What will you learn?

  • Communicate & collaborate with stakeholders & business/financial leaders using the right terminology and vocabulary
  • Learn about fundamental finance concepts
  • Develop skills in interpreting financial statements
  • Analyze product P&L to identify trends
  • Apply finance concepts learned in the last term to create bottom-up financial models for businesses
  • Understand the basics of Enterprise Valuation, Pre & Post Money Equity valuation
  • Gain proficiency in designing and presenting financial data

Pre-requisites

There are no prerequisites for this course.

Description

This course will introduce learners to the fundamentals of business finance. The emphasis is on practical applications and problem-solving techniques. The course is designed to introduce learners to the financial decision-making process that will provide insight for the necessity to consider the financial implications of any managerial decision. The learners will be equipped with tools to understand and solve basic financial problems that a business confronts. You will learn about accounting principles, time value of money, costing that form the core of any financial decision. This course is hands-on and will provide the learners an opportunity to apply finance theory to real business cases. Learners will learn to decipher a business problem in terms of what the finance theory says about it, what decision can be made, how the management should be presented with solutions. Learners will learn how to present financial data effectively. The emphasis is on practical applications and problem-solving techniques.

Course curriculum

  • 1

    Chapter 1 - Finance & Accounting for Managers

  • 2

    Chapter 2 - Accounting : Understanding Financial Statements

    • The Language of accounting
    • What is Capital? How does it increase?
    • What are the Primary Financial Statements, and what are their building blocks?
    • Assets, Liabilities, Incomes & Expenses
    • Building a personal Balance Sheet
    • Building a Company Balance Sheet
    • What is the P&L Account?
    • The PL An introduction
    • Items in a PL statement
    • Format of PL Account
    • What happens during each transaction
    • A few initial entries
    • Some more entries
    • Entries for the end of the Year
    • Observations on Balance Sheet
    • Some accounting Concepts and Conventions
    • The key accounting concepts
    • Valuation of Assets shown in the Balance Sheet
    • Creating a template for PL and Balance Sheet
    • Making Accounting entries (Part-2)
    • Making Accounting entries (Part-3)
    • Additional Learning Resources
  • 3

    Chapter 3 - Basic of Investment Evaluation : The Tools

    • Compound Interest
    • Periodic Compounding
    • Compounding vs. Discounting
    • A = P*(1+r)^n and its derivations
    • The rule of 72
    • Applying the rule of 72
    • The impact of compounding
    • Arithmetic Mean vs Geometric Mean
    • Mean or Median which average to use
  • 4

    Chapter 4 :The Basics of Investment Evaluation

    • Present Values and Future Values of A Cash flow
    • $100 now or $110 later?
    • The Required Rate of Return "r"
    • My expectation of "r" depends on risk perception
    • Two Projects: A and B
  • 5

    Chapter 5 - Investment Evaluation: How to deal with cash flows of Differing time periods

    • Given a series of cash flows, how to add them?
    • Present value of an annuity
    • Investing in a Bond - what happens when I buy a bond?
    • When I sell a bond, how do people value it?
    • Three requirements for a DCF
    • Why analyzing cash flows and not profits is important?
    • Spreadsheet conventions for DCF problems
    • DCF two methods - NPV & IRR
    • The Capital Budgeting Process
    • Investment Evaluation - A few key concepts and terms
    • Present value of a growing perpetual annuity
  • 6

    Chapter 6 - A Capital Budgeting problem

    • A Capital Budgeting Problem - ABC ltd
    • Additional Learning Resources
  • 7

    Conclusion

    • Conclusion
    • Resource Library