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Introduction to Finance and Financial Analysis

How can you make better financial decisions for your company? Learn more about corporate finance with this free course.

Publisher: Saylor Academy
What criteria do companies use when making financial decisions? This course delves into the differences between bonds and stocks, their advantages and disadvantages, and their uses and limitations. You will be introduced to financial statements, different types of financial ratios and how to interpret and apply them. The course presents pro forma financial statements and teaches you to use them for financial forecasting.
Introduction to Finance and Financial Analysis
  • Duration

    6-10 Hours
  • Students

    2,145
  • Accreditation

    CPD

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Description

Modules

Outcome

Certification

View course modules

Description

Finance is a broad subject and you make financial decisions constantly. Whether you work on Wall Street or in a small company, finance is vital to every business so understanding its fundamentals is key to your business education. Is there a place for ethics in the world of finance? This diploma course will help you realise why it is crucial for individuals working in the financial sector to have organisational, professional and personal ethical behaviour. Transparency within financial markets is essential, and you will be taught about the most important legislation. You will understand what criteria corporations use when making financial decisions, the purpose and types of different financial institutions, the largest stock exchange markets and leading players, and the purpose and function of a market index. This course will explain how stocks are valued and differentiate between the three models used in corporations’ valuations. Calculate an investment's dollar return and percentage return and use historical and average returns to predict future performance. Investigate the effect a bond's market price has on its yield, how to use the rating system to assess the risk associated with different bonds, how to purchase them, and why bond markets may not have price transparency. Discover how an organisation can finance its operations through bonds and identify different types of bonds and their duration, advantages and disadvantages. Finally, learn about the principal's liability in contracts, torts and criminal law, the agent's liability in tort and contract, and how to terminate agency relationships.

What are the primary financial statements and how is the information used for economic analysis and forecasting? This course presents the major financial statements: income statements, balance sheets and cash flows. Next, investigate the less commonly used financial statements such as the statement of equity and the free cash flow statement (different to the statement of cash flows just mentioned). Then, look at the income statement, the non-cash items and the effects of GAAP (generally accepted accounting principles). The balance sheet represents a firm's financial position at a single point in time. You will be able to identify assets, liability and shareholder's equity and learn how to compute the balance sheet equation. You will investigate the impact of taxes on firms and how different forms of a corporate organisation affect the tax obligations for the firm and the individual owners. Various types of taxes are defined and the impact of depreciation on taxable income is discussed. Ultimately, a tax credit is compared to a tax deduction and you are shown how to calculate tax liability and depreciation. 

Finally, the course introduces the statement of cash flows, the three types of cash flows, their connection to other financial statements and the difference between economic value and market value. It also presents so-called forecasting or pro forma financial statements – pro forma income statements, balance sheets and cash budgets. After completing the course, you will be able to create a forecast of the income statement, using assumptions for the future growth of expenses and sales by category; and develop a forecast of a balance sheet and analyse it. The course emphasises the importance of cash and good cash management. After finishing, you will have detailed knowledge of both the uses and the limitations of financial statements. Do you want to know why financial ratios are necessary for understanding a business? This course exposes you to the different types of financial ratios, their formulas, how to compute them, and which financial statements contain the information needed to calculate them. You will learn how to interpret ratios and apply those interpretations to understanding a firm's activities. You will also be able to use ratio analysis to assess a company's performance to compare its performance to itself, competitors, industry and across time. Are you ready to make your first steps into the path of better understanding corporate finance and financial analysis? Then start your learning journey today.

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