Finance courses are among the most frequently requested by engineers and technical professionals. One reason is rapidly advancing technology, increasing project complexity and competitive pressures place enormous demands on you to do the best possible cost estimation and economic evaluation of your engineering projects, products and services. Secondly, people wish to communicate effectively with finance personnel and in the board room, but don’t understand the language.

Finance is, in fact, uncomplicated. T he main problem is that accountants (as with other specialists in their fields) communicate using a language that has much topic-specified jargon. In today’s world financial decisions are coming under increasing scrutiny. It is essential therefore that you have enough information to make effective choices and to drive your engineering projects forward with sound justifications.

This program commences with the basics of finance pertinent to engineers and technical professionals. Basic accounting and finance terms are explained in simple English with an emphasis on the engineering and technology world. Cash flow concepts are discussed and the issue of making appropriate investment decisions is examined, using such techniques as NPV and IRR. Finally, capital budgeting and risk are discussed in an easy-to-understand manner.

This is certainly not an advanced program, but one aimed at providing you with the fundamentals of financial management from a practical engineering and technology perspective.

COURSE OBJECTIVES:

By the end of this course you will be able to:

  • Understand the financial workings of your company
  • Read and explain simple financial statements
  • Understand economic evaluation techniques in project proposals
  • Calculate the financial viability of expenditure proposals
  • Optimise the use of scarce capital on your projects
  • Understand the essentials of discounting cash flows for a project and calculate NPV as well as IRR
  • Manage your company assets more effectively and know when to replace equipment
  • Effectively execute sensitivity studies taking into account risk and uncertainty
  • Rank alternative investment proposals using discounted cash flow techniques
  • Gain the knowledge of the pros and cons of the different economic evaluation methods
  • Prepare project expenditure proposals that can win management approval
  • Make effective decisions under capital rationing situations
  • Communicate effectively with your financial manager peers
  • Manage your personal wealth and finances far more effectively than before

Course Outline

MODULE 1: Accounting Basics

  • Fixed and current assets
  • Current and long term liabilities
  • Equity
  • Chart of accounts
  • Types of accounting books
  • The double entry system
  • Debits and credits
  • Sample transactions

MODULE 2: Financial Statements

  • Balance Sheet
  • Income Statement
  • Cash Flow Statement

MODULE 3: Ratio Analysis

  • The concept and application of ratios
  • Liquidity ratios
  • Leverage (gearing) ratios
  • Activity ratios
  • Profitability ratios
  • Investment ratios

MODULE 4: Investment Decisions and Profitability

  • Ratios vs. Income Statement and Balance Sheet
  • Improving Return on Assets (RoA)
  • Improving Return on Equity (RoE)
  • SoftSales increases vs. tax savings

MODULE 5: Economic factors

  • Micro economics
  • Macro economics
  • Forecast final cost
  • Inflation
  • Business cycles

MODULE 6: Cost Accounting

  • Direct and indirect costs
  • Fixed and variable costs
  • Breakeven analysis
  • Standard cost accounting
  • Activity based costing

MODULE 7: Cash Flow Concept

  • Cash flow model for industrial operations
  • Depreciation concept
  • Depreciation methods
  • Straight line
  • Declining balance
  • Years digits
  • Prediction of cash flow for a project
  • ProjDiscounted vs. undiscounted cash flows

MODULE 8: The Time Value of Money and Related Concepts

  • Discounting vs. compounding
  • Present Value (PV)
  • Future Value (FV)
  • Net Present Value (NPV)
  • Net Future Value (NPV)
  • Internal Rate of Return (IRR)
  • Discount Rate, Cost of Capital and Hurdle Rate
  • Using tables and spreadsheets


MODULE 9: Investment Proposal Ranking Methods

  • Discounted and undiscounted payback methods
  • NPV method
  • IRR method
  • Benefit to Cost Ratio method
  • Average Rate of Return method
  • Incremental (marginal) analysis method

MODULE 10: Capital Management

  • The capital management process
  • Profitability and rate-of-return
  • Capital rationing

MODULE 11: Inflation

  • Effects of inflation in investment
  • Effects of inflation in economic evaluation
  • Effects of inflation on Net Present Value
  • With depreciation
  • Without depreciation

MODULE 12: Risk and Uncertain ties in Economic Evaluation

  • Sensitivity analysis
  • Probabilistic sensitivity analysis
  • Monte Carlo analysis

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How can an e-learning course be interactive?

Boredom can be a real danger, however, we use an interactive approach to our e-Learning – with live sessions instead of recordings.  The webinar software allows everyone to interact and involves participants in group work; including hands-on exercises with simulation software and remote laboratories where possible.  You can communicate with text messages, or live VoIP speech, or can even draw on the whiteboard during the sessions.

 

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