Financial Analysis & Measuring Business Performance

"Excellent class - loved the simulation"
Manager
Texas Instruments

Description

To sustain profitability, all managers need to understand where value comes from in their firm. In this program, you will learn a systematic approach for analyzing financial statements and for evaluating the impact on profitability of a wide range of strategic decisions.

This program takes a broad look at finance. By examining the way investors view a company, you will gain an understanding of how management decisions translate into value for shareholders. You will evaluate the effect important measures such as pricing and cost containment, asset usage, and financing structure have on Return On Equity (ROE) and market value of the firm. The program provides answers to tactical questions such as: 1) should I offer early payment discounts to my customers; 2) should I place consigned inventory at my customers; 3) which customers are unprofitable; 4) how does off-balance sheet financing or leasing affect the financial ratios; and 5) how does outsourcing affect these ratios?

After a thorough explanation of the framework for evaluating the outcomes from these key decisions, you will have the opportunity to implement what you have learned in a comprehensive strategy simulation.

Integrative Business Simulation

The Business Simulation serves as an interactive case study where participants become the top corporate decision-makers of a high tech manufacturing company and experience the challenges of a realistic business environment that includes inflation and economic downtowns. Fortunes can be made or lost, managers can be fired, loan sharks and corporate raiders are waiting to capitalize on mistakes and even bankruptcy is a possibility.

The simulation requires participants to make a rich set of managerial decisions involving: competitive analysis and strategy formulation; marketing strategy; production planning; financial planning; pricing and promotion strategy; and operations and R&D decisions. The outcome is measured by the company’s market value at the end of the simulation. During the debriefing sessions, participants have the ability to analyze their results and understand how strategy affects their company’s sales, profitability, return on investment, and market value.

Topics

Measuring the effect on performance and ROE of:

• Receivables Policies
• Inventory Management
• Payables Policies
• Cash Conversion Cycle
• Use of Long-Term Assets
• Leverage
• Business Valuation

Key Benefits

• Understand the key drivers of ROE
• Evaluate performance using financial ratio analysis
• Understand how investors view your company and calculate free cash flow
• Look into the effect of strategic decisions on ROE
• Assess the risk/return relationship
• Learn to balance the trade-offs between growth and profitability
• Calculate the firm's sustainable growth rate and capital requirements
• Examine the value levers of the firm within the context of a Value Based Management system
• Integrating operating and investment strategies and their effects on the financial performance of the firm

Continuing Education Units

Participants earn 1.4 continuing education units (CEUs). A certificate of completion will be presented from Texas Executive Education.