Overview

"Financial Reports are as revealing of the HEALTH OF A BUSINESS as the pulse rate and blood pressure are indicators of the HEALTH OF A PERSON."

A fundamental financial objective of all organizations is to be healthy and stable. The financial reports are the means of the company to summarize and communicate financial performance.

If all the organs and parts of the body contribute to the well-being of the person, it also follows that the different sections/departments of the company contribute to its financial condition.

The workshop aims to equip the participants with the knowledge and understanding of the contents of the basic financial reports so that they can link their role in the organization with the financial results of the business.

Learning Objectives

The course will enable the participants to:

1. To define the general financial objectives of the company

• Profitability

• Healthy cash flows o Financial stability

2.To identify and explain the information value of the basic financial statements:

• Balance Sheet

• Income Statement

3. To demonstrate the use of the financial information in decision-making in their day-to-day operations /functional areas

Program Outline

Day 1

A.Introduction to Financial Reports

• Overview of Business Decisions vs Financial Information

• Introduction to o Balance Sheet

a. Income Statement

• Definition of Accounting Principles & Terms

• Transaction Analysis

b. Analyzing Balance Sheet & Income Statement Transactions

c.Accounting Link – Relationship between the income statement and balance sheet

B.Discussion on Taxes

• Value Added Taxes

• Income Taxes including Withholding Taxes

• Excise Taxes

*including a discussion of changes relating to the above items under the new TRAIN

C. Analyzing the Income Statement (Annual Report)

• Vertical Analysis – Story of Profitability o Sales analysis

a. Gross profit margin o Operating Expenses

b. Income from Operations (IFO)

c. Net profit margin

Day 2

A. Additional Tools for Profitability Analysis

• Breakeven analysis

• Return on investment o Return on assets o Return on equity

B. Analyzing the Balance Sheet

• Asset Management

a. Accounts Receivable o Inventory

b. Property & Equipment

c. Capital Expenditures vs Operating Expenses

• Working Capital

• Capital Structure o Leverage ratios o Coverage ratios

• Recap of Balance Sheet Management

C. Cash Flow Statement

• Differentiating between profits and cash flows

• Relating the cash flow statement to the balance sheet and income statement

• Information value of the Cash Flow Statement