Key Learning Objectives
- Demystify financial jargon to fully understand and interpret financial statements accurately
- Understand and interpret balance sheet and profit and loss statements
- Discover the distinction between cash flow and profit
- Gain an insight into how equity analysts value mining and energy shares
- Learn how to manage for increased shareholder value
- Have the framework and tools for discounted cash flow analysis
- Make correct investment and development decisions
- Understand currency and commodity price hedging issues and techniques
- Learn the difference between cash costs and full costing
- Improve your career prospects by moving from being a technician to a manager
About the Course
A rapidly changing and increasingly competitive global resource industry has resulted in a focus on efficient financial management and astute financial decision making. For technical managers, this has meant a high level of technical expertise is no longer sufficient for superior management performance: they must now be conversant in principles of finance too.
This course is specifically designed for those with technical training and requires only basic mathematical ability as a prerequisite. The course is presented in a manner that reduces the jargon to basic principles and applies them to numerous real life examples. The course is not designed to train participants to be accountants, but rather, to give participants the confidence and ability to communicate with accountants and finance managers and to improve their own financial decision making.
The first day presents an overview of accounting statements and reports with particular reference to resource industry issues. The morning focuses on the structure of the key financial statements whereas the afternoon examines the interpretation of financial reports.
The second day considers financial decision making and the impact that correct (and incorrect) decisions can have on corporate value. The fundamentals of financial theory are reviewed and their application in a resources industry context is then applied in detail.
Who Should Attend
- Business analysts
- Lawyers, accountants
- Technical & operations managers
- Business executives, professionals
“Over the years I have attended many training courses provided by [Informa Corporate Learning]. I have always found the course content to be relevant and accurate and the course facilitators to be leaders in their field.”
Analyst, Eni Australia Ltd.
Accounting and Financial Management
- The role of the technical manager in value creation
- Corporate stakeholders
- The importance of correct financial decision making
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
Review Day 1, End of Day Quiz
Economic Analysis and Value Creation
Introduction to Financial Analysis Theory
- The time value of money
- Sources of capital
- The weighted average cost of capital (WACC)
Discounted Cash Flow 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
- 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
On-site & in-house training
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