INTRODUCTION FOR FINANCE ANALYSIS, COSTING, MODELLING AND BUDGETING FOR MANAGERS
This course is designed for managers who desire more knowledge about how to do finance analysis, budgeting, and costing for a company department, cost center, project, products, and services. It also provides an accounting and finance primer to allow managerial professionals to do accurate costing, analysis, budgeting, and forecasting to avoid issues of not meeting Key Performance Targets (KPI) targets.
KEY TAKEAWAYS
At the end of the program, participants will benefit from:
- Revisiting your organization vision & mission to be relevant in today’s competitive environment.
- Devising ways to achieve your budget targets.
- Learning from successful budgeting using the beyond budgeting approach.
- Planning how to achieve optimum profitability under budget constraints.
- Considering the basis for deciding whether to proceed or reject the project proposal.
- Managing Materials, Labour & overhead costs.
- Strategies on creating turnaround for the company via application of cost reduction and cost recovery strategies to manage and achieve target budget KPIs.
- Strategies to improve debt collection & cash flow.
- Formulating cost reduction strategies for your organization costs.
- Understanding the tracking cost control using Key Performance Indicators (KPI) and variance analysis reports.
- Performing financial modelling for budget and forecasts tasks using exponential smoothing and growth model, practical Excel formulas, functions for financial data analysis, lookup, and formula referencing.
- Understanding and doing financial modelling for capital budgeting using payback period, Discounted Cash Flow (DCF), Net Present Value (NPV), and Internal Rate of Return (IRR) to evaluate the feasibility of projects and build the management dashboard.
TARGET AUDIENCE
Business Managers, Project Managers, Financial Analysts, Finance Managers, and Accounting Managers of all levels who have responsibility in areas of financial analysis, costing, forecasting, and doing annual budgets. This can be extended to staff who have delegated responsibilities to perform analysis, costing, and budgeting management and control tasks.
METHODOLOGY
Interactive Lectures, Gamified Quiz, Videos, Hands-on Excel exercises, and group discussions.
Important note: Participants will be required to bring their own laptop for hands-on Excel exercises on financial analysis, costing, budgeting, and spot quizzes.
COURSE CONTENT
DAY 1
Session 1: Essentials Budgeting and Forecasting Basics
- Reviewing the basic financial building blocks: Income Statement, Balance Sheet, Cash Flow as basis for budgeting.
- Setting objective of the business: Is the budget in-line with the target of the shareholders?
- Department budget components.
- Budget creating analysis and forecasting strategies.
- Strategies for aligning the department budget.
- Case Studies Analysis: Is your budget well equipped to deal with external trends in the industry?
Session 2: Collaborative Budgeting and Forecasting Techniques
- Increasing participation of various departments in the budgeting and forecasting process.
- Working hand-in-hand with aviation associations and experts that help spot industry trends and forecast potential happenings in areas such as new airlines entrants, demand, prices, and labour cost.
- Putting your corporate strategy at the forefront of the budgeting process: Is this the way moving forward?
- Understanding company’s financial management information systems.
- Understanding the accepted industry budgeting and finance standards.
- Identifying weaknesses in your company’s department budget and suggesting ways of improvement to optimise the accuracy and minimise potential deviations from the budget.
Session 3: Introduction and Overview of Financial Modelling
Training method: Requires hands-on Excel using a laptop.
- Define the Terms Model and Financial Model.
- Learn the 10 steps to create good Financial Models.
- The 12 steps to Improving traditional Financial Models.
- Use Flowcharting Techniques to improve your model.
- Modelling and Reporting techniques – Tips for best practice structure and design of financial models.
- Separation of inputs, calculations, and outputs.
- Avoiding hard coding.
- How to best include adjustments.
- Effective styling to purpose.
- Indicators of risk and mitigating the risk of error.
- Using reconciliations and zero checks.
- Tips for effective reporting.
Key Practical Formulas for Financial Data Analysis, Validation and Modelling
- Understanding Financial Functions and hands-on session:
- Using PMT
- Using FV
- Using NPV
- Using PV
- Using RATE
- Using EFFECT
- Using NOMINAL
Understanding Data Lookup Functions
- Using VLOOKUP
- Using VLOOKUP for Exact Matches
- Using HLOOKUP
- Using INDEX
- Using MATCH
- Using SUMIF and SUMIFs
DAY 2
Session 4: Monitoring Budgets and Forecast Essentials
- Prepare and identify cost recovery plans (e.g., charge backs).
- Using periodic financial reports to monitor budget progress.
- Using budgets for planning and control.
- Business plans and policies.
- Understand accounting policies and procedures related to revenue and expense recognition.
- Strategies for monitoring and controlling revenues and expenses.
Session 5: Increasing Organisations’ Competitive Advantage through Value Costing
- Understanding the importance of using relevant costs for decision-making models.
- Terminology, valuation principles, and financial reports.
- Accurately estimating different costing categories: Fixed, Variable, and Semi-Variable.
- Recognising seasonality trends in the business that can influence cost forecasting.
- Case Study exercise: Participants will be given cost data and related supporting information from which you will create forecasting models, standard costs/budget values as well as estimating the fixed and variable behavior of the costs.
- Uncovering business challenges in cost management and segregating them into fixed, variable, and semi-variable categories.
- Principles of sunk costs, operating costs, appraisals, and benchmarking.
Session 6: Capital Budgeting
- Depths of capital budgeting long-range financial plan with key analysis.
- Build forecast models using exponential smoothing method.
- Use exponential growth rate by plotting data into scatter plots, and perform correlations analysis between business indicators for growth rate prediction.
- Introduction to What If Analysis AKA Sensitivity Analysis.
- Use Solver to search feasible solutions and decide on the most optimal choice.
- Use Break-even analysis.
- Identify major financial ratios.
- Use Financial Ratios to Measure a Firm’s Financial Performance in financial forecasts and plans.
