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

Finance and Accounting Courses