Financial Analysis, Planning and Budget Control

Description

The course includes numerous practical examples, real-life illustrations, participative exercises, and case studies. It will be presented in a manner that suit individuals with varying levels of financial knowledge and experience.

Participants will gain both a theoretical and a practical knowledge of all the topics covered. The emphasis will be on the practical application of the concepts and as a result, delegates will return to their respective workplaces with the ability and confidence to apply the techniques learned.

What you will learn

The Challenge of Financial Economic Decision-Making

• The Practice of Financial / Economic Analysis
• The Value-creating Company
• Corporate Value and Shareholder Value
• A Dynamic Perspective of Business
• The Agency Problem and Corporate Governance
• What information and data to use?
• The Nature of Financial Statements
• The Context of Financial Analysis and Decision-making

Assessment of Business Performance

• Ratio Analysis and Business Performance
• Management’s Point of View
• Owners’ Point of View
• Lenders’ Point of View
• Ratios as a System – Pyramids of Ratios
• Integration of Financial Performance Analysis
• Economic Value Added (EVA)
• Predicting Financial Distress and Z-score Model

Analysis of Investment Decisions

• Applying Time-adjusted Measures
• Net Present Value (NPV) and Internal Rate of Return (IRR)
• Modified Internal Rate of Return (MIRR)
• Strategic Perspective
• EVA and NPV
• Refinements of Investment Analysis
• Equivalent Annual Cost (EAC)
• Sensitivity Analysis, Scenario Analysis, Simulation, and NPV Break-even
• Dealing with Risk and Changing Circumstances

Projection of Financial Requirements

• Interrelationship of Financial Projections
• Operating Budgets
• Standard Costing and Variance Analysis
• Cash Forecasts and Cash Budgets
• Sensitivity Analysis
• Dynamics and Growth of the Business System
• Operating Leverage
• Financial Growth Plans
• Financial Modelling

Valuation and Business Performance

• Managing for Shareholder Value
• Shareholder Value Creation in Perspective
• Evolution of Value-based Methodologies
• Creating Value in Restructuring and Combinations
• Financial Strategy in Acquisitions
• Business Valuation
• Business Restructuring and Re-organisations
• Management Buy Outs (MBOs) and Management Buy Ins (MBIs)

Strategic and Financial Planning

• Financial Accounting and Management Accounting
• The Links between Strategic Planning, Budget Setting, and Performance Measurement
• Planning and Strategic Management
• Mission, Vision, and Objectives
• The Planning Process
• External Environment Analysis, Internal Resources Analysis, SWOT and PESTEL
• Shareholder Wealth Maximisation, value Creation and Financial Strategy
• Financial Planning and Modelling, and Long-term and Short-term Financing

Cost-Analysis for Budgeting

• What is Costing?
• Cost Behaviour – fixed costs and variable costs
• Contribution, Cost / Volume / Profit (CVP) Analysis and break-even models
• Traceable Costs and Non-traceable
• Cost Allocation
• Product Costs and Period Costs – product costing for inventory valuation and profit ascertainment
• Direct costs, Indirect costs, Absorption Costing and Marginal costing
• Product Costing for Budget Setting, Budgetary Control and Performance Measurement
• Refinement of the Costing System and Activity-Based Costing (ABC)

The Framework for Budgeting

• What is a Budget – and Why Budget?
• The Budgeting Framework and the Various Types of Budgets: top down; bottom up; incremental; zero-based; activity-based
• The Budget Process
• Qualitative and Quantitative Techniques of Forecasting Sales and Costs, and Sales Pricing
• Budgeting for Labour Costs and Depreciation
• The Departmental Budget
• Preparation of the Master Budget and the Cash Forecast / Budget
• The Human Side and the Behavioural Aspects of Budgeting

Activity-Based Budgeting (ABB), Capital Budgeting, Budgetary Control and Variance Analysis

• How the Budget is controlled in your Organisation
• Activity-Based Budgeting (ABB)
• Budgeting for Capital Projects
• Discounted Cash Flow (DCF) investment appraisal methods of Net Present Value (NPV) and Internal Rate of Return
• Capital rationing and the Profitability Index (PI)
• Budgetary Control Systems and
• Responsibility Accounting
• Standard Costing for Budgeting and
• Budgetary Control
• Fixed Budgets, Flexed Budgets, Variance Analysis, and the reasons for variances

Beyond Budgeting – Broadening Performance Measurement Systems

• Integrating continuous improvement into the Budget Process
• Advantages and Disadvantages of Budgeting
• How to Improve the Budget Process in your organisation
• The Conflict between Performance Improvement and the Costing System
• Lean Thinking and Performance Improvement
• What next – beyond the Budget?
• The Balanced Scorecard – linking strategy with budgeting and with performance measurement
• Developing and Adapting the Balanced Scorecard: financial perspective; customer perspective; internal business process perspective; learning and growth perspective