

Budgeting, Forecasting and the Planning Process
Overview:
Introduction:
This leading-edge Budgeting, Forecasting, and the Planning Process training seminar provide the theoretical basis and necessary skills to develop world-class strategic planning, forecasting, and budgeting processes. A strategy is a long-term plan of what an organization is going to do to achieve its overall policy. This training course will enable delegates to develop a framework that links strategies to annual budget and targets and aims for world-class levels of management and organizational performance.
A budget is a short-term plan of how an organization quantifies the operational activities required to achieve its long-term strategy. This Budgeting, Forecasting, and the Planning Process training course will provide delegates with the skills and forecasting techniques to develop a budget as a plan, and use control budgets and analysis of variances to actual to identify areas in which financial performance may be improved.
Course Objectives:
At the end of this course the participants will be able to:
- Improve their ability to think strategically and participate in the integration of the organization’s strategic management and budgeting processes
- Use forecasting techniques most appropriate to their organization’s strategic planning and budgeting
- Apply the techniques that relate to the key principles of financial management: shareholder wealth maximization; cash flow; time value of money; risk
- Appreciate the behavior of costs and identify the costing methods that may best be used in financial planning, budgeting, and budgetary control
- Use best practice to develop operating budgets, capital expenditure budgets, and cash flow budgets and forecasts in line with organizational strategic objectives
Targeted Audience:
- Line Managers
- Project Managers
- Professional Advisers and consultants who would like to further develop their strategic thinking and decision-making, and refresh and update their skill-sets relating to planning, forecasting, and budgeting, and their linkages
Course Outlines:
Unit 1: Strategic Management and Financing:
- Strategic Analysis, Strategic choices, and evaluation, and strategic implementation
- The Links between Strategy, Forecasting, Planning, Budgeting, Performance Measurement
- Strategic capability and avoiding the Spiral of Death
- Shareholder Wealth maximization, Corporate and Shareholder value creation
- Financial Strategy, Dividend Policy, the Agency Problem, and Corporate Governance
- Long-term Financing
- Debt and Equity; Cost of Equity using Dividend Growth and Capital Asset Pricing Model (CAPM); Cost of Debt; Weighted Average Cost of Capital (WACC)
- Capital Structure Optimisation Models to minimize WACC
- Using Strategy Maps to link strategies to Performance Measurement: The Balanced Scorecard
Unit 2: Financial Planning, Forecasting, and Risk Analysis:
- The Financial Planning Process and Modelling using Excel
- Statistical Forecasting Tools and Techniques
- Time series; moving averages; exponential smoothing; Pareto Analysis; trend progression; linear regression; correlation
- Forecasting long- and short-term sales revenues, and sales pricing
- Porter’s generic strategy of cost leadership and differentiation; Bowman’s strategy clock; full cost pricing; marginal cost pricing; target cost pricing; life-cycle costing; kaizen costing; value-based pricing
- Using Excel for Optimum Product mix decisions
- Short-term Financing, Working Capital, and the Cash Operating Cycle
- Direct and Indirect Cash Flow Analysis and Cash Flow Forecasting using Excel
- Uncertainty and Risk
- Business Risk
- Financial Risk
- Systematic Risk
- Unsystematic Risk
- The Choices available to minimize and mitigate risk
Unit 3: Cost Analysis Techniques:
- Cost Behaviour and Activities
- Fixed and Variable Costs, Direct and Indirect Costs
- Product Costs and Period Costs
- Cost Allocation and Absorption of Overheads
- Absorption or Full Costing
- Marginal Costing
- Cost-Volume-Profit (CVP) and ‘what-if’ analysis using Excel
- Activity-Based Costing (ABC) and Activity-Based Management (ABM)
Unit 4: Budgeting, Budgetary Control, and Performance Improvement:
- To Budget or Not – Purposes and Reasons for Budgets
- Stages in the Budget Preparation Process
- Preparation of the Master Budget
- Activity-Based Budgeting (ABB)
- Responsibility Accounting and Variance Analysis
- Standard costing; flexed budgets; budgetary control to measure organizational and management performance
- Advantages, Disadvantages, and Behavioural Aspects of Budgeting
- The Conflict between Performance Improvement and the Costing System
- Lean thinking and integrating continuous performance improvement into the Budget Process
Unit 5: Project Appraisal and Capital Budgeting:
- The Time Value of Money
- Future Values
- Present Values
- Discounted Cash Flow (DCF)
- Capital investment Project Appraisal
- Accounting Rate of Return (ARR); payback; Net Present Value (NPV); Internal Rate of Return (IRR); Modified Internal Rate of Return (MIRR); Discounted Payback; Equivalent Annual Cost (EAC)
- Project Risk
- Sensitivity Analysis; simulation; scenario analysis; NPV break-even
- Capital Rationing
- Capital Budgeting and the Profitability Index (PI)