Finance for Engineers, Project & Technical Professionals

Course overview

Course outline

1. 1Day 1: Financial Fundamentals and Business Performance for Engineers

   • Understanding how engineering activities, technical projects, and operational decisions contribute to financial performance

   • Interpreting income statements, balance sheets, and cash flow statements from a technical management perspective

   • Distinguishing profitability, liquidity, cash generation, and financial sustainability

   • Analyzing financial ratios covering operating margins, return on assets, liquidity, and financial leverage

   • Understanding capital expenditure (CAPEX), operating expenditure (OPEX), depreciation, and their financial implications

   • Practical exercise: Reviewing a company's financial performance and identifying the implications for engineering investment decisions

2. 2Day 2: Engineering Cost Analysis, Budgeting and Profitability

   • Classifying direct, indirect, fixed, variable, and semi-variable costs in engineering and technical operations

   • Developing engineering cost estimates using analogous, parametric, and bottom-up estimating techniques

   • Preparing project budgets covering materials, labour, equipment, subcontractors, overheads, and contingencies

   • Applying contribution margin, cost-volume-profit analysis, and break-even calculations to technical operations

   • Evaluating lifecycle costs, maintenance expenditure, operating efficiency, and opportunities for cost reduction

   • Excel workshop: Building an engineering project cost model and evaluating the financial impact of alternative technical solutions

3. 3Day 3: Project Financial Planning, Cash Flow and Cost Control

   • Developing project financial plans that connect engineering schedules, resource requirements, expenditure, and payment milestones

   • Preparing cash flow forecasts covering initial investment, operating expenses, revenues, working capital, and project completion

   • Analyzing budget deviations, committed costs, actual expenditure, and projected final costs

   • Applying Earned Value Management concepts to evaluate cost performance and forecast project outcomes

   • Conducting sensitivity and scenario analysis to assess cost escalation, schedule delays, and changes in project assumptions

   • Case study: Investigating an engineering project experiencing budget overruns and developing a financial recovery plan

4. 4Day 4: Capital Investment Appraisal and Engineering Economics

   • Applying the time value of money to long-term engineering and infrastructure investment decisions

   • Calculating Net Present Value (NPV), Internal Rate of Return (IRR), and payback periods for capital projects

   • Comparing investment alternatives using discounted cash flow analysis and equivalent annual cost

   • Evaluating equipment replacement, asset upgrades, energy efficiency investments, and make-or-buy decisions

   • Assessing financial uncertainty through discount rates, sensitivity analysis, and risk-adjusted investment scenarios

   • Practical workshop: Building an Excel investment appraisal model to compare alternative engineering capital projects

5. 5Day 5: Financing Technical Projects and Presenting Investment Decisions

   • Understanding internal funding, debt financing, leasing, and other financing options for engineering and capital projects

   • Evaluating the cost of capital and its influence on project investment decisions

   • Developing financially supported business cases with investment requirements, expected benefits, assumptions, and risks

   • Integrating financial analysis with technical feasibility, operational reliability, asset life, and strategic priorities

   • Presenting financial forecasts, investment comparisons, and recommendations to finance teams and senior management

   • Capstone exercise: Preparing and presenting an engineering investment proposal supported by cost estimates, cash flow forecasts, NPV and IRR analysis, risk assessment, and a management recommendation