Practical Business Finance for Non-Financial Executives
A basic knowledge of business and corporate finance is essential for any non-financial management and professionals to function effectively in his/her current capacity. The ability to understand financial jargons is not only useful as a life skill, but a much needed requirement for non-financial professionals occupying or about to assume a greater leadership role in the organization.
In this program, participants will learn how to determine the financial health of a business. Participants will appreciate the need for allocation of scarce financial resources and tighter financial management so as to obtain the best financial value-add for the company. Participants will learn not only the thoughts that go into building up a financial case for a new capital project, but also learn how to use the various common financial tools to justify for a new capital project. Finally, participants will be introduced to the types of costs and their behavior, and how these could be used to determine the breakeven of a business, and forecast profitability under various simulated sales volumes.
- Tailored towards equipping Non-Financial Management Staff / Professionals with Practical Business & Corporate Finance Skills to Effectively Manage day-to-day and leadership work
- Understand the Cost of Doing Business
- Learn the Various Drivers behind Profitability and Cash Flows
- Understand How to Build a Financial Case for a New Project and How to Justify for one
- Understand the relationship between, Cost, Volume and Profit, and use the concept to generate different financial outcomes under various simulated conditions
-Participants are advised to bring along a calculator for this course.
Determining Business Profitability
- Reading Income Statement (Profit & Loss Statement)
- Building an Income Statement
- Understanding Profit Terms
- EBIT / Operating Profit
- Net Income
- Concept of Economic Value Add (EVA)
- Determining Returns
- Gross Profit Margin
- Operating Profit Margin
- Net Profit Margin
- Return on Investment (ROI)
- Return on Equity (ROE)
Determining Financial Health of a Business
- What Balance Sheet Tells You
- How To Determine Liquidity
- How To Determine Solvency
- How To Determine if Assets Are Managed Efficiently
Cash Is King!
- Why is Cash Generation Important?
- Why is Profitability Not Equal To Cash?
- Where is Cash Generated? How to Optimize It?
- Where is Cash Used?
Cost of Capital
- The Components of Capital
- Capital is Not Free!
- Determining Cost of Capital
- Why is understanding Cost of Capital important? *Its Link to Required Rate of Return
Capital Budgeting & Justifying for a New Project
- Capital Expenditure versus Operating Expenditure
- Determining Capital Budget Needs
- Importance of the Concept of Cash Flows & Time Value of Money
- Building a Financial Case for a New Project
- Financial Evaluation of Capital Projects
- Payback Method
- Net Present Value Method
- Internal rate of Return
Principles of Costs & Their Applications
- Understanding Fixed & Variable Costs
- Determining Contribution Margin
- Determining Breakeven Point
- Using Cost-Volume-Profit Analysis to make Sound Business Decisions
- 70% - Class Instructions / Illustrations / Discussions
- 30% - Simple Exercises / Case Study
Who should attend
Engineers or Professionals, Managers and Executives (PMEs) with no or little prior formal introduction to the world of business and corporate finance.