A
Typical Finance for Non-Finance Managers Course
All of our programmes are bespoke and tailored to the
specific needs of your organisation. As mentioned in our
finance overview, we use a
spreadsheet model to tie the concepts together. Delegates
also spend a substantial proportion of the time working
on practical problems, "discovering" for themselves
the uses and drawbacks of different techniques.
The following is a list of the areas that we would normally
cover:
Section I
- Profit & Loss
- Balance Sheet
- We then introduce cashflow
and examine how profitable businesses can fail through
lack of cashflow (and vice versa).
- Working capital, Fixed and
Current Assets, Creditors and Debtors
- Introduction to the concept
of Value Management
Section II
- Analysing Financial Performance
- the financial "barometers" are critical
tools for managers. Additionally, managers need to understand
these measures since they are often the same measures
used to assess managerial performance.
- profitability
- financial status
- financial management
- resource management
Section III
- Performance Drivers &
Intangibles
Ratios are useful but they are based on accounting data.
Accounting data is historical; it tells you where you
have been and the ratios are a very crude indicator of
future performance. A further difficulty with ratios is
the accounting classification of expenditure and investment.
Advertising is an expense and immediately reduces the
profit for the period and yet its benefits may not be
seen until much later and tend to be cumulative – eg KitKat
is an international brand because of almost a century
of advertising. Ratio analysis can induce myopia!
Provides managers with the tools to manage performance
drivers and recognise what activities create or destroy
value.
The Balanced Scorecard, as its name suggests, was a reaction
to the over-reliance on purely financial measures that
often present a “too-late”, distorted picture (eg no recognition
of key drivers such as brand and relationships) of a business.
The Balanced Scorecard does not remove financial measures
and objectives – it places them at the top! However, the
emphasis is on identifying what drives performance rather
than measuring the results and managing causes
rather than analysing symptoms.
- Overview of Activity Based
Costing
A popular approach developed over the last decade or
so to help companies to think about the forces that drive
the consumption of overhead resources. Non-volume allocation
bases known as cost drivers are identified, giving managers
a better understanding of the forces that drive overhead
costs in their departments. ABC improves the allocation
of overhead costs, thus enhancing the accuracy of ratios
analysis!
Section IV
- payback period
- discounted cashflow and IRR
- discounted payback
- risk analysis
- accounting versus economic profits
- Business Planning, Budgeting,
Forecasting
Many of the elements discussed above are brought together
in this section. It introduces the concepts of resource
planning and constraints. Each component of the overall
budget is considered: direct costs, overheads etc. Particular
emphasis is given to budgetary control – how can we be
sure that we are on course. Again, the traditional accounting
approach is married to the new thoughts centred on the
Balanced Scorecard – don’t just take the temperature of
the patient, monitor what the patient is actually doing.
(or to adopt a more positive approach, don't just time
the athlete in the race, monitor his training, diet, sleep,
attitude - these are the performance drivers, look after
these and the performance will take care of itself!) |
