Foundations of Finance
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Find strength through numbers.
In today’s hyper-connected business world, understanding financial and accounting issues are key for career progression in any sector. Get to grips with the fundamentals of both finance and accounting on a global scale in the finance capital of the world at Imperial London. This immersive five day programme equips managers with no formal financial training with the ability to critically analyse finance and accounting practice and make sound business decisions.
Our experienced Finance professors will help you and your international peers to speak the language of global business and develop the skills to intelligently use financial information and key metrics for commercial and career advantage. You’ll gain an understanding of the link between operating decisions and financial results and acquire a managerial accounting foundation.
The Imperial Foundations in Finance Programme will develop in you the highly prized ability to think critically and make autonomous decisions for commercial success. You will feel confident in using the language and methods of finance. Your organisation could benefit from greater efficiencies and profitability. A great investment in any language.
- The ability to intelligently use financial information
- Learning the key financial metrics
- Understanding the link between operating decisions and financial results
- Acquiring a managerial accounting foundation
- Using Financial Information Intelligently
Understand how accounting numbers come from operating decisions. Develop an understanding of accounting rules. We will show how to analyse the Income Statement and the Balance Sheet.
- Analysing the Statement of Cash Flows
We will demonstrate the Statement of Cash Flows and show how it is related to the Income Statement and the Balance Sheet. We will focus on the importance of cash and how to better manage cash flow.
- Measures of Business Performance
We will show how the DuPont System can be used to take the numbers from financial statements and systematically measure and understand the profitability of companies. We will show how finance and strategy can be integrated to build value in a business.
- Applying the DuPont System
We will analyse the performance of Diageo and benchmark against other outstanding companies. We will focus on Diageo’s profitability and value creation.
- Using Discounted Cash Flow
We will explain why discounted cash flow (DCF) is such a popular method which is used by companies all over the world to allocate resources and choose among investment alternatives. We will explain how Net Present Value (NPV) is used to select investments that are most likely to build value in companies
- Discounted Cash Flow Applications
The most important part of a DCF analysis is the derivation of the correct cash flows. This comes from an understanding of how the investment will affect the future of the business. We will focus on how to derive free cash flow by understanding how the investment will be executed and the strategy of the company. The session will compare NPV with alternative metrics for investment decision making such as Internal Rate of Return (IRR).
- Case Study – Airbus
We will analyse the decision to invest $13 Billion in R&D and capacity in the A380. The decision will be analysed from a strategic point of view and from a financial point of view. The potential future cash flows from the market for the product will be explored and the competitive response from Boeing will be discussed
- Applying NPV
We will develop an NPV analysis of the decision by Airbus to invest in the A380 and discuss the implications of the analysis for the decision made by management and the Board of Directors.
- Financial Strategy and Capital Structure
We will explore the financial strategies of companies. The emphasis will be on the optimal way to finance a business and why that is different depending on the company’s industry, maturity and growth opportunities. The “trade-off” theory of capital structure which involves having an understanding of the influence of taxes and risk on financing decisions, will be explained. We will then explore additional factors influencing financing decisions such as future growth opportunities and over and under valuation of companies.
- Case Study – Diageo
This case involves the process by which Diageo take the trade-off theory of capital structure and operationalizes it in order to choose an optimal structure for the firm. We will discuss why Diageo’s optimal capital structure may be different from other companies. We will explore alternative approaches that Diageo might have used.
- Current Global Financial Situation
Professor Allen will give his expert perspective of the current global financial situation in Europe, Asia and the USA.
- Case Study – Asahi Glass
We explore the attempts of a multi-national company to integrate finance and strategy. The CEO attempts to deal with difficult issues such as centralization vs. decentralization, choosing appropriate metrics, allocating resources, measuring cost of capital and the best ways to deal with risk. The issues are made particularly complicated because of the diversification and the global nature of the company. We will focus on how Asahi Glass deals with measuring the performance of individual segments of the company and how to decide which segments to try to grow in the future.
- Mergers and Acquisitions
We will focus on strategic reasons why M&A may be an attractive growth strategy compared to organic growth. We will deal with alternative types of mergers and when one might be preferred over another. We focus on how to value and acquisition candidate. Finally we discuss how to identify and value synergies than can result from combining the right two businesses together.
- Value Creation
We will integrate the week’s subjects by focusing on how the world’s top performing companies use financial information intelligently to formulate and execute strategies designed to achieve their financial objectives. We will focus on the importance of non-financial managers in that process. We will analyse data for companies in many businesses, from all over the world and identify those companies who achieve long term value creation and how those companies differ from less successful companies.
- Case Study – Emerson Electric
Emerson Electric is a company that has developed a management system that is focused on the importance of non-financial managers understanding how their decisions affect the company’s financial results. This session will discuss how that has led to superior financial performance for more than 50 years.
Programme Wrap Up
Who should attend
Those from any discipline seeking a firm foundation in global finance and accounting such as mid-level, non-finance managers. No previous financial education is required