PROGRAM DETAILS

 Overview

Many managers and executives have heard that “accounting is the language of business;” yet have not taken the opportunity to become basically numbers literate. This program offers accounting in a structured process. Participants will gain access to the language in a variety of exercises that eventually link to the Annual Reports and to the budgets prepared and managed by the executives. No preparation is necessary except to bring an open mind and a budget document or other financial documents of interest.

By combining techniques, analysis, problems, and examples with real case studies the program provides delegates with key cost awareness and budgetary skills, which is essential in managing and controlling processes/projects in times of increasing global competition where the budgets are inextricably linked with both strategy formulation and cost analysis. This program 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 systematic business management and for understanding the nature of financial statements, analyzing data, planning and controlling.

The program is targeted at providing a university-quality ‘MBA’ overview of accounting, decision making, and financial communications. 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:

• understand the content of and relationships between the financial statements (income statement, balance sheet, and statement of cash flow)
• use financial statements to evaluate the financial performance of an organization
• understand the budgeting process, including performance evaluation
• leverage cost behavior and its impact on management decisions
• calculate the need for and the methods used to allocate overhead
• communicate and to question financial information effectively

 Target Audience

While no particular level of prior knowledge 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:

• 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 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 – Accounting: An introduction

• What is accounting?
• Definitions of terms
• Importance of & who is interested in profit?
• Cash vs. Accrual accounting
• Accounting policies chosen by companies
• Accounting standards
• IFRS vs. GAAP vs. local alternative

Case study: Create a simple Pro Forma Income Statement

Day 2 – Financial Statements, Accounting Policies, and Reporting Standards

Income statement – basic components

• Income statement equation
• Revenues: recognition & importance
• The difference between profit and cash flow
• A closer look at costs and expenses
• Extracting the key figures
• Non-cash deductions: the what, the why & the how
  • Depreciation: the 4 options explored
  • Amortization: impairment test
  • Depletion: why Units of Production?

 Balance sheet

• Balance sheet equation
• Assets – current & long term
• Depreciation, Amortization & Depletion
• Liabilities – current & long term
• Equity – components

 Cash flow statement

• Cash flow statement equation
• Operating sources/uses
• Investing sources/uses
• Financing sources/uses
• Net cash

Case study: Create a linked set of financial statements

 Day 3 – Making and Communicating Decisions using Budgets

• The master budget overview
• The budgeting as a planning tool, a control mechanism & a communications device
• The Operating budget components
• The Financial budget
• The Capital budget
• The Cash Budget
• Interrelationship of Financial Projections
• Flexible vs. traditional budgets – the pros & cons
• Variance analysis as a tool for improvement & communications
• Direct/variable/product costs
• Indirect/fixed/period costs
• Mixed costs

Case study: Create a simple budget model from the financials

 Day 4 – Financial vs. Management accounting: differences and similarities 

• Objectives of Managerial Accounting
• Objectives of Financial Accounting
• Managerial vs. Financial Accounting: a comparative example
• Implications of IFRS
• Implications of GAAP
• Cost terminology: variable, fixed, controllable, non-controllable, incremental, sunk, opportunity, and relevant
• Cost behaviors in Cost-Volume-Profit scenarios: contribution margin and fixed costs
• Cost, Volume, Profit effects within variance analysis: state of the art
• Breakeven calculated 3 ways to target scenarios
• Cost/Benefit analysis (CBA)
• Leverage: risk vs. return

Case study: Calculate variance analysis to improve performance

 Day 5 Ultimatum Goal of Planning – Valuation, Business Performance & Decision Making

• Value: Definitions & Differences
• Valuation models demonstrated
• Business Valuation: who wants what
• Managing for Shareholder Value
• Shareholder Value Creation in Perspective
• Creating Value in Restructuring and Combinations beyond planning and reporting
• Responsibility centers: cost, profit, and investment
• Segment reporting internally and externally

Case study: Calculating value alternatives to impact values