Why Understand Finance?
Accounting methods
The income statement
The balance sheet
The cash fl ow statement
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Profitability ratios
Efficiency ratios
Liquidity ratios
Leverage ratios
Other ways to measure financial health
Top-down versus bottom-up budgeting
Getting started
Articulating your assumptions
Quantifying your assumptions
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Costs and benefi ts
Payback period
Net present value and internal rate of return
Break-even analysis
Sensitivity analysis
Evaluating unquantifiable costs and benefits
Performance of an investment
Performance of an existing unit
Forecasts
No matter where you work in your organization, you’ll do your job better if you understand basic fi nancial concepts. You’ll be a more effective contributor to your company’s efforts to make money and grow. This short course explains the basics of finance. Though taking it won’t make you a finance expert, it will help you:
Make sense of the three key financial statements.
Gauge your company’s financial health.
Weigh costs and benefits before committing resources.
Consider financial risks when making decisions.
Estimate future performance of your business.
Track investments against what you’ve budgeted.
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