Finance & Accounting
Overview
Day 2 of the Five-Day MBA Programme is dedicated to financial management and analysis, a critical area for any business leader. Understanding financial statements, mastering key financial concepts, and making informed decisions based on financial data are essential skills for managing an organisation's resources effectively. Whether you are a non-finance manager looking to enhance your understanding or a professional seeking to sharpen your financial acumen, this session will provide you with the tools to confidently navigate the financial aspects of business.
Throughout the day, participants will explore fundamental financial principles, including how to interpret financial statements, assess financial health, manage budgets, and make sound investment decisions. Practical case studies and interactive exercises will help demystify the numbers, ensuring that participants can apply financial insights in their everyday decision-making.
Learning Outcomes
Understand the components of key financial statements and how to interpret them.
Be able to manage budgets and use financial forecasting techniques to support strategic planning.
Have the ability to analyse a company’s financial health using key financial ratios and performance metrics.
Understand the principles of corporate finance and be able to evaluate capital investment decisions.
Gain insights into different financing options and learn how to make informed decisions about capital structure.
1. Introduction to Financial Accounting
Objective
To provide participants with a foundational understanding of financial accounting, focusing on how financial statements are prepared and what they reveal about a business’s performance.
Key Concepts
The purpose of financial accounting that provides relevant information to stakeholders
The accounting cycle, from transactions to financial statements
The accruals concept and matching principle
Key accounting conventions and terminology
Discussion Points
Why is financial reporting important for decision-making?
How can managers use financial statements to monitor performance and identify areas for improvement?
Outcome
Participants will gain a strong grasp of the basics of financial accounting, including how financial statements are compiled and their role in business performance evaluation.
2. The Balance Sheet
Objective
To provide participants with a detailed understanding of the balance sheet, which summarises an organisation’s assets, liabilities, and equity at a specific point in time.​​​​​​​
Key Concepts
Assets Current vs non-current assets
Liabilities Short-term and long-term obligations
Shareholders’ equity Retained earnings, share capital, and reserves
The accounting equation Assets = Liabilities + Equity
Case Study
Participants will review a sample balance sheet from a real-world company, interpreting its key figures and discussing what the balance sheet reveals about the organisation’s financial position.
Outcome
Participants will learn how to read a balance sheet and understand the financial health of a company, focusing on asset management, debt levels, and equity.
3. The Profit and Loss Statement (Income Statement)
Objective
To help participants understand how to interpret a profit and loss statement, which reflects an organisation’s revenues, costs, and profitability over a given period.
Key Concepts
Revenue, cost of goods sold (COGS), and gross profit
Operating expenses, EBIT (Earnings Before Interest and Taxes), and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation)
Net income and profit margins
Case Study
Participants will analyse an income statement from a listed company, examining revenue trends, cost control measures, and profitability ratios.
Outcome
Participants will be able to assess a company’s profitability and performance by interpreting income statements, enabling them to make better business decisions.
4. Cash Flow Management
Objective
To provide participants with a solid understanding of cash flow statements, which track the flow of cash in and out of a business, and highlight liquidity and operational efficiency.
Key Concepts
The difference between cash flow and profit
The three sections of the cash flow statement Operating, investing, and financing activities
Free cash flow Measuring cash available after capital expenditures
Managing working capital Inventory, receivables, and payables
Case Study
Participants will examine the cash flow statement of a medium-sized company, discussing how cash flow is managed and identifying potential liquidity issues.
Outcome
Participants will be able to interpret cash flow statements and understand how cash management affects a company’s liquidity and operational health.
Additional Online Content
5. Budgeting and Forecasting
Objective
To equip participants with the skills to create and manage budgets, and use forecasts to support strategic planning and resource allocation.
Key Concepts
The budgeting process Creating, monitoring, and controlling budgets
Types of budgets Operating, capital, and cash budgets
Forecasting techniques Rolling forecasts, variance analysis, and scenario planning
The role of budgeting in financial performance management
Workshop
Participants will work in groups to develop a budget for a fictional organisation, taking into account sales projections, cost structures, and capital expenditure plans. They will also perform a variance analysis to identify potential areas for improvement.
Outcome
Participants will develop practical skills in budgeting and forecasting, enabling them to allocate resources more effectively and improve financial planning in their organisations.
6. Key Financial Ratios and Performance Metrics
Objective
To help participants use financial ratios and performance metrics to analyse a company’s financial health and operational efficiency.
Key Concepts
Liquidity ratios (e.g., current ratio, quick ratio)
Profitability ratios (e.g., net profit margin, return on assets, return on equity)
Leverage ratios (e.g., debt-to-equity ratio, interest coverage ratio)
Efficiency ratios (e.g., inventory turnover, receivables turnover)
Case Study
Participants will perform a financial ratio analysis on a publicly listed company, discussing how ratios are used to evaluate financial performance and benchmark against industry peers.
Outcome
Participants will learn how to apply key financial ratios to assess a company’s financial performance, allowing them to make informed decisions about investments, financing, and operational improvements.
7. Capital Investment and Project Appraisal
Objective
To introduce participants to corporate finance concepts and tools for evaluating potential investments and capital projects.
Key Concepts
Time value of money (TVM) Discounting future cash flows
Net Present Value (NPV) and Internal Rate of Return (IRR)
Payback period and profitability index
Assessing risk in capital investment decisions
Workshop
Participants will work in groups to evaluate a proposed capital investment project, using NPV and IRR to determine its financial viability. They will also discuss how to factor risk and uncertainty into the decision-making process.​​​​​​​
Outcome
Participants will gain a solid understanding of corporate finance principles and learn how to evaluate investment opportunities using key financial metrics.
8. Financing Options and Capital Structure
Objective
To provide participants with an overview of financing options available to businesses, and how to make decisions regarding an organisation’s capital structure.
Key Concepts
Equity vs debt financing Benefits and drawbacks of each
Optimal capital structure Balancing debt and equity
Cost of capital Weighted Average Cost of Capital (WACC)
Dividend policy and shareholder value
Case Study
Participants will analyse a company’s capital structure, evaluating its mix of debt and equity, and discussing how financing decisions impact financial performance and risk exposure.​​​​​​​
Outcome
Participants will be equipped with the knowledge to assess financing options and make informed decisions about capital structure that align with business objectives and risk tolerance.
Conclusion
The second day will conclude with a reflection session, where participants will have the opportunity to discuss their key learnings and insights. The day will wrap up with a Q&A session, allowing participants to ask specific questions related to financial management and analysis.