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Objectives

• The objectives of the course are to enable delegates to:
  • Understand the relationship between financial planning, forecasting, and budgeting and integration of the strategic management process with the budgeting cycle
  • Understand cost behaviour, the use of alternative costing systems, and cost/volume/profit (CVP) analysis, and develop and prepare an operating budget and how it may be funded using the alternative sources of finance
  • Use various Excel models to forecast sales pricing, optimal product mix, long- and short-term sales levels, and build financial growth planning models .
  • Use the techniques of budgetary control: development of product standards, flexed budgets, and variance analysis and use of the results of variance analysis to improve operational performance
  • Determine a company’s cost of capital and use the technique of discounted cash flow (DCF) for capital budgeting and evaluation of capital project investment, and risk analysis using the techniques of sensitivity, simulation, and scenario analysis.

The Delegates

• Financial professionals, finance controllers, treasurers and inventory professionals
• Senior professionals with a direct responsibility for financial management and control
• Accountants, sales and purchasing professionals and those responsible for relationship with banks
• Any professional, at junior or senior level, who is a part of the financial decision- making team
• New interns and trainees with finance-related responsibilities

The Contents

• Introduction and course overview.
• Planning for Success

• • What are planning strategies?
  • Planning requirements and working capital
  • Financial planning for growth
  • Financial modelling
  • The balanced scorecard

• The Forecasting Process

• • Determine the purpose and objective of the forecast
  • Statistical analytical tools
  • Quantitative analysis and forecasting
  • Forecasting techniques

• Projecting Revenues – The Sales Budget

• • Projecting sales
  • Long-term trend sales forecast
  • Short-term trend sales forecast
  • The basis of revenue assumptions
  • Sales pricing
  • Full cost pricing
  • Marginal cost pricing

• The Nature and Behaviour of Costs

• • Cost behaviour & Cost classification
  • Fixed costs and stepped fixed costs
  • Variable costs and semi-variable costs
  • Notional costs
  • Cost allocation
  • Product costs and period costs
  • Product costing for inventory valuations and profit ascertainment
  • Absorption costing

• The Budgeting Process

• • Planning and control
  • Budgeting for sales and costs
  • Stages in the budget process
  • Budget preparation process
  • Accounting for headcount and labour costs in the budget model
  • Accounting for depreciation in the budget model
  • Putting the budget together

• Budgetary Control

• • Standard Costing
  • The purposes of standard costing
  • Flexed budgets
  • Variance analysis
  • The reasons for variances
  • Planning and operating variances

• Projecting Expenses – Activity Based Costing And Activity Based Budgeting :

• • The activities that cause costs
  • Processes and activities
  • Under- and over-costing – product cost cross subsidisation
  • Activity based costing (ABC)
  • Refinement of the costing system
  • ABC and cost management
  • Design of ABC systems
  • The cost hierarchy and cost drivers
  • Advantages and disadvantages of ABC systems
  • From traditional budgeting to activity based budgeting (ABB)
  • The ABB process
  • Motivation and the behavioural aspect of budgeting

• Evaluating Capital Project Proposals

• • Various types of capital projects
  • Capital project evaluation
  • Capital investment project appraisal
  • Accounting rate of return (ARR)
  • Payback method
  • Net present value (NPV)
  • Internal rate of return (IRR)
  • Discounted payback method
  • Choosing the right investment appraisal method
  • Equivalent annual cost (EAC) method
  • Modified internal rate of return (MIRR)
  • Capital budgeting methods
  • Capital rationing
  • Profitability index (PI)

• Budget Re-projection – Evaluating Risk And Uncertainty

• • Risk and uncertainty decision rules
  • Worst and best case scenarios
  • The value of perfect information (VOPI)
  • Analysing risk: expected values; standard deviation
  • Sensitivity analysis
  • Simulation model
  • Scenario analysis

• Course assessment  .

The Discount

10% in case of Three P. (or more)