Business Acumen (Finance)

Overview
This type of course is usually taught with lectures, long cases, and pre-existing reports which students tear apart trying to analyze. This method only creates confusion.

In this finance course, students work with a computer simulation of a start up business and blank spreadsheets, one for each key report They make decisions to raise capital, borrow funds, set prices, hire staff, and order materials, and buy equipment. They enter decisions via the spreadsheets, which immediately post each new number into the affected accounts on each report. Participants can immediately see the impact of each decision on each report, live on screen, before they commit. They also have the ability to change decisions and learn from cause and effect situations.

Objective
Day 1 covers "financials" and the three basic financial reports (a) Balance Sheets, (b) Income (and Expense) Statements, and (c) Cash Flow Statements. Participants learn how to read and interpret them and analyze the vital data they provide. There is also a careful review of key performance metrics with direction on how to calculate ratios such as return on investments and assets. These are brought together in one classic integrated model putting the pieces together to facilitate sound, financially-based business decisions.

Day 2 adds additional concepts which build on day one and includes how to calculate capital requirements for new products or projects. Participants also learn how to compute the cost of capital, define product costs, set pricing strategies, prepare appropriation requests, and calculate the time value of money, net present value, payback and hurdle rates. Morevoer, participants also learn how to prepare project justification and manage the approval process, concluding with the development of an actual appropriation request which will be presented.

Key Learning Points

DAY ONE

• Analyze a Balance Sheet - assets, liabilities, owner’s equity
• Analyze Income (and Expense) Statements
• Interpret cash flow statement’s sources and uses of cash
• Identify, and use financial metrics/return ratios
• Construct an integrated Financial Model - combining all metrics
• Make basic Business Decisions - raising capital, hiring staff, borrowing money, purchasing supplies

DAY TWO

• Identify product costs and cost drivers
• Understand the Price Elasticity of Demand
• Identify Capital Allocation strategies used by senior management
• Prepare Capital Appropriation Requests for new and not-new products and for other capital investment projects

Recommended for
Those need to understand finance, accounting, and business decision making ‘basics’, the language of business.

Also for Middle Managers, Program and Project Managers, Product and Brand Managers and anyone with profit and loss responsibility who manages against a budget or makes capital investment requests or capital allocation decisions.