Module 1 – Financial Accounts – an overview of the accounting information relevant to finance and financial analysis. Why it is useful and where it falls short. We review the structure and content of the P&L and see how it builds with an Excel-based downloadable exercise.
Module 2 – Ratios and Key Terms – his section shows how, given a P&L and Balance Sheet, you can start to analyse a business from different perspectives: Profitability, Liquidity, Efficiency, Returns and Credit. The Excel case study also continues.
Module 3 – Return on Capital Employed – One of the key aspects of analysis is Invested Capital – how much has been invested, where is it invested and what are the returns. This section takes a very practical look at the idea of capital invested in Operating and Fixed assets and compares how different businesses might give differing results, and why.
Module 4 – Cash and Cash Flows – going back to our Accounts case, this section focuses on cash flows rather than P&L and Balance Sheet. How do they compare? Where are the differences? Of course, a fully debriefed Excel case is part of the learning.
Module 5 – The Time Value of Money – This short section on the Time Value of Money will set you up for investment appraisal – but it’s very widely applicable outside that scope too.
Module 6 – Management Accounts – We now get into Management accounts – what they are and why they are used – and it leads us into the realms of budgeting and cost behaviour (the key to a good budget)
Module 7 – Management Accounting and Investment Appraisal – Now we now how to create a robust budget, the question is now whether a project – based on projected revenues and costs – is worthwhile. But ‘worthwhile’ isn’t clear cut, and this section looks at the appraisal techniques to help with decision making: to invest or not to invest…?
Module 8 – Business Valuation – We’ve now looked an investment appraisal, and given that a company is just a portfolio of investment decisions playing out, we naturally lead on to how to VALUE an entire business rather than evaluate a single project. Discounted cash flows holds the key, but there are simpler shortcut methods.
Module 9 – A Balanced Scorecard and summing up – Now the journey through the world of finance is almost complete, this final chapter reviews the entire program from a high level to recap and join it all together, and look at a more balanced approach to ‘scoring’ a business. We look at a real life case where we started the course: Tesco plc.