Financial Management & Nonroutine Decision Making – MDA

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Financial Management & Nonroutine
Decision Making – MDA Session 3, Topic 1
Topic Objectives Include:
• Knowledge of and insight into accepted financial & business
concepts, principles, applications and practices, as well as current
business priorities and measurements.
• Controlling costs and producing profits within an original budget and
how to maximize gains and profitability to meet strategic plans,
business model and departmental objectives within budget.
• Identifying and explaining the short and long-term implications
regarding strategies & decisions based on financial information and
data.
• Understanding the fundamentals and key concepts of financial
planning and accounting management.
Financial Management & Nonroutine
Decision Making
Why training is needed:
It takes something more than teams and collaboration
to create an organization in which everyone feels
involved and committed, where they understand what
they are a part of, and what the company is trying to
achieve and how they affect the results.
It takes a focus on what all businesses have in
common, but many managers don’t know much
about—the numbers!
Financial Management & Nonroutine
Decision Making
Why this topic is important :
For nonfinance managers to be successful in their jobs and
be key decision makers, they need to understand and apply
the basics of finance and accounting, including financial
reporting and analysis, budgeting, planning, margins and
forecasting.
All managers should “think finance” and “learn the
language” using management accounting information,
financial data and metrics to drive business performance
and to improve the overall capability of the organization.
Financial Management & Nonroutine
Decision Making
Open discussion: “Pro’s & Con’s?”
“What are some of the issues, benefits, concerns and
difficulties you have with understanding and using your
company’s financials at work?”
Financial Management & Nonroutine
Decision Making
Situations when these skills are used on the job:
Here are some work activities that you may have to use your financial and
decision making acumen. Can you think of others?
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Track Revenue by Market Sector, Segment & Region
Forecast Long-Term Cost Savings (Supply Base)
Perform Feasibility Studies/Reviews
Evaluate & Drive VaVe Opportunities
Evaluate Technical Feasibility vs Cost of Part or Product to be Produced
Establish/Set Inventory Levels & Turns and Forecast Demand & Usage of
Inventory
Order/Purchase or Approve Purchase of Materials & Supplies
Report Balances & Cash Activity to Financial Institutions
Determine Outsourced or Contracted Work or Projects
Approve Spending for Labor, Services or Equipment/Machinery (fixed assets)
Financial Management & Nonroutine
Decision Making
Understanding the “Big Picture”
• Understand the basics of financial measurement, including the income
statement, balance sheet and cash flow statement and the difference between
profit and cash.
• Finance is an art as well as a science. The discipline must quantify things that
can’t always be quantified, so it has to rely on rules, estimates and assumptions.
• A financially intelligent manager knows that the numbers can’t and don’t tell the
whole story. He/she knows that the overall economy, the competitive
environment, customer needs, the interdependency between departments and
other variables all must be considered.
What do you do, could do or should do to keep informed about financial,
accounting and budgets in your company and how would it benefit your
department/unit and influence your decision making?
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