Whether you are managing a team, working your way up in any business-related industry, or simply trying to improve your business skills and resume, understanding finance is vital to success. However, without a formal financial background – and therefore a limited understanding of the techniques and vocabulary – you can be at a severe disadvantage to other employees, managers or candidates that do.
This course provides a fluent and invaluable understanding of fundamental financial theory. It aims to equip all professionals with the techniques, terminology and financial skills required in business.
Combining written material, videos, screenshots and exercises this course will teach users:
Financial information is core to yours and other needs. The unit covers the language of finance to enable you to communicate your needs to others and theirs to you; the financial drivers of business, and balancing profitability against cash flow. This sets the big picture for the course content.
Using management accounts as a rich source of financial information.
Knowing the difference between fixed and variable costs underpins budgets and decision-making. Knowing the minimum volume of sales to needed to cover costs and how to allocate them between functions is equallyimportant.
Budgets help us to plan the financial year ahead. Each month’s actual performance can be compared against budgeted income and costs providing control over business activities. The unit covers the key master budgets essential for a business.
Being able to identify the reasons for the difference between actual and budgeted income and costs is essential. It provides an indicator of where action is needed to correct adverse performance if needed, that is, if it is controllable and not due to unforeseen circumstances.
Summarise what you have learned so far
Key performance indicators as a distillation of considerable financial information are a simple and direct way of communicating to all staff essential financial targets and whether they are being met of not.
What drives each business may differ so choosing what conveys the most important information needs careful consideration.
For your KPIs to have impact choosing how to present them is important.
There are many different types of business sectors, from manufacturing, retail, banking, the petro-chemical industry and many others. Same sector businesses often use the same KPIs to provide comparison the users of financial Filtered Unit Template Commercial in Confidence information.
Summarise what you have learned
The amount of financial capital to invest either in internal or external business opportunities is usually limited. This unit explains why using methods to choose between a range of opportunities is essential. It also covers alternatives to using capital to invest for example, in buying new or replacing business fixed assets.
You take a risk in choosing between opportunities unless you use a tried and tested method to select the best opportunity. Even then another risk is inflation and how it erodes the opportunities net gain.
When faced with a range of project investment opportunities that promise a high return in practice that net income will be eroded by inflation, since it tends to rise.
The unit compares what happens using the same project information but applying different appraisal methods to select the best one. The results are surprising.
Summarise what you have learned so far
Being able to put a successful business case is a useful skill. They are used to get approval for internal and external project opportunities.
The financial and non-financial resources (existing and new) needed must be identified. Never understate what is needed.
The market dictates what room there is for your product or service and the volume of sales. The sales can only be met if the resources are in place; chief amongst them is production capacity and staffing. The price you set should be based on what it is worth to the customer balanced against competitive pressure.
The financial plans are core to your business case. They demonstrate you understand the importance of them and have the ability to successfully control and monitor the project. They include the financial planning, the income forecast, the cash flow forecast, and a mini-balance sheet showing net project business worth.
Revise and apply what you have learned throughout this course, its sections, units, and modules
Dr. Janet Cole has over 20 years of finance experience. She trained as a chartered accountant with Hays Allen and worked in financial and management accounting roles as well as audit, information systems and business change. Dr. Cole worked for a range of firms during her finance career such as ARRI, Hoechst and Moss Chemists. She worked closely with managers and directors helping them to understand and make decisions based on key financial data.
Dr. Cole has been involved in providing finance and information systems training in her commercial roles and as an Associate Professor at Kingston University where she teaches on Finance, Information Systems and Business Change courses. She is the current chair of the Business Change special interest group for the British Computer society and contributed to the review of the Change Management Institutes body of knowledge.