Interpreting Business Performance for Improvement Online and Classroom Course

Where Information is not available, Managers are in darkness as business can only be managed properly when decisions are based on certain metrics but not just on a guess work. Interpreting Business Performance for Improvement is a course designed to equip participants with the requisite skills to compute the relevant information for performance improvement.

Learning Objectives

At the end of this training session, participants will be able to

• Compute relevant ratio to aid effective management decisions
• Compare and contrast performance over various periods of time
• Analyze performance across industries
• Bench mark performances
• Interpret business performances using ratios and graphics
• Base Business Decisions of Facts and not Fiction

Course Contents

• Fundamentals of Financial Statements
• Who/what are the driving forces behind published accounts
• Where do the rules come from
• What has tax got to do with anything?
• Background accounting knowledge for analysts to help understand the basis of financial statements
• The primary financial statements and how they link
• Balance sheet: Showing the position of a company
• Income statement: Showing the performance of a company
• Cash flow statement: Showing the difference between a company’s ability to generate and spend cash
• Key accounting principles and terms
• Accruals concept
• Going concern
• The accounting equation
• Double entry
• Applying double entry
• The primary financial statements
• The purpose of financial statements
• Analyzing the three statements: Identifying possible ways to initially analyze financial statements
• Analysis of the Income Statement
• Capitalization vs. expense
• Classification of expenses: Cost of sales, operating expenses
• Revenue recognition
• Different types of reported profit metric
• Gross profit, operating profit, net profit, EPS
• Cleaning up the reported numbers
• Exceptionals and other one-off items
• Core vs non-core
• Analysis of the Balance Sheet
• Non-current assets
• Intangibles – what can be recognized
• Tangibles – carrying values, useful lives and impairments
• Current assets and working capital
• Liabilities and provisions
• The capital structure
• Debt
• Equity capital and reserves
• Pensions
• Non-controlling interests
• Investments
• Net debt, Debt/Equity, Debt/Capital
• Working capital cycle – Inventory days, Receivable days, Payable days
• Balance sheet and income statement combined analysis
• Efficiency of use of resources
• Return on equity
• Return on capital
• Capital structure
• (Net) debt / EBITDA
• Ratio analysis: Profitability or Return on Investment Ratios
• Gross profitability
• Net profitability
• Return on assets
• Return on investment 
• Earnings per share
• Investment turnover:
• Sales per employee
• Profit metrics more indicative of future performance
• EBIT, EBITA, EBITDA, underlying net income/EPS
• Growth rates
• Margins
• Interest cover
• Liquidity Ratios
• Current ratio
• Quick ratio (or "acid test")
• Sales to receivables (or turnover ratio)
• Days' receivables ratio
• Cost of sales to payables
• Cash turnover
• Leverage Ratios
• Debt to equity ratio
• Debt ratio:
• Fixed to worth ratio
• Interest coverage
• Efficiency Ratios
• Annual inventory turnover
• Inventory holding period
• Inventory to assets ratio
• Accounts receivable turnover
• Collection period