Introduction

This seminar is a combination of 2 modules –

Module 1 - Understanding Finance to Influence Strategic Decisions
Module 2 - Financial Analysis, Planning & Control

Both modules are taught by experts in their fields to provide an innovative and interesting seminar combining the best practices in both strategy and financial analysis. This enables delegates to see far beyond their own department for the future and combined benefit of the company.

Who Should Attend?

This seminar is a ‘must’ for any Finance Professionals.

MODULE 1 – Understanding Finance to Influence Strategic Decisions

Introduction

This seminar will help participants understand how financial analysis and basic financial concepts can be used by managers at all levels to make better strategic decisions. The seminar will establish the theoretical framework for making strategic financial decisions and review the tools available to managers for analyzing and evaluating strategic alternatives.

Topics examined in this seminar include such fundamental concepts as risk versus return, the cost of capital, the time value of money and the significance of statistics. The seminar will also examine the importance of financial planning, capital budgeting, leverage, capital structure and mergers as a means to achieve strategic objectives. Finally, the seminar will review the potential impact of economics, taxes and foreign currency on strategic planning.

Seminar Objectives - Upon completion of the seminar attendees will:

• Understand the importance of finance as a component of the strategic decision making process
• Understand the significance of the theoretical concepts underlying the use of financial tools in the strategic decision making process
• Understand the application of financial tools in the strategic decision making process
• Understand how external factors can impact strategic financial plans and affect strategic decisions
• Have gained practical experience using analytic tools to evaluate the financial consequences of alternative strategic decisions
• Have used financial tools to evaluate strategic alternatives in case studies taken from the real world

Training Methodology

The seminar will be presented in a participative classroom style with discussion, practical exercises and case studies. Attendees will need to bring a pocket calculator in order to participate in the exercises and case studies. If the attendee has a laptop computer with Microsoft Excel he or she may want to bring that.

Seminar Benefits

Attendees should leave the seminar with a better understanding of how financial considerations help to determine an organization’s strategic decisions which should enable managers to better anticipate how such decisions may affect their own department or business unit. Organizations should benefit from the ability of managers to understand and anticipate the financial factors that go into strategic decisions which should ultimately result in better strategic planning.

Seminar Outline – Week 1

Module 1 - Fundamentals of Strategic Planning

• Why plan
  • Establish an unambiguous direction
  • Balance long term and short term objectives
  • Identify required and available resources
  • Establish investment criteria
  • Compare investment alternatives
• Components of a plan
  • Mission Statement
  • Long Term Goals
  • Short Term Objectives
  • Operating Plan
  • Financial Plan
• Apply Knowledge in an Exercise

Module 2 - Fundamentals of Financial Statements

• Understanding financial statements
• Analyzing financial statements
• Using financial analysis in strategic planning
• Apply Knowledge in an Exercise

Module 3 - Important Concepts

• Profit Versus Wealth
• The Value of Money Over Time
• Risk Versus Return
• The Cost of Capital
• Apply Knowledge in an Exercise

Module 4 - Capital Budgeting

• Preliminary Steps
• Capital Budgeting Methods With No Risk
• Capital Budgeting Methods With Risk
• Apply Knowledge in an Exercise

Module 5 - Capital Structure and Leverage

• Basic Concepts
• Explaining Financial Leverage
• The Impact of Working Capital on Leverage
• Capital Structure
  • Capital Structure and the Value of Stock
  • Capital Structure and the Value of the Firm
  • Capital Structure Controversies
• Sources of Capital
  • Equity
    • Common
    • Preferred
    • Quasi Equity
  • Debt
    • Long Term
    • Short Term
    • Seasonal
    • Permanent
  • Lease versus Loan
• Apply Knowledge in an Exercise

Module 6 - Bringing It All Together

• Review What Was Learned in Previous Modules
• Apply Knowledge in an Exercise

Module 7 - Case Study

• Establish Strategic Objectives
• Establish Minimum Return of Investment Criteria
• Establish Strategic Investment Needs/Alternatives
• Determine Financial Resource Requirements
• Determine Financing Alternatives
• Analyze projected ROI from Each Investment Alternative
• Do Sensitive Analysis using Different Financing Alternatives
• Analyze Profit and Loss and Cash Flow Implications of Each Alternative
• Analyze Each Alternative’s Balance Sheet Impact
• Analyze Impact on Capital Structure, Stock Price and Value of Firm
• Make Recommendations

Module 8 - Case Study

• Review and Discuss Recommendations

MODULE 2 - Financial Analysis, Planning and Control

Introduction

Management has been defined as “the art of asking significant questions.” The same applies to financial analysis, planning and control, which should be targeted toward finding meaningful answers to these significant questions—whether or not the results are fully quantifiable.

