Finance for Non-Financial Managers

Day One

Session 1 – Fundamentals of Financial Reporting

• Finance for non-financial managers training equips participants with a practical understanding of core financial concepts, enabling more informed decisions and driving stronger business performance within teams and organisations

• The key components of accounts: Income

• Expenses

• Assets

• Liabilities

• Equity

Introduction to the primary financial reporting statements and key financial performance indicators:

• Net income – measures of profit

• Balance sheet – capital employed and leverage

Fundamental financial management accounting concepts – accruals vs. cash-based accounting

Case Study Exercise: Identify the key measures of strong financial performance

Session 2 – Understanding Profit and Loss/Net Income

• The financial reporting period and the importance of the cut-off

• Reporting revenue and key principles for revenue recognition

• The difference between assets and expenses, and borderline issues such as R&D

• Expense categories: direct and overheads

• Non-recurring exceptional items conclude session 2 of the finance for non-financials training

Profit and loss appraisal exercise: The calculation of gross, net margins and EBITDA

Session 3 – Cash Flow Vs. Profit and Loss

• What is meant by ‘cash’? Plus, the importance of positive operating cash flows

• Accruals compared with cash accounting - examples including credit sales, purchases, accruals and prepayments

• Other non-cash items, such as provisions and depreciation

Exercise – Converting cash profit to accruals profit

Session 4 – An Introduction to the Balance Sheet

• Balance sheet purpose: creditor protection and the impact on reporting assets and liabilities

• Non-current assets and depreciation (amortisation)

• The net current position, working capital and the assessment of liquidity

• Management of working capital: the key issues to remember, such as inventory holding periods

• Finance for non-finance executives training concludes Section 4 with an exploration of financial leverage and the ‘cost of capital’ concept

Exercise – appraisal of a simple balance sheet – net current position, return on capital and gearing

Day Two

Session 5 – Management of Working Capital

This session introduces the core components of working capital management, focusing on how businesses manage inventory, receivables, and supplier payments to maintain healthy cash flow.

• Introduction and overview: What is meant by the working capital cycle?

Managing inventory:

• Stock holding periods and the concept of effective inventory reordering

Management of receivables:

• The impact of slow or non-payment

Management of supplier payment terms (as part of overall working capital management)

Case Study: The calculation of the stock holding period, debtor and creditor days and the working capital obligation of the business.

Session 6 – Risk Management

• Identifying and reacting to key business risks

• Currency risk and financial management issues of foreign currency cash flows

• Interest rate risk and the importance of considering the impact of delayed payment terms

• Credit risk: How should this be reflected in the contract pricing, as assessed in the finance for non-financial managers training

Exercise: Appraisal of different customer types. Which is the best for the business overall? (This could include issues such as allocation of scarce resources.)

Session 7 – Project Appraisal Techniques

Training introduces fundamental techniques for evaluating investment projects.

• An introduction to common appraisal strategies, including: Net present value and discounted cash flows (the time value of money impact)

• Return on investment, internal rates of return

• Payback periods

Additional considerations, including foreign currency cash flows and inflation

Exercise – case study involving basic project appraisal

Session 8 – Concluding Thoughts

• Several issues to consider: Long-term contracts and service agreements – how revenue, costs and profits are reported

• Leasing agreements – the impact of capital and operating leases on commercial performance

• Provisions and contingencies – when to recognise a liability

Synoptic exercise – review of an example draft contract or commercial agreement with a typical customer or client, concludes finance training for non-finance professionals

Please note that sessions allow short breaks of about 15 minutes in both morning and afternoon sessions.

Training Objectives

• Finance for non-financials training enhances the business decision-making capabilities of managers. Participants are equipped with the financial understanding to make informed, strategic decisions that contribute to both financial and broader operational goals of their organisation.

• Attendees will communicate more effectively with colleagues in accounts and finance teams.

• Non-financial managers gain a solid understanding of relevant concepts whilst improving their ability to contribute to their organisations' financial health and strategic direction.

• Finance for non-financial managers training helps participants strengthen commercial and financial understanding by building a solid foundation in core finance and accounting principles.

Training Course Summary

This course equips you with essential financial knowledge and the practical skills required to perform more effectively in a commercial environment. From recording and reporting financial information to interpreting profit and loss statements, balance sheets and cash flow, participants will learn how to apply financial analysis, project appraisal and risk management techniques with confidence.

Finance training for non-finance professionals provides the knowledge needed to make more informed commercial decisions and communicate more effectively with finance teams.