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