The main goal of the course is to develop a knowledge basis related to performance measurement, together with an introduction to the link between accounting and valuation. To this aim, the course explores how accounting information is used for financial analysis and forecasting purposes as well as how financial, non-financial and ESG (environmental, social and governance) indicators can be combined to design comprehensive performance measurement systems that supports internal (i.e. governance and management) and external processes (i.e., valuation).

Knowledge and understanding At the end of the course, the student will be able to understand the usefulness of accounting information for performance measurement and evaluation, comprehend the principles of cost accounting and appreciate the role of the planning and control tools. The student will also recognize the importance of ESG information for firm accountability and value creation. Applying knowledge and understanding At the end of the course, the student will be able to (i) read, reclassify, and interpret financial statements; (ii) analyze costs; (iii) design and quantify multidimensional reporting tools; (iv) evaluate firm sustainable performance; and (v) use archival databases and own assessment using appropriate frames. Making judgments Classes involve a combination of traditional lectures, practical exercises and case studies. Students completing this course will develop the ability to face problems and questions related to financial analysis, performance measurement and evaluation, through analytical reasoning and critical thinking, also showing awareness of sustainability-related issues. Communication skills Students are expected to make presentations during classes (both individually and in teams) and actively interact with colleagues and teachers. Through these activities, they will develop the ability to effectively communicate with the corporate stakeholders (including top management and the main actors of the control system) using business and technical vocabulary. Learning skills The course will be conducted in an active learning environment that will favour the development of technical and learning skills. These skills will enable students to autonomously update and deepen the topics addressed during the course in their academic careers and the world of business.

The course is designed to provide students with the conceptual background and analytical tools necessary for performance management and evaluation, through the use of financial and non-financial information. To this aim the course is divided into two parts. In the first part, we will discuss the features of the reclassified financial statements and the traditional methods used in analyzing them. Then, we will discuss the relationship between costs, revenues and profits, and the tools that support managers in performance measurement and management. In the second part, we will analyze the limitations of traditional performance measures and discuss the financial and non-financial performance measures that provide better indications of value creation. Particular attention will be devoted to the analysis of Environmental, Social and Governance (ESG) indicators and the related disclosures to assess ESG performance.

The textbooks for this course are the following: Penman S.H., 2013 (PSH), Financial Statement Analysis and Security Valuation, McGraw-Hill (5th Edition – International Edition) – Chapters 3, 5, 8, 10, 11, 12 and 14. Horngren C. et al., 2023 (HC), Introduction to Management Accounting, Pearson Education, (17th edition) – Chapter 4. Other materials (available via Luiss Learn Platform) include: - Slides - Additional readings of academic and professional papers - Case studies

Teaching and learning consist of class and out-of-class activity. The former includes lectures, practical exercises, cases, academic paper discussions, and project work presentations. The latter includes independent reading of the textbook and additional materials, exercises, cases, and project work preparation.

Attendance is strongly encouraged. Students attending the course will be assessed through: (1) a continuous assessment approach based on (i) a mid-term evaluation (30%) and (ii) a team project work developed and presented during the course (40%); and (2) final written exam (30%). Non-attending students do not take part to the continuous assessment activities (mid-term evaluation and/or team project work) and will be evaluated with a final exam weighting 100% of the overall final grade. More information on the mid-term evaluation, the team project work and final exam will be provided during the classes.

Criteria for assigning the thesis are: 1) Attendance to the course 2) Exam results 3) Quality of the research proposal The proposal must be presented in written form (max two pages) introducing (a) the main objective and research question; (b) a brief literature review; (c) the methodology; and (d) the contributions. A list of main bibliographic references and an hypothetical index is also required.