Introduction:
This course is designed to equip non-financial professionals with a comprehensive understanding of financial principles and practices. Over 15 days, participants will gain the knowledge needed to interpret financial statements, analyze financial data, manage working capital, and make informed budgeting and investment decisions. The course will also cover essential negotiation skills, particularly in the context of financial compensation and agreement settlements.
Course Objectives:
- To provide a foundational understanding of key financial statements and their components.
- To develop analytical skills for interpreting financial data and making informed business decisions.
- To enhance participants' ability to manage working capital and budgets effectively.
- To introduce participants to capital budgeting techniques and their application in investment decisions.
- To build negotiation skills related to financial compensation and settlements, particularly for legal professionals
Course Outlines:
Day 1: Introduction to Financial Statements
- Overview of key financial statements.
- Understanding the accounting cycle.
- Introduction to the five main accounts in financial statements.
- Income statement: Purpose and significance.
- Accrual basis versus cash basis accounting.
Day 2: Income Statement Analysis
- Detailed exploration of the income statement.
- Understanding revenues, expenses, and net income.
- Performance measurement through the income statement.
- Impact of accrual versus cash accounting on the income statement.
- Practical exercises on reading and interpreting income statements.
Day 3: Balance Sheet Analysis
- Introduction to the balance sheet.
- Understanding assets, liabilities, and equity.
- Assessing financial position using the balance sheet.
- Comparison between balance sheet and income statement.
- Practical exercises on analyzing balance sheets.
Day 4: Statement of Owners’ Equity
- Overview of the statement of owners' equity.
- Understanding equity changes over time.
- Impact of business activities on equity.
- Relationship between the balance sheet and statement of owners' equity.
- Practical exercises on preparing and analyzing the statement of owners' equity.
Day 5: Statement of Cash Flows
- Introduction to the statement of cash flows.
- Importance of cash flow in financial management.
- Breakdown of operating, investing, and financing activities.
- Cash flow analysis for business decision-making.
- Practical exercises on reading and interpreting cash flow statements.
Day 6: Wrapping Up Financial Statements
- The cycle of financial statements: Integration and flow.
- Connecting the income statement, balance sheet, and cash flow statement.
- Introduction to financial statement consolidation.
- External auditors: Role and responsibilities.
- Internal auditors: Role and responsibilities.
Day 7: Financial Ratios and Analysis
- Importance of financial ratios.
- Horizontal analysis: Tracking performance over time.
- Vertical analysis: Common size financial statements.
- Liquidity ratios: Assessing short-term financial health.
- Practical exercises on calculating and interpreting financial ratios.
Day 8: Advanced Financial Ratios
- Solvency ratios: Assessing long-term financial stability.
- Activity ratios: Evaluating asset management efficiency.
- Profitability ratios: Measuring business performance.
- Limitations of financial ratio analysis.
- Practical exercises on advanced ratio analysis.
Day 9: Trend and Comparative Analysis
- Horizontal and trend analysis techniques.
- Comparative analysis: Benchmarking against industry standards.
- Common size financial statements for vertical analysis.
- Building blocks analysis: An integrated approach.
- Practical exercises on trend and comparative analysis.
Day 10: Working Capital Management Basics
- Definition and importance of working capital.
- Working capital management strategies for current assets.
- Balancing profitability and liquidity.
- Working capital management strategies for current liabilities.
- Practical exercises on working capital management.
Day 11: Advanced Working Capital Management
- The trade-off between profitability and certainty.
- Cash management strategies.
- Inventory management techniques.
- Accounts receivable and payable management.
- Practical case studies on working capital management.
Day 12: Breakeven Analysis
- Defining fixed and variable costs.
- Contribution margin: Calculating and interpreting.
- Computing the breakeven point.
- Sensitivity analysis: Adjusting for different scenarios.
- Practical exercises on breakeven analysis.
Day 13: Decision-Making with Breakeven Analysis
- Applying breakeven analysis in business decisions.
- Using breakeven analysis for pricing strategies.
- Impact of cost structure changes on breakeven point.
- Sensitivity analysis: Practical applications.
- Case studies on decision-making using breakeven analysis.
Day 14: Operating Budget Process and Techniques
- Introduction to the operating budget.
- Steps to budget development: Planning and execution.
- Master budget components: Sales forecasting and projections.
- Approaches to budgeting: Incremental vs. zero-based budgeting.
- Budgetary control: Monitoring and corrective measures.
Day 15: Capital Budgeting and Financial Negotiations
- Introduction to capital budgeting: Concepts and techniques.
- Time value of money: Understanding its importance in investment decisions.
- Calculating net present value (NPV) and internal rate of return (IRR).
- Financial negotiations: Strategies for compensation discussions.
- Settling agreements for lawyers: Best practices and case studies in financial negotiations.
