Objectives

Upon completion of this course, participants will be able to:

• Confidently read and interpret the three core financial statements: Income Statement, Balance Sheet, and Cash Flow Statement.
• Understand key accounting principles and the relationship between profitability and cash flow.
• Analyze financial performance using essential ratios (e.g., liquidity, solvency, profitability).
• Apply capital budgeting techniques (e.g., ROI, Payback Period) to evaluate project proposals.
• Develop, manage, and monitor departmental budgets effectively.
• Identify and understand the cost structure of their business unit (e.g., fixed vs. variable costs).
• Make informed operational decisions that drive financial value and manage risk.
• Communicate financial results and recommendations clearly to both financial and non-financial peers.
• Understand the financial implications of common business activities (e.g., pricing, inventory).
• Contribute constructively to the corporate planning and strategic process.

Target Audience

• Department Heads and Mid-Level Managers
• Engineers, IT, Marketing, and Operations Professionals
• Sales and Business Development Managers
• HR and Administration Professionals
• Small Business Owners and Entrepreneurs
• Anyone whose work impacts the organization's budget and financial health
• Future leaders preparing for senior management roles

• Interactive sessions focused on interpreting real-world company financial statements
• Case studies involving operational decisions and their financial impact (e.g., pricing, hiring)
• Group activities creating and analyzing simple departmental budgets
• Individual exercises on calculating financial ratios and break-even points
• Discussions translating financial concepts into functional business language
• Hands-on workshops using simple templates for capital project evaluation

Unit 1: Deciphering the Financial Statements

• Understanding the structure and purpose of the Income Statement
• Key components: Revenue, Cost of Goods Sold, Operating Expenses
• Calculating and interpreting Gross Profit, Operating Income, and Net Income
• The concept of accrual accounting vs. cash accounting
• Non-cash expenses: Depreciation and Amortization simplified
• Understanding margin analysis and its importance

• The accounting equation: Assets = Liabilities + Equity
• Understanding current vs. non-current assets and liabilities
• The purpose and structure of the Statement of Cash Flows
• Distinguishing between Operating, Investing, and Financing activities
• The link between the three financial statements
• Understanding working capital management principles

Unit 2: Financial Analysis and Performance Measurement

• Liquidity ratios: Current Ratio and Quick Ratio
• Profitability ratios: Net Profit Margin, Return on Equity (ROE), Return on Assets (ROA)
• Solvency ratios: Debt-to-Equity and Times Interest Earned
• Efficiency ratios: Inventory Turnover, Days Sales Outstanding (DSO)
• Using trend analysis and benchmarking with financial ratios
• The Dupont Analysis framework for performance breakdown

• Distinguishing between fixed, variable, and semi-variable costs
• The importance of contribution margin and its calculation
• Conducting Break-Even Analysis for products, projects, and services
• Understanding Activity-Based Costing (ABC) principles
• Making make-or-buy decisions based on cost analysis
• Analyzing overhead costs and allocation methods

Unit 3: Budgeting and Operational Finance

• The purpose and process of creating an annual budget
• Techniques for accurate expenditure forecasting
• Budget tracking, monitoring, and control mechanisms
• Performing variance analysis and explaining deviations
• Managing resources effectively within budget constraints
• Tips for a successful budget presentation and negotiation

• Understanding the concept of the Time Value of Money (TVM)
• Evaluating projects using Payback Period and Discounted Payback
• Simple Net Present Value (NPV) and Internal Rate of Return (IRR) principles
• Applying Return on Investment (ROI) to project selection
• Understanding the concept of risk and sensitivity analysis in project evaluation
• The difference between capital and operating expenses

Unit 4: Financial Value and Communication

• Understanding the concept of shareholder value creation
• The financial impact of operational decisions (e.g., inventory levels, credit terms)
• Strategies for improving cash flow and reducing waste
• Basic principles of asset utilization and efficiency
• Key drivers of profitability and margin improvement
• Understanding the financial life cycle of a business

• Translating financial jargon into clear business language
• Structuring financial reports for maximum impact on decision-making
• Presenting budget performance and forecasts to senior management
• Techniques for using visuals (charts, graphs) to tell a financial story
• Understanding the finance department's perspective and priorities
• Engaging in productive dialogue with the finance team