Understanding Finance to Influence Strategic Decisions

Introduction:

The good understanding of strategic analysis and decision-making and the links between these and finance enables all managers at every level to make better strategic decisions and achieve improved performance.

This course has been designed to build on the theoretical framework by developing practical tools and techniques for analyzing and evaluating strategic alternatives and making strategic financial decisions.

Targeted Groups:

General Management
Estimating, Costing, and Project Management
Asset Management
Any other financial or non-financial professionals that need or wish to understand the financial aspects of the strategic decision-making process

Course Objectives:

At the end of this course the participants will be able to:

Develop strategic thinking
Use the strategic management process to develop missions and objectives and carry out strategic analysis and decision-making
Forecast financial data using various Excel models
Understand the structure of the income statement, balance sheet, and cash flow statement, and analysis of the cash operating cycle, for improved financial performance, and better management of working capital and cash flow
Identify the alternative sources of finance and financial (or capital) structure, and evaluate the models of optimum capital structure and minimization of the weighted average cost of capital (WACC)
Use the technique of discounted cash flow (DCF) for capital budgeting and evaluation of capital project investment, using net present value (NPV), internal rate of return (IRR), equivalent annual cost (EAC), and the profitability index (PI)
Use the techniques of uncertainty analysis and risk analysis and develop appropriate risk management tools of insurance and hedging of interest rates and foreign currency exchange rates.
Understand the influence of financial considerations on an organization’s strategic decision-making
Improve their self-confidence in dealing with finance and financial professionals
Coordinate effectively with other professionals on financial issues.

Targeted Competencies:

Strategic planning
Interpreting financial statements
Risk management
Planning and budgeting process
Forecasting cash flow
Calculating the cost of capital
Budgeting
Data analyzing
Using advanced Excel

Course Content:

Unit 1: 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 and strategic decision-making
Strategic implementation
Corporate objectives and accountability
Forecasting financial data

Unit 2: Fundamentals of 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

Unit 3: Capital Structure and Leverage:

Sources of funds
Capital cost models
Cost of equity
Cost of debt
Weighted average cost of capital (WACC)
Can we determine a company’s optimal capital structure?
Capital structure models
Preparing projections to determine financing needs

Unit 4: 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?

Unit 5: 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 company?
How to minimize risk?
Insurance and hedging
Interest rate and foreign currency exchange rate risk

Finance and Accounting Courses

Understanding Finance to Influence Strategic Decisions

Introduction:

Targeted Groups:

Course Objectives:

Targeted Competencies:

Course Content:

Unit 1: Fundamentals of Strategic Planning:

Unit 2: Fundamentals of Financial Statements:

Unit 3: Capital Structure and Leverage:

Unit 4: Capital Budgeting:

Unit 5: Managing Financial Risks:

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