Short-term planning and budgeting is more likely to succeed if it is based on the longer-term strategic direction developed from an organisations’ vision and mission. Creation of value in terms of corporate value of the business itself and in terms of shareholder value is derived in part from generating profit, but more importantly from cash flow. Both require an understanding and control of revenues and costs.
The control of costs always presents a challenge. Within the energy industry the challenge is even greater as costs must be always be managed without compromising safety or risking interruption to production. This training programme presents the practical tools and techniques that may be applied to gain an improved understanding of profit and cash flow and the relationships between them and the costs, revenues, receipts and payments of which they are comprised. This will enable improved control of costs and provide opportunities for both immediate savings and long-term organisational improvements.
A key element of the long-term planning process is the capital investment required for future growth to ensure continued creation of value and increasing levels of profit and cash flow. The sourcing of long-term financing for this long-term investment at the lowest cost provides the key to success. Capital investment must be appropriately evaluated to ensure adequate returns that add to and do not destroy organisational value.
This training programme will include consideration of the most appropriate long-term sources of financing for investment and their costs, and the evaluation and appraisal of such investment. The use of forecasting and modelling tools and techniques will be used to support both short-term operational (revenue, cost, and profit) and long-term capital expenditure (investment) planning and control.
This training programme is designed to develop the financial knowledge and expertise necessary to understand profit and control costs, cash flow, planning and investment in the energy industry through:
- Using strategic models to develop business plans
- Long-term planning and decision-making to create value
- Understanding cost behaviour and its impact on profit
- Managing and controlling costs and cash flow
- Using the tools and techniques of forecasting
- Evaluating, analysing, and managing business and financial risk
- Planning and budgeting for investment, profit and the all-important cash flow
- Using planning and performance measurement software
- Analysing and evaluating variances to control and manage costs and profit
- Developing opportunities for cost reduction
- Alternative methods of investment appraisal
Who Should Attend?
This course is designed for individuals employed in financial analysis, financial management, asset valuation, and risk management roles within the energy sector, and professionals and managers within consulting and financial services, production, and trading and distribution businesses, and those with responsibility for departments or projects, including responsibility centre budget holders, project managers, engineers, and associated support function roles.
The Course Outline
Among a wide range of valuable topics, the following will be prioritised:
- Strategic development and management models
- Planning for value creation, profit and cash flow
- Understanding costs and revenues
- Forecasting and opex planning
- Budgeting and controlling profit and cash flow
- Capex planning and investment in the energy industry
- Discounted cash flow (DCF)
- Net present value (NPV), internal rate of return (IRR),modified internal rate of return (MIRR), equivalent annual cost (EAC)
- Capital rationing, profitability index (PI) and capital budgeting
Certificate of Completion will be provided to the participants who attend and complete the training course.