Essentials of Finance and Accounting

Schedule

Module 1 - Introduction
Hemang Desai
In this module, you will:

• Be introduced to the "Fluent in Finance" online curriculum that is used as both as an aid in the prework, and as a supplemental information source for the entire program
• Review the essential concepts of finance and accounting, including language used

Module 2 - Manager’s Guide to Financial Statements 
Hemang Desai
In this module, you will:

• Understand the role and importance of accounting or financial reporting in capital markets
• Understand the core principles underlying financial reporting, as well as why these principles are important and how they affect information conveyed in financial statements
• Learn about key financial statements: the balance sheet, the income statement, and the statement of cash flow statement, as well as what insights managers can learn from each
• Perform "hands-on" analysis of how business transactions are recorded and then build financial statements from ground-up
• Discuss limitations of financial statements and some techniques for overcoming them

Module 3 - Strategic Analysis of Financial Statements
Hemang Desai
In this module, you will:                

• Understand the link between strategy and financial statements
• Develop a framework of strategic financial statement analysis
• See an illustration of a wide range of ratios that allow us to assess operating, investing and financing decisions made by the management
• Learn how to separate the impact of operating/investment decisions from financing decisions

Module 4 - Financial Analysis and Financial Planning
Jim Linck
In this module, you will:

• Be able to differentiate between earnings and cash flow, and understand why that is an important distinction
• Link the various operational areas (collections, inventory management, growth, supplier relations) into an overall assessment of cash needs

Module 5 - Time Value of Money and Capital Budgeting
Jim Linck
In this module, you will:

• Understand the mechanics of compounding and discounting
• Be able to solve a wide variety of Time Value of Money (TVM) problems, such as lump sums, annuities, and perpetuities
• Be able to illustrate where value comes from and how to quantify the value implications of decisions
• Compare and contrast different capital expenditure decision rules including NPV, IRR and payback period
• Understand how to use the NPV rule to make value-maximizing decisions and avoid poor decisions brought about by common misuses of alternative decision rules

Module 6 - Nature of Costs, Cost Volume Profit Analysis and Relevant Cost Analysis
Gauri Bhat 
In this module, you will:

• Review a quick review of basic cost concepts, including the differences between manufacturing and non-manufacturing; as well as average, marginal and total costs
• Understand the different cost classifications, including fixed vs. variable; direct vs. indirect; and relevant costs, opportunity costs, and sunk costs
• Analyze of cost behavior and cost-volume-profit relationships
• Understand and calculate break-even point
• Determine the importance of contribution margins in decision making
• Understand operating leverage and its link to risk
• Apply relevant costing principles to decisions involving special orders, add/drop a product or service, and product mix given constrained resources

Module 7 - Cost Allocation and Activity Based Costing 
Gauri Bhat 
In this module, you will:

• Discuss cost allocation theory and practice
• Determine the implications of choosing a cost driver
• Understand how traditional unit-level allocation bases to divide common costs can produce misleading product costs
• Be able to articulate the concept of death spiral and its implication; as well as introduce the solution, Activity Based Costing (ABC)
• Describe how a sophisticated costing model (ABC) influences decision-making

Module 8 - Fundamental Analysis of Financials Statement to Assess Risk and Earnings Quality
Hemang Desai
In this module, you will:

• Learn how to conduct fundamental analysis of a company to assess its risk, growth prospects, quality of earnings etc.
• Learn how might flexibility in accounting and managerial incentives influence information in financial statements
• Learn how analysts and other capital market intermediaries unravel this biased reporting to assess earnings quality

Module 9 - Value Based Management
Jim Linck
In this module, you will:

• Understand the source of value and the interplay between a firm and the capital markets
• Begin to familiarize yourself with core finance concepts including value maximization, cash flow, and the importance of market prices
• Be able to broadly recognize the difference between earnings, cash flow and economic profit, and value
• Begin to understand how margins and asset utilization impact performance, and the tradeoffs between the two