Finance for Non-Finance Managers

Part 1

The Nature and Purpose of Finance and Accounting

• A basic model of an organisation’s financial framework
•  Understanding the accounting process
• The five primary accounts in financial reports
• Income statement: a tool for assessing performance
• Accrual basis vs cash basis
• Balance sheet: a tool for evaluating financial standing
• The balanced condition
• Statement of owners’ equity
• Statement of cash flows: cash is vital
• Conclusion: the flow of financial statements
• Responsibilities of external and internal auditors

Part 2

Analysis of Financial Statements

• Why are ratios beneficial
•  Horizontal and trend analysis
• Vertical analysis: common-size reports
• Building blocks analysis and interpreting the figures:
• Liquidity ratios: ability to settle short-term obligations
• Solvency ratios: capacity to settle long-term obligations
• Activity ratios: efficiency in managing assets
• Profitability ratios
• Limitations of Financial Ratio Interpretation

Part 3

Working Capital Management

• Defining working capital and its management
• Strategies for managing current assets in working capital
• Balancing profitability and cash flow
• Strategies for managing current liabilities
• The trade-off between profitability and stability

The Concept of Financial Management

• Accounting vs finance: principles and duties
• Three main areas of finance:
• Financing decisions
• Investment decisions
• Operational decisions

Part 4

Breakeven Analysis and Decision Making

• Identifying fixed costs
• Identifying variable costs
• Contribution margin equation
• Calculating the breakeven point
• Sensitivity analysis: altering assumptions

Operating Budget Process and Techniques

• What is an operating budget
• Stages of budget creation
• Master budget components
• Sales projection
• Approaches to budgeting
• Incremental budgeting
• Zero-based budgeting
•  Budget control and adjustments

Part 5

Capital Budgeting: The Investment Decisions

• Examples of capital budgeting exercises
• Time value of money: a necessity for investment decisions
• Required return rate for investments
• Examples of cash outflows for capital projects
• Examples of cash inflows for projects
• Net present value calculation
• Internal rate of return