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Certificate in Cash Flow and Forecasting - (In-house Course)

Improved Skills
Improved Performance

We support professionals and organizations with business skills development through hands-on public and in-house training courses.

Learning objectives
  • Interpret cash flow statements and ratios, and identify positive and negative corporate performance;
  • Appreciate why cash flow analysis is more important than balance sheet and income statement analysis;
  • Evaluate free cash flow and the ability of companies to meet their financial commitments;
  • Use the latest computer spread sheet formats in projecting cash flow.
Skills acquired
  • Comparison of different cash flows;
  • Compare debt capacity and cash flow in a corporate;
  • Analyse cash flow ratios versus traditional financial ratios;
  • Construct a cash flow statement;
  • Prepare a detailed cash budget;
  • Build a forecast model and incorporate debt service capacity.
Key Business Benefits
  • Review figures of selected international companies and highlight the differences between profits and cash;
  • Analyse major companies’ cash flows;
  • Review different companies’ cash flows and identify potential problems;
  • Prepare interpretation of numerous cash flow statements;
  • Evaluate the drivers of cash flow of numerous companies;
  • Prepare a simple forecast model to incorporate seasonality.

Outline

DAY 1

Session 1
Accounting For Cash
  • Difference between cash and profit
  • Cash inflows
  • Cash outflows
  • The cash conversion period
  • Accruals and non-cash items
Session 2
The Cash Flow Statement
  • A tool for analyzing sources and uses of cash
  • The published and the derived cash flow statement
  • Accounting standard
  • Exercise: Prepare interpretation of numerous cash flow statements
Session 3
Constructing the Cash Flow Statement
  • From the books of accounts – The accountancy method
  • From the balance sheet and income statement – The
  • banking method
  • Case Study: Construct a cash flow statement
Session 4
Analyzing Historic Cash Flow Statements
  • Structure of cash flow statements
  • Profitability measures
  • Working investment management
  • Investment decisions – impact of capital expenditure, acquisitions and disposals
  • Funding decisions
  • Different drivers in different businesses
  • Relating cash flows to loan repayment
  • Case Study: Review selected international companies’ cash flow
Session 5
Cash Flow Ratios
  • Calculating and understanding cash flow ratios
  • Cash flow ratios as a predictive tool – success versus distress
  • The use of cash flow ratios as loan covenants
  • Case Study: Analyze cash flow ratios versus traditional financial ratios (selected corporates)
Session 6
Understanding the Priority of Cash Flows
  • Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
  • Operating cash flow and free cash flow ǽǽ Lumpy and volatile cash flows
  • Allocating available cash to appropriate resources
  • Debt capacity and structure
  • Case Study: Compare debt capacity and cash flow in a corporate
Session 7
Analyzing Complex Cash Flows
  • Looking at cash flows in conglomerate companies
  • Understanding typical cash flows in different businesses
  • Spotting creative accounting situations
  • Cash flows in groups – inter-company trading
  • Exercise: Analyze major companies’ cash flows
DAY 2

