Finance for Non-Financial Professional

Created by LEC Team
Last updated Mon, 27-Mar-2023
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You will certainly also recognize the terms used by accountancy as well as the finance team and also will feel extra positive when being entailed with them or using them. This course will certainly aid you to do a much better job and prepare you for senior administration positions where financial awareness is critical.

Course Objectives of Finance for Non-Finance

  • Define the four vital economic statements: balance sheet, revenue declaration, capital, and also changes in proprietor equity
  • Define crucial monetary terms such as earnings, and margins, and also utilize utilized in companies

  • Analyze the economic wellness as well as problem of a business, department, or duty centre and usage financial info for management and assessment
  • Distinguish between bookkeeping and also financing and also explain the financing duty in running services
  • Prepare a firm's operating budget and also associate it with the company's calculated objectives
  • Apply funding budgeting strategies as well as cost-volume-profit evaluation to improve decision making

Day 1
The key financial statements

  • 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

  • Statement of owners’ equity

  • Statement of cash flows: cash is king

  • Wrapping up: the cycle of financial statements

  • External and internal auditors’ responsibilities

Day 2
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: the ability to manage assets efficiently

    • Profitability ratios

    • Limitations of financial ratio analysis

Day 3
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

    • The 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 assumptions

Day 4
Operating budget process and techniques

  • What is the operating budget?

  • Steps to budget development

  • Master budget components

    • Sales forecasting

  • Approaches to budgeting

    • Incremental budgeting

    • Zero-based budgeting

  • Budgetary control and correction

Day 5
Capital budgeting: the investing decisions
  • Examples of exercises involving capital budgeting

  • Time value of money: a prerequisite for investing decisions

  • The 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

Recap: the concept of financial management

  • Accounting versus finance: rules and responsibilities

  • Three pillars of finance

    • Financing decisions

    • Investing decisions

    • Operating decisions

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