Introduction

This interactive training program will develop an understanding of the importance of financial reporting in the business. It will consider how the Annual Report provides an opportunity for the management of a company to account for its actions to the stockholders. The seminar will consider the framework imposed by accounting and financial reporting standards, corporate legislation, and the requirements of stock markets around the world.

The implications of recent financial scandals in the USA, and how these have prompted the strengthening of corporate governance around the world will be discussed.

The training program will also consider the ways in which internal reporting contributes to the control of costs, identification and correction of problems, and how to make and implement profitable decisions.

The highlights of this course will be:

• The formats and structures of company annual reports, and how to read and understand them.

• The generally accepted accounting principles that are applied in the U.S. and Europe

• International rules of corporate governance

• Tools and techniques to evaluate business performance, and to predict future problems.

• The evaluation of new investment proposals – will they add value to your organization?

Objectives

At the end of this seminar participants will:

• The evaluation of new investment proposals – will they add value to your organization?

• Understand and use analytical tools and techniques in practical case-study situations.

• Appreciate the importance of new investments in maintaining growth and competitiveness, and how these investments should be evaluated.

• Identify the role of accounting standards in the communication of financial results

• Apply key accounting standards to their respective enterprises

• Understand the role of audit

Target Audience

This training program would be relevant to all of those involved in the preparation, presentation, and interpretation of corporate financial reports from both the private and public sectors; in commercial businesses, and government and not-for-profit organizations.

This course is suitable for a wide range of professionals but will greatly benefit: 

• Financial accounting team members

• Financial planning and budgeting professionals

• Strategic planning and head office team members

• Corporate communication and investor relations professionals

• Investment analysts and advisers

Outlines 

DAY 1: Financial Reporting & Corporate Governance

• Business objectives and shareholder wealth
• Users of financial information
• Role of accounting in financial reporting
• Key financial statements: nature and purpose
• Conceptual framework of accounting
• Introduction to accounting standards
• Development of accounting standards
• International financial scandals
• Agency problem
• Role of audit
• Need for corporate governance
• Corporate governance (UK, US, GCC)

DAY 2: Balance Sheet & Financial Position

• Balance Sheet structure
• Shareholders’ equity
• Current & non-current assets
• Current & non-current liabilities
• Working capital
• Preparing the balance sheet
• What the balance sheet tells us
• Limitations of the balance sheet
• Accounting terminology

DAY 3: Income Statement & Working Capital

• Preparation of Income Statement
• Calculation of profit
• Income & expenditure categories
• Asset valuation (current & non-current)
• Link between Income Statement & Balance Sheet
• Cash vs profit
• Working capital: inventory, receivables, payables, cash
• Judgment in accounting
• Nature and purpose of working capital

DAY 4: Costing & Break-even Analysis

• Management accounting overview
• Cost-volume-profit (CVP) analysis
• Break-even analysis
• Impact of volume & sales changes
• Limitations of break-even analysis
• Cost structure behavior

DAY 5: Cash Flow Statement

• Purpose of Cash Flow Statement
• Preparation & presentation
• Sources and uses of cash
• Link between financial statements
• Cash flow as performance predictor
• Cash flow vs profit

DAY 6: Time Value of Money & Investment Appraisal

• Interest rates & time value of money
• Discounting & compounding
• Present & future value
• Annuities & perpetuities
• NPV & IRR
• Free cash flows
• Inflation effects
• Risk & uncertainty
• Capital rationing

DAY 7: Financing & Cost of Capital

• Financing the business
• Sources & types of finance
• Gearing & financing policies
• Stock market listing
• Cost of capital (Ke, Kd, WACC)
• CAPM model
• Company valuation methods
• Shareholder value added
• Financial growth modeling
• Excel forecasting

DAY 8: Financial Statements Analysis

• Annual report structure
• Financial reporting developments
• Interpretation of financial statements
• Common size analysis
• Ratio analysis (DuPont system)
• Profitability, liquidity, efficiency ratios
• Capital structure & investment ratios
• Cash vs profit performance

DAY 9: Advanced Analysis & Risk

• Value-added analysis
• Segmental analysis
• Limitations of financial statements
• Predicting corporate failure
• Non-financial factors
• Liquidity problems
• Post balance sheet events
• Auditor’s report
• Failure prediction ratios

DAY 10: Financial Failure Models & Case Study

• Altman Z-score model
• Multivariate failure prediction models
• Integrated financial accounting case study
• Final review of financial analysis tools
• Decision-making applications