Interview Prep Flashcards
Five key objectives of a FD
Meets its strategic goals, Maintains its financial health, Identify future financial problems, Identify financial opportunities, Scalable and Integrated Systems and Processes.
Understand the Business..
Understand the people, Evaluate systems, process and controls, Understand risk in the business, Understand the individual commercial needs of the business.
Problem-solve..
Attention to detail, Communicate
Question…
Question, Learn, Change. Ask why, not what. Learn from both our mistakes and successes.
Act rather..
Act rather than react, Make that call, Drive forward confident in expectation.
Key functions at core?
Budgeting, Performance, Reporting, Cash Flow, Forecasting plus SA, Working capital, Publication of accounts, Project appraisal, Statement analysis.
Blue on matrix?
(1) Translate objectives into viable financial plans.
(2) Useful resource, not a police force.
Green (2) on matrix (+7)?
**(1) Strategic objectives and Operational management.
(2) Plan, Record and Control an organisation’s activities.
(1) Identify objectives
(2) Identify potential strategies
(3) Evaluate strategies
(4) Choose alternative courses of action
(5) Implement the long-term plan
(6) Measure actual results and compare with plan
(7) Respond to divergences from plan
Circle on matrix?
(1) Good corporate governance (2) Risk register (Strategic and Operational (3) ICT and Information governance (4) Commercial minded. (5) Regulatory and governmental compliance + Company Administration (6) Business Intelligence (Fin and non-fin info..) + Businesses are partnerships + Internal / External interface (7) Internal / External audit + Process and policy adherence + Control-conscious environment.
6 Takeaways from Online, 5 Events (Online) and 4 Events (IK-UK)
(1) Forward-thinking financial leadership. (2) Informed participation in strategic decision making. (3) Line report/Finance professionals x 6. (4) ERP projects x 2. (5) EY formation. (6) RGU collaboration.
Due diligence, SPA, ERP x 2, Covid, Move, Investigation, Disciplinary, Wind-down, Delipidations.
Three types of strategy in existence?
(1) Growth strategies. (2) Stability strategies. (3) Retrenchment strategies.
Challenges at ASF?
Clean up crew, Punting issues, Crisis management, Unpleasant surprises and Meeting reporting needs but not user needs.
Proven bad strategies?
Hit another home run, Follow the leader, Arms race, Do everything, Losing hand.
Optimum approach to strategies?
(1) You cannot implement what you do not know. (2) A flexible approach that adapts to the unexpected (3) Difference between operational and strategic thinking and people (4) Keep strategy on track, keep it adaptable and if it fails move from it sooner rather than later and develop another.
4 headings in prism of finance department??
(1) Perception. (2) Metrics. (3) Info orientation. (4) Processes.
Perception?
Cost centre. Profit manager, Value creation centre.
Metrics?
Financial, Financial and nonfinancial, Real-time and predicting.
Info orientation?
Past - Past, Reactive present, Stable future - Past, Proactive present, Potential future.
Processes?
Informal and ad-hoc, Formalised with some integration, Automated with full integration.
Daily reporting?
Drive the business towards its targets, Flight instrument panel. Position and performance, Remedial - Narrative
Monthly reporting - Focus 1?
Focus in upon (-), Drive forward (+) - Accurate reliable information, financial and non financial… - Too little vs Too much information - Timely information vs Accurate information - A continually forward-facing organisation is hugely beneficial to (1) The performance of the business and (2) Relationships within the business.
Monthly reporting - Focus 2?
Working papers are principle link between accounting records and financial statements. - Record, Evidence, Reconcile, Adjust, Working papers - Well ordered documentary regime tracing and explaining any balance - Papers and Timetables, Conventions and Priorities.
Annual reporting?
Processes, Objectives, Management Accounts to Statutory Accounts, Disclosure and Audit.
5 elements of the business?
The Business, The Numbers, The Performance, The Processes, The Controls.
Return on Investment?
Net profit after tax + Net cash inflow = Return on investment.
Elements of reporting pack?
P & Loss, Balance sheet, Sales/Price/Margin, Cost/variance - Ac payable and cash out, Ac Receivable and cash in, Cash flow forecast, Forecast + sensitivity analysis, Budgeting - For Ex, Cap Ex, Project appraisal, Statement analysis - KPI’s, Contracts review. Controls review, Other review.
Element of analysing processes?
