Managers in non-financial areas are routinely measured by criteria relevant to their functions – productivity, scrap, on-time shipment, downtime, customer returns, etc. – some without a clear understanding of how their functional performance links to the company’s financial performance. This course has two objectives: the first is to provide an understanding of financial terms, reporting formats and analysis, and the second is to provide an understanding of cost as it applies to the creation of goods and services. Participants will learn about assets and liabilities return on investment, budgeting and the need for cash planning. Building on the financial basics, the course then examines the elements of cost related both to products and to departmental operations, linking the operational performance results to their corresponding financial impact, which is often not obvious. The course covers overhead allocation methods, followed by a discussion of activity- based costing as a means of seeing the true cost of an indirect activity. Finally, the course presents the Statement of Performance, a tool for linking operational performance with financial performance.
Upon completion of this course participants will be able to see the business and their area of responsibility in financial terms through an understanding of the P & L report, balance sheet, cash flow statement, and budget variance reports. They will understand the contributing factors for direct, indirect and overhead product cost structure and they will be able to relate financial strategy to its implications in their area and understand and predict the financial impact of operational improvements and decisions.