Introduction

Most strategic and operational business decisions rely on fundamental knowledge of financial management including the ability to speak and understand the language of finance. While this knowledge is an essential skill for leaders and managers throughout the organization, it is also a prerequisite for both finance professionals who need to make day-to-day decisions as well as accounting professionals who wish to advance their careers. Those without a clear understanding of financial statements analysis and management are unable to communicate professionally with finance managers and business leaders. This course consists of modules that clarify financial terminology and concepts giving you the required tools to communicate fluently with top executives and articulate business investment and project proposals to decision-makers.

Objectives

By the end of the course, participants will be able to:

• Apply financial analysis techniques to generate conclusions and recommendations regarding business performance

• Utilize their macro-finance understanding from a strategic and operational perspective

• Design dynamic strategic financial planning models

• Demonstrate an understanding of mergers, acquisitions, takeovers, and corporate control

• Compare how equities and fixed income securities are priced

• Develop a practical understanding of corporate finance, cost of capital, and capital budgeting 

Methodology

The course uses a mix of interactive techniques such as brief presentations by the consultant, group exercises, case studies, and the use of Excel to apply the knowledge acquired throughout the course followed by participants' presentations of the results.

Target Audience

Finance professionals, finance managers, corporate controllers, financial controllers, treasury professionals, chief accountants, accounting managers, senior accountants, banking professionals, and corporate business professionals.

Outlines

Day 1

The scope of financial analysis and management

• • Introduction to the three pillars of financial management
    • Operating, investing, financing decisions
  • An inside look at the key financial statements
  • The building blocks of financial statements analysis
    • Vertical analysis and common size financial statements
    • Horizontal and trend analysis
    • Liquidity analysis
    • Solvency analysis: debt and equity
    • Efficiency and working capital management
      • Balances of cash
      • Balances of accounts receivable
      • Balances of inventory
      • Balances of trade payables
      • Using short term bank facilities
      • The cash conversion cycle
    • Profitability analysis: margins and returns

Day 2

Strategic financial planning and forecasting

• • Overview of the financial planning process
  • Revenue forecasting: bottom-up versus top-down
  • Forecasting cost of goods sold
  • Forecasting fixed and variable costs
  • Forecasting balance sheet accounts
    • Using days sales outstanding
    • Using days of inventory on hand
    • Using days of payables
    • Fixed assets forecasting
    • Retained earnings and dividend pay-out policy
  • Building 12 monthly forecast for a seasonal business
    • Modeling 'what-if' analysis

Day 3

Mergers, acquisitions, and corporate control

• • Methods of acquisitions
  • Types of Mergers and Acquisitions (M&As)
  • Motives for mergers and acquisitions
  • 5 phases to the M&A process
  • The process of due diligence
  • Reasons behind failed mergers

Day 4

Financing decision: the right mix of debt and equity

• • Valuation fundamentals of financial instruments
    • How to price a bond before issuance
    • How to price a stock before offering
  • The weighted average cost of capital
    • Impact of debt-to-equity ratio on the cost of funds
    • Deciding on the mix of debt and equity
  • Optimal financing structure

Day 5

Capital budgeting and investment decisions

• • Practical applications of the time value of money using Excel
    • Future value calculations
    • Present value and NPV calculations
    • Internal rate of return
    • Verifying loan installments based on effective interest method
  • The capital budgeting process
    • Forecasting incremental cash flows
    • Deciding on the appropriate discount rate
    • Identify working capital commitment
    • Net present value: key decision-making criteria
    • Internal rate of return for decision making
    • Discounted payback period
    • Profitability index