Introduction

Business professionals and managers in any organization rely upon financial information to enable them to effectively undertake their roles. Financial information can provide a clear picture of events that have occurred, and a sound basis for forecasting future events. It can also show whether activities are cost-effective, whether targets have been met, and can be used to measure comparative performance and profitability.

It is vitally important that managers are able to understand, interpret, and utilize financial information and reports, and can acquire the knowledge and skills to apply financial techniques to financial data, to inform logical and worthwhile decision-making.

Course Objectives:

After completing this course, you will be able to:

•  Explain the importance of finance and the interpretation of financial information
•  Apply the concepts of accounting and finance to analyze financials
•  Learn about key accounting and finance terms
•  Examine financial statements by using key ratios
•  Explain the importance of the budgeting process
•  Learn about key components needed to improve profitability
• Finance Practices
• Finance Standards
• Interpretation of Financial Data
• Using Financial Analysis Tools

Target Audience:

Any manager seeking an understanding of finance and how to enable an organization to realize its objectives. In particular:

• Project managers
• IT and service support managers
• Sales executives/consultants and new graduates

Course Outlines:

Day (1)

Business Organizations, Sources of Finance, the Finance Function

• The development of business organizations
• The role of Finance and the Finance Function
• Sources and types of finance for business organizations

Teamwork exercise: preparing a business plan to present to potential investors

• The structure of the financial accounting system
• The Income Statement and Statement of Financial Position

Teamwork exercise:  Financial accounting and reporting case study

Day (2)

The Annual Financial Report

• The purpose and format of the Annual Financial Report (AFR), prepared according to IFRS.
• The financial and non-financial elements of the AFR

Teamwork exercise: Assessing the effectiveness of the AFR as a means of communicating with our key stakeholders

• The difference between cash flow and profit

Teamwork exercise: Preparing and presenting a Cash Flow Statement

• How to analyze and interpret the AFR

Teamwork exercise and presentation: Assessing a company’s performance and position by analyzing their AFR

Day (3)

Management Accounting

• Understanding the difference between management accounting and financial accounting
• Calculating the cost of our products and the problem of overheads (indirect costs)
• Overhead apportionment – absorption costing versus Activity Based Costing

Teamwork exercise: Preparing cost estimates for a contract bid

• Cost-Volume-Profit and break-even analysis
• Budgeting – objectives, and process

Teamwork exercise: preparing next year’s budgets for a manufacturing business

• Analyzing the differences between budget and actual, using Variance Analysis

Day (4)

Investment Appraisal

• The time value of money – future values and present values, perpetuities and growth

Group discussion: Identifying new investment opportunities for your business: 

Teamwork exercise: Basic appraisal methods – Accounting Rate of Return and Payback

• The cost of capital - Equity and Debt

Teamwork exercise: Calculating the Weighted Average Cost of Capital (WACC)

Teamwork exercise: Advanced appraisal methods – Net Present Value (NPV) and Internal Rate of Return (IRR):

• Dealing with capital rationing using the Profitability Index method
• Dealing with forecasting uncertainty using Sensitivity Analysis

Teamwork exercise: Comprehensive investment appraisal mini-case

Day (5)

Treasury and Risk Management

• Interest rate risk

Group discussion: The role of Treasury

• Managing interest rate risk using options and swaps

Teamwork exercise: Devising an effective interest rate swap

• Foreign currency risk
• Managing foreign currency risk using natural techniques
• Managing foreign currency risk using transactional techniques

Teamwork exercise: Hedging the risks of a foreign currency transaction