Management Accounting Financial Strategy

Course Properties

Course date: 18-03-2018
Course End Date: 22-03-2018
Location Dubai

Course Objective:

             At the end of the training, participants will:
              • Understand and apply contemporary thinking on strategic financial management;
              • Understand and utilize appropriate tools for strategic financial management;
              • Evaluate strategic financial management options in light of the needs of management and the policy of the enterprise;
              • Characterize and describe the enterprise's financial strategy and use that characterization to develop optimal financial

                  strategy for all stages of the life-cycle; 
              • Assess and evaluate proposed strategies.


Who Should Attend:

   Financial managers, financial controllers, finance department heads, chief financial officers, accounting managers, and senior finance officers.

Course Contents:

          • Formulation of Financial Strategy
                         The financial and non-financial objectives of different organizations (e.g. value for money, 

                            shareholder wealth, providing a surplus). 
                        The three key decisions of financial management (by which we mean investment, financing, 
dividend) and

                            their links. 
                        Benefits of matching characteristics of investment and financing, (e.g. in cross-border investment.) 
                        Identifying the financial objectives of an organization and the economic forces affecting its 
financial plans,

                            e.g. interest, inflation and exchange rates. 
                        Assessing attainment of financial objectives.
                        Developing financial strategy in the context of regulatory requirements (e.g. price and service 
controls exercised

                           by industry regulators) and international operations.
                        Modeling and forecasting cash flows and financial statements based on expected values for 
economic variables

                           (e.g interest rates) and business variables (e.g. volume and margins) over a number of years.
                        Analysis of sensitivity to changes in expected values in the above models and forecasts. 
                        Identifying financing requirements (both in respect of domestic and international operations) 
and the impacts

                           of different types of finance on the above models and forecasts.
                        Assessing the implications for shareholder value of alternative financial strategies, including 
dividend policy.

                            (Note: Modigliani and Miller's theory of dividend irrelevancy will be tested in broad terms. The mathematical

                             proof of the model will not be required, but some understanding of the graphical method is expected.)
                        Current and emerging issues in financial reporting (e.g. proposals to amend or introduce new 

                             standards) and in other forms of external reporting (e.g. environmental accounting).

         • Financial Management
                      Working capital management strategies. (Note: No detailed testing of cash and stock management models will

                          be set since these are covered at the Managerial level.)
                      Types and features of domestic and international long-term finance: share capital (ordinary and preference

                          shares, warrants), long-term debt (bank borrowing and forms of securitized debt, e.g. convertibles) and finance

                          leases, and methods of issuing securities.
                     The lender's assessment of creditworthiness.
                     The lease or buy decision (with both operating and finance leases).
                     The operation of stock exchanges (e.g. how share prices are determined, what causes share prices to rise or fall,

                          and the efficient market hypothesis). (Note: No detailed knowledge of any specific country's stock exchange will

                          be tested.)
                     The capital asset pricing model (CAPM): calculation of the cost of equity using the dividend growth model

                         (knowledge of methods of calculating and estimating dividend growth will be expected), the ability to gear and

                         ungear betas and comparison to the arbitrage pricing model. 
                    The ideas of diversifiable risk (unsystematic risk) and systematic risk. (Note: use of the two-asset portfolio formula

                        will not be tested.) 
                    The cost of redeemable and irredeemable debt, including the tax shield on debt (numerical questions on the cost

                       of convertible debt will not be tested). 
                    The weighted average cost of capital (WACC): calculation, interpretation and uses. 
                    Criteria for selecting sources of finance, including finance for international investments. 
                    The effect of financing decisions on balance sheet structure and on ratios of interest to investors and other

                        financiers (gearing, earnings per share, price-earnings ratio, dividend yield, dividend cover gearing, interest

                    Management of the finance function and relationships with professional advisors (accounting, tax and legal),

                       auditors and financial stakeholders (investors and financiers). 
                    The role of the treasury function in terms of setting corporate objectives, liquidity management, funding

                       management, currency management. 
                    The advantages and disadvantages of establishing treasury departments as profit centers or cost centers, and

                       their control.

       • Business Valuations and Acquisitions
                     Valuation bases for assets (e.g. historic cost, replacement cost and realizable value), earnings (e.g. price/earnings

                         multiples and earnings yield) and cash flows (e.g. discounted cash flow, dividend yield and the dividend growth

                     The strengths and weaknesses of each valuation method and when each is most suitable.
                     Recognition of the interests of different stakeholder groups in mergers, acquisitions and company valuations. 
                     Application of the efficient market hypothesis to business valuations.
                     Selection of an appropriate cost of capital for use in valuation.
                     The impact of changing capital structure on the market value of a company. (Note: An understanding of

                        Modigliani and Miller's theory of gearing, with and without taxes, will be expected, but proof of their theory

                        will not be examined.) 
                     Forms of intellectual property and methods of valuation. 
                     The reasons for merger or acquisitions (e.g. synergistic benefits). 
                     Forms of consideration and terms for acquisitions (e.g. cash, shares, convertibles and earn-out arrangements),

                        and their financial effects. 
                     The post-merger or post-acquisition integration process (e.g. management transfer and merger of systems).
                     The implications of regulation for business combinations. (Note: Detailed knowledge of the City Code and EU

                        competition rules will not be tested.)
                     The function/role of management buy-outs, venture capitalists. 
                     Types of exit strategy and their implications.

        • Investment Decisions and Project Control
                     Identification of a project's relevant costs (e.g. infrastructure, marketing and human resource development needs),

                        benefits (including incremental effects on other activities as well as direct cash flows) and risks (i.e. financial and

                     Linking investments with customer requirements and product/service design.
                     Linking investment in IS/IT with strategic, operational and control needs (particularly where risks and benefits

                        are difficult to quantify).
                     Calculation of a project's net present value and internal rate of return, including techniques for dealing with cash

                        flows denominated in a foreign currency and use of the weighted average cost of capital.
                     The modified internal rate of return based on a project's 'terminal value'

                        (reflecting an assumed reinvestment rate).
                     The effects of taxation (including foreign direct and withholding taxes), potential changes in economic factors

                        (inflation, interest and exchange rates) and potential restrictions on remittances on these calculations.
                     Recognizing risk using the certainty equivalent method

                        (when given a risk free rate and certainty equivalent values).
                     Adjusted present value. (Note: The two step method may be tested for debt introduced permanently and debt in

                         place for the duration of the project.)
                     Capital investment real options (i.e. to make follow-on investment, abandon or wait).
                     Project implementation and control in the conceptual stage, the development stage, the construction stage and

                        initial manufacturing/operating stage.
                     Post completion audit of investment projects.
                     Single period for capital rationing for divisible and non-divisible projects. (Note: Multi-period rationing will not

                        be tested.)