Accounting & Finance Fundamentals

1. Introduction

The changing economic and financial environment in China

Why companies need financial management?

Short example

Responsibilities of financial managers

Principles of financial management and ways of thinking

Measuring the financial capacity

The question of time value of money

The users of the financial statements

Distinction between financial and management accounting　

Exercise: overview of financial statements of ABC

Quick Test: test your understanding

2.　Understanding Financial Statements

Components of accounting statements

The fundamental accounting equation

Relation between balance sheet and profit & loss account

Understanding the balance sheet: assets & liabilities

Recording of specific transactions - what you need to be careful about

Exercise: creating the balance sheet of ABC

Understanding the profit and loss accounts

Exercise: creating the profit and loss account of ABC　

3. Cash Flow Analysis

Understanding cash flows

Exercise: creating the cash flow statement of ABC　

Measuring and managing the working capital

The capacity of self-financing

The interaction between the working capital cycle, the investment and the financing

Estimating the finance needs

4.　The time value of money

Present and future value

Annuities

Discounting cash flows

5. Accounting standards and the integrity of the financial statements

Day 2

Financial Planning & Control Techniques

Introduction: The objectives of the manager on Finance Planning　

1. Interpreting Financial Statements

Analysis of company accounts

Analysis of the funding structure

2.　Financial Performance Metrics　

Ratio analysis

Exercise: application to ABC

3. Forecasting Cash Flows　

Working capital management

Cash Budgeting

Breakeven analysis

Short term financing

Exercise: application to ABC

4. Cost Management & Operating Budgets

Breakeven analysis

Variable cost / fixed costs

Cost / volume and price relationships

5. Making Investment Decisions

Investment: investment and strategies of the company, impact of the operational

Valuation techniques (TIR / VAN)

The investment process

Exercise　　

Day 3

Strategic Financial Planning

1.　　Strategic Planning

Business plan

The different possible financial strategies (in relation with the strategy of the firm)

How to finance the investment and the growth of the company: the environment in China

Sources of Internal / External Financing

Long term financing

2.　　Financial Management

Cost of capital

Financial structures; optimize the financial profitability: the action of leverage, balance between stockholders" equity/ debts, the cost of the debts, the creation of the value

Action on the requirement of the working capital: define the optimal FR and BFR

3.　　External Financing

Bank loans

Equity

Leasing

4.　　How to measure the value of the company? : Company valuations

Valuation techniques

Value- based management (shareholder value)

shareholder valu added

acquisition analysis

Limitations of the shareholder value approach

5. Impact of cross-cultural factors on the practice of financial management in China