Course Outline

Day 1

The key financial statements

  • Understanding the accounting cycle
  • The five main accounts in financial statements
  • Income statement: tool for performance measurement
  • Accrual basis versus cash basis
  • Balance sheet: 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
  • Common size financial 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: 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

Recap: concept of financial management

  • Accounting versus finance: rules and responsibilities
  • Three pillars of finance
  • Financing decisions
  • Investing decisions
  • Operating decisions

Day 2

Break-even 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

Quick Overview of financial analysis

  • Users of financial data
  • Types of available financial information and the annual financial report
  • Content of the annual financial report and ways to read it
  • Non-financial elements of the annual financial report and their importance
  • Understanding the income statement, balance sheet and cash flow statement
  • Other comprehensive income components


Course Materials

It is very important to analyze the need for Training along with the level of knowledge you require. This session give you a liberty to choose the modules you need, discuss it with the trainer how you want to be delivered, decide the place at your convenience and allocate number of hours to solve your problem. This does not include any development as a consulting but will include solution if you are facing a particular problem.