Cost, Creep, Identify, Flowchart, Buy-in, Challenge, Tools / Metrics / Controls (TMC), Make sure it works, Drive forward.
What is internal control?
Processes, designed and effected by those charged with governance, where rules/procedures and mechanisms are introduced and implemented within a business to ensure integrity, accountability, compliance, fraud and effectiveness and efficiency of operations.
What are the prevent controls and detect controls?
Authorisation, Documentation, Reconciliation, Security and Segregation of duties. Prevent 4/5 Detect Reconciliation and Internal and External audit.
What is corporate governance?
A set of relationships between Directors, Shareholders and Stakeholders which provides a structure through which (1) The objectives of the company are set (2) The means of achieving these are set also and (3) the means of monitoring performance to that end are determined.
4 items determined from pivot tables / financial analysis?
Metrics, Trends, Issues, Successes and failures.
9 elements of consideration starting with market?
Market, Price, Agility, Liquidity, Acquisition, Location, Exposure, ERP, Economy.
Key principles of acquisition?
Capacity Market vs Risk - Market power, Competitive power, Barriers to market, Supply chain security, Economies of scale (Revenue synergies, Cost synergies, Financial synergies)
Success is technology?
(1) Operating platform (2) Document creation (3) Workflow management (4) Billing system.
Build from within - Consultant’s watch. Your watch.
How do you like to be managed?
(1) What do you want? (2) How do you want to get there? (2a) Taken to new places or simply delivered? (3) This sets parameters (4) Autonomy with accountability (5) Underpinned by Communication and Teamwork (6) Recognise wins and shortcomings with equal vigour.
Risk management is greater than Liabilities and Investments?
Strategy, Financial, Legal, Security.
5 stages of dealing with risk?
Identify risk, Analyse risk, Prioritise risk, Deal with risk [Avoid, Accept, Mitigate or Transfer], Monitor risk.
4 approaches to risk?
Avoid, Accept, Mitigate, Transfer.
The Table of Risk
High risk of occurring / Low cost
High risk of occurring / High cost [Detailed plans]
Low risk of occurring / Low cost
Low risk of occurring / High cost [Outline plans]
4 main types of data analysis?
Descriptive, Diagnostic, Predictive, Prescriptive.
10 categories of data analysis?
Cluster, Cohort, Factor, Regression, Time series, Decision trees, Data mining, Text analysis, Mean analysis, Standard deviation.
Cash flow statements / Forecasting tools?
Time series model, Econometric model (Relationship between economic variables to forecast future developments), Judgemental/Opinion/Subjective, Delphi method. - Straight line, Moving average, Single linear regression, Multiple linear regression.
Optimising profit?
(1) The real revenue of your business is net margin after all your variable costs. (2) More bad business decisions are made by including fixed costs in an appraisal of product performance than through any other accounting convention. (3) Do not convert a variable cost into a fixed one (make it yourself) unless the fixed cost will still be economical if a 30% fall occurs in the level of demand. (4) Breakeven to actual sales calculation.
Optimising cash?
(1) Generation of profits (2) Well-organised treasury (3) Minimum working capital (4) Effective use of fixed assets.
Indicators of cash performance?
(1) Overall bank balance (2) Free cash flow (3) Gearing ratio (4) (Debt ratio (5) Interest cover.) [A] Inventory, [B] Receivables, [C] Payables, [D] Fixed assets, [E] Research & Development, [F] Treasury.
The controls - Fraud?
Use of services and facilities a privilege not a right. Remuneration schemes, make as self-policing as possible. Some MD’s fail to understand that you cannot make money by accounting. Double wham if your forecast is based on inflated sales.
Optimising performance?
You must understand the structure and dynamics of the business, You must understand the driving forces inside and outside the business, You must understand people’s personal objectives which are all different, Management reports must extend beyond results to causes and effects.
(1) Financial Performance
(2) Competitive Performance
(3) Quality of Service
(4) Flexibility
(5) Use of Resources
(6) Innovation
The effective management of a process or a series of processes entails a cycle?
Define, Action, Measure, Analyse, - Improve & Control or Report & Instruct.
Greatest strengths?
(1) Ability to bring people along with an idea or a project (2) Communicate financial and non-financial information (3) Focus on areas (-) Drive areas forward (+) (4) Clear idea of what I want to achieve at any particular time.
