Course details

Overview ?

Introduction

In recent years there has been a growing recognition that, in the long run, effective management of cash flow is more important than profit. Long-term cash flow is the real value of a business. It has also been recognised that there is significant potential for improved financial performance from the more effective management of working capital – both directly from immediate cash gains and reduced net interest costs, and indirectly through its impact on increased profitability and return on capital employed. A key challenge in achieving these performance improvements results from the fact that actual levels of working capital and delivery of cash flow are effectively determined by the day-to-day actions of a great many managers and staff, which in large corporations often run into tens of thousands.

This highly participative 5-day seminar covers the principles, techniques and skills involved in the effective management of cash flow and working capital in any business, blending a clear theoretical framework with extensive use of real-life examples and case studies.

Key areas covered in this program include:

Optimising working capital
Managing accounts receivable
Managing inventory
Strategic management of cash & working capital
Planning, forecasting and monitoring cash and working capital
Financial modelling tools and techniques for cash and working capital management

Objectives

By the end of this programme you will be able to:

Acquire an understanding of the fundamentals of effective management of cash flow, including the optimisation of the level of working capital.
Develop practical experience of how to manage cash flow and optimise working capital to facilitate such delivery in real life business situations.
Increase personal financial skill levels
Develop confidence through understanding the major drivers of successful financial performance.
Learn a number of technical skills, all of which lead to the ability to calculate the required figures and implement them into value adding business decisions.

Training Methodology

This seminar is strongly participative, with a learning-by-doing style that makes extensive use of examples, and team-based exercises and case studies (both numeric/analytical and non-numeric/descriptive), and open discussion. A fair level of numeracy is an advantage on this course as is some prior familiarity with the financial basics of income statements, balance sheets, and cash flow statements (although this is not essential).

The course will include refresher sessions on accounting and the basics of discounted cash flow (DCF). Each day will comprise several sessions, introducing new material to build on the learning from previous sessions. The program is designed to support the company’s organisational values, enabling employees to learn key finance skills.

Organisational Impact

Organisations will benefit from trained managers who will:

Manage cash and working capital more effectively (including inventory and accounts receivable)
Be pro-active in seeking and finding approaches to improve both cash and working capital management
Communicate the importance of improving cash and working capital management to colleagues
Help others to improve cash and working capital management
Better budget and plan cash and working capital

Personal Impact

Understand the basic concepts of finance as it relates to their businesses
Read and understand balance sheets and profit-and-loss statements
Be aware of the singular importance of cash as the life blood of a business
Focus on key management areas of inventory, accounts receivable and accounts payable
Understand how to control and manage the cash flow of a business
Forecast cash flows and draft a cash budget
Evaluate projects based on their expected cash flows
Incorporate risk into financial decisions

SEMINAR OUTLINE

DAY 1: Accounting for Cash & Performance

A Performance Management Model
The Financial Language
Accounting Basics
Cash Flow and Working Capital
The 3 Key Financial Statements
Cash Vs Profit
Using financial statement to manage cash and working capital

DAY 2 : Measuring & Improving Performance

The Impact of Inflation on Financial Performance
Measuring Performance: Ratios and KPIs
Benchmarking of Performance
Ratios for cash and working capital management
Basics of working capital management
Credit Risk Management
Financial modelling for cash and working capital management
Spreadsheet modelling and tools and approaches

DAY 3 : Strategic Cash Management

Cash & Cost modelling
The Economic Value Model
The Time Value of Money and Discounted Cash Flow (DCF)
The Key Investment Indicators
Defining the Right Base Case, Sensitivity and Risk Analysis
Treatment of Working Capital
Valuing Companies and Acquisitions
Where Does Net Present Value (NPV) Come From?
The Drivers of Value
Learning from Experience and Delivering Project Value

DAY 4 : Optimisation of Working Capital

Optimisation not Minimisation
Key Issues
Stock
Debtors
Creditors
Stores
Settlement Options
The Cost of Working Capital
Long term
Short term
Practical Examples
Engaging the Organisation

DAY 5 : Final Session

Course Summary and Checklists
Cash Budgets & Budgeting
Financial Skills and Further Development
Open Forum
Course Review

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Day 3

Day 4

Day 5

Training Methodology

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