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
Evaluate investment projects using DCF and other appraisal methods
►Target Audience
Sales and marketing executives
Supply-stream professionals
Project professionals
Internal auditors
Any non-financial professionals who are required to read, interpret, and contribute to business financial reports
Senior professionals of manufacturing, marketing, engineering
Human resources professionals
Legal professionals
Executive professionals who are involved with development of long-term customers, suppliers, outsourcing partners, and other global strategic alliances
Consultants who work with professionals and executives, to support improvements to operational and financial processes
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 versus 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 versus long-term, debt versus 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
Review of restructuring strategies: Demergers, spin-offs, unbundling, MBO, MBI, BIMBO