Commercial & Financial Awareness for Telecoms Companies

Develop the confidence, knowledge, skills and language to work with financial information within the telecommunications sector

Course Overview

This course is designed specifically for those working in the communications sector who have no formal financial, accounting or business school training who need to be able to work with financial information and their colleagues in the finance function. The course provides clear, easy-to-follow explanations of key financial concepts with extensive worked examples and exercises drawn from the communications sector. The course builds slowly and steadily upon itself, repeating the key themes before introducing new knowledge and skills to ensure participants really can deploy their learning on their return to the office. The course encompasses the skills required to perform investment appraisals for business cases, prepare and manage budgets as well as being able to read and analyse financial statements. A bonus session looks at the role of financial institutions, equity analysts and company valuations as well as approaches to financing and an analysis of the Dot Com boom and bust. The course is highly practical and extensive use is made of computer based simulation models, group exercises and case studies throughout every session.

About the Trainer

Graham Friend holds an M.A. and an M.Phil. in Economics from Trinity College, Cambridge. On leaving Cambridge Graham joined PriceWaterhourseCoopers as a Management Consultant where he also qualified as a Chartered Accountant. Graham has over 15 years experience of consulting with a focus in the telecommunications, media and technology sectors. Graham has a wealth of practical experience gained from managing diverse strategic and commercial planning assignments across Western European as well as Africa, the Middle East, the Caribbean, Australia, Singapore, Hong Kong and China. Graham is an expert in strategic, commercial and financial analysis and planning as well as business modelling. In addition to speaking at conferences around the world Graham was asked by The Economist to co-author two books, one on Business Planning and the other on Business Modelling. Graham is a highly experienced business trainer and has a gift for presenting complex commercial issues in a clear, concise and practical manner. Graham delivers training to companies such as Vodafone, Orange and Motorola as well as regulators such as the United Kingdom's Ofcom.

Course benefits

• Increase your confidence in relation to accounting and finance and in your dealings with finance professionals
• Develop an understanding of the layout, contents and significance of the Profit and Loss, Balance Sheet and Cash Flow statements
• Be able to define and appreciate the importance of key terms such as EBITDA, Net Profit, Margins, Free Cash Flow, the Return on Capital Employed and Shareholder Value
• Understand the economics of companies in the communications sector and how value is created and the implications for strategy
• Learn the tools and techniques for reviewing financial information to identify financial strengths and weaknesses
• Learn the principles of best practice budgeting and how to exercise budgetary control
• Learn how to use investment appraisal techniques to make better business decisions

Who should attend?

The workshop assumes no prior financial, accounting or business school training and so is particularly relevant for

• Non-accounting managers and executives with financial performance responsibilities
• Cost centre managers and budget holders
• Engineers, IT and technical managers
• Sales and marketing managers
• Product development managers
• Operational managers
• Project managers
• Corporate attorneys / legal professionals
• HR professionals

For those that already hold a business degree or have financial training the course is relevant for

• Business professionals looking to understand "the big picture" within the telecoms sector
• Those wanting to refresh their knowledge and skills

Prerequisites

The course assumes no prior knowledge of finance or accounting.

Course Structure and Contents

The course is run over two days and comprises a number of modules. The first day begins with a basic introduction to the financial statements before allowing participants to use their new knowledge to examine the economic performance of companies in the communications sector. The second day looks at how to evaluate investment opportunities - both projects and company investments. The day concludes with a session on budgeting and budgetary control with a case study to bring everything together.

Overview of the basic financial statements

• A review of the contents, layout and significance of the financial statements
• The difference between opex and capex
• The difference between fixed and variable costs
• An introduction to accounting slang - the "top" and "bottom" lines
• Definitions of key terms such as ARPU, EBITDA, Net Profit, Capital Employed, Margins, Free Cash Flow and Shareholder Value

The economics of communications companies

• Economies of scale and the implications for company strategy
• Financial performance of companies within the communications sector
• Differences between the developing and developed markets

Business simulation exercise

· Use a simulation model to examine the levers of value creation and the economics of a communication company

Accounting concepts and principles

• The basics of account preparation
• How to present capital expenditure and fixed assets in the financial statements - depreciation and amortisation
• Understanding prepayments and accruals
• Financing issues and interest payments

Profitability and efficiency analysis

• A step-by-step guide to reviewing financial information and an overview of the techniques which can be used
• Calculate profitability margins from gross margin, EBITDA margins down to Net margins
• Understand the significance of different measure of profit
• Review efficiency ratios such as debtor days, creditor days and stock turnover
• Learn how to manage cash effectively
• Perform a benchmarking exercise within the communications sector to get a feel for typical levels of performance

Return on Investment, solvency and investment analysis

• Learn the meaning of return on investment and calculate ratios such as Return on Capital Employed and Return on Equity
• Examine ratios that examine the solvency of a business such as gearing and interest cover
• Look at the ratios and techniques that equity analysts uses to value companies
• Examine the levels of performance achieved by companies within the communications sector
• Discover the horrors of the Dot Com boom and bust

Investment appraisal techniques - Part I

• Explore how shareholder value is created
• Examine the two fundamental principles of investment appraisal
• Learn how to apply Pay Back analysis
• Understand the importance of Break Even analysis to aide decision making
• Appreciate the strengths and weaknesses of each technique
• Discuss appropriate levels of performance or hurdle rates for each measure within the communications market

Investment appraisal techniques - Part II

• Develop an understanding of the principles behind Discounted Cash Flow Analysis
• Learn how to calculate a Net Present Value and understand its relevance to decision making
• Appreciate how the Internal Rate of Return relates to the NPV and how the IRR is used in decision making
• Examine how the techniques can be modified when investment funds are limited
• Appreciate the strengths and weaknesses of each technique
• Look at how the techniques can be developed to deal with the uncertainties of the communications sector
• Examine expected levels of performance in the communications sector

Budgeting and budgetary control

• Understand the importance of budgeting and budgetary control and the typical budgeting process
• Review best practice principles for preparing a budget
• Understand the layout of management accounts
• Learn how to calculate and interpret variances in actual and budgeted performance
• Prepare a variance report and attend a mock board meeting

[back to top]