Advanced Financial Budgeting and Management

Introduction:

Theories of budget and financial management should extend beyond theoretical perspectives, incorporating practical measures that add value to the organization. This Advanced Financial Budgeting and Management program emphasizes creating ergonomic models and utilizing scenario analysis, enabling management to reduce time spent on data gathering and focus more on analyzing data for strategic purposes.

Participants will gain practical experience with Microsoft Excel, which is crucial for developing financial management competencies within their institutions. The course introduces basic tools for what-if analysis, including the solver tool, and provides comprehensive knowledge of models and techniques used for forecasting and capital budgeting with the aid of Microsoft Excel.

Budgeting, as an aspect of financial management, is considered a subsystem of an organization’s overall planning system. In this course, participants will learn how budgetary constraints should inform the realization of organizational core objectives, supporting the decision-making process and the financial health of the organization.

Objectives:

At the end of this Advanced Financial Budgeting and Management course, participants will be able to:

• Create Budget Models for Their Departments and Organizations:
  • Develop unique budget models suitable for their departments and organizations.
• Apply Different Types of Forecasting to Manage Uncertainties within Budgets:
  • Utilize various forecasting methods to address and mitigate uncertainties in the budgetary process.
• Invest in Capital Budgeting Tools to Evaluate Actions on Capital Budgeting:
  • Explore capital budgeting tools within defined methodologies and make informed decisions.
• Employ IT Tools, Particularly Microsoft Excel, in the Budgeting Process:
  • Effectively apply Microsoft Excel tools and functions, such as what-if analysis and the solver function, to enhance the budgeting process.
• Explore, Appraise, and Uncover Weaknesses in the Budgeting Process:
  • Investigate existing practices surrounding budgets in organizations and offer recommendations for improvement.

Training Methodology:

• Interactive Lectures
• Case Studies
• Group Discussions
• Excel Workshop Practicals
• Situational Exercises

Course Outline:

Unit 1: Planning and Budgeting

• Budgeting and Management Functions
• Budgeting as a Planning Tool
• Budgets and Key Financial Statements
• Budgetary Processes: Top-Down vs. Bottom-Up

Unit 2: Methods, Process, and Cycle of Budgeting

• Budgeting Cycle
• Principles of Successful Budgeting
• Budgeting as a Value-Adding Activity
• Top Ten Common Budgeting Issues
• Choosing the Most Useful Budget Type:
  • Incremental Budgeting
  • Zero-Based Budgeting
  • Benefits of Flexible Budgeting
  • Kaizen Budgeting for Controlling Differences
  • Activity Costing and Budgeting
  • Continual and Rolling Budgets and Forecasts
  • Deriving Budget and Its Elements
  • Revenue and Expenditure Budgets
  • Commonly Used Methods in Budgetary Control
  • Creating a User-Friendly Budget Model

Unit 3: Prediction Techniques

• Prediction and Assumptions
• Quantitative and Qualitative Methods
• Phases in Model Prediction Constructs
• Insights into Time Series and Trend
• Techniques for Data Adjustments
• Moving Averages
• Simple and Multivariate Regression

Unit 4: Advanced Capital Budgeting Evaluation Techniques

• Business Risks and Cost of Capital Considerations
• Investment Project Classification
• Cash Flow Projections Determination
• Investigating Investment and Operating Cash Flows
• Time Value of Money
• Required Rate of Return on Investment
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Modified Internal Rate of Return (MIRR)
• Profitability Index
• Payback and Discounted Payback Periods
• Capital Rationing
• Comparison and Evaluation of Different Techniques
• Sensitivity/Risk Analysis

Unit 5: Break-Even Analysis and Optimization Techniques

• Cost-Volume-Profit (C.V.P.) Analysis
• Establishing Target Income Through C.V.P. Analysis
• Break-Even Analysis for Single vs. Multiple Products
• Adapting the Budget to Constraints
• Designing Models for Optimization