Understanding Finance to Influence Strategic Decisions

Course outlines:

Module One:

Linking Strategic Management and Decision-Making with Financial Planning and Budgeting

• Strategy and Strategic Management
• Vision, Mission, and Objectives
• Key Features of Strategic Decision-making
• Rolling-out and Implementing Strategies
• Value Creation and Maximization of Shareholder Wealth
• Corporate Objectives, Accountability, and Corporate Governance
• Management Accounting and the links between Strategic Planning and Budgeting

Module Two:

The Financial Statements and Their Links with Planning and Financial Decisions

• The Three Key Financial Statements
• Balance Sheet
• Income Statement
• Statement of Cash Flows
• Sources of Internal and External Financing
• Cost of Equity, Cost of Debt, and the Weighted Average Cost of Capital (WACC)
• Capital Structure Models to minimize WACC
• Preparing a long-term Financial Plan to Determine Financing Requirements

Module Three:

Costing Systems and Measurement Systems that Support Financial Decision-Making

• Costs and Activities
• Cost Behavior
• Fixed Costs and Variable Costs
• Cost-Volume-Profit (CVP) Relationships, Break-even and Sensitivity Analysis
• Direct and Indirect Costs
• Activity Based Costing (ABC) and Management (ABM)
• Refining the Costing System for Improved Decision-making

Module Four:

Capital Investment Decisions

• Future Values, Present Values and Discounted Cash Flow (DCF)
• Capital Budgeting Principles
• Evaluating Capital Investment Projects using Accounting Rate of Return (ARR) and Payback
• DCF Evaluation Methods of Net Present Value (NPV), Internal Rate of Return (IRR), Modified Internal Rate of Return (MIRR), Equivalent Annual Cost (EAC)
• Deciding on which Investment Appraisal Methods to use
• Capital Budgeting, Capital Rationing and the Profitability Index (PI)
• Further Factors to Consider in Investment Appraisal

Module Five:

Linking Performance Measures to Strategic Decisions and Financial Risk Management

• Linking Strategic Objectives to Key Performance Indicators (KPIs) in a Balanced Scorecard
• Obstacles to Achieving Strategic Objectives created by the Accounting and Costing System
• Uncertainty and Risk Analysis
• Types of Business Risk and Financial Risk
• Risk Management Principles
• Development of Risk Management Tools to Mitigate and Minimize Risk
• Insurance and Hedging
• Interest Rate Risk and Foreign Currency Exchange Rate Risk