Advanced Accounting & Finance Management

Introduction:

This course offers an in-depth overview of the accounting and finance world. Part 1 emphasized the internal workings of the finance/control function as it communicates with external and internal constituencies to provide information for decision making under uncertainty. Part 2 emphasizes the capital markets impact on corporate finance, risk, and governance.

This course not only presents the key financial tools generally used, but also explains the broader context of how and where they are applied to obtain meaningful answers. It provides a conceptual backdrop both for the financial/economic dimensions of strategic business management and for understanding the nature of financial statements, analyzing data, planning, and controlling.

Targeted Groups:

Financial Controllers
Chief Accountants
Finance or Accounting Managers, Supervisors
Staff accountants
General Ledger Accountants
Professionals in accounting and finance who wish to upgrade their skills

Course Objectives:

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

Specify the exact nature and scope of corporate financial reporting
Identify and criticize specific concepts, rules, and procedures are in place for corporate financial reporting
Understand multiple interpretations of financial statements via IFRS, FAS, SEC, etc
Integrate risk management and corporate governance
Understand the content of and relationships between financial statements (income statement, balance sheet, and statement of cash flows)
Understand how to use financial statements to evaluate the financial performance of an organization
Understand discounted cash flow (DCF) techniques and their application to financial decision making
Understand the budgeting process, including performance evaluation
Understand cost behavior and its impact on management decisions
Learn how to communicate and to question financial information effectively
Improve the appreciation for the finance, accounting, and governance approach
Integrate business plans and strategic intent
Reduced inter-functional territorial battles
Increase skill set in all phases of finance, accounting, and governance
Gain the ability to participate in and to lead the finance and accounting process
Recognizing the increased professionalism to deal with the current and future topics

Targeted Competencies:

Using financial information for guiding decisions
Clarifying KPIs across different functions
Building strategic thinking and implementation orientation into their professional lives
Challenging the status quo of finance/accounting, budgeting, and decision making
Recognizing the value of external standards, governance requirements, and measurements of qualitative elements
Identifying Value Creation principles as the driving force for decision making

Course Content:

Unit 1: Accounting: An introduction:

What is accounting?
What forms can accounting take
Definition and importance of profit
Decision scenarios explored
Funding business operations
Who is interested in profit?
Cash vs. Accrual accounting
Cash flow forecasting and improvement
Accounting policies chosen by companies
Accounting standards

Unit 2: Financial Statements, Accounting Policies, and Reporting Standards:

Income Statement – Basic Components:

Revenues & the questions
Direct/variable/product costs
Indirect/fixed/period costs
Mixed costs
Non-cash deductions: the what, the why & the how
Depreciation: various methods explored
Amortization: impairment test
Depletion: when & how
The difference between profit and cash
A closer look at costs and expenses
Profit calculations
Summarizing profit statements and extracting the key figures

Balance Sheet:

Assets – current & long term
Liabilities – current & long term
Equity – components
Capital employed - options
Managing the working capital cycle

Cash Flow Statement:

Operating sources/uses
Investing sources/uses
Financing sources/uses

Unit 3: Making and Communicating Decisions Using Budgets:

The master budget
The budgeting as a planning tool, a control mechanism, a communications device & value creation
Budgeting Sales to “drive” the correct budget
Operating budget components
Financial budget
Pro Forma Financial Statements
Cash Budgets
Capital budget
Interrelationship of Financial Projections
Dynamics and Growth of the Business System – a model review
Flexible vs. traditional budgets – the pros & cons
Variance analysis as a tool for improvement & communications
Price and volume effects within variance analysis: state of the art

Unit 4: Financial VS Management Accounting

Differences and similarities
Objectives of Managerial Accounting
Managerial Versus Financial Accounting:
Role of the Managerial Accountant
Financial accounting: what we show to the public
Objectives of financial accounting
Role of financial accountant
Cost terminology: variable, fixed, controllable, non-controllable, incremental, sunk, opportunity, and relevant
Cost behaviors in Cost-Volume-Profit scenarios: contribution margin and fixed costs
Breakeven and targeted net income scenarios
Cost/Benefit analysis

Unit 5: Ultimatum Goal of Planning – Valuation, Business Performance & Decision Making:

Definitions of Value
Responsibility centers: cost, profit, and investment
Measuring responsibility center performance
Segment reporting internally and externally
Business Valuation from multiple perspectives
Managing for Shareholder Value
Shareholder Value Creation in Perspective
Evolution of Value-Based Methodologies in planning and budgeting
Creating Value in Restructuring and Combinations beyond planning and reporting- the case for real change!

Unit 6: What is Finance & Working Capital – Liquidity or Bankruptcy:

Finance is a numbers game
Yet finance is more than the numbers
The three major components of finance
Working capital (WC) defined
Relationship to current ratio
Components of WC
Inventory
Accounts receivable
Cash
Accounts payable
Notes payable
The critical rations to compute
What should they be & why
The questions to ask
The answers you want

Unit 7: Capital Structure – What It Is & Why It Is Important:

Equity capital - what it is
Equity capital – calculating it costs/required rate of return
Debt capital – what is it really
Debt capital – calculating it costs/required rate of return
Weighted Cost of Capital (WACC) – why it is so important
Calculating your WACC
When & how to use WACC
Leverage: two-edged sword - defined
Operating leverage - calculated
Financial leverage - calculated
Combined leverage – Wow! Look at the impact

Unit 8: CAPEX - Analysis of Investment Decisions with What-if Risks:

Cash Flows and the Time Value of Money
Discuss the capital project evaluation process
Ideas for the future with a multiple periods horizon
Estimating cash flows within the business system
Net present value (NPV) & Internal Rate of Return (IRR) as preferred methods
Profitability Index (PI) & Modified Internal Rate of Return (MIRR) as reasonable alternatives
Defining the approval criteria and review process
Post-implementation audits of capital projects
Refinements of Investment Analysis
Dealing with Risk and Changing Circumstances – how do we explain?
Cost of Capital and Return Standards
Benchmarking Discount & Hurdle rates

Unit 9: Risk Management as an integral part of Corporate Governance:

Understanding uncertainty and risk/opportunity
Identifying strategic financial risks
Identifying operational risks
Identifying functional financial risks
Assessing financial risks in each perspective
Finding our personal risk profile (appetite for risk)
Clarifying desired outcomes, expected outcomes, and actual outcomes
Performance measures – the need for FRM/ERM
Quantitative and qualitative risks
Developing FRM/ERM strategy – do we need a CRO?
Other risk issues to be concerned with: Joint ventures, alliances, product liability, environmental risk, outsourcing risk, growth risk, R&D risk, natural disasters, catastrophic risks, supply chain risk, reputation risk, and psychology of risk among others