Training on Financial Management for Non-Financial Profession

Module 1:Company Objectives, Accounting Standards and Financial Statements

• Measuring company performance

• Value creation and the primary objective of maximization of wealth

• Profit and loss account (income statement)

• Balance sheet

• Cash flow statement

• Reading and Interpreting Financial Statements

• Measurement of operating performance

• Measures of financial performance and financial position

• Risk measurement

• Limitations of ratio analysis

• Cost/Volume/Profit (CVP) Analysis:

  • Cost, volume, profit relationships

  • Break-even analysis

  • Profit modeling

  • Limitations of break-even analysis

• Case Study: Analyze the financial statements of a company to identify operating performance, risk, and profitability

• Practical Exercise: Prepare a CVP and break-even analysis for a sample business

Module 2:Discounted Cash Flow (DCF)

• The importance of the timing of cash flows

• Future values

• Present values

• Loan payments and valuation of annuities

• Capital Investment Appraisal:

  • Methods for evaluating capital projects

  • Payback

  • Net Present Value

  • Internal Rate of Return

  • Discounted Payback

• Capital Budgeting:

  • Capital rationing

  • Ranking investment projects

  • Inflation and investment

  • Using expected values and standard deviations to make decisions

• Case Study: Evaluate multiple capital investment projects using NPV, IRR, and discounted payback

• Practical Exercise: Calculate present and future values and perform DCF analysis for a sample investment

Module 3:Financial Structure

• Cost of debt

• Cost of equity

• Weighted average cost of capital (WACC)

• Optimal capital structure

• Costing:

  • Fixed costs, variable costs, and overheads

  • Overhead allocation, absorption, and the use of activity-based costing (ABC)

  • Expenses versus inventory (stock valuation)

  • Contribution compared with profit

• Decision-Making:

  • Make versus buy decisions

  • Shut-down or contribution decisions

  • Product mix decisions and limiting factors

  • Decision trees

• Case Study: Determine the optimal capital structure and evaluate financial decisions using contribution and ABC costing

• Practical Exercise: Solve a make-or-buy and product mix decision problem with decision tree analysis

Module 4:Budgeting

• Purposes of budgeting

• The budget process

• Activity-based budgeting

• Uncertainty and risk – worst and best outcomes

• Maximin and minimax regret rules

• Motivation and behavioral aspects of budgeting

• Problems in budgeting

• Budgetary Control:

  • Organisational and accounting control systems

  • Standard costing

  • Flexed budgets

  • Variance analysis

  • Types of variances and the reasons they occur

  • Planning and operational variances

• Case Study: Evaluate a company’s budget variances and recommend corrective actions

• Practical Exercise: Prepare a flexed budget and variance analysis for a sample organization

Module 5 :Working Capital Management and Cash Improvement

• Working capital and working capital requirement

• Managing working capital

• Cash improvement techniques

• Cash management and banking facilities

• Business Valuation:

  • Types of valuation methods

  • Stock market valuation

  • Net assets valuation

  • Capitalised earnings valuation

  • P/E ratio valuation

  • Gordon growth model valuation

  • DCF valuation

• Case Study: Analyze a company’s working capital and propose cash improvement measures; perform valuation using multiple methods

• Practical Exercise: Calculate working capital ratios and estimate the company’s valuation using DCF and P/E methods