4 Quantitative MBA Topic
Joshua John is the digital strategist for MBA@UNC, the innovative online MBA program from the University of North Carolina Kenan-Flagler School of Business. MBA@UNC gives working professionals anywhere in the world the flexibility of an online program combined with the top-quality business education offered on UNC’s campus.
Quantitative MBA Topics
A number of individuals have made the career move of pursing an executive MBA and succeeded exceptionally well. Over 30% of the CEOs in the United States are engineers. There are a number of reasons why they are successful, but an engineers quantitative experience and background is often the thing that sets them apart of a typical MBA candidate. While differential equations, regression models, and holomorphic functions may have contributed to a number of sleepless nights in college, an MBA program consists of four quantitative basics – finance, accounting, and economics. Your first year in your MBA program will be challenging and these classes will be difficult as well as demanding, but an engineer’s mathematical background will give them an advantage.
Financial Math
Financial mathematics is a unique and complicated area of study that evaluates risk. These are the skills used to determine whether or not to go ahead with an investment, namely, whether or not something is a “fair bet.”
Most MBA programs will cover topics such as annuities and perpetuities, bonds and net present value. Having a general understanding of these topics will help you delve into deeper topics. For instance, students will learn how to estimate the future value of annual compounding investments.
Knowing the basics of Microsoft Excel is imperative to doing well in any quantitative MBA course. Taking a refresher course before beginning your graduate studies is a good idea, especially when it includes a review of functions. Learning how to put these tools to use is a good way to prepare for success. In order to do well in financial math, you also need a thorough understanding of the time-based value of different financial products and processes.
Accounting
Accounting in an MBA program entails the tracking, analyzing, summarizing and reporting of multiple streams of financial information related to a business. You will be taking classes alongside working accountants, often CPAs who are trying to move into management or other areas of business, and you should be prepared to begin classes with rudimentary knowledge in place.
MBA programs generally focus on the three main types of statements created by company accounting departments. These include balance sheets, income statements and statements of cash flows. Your objective throughout these courses is to understand how these reports relate to one another. Expect to study these three financial documents, as well as statement connections, t-accounts and balance sheet equations and accounting journals.
Microeconomics
Microeconomics involves the study of an individual person or business’ financial decisions. It focuses on the small picture, and how it relates to and impacts market influence. This is useful in a variety of scenarios, including how much stock a business should carry in order to maximize their monthly profits.
Schools typically focus on the effects of supply and demand, equilibrium points and customer surplus, and learn how to analyze buyer decision-making based on basic accounting reports. Subtopics included in lessons span marginal analysis, as well as supply and demand.
Calculus is often used in microeconomics studies. It’s a good idea to brush up on your advanced math skills before beginning your MBA classes. It may also be helpful to review graph and table making, and other similar features in Excel.
Stats and Probability
The study of statistics and probability centers on data and how analyzing that data can tell us about human behavior, as well as chance. In an MBA program, you quickly jump from basic data to stock market analysis.
MBA programs usually cover linear combinations, discrete probability distributions, linear regression, continuous distributions, sampling and inference. Included are in-depth analysis and mastery of elements such as covariance and correlation, the measure of linearity, confidence intervals and hypothesis testing.
Understanding tables and graphing functions in Excel is a must for these classes, as is knowing how to graph data. Doing some refresher work specifically designed for advanced stats and probability courses can mean the difference between enjoying the challenges of your MBA program and suffering from extreme amounts of stress.
Success in your MBA program may depend on your preparation for these four quantitative topics. Familiarize yourself with what your program will require and brush up on any areas that are rusty for you. Knowing and preparing can make all the difference!
