Finance for Non-Finance Professionals 17743 Course Objectives Define the four key financial statements: balance sheet, income statement, cash flow, and changes in owner equity, as well as critical financial terms such as profit, margins, and leverage. Interpret the financial health and condition of a company, division, or responsibility center and use financial information for management and evaluation. Develop an operating budget aligned with the organization’s strategic objectives. Apply capital budgeting techniques to evaluate long-term decisions in projects and capital expenditures. Calculate the breakeven point using cost behavior concepts to support short-term decision-making. Target Audience Managers, supervisors, and staff from any function, including finance, need to improve their understanding and usage of financial information. Course Outline The Key Financial Statements Understanding the accounting cycle The five main accounts in financial statements Income statement: A tool for performance measurement Balance sheet Statement of owners’ equity Statement of cash flows Wrapping-up: The cycle of financial statements External and internal auditors’ responsibilities Analysis of Financial Statements Why ratios are useful Horizontal and trend analysis Building blocks, analysis, and reading through the numbers Liquidity ratios: Ability to settle short-term dues Solvency ratios: Ability to settle long-term dues Activity ratios: Ability to manage assets efficiently Profitability ratios Limitations of financial ratio analysis Working capital management Definition of working capital and working capital management Various working capital management strategies Operating Budget Processes and Techniques The meaning of the operating budget Steps to budget development Master budget components Sales forecasting Approaches to budgeting Incremental budgeting Zero-based budgeting Budgetary control and correction Capital Budgeting: The Investing Decisions Examples of decisions involving capital budgeting exercise Time value of money: A prerequisite for investing decisions The required rate of return for investments Examples of cash outflows for capital projects Examples of cash inflows for capital projects Net Present Value (NPV) calculation Internal rate of return (IRR) Cost Behavior Concepts and Breakeven Analysis Defining fixed costs Defining variable costs Contribution margin Computing breakeven point Sensitivity analysis: changing assumptions
