Assessing Financial Health
This course is aimed at directors, keen to develop requisite skills or refresh their knowledge, for analysing and interpreting key information from accounts.
In an increasingly competitive and regulatory environment, understanding financial concepts and terms used by directors in today’s business world has never been so important and is key to identifying key information and underlying messages within accounts. This highly interactive programme will give delegates an opportunity to learn how to navigate quickly, and as a result, you will be in a better position to assess your company’s financial position.
Features and objectives
You will learn about the value and use of accounts, and the importance of narratives and other supplementary information contained in a set of accounts.
Provides practical, real-life examples to focus on the modern-day challenges and the way finance plays a role in a director’s everyday life.
Participation in this course will enable you to:
- Critically analyse financial statements, detect weaknesses, avoid pitfalls
- Interpret key messages issued by senior management
- Identify vital ratios as a method to diagnose potential problem areas
- Evaluate stakeholder expectations and potential uses of reported information
Introduction and Course Objectives
- Course Leader and participants (Getting to know who is in the virtual room)
- What is of particular interest to you and why?
Financial information – inter-relationship and key messages
- Differing expectations and perspectives (Board, Shareholders, other stakeholders)
- Financial versus management information
- The main components of financial statements (includes Directors and Auditors Reports, Notes)
- Discussion: Stakeholder expectations – knowing the key questions on financial information
Balance sheet – assessing the financial condition
- Snapshot of financial strength and the well-being of a company
- Assets, liabilities, working capital, and funding
- Key messages to look out for
Income statement – exploring margins and profit to cash conversion
- Income and expenses (fixed versus variable costs)
- Cash versus profit – the critical difference
- How is the company doing?
- Case Study – Carrying out the fundamental health check
Cash flow statement – appraising the sources and uses of cash
- Classification into operating, investing, and financing activities
- What can you do with a Cash Flow Statement?
Analysis and reporting – pinpointing signals, ratios, and trends in key drivers
- Identifying trends in key business drivers (e.g. EBITDA margin, gearing)
- Ratio classification into main groups
- Reading between lines – What are the directors trying to tell us?
- Discussion: Spotting companies in financial distress
Recap and Closing discussion
- Reflections and key takeaways?
Over 25 years, Raj has held board positions specialising in finance, treasury, governance, and risk within the financial, energy, and retail sectors. His knowledge and expertise have inspired him to become a course leader for the last 10 years, delivering for institutions like ACCA, ICAEW, and IoD.