Overview
A well-known professional engineer encapsulated this thought - "Do you want to be an engineer who happens to be a businessman, or do you want to be a businessman who happens to be an engineer?” This is an important key to UNDERSTANDING the principles of finance in the engineering world.
This course will enable you to integrate financial best practices with the powerful functionality of Excel, to effectively build, use and interpret predictive financial models in preparing budgets, projections, business evaluations and cash flows. Enabling the individual to strategically plan or react quickly and efficiently to changes that happen in the real-life situations.
Engineers, technical staff, and others in the built environment professions will be empowered with the language and the practice of finance in the engineering sector. It will enhance your knowledge and understanding of the legal environment around you and your fiduciary duties in terms of your relative positions within an organisation. Why Should an Individual Attend?
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In today's economy, it is critical that an engineer and any other built environment professional, understands the financial management of their firm and its projects.
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It will assist you in gaining, the skills, knowledge, and the confidence, needed to understand and navigate your way through the financial landscape of the business, especially, if you are in a non-financial role.
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Understand the language of finance and the impact of finance of your business, so that you don’t run the risk of seeing the company lose ground or even the firm’s demise against those who do.
Outcomes
By the end of the course, delegates will be able to:
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Evaluate business performance and strategic risk using profit, ROI, and risk–reward analysis within South African business contexts
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Navigate legal and governance frameworks through understanding business entities, the Companies Act, and King Reports I–IV
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Master tax and accounting foundations, including key principles, transactions, and the accounting equation
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Apply core bookkeeping tools and processes such as journals, T accounts, EASEL, source documentation, and trial balances
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Produce and interpret financial statements like income statements, balance sheets, and other compliance-aligned reports
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Confidently manage financial operations, from accounts receivable/payable to analyzing financial data for better decision-making
Program Outline
DAY ONE
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Basic concepts of what profit is, mark-up and margins
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Principles of risk and return. The different types of financial investments, risks associated, and expected rewards
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Basic Tax:
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Individual, Company, VAT, STC; Capital Gains
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Forms of Business Ownership and Organisations
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Understanding the Language of Accounting
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Accounting Process
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Transactions
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Accounts
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Double entry
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Trial Balance
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How the above concept’s produce the end-product of financial statements, in the form of:
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Balance Sheets
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Income Statements
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Statement of changes in equity
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Cash Flow Statement
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Understanding of the above financial Statements
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A Case Study of an Engineering Firm (using actual accounts and postings)
The above content covers such aspects as WIP, time sheets, the importance of managing WIP and billing it, ASAP. The different software packages available for engineering companies, as well as, the way WIP should be handled in the financials of the company. The concept of IFRS in engineering companies and how they should respond. The importance of cash flow in an engineering company, and how this should be managed
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Financial Analysis, Ratios, and principles behind ratio analysis:
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Profitability ratios
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Liquidity Ratios
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Efficiency Ratios (Debtors, WIP and cash management, the effects of poor debtors’ turnover on cash and profitability)
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Gearing Ratios
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Market Ratios
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How does the above merge together in the Du Pont cascade, to give the “Magic Formula”
DAY TWO
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Continuation of Ratio Analysis
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Introduction to Budgeting and Profit Planning
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How will the business acquire finance and allocate the required resources to achieve profit expectations of the owners?
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Capital Budgeting: - covering such aspects as:
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Time Value of Money
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Future Value
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Present Value
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Present and future values of annuities
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NPV, IRR, Payback
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How the above concepts are employed in a business to ensure cost effective capacity planning
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How to evaluate your business, different valuation models to assess the worth of an Engineering Firm.
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Asset Valuation
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Restated Asset Valuation (Fair Value)
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Constant Growth Model
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Discounted Cash Flow,
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Principles of WACC
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Using WACC as the discount rate
Basic Costing Principles: Covering the ECSA guidelines and how to calculate overhead factors, and how the costing of direct as well as indirect cost is apportioned Who Should Attend?
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Engineers
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Architects
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Project / Construction Managers
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Quantity Surveyors
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Construction Health & Safety
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Contractors / Sub Contractors
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Executives / Senior Management
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Middle Management
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