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Who should attend:
Financial Manager, Manager R&D, Sales/Marketing Manager, Manager
General Accounting, Business Unit Manager
The approach to this seminar is highly
interactive, requiring the application of principles to case study based
on the client's business. Work teams of 5 or 6 will produce budgets for
various business functions such as sales and marketing, general and
administration, research and development. (NOTE:
It is strongly recommended that one team member be familiar with
accounting terminology and client accounting methods.) These separate
pieces will be combined by the group into a completed budget for the
"case study company." The facilitator will evaluate the final
submissions. Comments upon each will be made in the summation of the
course.
Budgeting and the
Management Process
- Strategy - direction and vision
- Implementing strategy - the operational
planning process
- Budgets - the financial expression of
the operating plan
- The purpose of budgets - control
- The human side of budgeting
- Case study, part 1- roles and
responsibilities of the team
The Framework for
Budgeting
- Elements of the budget framework
- The financial statements
- Advantages and limitations of budgets
- Reporting - the key to control
- Case study, part II - preparation of
financial statements
Developing the Revenue
Budget
- Operating versus non-operating revenue
- Revenue recognition versus sales
- Sales forecasting
- Profitable growth and the cost of
capital
- Pricing considerations
- Case study, part III - the sales
forecast
Budgeting Costs and
Expenses
- Cost, profit, volume relationships
- Cost of service provided
- Operating expenses - selling, G/A, R/D
- Directly variable expenses
- Fixed expenses
- The allocation problem
- Assignable and non-assignable expenses
- EBIT, EBITDA
- Case study, part IV, budgeting operating
profit
Accountability for
Results
- The business unit statement
- Variance analysis
- Priorities
- Long term versus short-term results
- Contingency plans
- How not to cut a budget
- Case study, part V, the profit center
statement
Building the Balance
Sheet
- Key financial ratios
- The capital budget - NPV, IRR
- The cost of capital and the hurdle rate
- Case study, part VI, investment decision
- lease or buy
Cash Flow
- Budgeting cash requirements
- Developing a cash flow forecast
- The three sources of cash
- Free cash flow
- The completed budget
Presentation and
Evaluation
- This module will comprise a recap of the
key points of the program; an evaluation of each team's budget and an
appropriate conclusion.
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