Budgeting and Forecasting

Course : Budgeting and Forecasting
Course Overview
Executives are faced with ever-increasing challenges. Global competition, overcapacity, downsizing, and changing
business environments have placed enormous demands on managers, calling for greater management skills. Today’s
executives wear multiple hats and need multiple skills. Even highly innovative and creative managers with excellent
people skills must report and understand financial terms and concepts.
This course will provide the delegates with a basic understanding of how to prepare a financial plan or
budgeted financial statements. It will cover best practices in budgeting and the problems associated with
budgeting and how to solve them. It will also enhance your ability to prepare, interpret and use financial
information in your managerial decision-making. It has been designed to transform the non-financial and
finance manager into a more effective team member who can propose, analyze and evaluate financial;
planning and forecasting decisions. It does so by providing a fundamental understanding of the content,
concepts, software models and terminology of financial planning and forecasting. These are reinforced with
multiple questions and answers, discussions, group breakout sessions; excel template presentations, videos
and exercises.
The Program is designed to help the Delegates:
ü Understand the principles of financial planning and forecasting and the practical problems and how
to overcome them.
ü Understand how economic outcomes of business decisions are planned for and reflected in your
organization’s financial reports.
ü Communicate more effectively with the financial executives in your organization.
ü Improve your financial vocabulary so that you are better able to understand and interpret financial
ü Increase your comprehension of current analytical financial planning and forecasting practices and
ü Learn to use financial forecasting information in managerial decision-making.
ü Discuss current financial problems.
ü Understand the impact of operating decisions on financial performance.
Course Contents
The fundamentals of Financial Planning and Forecasting
ü What is a financial plan?
ü Why is planning an important concept in managing organizations?
ü What is the difference between planning and forecasting?
ü Who is responsible for the financial planning function in the business?
ü Planning for costs and revenues
ü Why do business costs need controlling?
ü Uncontrollable costs – do they exist?
ü Who has the responsibility for cost management in the business?
ü Overview of the financial statements and how they interrelate
ü The Balance Sheet – the financial “snapshot” of the business
ü The Profit and Loss Statement. How can we project it out for 5 years?
ü What are the more important items you should look for?
ü What the financial statements will not disclose – how can we get behind the figures?
Forecasting and budgeting direct and indirect labour costs
ü Planning labour costs both direct and indirect
ü Recording direct and indirect labour costs
ü Budgeting for direct and indirect labour costs
Statistical Analysis of Financial and Accounting Data
Linear Regression Analysis
ü OLS estimation
ü Hypothesis Testing
ü Goodness-of-fit
Fundamentals of Forecasting
ü Roles and conditions of forecasting
ü Explanatory versus time-series forecasting
ü Accuracy of forecasting
ü Descriptive Statistics
ü Selection of forecasting models
ü Forecasting Technique
Simulation models for financial planning
ü The simulation process
ü Evaluating simulation models
ü Model estimation
ü Vector Auto regressions
ü Limited data
ü Dynamic models
ü Stability and Oscillations
ü Multipliers and dynamic response
ü The impulse response function and vector auto regressions
ü Stochastic simulation
Time-series models
ü Smoothing and extrapolation
ü Seasonal adjustment
ü Stochastic time-series
ü The autocorrelation function
ü Random Walks
ü Co-integrated time-series
ü AR, MA, ARMA, and ARIMA models
Estimating and Forecasting with time-series models
ü Diagnostic checking
ü Minimum mean-square-error forecasts
ü Forecast error
Applications of regression and/or time-series models and simulation in finance
Flexible budgets: concepts, development and application
ü What is flexible budgeting?
ü Use of sensitivity analysis
ü Importance of flexible budgeting in practice
Budgeting and forecasting capital expenditures
ü Difference between capital and revenue expenditure
ü Organization of capital expenditure budget approval systems
ü Need for capital project monitoring
Completion procedures and applications of the overall profit plan or master budget
ü The financial planning and forecasting process as a control system within the business
ü The behavioral aspects of accounting control systems
ü Responsibility budgeting, accounting & control ideas
ü Zero based budgeting concept (ZBB)
ü Activity based management (ABM) and Activity based costing (ABC) defined
Way forward After the Training
Participants will develop a work plan through the help of facilitators that stipulates application of skills acquired in
improving their organizations. ASPM will monitor implementation progress after the training
Training Evaluation:
Participants will undertake a simple assessment before the training and another assessment after the training to
monitor knowledge and skills gained through the training

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