Municipalities Financial & Administrative Performance Supervising Systems & Governance
Course Code: PJ11
►Course Objective
- Read and understand their organisation’s Annual Financial Report
- Evaluate their firm’s financial performance
- Understand and use analytical tools and techniques in practical case-study situations
- Use analytical techniques to project future performance
- Make critical judgements of accounting policies when evaluating company performance
- Appreciate the importance of new investments in maintaining growth and competitiveness
- Improve their management skills and increase their value to the organization
►Target Audience
- managers
- senior buyers
- project managers, civil engineers
- construction managers
- contractors, sub-contractors
- site engineers, senior management
►Course Outline
DAY 1
Introduction to Advanced Financial Analysis
- Who are the users of financial data?
- What types of financial information are available to each user group?
- The published Annual Financial Report (AFR) – what is its purpose?
- The structure and contents of an AFR – comparison of UAE, UK, and US versions
- The non-financial elements of the AFR – how important are these?
- Understanding the three main financial statements: Income Statement, Balance Sheet, Cashflow Statement
- Comparison of different formats for the financial statements
- Identifying the important numbers from the financial statements
- Case study to show how the Income Statement, Balance Sheet, and Cashflow Statement are inter-linked and inter-dependant
DAY 2
Understanding and Analysing the AFR
- Why do we need to analyse the AFR?
- Using common-size analysis to improve comparability
- Calculating trends and growth patterns
- Using Ratio Analysis to assess five key aspects of company performance:
- Profitability
- Liquidity
- Efficiency and Working Capital Management
- Financing Structure and Risk
- Investment Performance and Potential
- Case Study on analysis and interpretation of company performance
DAY 3
Analytical Tools and How to Analyse the Cash flow Statement
- Introduction to Excel tools for analysing financial statements
- Setting up spreadsheets for common-sizing and ratio analysis
- Using statistical tools mean, standard deviation, regression analysis
- Using graphical representation
- How to access data and analysis from Bloomberg and Yahoo! Finance
- Why do we need the Cash flow Statement?
- Key ratios we can calculate from the Cash flow Statement
- How to use current cash flow information to forecast future revenues and profits
DAY 4
Financing the Business and Valuing the Business
- Analysing the Balance Sheet to identify debt and equity, short-term and long-term finance
- Measuring the company’s capital structure, and estimating the costs of capital:
- Cost of Equity (Ke), using DVM and CAPM
- Cost of Debt (Kd)
- Weighted Average Cost of Capital (Ko)
- Case study on Cost of Capital calculation
- Why do we need to value a business?
- Business valuation models:
- Net Asset value – balance sheet, replacement cost, or realisable value
- Price/Earnings ratio value
- Dividend growth value
- Present value of future free cash flows
- Case study on valuing a business
DAY 5
Identifying Creative Accounting and Forecasting Future Failure
- What is creative accounting?
- Who benefits from creative accounting?
- How does creative accounting work? – some illustrative examples
- Creative accounting scandals – Enron, Worldcom, Parmalat
- The symptoms of financial distress – financial and non-financial factors
- Using ratio analysis to identify financial distress or predict future failure
- Forecasting future failure using ratio combinations – the Altman Z-score model
- Case study on forecasting future failure
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