The A2Z of Financial Management

The A2Z of Financial Management

 OBJECTIVES

• Identify the key components of the profit and loss account
• Recognise the function of the Balance Sheet and how to interpret it
• Appreciate the importance of positive cash flow
• Identify the need to manage the growth of a business
• Recognise the significance of the link between the returns and time scales of different capital investments
• Identify the key stages of business planning and how they impact upon the development of a budget

WHO SHOULD ATTEND?

• All personnel wanting to gain:
  • a clearer understanding of the fundamentals of business finance and how finance impacts on the decisions they make on a day-to-day basis either at a departmental or company-wide level
  • a better understanding of business planning, developing budgets and budgetary control

COURSE OUTLINE

DAY 1 – Understanding Profit and Return on Investment

• Why do we need financial information?
• What are the differences between management accounts and statutory accounts?
• Understanding the language of finance, company accounts and annual reports
• Why Return on Capital Employed is so important?
• How to improve ROCE
• The structure of the P & L account
• The importance of marginal performance improvements
• The link between cost of sales, selling price, volume and expenses
• How to calculate breakeven
• How to determine a selling price

DAY 2 – The Balance Sheet and Depreciation

• Content and layout of balance sheets
• Working Capital
• Interpretation: Fact vs. Judgement
• The difference between expenditure and capital expense
• Why fixed assets are depreciated
• The different types of depreciation
• Taking a structured approach to carrying out a business health check

DAY 3 – Managing Cash Flow and Growth

• The difference between profit and cash
• Cash flow forecasting
• Cash flow statements
• How can growth be funded?
• What type of funding should be used?
• How to calculate the debt to equity ratio
• Getting the balance right

DAY 4 – Capital Investment and Interpreting Accounts

• Why capital projects should be appraised?
• Different appraisal methods
• Short Term Indicators
• Long term Indicators
• Overall Business Performance Indicators
• The indicators used in corporate valuation
• Analysing several sets of accounts
• What are the accounts telling you?
• What actions need to be taken?

DAY 5 – Introduction to Business Planning

• Why Plan?
• What is a budget?
• What should we measure?
• Key central corporate objectives
• The business planning process
• Examining the external environment
• Competitive management and performance
• External Environment – PEST Analysis
• SWOT analysis
• Zero based or incremental budgeting – which is best?
• A structured approach to developing a budget
• Content of a financial budget