Finance for the Non Financial Manager - A Guide to Financial Confidence in 2 Days

Introduction

Many jobs and commercial roles now require the individual to be financially confident and competent, even when they may have no background or experience in accounting.

Spread over two days (2 x 6 hours), this virtual classroom session is designed to provide the knowledge and skills necessary to achieve this expectation and to enable you to be able to deal effectively with colleagues in finance and accounting.

The sessions will also increase and improve your overall commercial awareness and skills.

What You Will Learn

The live and interactive broadcast course will cover the following:

Day 1

Session 1 - Fundamentals of Financial Reporting

• Course objectives - to provide the technical skill and knowledge for commercial managers to take ownership of their business unit
• The key components of accounts - income, expenses, assets, liabilities and equity
• An introduction to the primary financial reporting statements and the key financial performance indicators:
• Net income - measures of profit
• Balance sheet - capital employed and leverage
• Fundamental accounting concepts - accruals v cash-based accounting
• Exercise - case study to identify the key measures of strong financial performance

Session 2 - Understanding Profit and Loss/Net Income

• The financial reporting period and the importance of cut-off
• Reporting revenue and key principles for revenue recognition
• Difference between assets and expenses and borderline issues such as R&D
• Expense categories - direct and overheads
• Non-recurring exceptional items
• Exercise - profit and loss appraisal exercise including calculation of gross and net margins and EBITDA

Session 3 - Cash Flow v Profit and Loss

• What is meant by ‘cash’ and the importance of positive operating cash flows
• Accruals compared with cash accounting with examples including credit sales and purchases and accruals and prepayments
• Other non-cash items such as provisions and depreciation
• Exercise - converting cash profit to accruals profit

Session 4 - An Introduction to the Balance Sheet

• The purpose of the balance sheet - creditor protection and the impact on reporting assets and liabilities
• Non-current assets and depreciation (amortisation)
• The net current position - working capital and the assessment of liquidity
• Financial leverage and the concept of the ‘cost of capital’
• Exercise - appraisal of a simple balance sheet - net current position, return on capital and gearing

Day 2

Session 5 - Management of Working Capital

• Introduction and overview - what is meant by the working capital cycle
• Managing inventory - stock holding periods and the concept of effective inventory re-ordering
• Management of receivables - the impact of slow or non-payment
• Management of supplier payment terms (as part of overall working capital management)
• Exercise - case study including calculation of stock holding period, debtor and creditor days and the overall working capital obligation of the business

Session 6 - Risk Management

• Identifying and reacting to key business risks
• Currency risk and management of foreign currency cash flows
• Interest rate risk and the importance to consider the impact of delayed payment terms
• Credit risk - how should this be reflected in the contract pricing
• Exercise - appraisal of different customer types which is the best for the business overall (this could include issues such as allocation of scarce resources)

Session 7 - Project Appraisal Techniques

• An introduction to common appraisal techniques including:
• Net present value and discounted cash flows (the time value of money impact)
• Return on investment, internal rates of return
• Payback periods
• Additional considerations such as foreign currency cash flows and inflation
• Exercise - case study involving basic project appraisal

Session 8 - Budgeting and Cost Control

• How a budget fits into the overall business plan and strategy and the different types of budget - fixed, flexible and zero-based
• Cost control - different types of cost and the relevance to business decision making
• Budget control - comparing actual costs to budget and how to deal with variances

The course timings will also allow for short breaks of about 15 minutes in both the morning and afternoon sessions.

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.