Description

1.1

ABOUT THE COURSE This course brings together two most of the most important areas of financial management: Understanding Finance to Influence Strategic Decisions, and Financial Analysis, Planning and Control. It will help organizations to: Think and manage strategically and plan more effectively for the future Identify the role of financial management in strategic decision-making Use the financial techniques of planning and control Improve performance from the use of the tools of financial analysis COURSE OBJECTIVES The course provides delegates with the knowledge required to find better answers to questions such as: How are organizational strategies developed? How does financial management support strategic development? What is the exact nature and scope of the organizational problems to be analysed? Which specific financial variables, relationships, and trends are likely to be helpful in analysing problems? How reliable are available financial data, and how is uncertainty and risk likely to impact on the outcomes of decisions? In economic and financial analysis what are the implications and relative importance of cash flow as distinct from accounting profit? What limitations are inherent in financial data and the key financial statements, and how will these affect financial analysis?

COURSE CONTENT

Understanding Finance to Influence Strategic Decisions

Fundamentals of Strategic Planning

• What is strategy?
• Strategic management
• Strategic analysis
  • Mission
  • Objectives
  • Strategic decision-making
• The strategic planning process
  • Environmental analysis
  • Resources analysis
• Strategic choice
• Strategic implementation
• Corporate objectives and accountability
• Forecasting financial data

 Financial Statements

• Financial statements
• Balance sheet
• Income statement
• Alternative asset valuation methods
• Cash flow statement
• Common size (or horizontal) trend analysis of financial statements
• Vertical trend analysis of financial statements
• Segmental analysis of financial statements
• Value added analysis of financial statements
• Understanding the cash flow cycle and the operating cycle
• Break-even and multiple product break-even analysis

Capital Structure and Leverage

• Sources of funds
• Capital cost models
• Can we determine a organizational’s optimal capital structure?
• Capital structure models
• Preparing projections to determine financing needs

Capital Budgeting

• Future values, present values and DCF
• Capital budgeting principles
• Methods of evaluating capital investment projects
• Accounting rate of return (ARR) and payback
• Net present value (NPV) versus internal rate of return (IRR)
• How do you choose which method to use?
• Equivalent annual cost (EAC) method
• Capital budgeting methods
• Capital asset pricing model (CAPM) versus arbitrage pricing theory (APT)
• Does it make a difference whether we lease or buy?

Managing Financial Risks

• The value of perfect information (VOPI)
• Types of risk
• Risk management principles
• Talking to your bankers about managing risk
• How to develop the tools for your establishment?
• How to minimise risk?
• Insurance and hedging
• Interest rate and foreign currency exchange rate risk

    II.        Financial Analysis, Planning and Control

The Challenge of Financial/Economic Decision-making

• The Practice of Financial/Economic Analysis
• The Value Creating Company
• A Dynamic Perspective of Business
• The Nature of Financial Statements
• The Context of Financial Analysis

Projection of Financial Requirements

• Interrelationship of Financial Projections
• Operating Budgets
• Standard Costing and Variance Analysis
• Cash Forecasts/Budgets
• Sensitivity Analysis
• Dynamics and Growth of the Business System
• Operating Leverage
• Financial Growth Plans
• Financial Modelling

Analysis of Investment Decisions

• Applying Time-Adjusted Measures
• Strategic Perspective
• Economic Value Added (EVA) and Net Present Value (NPV)
• Refinements of Investment Analysis
• Equivalent Annual Cost (EAC)
• Modified Internal Rate of Return (MIRR)
• Dealing with Risk and Changing Circumstances