Advanced Cash Flow & Working Capital Management
Overview
This Advanced Cash Flow and Working Capital Management training course will provide you with not just the theory but also the practical tool kit you will need to supercharge the working capital and cash flow engine that is at the very heart of business performance and strength. There is no question that profit is a key component of long-term success and growth but business history is littered with the names of profitable companies that collapsed through lack of cash resources. Not only is cash the essential fuel that keeps the engine running – modern economic theory recognises cash flow as being the key driver of business and shareholder value. This training course will comprehensively cover the principles of effective working capital and cash flow management and will also provide an extensive toolkit of practical methodologies for optimising each of the components of working capital and managing the other key drivers of business cash flow. This training course will highlight: Fundamentals of accounting for cash and working capital Understanding the drivers of cash flow, liquidity and solvency Managing and improving operating cash flows Techniques for optimising the components of working capital Business funding and capital structure Principles of capital investment decision-making Advanced techniques for cash flow forecasting
Objectives
At the end of this working capital and cash flow management course, the participants will be able to: Understand compelling cash flow management fundamentals, including optimizing the functional working capital level. Develop practical experience in managing cash flow and optimizing working capital to facilitate such delivery in real-life business situations. Increase personal financial skill levels. Develop confidence through understanding the primary drivers of successful financial performance. Learn many technical skills, all of which lead to the ability to calculate the required figures and implement them into value-adding business decisions. Understand balance sheets and profit-and-loss statements. Understand the importance of cash as the lifeblood of a business. Focus on crucial inventory, accounts receivable, and accounts payable management areas. Understand how to control and manage the cash flow of a business. Forecast cash flows and draft a cash budget. Evaluate projects based on their expected cash flows. Incorporate risk into financial decisions.
Audience
Accounting and financial specialists. Those who wish to understand how to interpret the financial statements of business entities, those who wish to learn the mechanics of preparing financial statements under IFRS. Individuals charged with the responsibility of providing financial information about a reporting entity that is useful to users in making decisions. Financial accounting team members Financial planning and budgeting professionals Strategic planning and head office team members Corporate communication and investor relations professionals Investment analysts and advisers
Methodology
This seminar is strongly participative, with a learning-by-doing style that makes extensive use of examples, and team-based exercises and case studies (both numeric/analytical and non-numeric/descriptive), and open discussion. A fair level of numeracy is an advantage in this course as is some prior familiarity with the financial basics of income statements, balance sheets, and cash flow statements (although this is not essential). The course will include refresher sessions on accounting and the basics of discounted cash flow (DCF). Each day will comprise several sessions, introducing new material to build on the learning from previous sessions. The program is designed to support the company’s organizational values, enabling employees to learn key finance skills.
Outline
Unit 1: Accounting for Cash Flow Management and Performance A Performance management model of cash flow. The financial language. Accounting basics. Working capital and cash flow management. The 3 Key financial statements. Cash flow vs. profit. Using financial statements to manage cash flow and working capital. Unit 2: Measuring and Improving Performance The impact of inflation on financial performance. Measuring performance: ratios and KPIs. Benchmarking of performance. Ratios for cash flow and working capital management. Basics of working capital management. Credit risk management. Financial modeling for cash flow and working capital management. Spreadsheet modeling and tools and approaches. Unit 3: Strategic Cash Management Cash flow and Cost modeling. The economic value cash flow model. Time value of money and discounted cash flow (DCF). The critical investment indicators. Defining the proper base case, sensitivity, and risk analysis. Treatment of working capital. Valuing companies and acquisitions. Where does net present value (NPV) come from? The drivers of value. Learning from experience and delivering project value. Unit 4: Optimisation of Working Capital Optimization, not minimization. Key issues. Stock. Debtors. Creditors. Stores. Settlement options. The cost of working capital. Long-term. Short-term. Practical examples. Engaging the organization. Unit 5: Cash Flow Planning and Forecasting Approaches to managing cash resources. Cash flow forecasting methods. An integrated approach to risk management. Techniques for managing risk. Building a fundamental driver cash flow forecast. Sensitivity testing cash flow forecasts.