Financial Analysis for Legal Professionals

This course is designed for Legal professionals who are seeking to develop a stronger knowledge of finance and financial analysis approaches to apply to their everyday working lives in advising their clients. This course is designed to help those legal professionals who are confronted by financial concepts and analyses in their daily duties to effectively integrate the associated risks and business financial analysis impacts into their considerations and advisory duties. Legal communications, decisions and negotiations with internal and external stakeholders, such as clients, banks and financial institutions necessarily require a sound understanding of finance. The course, therefore, strives to develop a general understanding of finance and the techniques used in financial planning and analysis. The course focuses on a number of specific objectives, including the following:

• Developing an understanding of core financial principles;
• The differences between cash and profit including the accruals concept in accounting;
• The differences between equity and debt and the core interests of investors and lenders;
• Core financial drivers of a business - a review of the key interests of bankers and investors in finance;
• Understanding the use and application of financial statements;
• Understanding the key measures of profitability, liquidity and solvency and scripting the story behind the figures;
• Review of the key financial statements analysis to understand key drivers of profit, financial risk and liquidity and cash flow analysis;
• Financial risk, gearing and the importance of liquidity for the going concern;
• The importance of cash flow generation in business as well as for debt repayment and company valuations from the cash flow statement;
• The fundamental principles of ratio analysis and early warning signals for company development;
• How financiers and investors use cash flow forecasts and free cash flow to assess their financing decisions; and
• The use of free cash flow in understanding how companies can honour their annual debt service

Introduction to Finance and Financial Concepts

• Introduction to key financial drivers of a business – how finance links all business functions and processes
• Central finance concepts explored:
• The Conceptual Framework
• Fair Presentation
• Prudence
• Going Concern
• Capital Budgeting
• Fair Value Measurement
• Risk / Return Trade-Off
• Consolidation
• Control
• Risk Management
• What drives legal finance professionals in Performance, Shareholder Value and its’ measurement
• Concepts of debt and equity and the appropriate circumstances of when to use either form of finance for investment purposes
• The principle financial ratio analysis used to measure return and assess risk
• Principles of risk in business and the financial planning analysis concepts underlying such risks and the management/mitigation thereof
• What financial issues do lawyers need to pay particular attention to in finance?

Workshop: High-level overview of a company’s financial statements and methods to identify key financial statement analysis concepts and issues for risk management consideration

Introduction to the Financial Statements – plus a focused overview of Performance

• Introduction to the three principal financial statements
• The profit & loss account
• The balance sheet
• The cash flow statement

• Plus: the role Accounting Policies, Notes and Statements of Shareholder's Equity play in the overall financial statement analysis picture

• The importance of different calculations of profit and margins in assessing operating efficiency
• Financial performance trend analysis using the Profit and Loss Account
• Basic balance sheet components were identified and inter-relationships defined
• Ratio analysis using the balance sheet
• Assessing the ability of different companies (and sectors) to carry varying levels of gearing and liquidity dependent on their business models and revenue volatility
• The importance of liquidity and liquidity preservation for the going concern
• A review of short- and long-term liquidity from the balance sheet
• Assessing a company’s liquidity and capital investment needs through the Cash Conversion Cycle
• The importance of effective working capital management for the going concern
• The importance and role of the cash flow statement in financial management
• Measuring movements in Operating, Investing and Financing cash flows
• The importance and role of the Debt Service Coverage Ratio in debt structuring
• Using cash flow forecasts as part of risk analysis and mitigation
• The importance and application of the risk table in mitigating risk – the role of the lawyer in assisting in credit risk mitigation

Workshop: Analysis of a company’s financial statements with particular focus on the key ratios and relationships to understand the concepts of liquidity, gearing and performance.

The trainer is an international expert in training course development and delivery, with a focus on the analysis of financial and business management. The accounting and finance courses are designed to be industry-specific and address many industry sectors and are all based on deep knowledge acquired by working in those economic sectors with their development bases in IFRS.

The trainer has extensive experience in providing professional financial management training around the world over the past 20+ years and has worked with companies operating in various economic sectors of the economy – banking, governments, manufacturing, mining and agricultural, retail, service delivery and SMEs across most industry segments.

The trainer brings technical and practical experience obtained through 10 years with Deloitte; where he was both technical director and audit client service partner for companies such as Microsoft, Procter & Gamble, SAB Miller and General Motors, and has worked on various engagements across most business sectors.

This highly interactive workshop-style webinar has been designed to give a comprehensive introduction to the fundamental issues surrounding finance and financial analysis strategy from the perspective of a legal professional.

Having a sound understanding of financial concepts and principles plus the ability to understand and apply these in the professional workspace is a critical skill component of any business professional. Such skills are of particular relevance to the legal finance professionals who play an integral role in adding valued support to the finance team in order to achieve the desired outcomes of the business and to honour the needs of the various stakeholders in the business.

Financial Analysis is a topic that is both broad in scope and full of practical complexity but being able to effectively participate in its application in the workplace is of paramount importance.