Understanding Financial Statements for Non-Finance Personnel - 59th Run

The Understanding Financial Statements for Non-Finance Personnel workshop is designed to provide basic knowledge of accounting and finance for executives and managers in marketing, operations, HR & IT, entrepreneurs and self-employed professionals with non-finance background. It demystifies finance by explaining simply and clearly what the key financial statements mean, how they work and relate to each other and how to apply key management ratios to evaluate the strengths and weaknesses of the business operations. 

As the focus is on the decision-making process, participants will not be required to understand the book-keeping process and the preparation of financial statements. Instead, upon completing the workshop, they will gain the know-how to apply various analytical techniques to examine the performance of the business operations. Published accounts of public-listed companies and corporate development, both local and overseas, will be used to facilitate practical learning.

Key Topics

Learning about Financial Statements

• Nature & role of accounting
• Desirable qualities of a financial report
• Accounting as an information system
• Financial & management accounting compared
• Fundamental accounting assumptions
• Accounting policies
• Objectives of financial statements: User groups & their areas of interest

Basic Financial Statements

(1) Balance Sheet

• Source & use of funds approach
• Vertical format presentation
• Current assets
• Fixed assets
• Liabilities
• Shareholders' funds
• Capital employed
• Net worth
• Working capital
• Long & short balance sheet analysis

(2) Profit & Loss Account

• Timing adjustments
• Distribution or appropriation of profits

(3) Cash Flow Statement

• Operating cash cycle
• Relationship between depreciation & cash flow
• Non-operating cash outflows & inflows

Interpreting Auditors' Reports

• Objectives & scope of audit
• Reasonable assurance
• True & fair view
• Auditors' opinion: Unqualified, emphasis of matters, qualified, disclaimer, adverse opinion

Analysing Performance of an Enterprise

(1) Liquidity Ratios

• Importance of liquidity
• Application, case studies & interpretation techniques

(2) Profitability Ratios

• Importance of profitability
• Return on investment
• Drivers of margin on sales
• Drivers of sales to total assets
• Operating profit model
• Application, case studies & interpretation techniques

(3) Solvency Ratios

• Importance of solvency
• Application, case studies & interpretation techniques

(4) Asset Management

(5) Ratios

• Importance of asset management
• Application, case studies & interpretation techniques

(6) Stock Market Ratios

• Application, case studies & interpretation techniques