco – MARKOVIČ, Peter. Die Befriedigungsaussichten der Gläubiger von Kapitalgesellschaften : wirtschaftliche und juristische Aspekte im Rahmen der EWU. 1. Auflage. Bratislava : KARTPRINT, 2018. 173 s. ISBN 978-80-89553-55-6.
4. FLICK, Sebastian – MARKOVIČ, Peter. Nachhaltigkeit in den Kapitalanlagen von Versicherungen. 1. Aufl. Bratislava : Wolters Kluwer, 2016. 181 s. ISBN 978-80-8168-344-2.
5. GUSERL, Richard – PERNSTEINER, Helmut. Finanzmanagement. Grundlagen – Konzepte – Umsetzung. München : Gabler Verlag, 2011. 620 s. ISBN 978-3-8349-0278-8.
6. KASTRATI, Ilir – MARKOVIČ, Peter. Portfoliomanagement aus der sicht der Theorie und Praxis : die Portfoliostrategien vor dem Hintergrund der globalen Wirtschafts- und Finanzkrise. 1. vyd. Bratislava : KARTPRINT, 2017. 140 s. ISBN 978-80-89553-50-1.
7. KRUSCHWITZ, Lutz – HUSMANN, Sven. Finanzierung und Investition. 6. Auflage. München : Oldenbourg Verlag, 2010. 528 s. ISBN 978-3-486-59100-2.
8. LUDWIG, Sven – MARKOVIČ, Peter. Informationsasymmetrien Bei M&A Transaktionen : Eine empirische Analyse möglicher Risiken. 1. Auflage. Frankfurt am Main : Neowiss - Europäischer Wissenschaftsverlag, 2019. 160 s. ISBN 978-3-945484-17-3.
9. SCHMIDT, Simon – MARKOVIČ, Peter. Modernisierung von Betriebsmitteln am Beispiel der Stahlindustrie : Innovationskonzept und seine finanzökonomische Sicht. 1. Auflage. Bratislava : KARTPRINT, 2018. 203 s. ISBN 978-80-89553-51-8.
10. ZANTOW, Roger. Finanzwirtschaft der Unternehmung. Grundlagen des modernen Finanzmanagements. 2. aktualisierte Ausgabe. München : Pearson Studium, 2007. 574 s. ISBN 978-3-8273-7278-9.
11. ZORN, Daniel – MARKOVIČ, Peter. Informationsasymmetrie der Fair Value bei kleinen Aktienportfolien unter Berücksichtigung ausgewählter Rechnungslegungsstandards. 1. vyd. Bratislava : Vydavateľstvo EKONÓM, 2013. 153 s. ISBN 978-80-225-3757-5.

Syllabus

1. Basic bases for the formulation of the financial strategy of the enterprise - initial financial and economic analysis of the enterprise. Application of "ex post" and "ex ante" financial analysis approaches in combination with the assessment of the sustainability of corporate financing. 2. Debt policy of the enterprise - determination of the optimal and economically sustainable share of own and foreign capital. Model approaches to quantification of the cost of capital of the enterprise on the domestic and foreign financial market. 3. Credit policy of the enterprise - solving the issue of supplier and trade credits. Management of relations with suppliers and customers. Determination of customer financing costs. Assessment of creditworthiness of clients (in the short term). 4. Liquidity policy - optimisation of the volume of free cash flow, in relation to short-term appreciation possibilities. Methods and models for managing cash balances. 5. Tax policy of the enterprise - optimization of the tax burden of the enterprise, solving the issues of determining the assessment base, tax rate. Investigation of the impact of direct and indirect taxes on the financial performance of the enterprise. 6. The policy of distribution of the economic result - solving the principle issue related to retained earnings. Formation of the dividend policy of the enterprise, solving the agency relationship between the owners and the financial enterprise management. 7. Financial reporting policy - deciding on the volume, structure and frequency of corporate information disclosure. Corporate reputation management. 8. Methods and tools of financial strategy implementation. Assessment of financial perspective in Balanced Scorecard (BSC).

Requirements to complete the course

10 % continuous performance of assigned tasks, 30 % continuous written work (scientific essay), 60 % oral examination

Student workload

participation in consultations 16 h, preparation for consultations 32 h, processing of continuous assignments 16 h, processing of scientific state 90 h, preparation for the exam 106 h)

Language whose command is required to complete the course

Slovak, English

Date of approval: 09.02.2023

Date of the latest change: 18.05.2022