Finance for Non-Financial Managers - A 2 Day Bootcamp

Introduction

From the fundamentals of financial reporting to risk management and managing working capital this practical two day course will provide you with the technical skill and knowledge to take ownership of your business unit and become more financially pro-active in your role.

If you are looking to get to grips with how accountants think and be able to use the language of finance then this course is for you.

What You Will Learn

This course will cover the following:

Session 1 - Fundamentals of Financial Reporting

• The key components of accounts - income, expenses, assets, liabilities and equity
• An introduction to the primary financial reporting statements and the key financial performance indicators:
• Net income - measures of profit
• Balance sheet - capital employed and leverage
• Fundamental accounting concepts - accruals v cash based accounting
• Exercise - case study to identify the key measures of strong financial performance

Session 2 - Understanding Profit and Loss/Net Income

• The financial reporting period and the importance of cut-off
• Reporting revenue and key principles for revenue recognition
• Difference between assets and expenses and borderline issues such as R&D
• Expense categories - direct and overheads
• Non-recurring exceptional items
• Exercise - profit and loss appraisal exercise including calculation of gross and net margins and EBITDA

Session 3 - Cash Flow v Profit and Loss

• What is meant by 'cash' and the importance of positive operating cash flows
• Accruals compared with cash accounting with examples including credit sales and purchases and accruals and prepayments
• Other non-cash items such as provisions and depreciation
• Exercise - Converting cash profit to accruals profit

Session 4 - An Introduction to the Balance Sheet

• The purpose of the balance sheet - creditor protection and the impact on reporting assets and liabilities
• Non-current assets and depreciation (amortisation)
• The net current position - working capital and the assessment of liquidity
• Financial leverage and the concept of the 'cost of capital'
• Exercise - appraisal of a simple balance sheet - net current position, return on capital and gearing

Session 5 - Management of Working Capital

• Introduction and overview - what is meant by the working capital cycle
• Managing inventory - stock holding periods and the concept of effective inventory re-ordering
• Management of receivables - the impact of slow or non-payment
• Management of supplier payment terms (as part of overall working capital management)
• Exercise - case study including calculation of stock holding period, debtor and creditor days and the overall working capital obligation of the business

Session 6 - Risk Management

• Identifying and reacting to key business risks
• Currency risk and management of foreign currency cash flows
• Interest rate risk and the importance to consider the impact of delayed payment terms
• Credit risk - how should this be reflected in the contract pricing
• Exercise - appraisal of different customer types which is the best for the business overall (this could include issues such as allocation of scarce resources)

Session 7 - Project Appraisal Techniques

• An introduction to common appraisal techniques including:
• Net present value and discounted cash flows (the time value of money impact)
• Return on investment, internal rates of return
• Payback periods
• Additional considerations such as foreign currency cash flows and inflation
• Exercise - case study involving basic project appraisal

Session 8 - Course summary

• Some other issues to consider:
• Long term contracts and service agreements - how revenues' costs and profits and reported
• Leasing agreements - impact of capital and operating leases on commercial performance
• Provisions and contingencies - when to recognise a liability?
• Synoptic exercise - review of example draft contract with customer and calculation of how adjustments will impact the overall performance of the contract