Advanced Financial Analysis, Evaluation & Budgeting
Course Code: FA01
►Course Objective
- How are business strategies developed?
- How does financial management support strategic development?
- What is the exact nature and scope of the business problems to be analysed?
- Which specific variables, relationships, and trends are likely to be helpful in analysing problems?
- Are there possible ways to obtain a quick ‘ballpark’ estimates of likely outcomes of decisions?
►Target Audience
- This Course is designed for business professionals that need or wish to understand the financial aspects of the strategic decision-making process. It is crucial for every role and at every management level in the organisation, including for example:
- Sales and Marketing
- Engineering
- Project Management
- Purchasing
- Logistics
- Human Resources
- Interns, financial analysts, financial controllers, accountants, treasurers, corporate planning and business development professionals, and others active in the planning process
- Middle and junior management as a useful element in their career advancement
- All participants will be able to offer their input, based on their individual experiences, and will find the seminar a useful forum for upgrading and enhancing their understanding of best corporate financial practices in the areas covered.
►Course Outline
Day 1:
Linking Strategic Management and Decision-making with Financial Planning and Budgeting
- Strategy and strategic management
- Vision, mission, and objectives
- Key features of strategic decision-making
- Rolling out and implementing strategies
- Value creation and maximisation of shareholder wealth
- Corporate objectives, accountability, and corporate governance
- Management accounting and the links between strategic planning and budgeting
DAY 2:
The Financial Statements and Their Links with Planning and Financial Decisions
- The three key financial statements
- Balance sheet
- Income statement
- Statement of cash flows
- Sources of internal and external funding
- Cost of equity, cost of debt, and the weighted average cost of capital (WACC)
- Capital structure models to minimise WACC
- Preparing a long-term financial plan to determine funding requirement
DAY 3:
Costing Systems, Budgets and Measurement Systems that Support Financial Decision-making
- Costs and activities
- Cost behaviour
- Fixed costs and variable costs
- Cost/volume/profit (CVP) relationships, contribution and break-even analysis
- Direct and indirect costs
- Activity-based costing (ABC)
- Refining the costing system for improved decision-making
DAY 4:
Capital Investment Decisions
- Future values, present values and discounted cash flow (DCF)
- Capital budgeting principles
- Evaluating capital investment projects using accounting rate of return (ARR) and payback
- DCF evaluation methods of net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), equivalent annual cost (EAC)
- Deciding on which investment appraisal methods to use
- Capital budgeting, capital rationing and the profitability index (PI)
- Further factors to consider in investment appraisal
DAY 5:
Linking Performance Measures to Strategic Decisions and Financial Risk Management
- Linking strategic objectives to key performance indicators (KPIs) in a balanced scorecard
- Obstacles to achieving strategic objectives created by the accounting and costing system
- Uncertainty and risk analysis
- Types of business risk and financial risk
- Risk management principles
- Development of risk management tools to mitigate and minimise risk
- Insurance and hedging
- Interest rate risk and foreign currency exchange rate risk
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