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:

Part 1 - Understanding financial information

Session 1 - fundamentals of financial reporting

• Course objectives - to provide the technical skill and knowledge for commercial managers to be better able to deal with all aspects of financial management in their work
• 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
• Financial records - how the double entry bookkeeping process works - with practical example
• 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

Part 2 - Applying and using financial knowledge

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 - Budgeting and cost control

• The key elements of the budgeting process
• The budget in context
• How a budget fits with the business strategy and plans
• Agreeing the scope and purpose of the budget
• Understanding costs and the relationship between costs and business activities
• Types of cost - fixed, variable and sunk costs for example
• Costing techniques such as marginal and absorption costing
• The human element to budgeting
• Different types of budget that can be used
• Assessing the impact of the person - what is a reasonable budget expectation?
• How to manage a budget
• The need for accurate and timely management information
• Variance and look back analysis
• Exercise - Creating a budget for an activity and then performing a look back review

Session 7 - Ratio and performance analysis

• Summary and recap of analysis measures available
• The regulatory status of performance ratios such as EBITDA
• Profitability measures used
• How to measure liquidity, solvency and return on investments
• Exercise - case study applying ratio analysis to different types of business

Session 8 - Course summary

• Some other issues to consider:
• Project appraisal - Net Present Value techniques
• Risk management - how to manage financial risks such as interest rates, foreign currency and market fair values
• Plenary session - your financial questions answered (if we have not already done so)

The course timings will also allow for short breaks of about 15 minutes in all 8 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.