Finance for Non-Finance Managers
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Finance for Non-Finance Managers Course
Introduction:
Gaining a comprehensive understanding of key business finance concepts is essential for non-financial managers as it enables them to make effective decisions and brings them closer to achieving their goals and objectives. Executives and directors of a company need to regularly engage with their finance team to grasp the insights provided by the company's financial profit and loss accounts, which reflect its financial position and performance.
Acquiring knowledge in finance for non-financial managers enhances their ability to proficiently manage the day-to-day financial aspects of an organization. Moreover, it enables them to delve into various financial reports, gaining a detailed understanding and making critical business decisions with confidence.
This five-day course is specifically designed to empower managers with the understanding of how their decisions impact the financial performance of their organization. The course materials and activities are tailored to demystify finance terminology and equip managers with a range of financial techniques to enhance their managerial skills. Participants will explore different financial reporting statements and measures to drive performance improvement. They will also gain insights into costing mechanisms, financial methods such as budgeting for effective planning and performance control.
Throughout the course, participants will be encouraged to relate the concepts to their own work context. The course will also provide an understanding of the language used by accountants and how financial statements integrate. It will offer practical explanations of financial statements, including basic accounting concepts such as depreciation, cost behavior, cash flow, working capital, and budgeting.
Course Objectives:
At the end of this Finance for Non-Finance Managers Course you will be able to:
- Explain the purpose of the three key financial statements ‘Income Statement, Statement of Financial Position, and Cash Flow Statement’.
- Define the four key financial statements: balance sheet, income statement, cash flow and changes in owner equity as well as key financial terms such as profit, margins and leverage used in organizations
- Interpret the financial health and condition of a company, division or responsibility centre and use financial information for management and evaluation
- Distinguish between accounting and finance and explain the finance role in running businesses
- Prepare a company’s operating budget and relate it to the organization’s strategic objectives
- Apply capital budgeting techniques and cost-volume-profit analysis to enhance decision making
- Demystify the rules of capital expenditure vs operational expenditure helping you to justify investments to your senior managers and finance team.
- Simply assess the viability of entering new markets or developing new products.
Who Should Attend?
This Finance for Non-Finance Managers Course is ideal for:
- Non-finance professionals at all levels who need to develop an understanding of business finance.
- All staff within a business, company, partnership or charitable organisation should have an understanding of finance in order to contribute to their organizations’ success.
- Anyone who is in a role where they need to understand how their business is managed financially.
- This training course is ideal for people who feel baffled by a set of accounts and want to feel more confident when using accounts and gain a basic understanding of financial management.
Course Outlines:
The Nature and Purpose of Finance and Accounting
- A simple model of an organizations’ accounting framework
- Understanding the accounting cycle
- The five main accounts in financial statements
- Income statement: a tool for performance measurement
- Accrual basis versus cash basis
- Balance sheet: a tool for financial position
- The balanced status
- Statement of owners’ equity
- Statement of cash flows: cash is king
- Wrapping-up: the cycle of financial statements
- External and internal auditors’ responsibilities
Analysis of Financial Statements
- Why are ratios useful
- Horizontal and trend analysis
- Vertical analysis: common size statements
- Building blocks analysis and reading through the numbers:
- Liquidity ratios: ability to settle short-term dues
- Solvency ratios: ability to settle long-term dues
- Activity ratios: the ability to manage assets efficiently
- Profitability ratios
- Limitations of financial ratio analysis
Working Capital Management
- Definition of working capital and working capital management
- Working capital management strategies for current assets
- Balancing profitability and liquidity
- Working capital management strategies for current liabilities
- Trade-off between profitability and certainty
The Concept of Financial Management
- Accounting versus finance: rules and responsibilities
- Three pillars of finance:
- Financing decisions
- Investing decisions
- Operating decisions
Breakeven Analysis and Decision Making
- Defining fixed costs
- Defining variable costs
- Contribution margin formula
- Computing breakeven point
- Sensitivity analysis: changing assumptions
Operating Budget Process and Techniques
- What is an operating budget
- Steps to budget development
- Master budget components
- Sales forecasting
- Approaches to budgeting
- Incremental budgeting
- Zero-based budgeting
- Budgetary control and correction
Capital Budgeting: The Investing Decisions
- Examples of exercises involving capital budgeting exercise
- Time value of money: a prerequisite for investing decisions
- Required rate of return for investments
- Examples of cash outflows for capital projects
- Examples of cash inflows for projects
- Net present value calculation
- Internal rate of return