Why Attend
As a professional, you are constantly faced with decisions that require professional judgment. By definition, acumen is “the ability to make good judgments and make quick decisions”. Backing-up your experience with strong financial acumen would provide quantitative support for your options, add credibility to your decisions and raise the likelihood of winning strategic bets.
In this training course, we will combine the strategic and commercial aspects of the business with the financial one. You will understand how day-to-day operating decisions in procurement, production, and sales, as well as on how and where to compete, will impact your company’s profitability and financial situation.
You are responsible for your business, and your decisions can make or break it. In this course we will equip you with the financial acumen to evaluate your past decisions and apply the best judgment in the future.
Course Methodology
The course uses a mix of interactive techniques, such as brief presentations by the consultant, case studies, hands-on applications of analysis using Excel and group exercises to apply knowledge acquired throughout the course.
Course Objectives
By the end of the course, participants will be able to:
- Define where and how their company competes and identify which competitive advantages generate shareholder value
- Interpret how macroeconomic conditions and industry specific situations can impact their company’s profitability and performance
- List the components of the basic financial statements
- Analyze the ability of the company to survive over the short run and long run, and exercise commercial decisions that can improve their company’s performance
- Apply cost concepts to make informed decisions that are strategically and financially fit for the company
Target Audience
Managers, supervisors and staff from any function including finance who need to improve their understanding and usage of financial information.
Target Competencies
- Strategy identification
- Economic analysis
- Industry analysis
- Understanding financial statements
- Financial analysis
- Working capital management
- Financial decision making
- Managerial decision making
Course Outline
- Strategy: value creation and value generation
- Identifying the business stakeholders
- Shareholders’ value: definition and dynamics
- Corporate strategy: where and how?
- Competitive advantages: winning over rivals
- Types of competitive advantage
- How competitive advantages drive company’s profitability
- Are all strengths competitive advantage?
- Ryanair case: strategy in low-fare airline
- Basics of economic and industry analysis
- Top-down approach for analysis
- Macroeconomic factors: are you operating in a sustainable country?
- Indicators of GDP, unemployment rates, inflation, exchange rates and interest rates
- Deficit-to-GDP, debt-to-GDP and GDP growth rates
- Industry analysis: are you operating in an attractive industry?
- Michael Porter’s five forces shaping industry’s long term profitability
- Power of suppliers
- Power of customers
- Rivalry between competitors
- Availability of substitutes
- Threats of new entrants: assessing barriers
- Starbucks, Apple Inc., Nike and McDonald’s cases
- Michael Porter’s five forces shaping industry’s long term profitability
- Mastering the financial statements: a prerequisite for decision making
- Accounting versus finance: the past versus future
- Income statement: indicator of performance
- Revenue and expense recognition
- Fixed and variable costs
- Direct and indirect costs
- Balance sheet: indicator of financial position
- Measurement and classification of components
- Three limitations of balance sheet
- Statement of changes in owners’ equity
- Cash flow statement:
- Operating, investing, and financing activities
- Reading and interpreting cash flow
- Cash-flow model for start-up phase
- Cash-flow model for supernatural growth phase
- Cash-flow model for mature growth phase
- Financial analysis: a hands-on approach
- Analysis of publicly listed companies: a hands-on approach using Excel
- Common size analysis to improve comparability
- Calculating trends and growth patterns
- Liquidity analysis
- What is the suitable level of liquidity?
- Current, quick, and cash ratios
- Asset management and activity ratios
- Days to collect receivables: KPI for sales and credit departments
- Days to sell inventory: KPI for supply chain and sales departments
- Days to settle payables: KPI for procurement department
- What can go wrong: managing gaps in cash collection
- Financing structure and risk
- Why using loans can be good to your business?
- Measuring shareholders’ required return on investment
- Calculating the economic added value, or lost value
- Debt, equity, and times interest earned ratios
- Profitability analysis
- Net profit margin, operating profit margin, gross profit margin, return on assets
- Return on equity: its impact on your bonus
- Financially-informed decisions: the winning recipe
- Cost-structure analysis: Do you need a business-model redesign?
- Fixed costs and variable costs behavior
- Operating leverage: how sensitive is your business to change in sales
- Margin of safety: a measure of risk
- Product-line analysis:
- Calculating contribution margin from units sold
- Breakeven point: minimum quantity to avoid losses
- Target income: quantity needed to achieve a certain profit
- Identifying relevant costs for decision making
- Add or drop a business segment
- Allocating cost by segment
- Keeping projects with highest contribution
- Managing scarce resources
- Outsourcing decisions: make or buy a good or service
- Looking at quantitative and qualitative factors
- Special order pricing decisions
- Pricing techniques
- Target costing
- Cost-plus pricing
- Value pricing
- Price war or coopetition?
- Cost-structure analysis: Do you need a business-model redesign?
- Analysis of publicly listed companies: a hands-on approach using Excel
