Overview / Why Attend

This course is designed for non-financial managers who need to evaluate operating, investing, and financing decisions financially. It assumes prior exposure to basic finance concepts and advances participants' ability to assess financial ratios, breakeven, NPV, financing alternatives, and risk.

Course Objectives

• Identify the major accounts on the financial statements and their relationship with the key financial ratios.

• Utilize breakeven and operating leverage concepts to evaluate operating decisions.

• Calculate Net Present Value (NPV) to evaluate proposed investment opportunities and projects.

• Compare various financing options and highlight the impact of each option.

• Identify types of risks across various operating, investing and financing decisions.

Target Audience

Managers, supervisors, department heads, and professionals who have taken the basic finance for non-finance course and would like to advance their financial skills to a higher level.

Course Outline

Overview of Key Concepts in Accounting and Finance

• Key financial statements: Income statement, balance sheet and cash flow

• Summary of accounting considerations for major accounts

  • Key financial ratios

    • Profitability ratios

    • Liquidity ratios

    • Debt ratios

    • Activity ratios

• The three pillars of finance

  • Operating, investing and financing decisions

Operating Decisions

• Managerial accounting concepts

  • Types of cost behavior: Fixed costs, variable costs and step costs

  • Relevant costs, sunk costs and opportunity costs

• Breakeven analysis

• Operating leverage

• Evaluating operation decision options

  • Extending credit to customers

  • Hiring additional staff

  • Outsourcing decisions

  • Accepting special orders

Investing Decisions

• Overview of time value of money

• Cost of capital

• Evaluation methods

  • Net Present Value (NPV)

  • Internal Rate of Return (IRR)

• Evaluating investing decision options

  • Mid-term and long-term projects

  • Contracts with customers and suppliers

  • Valuation of companies

Financing Decisions

• Characteristics of debt vs. equity financing

• Types of debt financing

• Evaluating financing decision options

  • Short-term vs. mid- and long-term debts

  • Impact of interest rates

• Setting up company for an Initial Public Offering (IPO)

Introduction to Risk Management

• Definition and importance of risk management

• Enterprise Risk Management Process (Identify, Assess, Treat, Review)

• Types of financial risks: Operational, market, liquidity, credit, and strategic risks

• Identifying risks across financial activities

  • Operating activities: Expense variability and inefficiencies

  • Investing activities: Market volatility and Return on Investment (ROI) uncertainty

  • Financing activities: Interest rate fluctuations and liquidity challenges

• Simple tools for risk assessment

  • Risk prioritization using a basic impact vs. likelihood matrix