LOOKING BEYOND FINANCIAL STATEMENTS (MODULE 1)

HOW WILL THIS COURSE BENEFIT YOU?




BY ATTENDING THIS TRAINING, YOU WILL :
- understand your own company's financial statements better to prepare and strategise your messages to an ever discerning/demanding stakeholders' audience.
- know the need to build the "extra edge" as a result of the changes of the investing landscape (i.e. capital markets are very competitive today and investment managers require high calibre information)
- learn to deliver more convincing messages by letting your financial figures and facts speak for you
- be able to prepare in advance in addressing the financial queries and concerns more objectively before you are being asked.
- have a clearer picture as to how your company is navigated towards its operating and strategic goals


WHO SHOULD ATTEND


ALL NON FINANCIAL EXECUTIVES IN THE COMPANY WHO ARE INVOLVED IN FINANCIAL MANAGEMENT, INCLUDING :


CEOs
COOs
Investor Relations Executives/Managers
PR Executives/ Managers
CorpComms Managers
Non Finance Managers
Course outline


This course highlights the essentials of the financial skills so as to build an 'extra edge' to the ever increasing demand of the stakeholders as a result of the increasing competition for funds in the capital markets. As such, all companies need to equip their teams with solid and practical financial knowledge so as to address their information needs and concerns. This training will give the participants a practical insight of better handling these challenges in looking beyond financial statements. Unlike a large-scale conference, this workshop capacity is deliberately kept to a manageable classroom size to facilitate effective learning and meaningful discussion.


PROGRAM OUTLINE


THE IMPORTANCE OF THE FINANCIAL STATEMENTS


No matter what size the company and nature of its business, it is essential to acknowledge and recognise the importance of its financial statements as a mean to understand its performance and financial health.


The question arises here is whether understanding the financial statements is sufficient.


HOW TO HAVE A QUICK VIEW ON THE FINANCIAL STATEMENTS
- 9 pointers
- what are they
- why they are important


It is important to have a helicopter view of the company so as not to lose sight of their core objectives in the course of running their day-to-day operations, often losing battles not of knowledge but of the minds of both senior management and the investing community.


MAIN COMPONENTS OF FINANCIAL STATEMENTS
- what are they
- you can not read them in isolation, but in integral parts
- let your financial figures and facts speak for you
- their relevance and limitations
- the key messages they are telling you


Understand each component of the financial statements; their usefulness and limitations. What is more important is the key message they are telling you.


FINANCIAL RATIOS
- serve as measuring tools, monitoring, comparing and bench marking
- objective assessment
- 7 main types
- the underlying factors/ causes


Understand each type of ratios; their relevance and limitations. What are the convincing messages and the concerns you need to address so as to achieve both of your operating and strategic goals.


KEY PERFORMANCE INDICATORS


- definition
- characteristics
- why it is important


This is vitally important for you to stay focus on these key indicators to ensure that you are working towards your goals.


OTHER FACTORS


- Industry outlook
- trend analysis
- the operating environment


Understand the external changes that will have implications on your company and the mitigation factors. Their risks and opportunities. Be vigilant to these changes and responsive effectively.


FINANCIAL PROJECTIONS AND THEIR KEY ASSUMPTIONS


To give a foreseeable outcome based on the reliable and objective assumptions


The likely scenario based on their reliable and consistent key assumptions in a forseeable operating environment so as to gain confidence from the financial community and trust ultimately.

P.S To make access to the date and venue of this course, please click at the title of this article.

To read other course/workshop, please click at the link below:-
http://moneytellsstories.blogspot.com/2011/06/course-on-personal-leadership-workshop.html

http://www.mira.com.my/misc/events_20110629.pdf

KEY PERFORMANCE INDICATORS

Dear everyone,

Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), is used significantly to present or identify a few factors that organisations should focus on to be successful. This is because they serve as a powerful and meaningful tool to define and measure the progress of their pre-set goals. As such, the key impetus for using KPI was the notion that factors which get measured are more likely to be achieved versus factors which are not measured. Hence, I decided to bring it into our today's discussion, with the hope that you too equip yourself with this tool.

A) Definition

i) What Does Key Performance Indicators (KPI )Mean?

A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their strategic and operational goals. KPIs vary between companies and industries, depending on their priorities or performance criteria.

ii) Investopedia explains Key Performance Indicators

A company must establish its Strategic and Operational goals and then choose the KPIs which best reflect those goals.

For example, if a software company's goal is to be the fastest growing company in its industry, its main performance indicator may be the measure of annual revenue growth. You may find some KPIs in some annual reports. Also, KPIs are often refer to as the Industrial Standards, in that particular sector.

As usual, once an organization has formed its mission, identified all its stakeholders, and defined its goals, a useful tool to measure its progress toward those goals is required. And Key Performance Indicators come in to the picture, to play the role like  measuring tapes.

B) Characteristics

The Key Performance Indicators selected must best reflect the organization's goals, they must be key to its success, and they must be quantifiable (measurable). Key Performance Indicators usually are long-term considerations.

I will discuss these three main issues in more depth:-

a) Key Performance Indicators must be in quantifiable measurements.

An organisation may have chosen the percentage of its income that comes from return customers as KPI. A school may focus its Key Performance Indicators on graduation rates of its students.

b) Reflect The Organizational Goals

A company has one of its goals "to be the most profitable company in our industry" will have Key Performance Indicators such as "Pre-tax Profit" and "Shareholder Equity" that measure its profit.

On the other hand, a school which is not concerned of making profit, will chose different Key Performance Indicators. KPIs like "Graduation Rate" and "Success In Finding Employment After Graduation", precisely reflect the school's mission and goal.

c) Must Be Quantifiable and Measurable

In order for it to function, Key Performance Indicator must be translated into meaningful ratios or percentage or value, which accurately define its goal, that can be quantifiable and measurable. To make this point clearer, just take an example of a KPI such as "Be The Most Popular Company". You can see it is not clear and very subjective because there is no way to measure the company's popularity or compare it to others.

Another good example we can look at, is a general goal such as "Generate More Repeated Customers", is meaningless because it does not distinguish between new and repeat customers.

Once the Key Performance Indicators is defined, it is good to use them constantly throughout the years so that you can measure them over a longer period. To make it more meaningful, you may consider whether to breakdown into KPI components. For example a KPI of "Increase Sales", you need to consider whether to break down into units sold or dollar value of sales.

Further considerations, as append below, may need to be considered on Good Returns or discount

 i) whether it needs to be deducted from sales in the month of the sales or the month of the returns?

 ii) whether sales needs to be recorded at list price or at the actual sales price?

It is also a good practice to use your pre- set targets, as your benchmark, for each Key Performance Indicator.

d) Must be Key To Organizational Success

KPIs must be selected from those Critical Factors that are essential to the organization reaching its goals. It may be good to keep the number of KPIs small so as to keep everyone's attention focused on achieving the same KPIs. KPIs should not be easily achievable, 

It must be stressed that what is important here is that the KPIs must help the company to meet its overall objective.

Trust the above discussion has given you a good understanding of its concept and application.

Please feel free to share your view/ thought in this issue. Thanks and look forward to hearing from you.

Skype me at james.oh18

James Oh