Financial Management For Non-Financial
Course Code: FA07
►Course Objective
- 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
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