Finance for the Supply Management Professional: Supplier Financial Analysis
- To learn what is important to look for in financial statements
- Identifying potential financial misstatements
- Recognizing the "Red-Flags" on financial statements
- Using ratios for quick analysis
- Using a range of Excel® models to analyze a supplier with little information.
WHAT YOU WILL LEARN
- A proven set of decision-making tools and financial analysis techniques
- How to effectively evaluate suppliers’ financial status
- How to apply best-practice financial practices to SMP.
- How to build a convincing case study for decision-making
WHO SHOULD ATTEND?
Supply Management professionals who want to learn about the relationship between finance and procurement while learning and/or revisiting the advanced concepts of the financial side of the business.
- Financial professionals
- Operational managers
- Process owners
- Project managers
- Everyone tasked with the effective and efficient evaluation of potential investments, acquisitions, outsourcing agreements, or long-term contracts
- Those responsible for the making or evaluating management of a decision-making process and want to use Excel® more effectively and an analytical tool
Each participant will receive an Excel® workbook of the case study templates to be worked through during the program so please bring your laptops loaded with Excel® 2010 or later.
Course Outline –
I. Finance and Accounting introduction
- Basic financial statement understanding
- Balance Sheet
- Income Statement
- Cash Flow Statement
- Case study: Find the Links between the 3 financial statements
- Non-Cash Deductions & its Impact
- Depreciation vs. Amortization vs. Depletion (with Excel examples)
- Financial vs. Management Accounting (with Excel examples)
II. Key Ratios for Analysis
- What are Ratios & why are they important
- Liquidity; Turnover; Leverage & Profitability (Excel Ratio model)
- Case study: ROE, ROA & Equity Multiplier calculations using the DuPont Model
- Suppliers Benchmarking model
- Case study: Compare Supplier Ratios to Peer group
- Operating Cycle vs. Cash Cycle
- Case study: Calculate the Cash & Operating cycles of a Supplier
III. Financial Analysis
- Altman Z-Score to measure financial Solvency – 3 approaches
- Case study: Calculate the Z Score model; predict bankruptcy
- Beneish M-Score model & what it tells us about earnings manipulation
- Case study: Apply the Beneish model to determine if earnings are real
- The F-Score & how is reveals potential fraud
- Case study: Calculate a supplier’s F-Score to determine accuracy of financials
- The Sloan Index to compare cash flow to profits
- Case study: Calculate this index to see how solid their cash flow is
IV. Supplier Analysis
- Sourcing analysis (Excel model)
- Sourcing alternative analysis (Excel model)
- The value of taking/passing on a Discount
- Case study of a Supplier Discount
- What is the value of the Economic Order Quantity (EOQ) (Excel model)?
- Target Costing Model (Excel example)
- How do you know how much External Funding is Needed by a Supplier?
- Case study: Calculate EFN to make sure they have enough