Finance for Non-Financial Managers - Curriculum

This three day program will be organized into three primary sections:

Financial Statements: Speaking the Language of Business

This module will focus on understanding the language of business: the balance sheet, income statement, and cash flow statement.  Participants will learn how these three statements are interconnected and the idiosyncrasies common to each.  The concepts of book value versus market value and depreciation will also be introduced as they relate to analyzing a company’s financial statements. The concept of cost allocation and a review of department level financial statements will also be covered. 

Financial Statement Analysis

Management professionals must not only understand how to read and analyze financial statements, but also how to turn financial information into profitable and ethical business decisions. This module builds on the understanding gained in the previous module in order to provide valuable insight into the firm’s operations.  Participants will learn how to evaluate their firm’s profitability, efficiency, leverage, and liquidity both over time and relative to peer organizations.  Participants will learn how to calculate, decompose and analyze returns to see which areas of your business are performing well and which areas need improvement. 

Financial Tools for Evaluating Operating and Strategic Investments

Considering a new strategic initiative or an investment to improve current operations? This session will demonstrate financial tools and models that can be used evaluate the probability that the future benefits will be large enough to justify the upfront costs.

Participants can expect to:

  • Gain an understanding of the time value of money and its importance in investment analysis.
  • Learn how and when to use alternative measures of Return on Investment, e.g., Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period.
  • Practice using Excel spreadsheets to conduct discounted cash flow (DCF) analyses of potential projects and initiatives.  
  • Use scenario analysis and other techniques to evaluate the risk/reward trade-offs present in all business investments.
  • Discuss the best ways to package a proposal so that it will receive appropriate consideration from corporate officers and others who make the project funding decisions.

Preparing and Presenting Financial Forecasts

This session focuses on the art and science of financial forecasts, as well as presentation strategies designed to ensure maximum impact of your work.  The session will review the basic Discounted Cash Flow (DCF) Model and then expand it through the use of scenario analysis.  Extreme events, such as Black Swan risks, will be noted as a special case of scenario analysis.  Importantly, macroeconomic and historical analysis will be combined to obtain reasonable forecast assumptions.

Special emphasis will be placed on the strengths and weaknesses of various forecast techniques.  The importance of setting reasonable expectations will also be discussed in the context of Behavioral Finance. Participants will learn to effectively model a range of revenue, expense, and profit scenarios in Excel.

The second part of the session will focus on effectively presenting financial forecasts.  Techniques will include strategies for influencing others (Reciprocation; Commitment and Consistency; Social Proof; Liking; Authority; Scarcity) and data visualization.  Once again, research from Behavioral Finance will be used to custom tailor the results of your forecasts to a wide range of end users. The session aims to be interactive, utilizing a number of spreadsheets, internet websites, and presentation exercises.

Case Study: Pulling it All Together To Make Good Decisions

We will discuss investment evaluation techniques in the context of a real-world case. A manufacturer and retailer of specialty doll products needs to decide between two investment projects. You will learn how financial forecasts can be used to compute cash flows, and then use discounted cash flow analysis and other project performance measures to contrast between the two projects and make a recommendation.

Capstone Project

You will be furnished with information about a hypothetical investment prospect. Your job will be to work as part of a group to apply all you have learned from prior sessions about investment evaluation and make a recommendation about whether the investment should be pursued or not. You will present your findings as a group of consultants, clearly explaining the logic behind your analysis and emphasizing any assumptions underpinning it.