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Course Outline

The Why & How of Numbers

  • Clarifying commonly used finance and accounting terms, including:
  • Are there any financial regulations governing the accounting and finance sector?
  • Different accounting methods, such as cash versus accrual basis
  • Introduction to Financial Statements, which include:
  • Income Statement
  • Balance Sheet
  • Cash Flow Statement
  • Statement of Changes in Equity
  • The relationship and data flow among all Financial Statements

Revenue & Expenditure

  • What is included in Revenue and what is excluded from it
  • Cash versus Revenue; why these concepts differ
  • Different types of expenditure recorded in financial transactions
  • What is Cost of Goods Sold – why it is important and how it impacts profitability

Income Statement

  • A detailed review of the Income Statement and its line items
  • Understanding key terminology used in the Income Statement
  • Different types of profits, such as Gross Profit, Operating Profit, and Net Profit
  • What are EBIT and EBITDA and their significance
  • What are extraordinary items and how they are treated during Income Statement analysis

Balance Sheet

  • Key terms used in the Balance Sheet, such as Assets, Liabilities, and Equity
  • Understanding the nature of Assets and their classification into Current and Non-Current assets
  • What are intangible assets and how they are recorded in the balance sheet
  • Understanding Depreciation & Amortization
  • How to classify Current & Non-current liabilities
  • What is included in Equity, Retained Earnings, and Reserves?

Cash Flow Statement

  • Understanding the structure of the Cash Flow Statement
  • What are the different classifications of cash flows according to activities
  • Cash flow from Operating Activities
  • Cash flow from Investing Activities
  • Cash flow from Financing Activities
  • Establishing the link between cash flows from the above three activities and how a business can relate to financing sources using cash flows from different activities

Financial Statement Analysis – Ratio Analysis

  • What is the objective of Financial Analysis
  • What are the different types of financial ratios?
  • How to calculate and interpret different types of financial ratios, including:
  • Profitability ratios
  • Liquidity Ratios
  • Solvency Ratios
  • Investor Ratios
  • Are ratios half the picture?
  • How to use ratios to analyze a company’s financial health

Introduction to Budgeting

  • How can financial budgets play a vital role in managing the business?
  • What is the budget cycle?
  • Long-run budget vs short-run budgets
  • Different budgeting methodologies, including static budget, flexible budget, zero-based budgets, etc.

Investment Appraisal & Project Evaluation Techniques

  • Clarifying the Time Value of Money concept
  • Using the time value of money concept to calculate discounted cash flows
  • How to segregate between relevant and irrelevant cash flows when analyzing a new project
  • Introduction to various investment appraisal techniques, including:
  • Net Present Value (NPV)
  • Internal Rate of Return (IRR)
  • Payback Method
  • How to make project decisions regarding accepting or rejecting a new project
 7 Hours

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