Course details

Overview ?

Introduction

A thorough grasp of the principles of financial analysis is a key competency needed for effective management of a business. This 5 day interactive program goes far beyond the typical financial analysis program. It uses both the principles of analysis and the power of Excel® to identify the strategic drivers that can dramatically enhance the shareholder value of your organization.

Using Excel®, delegates will:

Develop the basics of strategic financial planning
Apply the latest financial analysis techniques
Use the tools of finance, such as the time value of money
Determine key performance indicators in order to manage the drivers of business success
Create tools to use within their own business

Seminar Objectives

On completion of this seminar delegates will be able to:

Identify the key steps in developing a financial model
Analyse a company’s annual report identifying key performance indicators in order to understand what the numbers are really saying and make projections of future performance
Understand the theory of interest and the time value of money and their applications
Develop an Economic Value-Added model to see the organization from the shareholders’ perspective
Project the benefit of Capital Investment
Learn how to use Excel® tools such as Solver, Goal Seeker, and Scenario

Training Methodology

The training comprises teaching sessions covering each topic with demonstrations of the applications on each of the topics. Delegates then use the templates prepared in order to apply the knowledge gained on each section to short case studies, using Excel®. Additional practice cases are available for delegates who may develop the proficiencies more swiftly.

Organisational Impact

Delegates will be confronted with the issues in financial management and analysis which are needed in order to be effective financial managers.

They will emerge with:

A thorough understanding of the objectives of profitability and efficiency, essential for companies to succeed in a competitive environment
The skill to use Excel® as a tool to assist in resolving issues
Skills in basic modelling techniques which will enable them to build models appropriate to their company and industry.
A greater understanding of the financial drivers of an organisation
The ability to create “what if?” scenarios
The skills to impact upon return on investment

Personal Impact

By attending the seminar each person will:

Develop an improved understanding of financial drivers
Recognise the necessity of return on investment as an imperative for the company by which they are employed
Improve their knowledge of the many applications of Excel® and their confidence in using this package
Improve their career prospects
Impact upon shareholder value
Develop greater confidence in discussing financial strategy

Who Should Attend?

All financial professionals
Financial management
Department heads
Internal auditors
Project professionals
Sales and marketing professionals
R&D professionals
and anyone who needs to understand the short and long-term financial impact of key decisions

Programme Outline

Day 1 – Introduction and overview of Financial Modelling and the International Business Environment

Define the Terms Model and Financial Model
Learn the 10 steps to create good Financial Models
Use Flowcharting Techniques to improve your model
Overview of the strategic and operational aspects of a global business entity
The Organizational Planning Model
The Product/Decision/Information Cycle
The Objectives of Financial Analysis
Creating wealth by adding value
Basic metrics of wealth creation and financial performance

Day 2 – Analysing the Annual Report and Creating Shareholder Value

Ratio Analysis – The heart of Financial Analysis
Use Excel® templates to calculate and interpret liquidity, leverage and profitability ratios
Interpret the results of ratio analysis from an accrual accounting perspective
The inter-relationship between the DuPont Formula and EVA®
How to use the Altman Z-Score
Use various investment surveys to benchmark the results of financial analysis
What constitutes “Shareholder Value?”
Finding the cost of equity
Determine the Cost of Debt, Preferred Equity and Common Equity
Calculate Weighted Average Cost of Capital (WACC)
Develop the EVA© Model
Impact of Acquisitions on WACC

Day 3 – The Time Value of Money and the Steps in Building Financial Models

The impact time has on the value of money
Understand the various interest calculations
Using WACC and ROIC as benchmarks
Use Excel®, to determine Present Value, Future Value, Net Present Value, Internal Rate of Return, Modified Internal Rate of Return
Using IRR as a basis for capital project evaluation
Situations that require models
Models and Shareholder Value (EVA®)
Identification of Forecast Validation Criterion
Determination of Model and Forecast Horizons
The recognition of risk in forecasts
The Role of Assumptions in Financial Forecasting

Day 4 – Evaluating Capital Project Proposals and Effective Management of Historical Data Using Excel®

Identify the various types of capital projects
Discuss the capital project evaluation process
Determining the initial and subsequent capital project cash flows
Development of the “Hurdle Rate” for capital projects
Discuss the use of “Terminal Value” in evaluating capital projects
Use Excel® to evaluate capital projects by applying NPV, IRR, and Discounted Payback models
Understanding the Approaches Used to Build Financial Forecasting Models
Recognizing the Basic Patterns Inherent in Historical Data
Using the Exploratory Data Analysis Tools Available in Excel®
Key Factors in Determining the Proper Time Horizon to Choose for Your Model
Determining Degrees of Reliability in Model Projections
Selecting the Degree of Robustness and Sensitivity of the Model

Day 5 – Use of Time Series Analysis and Evaluating Investment Portfolio’s

Development of Time Series Models using histograms, moving averages, exponential smoothing, and regression analysis
Mastering the use of Exponential Smoothing as a Data Analysis tool
Validation of Time Series Analysis
Appreciate the Meaning and Importance of Sensitivity Analysis
Developing “What-if” Scenarios in Your Financial or Operational Models
Using the Excel tools “Scenario and Goal Seek”
Principles of risk measurement in individual shares
Graphing expected return and risk using variance analysis
Modern portfolio theory using the capital asset pricing model
Managing a balanced portfolio
Use Excel® to determine the beta of listed share on a securities market