Practical Financial Fundamentals & Project Investment Decision Making

 

THE WORKSHOP

In today’s world, financial decisions are coming under increasing scrutiny. It is essential that you have enough information to make effective choices and to drive your engineering projects forward with sound justifications.

This workshop begins with the basics of finance pertinent to engineers and technical professionals. Basic accounting and finance terms are explained in simple English with an emphasis on the engineering and technology world. Cash flow concepts are discussed and the issue of making appropriate investment decisions is examined, using such techniques as NPV and IRR. Finally, capital budgeting and risk are discussed in an easy-to-understand manner.

This is certainly not an advanced workshop, but one aimed at providing you with the fundamentals of financial management from a practical engineering and technology perspective.

WHAT IS INCLUDED?

  • Receive a certificate of attendance in support of your continuing professional commitment
  • All workshops include the associated hardcopy technical manual
  • Printed workshop handouts
  • Lunch and refreshments
  • Interact and network with workshop attendees and experienced instructors
  • Practical, industry driven content to assist you in your continuing professional development (CPD)
  • Attendees automatically become IDC subscribers and receive exclusive deals and technical content every month

WHO SHOULD ATTEND?

  • Consulting engineers
  • Instrumentation engineers
  • Management accountants
  • Mechanical and electrical engineers and technicians
  • Metallurgists and scientists
  • Plant engineers, operators and supervisors
  • Production workers
  • Sales engineers
  • Technical professionals

CONTENT SUMMARY

INTRODUCTION FINANCIAL STATEMENTS

  • Recording of financial information
  • Assets, equity and liabilities
  • The balance sheet
  • The profit and loss statement
  • The cash flow statement
  • Ratio analysis
    • Liquidity ratios
    • Leverage ratios
    • Activity ratios
    • Profitability ratios
    • Investment ratios
  • Cash flow versus profit
  • du Pont analysis
    Practical Exercise

COST ESTIMATION

  • Direct and indirect costs
  • Fixed and variable costs
  • Breakeven analysis
    Practical Exercise

CASH FLOW CONCEPTS

  • Cash flow models for manufacturing
  • Depreciation methods
    • Straight line
    • Declining balance
    • Years digits
  • Cash flow forecasts
    Practical Exercise

TIME VALUE OF MONEY

  • Compounding versus discounting
  • Discount rate, hurdle rate and cost of capital
  • Present and future values of money
  • Effect of compounding period
  • Effective and nominal interest rates
  • Compounding and discounting multiple cash flows
  • Net present value versus internal rate of return
  • Annuities
  • Compounding and discounting tables
  • The use of spreadsheets
    Practical Exercise

RANKING OF INVESTMENT PROPOSALS

  • Undiscounted and discounted payback method
  • NPV method
  • NFV method
  • IRR method
  • Benefit/cost ratio and NPV ratio methods
  • Incremental NPV method
  • Incremental ROI method
    Practical Exercise

CAPITAL MANAGEMENT

  • Capital rationing
    Practical Exercise

EFFECTS OF INFLATION

  • Inflation and NPV
    Practical Exercise

RISK AND UNCERTAINTY

  • Sensitivity analysis
  • Monte Carlo analysis
    Practical Exercise

TYING IT ALL TOGETHER

  • Revision of the key concepts
  • How to apply this to corporate financial decision making
  • How to apply this to personal wealth creation

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