Project Management Training Courses
Practical Financial Fundamentals and Project Investment Decision Making (FM)
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All our workshops are available on an on-site basis. |
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With financial decisions coming under increasing scrutiny it is essential to have enough information and knowledge to make effective choices and to drive your projects forward with sound justifications to your managers. Specifically designed for people in the engineering industries, this workshop provides you with the skills to deal with your financial people competently and effectively and gives you a solid understanding of the essentials of financial management.
This course commences with the basics of economics and gives you a solid understanding of the world order underpinning and driving the financial system. Basic accounting and finance terms are explained in simple english with an emphasis on the engineering and technology world. We then discuss cash flow concepts. The issue of making appropriate investment decisions is then 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 course but one aimed at providing you with the fundamentals in financial management from a technology and engineering perspective.
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 professional
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, leverage, activity, profitability and 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 and 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, NFV and IRR method
- Benefit/cost ratio and NPV ratio methods
- Incremental NPV and ROI method
Practical Exercise
CAPITAL MANAGEMENT
- Capital rationing
Practical Exercise
EFFECTS OF INFLATION
- Inflation and NPV
Practical Exercise
RISK AND UNCERTAINTY
- Sensitivity and 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