Financial Management for Non-Financial Professionals

DAY 1

A Strategic View of the Business Environment

• The business environment

• The uses and purpose of accounting

• Users of accounting and financial information

• Accounting terminology

• Cash versus profit

• Profit and profitability

• The structure of the balance sheet

• The income statement – financial performance

• What is profit?

• The structure of the income statement

• The links between the income statement and the balance sheet

• Accounting conventions

• The published annual report

DAY 2

The Financial Statements and Financial Analysis

• The cash flow statement

• What is included in the cash flow statement?

• Why is cash flow so important?

• The structure of the cash flow statement

• The links between the cash flow statement, profit and loss account, and balance sheet

• Interpreting the annual report

• The key elements of published reports and accounts

• Ratio analysis: profitability; efficiency; liquidity; investment; cash flow; the Dupont system

• Cash versus profit as a measure of performance, EBITDA and

• Predicting business failure – the Altman Z-score

• Sources of financial information

DAY 3

Budgeting and Break-even Analysis

• Management accounting

• Cost behavior

• The overhead problem, traditional versus activity-based absorption

• Cost/volume/profit (CVP)analysis

• Break-even analysis

• The impact of cost structure changes

• Limitations of CVP analysis

• Purposes of budgeting

• The budget process, including activity-based budgeting

• Uncertainty and risk – worst and best outcomes

• Motivation and the behavioral aspects of budgeting

• Problems in budgeting

DAY 4

Budgetary Control, DCF and Capital Investment Appraisal

• Budgetary control

• Standard costing

• Flexed budgets and variance analysis

• Types of variances and the reasons they occur

• Planning and operational variances

• Investment decisions

• Time value of money

• Appraisal techniques

• The effect of inflation

• Free cash flows

• Capital rationing and control of capital investment projects

• Risk and uncertainty and decision-making – sensitivity analysis

DAY 5

Financing the Business and Strategic Accounting

• Financing the business

• Financing principles, including short-term versus long-term, and debt versus equity (gearing)

• Sources and types of finance

• The cost of capital, cost of equity (Ke), and cost of debt (Kd)

• The weighted average cost of capital (WACC)

• Capital Asset Pricing Model (CAPM)

• Strategic management accounting

• The effect of competitive strategy, and how to gain competitive advantage

• Competitor information and strategic positioning

• Cost of debt and equity capital

• The disadvantages of traditional cost analysis

• The balanced scorecard and critical success factors

• Economic value added

• Benchmarking