The Oxford Financial Excellence Programme

Introduction

This Seminar provides business professionals with a deeper understanding of financial management as practiced by today's most powerful companies by demystifying the complex world of finance, and providing the tools and insights that you will need to meet your own professional goals and the greater goals of the organisations you serve.

Seminar Objectives

By the end of this seminar delegates will be able to:

• Acquire an understanding of the fundamentals of the successful management of corporate financial performance, from the development of strategy through planning and budgeting to performance monitoring and control
• Develop practical experience of the workings of a best practice financial performance management model, and of how to improve corporate financial performance in real-life
• Gain the insights required to win in the global marketplace, for example relating to:
  • Interpreting financial statements
  • Evaluating financial performance
  • Financial forecasting
  • The financing decision
  • Determining the cost of capital
  • Evaluating investment opportunities
  • Managing risk
• Raise financial skills

Who Should Attend?

• Staff who wish to gain an up-to-date and broader perspective on how industry leaders continually improve their financial performance, learn about current best practices, and improve their competencies in this area
• Financial and non-financial business professionals from all functions of an enterprise
• Financial professionals wanting an update or a ‘refresher’ of their knowledge
• Recent company recruits who need to learn about modern corporate financial performance management processes, and develop their competencies in this area
• People from outside business who require a thorough conceptual and practical introduction to the performance management processes and techniques adopted by the leading players

Training Methodology

Using a combination of seminars, team exercises and individual exercises, delegates will gain both a theoretical and 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.

There will be a strongly participative, learning-by-doing, style, making extensive use of short case studies (both numeric/ analytical and non-numeric/descriptive) and syndicates, as well as open plenary discussion sessions.

Some parts of the course will include short revision/refresher sessions on accounting and DCF basics. Each day will comprise several sessions, introducing new material to build on the learning in the previous sessions.

The seminar manual will include copies of all the material used.

Delegates are requested to bring laptop computers to the seminar.

  Seminar Outline

Day 1 – The financial framework and language

• The value model
• Definitions of value
• Value to the investor
• Managing for shareholder value
• Shareholder value creation in perspective
• The three key financial statements
• Balance sheet
• Income statement
• Cash flow statement

Day 2 – Managing performance measurement

• A performance management model
• Ratios and KPIs
• Ratio systems
• Integration of financial performance measures
• Benchmarking financial performance
• Planning

Day 3 – Managing operating performance

• Cost behaviour and operating leverage
• Budgets
• Activity based budgets
• Control
• Flexed budgets and variance analysis
• Benchmarking operational performance
• Internal benchmarking

Day 4 – Managing capital

• Cash flow, the time value of money, and DCF
• Standard evaluation terminology
• The key investment analysis indicators
• Applying time-adjusted measures
• Choosing the best method
• Alternative evaluation methods
• Risk management
• Sensitivity analysis
• The key driver of value: cost of capital
• Cost of debt capital and cost of equity capital
• Weighted average cost of capital (WACC)
• Capital restructuring – financial engineering
• Management buy-outs and management buy-ins

Day 5 – Managing working capital

• Cash flow, working capital, and the operating cycle
• Optimise not minimise
• Key issues: stocks; debtors; creditors
• Stocks management
• Debtors and credit management
• Creditors management
• The cost of working capital
• Cash improvement

Day 6 : An introduction to the Financial Markets

• An introduction to the equity markets:
  • IPO’s
  • Market Indices
  • International Equity Market Links
• An introduction to bond markets
  • Long Term versus Short Term
  • Treasury versus Corporate
  • Types of Bond
• An introduction to the FX market
  • The spot and forward market
  • Exchange Rate trends and linkages
  • Carry Trades
• An introduction to the Derivatives Market
  • Futures
  • Options
• The link between risk and return.

Day 7: Evaluating investment opportunities

• The Markowitz model of Portfolio Risk
• The Capital Asset Pricing Model
  • A practical application of the CAPM to a range of companies
• The time value of money and discounted cash flow techniques
• The Gordon Growth Model
  • A practical application of forecasting dividends
• Determining the Cost of Debt
• The weighted average cost of capital (WACC)
  • The Ameritrade Case
• Investment Appraisal using the Net Present Value approach
  • The importance of the cost of capital
  • Scenario analysis
• Payback and adjusted Payback
• The Internal Rate of Return (IRR) approach
  • A practical application of the IRR approach.
  • Pitfalls in using the IRR approach
• Real Options

Day 8: A walk through an annual report

• The Balance Sheet
• The Income Statement
• The Cash Flow Statement
• Ratio Analysis
• A practical application of Ratio Analysis:
  • Apple v Microsoft
  • Next v Tesco
  • Easyjet v British Airways
• Forecasting Sales
  • The cost of sales approach

Day 9: The Corporate Financing Decision

• Financial Leverage
  • Modiglianni and Millers Theory of Capital Structure
  • The Risk of Bankruptcy
  • The Optimal Capital Structure
• The Dividend Decision
  • The clientele effect
  • The taxation effect
• The principal agent problem
• The market for Corporate Control

Day 10: Risk Management

• Hedging Exchange Rate risk using:
  • the forward market
  • the options market
  • zero cost collars
• Hedging commodity price risk using:
  • Options
  • Futures
• Practical Application of airlines hedging fuel price risk – the importance of correlation