WHO IS THIS COURSE FOR?
Managers, prospective managers, and anyone else within an organisation involved in making business decisions.
To give learners a thorough, practical understanding of the basics concerning the structure and use of the key financial statements and financial analysis ratios. This will empower them to analyse – and potentially improve – the financial performance of their own business.
- Explain the function and purpose of the three key financial statements.
- Describe the structure and use of the P&L account/Income Statement.
- Explain how a Balance Sheet is used and formatted.
- Demonstrate how to calculate and manage a company’s Cash Flows.
- Explain how companies analyse their cost structures.
- Describe how businesses can use the information in their Financial Statements to gain insights into key performance areas.
- Compare and describe the key investment evaluation concepts and models.
- Demonstrate the potential uses of the Profit Margin, Asset Turnover and Return On Capital Employed (ROCE/RONA) ratios.
10 – 12 Hours
A fully integrated and interactive digital learning course. Delivered online through the publisher’s Academy LMS or via your own corporate LMS.
1. INTRODUCTION TO FINANCIAL STATEMENTS
Give a detailed overview of the three main financial statements (e.g. Balance Sheet, Profit & Loss Account and Cash Flow) and an explanation of the principles of accounting that underpin them. Explain their function in measuring and directing the performance of a company, and how they reflect the different business activities that a company engages in.
2. PROFIT AND LOSS ACCOUNT/INCOME STATEMENT
Describe the elements used to structure a P&L. Distinguish between the different types of costs and expenses that impact the profits generated by a company. Build a P&L using specific figures of your own.
3. BALANCE SHEET
Describe the purpose of a Balance Sheet, explaining what it communicates about the financial structure of a company. Explain how assets and liabilities are classified. Define working capital. Format a Balance Sheet in order to assess financial performance and enhance decision-making within a business.
4. CASH FLOW STATEMENT
Explain how cash is not the same as profit – and that it is essential for a business to manage cash effectively. Describe the different cash sources for a business, and list the operational decisions that can enhance cash flows. Calculate cash flows using the information contained in financial statements.
5. COSTING DECISIONS
Distinguish between fixed and variable costs and how these impact on both calculating contribution margin, and the application of breakeven analysis. Apply these financial concepts to make business decisions concerning production, pricing and product selection.
6. INTRODUCTION TO FINANCIAL ANALYSIS
Explain the relevance of using financial analysis to guide financial management decisions. Explain how financial analysis ratios are utilised to assess and enhance operating performance.
7. INVESTMENT APPRAISAL
Describe the application of a number of key methods of assessing the feasibility/potential financial impact of investment projects. Explain how to analyse cash flows and apply the concept of the ‘Time Value’ of money. Use sensitivity analysis to assess risks, and refine assumptions.
8. PROFIT MARGIN
Explain how profit margin is calculated, and used to ‘benchmark’ performance within and between different industries. Apply the use of profit margin to making business decisions.
9. ASSET TURNOVER
Explain what asset turnover is, and how it is calculated. Use fixed asset and working capital ratios to assess and improve business performance. Calculate and assess asset turnover using your own figures.
10. RETURN ON CAPITAL EMPLOYED/RETURN ON NET ASSETS
Explain how ROCE/RONA offers an integrated way of analysing a company’s business performance. Use ROCE to assess a number of key business scenarios. Apply a ROCE flow chart to assess business scenarios within your own company.
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