Understanding Finance to Influence Strategic Decisions

Introduction

It is essential to fully understand how finance influences strategic decision-making because it provides the foundation for an organization’s economic survival, development, growth, and future prosperity. Are you familiar with the core principles of finance and their links with strategic decisions and financial planning? Are you able to use the financial tools, techniques, and know-how that influence strategic decision-making and apply them practically in real-life business situations?

This exciting and user-friendly, Understanding Finance to Influence Strategic Decisions training course deals with, for example, how to avoid unachievable strategic plans and budgets, non-value-adding project investments, high costs of capital, high exposures to financial risk. It illustrates and reinforces the use of essential financial tools and techniques and will enable non-financial and financial professionals at every level to make better-informed decisions to improve financial performance and increase corporate value and shareholder value.

This training course highlights:

• Linking business and financial strategic decision-making processes with financial planning and budgeting
• Clarification of the financial statements and their links with financial planning, budgeting, and decision-making
• Alternative costing systems, budgeting and measurement systems that support financial decision-making
• Capital investment decisions using DCF, and financing decisions, capital structure, and WACC
• Linking KPIs to strategy using a balanced scorecard, and management of interest rate and foreign currency exchange rate risk

Objectives

By the end of this training course, you will have significantly upskilled to be able to:

• Think strategically and use the strategic management process and its links to KPI systems as a basis for improved decision-making to maximize shareholder wealth
• Analyze and interpret the income statement, balance sheet, and statement of cash flows, and use appropriate costing and measurement systems for more effective planning and budgeting, management of working capital and cash flow, and improved financial performance
• Identify the alternative sources of long-term finance, and evaluate the models of optimum capital structure and minimization of WACC
• Apply the technique of DCF for evaluation of capital project investments, and capital budgeting
• Use the techniques of uncertainty and risk analysis and develop appropriate risk management tools, and insurance and hedging of interest rates and foreign currency exchange rates

Training Methodology

This is an interactive course. There will be open question and answer sessions, regular group exercises and activities, videos, case studies, and presentations on best practices. Participants will have the opportunity to share with the facilitator and other participants on what works well and not so well for them, as well as work on issues from their own organizations. The online course is conducted online using MS-Teams/ClickMeeting.

Who Should Attend?

An understanding of how finance influences successful strategic decision-making is crucial for every role and at every management level in any organization. This Understanding Finance to Influence Strategic Decisions training course is essential for a wide range of professionals from companies, corporations, and governmental organizations, and in addition to interns, financial analysts, financial controllers, accountants, and others active in the planning process this training course will greatly benefit business professionals working in:

• General Management, Sales and Marketing
• Estimating, Costing, and Project Management
• Operations and Engineering
• Procurement and Logistics
• Asset Management
• Human Resources
• And any other financial and non-financial professionals that need or wish to understand the financial aspects of the strategic decision-making process

Course Outline

DAY 1: 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 Maximisation of Shareholder Wealth
• Corporate Objectives, Accountability, and Corporate Governance
• Management Accounting and the links between Strategic Planning and Budgeting

DAY 2: 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

DAY 3: Costing Systems and Measurement Systems that Support Financial Decision-Making

• Costs and Activities
• Cost Behaviour
• 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

DAY 4: 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

DAY 5: 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 Minimise Risk
• Insurance and Hedging
• Interest Rate Risk and Foreign Currency Exchange Rate Risk