Mastering Budgeting & Forecasting

Mastering Budgeting & Forecasting

OBJECTIVES

• Evaluate the budgeting process in their organizations and recommend improvements
• Create budget templates and models for their departments or organizations
• Apply several forecasting techniques to better manage uncertainties in budgeting
• Evaluate capital budgeting decisions using several methods and recommend proper action
• Utilize Microsoft Excel functions and tools in the budgeting process including breakeven analysis and optimization

WHO SHOULD ATTEND?

Finance directors, managers, controllers, accountants, budget analysts, budget owners and professionals who wish to expand their budgeting knowledge.

COURSE OUTLINE

Budgeting and planning

• • Strategy development framework
  • The three horizons of growth model
  • Strategic budgeting and resource allocation
    • Growth-share matrix
    • Nine-box matrix
  • Budgets and the key financial statements

Budget cycle, process and approaches

• • The budget cycle
  • Characteristics of successful budgeting
  • Making the budget a value-adding activity
  • Top ten problems with budgeting
  • Choosing the proper budgeting approach:
    • Incremental budgeting
    • Zero-based budgeting
    • Flexible budgeting
    • Kaizen budgeting
    • Activity based budgeting
    • Rolling (continuous) budgets and forecasts
  • The master budget and its components
  • Operating and capital budgets
  • Best practices in budgeting
  • Creating a user friendly budget template

Forecasting techniques

• • Forecasting models
  • Qualitative and quantitative methods
  • Steps in developing forecasting models
  • Time series and trend analysis
  • Data conditioning techniques
  • Exponential smoothing and moving averages
  • Simple and multiple regression analysis

Modeling projected financial statements

• • Micro and macro factors
  • Forecasting sales
    • Estimating market demand
    • Estimating company demand
    • Developing sales forecast
  • Forecasting cost of sales
  • Forecasting operating expenses
  • Forecasting key assets and liabilities accounts
  • Modeling the income statement forecast
  • Modeling the balance sheet forecast

Advanced capital budgeting evaluation techniques

• • Business risk and cost of capital
  • Classifying investment projects
  • Cash flow estimation
  • Analyzing investment and operating cash flows
  • The time value of money concept
  • The required rate of return
  • Net Present Value (NPV)
  • Internal Rate of Return (IRR)
  • Multiple internal rates of return
  • Modified Internal Rate of Return (MIRR)
  • Profitability Index (PI)
  • Payback period and discounted payback period
  • Capital rationing
  • Comparing and evaluating techniques
  • Sensitivity and risk analysis

Breakeven analysis and optimization techniques

• • Cost Volume Profit (CVP) analysis
  • Using CVP to reach a target income
  • Single product and multiple products breakeven analysis
  • Working with budget constraints
  • Building optimization models