Accounting and Budgeting for Managers

Concepts and Principles

• Financial accounting and management accounting – the differences
• Cash and accrual accounting compared and when they are used
• International accounting standards – formats and content
• The distinctive character of public sector accounting and budgeting

Interpreting Financial Statements

• The income statement (P & L) statement, format, content and key concepts
• Interpretation of key ratios derived from the income statement; P/E ratio, Profit margin
• The language and major components of the balance sheet
• Business ratios derived from the balance sheet and P & L together, liquidity, debt, profitability etc.

Investment Appraisal

• Defining the value generated and the required return – the hurdle rate
• Return on capital employed – calculation methodology and interpretation
• Payback period calculations
• NPV and IRR calculations
• Non-financial aspects of investment appraisal and decision making

Essential Budgeting Processes

• Purpose and benefits, problems and limitations of capital and operational budgets and the important differences
• Budget processes in the private sector
• Budget processes in the public sector
• Identification of risks to the budget and actions to mitigate them

Measuring Financial Performance

• What is financial performance?
• Financial performance in the public sector
• The importance of cash flow – how to measure and improve it
• Gross profit, operating profit, net profit margin
• Key investor ratios