Interpreting Financial Statements for Performance Excellence

Interpreting Financial Statements for Performance Excellence

Introduction

To be able to perform the roles of managers effectively, a thorough understanding of financial statements is imperative. Steering a company without an understanding of financial statements is like flying an airplane without the panel of instruments.

Invariably in almost every Management meeting, financial statements will be tabled and discussed. In the meeting, performance targets are set for the future and current performances are also evaluated quantitatively based on financial figures. Monthly performance is evaluated against targets set in the current period, cumulative year to date, previous years, and against competitors and industry norms. Tools of financial analysis are used to assess the health and sustainability of the business organization.

A thorough understanding of financial statements and their corresponding analysis will empower the managers to play an effective role in discharging their duties to the Company.

Methodology

Lectures, discussions and case studies

Who should attend?

General Managers, Operations Managers, Marketing & Sales Managers, Business Development Managers, Production Managers, Human Resources Managers

Organization

Imperium Edumaax - Professional Development

Outcome

At the end of this course, participants will:

• To enable participants to understand thoroughly and to interpret with intelligence a set of financial statements
• To enable participants to deliberate financial performance and to set financial targets with foresight and confidence
• To enable participants to answer with confidence and intelligence the questions raise by his superiors or financial managers on financial issues
• To understand the concept of Economic Value Added as performance criteria and as targets for performance linked reward package

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No	Topic	Topic Description
1	Overview of financial statements:	The importance of understanding the financial statements Simple accounting jargon and terms (glossary of accounting terms) Business entity
2	Unveiling the mystery of financial statements:	Original accounting transactions, source documents and how accounting statements are prepared from these documents An actual exercise of preparing financial statements
3	Thorough understanding of financial statements:	The users and their objectives of using financial statements What is financial analysis Interpreting and understanding financial analysis Analyzing business solvency and liquidity Analyzing business gearing or debt equity structure
4	Thorough understanding of financial statements (cont’d):	Analyzing the speed of business turnover Analyzing the earning capacity and the quality of earnings Analyzing business growth ability
5	To summarize and arrive at the overall financial analysis using the Du Pont Chart:	Meaning of return on capital employed (ROCE) Meaning of weighted average cost of capital (WACC) Relationship between ROCE and WACC
6	Case study	A case study on financial analysis – Part 1
7	The meaning and importance of Economic Value Added (EVA):	Is the person entrusted to manage the company creating value for or destroying the value of the company? How to compute EVA? EVA, A better performance measuring and reward criteria
8	Investment Analysis	Driving long term share price appreciation by adding economic value to the business organisation
9	Avoiding the pitfalls and understanding the limitations of financial analysis	Summary and conclusion

Expert

David Lam Hai Chiang

Mr. David Lam Hai Chiang FCCA, CA(M) is currently the Director and Head of Imperium Centre for Professional Accountancy at Imperium International College. He is a veteran ACCA professional who has gained valuable experience in the profession, in the corporate and education sectors over a period of 45 years. His varied exposure includes being an audit associate in London to Chairman of Foreign Equity Companies in 7 cities in China. As the head of centre, David is passionate to help students to be self-reliant financially and to realise their potential in the pursuit of their careers. His position in Imperium offers him an ideal opportunity in helping people pass the challenging ACCA exams, thereafter, to counsel and advice his graduates to be budding global accountancy professionals with enviable earning capacity and the right moral character to advance in their career.