Understanding Finance to Influence Strategic Decisions

Introduction

A good understanding of strategic analysis and fundamental financial concepts enables all professionals at every level to make better strategic decisions and achieve improved performance.

This highly interactive seminar has been designed to establish the theoretical framework for making strategic financial decisions and review the tools available to managers for analysing and evaluating strategic alternatives.

Seminar Objectives

• To create opportunities for your personal development and your ability to accept new challenges when they arise
• To enable you to develop and manage the financial aspects of your role more effectively
• To improve your self-confidence in dealing with finance and financial professionals
• To enable you to manage the stresses and pressures of an increasingly complex financial environment

Who Should Attend?

This seminar is designed for business professionals from sales and marketing, project management, human resource and other non-financial areas that need or wish to understand the financial aspects of the strategic decision making process. Other prospective attendees would include interns, junior financial analysts and other people active in the planning process.

Competencies Emphasised

• How to use the tools of strategic management and planning
• How to interpret and analyse the financial statements of a business: balance sheet; income statement; cash flow statement
• How to identify the various sources of funding available to a company
• How to evaluate the costs of financing and the company’s average cost of capital
• How to prepare financial projection models to determine the financing needs of the business
• How to budget for investments in new projects
• How to manage financial risks
• How to deal with risks relating to interest rates and foreign currency exchange rates

Personal Impact

This seminar will empower individuals to develop the financial aspects of their job, enhance their performance, and broaden their role. Delegates should leave the seminar with a better understanding of how financial considerations help to determine an organisation’s strategic decisions, and should enable managers to better anticipate how such decisions may affect their own department or business unit.

Organisational Impact

This seminar will enable delegates to:

• Recognise the importance of finance as a component of the strategic decision-making process
• Appreciate the significance of the theoretical concepts underlying the use of financial tools in the strategic decision-making process
• Apply the appropriate financial tools in the strategic decision-making process
• Identify the impact of external factors on a company’s strategic financial plans and decision-making
• Evaluate the financial consequences of alternative strategic decisions Organisations should benefit from an increase in the ability of their managers to understand and anticipate the financial factors that form the basis of strategic decision-making, which should ultimately result in better strategic planning, and improved company performance.

Training Methodology

The seminar includes numerous practical exercises, and participative exercises and case studies. It will be presented in a very user-friendly way to suit individuals with varying levels of financial knowledge and experience. Our aim is for this to be an enjoyable learning experience.

Seminar Outline

Day 1 – Fundamentals of strategic planning

• What is strategy?
• Strategic management
• Strategic analysis
  • Mission
  • Objectives
  • Strategic decision-making
• The strategic planning process
  • Environmental analysis
  • Resources analysis
• Strategic choice
• Strategic implementation
• Corporate objectives and accountability
• Forecasting financial data

Day 2 – Fundamentals of financial statements

• Financial statements
• Balance sheet
• Income statement
• Alternative asset valuation methods
• Cash flow statement
• Common size (or horizontal) trend analysis of financial statements
• Vertical trend analysis of financial statements
• Segmental analysis of financial statements
• Value added analysis of financial statements
• Understanding the cash flow cycle and the operating cycle
• Break-even and multiple product break-even analysis

Day 3 – Capital structure and leverage

• Sources of funds
• Capital cost models
• Can we determine a company’s optimal capital structure?
• Capital structure models
• Preparing projections to determine financing needs

Day 4 – Capital budgeting

• Future values, present values and DCF
• Capital budgeting principles
• Methods of evaluating capital investment projects
• Accounting rate of return (ARR) and payback
• Net present value (NPV) versus internal rate of return (IRR)
• How do you choose which method to use?
• Equivalent annual cost (EAC) method
• Capital budgeting methods
• Capital asset pricing model (CAPM) versus arbitrage pricing theory (APT)
• Does it make a difference whether we lease or buy?

Day 5 – Managing financial risks

• The value of perfect information (VOPI)
• Types of risk • Risk management principles
• Talking to your bankers about managing risk
• The analytical tools to manage risk
• How to develop the tools for your company
• How to minimise risk
• Insurance and hedging
• Interest rate and foreign currency exchange rate risk

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