Business Strategy Revealed - The Financial Drivers

This In-house course reveals, as no other, the immutable financial truths that successful companies follow

Course Overview

This In-house programme covers the wider organisational issues such as company performance, strategy as revealed by the figures, the importance of appraising expenditure – all through a complete understanding of corporate financial reports, decision making models etc.

Objectives

  • To reveal what strategy is and how it relates to finance
  • To make clear strategies are nothing without objectives – what are yours?
  • To understand how financial strategies and tactics link to objectives
  • To develop skills in communicating between disciplines – using your financial reports
  • To really understand business

Who should attend?

  • Business development managers and directors
  • Project engineers, managers and directors
  • Executives from all disciplines
  • The CEO
  • The CFO and financial personnel wishing to enhance their ability to relate to their colleagues

Your next step is to call us now on +44 (0)20 7729 6677 or email us at info@falconbury.co.uk or use our contact form and find out how we can help. There are no commitments, and if we cannot help our advice and recommendations are free of charge

Sample Programme

What is strategy – What does financial strategy mean?

This session addresses the task of defining financial strategy and in the process clarifying usage of the many terms associated with “strategy” and “strategic”

It is when we hear the word strategy that we run in to a range of meanings, quite incorrect usage, vagueness and misunderstanding. At the outset we need to be clear as to what the words “financial” and “strategy” really mean; what is meant by the individual words and therefore the term Financial Strategy

“Why be in business?”

What do strategies both operating and structural aim to achieve? Answering these questions reveals the truth that finance is intimately interlinked with all business strategies

Strategically why is anyone in business? Successful and long-lived (sustained) companies understand the reasons. When directors (maybe under the influence of their short-termist shareholders) lose sight of why they are in business then egos, indolence or incompetence lead to value if not company destruction

The principal financial statements

  • Where we get the numbers from for our strategic understanding, modeling and reporting
  • How can strategic decisions be made if you don’t know where you are and how you got there?
  • The balance sheet shows both the amounts of and the disposition of net assets available to operate the business and how these net assets are funded, by borrowings or equity- shareholders’ funds. This is essential knowledge understanding, monitoring and delivering operating strategy, particularly efficiency
  • The profit and loss account / income statement tells you about revenues /sales costs and resultant profit or loss chasing sales, reducing costs and targeting a profit number can all be sub strategies that lead to higher profits and thus returns. Understanding the income statement and tactics to mange and improve profit is a must

Accounting “Rules”

  • Accounting theory and rules affect the strategic numbers and underlying tactics
  • This session explains the important principles that are used by accountants and as a minimum affect reporting of strategy but also may ‘outlaw’ some strategies – regulators frown on ‘creative’ accounting
  • It is particularly financial strategy that is affected by accounting rules and standards. The IASB, FASB and other international and national standard setting bodies aim to restrict poor, if not downright erroneous, accounting and bring consistency to accounting practice and financial reporting

Published or statutory accounts

  • Published accounts and other material including promotional material reveal, or rather at times obscure strategies. There is the need to understand what has to go into published material so that your strategies are clear (unless you wish to hide them!)
  • Published accounts are THE record of a company – the history – benchmarks – stewardship
  • Published accounts are required by law, for good reasons, and are a very useful support for directors and managers. Company directors, in particular, must understand them as they are collectively signing up to them

Interpreting financial statements

  • Are your selected strategies being followed and is the outcome as planned?
  • If you are to understand the directions in which your company is heading your must be able to read the figures – to interpret, the sometimes conflicting, messages they give
  • Dashboards are the fashion – but what is on the dashboard – are the indicators useful. The very word ‘indicator’ is unfortunate – ‘deliverable’ would be a better term

Cash – the vital element

  • No strategy will succeed if cash flows are not understood and managed
  • If you run out of cash you will be bust before the strategy is achieved!

Budgeting

  • Budgeting in the sense of operational budgeting and short term cash budgets
  • The budget process is THE key tool, tactic, to be used to deliver operational strategy. But more, it is a tool to establish and review operational strategies – will they work?
  • The budgeting exercise should deliver the operational strategy

Capital structure, company valuation and investment strategy

  • Operational strategy may be the best it can be – funding strategy may mean the difference between success and failure
  • Maybe the most important part of financial strategy, investing for the future
  • If you want a value destroying strategy then avoid rigorous investment appraisal!
  • There are two paths to follow when investing. Internal investment, growing the businesses as it exists now, organic growth. Successful companies have to be very rigorous with their investment appraisal processes, especially where the strategy is one of level output and continuation, ‘as is’, rather than growth.

Recommended Trainer

Ralph Tiffin, BSc, FCA, AMIMechE, is chartered accountant as well as having been apprenticed and having practised as a mechanical engineer. He is in demand as an experienced lecturer and regularly presents technical update courses for the Accounting Institutes, the Institution of Chemical Engineers, the Institution of Mechanical Engineers and other professional and private organisations.

Ralph runs his own accountancy practice – McLachlan+Tiffin – Statutory Auditors. This has a respected reputation as management and training consultants to a wide range of companies in the UK and overseas. The very specialised skills of the partners ensure that they are in constant demand to advise on business processes, particularly new business planning, budgeting and project appraisal.

Ralph is an expert in the area of project and capital expenditure appraisal; he is author of Practical Investment Appraisal, Butterworths and Successful Project Appraisal, Thorogood, Executive Finance and strategy – Kogan Page – September 2014 plus many others.. Above all he believes in presentation of practical methods for improving investment appraisal and the subsequent project/capex cost control.