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Finance for Non-financial Managers
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Understanding Business Finance
Who will benefit from this workshop?
Any manager who needs to understand how business finance works, whether or not they have budget responsibility.
Additionally, managers who acknowledge that they should be aware of the financial consequences of their decisions and the financial context in which they operate. Finally, any manager who wishes to gain an insight into how financial measurement and analysis can aid efficiency improvements and profitability.
Objectives
At the end of the course the delegates will be able to:
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Understand the basic foundations of financial accounting and management including the statutory and regulatory framework
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Identify and understand the purpose, structure and content of financial statements and in particular P&L Accounts, Balance Sheets, and Cash Flow Statements
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Construct P&L Accounts and Balance Sheets from given data
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Understand the difference between profit and cash
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Understand the management of working capital and cash flow
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Use financial ratios to analyse business performance and to measure risk
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Appreciate the importance of and understand business planning, including budgeting and cash flow forecasting
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Calculate breakeven analysis and understand what effects on it and to what extent
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Identify and apply different approaches to costing and pricing
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Understand how capital investment decisions might best be made
Structure of the course
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Day 1
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Introductions, administration, and objectives
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The purpose of the accounting process, how it works (double entry), who is it for, and the fundamental concepts of ‘true and fair view’, ‘prudence’, ‘accruals’ or ‘matching’, and the statutory and regulatory framework.
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The business cycle, how profit is generated and then illustrated in the P&L Account.
The concept of assets and liabilities and the structure of a balance sheet.
What a cash flow statement looks like and what it seeks to show.
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Coffee
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Practical exercise: Case Study 1, Part 1: Constructing a P & L Account and Balance Sheet |
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Lunch
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The difference between profit and cash.
The concept of solvency. The cash flow statement
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Tea
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What is working capital and what is cash flow?
The working capital and cash flow cycles
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Introduction to financial ratios and their use in analysis and risk management
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Close
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Day 2
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Review of Day 1 and practical exercise: case Study 2, Part 1: Trial balance, P&L and Balance Sheet
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Case Study 2, Part 2: Ratio Analysis
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How the historical perspective provided by the financial statements should be used as a basis for the business planning, budgeting and cash flow forecasting processes. What do these look like?
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Coffee |
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Breakeven – what is it and how you calculate it. The impact of price/volume and costs.
The margin of safety and how it is possible to broaden it.
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Practical exercise: Case Study 1, Part 2: Budgeting and breakeven
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Lunch |
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Cash flow forecasting – its purpose and how you construct a CFF.
The differences between budgets and CFFs.
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Practical exercise: Case Study 1, Part 3: Cash Flow Forecasting (CFF)
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How budgets and CFFs are used as practical management tools. Actuals v budgets and variance analysis.
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Tea |
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Costing and pricing.
Absorption costing, marginal costing, and ABC.
The impact of price increases and discounts.
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Capital Investment Appraisal techniques including NPV, DCF, and IRR
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Review of objectives, any final questions, and post course questionnaire
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Close |
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