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Course Outline

Accounting and financial management introduction Download Course Brochure
  • The role of the technical manager in value creation
  • Corporate stakeholders
  • The importance of correct financial decision maki

The financial statements

  • The balance sheet
  • The profit and loss statement
  • The cash flow statement (with specific reference to resource company issues)

Accounting ratios and key performance indicators

  • What are the key financial ratios for resource companies
  • How to use accounting KPIs to manage the business
  • Trend analysis and comparative analysis

Cash v profit

  • The difference between cash flow and profit
  • The concept and implications of accrual accounting
  • Cash costs and full costs

Hedging and risk management

  • What are the exposures a resource company should manage?
  • Hedging instruments and strategies (incl. forwards and options)
  • Are we reducing risk or creating risk? A few recent case studies

Introduction to financial analysis theory

  • The time value of money
  • Sources of capital
  • The weighted average cost of capital (WACC)

Discounted cash flow (DCF) analysis

  • Absolute and incremental approaches
  • Revenue, capital and operating cost components
  • Depreciation and tax implications

Ranking competing resource investments

  • Net present value (NPV), internal rate of return (IRR)
  • Payback and capital efficiency ratios
  • What ranking criteria do I use and when?
Issues, techniques and traps
  • Inflation: What are real and nominal cash flows?
  • Sunk costs: How do I treat prior expenditure?
  • Annuities and amortising loans
Risk analysis
  • Understanding uncertainty and risk
  • Sensitivity analysis and probabilistic analysis
Resource stock valuation
  • How do analysts value resource stocks?
  • Valuation methods
  • The valuation of shareholders equity
Course review, questions and discussion
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