This interactive seminar will develop an understanding of the importance of financial reporting in business. It will consider how the Annual Report provides an opportunity for the management of a company to account for their actions to the stockholders. The seminar will consider the framework imposed by accounting and financial reporting standards, corporate legislation, and the requirements of stock markets around the world. The implications of recent financial scandals in the USA, and how these have prompted the strengthening of corporate governance around the world will be discussed.

The seminar will also consider the ways in which internal reporting contributes to the control of costs, identification and correction of problems, and how to make and implement profitable decisions.

The highlights of this course will be:

• The formats and structures of company annual reports, and how to read and understand them.
• The generally accepted accounting principles that are applied in the U.S. and Europe
• International rules of corporate governance
• Tools and techniques to evaluate business performance, and to predict future problems.
• The evaluation of new investment proposals – will they add value to your organisation?

At the end of this seminar participants will:

• The evaluation of new investment proposals – will they add value to your organisation?
• Understand and use analytical tools and techniques in practical case-study situations.
• Appreciate the importance of new investments in maintaining growth and competitiveness, and how these investments should be evaluated.
• Identify the role of accounting standards in the communication of financial results
• Apply key accounting standards to their respective enterprises
• Understand the role of audit

The seminar will be conducted along workshop principles with formal lectures, case studies and interactive worked examples. Relevant case studies will be provided to illustrate the application of each technique in an operational environment. Each learning point will be re-inforced with practical exercises. Discussion in groups will promote exchange of concepts and ideas.

What will your organisation gain from sending employees to attend this seminar?

• Confidence in understanding financial position and performance
• Awareness of the causes of accounting scandals, and how to avoid them
• Understanding of the importance of corporate governance
• Understanding of the tools and techniques that can monitor and improve performance
• Ability to identify problem areas, and suggest realistic solutions
• Ability to evaluate and select new investments that will generate growth and meet the stockholders’ expectations.

What will the employee gain from attending this seminar?

• Exchange of ideas and knowledge with other professionals
• Increased awareness of techniques in financial analysis and capital appraisal
• Better understanding of the language of finance and accounting
• Knowledge and understanding of business risk
• Increased ability to identify problem areas
• Increased confidence to tackle new situations

• Financial Officers, Controllers and Treasurers
• Professionals responsible for financial reporting
• Accountants, Project Professionals, Budget Analysts
• Anyone with an interest in financial reporting

DAY 1 : Financial Reporting and Corporate Governance

• Business objectives and shareholder wealth
• The users of financial information
• The role of accounting in financial reporting
• Key financial statements, their nature and purpose
• The conceptual framework of accounting and financial reporting
• Introduction to accounting standards
• The development of accounting standards
• International financial scandals
• The agency problem
• The role of audit
• The need for corporate governance
• Corporate governance in the UK, US, and in GCC countries
• The Balance Sheet
• Shareholders equity
• Current and non-current assets
• Current and non-current liabilities
• Working capital
• Preparing the balance sheet
• What does the balance sheet tell us?
• What are its limitations?
• Accounting terminology

DAY 2 : Accounting Systems, Reporting and Decisions

• Preparation of the Income Statement
• Calculation of profit
• HCategories of income and expenditure
• Valuation of current and non-current assets
• The format of the Income Statement and Balance Sheet
• The link between cash and profit
• The link between asset valuation and profit
• Inventory, receivables, payables, and cash
• The application of judgement
• The nature and purpose of working capital
• Management accounting and cost-volume-profit (CVP) analysis
• Break even analysis
• The impact of volume and sales changes on cost structures
• The limitations of break-even analysis

DAY 3 : Cash Flow and Investment Appraisal

• The purpose of the Cash Flow Statement, and its contents
• The preparation and presentation of the Cash Flow Statement
• Sources and uses of cash
• The link between the Cash Flow Statement, the Balance Sheet, and the Income Statement
• The Cash Flow Statement as a predictor of future performance
• Interest rates and the time value of money
• Discounting and compounding – present values and future values
• Annuities and perpetuities
• Investment appraisal: what is an investment?
• Appraisal techniques NPV and IRR
• Relevant cash flows and free cash flows
• The effect of inflation
• Dealing with risk and uncertainty
• Asset replacement and annual equivalent value
• Capital rationing
• Managing the investment project

DAY 4 : Financing and Cost of Capital

• Financing the business
• Financing principles
• Sources and types of finance, and the effect of gearing
• Defensive, neutral, aggressive financing policies
• Stock Market listing
• The Cost of Capital
• Cost of equity (Ke)
• Cost of debt (Kd)
• Weighted average cost of capital (WACC)
• Capital Asset Pricing Model (CAPM)
• The need for company valuations
• Valuation methods: Net assets; PE Ratio; Dividend growth model; Present value of future free cashflows; Capitalised earnings
• Shareholder value added
• Financial growth modelling: analysis of growth patterns
• Use of Excel for growth forecasting
• DCF valuation

DAY 5 : Analysis and Interpretation of Financial Reports

• The contents of the published annual report
• Recent developments in financial reporting
• Interpretation of financial statements
• Common size analysis
• Ratio analysis, including the Dupont system
• Profitability ratios
• Liquidity ratios
• Efficiency ratios
• Capital structure ratios
• Investment performance ratios
• Measuring performance – cash ratios or profit ratios?
• Value Added analysis
• Segmental analysis
• The shortcomings of financial statements, for interpretation purposes
• Predicting corporate failure
• Non-financial factors
• General financial management issues
• The effect of poor liquidity
• Post balance sheet events and contingencies
• The auditors report
• Failure-predicting ratios
• Multivariate failure predicting models – Altman Z score
• Integrated financial accounting case study