Course Description

INTRODUCTION

Business professionals need to understand the financial factors critical to business success. This interactive Financial Management for Non-Financial Professionals training seminar will show how finance works in today’s fast-moving business environment. For any business the key elements of profitability, liquidity and financial structure are critical to continuing success and competitiveness. So these three elements are comprehensively explored and developed at all levels of business activity.

You will learn about the accounting processes of recording and reporting business transactions, and how these are summarised as periodic financial reports in accordance with statutory requirements. You will also learn how these financial reports are analysed by a variety of user groups.

Course objectives:

Explain the nature and role of financial statements and their interpretation

Use the language of accounting and finance to communicate effectively with financial professionals

Review the financial performance and financial position of an organisation using the appropriate financial ratio and break-even analysis techniques

Use budgetary control to compare actual against planned performance and to identify corrective actions.

The benefit of this course:

Greater awareness of the role of accounting and finance

Ability to understand the structure of accounting systems, and financial reports

Ability to make more effective and better informed contributions to financial discussions

Ability to use tools and techniques for financial control and financial management

Greater understanding of the key drivers which ensure sustainable growth and competitiveness.

Explain the nature and role of financial statements and their interpretation

Use the language of accounting and finance to communicate effectively with financial professionals

Review the financial performance and financial position of an organisation using the appropriate financial ratio and break-even analysis techniques

Use budgetary control to compare actual against planned performance and to identify corrective actions.

Better able to contribute to the effective financial management of their organisation

Able to evaluate alternative courses of action and identify the most effective choices with regard to the future improvement of their organisation

Able to liaise more effectively with other departments on financial matters.

Course Outline

DAY 1

The Business Environment and the Role of Accounting

The Business Environment                  

The Uses and Purpose of Accounting   

Users of Accounting and Financial Information                        

Accounting Terminology

The Dual Entry Accounting System  

The Income Statement – financial performance                                    

The Balance Sheet – financial position

Cash Flow vs. Profit

The Cash Flow Statement - Where the cash comes from and where it goes to?

The Links between the Cash Flow Statement, Income Statement and Balance Sheet      

DAY 2

The Financial Statements and Financial Analysis

Accounting Conventions and Accounting Standards (IFRS)

The Key Elements of Published Annual Financial Reports (AFR)            

Techniques for Interpreting the Financial Statements - Common-Size Analysis and Ratio Analysis

Financial Statements analysis – Case Study

Cash Flow Ratios – A different perspective                      

Predicting Business Failure with Ratios and other Key Indicators

Publicly Available Sources of Corporate Financial Information

DAY 3

Budgeting and Break-even Analysis

Management Accounting – The Internal Perspective

The Importance of Cost Analysis – materials, labour and overheads

Understanding Overheads, and How they should be treated in internal analysis and decision-making

Cost / Volume / Profit (CVP) Analysis and The Break-even Point

Using CVP Analysis to make Profitable Decisions

The Purpose and Importance of Budgeting

Preparing and Implementing Your Budget

Different Budgeting Models – Are they relevant for your business?

Is budgeting an effective management technique?

Issues of Risk, Uncertainty, Motivation and Asymmetric Behaviour

DAY 4

Budgetary Control and Capital Investment Appraisal

Budgetary Control with Monthly Management Reports

Standard Costing and Variance Analysis

Case Study on Calculating and Interpreting Variances

Internal Growth Strategies – Types of Capital Investment

Basic Appraisal Techniques as a Filtering Process – ARR and Payback

Why you should consider the time value of money?

Discounted Cash Flow Appraisal Techniques – NPV and IRR

Practical Issues to consider in NPV Appraisal - inflation, capital rationing, risk and uncertainty

Investment Appraisal Exercises using Spreadsheets

DAY 5

Financing the Business and Re-organisation Strategies

Financing the Business – Why and When

Financing Principles, Short-term vs. Long-term, Debt vs. Equity

Sources and Types of Finance

Determining the Cost of Long-term Finance - The cost of Capital Models:

Cost of Equity (Ke) – Dividend Valuation Model

Cost of Equity (Ke) - Capital Asset Pricing Model

Cost of Debt (Kd)

Weighted Average Cost of Capital (WACC)

Review of External Growth Strategies:

Mergers, Acquisitions and Joint Ventures.