Finance For Non Finance

This course covers important concepts of Finance and helps participants to understand how these concepts are useful for decision making. 

Objectives:

• Define the key financial statements: balance sheet, income statement, cash flow as well as key financial terms such as earnings, margins and leverage used in organizations.
• Interpret the financial health and condition of a company, division or responsibility centres and use financial information for management and evaluation.
• Distinguish between accounting and finance and explain the finance role in running business.
• Apply capital budgeting techniques and cost-volume-profit analysis to enhance decision making.

Contents:

Financial Reporting

• Role of Financial Reporting
• Understanding the accounting cycle
• Accrual basis versus cash basis
• External and internal auditor’s responsibilities

The Key Financial Statements

• Income statement: tool for performance management
• Balance sheet: tool for financial position
• Statement of cash flows
• Notes disclosures
• Wrapping up: the cycle of financial statements

Analysis of Financial Statements

• Why are ratios useful
• Trend analysis
• Liquidity ratios: ability to settle short-term dues
• Solvency ratios: ability to settle long-term dues
• Activity ratios: ability to manage assets efficiently 
• Profitability ratios
• Limitations of financial ratio analysis

Trend Analysis

• Historical analysis
• Vertical analysis
• Ratio analysis and why are ratios useful
• Financial ratios
• Solvency ratios
• Operational ratios
• Valuation ratios
• Practical exercise on analysing a real life company’s financial statements
• Limitations of financial ratio analysis

Case study on Frauds and Financial Statement 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

Breakeven Analysis and Decision Making

• Defining fixed costs
• Defining variable costs
• Contribution margin formula
• Computing breakeven point
• Sensitivity analysis: changing assumption

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