Finance Industry Transformation & Regulation

Introduction

With changing financial needs and business models, it is now more crucial than ever for finance teams to transform and drive value for their organizations. Economic regulators and play a critical role in the determination of tariffs and the assessment of firm conduct.

Different costing methodologies can result in very different tariffs for regulated entities or different evaluations of organization’s business conduct. The costs of capital need to be carefully weighed when arriving at a final tariff or evaluating a market outcome.

This course will consider the cogent competencies in the finance value chain of the future and why and how they are relevant to your business environment today.

Course Objective

At the end of this course, participants will be able to:

• Gain insight into the competencies required in the finance value chain of the future to navigate finance industry transformation.
• Identify how to apply competencies to your own work and build multidisciplinary teams that work cross functionally
• Adapt to the emerging role of finance.
• Recognize the skills that will be affected by changes to the future of finance and potential ways of acquiring these new skills
• Develop and understand their evolving roles as well as the skills and competencies their teams will require.

COURSE OUTLINE

MODULE 1: FINANCIAL ANALYSIS

• Analysis of financial statements
• financial statements outline
• Statement of financial position
• Statement of cash flows
• Statement of financial performance

MODULE 2: THE FINANCIAL ANALYSIS AND COST ACCOUNTING ROLE

• Using cost accounting and financial analysis in regulatory decisions
• Standards of evidence used in financial analysis and cost accounting
• Activity based costing
  • Fixed & Variable costs
  • Overhead expenditure allocation
  • Cost & revenue drivers
  • Measures of costs
  • Volume and non-volume based revenue drivers
• Based costing profitability analysis
  • Resource consumption models
  • Cost vs. benefit considerations

MODULE 3: TARIFF SETTING & ASSET VALUATION

• The regulatory tariffs & asset base
• Regulatory objectives & asset valuation
• Return on initial investment
• Price signalling & smoothing
• Approach & methodology to asset valuation
  • Historic cost
  • Deprival value
  • Replacement cost
• The tariff model
• Asset base depreciation
• Nominal & real values
• De-escalating depreciation & future tariff determinations

MODULE 4: THE COST OF CAPITAL

• Finance role in regulated tariffs and charges setting
• Risk and return
• Relevance to State Owned Enterprises
• Essential determinants of Weighted Average Cost of Capital (WACC)
• Capital structure
• Inflation
• Debt Cost
• Tax
• Equity Cost

MODULE 5: CALCULATION OF CAPITAL COST FOR TARIFF DETERMINATION

• Regulatory practice approaches
• Cost of debt and benchmarking values
• Return on equity and Capital asset pricing model (CAPM)
• Spreadsheet modelling
• Standard values of inputs
• Standard WACC for a regulated utility
• Capital structure effects
• Treatment of tax
• Implementing lessons learnt

Who Should Attend?

• Finance managers
• Controllers
• CFOs
• Finance team members

Delivery Method: This will include combine lectures, discussions, group exercises, case studies and illustrations. Participants will also understand the theoretical and practical knowledge of the topic.

Venue: Gambia

Fee: $5,000

Duration: 1 week

Course Date: March 27th – 31st 2023