Know the organization of the company
The balance sheet: understanding the financial structure of the company
The balance sheet:
The assets of the company,
The liabilities of the company,
The debts of the company,
Understand and analyze the balance sheet appendices,
Explanation of the variation of certain items: fixed assets, depreciation and provisions,
Schedule of debts and debts,
Commitments given and received but not recognized (« off-balance sheet » commitment): leasing, expected effects not yet due, guarantee …
Balance sheet: cash function.
Functional analysis of the balance by cycle,
The operating cycle, short cycle
The cycle: purchasing-storage, production, sales,
Setting up of current liabilities,
Setting up of current liabilities,
The investment cycle, long cycle
The notions of investments,
Highlighting stable jobs: acquisitions of durable goods,
The financing cycle:
Long cycle concept, stable resources,
Establishment of own resources,
Establishment of external resources.
Functional balance construction
Understand the logic of the functional assessment
Understand the funding study,
Distinction between long cycles (investment and financing) and short operating cycles.
Understand the broad masses of the functional balance sheet (stable jobs, stable resources, current assets, circulating debts).
Establish the functional balance sheet
Set up functional balance items
The restatement of certain accounting information:
The value of assets (stable and circulating),
Restatement of depreciation and impairment,
The reprocessing of bank loans,
Restatement of marketable securities (VMP).
Functional balance analysis
Balance sheet analysis using 3 tools:
Global Net Working Capital (FRNG)
Understand the working capital,
Calculation of the working capital,
Diagnose the results of the FRNG,
The working capital requirement (BFR)
Origin of need in working capital,
Calculation of different ways of the BFR,
Distinction between BFR and BFRHE (need of working capital excluding exploitation).
Understand the role of treasury,
Adjustment of the FRNG and BFR based on net cash,
Appreciate the financial balance of the company.
Linking the 3 management tools,
Comparison of 3 tools to find business management solutions,
Scenario and search for steering solutions.
The ratios resulting from the functional assessment
To measure synthetically the financial structure of the company and the performance of the company,
An analysis of the evolution over time of the financial situation,
Comparisons of the current situation of the company with that of companies in the same sector of activity.
The analysis ratios of the financing structure:
The structural funding ratio (or capital funding ratio),
The financial independence ratio,
Inventory turnover ratios:
Time limit for disposal of merchandise stocks,
Delay of stocks of finished products,
Customer payment deadline,
Time of settlements of the suppliers.
Case study: deciphering the balance sheet of a company
Profit and loss account: read the activity of the company
The income statement :
Distinction in the balance sheet and profit and loss account,
Understand the formation of the income statement,
Understand the different items in the income statement,
The classification of loads and products,
Expenses and revenues are different from purchases and sales.
Charges and products are classified in three categories:
Expenses and revenues,
Expenses and financial products,
Expenses and exceptional products.
The distinction is particularly important with respect to fixed assets, inventories and provisions.
Fixed assets and depreciation,
Inventories and changes in inventories,
Provisions and precautionary principle.
Analysis of the income statement,
Understand the different stages of the formation of the result,
Establishment of an income statement analysis,
Measure the performance of the company.
Intermediate management balances (GIS)
Understand the operation of loads and products of the same nature.
Calculation of the different balances:
The commercial margin,
Judge the commercial performances
The production of the exercise,
Measure the activity of industrial enterprises
Measure the wealth created by the company during the production process
Gross operating surplus (EBITDA)
Measure the performance of the company regardless of its mode of financing, choice in terms of investment, and exceptional items.
Measure the profitability of the main activity of the company.
Profit before tax
Measure the effectiveness of the financial function of the company.
The exceptional result
Give an indicator on operations that are not reproducible from year to year.
The result of the exercise
To quantify the profit, thus what will be able to be distributed totally or partially to the shareholders.
The gain or loss on disposal
Representation of disposals of the company’s fixed assets,
Use in the calculation of cash flow (CAF).
The contribution of GIS in the analysis of the activity and the profitability of the company.
Case study: analysis of the income statement of a company
Evaluate the investment and financing of the company
Analysis of the activity
Cash flow (CAF)
Presentation of the CAF,
Multiple choices of financing,
The concept of payables and cashable products,
Non-disbursable expenses and non-cashable products,
The case of proceeds from the sale of assets.
The calculation of the CAF
Calculation from the EBE,
Calculation from the result of the exercise.
Concept of potential cash flow,
Indicator of the financing potential of the company.
The use of CAF
Remuneration of the shareholders,
Finance the company’s investments,
Reimburse any debts of the company,
Finance the current activity of the company (BFRE).
The behavior of the charges in relation to the activity
Operating expenses or variable expenses,
Structural charges or fixed charges,
Classification of variable and fixed loads.
Differential income statement
Composition of the differential income statement
Concept of turnover
Notion of variable and fixed loads,
Notion of margin on variable cost
Notion of the variable cost margin rate.
Determination of the break-even point in value,
Determination of break-even point in quantities
Graphical representation of the break-even point
Measure the risk of exploitation
The safety margin and the safety index
Determination of the decrease of sustainable turnover by the company,
Notion of the breakeven point and calculation in number of days to reach the breakeven point.
The operational lever
Concept of operational leverage,
Measure in relative value, the impact of the result of a change in turnover.
Case study on investments and financial analysis
Calculate cash flow (EB operating budget)
Elaborate an annual income statement,
Elaborate a table of VAT,
Develop a cash flow chart,
Build a financing chart.
Determination of long-term and short-term financing needs,
Use the financing chart to determine long-term resources
Use the cash flow chart to determine cash requirements and surpluses,
Check the value of the criteria of liquidity, solvency and profitability.
Finance cash requirements
Know the banking conditions: different rates (discount rate, overdraft rate), bank fees, bank outstandings.
Measure the impact of the value date system on the needs of the business.
Determine the type of financing and assess the Total Effective Rate (APR): overdraft, discount, assignment of receivables, factoring.
Place excess cash
Know the different types of investments and their risks
Calculate their performance
Identification and selection of relevant performance indicators
Case study: EC operating budget
Design of the operating budget dashboard
Master the basics of Excel,
Quick formatting of a table,
The printing of paintings,
The role of the workbook (naming, organizing the sheets, linking the different pages),
Know how to use the essential functions for setting up dashboards,
Techniques and various tips,
Analysis of dashboards with forecasts
Communicating the results to the team / designing an action plan
Elaboration of different budgets: sales, purchases, overheads, VAT, personal expenses, cash …
Update and evolution of the dashboard, monitoring, control and management of gaps.
Consolidated accounts: the case of companies belonging to a group of companies
– The economic and financial significance of the consolidation
– Consolidation methods and their impact on the accounts
The unique database
– Read and decipher its content
– What relationship with other documents of the company?