CASH FLOW MANAGEMENT & ANALYSIS

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COURSE OVERVIEW

This concise course equips you with vital skills for optimizing cash flow and working capital, the lifeblood of business vitality and value. Despite profits indicating long-term growth potential, many profitable businesses fail due to poor cash management. You’ll learn how to manage cash effectively, prepare cash flow statements via direct and indirect methods, and perform precise cash flow forecasting and analysis to maintain business solvency and drive shareholder value.

COURSE OBJECTIVES

By completely attending this course, participants will be able to:

Interpret financial statement interrelations.
Enhance cash flow statement analysis skills.
Understand cash and working capital links.
Optimize working capital strategies.
Apply cash flow forecasting techniques.
Use relevant ratios and metrics to assess performance.
Constructing the cash flow statement.
Preparing cash forecast.

TARGET COMPETENCIES

Connections between financial statements
Articulation of cash flow information
Oversight of working capital and cash flow
Tactics for cash liquidity enhancement
Financial forecast and budget alignment
Interpretation of cash flow analysis
Cash flow metric proficiency

Treasury Staff, Commercial Managers, Supply Chain and Procurement Team Members, Receivables and Payables Team Members, Planning and Budgeting Managers Financial & Management Accountants, Capital Investment and Project Team Members

The course uses a mix of interactive techniques, such as brief presentations, application of theories presented, and demonstrations of real-life examples. It will also include many group and individual exercises to exchange experience and apply knowledge acquired throughout the course.

RELATIONSHIPS BETWEEN FINANCIAL STATEMENTS

Principles of Financial Statements
Income statement
Balance sheets
Cash flow statements
The Vital Difference between Profit and Cash Flow
Cash vs. accrual accounting
Fundamentals of Cash Flow and Working Capital
Cash and cash equivalents

PRESENTATION OF CASH FLOW

Analyzing and Interpreting the Cash Flow Statement
Elements of a cash-flow statement
Operating cash flow
Investing cash flow
Financing cash flow
Methods in calculating operating cash flow
Direct versus indirect methods
The Drivers of Cash Flow, Liquidity and Solvency
Trade-off between liquidity and profitability

CASH FLOW AND WORKING CAPITAL MANAGEMENT

How Working Capital Drives Financial Performance
Understanding the Working Capital Cycle
Conservative working capital management
Aggressive working capital management
Working capital optimization
Practical Tools to Optimize Inventories
Practical Tools to Optimize Trade Receivables
Minimizing Cash Float and Accelerating the Cash Cycle
Cash conversion cycle
Accounts receivable factoring, pledging and assignment
Suppliers early payment discount

ALIGNING BUDGETS AND CASH FORECASTS

Why to forecast cash flow
Who is involved
Cash Flow Forecasting Methods
Use of budgets as a start point
Revenue and expenditure patterns
Impact of capex and investment activities
Use of rolling forecasts
Sensitivity Testing Cash Flow Forecasts
Ensuring that cash-flow forecasts align with budgets

CASH FLOW RATIOS

Ratio relating liquidity vs turn over ratios
External financing index ratio
Cash sources component percentages ratio
Financing policies ratio
Operating cash index ratio
Operating cash inflow ratio
Operating cash outflow ratio
Long-term debt payment ratio
Productivity of assets ratio
Cash flow adequacy ratio
Reinvestment ratio
Dividends payout