This seminar not only presents the key financial tools generally used, but also explains the broader context of how and where they are applied to obtain meaningful answers. It provides a conceptual backdrop both for the financial/economic dimensions of systematic business management and for understanding the nature of financial statements, analyzing data, planning and controlling.

Seminar Objectives - The seminar provides delegates with the tools required to find better answers to questions such as:

• What is the exact nature and scope of the issue to be analyzed?
• Which specific variables, relationships, and trends are likely to be helpful in analyzing the issue?
• Are there possible ways to obtain a quick “ballpark” estimate of the likely result?
• How precise an answer is necessary in relation to the importance of the issue itself?
• How reliable are the available data, and how is this uncertainty likely to affect the range of results?
• Are the input data to be used expressed in cash flow terms—essential for economic analysis—or are they to be applied within an accounting framework to test only the financial implications of a decision?
• What limitations are inherent in the tools to be applied, and how will these affect the range of results obtained?
• How important are qualitative judgments in the context of the issue, and what is the ranking of their significance?

Competencies Emphasised

• Obtaining the relevant information, given the context of the situation
• Choosing the most appropriate tools
• Knowing the strengths and limitations of the available tools
• Viewing all analysis, planning and control decisions in the context of their impact on shareholder value

Personal Impact

Delegates will acquire the ability, when involved in decisions about business investment, operations, or financing, to choose the most appropriate tools from the wide variety of analytical techniques available to generate quantitative answers. Selecting the appropriate tools from these choices is clearly an important part of the analytical task. Yet, experience has shown again and again that first developing a proper perspective for the problem or issue is just as important as the choice of the tools themselves.

Organisational Impact

This seminar provides an integrated conceptual backdrop both for the financial/economic dimensions of systematic business management and for understanding the nature of financial statements. All the topics on the seminar are viewed in the context of creating shareholder value—a fundamental concept that is consolidated on the final day of the seminar.

Training Methodology

The training methodology combines lectures, discussions, group exercises and individual exercises. Delegates will gain both a theoretical and a practical knowledge of the topics covered. The emphasis is on the practical application of the topics and as a result delegates will return to the workplace with both the ability and the confidence to apply the techniques learned, in carrying out their duties.

All delegates will receive a comprehensive set of notes to take back to the workplace, which will serve as a useful source of reference in the future. In addition, all delegates will receive a CD-ROM disk containing additional reference material and Excel templates, related to the seminar. Delegates are requested to please bring a pocket calculator to the seminar.

Seminar Outline – Week 2

The Challenge of Financial/Economic Decision-making

• The Practice of Financial/Economic Analysis
• The Value Creating Company
• A Dynamic Perspective of Business
• The Nature of Financial Statements
• The Context of Financial Analysis

Assessment of Business Performance

• Ratio Analysis and Performance
• Management’s Point of View
• Owners’ Point of View
• Lenders’ Point of View
• Ratios as a System
• Integration of Financial Performance Analysis
• Some Special Issues

Projection of Financial Requirements

• Pro Forma Financial Statements
• Cash Budgets
• Operating Budgets
• Interrelationship of Financial Projections
• Financial Modelling
• Sensitivity Analysis
• Dynamics and Growth of the Business System
• Leverage
• Financial Growth Plans

Analysis of Investment Decisions

• Cash Flows and the Time Value of Money
• Components of Analysis
• Methods of Analysis
• Applying Time-Adjusted Measures
• Strategic Perspective
• Decisional Framework
• Refinements of Investment Analysis
• Dealing with Risk and Changing Circumstances
• Cost of Capital and Business Decisions
• Weighted Cost of Capital
• Cost of Capital and Return Standards

Valuation and Business Performance

• Definitions of Value
• Value to the Investor
• Business Valuation
• Managing for Shareholder Value
• Shareholder Value Creation in Perspective
• Evolution of Value-Based Methodologies
• Creating Value in Restructuring and Combinations

Oxford Management Centre
John Eccles House
Robert Robinson Ave
Oxford Science Park
Oxford
OX4 4GP
United Kingdom

Tel: +44 1865 338088

Fax: +44 1865 338100

email info@oxford-management.com