Finance for Non-Financial Managers
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Whether you are managing a division, a team or yourself, it is crucial to have a good understanding of finance in your business. This short, two-day program provides you with the essentials that you need.
How you will benefit
- Understand what drives some of the most common errors in business and how to avoid them
- Break through the language of finance
- Understand the basic accounting model and its limitations
- Analyze and interpret financial statements within the context of industry analysis and macroeconomic fundamentals
- Identify risk and understand the options available to manage risk
- Apply management accounting tools to business problems
- Understand the budget process and forecasting techniques
- Link financial objectives to strategy
- Identify key value drivers to help manage the value of a business
- Understand different valuation techniques and respective benchmarks
- Understand the essential tools and techniques in presenting a business case
Analyzing and Interpreting Financial Accounting Statements
While every organization has to subscribe to a Financial Accounting model, it is rarely if ever a good model from which to make business decisions from. Simply, the information comes too late and it is limited by certain concepts that will be highlighted during this program. However, as this is the model that is so often used to evaluate business performance it will be discussed in detail so that we can understand how to overcome the limitations.
- Understanding the accounting process
- Applying the fundamental accounting concepts
- Tools used to identify ‘value’
- Why ‘Cash is King’
- Common ratios to assess the financial risk of the organization
- Understanding commonly used words and acronyms, e.g. EBITDA, ROCE, CFROI, etc.
- Learning the limitations of the traditional accounting model and how to overcome them
An Introduction to Discounted Cash Flow Analysis and the Time Value of Money
By the end of the session participants will have a framework where you can analyze and interpret any company’s financial statements
Understanding Finance and Performance
We will cover the real link of accounting and finance to the performance of organizations. It is essential that managers are able to understand and apply the following, in order to deliver value to their organizations.
- Linking accounting to strategy
- How risk management drives value
- How value drivers are identified and what benefits they deliver
- The most commonly applied valuation tools
Management Accounting and Performance
While Financial Accounting is compulsory, Management Accounting is not. However, organizations with excellent Management Information Systems have a significant competitive advantage. When an organization is under pressure to lift profits, a reflex reaction is often to slash costs. This will inevitably erode the intangible value of the organization. We need a more creative approach to identify ways of improving performance.
- Understanding what drives a company’s ‘bottom line’
- Analyzing it from a customer perspective
- Customer profitability analysis
- Putting a measurement system in place to include both financial and non-financial metrics
- Managing risk and building certainty to add value
- Analyzing break-even and contribution analysis
- Identifying incremental cash flows
Making Investment Decisions
Current developments in the field of behavioral finance help us to understand better ways to forecast and warn us of common pitfalls in decision making, and we discuss how to understand and use these as a manager. Following from this, there are several financial decision tools used to make decisions. We assess these in terms of how and when these different methodologies are applied, including
- Discounted Cash Flow analysis (DCF)
- Net Present Value (NPV) of an investment
- Forecasting cash flows
- Measuring the required rate of return - Cost of capital, WACC, IRR
While valuations most often rely on discounting future cash flows, this is not always the case. Other valuation methods that managers will encounter – and their pitfalls – will also be discussed.
Who should attend
Finance for Non-Financial Managers is aimed at all professionals. It is not trying to make people into accountants; rather it aims to give business people the tools to understand the numbers in order to help them make better business decisions.