Session 8
Identifying Cash Flow Problems
  • The benefits of up-to-date forecasting
  • Watching the market closely for changes
  • Signs that your customers are in difficulty
  • How to avoid cash flow problems
  • Exercise: Review different companies’ cash flows and identify potential problems
Session 9
Cash Budgets
  • Cash inflows
  • Accounts receivable
  • Average collection period
  • Accounts receivable to sales ratio
  • Accounts receivable aging
  • Cash outflows
  • Accounts payable aging schedule
  • Case Study: Prepare a detailed cash budget
Session 10
Key Concepts Financial Forecasting
  • Types of forecasts and their uses:
  • Simple statements of when funds are due;
  • Hard copy schedules provided;
  • Simple Excel based ‘direct’ cash forecasts;
  • Comprehensive Excel based ‘indirect’ methods.
  • Professionally developed multi-tab Excel models
  • Appropriate financial forecast models:
  • Understanding credit risk;
  • Mapping the type of forecast to the underlying industry.
  • Sources of information.
  • Exercise: Evaluate the drivers of cash flow of numerous companies.
  • Business model;
  • Business risk:
  • Sustainability of sales;
  • Predictability of sales;
  • Volatility;
  • Seasonality;
  • Cycles.
  • Industry risk:
  • Competitiveness;
  • Benchmarking.
  • Exercise: Prepare a simple forecast model to incorporate seasonality.
Session 11
Forecasting Cash Flow
  • The key cash drivers
  • Looking at historical cash flows as a basis for future cash flow
  • Using value drivers to make decisions for future business profiles
  • Working with uncertainty – sensitizing within a range of possibilities
  • Use of sensitivity analysis and simulations
  • General principles of the structure of cash flow projections
  • Cash Flow Available for Debt Service (CADS)
  • Debt capacity – debt service capacity as a key indicator of risk
  • Projections – short, medium and long-term
  • Case Study: Build a forecast model and incorporate debt service capacity
Session 12
Cash Flow, Income Statement, and Balance Sheet
  • A model will be loaded on your PC to enable you to use historical information as a basis for forecasting
  • You will input assumptions about value drivers
  • The resulting forecasts will then be used to answer a number of questions about the company’s borrowing and repayment capabilities and the need for extra security on any financing
Session 13
  • Building the Forecast
  • Assumptions
  • Revenue forecast and growth – decompose sales
  • Cost of goods sold – decomposing
  • Inflation – real versus nominal
  • Revenues and costs; the level of fixed and variable costs
  • Income Statement:
    • Reviewing the income statement
  • Balance Sheet:
    • Assumptions
    • Non-current assets
    • Current assets
    • Equity
    • Liabilities – amortization table
    • Linkages to income statement and cash flow statement
    • Working capital budget
    • Capital expenditure budget
  • Cash Flow Forecast:
    • Linking to the income statement and balance sheet
    • Balancing
  • Using the Forecast:
    • Sensitivity and scenarios
    • What ifs
    • Using ratios
    • Interpreting the results
Session 14
Summary and Close
  • Course Review
  • Evaluation
LEARNING EXPERIENCE

PRE-COURSE
This part of the learning experience is meant to ensure a smooth transition to the face to face training. Participants are required to take the following steps:
  • Pre-course evaluation quiz - take a short quiz to establish the current level of knowledge;
  • Learning experience - analyze a document presenting guidelines on how to maximize your learning experience;
  • Pre-requisite reading - go through a series of documents to better understand the core-course content.
CORE-COURSE
During this course, different learning approaches will be implemented to stimulate direct and indirect learning, such as discussion activities, case studies, personal assessment, and written practices.

AFTER-COURSE
The learning process is not finalized when the core-course ends. Participants are required to take the following steps:
  • Action plan - create a plan for the actions and initiatives you intend to implement after the training course;
  • Additional reading - go through a series of resources to expand your content related knowledge;
  • Learning journal - reflect upon your 3 stages learning experience and complete a journal.
EVALUATION
The process is finalized only when you complete all of the 3 stages of the learning experience. Nonetheless, you will receive a:
  • Certificate of Attendance: after participating at the 2 days of on-site training course;
  • Certificate in Cash Flow and Forecasting: after you have successfully completed all of the 3 stages of the learning experience.

Speaker/s

Andre Lanser
CREDIT, CORPORATE FINANCE AND FINANCIAL MODELLING

Andre Lanser has delivered courses around the world in the areas of Credit, Corporate Finance, Valuation and Financial Modelling both for Corporates and Banks.ndre originally qualified as a Chartered Accountant, completing articles with PricewaterhouseCoopers. He started his career with a subsidiary of Commercial Union, involved in the steel manufacturing industry. His experience ranged from systems implementation, credit assessment of the highly risky construction industry customers, heading up the finance functions to successfully turning the business around and then selling the company through a trade sale.

Special Offer

Organize this training course in-house

If you have a group of five or more to train you can save time and money by running this training course in-house. Use the contact details provided to request a customized offer from one of our training solution specialists.

Call us and we will assist you through the registration process.
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TKI Skills Academy offers progressive training programs focused on enhancing personal and professional growth. Our courses, developed at global standards, are adapted to the market’s needs and professionals’ experiential learning expectations.

We created the Academy to help organizations reach peak performance through better-skilled professionals operating more mature organisational capabilities. Skills and overall business acumen such as effective communication, data analysis, emotional intelligence, risk management, and innovationare a proven ingredients of professional and organisational success.

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