Business Organizations, Sources of Finance, the Finance Function

• The development of business organizations
• The role of Finance and the Finance Function
• Sources and types of finance for business organizations

Teamwork exercise: preparing a business plan to present to potential investors

• The structure of the financial accounting system
• The Income Statement and Statement of Financial Position

Teamwork exercise:  Financial accounting and reporting case study

The Annual Financial Report

• The purpose and format of the Annual Financial Report (AFR), prepared according to IFRS.
• The financial and non-financial elements of the AFR

Teamwork exercise: Assessing the effectiveness of the AFR as a means of communicating with our key stakeholders

• The difference between cash flow and profit

Teamwork exercise: Preparing and presenting a Cash Flow Statement

• How to analyse and interpret the AFR

Teamwork exercise and presentation: Assessing a company’s performance and position by analyzing their AFR

Management Accounting

• Understanding the difference between management accounting and financial accounting
• Calculating the cost of our products and the problem of overheads (indirect costs)
• Overhead apportionment – absorption costing versus Activity Based Costing

Teamwork exercise: Preparing cost estimates for a contract bid

• Cost-Volume-Profit and break-even analysis
• Budgeting – objectives and process

Teamwork exercise: preparing next year’s budgets for a manufacturing business

• Analysing the differences between budget and actual, using Variance Analysis

Investment Appraisal

• The time value of money – future values and present values, perpetuities and growth

Group discussion: Identifying new investment opportunities for your business: 

Teamwork exercise: Basic appraisal methods – Accounting Rate of Return and Payback

• The cost of capital - Equity and Debt

Teamwork exercise: Advanced appraisal methods – Net Present Value (NPV) and Internal Rate of Return (IRR):

• Dealing with capital rationing using the Profitability Index method
• Dealing with forecasting uncertainty using Sensitivity Analysis