- Contracts and Procurement Training
- Understanding Financial Statements for non-Financial Professionals
- Course Outline
8:00am - Registration and coffee (1st day only)
8:30am - Session begins
4:30pm - Adjournment
Breakfast, two refreshment breaks and lunch are provided daily Description:
Financial statements are standard documents prepared for businesses that range in size from corner grocery stores to multinational corporations. Understanding Financial Statements (UFS) is aimed at people without a background in finance who may move into management positions in which knowing how to work with financial statements is a required skill. The course does not focus on details of how to prepare financial statements, i.e. bookkeeping and accounting, but rather on what information they contain and how this should guide management action. The course covers the income statement, balance sheet and statement of cash flow, illustrating key principles and concepts by both sample problems and analysis of actual company financial statements. Financial statements speak to both operational and financial management issues, and the course addresses each of these. Key differences between companies are illustrated based on their annual financial reports. Participants will emerge with an understanding of why financial statements are so critical to managers and investors, and will be able to extract key information from them and relate it to appropriate action. Who Should Attend:
Understanding Financial Statements will be of value to individuals who either anticipate moving into management positions or who have already done so and lack knowledge of financial statements and their relation to management action and investment decisions. Engineers, technologists, marketers, engineers, and MBA’s long removed from financial statement analysis will benefit from a comprehensive review of the management information contained in financial statements. Objectives:
The objective of the course is to equip participants with:
• An understanding of key differences between operational and financial management.
• A working knowledge of financial statements, i.e. what they measure and why it is important.
• The insight to link financial statement results to appropriate management action.
• The ability to “read” any company from its financial statements.
Course Outline: • “Flavors” of money: key differences between debt and equity.
• The financial statements, and what questions they answer.
• Operational vs. financial management (a concept revisited throughout the course).
• A brief overview of bookkeeping: the concept of the double entry.
• Why accounts are specific to a business.
• The importance of aligning sales and expenses.
• The Income Statement:
o The concept of depreciation and other non cash charges against income.
o The difference between cash and income.
o Using cash flow and income to make appropriate decisions.
o The impact of a chosen depreciation period.
o The concept of margin.
o Book and cash breakeven.
o Different treatments for interest on long term debt.
o EBIT and EBITDA as measures of value creation.
o Horizontal and Vertical Analysis for Income Statements.
o A brief overview of tax.
o The income statement as a rate function.
o How to “cook” the income statement, and steps to prevent this.
• The Statement of Retained Earnings
• The Balance Sheet
o Assets vs. liabilities (other people’s money) and equity (our money).
o The Balance Sheet at a point in time.
o Preparing a balance sheet and relating balance sheet entries to sales level.
o The concept of working capital and why it is the first test of business health.
o Fixing a working capital problem.
o Debt vs. preferred shares.
o The concept of leverage: changing the volatility of earnings.
o How to “cook” the balance sheet, and steps to prevent this.
• The Statement of Cash Flow
o The concept of sources and uses of funds.
o Using sources and uses to track management decisions.
o The Statement of Cash Flow (SCR): a consistent display of sources and uses.
o Using the SCF to analyze companies.
o Linking investment decisions to the character of the investor.
• Key ratios used in analyzing companies.
• Closing Thoughts
o The role of judgment in management decisions.
o How humans make judgmental decisions.
o Key financial issues facing companies. Expected Learning Outcomes
Upon completing this course, participants will be able to: • Use financial statements to evaluate both the character of a company and its financial health.
• Extract key financial information from financial statements and relate it to management issues within a company.
• Participate in senior management discussions related to financial statements.
• Use financial statements to analyze potential investments.
Special Features:Participants are expected to bring a laptop computer to the course to aid in problem solving and the analysis of actual financial statements, and will be given a CD with files to be used during the course. Students with an interest in further reading may purchase a text that explores financial statement analysis in greater depth.
Dr. Peter Flynn received a Ph. D. in Chemical Engineering from the University of Alberta in 1974 and spent the next 25 years in engineering, management and senior executive roles in Canada’s energy and telecommunications industries. In 1999 he returned to the University of Alberta to hold the Poole Chair in Management for Engineers, a position that oversees the Engineering Management graduate program in the Faculty of Engineering.
Peter’s industrial experience convinced him of the need for engineers and others in business who rise into management to have a basic knowledge of financial statements. He revamped financial education for engineers at the University of Alberta, and wrote a text, Financial Management for Engineers. In addition, he has widely taught short courses in understanding financial statements and tutored senior executives who lacked a financial background. Peter’s focus is not on the accounting preparation of financial statements but rather on the information they contain for managers.
Peter serves on a number of Boards, including Plutonic Power Corporation, The Balancing Pool of Alberta, Capital Region Housing Corporation, Fort Edmonton Foundation, and iCORE, and is a member or chair of the Audit Committee for each of these. Peter has applied his financial background in extensive research into the economics of biomass ultilization.
- Prerequisites & Certificates
- Cancellation Policy
If you wish to withdraw from a course, you must advise us, in writing, including the official receipt. Our policies regarding refund are:
More than fifteen business days in advance: a full refund minus $50.00 administration charge.
Fifteen or less business days in advance: a transfer to another course or a credit, valid for one year, to another GIC course can be considered. Credits are transferable within your organization.
If the course has been running for more than 2 weeks, or after the course has started, an 80% credit towards another GIC course may be considered, if notice is received before the start date of the second session. After this time, no refunds or credits will be issued. If a speaker is not available due to unforeseen circumstances, another speaker of equal ability will be substituted.
GIC reserves the right to cancel or change the date or location of its events. GIC's responsibility will, under no circumstances, exceed the amount of the fee collected. GIC is not responsible for the purchase of non-refundable travel arrangements or accommodations or the cancellation/change fees associated with cancelling them. Please call to confirm that the course is running before confirming travel arrangements and accommodations.
Refund Policy: Allow up to 30 days for refunds to be processed.
- Map & Reviews
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