Finance for Non-Finance Managers

Downloads for the Financial Accounts Module

This session builds a simple trading P&L from scratch.

We now start to identify and explain the different layers of profit in a P&L statement

With a downloaded Excel file, your tutor sets you up to have a go at building a P&L from underlying transactions.

Greg, your tutor, will now walk and talk through what you - hopefully - have had a go at doing yourself in the Exercise!

Before we get into the number crunching, we review key terms that you'll see in the P&L and Balance Sheet.

Using the Excel exercise covered in Section 1, we start a structured approach to analysis by looking at P&L ratios.

We move on to look at 'liquidity analysis' - looking at a company's ability to pay its bills (cover its short-term liabilities).

The 3rd element of analysis we look at is Efficiency - ratios that tell us whether the company is using its assets well to generate revenue and thus profit.

The 4th element is Returns - the profits that can be returned to investors of all types (debt investors or equity investors).

And finally, perhaps the most important element to banks and other lenders - that is analysing a company's level of debt to help us assess its ability to repay. 

How do we measure success of a company? Sales growth, profits, market share, profitability? Mark introduces the measures that may be used in this context. Mark will also look at generic corporate strategy and how it impacts on profitability, with an exercise for you to download and review.

Your tutor, Mark, shows how company's market positioning and strategy impacts on the numbers.

We now move onto one of the most commonly applied investor ratios - ROCE: what it is, why it's used and how to interpret it.  We start with a look at what Working Capital is and the funding gap, with a downloadable exercise.

Mark, your tutor, illustrates the solution to the little Working Capital funding gap and why it's so critical - especially for growing companies.

So how does Capital Employed link to a balance sheet and why do we look at this? Computing ROCE and which investors look at ROCE?

ROCE vs ROIC - what's the difference? A look at the retail companies ROCE numbers and how to interpret them. Plus a look at breaking down ROCE into its component parts for added interpretation.

In the introduction we look at the structure of a published Cash Flow Statement and the 3 key categories - CFO, CFI and CFF. There are two methods of presentation for Cash Flows - and here we look at the simplest "Direct" method.

More commonly, the Cash Flow Statement is presented using an Indirect Method, reconciling profit to Cash Flows.  Greg, your tutor, looks at the logic for this and introduces an exercise for you to have a go.