Fundamentals of Finance for Non-Financial Managers
Overview
Day 1:
Understanding financial statements and key financial metrics of performance for your business.
Morning
Understand how your day-to-day decisions and activities impact the financial performance of your business
Show how all management decisions and activities impact the
Balance Sheet
Income Statement
Cash Flow Statement
Clear differentiation between profit and cash
Practical illustrations using business data
Understanding the numbers in the financial statements
Understanding the terminology
Identifying the impact of accounting standards
Depreciation
Inventory
Fixed asset valuation
Goodwill
Research & Development
Impact of International Accounting Standards (IFRS)
Afternoon
Analyse the performance of business
Identify and understand the components of the key metrics of performance
Gross Margin
Operating Margin
PBT
PAT
Return on Capital Employed
Return on Assets
Inventory Days
Receivable Days
Payment Days
Gearing
Free Cash Flow
EPS
P/E Ratios
Market/Book Ratio
Total Shareholder Return
Economic Value Added
Compare performance of different businesses
Outcomes
Participants will:
have a clear understanding of how all their day-to-day activities impact the financial performance of their businesses
be fully familiar with all the key figures in the financial statements
will understand the key metrics of performance and how their business has performed against similar businesses
have a clear understanding of financial terminology
Day 2:
Identifying the levers to activate for improved financial performance
Morning
Measuring the impact of Volume Growth on Financial performance
Organic
Extending the range of services to existing clients
Leveraging existing resources to grow volume
Introducing new products and services
Developing new markets
Growth by Acquisition
o Margin Enhancement
Costing & Pricing
Various methods of cost measurement
Overhead allocations
Activity based costing
The pricing decision
o Identifying relevant costs
o Differentiation between fixed and variable costs
Competitive pricing
Value-based pricing
Cost management
Employee costs
o Rates/Hours/Overtime/Minimising non chargeable time
Non Pay Costs
o Supply chain management
o Shared services
o Vehicle and other equipment costs
o Outsourcing
Afternoon
o Minimising Investment in Assets
Fixed Assets
Premises
Vehicles and other equipment
Lease vs Buy decisions
Sale and Leaseback
Working Capital
Receivables management
Inventory management
Maximising the benefit of trade credit
Practical illustrations and case studies will be used throughout
Outcomes
Participants will learn and be motivated to use a practical toolbox of the many ways in which they can improve the financial performance of their business.
Day 3:
Investment Decision-Making
Morning
Making Good Investment Decisions
o Investment Decisions
New products, new markets, equipment replacement, outsourcing, acquisitions
o Analysing the Non Cash Flow Factors
STEEP analysis
Market strategy
Key resources
o Identifying relevant cash flows
Incremental cash flow
Sunk costs
Treatment of non cash costs
o Methodologies for dealing with risk and uncertainty
Participants will work through an investment decision using these tools to derive the relevant cash flows
Afternoon
o Identifying the appropriate hurdle rate for investment appraisal in your business
Components of Weighted Average Cost of Capital (WACC)
Risk premia
How can WACC be reduced
Risks
o Discounted cashflow techniques (Payback, NPV & IRR )
o Ongoing monitoring of investment projects
o Re-evaluation of investment decisions
o Techniques used in your business for evaluating investments
Case Study:
Participants will identify relevant cash flows for an investment decision, evaluate the proposal using Payback, NPV and IRR, and decide how the investment decision will be monitored on an ongoing basis.
Outcomes
Participants will:
Gain a full understanding of the key factors to be taken into account in making an effective investment decision
Be able to clearly identify relevant cash flows
Understand how the hurdle rate for investment decisions is arrived at
Understand discounted cash flow techniques and be able to use them to evaluate investment decisions
Appreciate the importance of post evaluation monitoring of investment decisions
Day 4:
Morning: The Capital Structure Decision
o Understand the key components of capital structure
Debt
Equity
o Examine the two types of risk in every business
Business Risk
Financial Risk
o Establish how to trade off the two types of risk to arrive at an appropriate capital structure for the business
o Consider all the factors that need to be taken into account in determining appropriate capital structure
o Consider the implications of carrying on a business within an inappropriate capital structure
o Identify all the sources of debt and equity finance
Apply these techniques to a case study and show how changes in the capital structure can significantly affect the overall profitability of the business
Afternoon:
Applying the course learning in practice
o Case Study applying all of the techniques learned in the previous days
o Revise and review all the learning
Outcomes
Participants will:
Understand the key criteria necessary for an effective capital structure
Be able to determine the appropriate capital structure for different businesses
Be able to apply all the learning in the 4 day programme to practical situations
July 26-29, 2010
Paris
3160 Euros
October 04-07, 2010
Milan , Italy
Fee 3100 EUROS
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