finance-value-creation-new-york-april



Financial Decision-Making for Value Creation  

Understand Risks and Consequences and Make Better Choices

15-17 April 2024 in New York

For non-finance executives with a solid grasp of finance and accounting basics, we have designed a course to take your knowledge to a higher level.  Instruction, exercises and case studies that illustrate the relationship of value creation and business strategy, revealing accounting in its proper context, and empowering you to do more with greater confidence because of it.

Attendees for this program will typically be in the following roles:

  • CEOs, General Managers, Heads of Business Units and their direct reports.
  • Corporate development, planning and strategy professionals.
  • Senior functional executives.
  • Business owners and functional managers.
  • Entrepreneurs and Board Members.
  • Regulators and Policy Makers.
  • Appreciate the simple and consistent logic of value creation.
  • Contrast and reconcile this with accounting language.
  • Understand the strategic and financial drivers of shareholder value.
  • Reconcile shareholder and stakeholder management perspectives.
  • Relate business strategy to shareholder value, and build an organizational platform aligning them.
  • Overcome the limitations of accounting-driven decision-making with a value-based performance measurement system.
  • Acquire a toolbox for strategic transactions to drive company value.
  • Be better prepared to critically evaluate an investment proposal.
  • Incorporate shareholder perspective into corporate decisions.
  • Drive performance by aligning  managerial interests to shareholder interest.
This program is designed as advanced training preparing senior non-finance executives to skillfully navigate today's competitive environment and successfully steer the company. Building upon your understanding of the basics, we refine your knowledge of how financial resources are accumulated, utilized and monitored to create shareholder value. Primary reliance on an accounting perspective, without an appreciation of financial value creation, simply isn't enough and places companies at a clear competitive disadvantage.

The dual focus is on the economic and strategic consequences of business decisions, and how business strategies are better formulated in the context of financial economics. We highlight financial value creation while placing accounting in its proper place as the language of business, but not necessarily a primary decision-making tool. We look at the broader picture and how finance should be integrated into every facet of corporate management.

Disparate corporate functions harmoniously come together by exploring, and then linking, performance measurement, strategy formulation, capital budgeting, the risk and return relationship, financing choices and internal governance, and learning the criteria investors employ to evaluate a company and determine its true value. The program will equip the participants with a collection of tools and insights enabling them to effectively enhance and further refine their financial intuition, adding to their financial understanding to make sounder decisions and systematically maximize shareholder value.

1. Financial Value Creation versus Accounting

Defining and establishing the value objective.
Why accounting can't measure value and how accounting profitability may not be what you think. 
In-depth analysis of the financial principles that do measure value.
Centrality of opportunity cost of capital as the minimum required rate of return.
Quantifying value principles into Present Value.
Assessing costs and benefits of decisions and investments with Net Present Value.
When return-based measures like IRR, may not always measure value.

2. A Review of Accounting and Financial Analysis

How managerial decisions and business activities impact accounting statements.
Seeing value creation in the context of accounting information.
The systemic link between balance sheet, income statement, and statement of cash flow.
The framework of financial analysis:
    Business & strategic analysis.
    Accounting analysis
    Financial analysis.
    Prospective analysis.
Managerial decision-making and the limits of financial ratio.
Risk as the critical benchmark.

3. Building the Platform to Manage for Value

The inadequacies of accounting.
Understanding tradeoffs between operating and asset efficiencies.
Integrating cost of capital in performance measurement.
Economic Value Added as a decision-making tool.
Understanding and correcting managerial misalignment.
Why effective incentive compensation requires reconciliation of an HR-centric approach with  shareholders' requirement of a competitive return.

4. Strategy in the Context of Shareholder Value

Why strategy is the means to an end and not an end in itself.
How and why competitive advantage drives value.
Relating strategy and the minimum required rate of return.
Understanding the relationship of strategy and value creation.
Reconciliation of strategic and financial objectives.
Integrating a balanced scorecard into the value equation.

5. How Companies and Projects are Valued

The Cash Flow-based framework.
A more refined and robust application of multiples.
Prioritizing investment projects.
Working with the biases of the investment process.
How capital markets value companies.
Explaining stock price volatility.
How debt affects company value.
Why financing structure is not a critical driver of value.

6. Strategic Transactions

Merges and acquisitions.
    Strategic rationale
    Acquisition valuation.
    Issues for private companies.
Initial public offerings.
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