PROGRAM DETAILS

Introduction

This course offers insights into the world of corporate finance, risk, and governance. Capital markets are central to the globalization phenomenon and essential for a well-functioning society. Because of this centrality and essential nature to societies, focus and attention must be paid to their proper functioning and oversight. To that end, this course offers an overview of the interaction between management and all other stakeholders. Diverse and complex stakeholder demands are best met by an efficient allocation of resources over an extended period of time.

By combining techniques analysis, problems and examples with real case studies the course provides delegates with key finance terminology and practice. This course not only presents the key financial tools generally used, but also explains the broader context of how and where they are applied to obtain meaningful answers. It provides a conceptual backdrop both for the financial/economic dimensions of strategic business management and for understanding the nature of financial statements, analyzing data, planning and controlling.

The course is targeted at providing a university-quality ‘MBA’ overview of finance, risk management, and corporate governance. Participants are expected to be high-potential learners seeking the next level of learning. Additional bibliographies, readings, and spreadsheets will be provided as takeaways.

Learning Objectives:

 This program will help you learn how to:

• Better appreciate the finance/ /governance approach
• Integrate business plans and strategic intent
• Improve productivity during the decision making process
• Understand the relationships between the financial statements
• Understand how to use financial statements to evaluate the financial performance of an organization
• Leverage the budgeting process, including performance evaluation
• Understand cost behavior and its impact on management decisions
• Communicate and to question financial information effectively

Target Audience

While no particular level of prior knowledge of finance is needed, there is an assumption that the attendees are committed to immersing themselves in a learning situation. This Mini MBA will benefit all professionals who are interested in broadening their understanding of the different functional areas and the cross-functional management issues that are faced by an organization in the present dynamic business environment. It will help you to identify areas of interest for further specialization and future career development.

Specifically, delegates who work in the following areas may gain the most:

• Accounting
• Operations
• Technical
• Administration
• Procurement
• Planning
• Sales & Marketing
• Research & Development

Training Methodology:

The training process is based on a carefully planned mix of succinct tutor input – with practical illustration of tools and concepts, group work on case studies (all video based – and lively), feedback, and selective work on individual issues in pairs.

The training is based on the systems to enable complete learning. There will also be some opportunity for role play. You will receive a toolkit within the material for subsequent everyday use.

Since many of the examples are in Excel^® delegates need to bring their own laptops for this course.

Program Content

 Day 1 – What is Finance & Working Capital – liquidity or bankruptcy?

• Finance is a numbers game
• Yet finance is more than the numbers
• The three major components of finance
• Working capital (WC) defined
• Relationship to current ratio
• Components of WC
  • Inventory
  • Accounts receivable
  • Cash
  • Accounts payable
  • Notes payable
• The critical ratios to compute
• What should they be & why
• The questions to ask
• The answers you want

Case study – calculating working capital under varying circumstances

 Day 2 – Capital Structure – what it is & why it is important

• Equity capital – what it is
• Equity capital – calculating it costs/required rate of return
• Debt capital – what is it really
• Debt capital – calculating it costs/required rate of return
• Weighted Cost of Capital (WACC) – why it is so important
• Calculating your WACC
• When & how to use WACC
• Leverage: two-edged sword – defined
  • Operating leverage – calculated
  • Financial leverage – calculated
  • Combined leverage – Wow! Look at the impact

Case study – the impact of leverage under 3 scenarios

 Day 3 – CAPEX -Analysis of Investment Decisions with What-if Risks

• Cash Flows and the Time Value of Money
• The capital project evaluation process
• Ideas for the future with a multiple time periods horizon
• Estimating cash flows within the business system
• Net present value (NPV) & Internal Rate of Return (IRR) as preferred methods
• Profitability Index (PI) & Modified Internal Rate of Return (MIRR) as reasonable alternatives
• Defining the approval criteria and review process
• Post-implementation audits of capital projects
• Refinements of Investment Analysis
• Dealing with Risk and Changing Circumstances – how do we explain?
• Cost of Capital and Return Standards
• Benchmarking Discount & Hurdle rates

Case study – develop & analyze a capital budget

 Day 4 – Risk management as an integral part of Corporate Governance

• Understanding uncertainty and risk/opportunity
• Identifying strategic financial risks
• Identifying operational risks
• Identifying functional financial risks
• Assessing financial risks in each perspective
• Finding our corporate risk profile (appetite for risk)
• Clarifying desired outcomes, expected outcomes, and actual outcomes
• Performance measures – the need for FRM/ERM
• Quantitative and qualitative risks
• Developing FRM/ERM strategy – do we need a CRO?
• Other risk issues to be concerned with: Joint ventures, alliances, product liability, environmental risk, outsourcing risk, growth risk, R&D risk, natural disasters, catastrophic risks, supply chain risk, reputation risk, and psychology of risk among others

Case study – analyze a full risk model

 Day 5 – Corporate governance

• What is Corporate Governance?
• Corporate Governance environment
• Relevance of Corporate Governance
• Perspectives on Corporate Governance
  • Shareholders vs. Stakeholders
  • Voluntary vs. Enforcement
  • 1-tier vs. 2-tier boards
  • Chairman/CEO duality
  • The independent director
• Corporate Governance models
• Structure & practices
• Emerging trends in Corporate Governance
• Principal-Agent theory and applications
• Independence in fact versus appearance

Case study – corporate governance choices