Course details

Overview ?

Introduction

This seminar brings together important areas of financial management, planning and control: Financial Analysis, Planning and Control; Setting & Controlling Budgets. It will help business professionals:

Plan more effectively for the future
Use the financial techniques of planning and control
Improve performance from the use of the tools of financial analysis
Link planning and budgeting with costing and performance measurement
Master the skills of budgetary and cost control

Objectives

The seminar provides delegates with the knowledge required to find better answers to questions such as:

Which specific 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?
How important are qualitative judgments in the context of decision-making?

and to focus on key issues such as:

Understand strategic planning and budgeting.
Link finance and operations for budgeting purposes and strategy execution
Learn how to build a comprehensive performance measurement system
Learn costing and budgeting terminology used in business
Understand the importance of a well-defined costing and budgeting process
Understand cost behaviour more accurately
Be able to perform and interpret variance analysis

Training Methodology

The seminar includes numerous practical examples and real life illustrations, and participative exercises and case studies. It will be presented in a very user-friendly way to suit individuals with varying levels of financial knowledge and experience. Our aim is for this to be an enjoyable learning experience. The training methodology combines presentations, discussions, team exercises and case studies. Delegates will gain both a theoretical and a practical knowledge of all the topics covered. The emphasis is on the practical application of the topics and as a result delegates will return to the workplace with both the ability and the confidence to apply the techniques learned.

All delegates will receive a comprehensive manual of the seminar to take back to the company, which will serve as a useful source of reference in the future. In addition, all delegates will receive a CD containing a soft copy of the manual and additional material such as Excel models used during the seminar.

Organisational Impact

Recognise the importance of finance as a component of the strategic decision-making process
Appreciate the significance of the theoretical concepts underlying the use of financial tools in the strategic decision-making process
Apply the appropriate financial tools in the strategic decision-making process
Identify the impact of external factors on a company’s strategic financial plans and decision-making
Organisations should benefit from an increase in the ability of their managers to understand and analyse the key financial statements and anticipate the financial factors that form the basis of strategic decision-making, which should ultimately result in better strategic planning, and improved company performance.

Personal Impact

This seminar will enable delegates to:

Broaden their financial knowledge, develop and manage the financial aspects of their role more effectively, and enhance their performance
Increase their self-confidence in dealing with financial issues and financial professionals.
Have a better understanding of how financial considerations help to support an organisations’ strategic decisions
Better appreciate how such decisions may affect their own departments or business units, as well as their companies
Acquire the ability, when involved in decisions about investment, operations, or financing, to choose the most appropriate tools from the wide variety of financial techniques available to provide a quantitative analysis

SEMINAR OUTLINE

The Challenge of Financial Economic Decision-Making

The practice of financial economic analysis
Corporate value and shareholder value
A dynamic perspective of business Benchmarking your own strategic position/competitor analysis
The agency problem and corporate governance
What information and data to use?
The nature of financial statements
The context of financial analysis and decision-making

Assessment of Business Performance

Ratio analysis and business performance
Management’s point of view
Owners’ point of view
Lenders’ point of view
Ratios as a system – pyramids of ratios
Integration of financial performance analysis – the Dupont system
Economic value added (EVA)
Predicting financial distress

Projection of Financial Requirements

Interrelationship of financial projections
Operating budgets
Standard costing and variance analysis
Cash forecasts and cash 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
Net present value (NPV) and internal rate of return (IRR)
Strategic perspective
EVA and NPV
Refinements of investment analysis
Equivalent annual cost (EAC)
Modified internal rate of return (MIRR)
Sensitivity analysis, scenario analysis, simulation, and NPV break-even
Dealing with risk and changing circumstances

Valuation and Business Performance

Managing for shareholder value
Shareholder value creation in perspective
Evolution of value-based methodologies
Creating value in restructuring and combinations
Financial strategy in acquisitions
Business valuation
Business restructuring and reorganisations
Management buy outs (MBOs) and management buy ins (MBIs)

Setting and Controlling Budgets

Strategic and Financial Planning

Financial vs. managerial accounting
Exploring the linkages between strategy, budgeting, costing and performance measurement
Understanding what strategic planning is and why it is important
Mission; Vision; Strategy; Goals and Objectives
The outside environment and the internal context: SWOT and PESTEL analysis
What is happening in your company
Looking for the drivers of value creation
Examples and cases

The Framework for Budgeting

What is a budget - why create a budget?
The budgeting framework
Various types of budgets
The budgeting process and the human side of budgeting
Sales forecasting and budgeting schedules
What is the budgeting process in your company?
Top down vs. bottom-up budget; incremental vs. zero-based
Examples of budgetary schedules

Cost Analysis for Budgeting

What is costing? Defining costs
Cost behavior – Fixed and variable
Breakeven models - The Equation Method
The contribution margin concept
Direct and indirect costs
Traditional vs. Activity Based Costing
Product vs. period costs
Case study and examples

Budgeting: case study day - Controlling the budget variances

What is the situation in your organization?
Is budgeting organized by department and/or projects?
Budget variance analysis
Describe the difference between a static budget and a flexible budget
Compute flexible-budget variances and sales-volume variances
Explain why standard costs are often used in variance analysis
Integrate continuous improvement into variance analysis
Case study, examples and exercises

Beyond Budgeting: Broadening Performance Measurement Systems

Advantages and disadvantages of budgeting
How to improve budgeting in your organization
What next? Beyond the Budget…
The Balanced Scorecard: linking Strategy to budgeting to Performance Measurement
Financial perspective, Customer perspective
Internal Business Process perspective, Learning and growth perspective
Developing and adapting the scorecard
Case study illustration