Finance and Accounting
Budgeting With Forecasting and the Planning Process
Overview:
Unit 1:
Strategic Management and Financing:
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Strategic Analysis, Strategic choices, and evaluation, and strategic implementation.
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The Links between Strategy, Forecasting, Planning, Budgeting, Performance Measurement.
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Strategic capability and avoiding the Spiral of Death.
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Shareholder Wealth maximization, Corporate and Shareholder value creation.
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Financial Strategy, Dividend Policy, the Agency Problem, and Corporate Governance.
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Long-term Financing:
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Debt and Equity; Cost of Equity using Dividend Growth and Capital Asset Pricing Model (CAPM); Cost of Debt; Weighted Average Cost of Capital (WACC).
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Capital Structure Optimisation Models to minimize WACC.
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Using Strategy Maps to link strategies to Performance Measurement: The Balanced Scorecard.
Unit 2:
Financial Planning, Forecasting, and Risk Analysis:
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The Financial Planning Process and Modelling using Excel.
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Statistical Forecasting Tools and Techniques:
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Time series; moving averages; exponential smoothing; Pareto Analysis; trend progression; linear regression; correlation.
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Forecasting long- and short-term sales revenues, and sales pricing:
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Porter’s generic strategy of cost leadership and differentiation; Bowman’s strategy clock; full cost pricing; marginal cost pricing; target cost pricing; life-cycle costing; kaizen costing; value-based pricing.
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Using Excel for Optimum Product mix decisions.
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Short-term Financing, Working Capital, and the Cash Operating Cycle.
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Direct and Indirect Cash Flow Analysis and Cash Flow Forecasting using Excel.
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Uncertainty and Risk: Business Risk, Financial Risk, Systematic Risk, Unsystematic Risk.
Unit 3:
Cost Analysis Techniques:
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Cost Behaviour and Activities.
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Fixed and Variable Costs, Direct and Indirect Costs.
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Product Costs and Period Costs.
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Cost Allocation and Absorption of Overheads.
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Absorption or Full Costing.
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Marginal Costing.
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Cost-Volume-Profit (CVP) and ‘what-if’ analysis using Excel.
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Activity-Based Costing (ABC) and Activity-Based Management (ABM).
Unit 4:
Budgeting, Budgetary Control, and Performance Improvement:
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To Budget or Not – Purposes and Reasons for Budgets.
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Stages in the Budget Preparation Process and Preparation of the Master Budget.
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Activity-Based Budgeting (ABB).
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Responsibility Accounting and Variance Analysis:
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Standard costing; flexed budgets; budgetary control to measure organizational and management performance.
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Advantages, Disadvantages, and Behavioural Aspects of Budgeting.
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The Conflict between Performance Improvement and the Costing System.
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Lean thinking and integrating continuous performance improvement into the Budget Process.
Unit 5:
Project Appraisal and Capital Budgeting:
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The Time Value of Money.
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Future Values & Present Values.
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Discounted Cash Flow (DCF).
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Capital investment Project Appraisal:
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Accounting Rate of Return (ARR); payback; Net Present Value (NPV); Internal Rate of Return (IRR); Modified Internal Rate of Return (MIRR); Discounted Payback; Equivalent Annual Cost (EAC).
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Project Risk:
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Sensitivity Analysis; simulation; scenario analysis; NPV break-even.
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Capital Rationing and Capital Budgeting and the Profitability Index (PI).