Finance, Risk Management & Corporate Governance
Course Overview
Course Objectives
- Specify the exact nature and scope of corporate financial reporting.
- Critically assess specific concepts, rules, and procedures related to corporate financial reporting.
- Comprehend the importance of working capital in today's market dynamics.
- Understand the implications of capital structure on a firm's success.
- Learn how improper capital budgeting can severely impact business outcomes.
- Identify and navigate limitations inherent in corporate financial reporting and governance.
- Manage financial risk in project management and make informed decisions.
- Enhance skills in all areas of finance and governance.
- Contribute more effectively to the finance and governance process within their organizations.
- Recognize the significance of professional development in addressing current and future challenges in finance and governance.
- Increase recognition of their learning and professional commitment by the organization.
- Engage with and navigate within a challenging learning environment.
- Integrate business plans with strategic intents.
- Thereby minimizing inter-functional conflicts.
Course Audience
Course Methodology
- Lectures
- Seminars & Presentations
- Group Discussions
- Assignments
- Case Studies & Functional Exercises
- Like all our acclaimed courses, this training program also follows the ‘Do-Review-Learn-Apply’ model
Course Outline
Day 1: Finance & Working Capital – Liquidity or Bankruptcy
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Finance is a numbers game – but more than numbers
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The three significant components of finance
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Working capital (WC) defined and its relationship to the current ratio
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Components of WC: inventory, accounts receivable, cash, accounts payable, notes payable
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Critical ratios to compute: what they should be and why
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Key questions to ask and the answers you need
Day 2: Capital Structure
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Concept and significance of capital structure
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Equity capital: definition and calculating the required rate of return
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Debt capital: definition and calculating the required rate of return
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Weighted Average Cost of Capital (WACC): importance, calculation, and application
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Leverage as a two-edged sword
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Operating leverage: calculation and implications
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Financial leverage: calculation and implications
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Combined leverage: impact on performance
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Day 3: CAPEX – Analysis of Investment Decisions with What-if Risks
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Importance of cash flows and the time value of money
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Capital project evaluation process
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Estimating cash flows within a multi-period horizon
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Investment appraisal techniques:
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Net Present Value (NPV) and Internal Rate of Return (IRR)
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Profitability Index (PI) and Modified IRR (MIRR)
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Defining approval criteria and review processes
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Post-implementation audits of capital projects
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Refinements of investment analysis and risk adjustments
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Dealing with uncertainty, benchmark discount rates, and hurdle rates
Day 4: Risk Management as an Integral Part of Corporate Governance
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Understanding uncertainty, risk, and opportunity
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Identifying strategic, operational, and financial risks
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Assessing risks and determining the organization’s risk profile (risk appetite)
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Desired, expected, and actual outcomes in risk management
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Performance measures: FRM (Financial Risk Management) / ERM (Enterprise Risk Management)
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Quantitative vs. qualitative risks
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Developing FRM/ERM strategy – role of the Chief Risk Officer (CRO)
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Broader risk concerns: joint ventures, alliances, product liability, environmental and outsourcing risks, growth and R&D risks, natural disasters, catastrophic and supply chain risks, reputation risks, and psychological aspects of risk
Day 5: Corporate Governance
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Defining corporate governance and its relevance in today’s environment
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Perspectives on corporate governance:
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Shareholders vs. stakeholders
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Voluntary vs. enforcement approaches
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1-Tier vs. 2-Tier boards
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Chairman/CEO duality
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Role of the independent director
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Corporate governance models, structures, and practices
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Emerging trends in governance
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Principal–agent theory and practical applications
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Independence vs. appearance of independence