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Finance for non-financial managers


This is a three day workshop and is based on unit std 117156 - "Interpret basic financial statements" and unit std 13941 - "Apply the budget function in a business unit"

The qualifying learner is capable of:
  • Analysing the basic elements of an income and expenditure statement.
  • Analysing the basic elements of a balance sheet.
  • Compiling a personal assets and liabilities statement.
  • Using the evidence in financial statements to make a financial decision.
  • Explaining the concept of budgeting in a business unit.
  • Analysing the budget needs of a business unit.
  • Presenting and justifying a proposed budget for a business unit.
  • Monitoring and controlling actual expenses and revenue against projected expenses and revenue.

Course Outline


Day 1
Chapter 1
Review of the Basics (4 hours; presentation of relevant terminology accompanied by examples and exercises to enhance learning)
  • Basic terminology to the accounting function.
  • The double entry system.
  • The Balance Sheet Equation
  • Income Statements
  • Cash Flow Statement
  • Statement of Retained Earnings
Chapter 2
Asset Management (2 hours; presentation of relevant terminology accompanied by examples and exercises to enhance learning)
  • Management of Current Assets
  • Managing Receivables Policy
  • Inventory Valuation Methods
  • Depreciation
Chapter 3
How to Read an Annual Report (2 hours; presentation of relevant terminology accompanied by examples and exercises to enhance learning)
  • Start at the Back
  • Footnotes
  • Financial Statements
  • CEO's letter
  • Explanations and Analysis
  • Checklist
Day 2
Chapter 4
Rationale for Budgeting and Budget Control (2 hours; presentation of relevant terminology accompanied by case study)
  • Financial Tools for Business Decision Making
    • Choosing New Projects and Capital Budgeting
    • Project Execution and Monitoring
  • The Basics of Accounting for the Project Manager
  • Cash Flow
Chapter 5
Budgeting (4 hours; presentation of relevant terminology accompanied by case study)
  • What is a Budget?
    • The Planning Process
  • The Budgeting Process
  • Limiting factors
  • Types of budget
  • The advantages of budgeting
  • The disadvantages of budgeting
  • The Incremental Budget
  • Zero- Based Budgets
Chapter 6
How to Prepare Budget Forecasts (2 hours; presentation of relevant terminology accompanied by case study)
  • Gathering information
  • Anticipating revenues
  • Estimating expenditure
  • Impact of Inflation on Financial Decisions
    • Calculating the Inflation Rate
    • Real Versus Nominal Rates Of Return
    • Real Versus Nominal Interest Rates
    • Real Versus Nominal Cash Flows
    • Net Present Value Analysis in an Inflationary Environment
Day 3
Chapter 7
Planning (2 hours; presentation of relevant terminology accompanied by case study)
  • Effective Implementation of Integrated Development Planning Process
  • Purpose of Performance Budgeting
  • Benefits of Performance Budgeting
  • Performance Measures in the Strategic Planning and Performance Budgeting System
  • Strategic Planning Phase
  • Performance Budget Development Phase
  • Performance Budget Implementation Phase
  • Performance Monitoring Phase
  • Foster Internal/External Involvement and Communication
Chapter 8
Capital Structure and Financing Decisions (1 hour; presentation of relevant terminology accompanied by examples and exercises)
  • First Principles
  • Objective in Decision Making
  • Debt: The Basic Trade-Off
  • Analysing External Financing Methods
  • Impact on shareholder income
  • EBIT – EPS Analysis
    • Financial Leverage
  • Impact on shareholder risk
Chapter 9
The Time Value of Money (1 hour; presentation of relevant terminology accompanied by examples and exercises)
  • Present Value and Future Value
  • After – Tax Interest Rates
  • Five-Step Procedure for Solving TVOM Problems
  • End-of- Period Convention
Chapter 10
Net Present Value (1 hour; presentation of relevant terminology accompanied by examples and exercises)
  • The Key to Creating Wealth
  • The Net Present Value Decision Rule
  • Choosing from among Alternative Projects Using The NPV Rule
  • Selecting a Discount Rate
  • Weighted Average Cost of Capital
Chapter 11
Alternative Project Decision Rules and Their Failings (1 hour; presentation of relevant terminology accompanied by examples and exercises)
  • Introduction
  • The Payback Period Rule
  • The Discounted Payback Period Rule
  • The Internal Rate of Return Rule
  • Flaws in the IRR Rule
Chapter 12
How to Project Cash Flows and Calculate Net Present Value (2 hours; presentation of relevant terminology accompanied by examples and exercises)
  • Introduction
  • Principle 1: Focus on Cash Flows
  • Principle 2: Use Expected Values
  • Principle 3: Focus on the Incremental
  • The Input Data Needed for NPV Analysis
  • An Example of NPV Analysis: The Case of Master Chef Pizza Company
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