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Course Outline

The 'Why & How' of Financial Numbers

  • Clarifying commonly used finance and accounting terms, including:
  • Are there financial regulations governing the accounting and finance sectors?
  • Overview of accounting methods, specifically Cash vs. Accrual basis
  • Introduction to Financial Statements, covering:
  • Income Statement
  • Balance Sheet
  • Cash Flow Statement
  • Statement of Changes in Equity
  • The relationships and data flow among all Financial Statements

Revenue & Expenditure

  • What constitutes revenue and what is excluded from it
  • Cash vs. Revenue: Why these concepts differ
  • Various types of expenditure recorded in financial transactions
  • Understanding Cost of Goods Sold – its importance and impact on profitability

Income Statement

  • A detailed review of the Income Statement and its line items
  • Grasping key terminology used in the Income Statement
  • Types of profits: Gross Profit, Operating Profit, and Net Profit
  • Understanding EBIT and EBITDA and their significance
  • Handling extraordinary items in Income Statement analysis

Balance Sheet

  • Key terms such as Assets, Liabilities, and Equity
  • Understanding asset nature and classification into Current and Non-Current assets
  • Intangible assets: definition and recording in the balance sheet
  • Comprehending Depreciation & Amortization
  • Classifying Current & Non-current liabilities
  • Components of Equity, Retained Earnings, and Reserves

Cash Flow Statement

  • Understanding the structure of the Cash Flow Statement
  • Classifying cash flows by activity type
  • Cash Flow from Operating Activities
  • Cash Flow from Investing Activities
  • Cash Flow from Financing Activities
  • Linking cash flows from these three activities and relating business financing sources to them

Financial Statement Analysis – Ratio Analysis

  • Objectives of Financial Analysis
  • Types of financial ratios
  • Calculation and interpretation of various financial ratios, including:
  • Profitability ratios
  • Liquidity ratios
  • Solvency ratios
  • Investor ratios
  • Limitations of ratios in financial analysis
  • Using ratios to assess a company’s financial health

Introduction to Budgeting

  • The vital role of financial budgets in business management
  • Understanding the budget cycle
  • Long-run vs. short-run budgets
  • Budgeting methodologies: static, flexible, zero-based, and others

Investment Appraisal & Project Evaluation Techniques

  • Demystifying the Time Value of Money concept
  • Calculating discounted cash flows using the time value of money
  • Distinguishing between relevant and irrelevant cash flows for new projects
  • Introduction to investment appraisal techniques, including:
  • Net Present Value (NPV)
  • Internal Rate of Return (IRR)
  • Payback Method
  • Making project decisions on accepting or rejecting new initiatives
 7 Hours

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