EXECUTIVE TRAINING PROGRAM

Financial Intuition for Executives:
The Simple Logic Behind Finance
(formerly Finance for Non-Financial Excutives)

at Amsterdam Institute of Finance

Instructor:
Professor: Ralph Walkling

Program description
In today's economy, it is even more important that non-financial executives understand the intuition behind finance. The analytical tools used in modern corporate finance can be very complex. However, the basic concepts of modern finance are not difficult to grasp when presented in an applied and intuitive manner. Fortunately, it is just these intuitive concepts that the non-financial executive needs in order to enhance their understanding and improve their ability to communicate with finance professionals.

Finance for Non-Financial Executives focuses on an intuitive appreciation of the fundamental concepts of finance and the ability to understand how these concepts are useful for decision making. It will not make you a financial expert, but it will enable you to understand the essential, intuitive principals behind modern finance. Through case studies and class interaction, we concentrate on understanding the practical application of the most important and widely used financial techniques.

An additional goal of the program is to enable improved communication with finance professionals both external and internal to the firm. The best executives think like investors: the individuals and corporations supplying the funds to finance the company.  Consequently, we spend time considering the perspective of the firm’s constituents.  Expanding the financial vocabulary of the participants also improves their ability to interact with finance professionals.

The program begins with a review of fundamentals:

  • What can we learn from the financial statements of a firm?
  • The executive must play the role of detective in analyzing financial statements.  What problem areas exist?
  • What are the opportunities for improving efficiencies?
  • What do the financial statements suggest about key areas of financial management: liquidity, efficiency, leverage or gearing, and profitability?
  • From a financial standpoint, what are the key drivers of business success?
  • What isn’t shown on the financial statements?
  • What is the difference between economic and accounting statements of financial health and performance?

Effective decision making involves analyzing the future consequences of today’s decisions.  Capital budgeting involves the selection of long-term assets of the firm.  The intuition is simple: we are trying to find projects that are worth more than they cost.  Related to this, projects have different levels of risk and we need to understand these risks to make sound business decisions. This section of the program illustrates techniques for estimating the cash flows from a project and determining if the project is beneficial for the business.

The program also includes an examination of external financial markets and case lessons from acknowledged financial masters including Warren Buffett of Berkshire Hathaway.

Program Objectives:
Participants in Finance for Non-Financial Executives will:

  • Enhance their grasp of the intuitive concepts of finance
  • Gain increased experience, confidence, and ability through applied cases, interaction and discussion
  • Increase their ability to communicate with financial professionals
  • Help make sense of today’s economy in practical common-sense terms

Who should attend?
This program is designed for executives in non-financial positions wishing to extend their knowledge of modern finance. It is recommended for those who have limited familiarity with financial statements and concepts but want to understand the meaning that lies beyond the numbers, and improve communication with financial specialists.

For further information about admission, please see our Enrollment Details.

Day 1

Financial Analysis for Decision Making

  • Review of financial statements
  • Finding the resources to grow the business
  • Sustainable growth
  • Improving efficiency in the organization: what financial statements can tell us and what they can’t!
  • Effective communication of financial reports
  • Bankruptcy prediction: Altman’s Z-score
  • Cash flow vs profit
  • Case analyses and practical examples in understanding financial statements

Day 2

Capital Budgeting: Selecting Profitable Projects

  • Discounted cash flow
  • Selecting good projects
  • Net present value vs internal rate of return vs payback
  • Measuring risk
  • Risk, inflation, and interest rates
  • How do we determine discount rates and hurdle rates?
  • The Weighted Average Cost of Capital
  • Measuring value in public and private companies
  • Corporate governance and value creation
  • Case Analyses in risk analysis and valuation: The wisdom of Warren Buffet

 

Upcoming sessions:
May 31 - June 1, 2010
€ 2,400
October 11 - 12, 2010
€ 2,400
 
(AIF programs are not subject to VAT)