COURSE OVERVIEW:

Welcome to the Financial Analysis Techniques course. This program provides an exploration of the tools, principles and evaluative methods that enable individuals and organisations to understand financial performance, forecast future outcomes, and make informed strategic decisions. It introduces the role and importance of financial analysis, the foundations of profitability assessment, the structure of cost behaviour, and the essential processes used to evaluate the financial implications of operational and strategic choices.

This course begins by exploring the analysis of business profitability, the factors that determine long-term viability, and the foundational techniques such as breakeven analysis. You will examine the chart of accounts, distinguish between fixed and variable costs, develop accurate cost estimates, understand the complexity of direct labour costing, and clarify what is meant by other expenses in financial reporting. This section also outlines the breakeven calculation, price-reduction analysis, and the financial and accounting solutions available for analysing performance, including outsourcing opportunity assessments and financial strategy considerations for new businesses.

Another learning area examines the variance analysis process and the drivers behind financial deviations. You will explore price versus volume impacts, prepare direct material and direct labour budgets, and analyse factory overhead, administration and distribution expenses. This section highlights how return on investment (ROI) functions as a financial forecasting tool, the elements analysed within ROI assessments, the characteristics of investments requiring evaluation, and the strategic significance of conducting robust forecasting to inform organisational direction.

A further learning area focuses on discounted cash flow (DCF) analysis and its essential role in investment evaluation. You will review the types of investments suitable for DCF assessment, the principles underlying discounted cash flow, the time-value-of-money concept, and the financial measures used within DCF frameworks. This section clarifies the fundamental premises of DCF methodologies and examines key profitability measures including net present value (NPV), the profitability index (PI), the internal rate of return (IRR) and the payback period.

Another learning area considers investment risk and its integration into ROI analysis. You will study capital expenditure decision-making, the preparation of cash flow forecasts, the appropriate time frames for long-term evaluations, and the characteristics of a high-quality financial forecast. This section also explains incrementality, why forecasts must comply with accounting rules, the implications of working capital investment, and the relationship between financial economics and pricing decisions in organisational planning.

A further learning area examines the establishment of ROI targets using the management-by-objectives (MBO) concept. You will review the internal rate of return formula, the strategic use of performance targets, and the requirements for aligning financial goals with operational and market realities. This section reinforces how structured financial planning enhances organisational accountability, strategic clarity and long-term value creation.

The final learning area provides a case study demonstrating the complete analytical process for evaluating an investment opportunity using discounted cash flow techniques. You will work through sales forecasting, the development of a forecast income statement, the calculation of working capital investment, and the preparation of a detailed cash flow forecast. This section shows how each analytical component contributes to a final investment decision and illustrates how DCF provides a rigorous framework for long-term financial evaluation.

By the end of this course, you will be able to analyse profitability, distinguish cost behaviours, build accurate budgets, evaluate investments using NPV, PI, IRR and payback, integrate risk considerations, construct robust cash flow forecasts, and apply discounted cash flow methods to guide strategic financial decisions across diverse organisational settings.

LEARNING OUTCOMES:

By the end of this course, you will be able to understand:

• The importance of financial analysis
• The analysis of business profitability
• The factors that determines profitability
• The breakeven analysis
• The chart of accounts
• The difference between fixed costs and variable costs
• The development of fixed-cost estimate
• The development of variable-cost estimates
• Why direct labour is a very complex cost to estimate?
• What is meant by other expenses?
• The breakeven calculation
• The price reduction analysis
• The financial analysis solution
• The accounting solution
• The outsourcing opportunity analysis
• The financial strategy for new businesses
• The variance analysis process
• Price versus volume
• Direct material budgeting
• Direct labour budgeting
• Factory overhead expenses
• Administration expenses
• Distribution expenses
• How the analysis of return on investment is a financial forecasting tool?
• what is analysed in ROI?
• The characteristics of investments that should be analysed
• Why are investments analysed so extensively?
• The long-term strategic implications of the forecasting process
• The importance of the discounted cash flow (DCF)
• The types of investments that can be evaluated with the DCF tool
• The principles of discounted cash flow
• The time value of money concept
• The discounted cash flow measures
• The basic premises of discounted cash flow?
• The measures of profitability that can be used to evaluate investments?
• The net present value (NPV)
• The profitability index (PI)
• The internal rate of return
• The payback period
• How investment risk can be incorporated into the ROI analysis?
• What is capital expenditure?
• The cash flow forecast and time frame
• The characteristics of a quality forecast
• The concept of incrementality
• Why the forecast should respect the accounting rules?
• The working capital investment
• Economics versus pricing
• How to establish return on investment target using management by objectives concept?
• The internal rate of return formula
• A comprehensive case study of the entire process of analysing an investment opportunity using the discounted cash flow technique including: sales forecast, forecast income statement, working capital investment and cash flow forecast examples

COURSE DURATION:

The typical duration of this course is approximately 2-3 hours to complete. Your enrolment is Valid for 12 Months. Start anytime and study at your own pace.

ASSESSMENT:

A simple 10-question true or false quiz with Unlimited Submission Attempts.

CERTIFICATION:

Upon course completion, you will receive a customised digital “Certificate of Completion”.