Economics of the Firm

2024/2025

Academic Year

ENG

Instruction in English

3

ECTS credits

Delivered at:

Department of Economics

Course type:

Compulsory course

When:

2 year, 4 module

Instructors

Artemova, Diana

Telekhov, Ignaty I.

Course Syllabus

Abstract

The purpose of Economic of the Firm course is to acquaintance students majoring in economics and management with the way modern business practices are organized. It covers the topics of firm types, their lifecycle and associations as well as the structure of financial statements and information it can provide for managers. The core topics of the course focus on policies to rise firm efficiency and on the way fixed and current assets are used to create a stream of profits and cash flows.

Learning Objectives

• The course aims to form a holistic view on different aspects of functioning of firms in the modern economy, develop skills in using tools to analyze efficiency of enterprises. Practical classes are based on solving problems and conducting complex economic calculations, which help to understand the specifics and provide basic tools for the work of an economist and a financial manager in a firm. Classes aim to form the habits of practical economic thinking and the ability to see opportunities for optimizing the activities of an enterprise, assess the level of economic efficiency, as well as determine the choice of an economically feasible strategy and tactics of firms.

Expected Learning Outcomes

• students are able to explain the concept and purpose of firms
• students are able to distinguish between different organizational and legal forms of organizations, name different types of classifications of firms
• students are able to choose between different legal forms of organizations depending on their goals, financial needs, desired level of responsibility, and ease of selling a stake in a business or attracting new owners
• students can name the three main statements of every firm - the balance sheet, the income statement, and the statement of cash flows - and list the information they contain
• students know and understand the relationships between different types of business associations, can name the reasons why business associations are created and what problems they can solve
• students can name and apply different types of firm income indicators, calculate profitability ratios and apply them to improve firm efficiency, apply a strategic profit model in firm analysis and decision making, read and interpret business press articles with analysis concerning specific firms

Course Contents

• 1. Introduction to the economics of the firm
• 2. Fixed (non-current) assets
• 3. Current assets and working capital
• 4. Cost structure
• 5. Income and profit
• 6. Business associations
• 7. Firm life cycle

Assessment Elements

• Work in Class
• Test
• Exam

Interim Assessment

• 2024/2025 4th module
  0.5 * Exam + 0.15 * Test + 0.35 * Work in Class

Bibliography

Recommended Core Bibliography

• Accounting demystified, Haber, J. R., 2004
• Fundamentals of corporate finance, Brealey, R. A., 2018
• Management accounting for decision makers, Atrill, P., 2012

Recommended Additional Bibliography

• Management and cost accounting, Drury, C., 2015

Authors

• BRODSKAYA NATALYA NIKOLAEVNA
• Telekhov Ignatii Igorevich