Financial statement analysis
This business course helps you to read and understand financial statements to evaluate how business performance is affected by four fundamental drivers of profitability viz., asset management, cost management, leverage management and tax management. It will also help you to identify areas for improvement.
The second part of this finance course deals with managing costs. You will learn how to prepare cost sheets, budget and make cost-based decisions.
The third part of the course provides an overview of financial markets to raise capital of different types. You will develop the ability to prepare and evaluate finances for your business plan and manage working capital.
The overall objective of the course is to build financial acumen to make you a successful entrepreneur or manager.
Week 1: Mechanics of Financial Accounting Introduction to financial accounting, Generally Accepted Accounting Principles, fundamental accounting equation, recording of financial transactions and preparation of accounting statements through accounting equation. Week 2: Reading Financial Statements Reading and understanding balance sheet, income statement and cash flow statement Familiarizing all accounting terms that normally appear in financial statements Week 3: Financial Statement Analysis Ratio analysis, understanding relationship between four profitability drivers, assessing financial health through credit scoring model. Week 4: Product Costing Preparation of Cost Sheet in manufacturing and service industry, Job and process costing, Activity-based costing. Week 5: Cost Analysis for Decision Making Behaviour of costs, Break-even analysis, relevant costing approach for different decision making scenarios. Week 6: Budgeting and variance analysis Preparation of operational and financial budgets, Comparing actual performance against budgets, Price and quantity variance, Controllable and non-controllable variance, Revenue and contribution variances. Week 7: Financial Markets Sources of finance, Angel funding, Venture Capital, Private Equity, Term Loan, Working capital financing and public equity. Week 8: Capital Budgeting Preparing project cash flow statement, measuring cost of capital and evaluating projects (NPV, IRR, Payback period). Week 9: Working Capital Management Working capital cycle, managing inventory, receivables and cash. Week 10: Course Review Ten important things that you need to remember in Finance.
Graduate level course
An overall understanding of business environment is required