INTRODUCTION

In the globally competitive world of 21st-century business, decision-makers face unprecedented levels of risk and uncertainty - to survive and flourish in this challenging environment organizations need the right tools with which to analyze problems and anticipate and manage the many opportunities and threats that may emerge.

Traditional forms of financial analysis and forecasting no longer meet these needs and the most progressive firms are using the power of financial models to help them analyze challenges and take a more powerful approach to manage risk in their planning and forecasting.

Financial management is the planning, organizing, directing, and controlling of an organization’s financial activities such as procurement and the utilization of funds. The purpose of this course is to provide participants with the fundamental financial knowledge and skills to enable them to participate in business activities such as financial planning, and financial control and to make savvy financial and investment decisions.

Target Audience

• Finance Professionals
• Budgeting and Planning Managers
• Commercial Managers
• Divisional Managers
• Purchasing and Supply Chain Managers
• Project Managers
• Chief Financial Officers and Financial Controllers
• Treasury Team Members
• Capital Investment and Project Staff
• Managers involved in Financial Decision-Making

LEARNING OBJECTIVES

At the end of the course participants will be able to:

• Appreciate the importance of the accounting and finance function
• Understand accounting for routine business transactions
• Be able to prepare simple financial statements
• Be able to analyze company performance using basic ratios
• Be aware of costing and budgeting techniques to maintain efficiency and profitability 
• Distinguish between financial accounting and financial management;
• Detail the definitions and terminology used in financial management;
• Underline the various accounting principles and definitions in order to build a foundation in accounting terminology on which to better understand financial management;
• Prepare a set of financial statements;
• Perform financial analysis of a set of financial statements;
• Establish the purpose of working capital management;
• Discover the role of budgeting in short-term financial planning;
• Explain the meaning of the time value of money and calculate its impact on investment decisions;
• Explain the relationship between risk and return on investment.

TOPICS TO BE COVERED

Day 1

Introduction to financial analysis

• Identifying the relationship between cash flow and profit
• Development of an integrated cash flow model
• Recognizing it’s all about cash
• Understanding the relationships between the three main accounting statements
• Exercise 1 - Accounting terminology

Fundamentals of accounting statements-the profit and loss account

How the P&L has changed over the last 25 years

• Detailed review of the Profit and Loss account including an explanation of all significant accounting terminology
• Profit types - trading, asset, and business
• Inventory, depreciation, capitalized interest
• Minority interests and consolidation
• Exceptional and material items

Fundamentals of accounting statements-the balance sheet

Detailed review of the balance sheet including an explanation of all significant accounting terminology

• Understanding the fixed assets note
• Accounting goodwill – what is it?
• Liabilities, pension fund accounting
• Debt and other liabilities like debt
• Deferred tax, contingent liabilities

Financial analysis techniques-ratio analysis

Objectives of ratio analysis

• Developing ratio analysis skills
• Different types of ratios
• How much information is there in ratios?
• Ratio rules – avoiding errors of principle

Day 2
Cash flow analysis and accounting issues

Understanding cash flows

• Detailed review of the cash flow statement
• Analyzing and interpreting cash flows
• Summarizing cash flows for analysis

Cash flow analysis

• The four phases in the life of a business Cash flow analysis-taking it further
• Dealing with the consequences of growth and no-growth

Accounting abuses and update

• Abuses of Fair Accounting
• Basic abuses relevant to all businesses
• More complex abuses relevant to larger groups

Global accounting in the new century

• Overview of the International Accounting Standards Board
• The implications of the IAS Initiative
• Review of new standards produced in the last five years

Day 3

Financial mathematics and project analysis

The time value of money

• Present and future values
• Defining the discount factor
• Exercises: Discounting calculations

Net present value -developing the concept

• NPVs and varying future cash flows
• Perpetuities and annuities
• Exercises: Annuities and perpetuities

Project analysis

• Introduction to project analysis
• Developing a forecast of the project cash flows
• Identifying the key risk areas

Evaluating capital investment projects

• Discounted cash flow techniques
• Calculating the internal rate of return

The responsibilities of management

• The essential aspects of the management task

Costing and break-even analysis

• Fixed and variable costs
• Marginal, absorption, and standard costing

Day 4

Spreadsheet analysis skills

Introduction to spreadsheets

• Using spreadsheet programs for business analysis and forecasting
• The issue of spreadsheet risk

 Day 5

• Financial Accounting
• Analysis of Financial Statements
• Short-term Financial Management Decisions
• Long-term Financial and Investment Decisions