Finance for Non-Finance Professionals

The Key Financial Statements

• Understanding the accounting cycle
• The five main accounts in financial statements
• Income statement: A tool for performance measurement
• Accrual basis versus cash basis
• Balance sheet: A tool for financial position
• The balanced status
• Statement of owners’ equity
• Statement of cash flows: Why cash is king
• Wrapping-up: The cycle of financial statements
• External and internal auditors’ responsibilities

Analysis of Financial Statements

• Why ratios are useful
• Horizontal and trend analysis
• Vertical analysis: Common size statements 
• Building blocks analysis and reading through the numbers:
• Liquidity ratios: Ability to settle short-term dues
• Solvency ratios: Ability to settle long-term dues
• Activity ratios: Ability to manage assets efficiently
• Profitability ratios
• Limitations of financial ratio analysis
• Working capital management
• Definition of working capital and working capital management
• Various working capital management strategies

Operating Budget Process and Techniques

• The meaning of an operating budget
• Steps to budget development
• Master budget components
• Sales forecasting
• Approaches to budgeting
• Incremental budgeting
• Zero-based budgeting
• Budgetary control and correction

Capital Budgeting: The Investing Decisions

• Examples of exercises involving capital budgeting exercise
• Time value of money: A prerequisite for investing decisions
• Required rate of return for investments (RRRI)
• Examples of cash outflows for capital projects
• Examples of cash inflows for projects
• Net Present Value (NPV) calculation
• Internal Rate of Return (IRR)

Cost Behavior Concepts and Breakeven Analysis

• Defining fixed costs
• Defining variable costs
• Contribution margin
• Computing breakeven point
• Sensitivity analysis: changing assumptions