Finance Sense: Finance for Non-Finance Executives

The course will span ten weeks, covering the material described below:

Week 1: Understanding Financial Statements

Managers, shareholders, creditors, employees, suppliers, lenders, business partners, tax authorities, regulators, and other interested groups seek answers to the following important questions about a firm: What is the financial position of the firm at a given point in time? How has the firm performed financially over a given period of time? What have been the sources and uses of cash over a given period of time?

To answer the above questions, the accountant prepares three statements: the balance sheet, the profit and loss account, and the cash flow statement. As a student of business, you should understand how these statements are prepared and what they contain.

 In this week, you will learn about the following aspects of financial statements.

·       Contents of the annual report

·       Accounting principles

·       Accounting model

·       Contents of financial statements (balance sheet, statement of profit and loss, and cash flow statement)

·       Managing the bottom line

·       Integrated reporting

·       Ethics in finance

Week 2: Financial Statement Analysis

If properly analysed and interpreted, financial statements can provide valuable insights into a firm’s performance. Analysis of financial statements is of interest to lenders (short-term as well as long-term), investors, security analysts, managers, and others. Financial statement analysis may be done for a variety of purposes, which may range from a simple analysis of the short-term liquidity position of the firm to a comprehensive assessment of the strengths and weaknesses of the firm in various areas.

In this week, you will learn about the following aspects of financial statement analysis:

·       Financial ratios

·       Comparative analysis

·       Du Pont analysis

·       Percentage-format financial statements

·       Problems in financial statement analysis

·       Guidelines for financial statement analysis

Week 3: Strategy, Planning, and Budgeting

The financial decisions in a business are guided by its strategy and long-term plans. So you must understand various dimensions of corporate strategy, business strategy, financial planning and budgeting.

In this week, you will learn about the following:

·       Corporate objective

·       Corporate  strategy

·       Business  strategy

·       Planning system

·       Budgeting

·       Financial forecasting

Week 4: Cost Analysis and Management

Financial accounting caters to external information needs in conformity with generally accepted accounting principles. Cost accounting generates information on costs, which is required for financial accounting as well as management accounting purposes. Management accounting seeks to provide information useful for planning, decision making, and control.

In this week, you will learn about the following aspects of cost analysis and management and some aspects of innovation:

·       Common cost classifications

·       Cost determination

·       Cost systems

·       Activity-based costing

·       Cost-volume-profit analysis

·       Contribution margin analysis

·       Strategic cost management

·       Frugal innovation

Week 5: The Financial System

The purpose of this book is to help you make better financial decisions. These decisions are made in the context of a financial system that constrains and facilitates them. The financial system, comprising a variety of intermediaries, markets, and instruments, provides the principal means by which savings are transformed into investments. Given its role in the allocation of resources, the efficient functioning of the financial system is critical to a modern economy.

In this week, you will learn about the following:

·       Functions of the financial system

·       Financial assets

·       Financial markets

·       Financial market returns

·       Financial intermediaries

·       Regulatory infrastructure

Week 6: Valuation Concept and Principles

Finance deals with the trade-off between the present and the future. Financial decisions typically involve cash flows occurring over a period of time. To value such cash flows we have to deal with time and risk. So, every manager must understand the basic valuation concepts and principles that address the issues of time and risk.

In this week, you will learn about the following:

·       Time value of money

·       Bond valuation

·       Equity valuation

·       Risk and return analysis

·       Portfolio diversification

·       Capital asset pricing model

Week 7: Investment Decisions

Capital investments represent the growing edge of a business. Capital investments have three distinctive features: (i) They have long-term consequences. (ii) They often involve substantial outlays. (iii) It may be difficult or expensive to reverse them.

Given the crucial significance of capital investments, firms spend substantial efforts in making these decisions and involve top executives from production, engineering, finance, marketing and so on.

In this week, you will learn about the following aspects of capital investment decisions.

·       Nature of investment decisions

·       Analysing the cash flows

·       Estimating the cost of capital

·       Investment criteria

·       Risk analysis

·       Evaluation by financial Institutions

·       Strategic aspects and options

Week 8: Financing Decisions

The primary thrust of financing decisions is to ensure the availability of funds for value-creating investment decisions, minimise the cost of capital, preserve financial flexibility, and distribute the funds to shareholders when the firm does not have worthwhile investment opportunities.

In this week, you will learn about the following aspects of financing decisions:

·       Financing decisions vs investment decisions

·       Different facets of financing decisions

·       Capital structure decisions

·       Financing instruments

·       Methods of financing, market timing, pricing and other factors

·       Distribution policy

Week 9: Working Capital Management

The key difference between long-term financial management and short-term financial management (also referred to as working capital management) is in terms of the timing of cash. While long-term financial decisions like buying capital equipment or issuing debentures involve cash flows over an extended period of time (5 to 15 years or even more), short-term financial decisions typically involve cash flows within a year or within the operating cycle of the firm. Working capital management is a significant facet of financial management.

In this week, you will learn about the following aspects of working capital management:

·       Characteristics of current assets

·       Factors influencing working capital requirements

·       Working capital policy

·       Operating cycle and cash cycle

·       Cash requirement for working capital

·       Cash management

·       Credit management

·       Inventory management

·       Management of payables and accruals

·       Ten commandments of working capital management

Week 10: Portfolio Management

Many people find personal investing to be a daunting activity. They are bewildered by the profusion and proliferation of investment alternatives, rattled by the fluctuations in financial prices, overwhelmed by the presence of mighty institutional investors, confounded by exotic instruments and complicated investment strategies, confused by the intricacies of the tax system, and exasperated by the financial scams that periodically rock the market.

Notwithstanding these concerns, investing can be a fairly manageable, rewarding, and enjoyable experience, if you adhere to certain principles and guidelines.

In this week, the concluding week, you will learn about the following aspects of personal portfolio management.

·       Financial scorecard

·       Investment alternatives

·       Investment planning

·       Asset allocation

·       Goal-based investments

·       Seven deadly sins of investing

·       Fundamental analysis and technical analysis

·       Life time financial success

·       Ten commandments of portfolio management

Pedagogy

We want this to be an engaging learning experience for you. Keeping that in mind, the course is designed to include videos, quizzes, discussions, case studies, additional exercises and resources.

Estimated Effort: 4 - 5 hours per week

Who Can Join This Course

·       Non-finance executives are keen to learn the basics of finance.

·       Professionals from any background who want to hone their finance sense.

·       Students pursuing graduate and postgraduate programs.

Enrolling and learning from the course is free. However, if you wish to obtain a certificate, you must register and take the proctored exam in person at one of the designated exam centre’s. The registration URL will be announced when the registration form is open. To obtain the certification, you need to fill out the online registration form and pay the exam fee. More details will be provided when the exam registration form is published, including any potential changes. For further information on the exam locations and the conditions associated with filling out the form, please refer to the form.