Finance for non-financial managers course

On our financial analysis and finance for non-financial managers training course delegates are given the opportunity to understand and interpret company accounts.  What do the key line items really mean?  How do the accounts link together? What’s interesting about what’s buried in the notes? What are the key ratios? How could the statements be used in investment analysis?

On this program course delegates bring a set of financial statements to class, review the statements with their class mates and the course tutor, and use company accounts to generate meaningful information right from the start of training.

Outline for the finance for non-financial managers training course – 1 day

Line items in accounts

Session 1: Introduction to company accounts

  • Reviewing key line items
  • What are the most important measures?
  • What are the most important measures of profitability?
  • What are the most important measures of financial strength?
Group exercise – understanding real accounts.  Delegates work in pairs to review a set of accounts for a client they know or for another company they are interested in.  What are the key line items?  Which do you need help understanding?  Is this a very profitable business (why)?

    • Do you think this company is well placed to contemplate an acquisition (why)?
    • Key linkages in accounts
Group exercise – understanding linkages in company accounts. Delegates work together to model the impact of new transactions (e.g. issue of shares, debt raising) for a start up business. How does inputting a transaction in one part of the financial statements affect the financial statements elsewhere? What are the main linkages between the statements? Can you create a set of financial statements for this business’s first year of operation, just like the company’s finance director would have to?

Using accounts in company valuation

Session 2: Real-life application - using accounts in company valuation

  • How do buyers value companies when they acquire?
  • Overview of valuation methods
  • Introduction to and discussion of common valuation techniques
  • Overview of common multiples
  • What accounting line items are the most important?
  • Which line items are the most volatile?  Which are the most consistent/ reliable?
Group exercise – company valuation. Participants place themselves in the position of a client faced with an offer to purchase their business. Based on the financial information available to us, what ball-park offer would be reasonable?

Putting together a deal

Session 3: Real life application – structuring a real deal

  • Introduction to the fundamental principles of deal structuring
  • Exploring “sources & uses” – a key learning concept
  • Concentrating on the key levers for a deal without getting bogged down in complex models
Case study (a) – deal structuring in practice. Delegates develop a deal structure for the ‘mega buy out’ of UK high street retailer Boots plc. What’s unusual about what you see there?  What can we learn from a deal like this?
Case study (b) – bringing it back down to earth. Delegates work in groups to build up a transaction structure for an example deal the firm might be advising on. What’s going to happen to debt levels? How much are fees going to be and where are they going to impact? What about goodwill? Delegates work together to analyse the immediate impact of the deal on their client’s financial statements. What’s the impact e.g. on the balance sheet?

Earn outs

Session 4: Real life application – agreeing an earn out

  • Earn outs
  • Key areas of debate
  • The link to company accounts
  • What accounting line items will the earn out reference to?
  • Does the seller want to be higher up or lower down the P&L?
  • What risks does the seller face?
Group exercise – earn outs. Delegates are supplied with a sample earn out from their client’s lawyer, who has asked for your input. What issues do you see there? What would it make sense to negotiate over? What could you achieve here?

Conclusion

Course conclusion

  • Key opportunities
  • Major areas of commercial debate
  • Recap on main learning points

Download the online outline for the course

Here you can download the finance for non-financial managers course outline online.