Finance Acumen

MEETING STAT

Join Zoom Meeting
https://zoom.us/j/93608785870?pwd=ZDFzY2U2djI2TlloeVdUUFE0L3FoUT09
Meeting ID: 936 0878 5870
Passcode: 855014

• DATE: 24, 25, 26 JUN 2021
• Mentor: S Subramanian (Subbu)
• Multi company participants

Course Structure

• QUIZ
• Learning from SW Airlines
  • Cost: food: $6 to 20 cents; Per mile cost: 30 cents
  • Every employee awareness
• DAY 1:
  • Fundamentals of financial statements
    • Market capitalization = stock price x No of shares outstanding
      • Drivers for stock prices
        • 8% by macro economics (GDP; news, policy; pandemic etc)
        • 31% by Stock market
        • 18% Industry
        • 41% Company specific actions
    • Shareholder expectations
      • Maximise ROI, EPS, Profits, Survival, sales
    • Drivers of Company Performance
      • Growth profit
      • Robust Margins
      • Managing by assets efficiently
    • Shareholder value
      • Shareholder value = Dividend Yield + Price appreciation
      • Return on Invested Capital
        • Share holders view : (ROIC) = Net profit / Invested capital
        • Managers view: Income statement; Balance sheet...
          • Income statement: How much is earned over a period of time (net income)
          • Sales Revenue: Sales and is Realised and Earned (post the delivery)
          • Expenses: When resource is used
          • Income:
          • Revenue : price x volume
          • Balance Sheet: Assets; What we Own & What we Owe (Liabilities, Owners equity, inventory )
          • Cash Flow analysis: At least 6 months cash flow is to be available when income becomes zero
          • Capital MGT is in 8 words: Buy low, Sell high; Collect now; Pay later

DAY 2

• Incremental Budgeting :
• Zero based Budgeting
• Compound Interest

DAY 3

• COSTING
  • Cost of services
    • Manpower
    • Consumables
    • Overheads
  • Cost types
    • Fixed
    • Variable
    • Controllable (travel; advertising; materials)0
    • Non-Controllable (man power; )
  • Costing Methods
    • Job
    • contract
    • Batch
    • Process ()
    • Service
    • Operation
    • Multiple
  • Cost DECISIONS
    • Types
      • Avoidable cost
      • Opportunity cost
      • Incremental cost (or marginal cost)
      • Differential cost
    • Setting standards
      • What it is ?
        • It is basically a cost per unit that should be attained (For eg: Rs0.75 per plant on SFM is setting standards)
        • This is also a goal for the company / project / process
      • Currently attainable standards
      • Target costing
        • TC = Anticipated selling price - Desired profit
      • Responsibility Centers
        • Cost centre (R&D; marketing)
          • xxx
          • Cost Unit
        • Revenue centre (sales)
        • Profit Centre
        • Investment centre
        • Discretionary cost centre (both cost and revenue; )
      • Break Even
        • Time point when Margin = Loss
    • Contracts
      • Type of Billing contracts
        • Fixed price contracts
  • CASE STUDY
  • COSTING & PRICING
    • Profitability
    • Elements of cost
    • Cost Cutting
      • Head count
      • salary reduction
      • Travel
      • Picnic
      • Training etc.