FINANCE FOR NON FINANCE

Program Objective :   The objective of this program is to make you literate in the domain of  finance and accounting.  Let us take some examples which highlight this need.

·       You have always believed that ‘credit’ implies something positive. After all your bank statement gets credited when money flows in. However your accountant says that he is crediting increase in liabilities. The two imply diametrically opposite. None of them should be wrong-after all it is serious business.

·         Your accountant friend tells you that profits earned are actually liabilities. What logic does it make? but actually they are.

·         A production or a marketing manager is reported with an adverse Overhead Variance. What are these Overheads, why not underfoot. How are they loaded on his department?

·       You are a production manager working day and night. Your management decides to sell what you produce at lower than cost. Have they gone crazy? Shouldn’t they ask you to reduce production?

·       You have heard of accounting scams eroding life time wealth of investors. Enron comes straight to your mind. You are fearful that the same may happen to you. Or should you not invest.

·        A CEO engineer is in the news for buying a multimillion dollar high class machine which is reported to be hurting the bottom line of the company to an extent that two of its units have already closed down. The CEO was highly qualified and a renowned world class engineer. Where did he go wrong?

The list of such situations goes on and on. What is important to note is that finance and accounting are important to one and all.

The program ‘Finance for Non Finance’ empowers the non-finance manager and others with an understanding of basic accounting and finance concepts.. The Participants learn to interpret crucial financial data in ways that enable them to improve their effectiveness and make a more productive corporate contribution for value creation. At the end of the course the participants will have an in-depth understanding of finance and accounts related matters which shall help them be more productive and efficient. 

Program Duration   The duration of the program is two days divided into four sessions. The first session is for three and a half hours. The other sessions are of three hours each. Every session shall have a tea break after 80 minutes of learning. Lunch shall be taken between the first two sessions each day.

Program Content Summary

Session 1

This session will help you understand the mechanics of accounting. How does the accountant arrive at the final statements? How are profits different from cash flows?. How a real life stands alone Balance Sheet , Profit and Loss , Statement of Changes in Equity and Cash Flow are understood.

Key words : Accounting Equation, Distinct Entity Concept , Capital and Revenue Expenditure, Double Entry, Accrual basis, Assets, Capital, Liabilities, Adjustments, Journal, Ledger , Trial Balance, Profit and Loss , Balance Sheet and Cash Flow Statement, PE Ratio, EPS.

Session 2

This session will help you understand the importance of time value of money and its relevance in decision making. Tools used to analyze potential investments shall be introduced in this session. How to compare alternative investments? How are investments analyzed?

Key words : NPV,IRR,PB,ARR, Present Value, Future Value, Annuity, Perpetuity, Cash Flows.

Session 3

This session shall highlight the link between the investment and financing decisions. Once a company has decided to invest, how does it plan to finance the same? Where should the money come from? How much would such money it cost? Is it prudent to consider financing costs as investment related cash flows?

Key words : Loan, Bonds, Debenture, Equity, Gordon Model, CAPM, Leasing, Cost of Capital, ROCE, Debt Equity Ratio, Return on Net worth.

Session 4

This session relates to times when the machinery has been bought and the operations begin. How to manage stock? What should be the debt policy? How long does it take to convert raw material into sales?

Key words : Cycle Count, Perpetual Inventory, JIT, Discount, Operating Cycle , Debtors turnover, Stock turnover