Introduction to Business Risk

CONTENTS

1st Day - Introduction and Objectives

• Candidates to give their current level of financial experience and knowledge.
• Objectives of the day explored and explained.

Part One - The Balance Sheet

• What is a Balance Sheet - destroying the myths.
• How and why does it balance?
• Introduction to the concept of Assets and Liabilities.

Understanding Assets

• Current - Fixed - Intangible - Others.

Understanding Liabilities

• Current and Long Term.

Exercise 1 - constructing a Balance Sheet for YOUR fictional business.

Video - The Balance Sheet Barrier.

Part Two - The Profit and Loss Statement

• What does the statement tell us? What is its purpose?
• An understanding and analysis of the various margins.

Exercise 2 - constructing a Profit and Loss Statement again for your business.

Video - About Working Capital.

Exercise 3 - To analyse briefly our fictional business (The financial statements give up their fundamental secrets!)

2nd Day - Ratio Analysis and Risk Assessment

Part Three - Ratio Analysis

• What are the financial ratios?
• What do they tell us?
• Why use financial ratios?
• How do we use them?

Part Four - Case Study Exercise

• Review of case study company - 'LUCAS' (5 separate years from inception to liquidation)

Exercise 4 - Ratios and Case Study Analysis.

Part Five - Trends

Exploring and recognising trends and their use in predicting -
a) future growth (potential success) or
b) declining results (potential failure)

Exercise 5 - Trends Analysis.