Finance for Non-Financial Professionals

Introduction:

To succeed at any work level and position, knowledge of basic financial principles is crucial. 'Finance for non-Financial Professionals' transforms financial and accounting concepts into decision-making tools you can use successfully every day. You will learn to apply the fundamentals of finance to improve budget management, increase potential profits, and assess the financial performance of business activities. You will also understand the terminology used by accounting and finance staff and will feel more confident when being involved with them or using them.

Targeted Groups:

• Managers
• Supervisors
• Staff from any function including finance who need to improve their understanding and usage of financial information

Course Objectives:

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

• Define the four key financial statements: balance sheet, income statement, cash flow and changes in owner equity as well as key financial terms such as profit, margins and leverage used in organizations
• Interpret the financial health and condition of a company, division or responsibility center and use financial information for management and evaluation
• Define between accounting and finance and explain the finance role in running businesses
• Prepare a company's operating budget and relate it to the organization's strategic objectives
• Apply capital budgeting techniques and cost-volume-profit analysis to enhance decision making

Targeted Competencies:

• Understanding financial statements
• Financial analysis
• Preparing operating budgets
• Working capital management
• Making capital budget decisions
• Financial decision making

Course Content:

Unit 1: The Key Financial Statements:

• Understanding the accounting cycle
• The five main accounts in financial statements
• Income statement: a tool for performance measurement
• Accrual basis versus cash basis
• Balance sheet: a tool for financial position
• The balanced status
• Statement of owners’ equity
• Statement of cash flows: cash is king
• Wrapping-up: the cycle of financial statements
• External and internal auditors’ responsibilities

Unit 2: Analysis of Financial Statements:

• Why are ratios useful
• Horizontal and trend analysis
• Vertical analysis: common size statements 
• Building blocks analysis and reading through the numbers:
• Liquidity ratios: ability to settle short-term dues
• Solvency ratios: ability to settle long-term dues
• Activity ratios: the ability to manage assets efficiently
• Profitability ratios
• Limitations of financial ratio analysis

Unit 3: Working Capital Management:

• Definition of working capital and working capital management
• Working capital management strategies for current assets
• Balancing profitability and liquidity
• Working capital management strategies for current liabilities
• Trade-off between profitability and certainty

Unit 4: The Concept of Financial Management:

• Accounting versus finance: rules and responsibilities
• Three pillars of finance:
  • Financing decisions
  • Investing decisions
  • Operating decisions

Unit 5: Breakeven Analysis and Decision Making:

• Defining fixed costs
• Defining variable costs
• Contribution margin formula
• Computing breakeven point
• Sensitivity analysis: changing assumptions

Unit 6: Operating Budget Process and Techniques:

• What is an operating budget
• Steps to budget development
• Master budget components
• Sales forecasting
• Approaches to budgeting
• Incremental budgeting
• Zero-based budgeting
• Budgetary control and correction

Unit 7: Capital Budgeting: The Investing Decisions:

• Examples of exercises involving capital budgeting exercise
• Time value of money: a prerequisite for investing decisions
• Required rate of return for investments
• Examples of cash outflows for capital projects
• Examples of cash inflows for projects
• Net present value calculation
• Internal rate of return