Financial Statements & budgets

:Program Objectives

1. How to decipher general accounting terminology and gain a clear understanding of the language of finance and accounting  
2. Gain insights to vastly improve your working knowledge and interpretive ability for balance sheets, income statements, and cash flow statements  
3. How to use your enhanced knowledge of financial statements to develop better budgeting, projection, and forecasting skills  
4. Interpreting annual reports: how to translate their deluge of information into knowledge that can help you make informed decisions
5. How to better communicate with accountants, bankers, comptrollers, and other finance professionals
6. Using financial ratios to analyze trends, conduct industry comparisons, and predict financial problems before they become insurmountable

:Course Outline

Financial Fundamentals

• Setting Strategic Objectives
• Communicating Strategic Goals
• Long Range and Short Range Planning
• Measuring and Monitoring Performance
• Meeting Investor Expectations
• Identifying Constraints and Opportunities
• Controlling Costs
• Cash Management and Timing Differences
• The Budgetary Process

Major Principles of the Accounting Process

• The accounting cycle – from source documents to financial statements & budgets
• What is the significance of the chart of accounts?
• The difference between statutory and management accounts
• What are the major accounting guidelines and standards?
• Simplifying The Major Accounting Terms You Should Know
• What are the key accounting concepts?
• What are assets and how are they valued?
• What are liabilities and how are they valued?
• What comprises equity and how it is disclosed?
• What are the different types of revenue and expenditure items?
• What are provisions, accruals and prepayments?
• How do you depreciate and amortize assets?
• What is "accrual accounting" profit and how does it differ from cash flow?
• Exercise: Profit Versus Cash Flow

The balance sheet 

• Discover what a balance sheet is, and what sets it apart from other financial statements budgets
• Decipher how accounts are classified within the balance sheet
• "Current," "fixed," and "other" assets -- what they are, how to assess their value to the company 
• Use comparative analysis to analyze an organization's financial picture over a specified period of time

The income statement

• Identify the components of a classified income statement 
• Understand why tax expense on the income statement is not always the same as taxes paid during the year  
• Distinguish gains and losses categorized as "extraordinary" and how they are reflected on the income statement
• Cost of Goods Sold -- learn what this means to an analysis of expenses
• Learn how to determine gross profit, compare to net profit, and draw conclusions about a company's operating environment

Understanding and analyzing financial statements & budgets

• What financial statements can't tell you --review the limitations of financial analysis
• Using horizontal analysis to determine increases or decreases in income, profits, and expenses 
• Using vertical analysis to compare individual income and expense amounts with net sales
• An introduction to ratio analysis
• Using ratios to determine profitability: proven formulas for net profit margin, net operating margin, return on assets, return on equity, earnings per share, and more.