Course Details

Objective

By the end of this course, participants will be able to:

• Determine full costs of outputs for the goods and services provided
• Conduct a Cost Volume Analysis (CVA), applying it to multiple cost drivers tomake recommendations for program management
• Apply Variance Analysis as a management tool to analyze performance-basedbudgets and determine where you stand in achieving your performance goals
• The purpose of budgets
  • Motivation
  • Targets
  • Benchmarking
  • Control
  • Responsibility
• Types of budget
  • Fixed
  • Flexible
  • Rolling
  • Zero based
• Stages of preparation
• Cash budgets – cash flow forecasts
• Master budgets – P & L and Balance Sheet
• Initial steps in constructing a spreadsheet model

Content

DAILY COURSE OUTLINE

This outline acts as a guide only. Course content will reflect participant requirements on a consensus basis. The following therefore is a tentative outline of the course materials. Practical examples, group exercises and case studies will be utilized throughout the course. The content presented during any given class may vary depending on the background and experience of the participants.

Budgeting and the Management Process

• What is a budget
• Why create budgets
• Strategy - direction and vision
• Implementing strategy - the operational planning process
• Budgets - the financial expression of the operating plan
• The purpose of budgets - control
• The human side of budgeting

Case study, part 1- roles and responsibilities of the team

The Framework for Budgeting

• Elements of the budget framework
• The financial statements
• Advantages and limitations of budgets
• Reporting - the key to control

Developing the Revenue Budget

• Scanning the surrounding environment
• PEST; SWOT; Porter 5 Forces, Organization Appraisal Analysis
• Scenarios and Sensitivity Analysis
• Operating versus non-operating revenue
• Revenue recognition versus sales
• Sales forecasting
• Profitable growth and the cost of capital
• Pricing considerations

Case study, part 2 - the sales forecast & preparation of financial statements

Budgeting Costs and Expenses

• Cost, profit, volume relationships
• Cost of service provided
• Operating expenses - selling, G&A, R&D
• Directly variable expenses
• Fixed expenses
• The allocation problem
• Assignable and non-assignable expenses
• EBIT, EBITDA

Case study, part 3, budgeting operating profit

Accountability for Results

• The business unit statement
• Budget could turn out to be irrelevant
• Flexing budget
• Variance analysis
• Floor Budgets
• Ceiling Budgets
• Drilling down for causes of variance
• Favorable Variance Vs. Unfavorable Variance
• Priorities
• Long term versus short-term results
• Contingency plans
• How not to cut a budget

Case study, part 4, profit centre statement

NOTE:
Pre & Post Tests will be conducted
Case Studies, Group Exercises, Group Discussions, Last Day Review &Assessments will be carried out.

Methodology

A highly interactive combination of lectures and discussion sessions will be managed to maximize the amount and quality of information and knowledge transfer. The sessions will start by raising the most relevant questions, and motivate everybody find the right answers. You will also be encouraged to raise your own questions and to share in the development of the right answers using your own analysis and experiences. Tests of multiple-choice type will be made available on daily basis to examine the effectiveness of delivering the course.
All presentations are made in excellent colorful power point. Very useful Course Materials will be given.

• 30% Lectures
• 30% Workshops and work presentation
• 20% Group Work& Practical Exercises
• 20% Videos& General Discussions