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FN 311 Financial Management FN 311 Financial Management Financial Information Financial Information System System EK BUNCHUA [email protected] Room # 406 Thammasat Business School
FN 311 Financial ManagementFN 311 Financial Management
Financial Information Financial Information SystemSystem
Room # 406Thammasat Business School
Today’s Plan Today’s Plan Financial Information System
An Overview Financial Intelligence System
Internet Workshop Financial Web Sites
Financial Decision Support System
Spreadsheet Workshop DSS Tools Financial Functions
Development of Development of Business Information SystemBusiness Information System
From local to nationalto global business
From local to nationalto global business
From buyer needsto buyer wants
From buyer needsto buyer wants
From priceto non-pricecompetition
From priceto non-pricecompetition
FNISMFISMKISHRISAISEISES
DSSMIS
ProfitMargin
Value Chain ModelValue Chain Model
CustomerServices
Marketing& Sales
OutboundLogisticsOperations
InboundLogistics
Firm Infrastructure
Human Resource Management
Technical Development
Procurement
Pri
ma
ryA
cti
viti
es
Su
pp
ort
Ac
tivi
tie
s
FINANCE
Financial Information SystemFinancial Information System
A subsystem of computer based information system that provides information to persons and groups both inside and outside the firm concerning the firm’s financial matters.
Information is provided in form of periodic reports, special reports, results of mathematical simulations, electronic communications, and the advice of expert systems.
(McLeod)
System ConceptSystem ConceptOrganizationas a System
AC HR
FN MFG
MK
Consists offunctionalSubsystems
B
C
A
D
Interact andinter-linkageamong thesubsystemsto achieveorg. goal
Each subsystemhas its dept. goal
Dir
ect A
chieve
System Boundary
Internal
External
Each subsystemcan be viewed asanother system;and consists of itsown subsystems
AIS HRISFNIS MFISMKIS
TPS
MIS
DSS
EIS
Classification of Information SystemsClassification of Information Systems
Executive Information System
Decision Support System
Management Information System
Transaction Processing System
Managerial LevelsSupport Provided
Functional Areas
Other departments and stockholders are the main customers of the FN services
FNIS must be integrated with other functional information systems, and must be linked across the organizational hierarchy to enable the free flow of information
FNIS ChallengesFNIS Challenges
Horizontal integration
Ve
rtic
al i
nte
gra
tio
n
Database
InternalRecordsSystem
InternalRecordsSystem
InternalAudit
System
InternalAudit
System
FinancialIntelligence
System
FinancialIntelligence
System
FinancialDecisionSupportSystem
FinancialDecisionSupportSystem
• Forecasting• Funds Management• Financial Control
etc.
A Model of A Model of Financial Information SystemFinancial Information System
Adapted from McLeod
A subsystem of any functional information system that gathers data describing the firm’s activities, transforms the data into information, and make the information available to users
Accounting Information System (AIS) Provides a record of everything of monetary
importance that happens in the firm
1. Internal Records System1. Internal Records System
Annual stockholder reports requires an external auditor to verify the accuracy of accounting records
Larger firms have their own staff of internal auditors who perform the same analyses as external auditors but have a broader range of responsibilities
With internal audit system, the firms can independently evaluate and influence their operations from a financial standpoint
2. Internal Audit System2. Internal Audit System
Objective: To identify the best sources of additional capital and th
e best investments of surplus funds.
Major task: To gather data and information from stockholders, fina
ncial community, and government
Sources: Journals, Newspaper, CD-ROM, On-line database, Inte
rnet, Research, etc.
3. Financial Intelligence System3. Financial Intelligence System
Internet LabInternet Lab
A decision support system should: Assist managers in making decisions
to solve semi-structured problems. Support the manager’s judgment rather t
han try to replace it. Improve the manager’s decision-making
effectiveness rather than its efficiency.
4. Financial Decision Support System4. Financial Decision Support System
4. Financial Decision Support System4. Financial Decision Support System
41. Forecasting Subsystem 41. Forecasting SubsystemBasic facts about forecasting All forecasts are projections of the past. All forecasts consists of semi-structured de
cisions. No forecasting technique is perfect.
Tool
Forecasting Models Forecasting Models
4. Financial Decision Support System4. Financial Decision Support System
42. Funds Management Subsyst 42. Funds Management Subsysteeee
Objectives To ensure that the revenue inflow is greater
than the expense outflow. To ensure that this condition remains as sta
ble as possible throughout the year.
Tool
Cash Flow Analysis Cash Flow Analysis
4. Financial Decision Support System4. Financial Decision Support System
43. Financial Control Subsystem 43. Financial Control SubsystemTools
BudgetingBudgeting Financial Ratios Analys Financial Ratios Analysisis
DSSDatabase
DSSDatabase
ModelBase
ModelBase
DSS Software SystemManage DSS Database
Manage Model BaseManage User Interface
DSS Software SystemManage DSS Database
Manage Model BaseManage User Interface
UserInterface
UserInterface
FinancialAccountingSales/MKTProduction
StatisticalForecastingOperationalPlanning
Components of DSSComponents of DSS
Electronic SpreadsheetsElectronic Spreadsheets
Tool for analysis, planning and modeling. Built-in statistical, mathematical and financ
ial functions. Formulas can be embedded using numbers
in the spreadsheet. The implication of changing numbers can i
mmediately be observed and analyzed.
Microsoft Excel LabMicrosoft Excel Lab
What-If AnalysisWhat-If Analysis
A model builder makes predications and assumptions regarding the input data
What will happen to the solution if an input variable, an assumption, or a parameter value is changed?
Goal Seeking AnalysisGoal Seeking Analysis
Goal seeking analysis checks the inputs necessary to desired level of an output (goal)
Backward solution approach
Sensitivity AnalysisSensitivity Analysis
Enables flexibility and adaptation to changing conditions and to tell requirements of different decision making situations
Provides a better understanding of the model and the world it purports to describe
Models that ask ‘what-if’ questions repeatedly to determine the impact of changes in one or more factors on outcomes
Questions?Questions?
