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Finance Fundamentals

What finance is for, how the income statement, balance sheet and cash flow statement work and connect, and the business economics behind margins, break-even and working capital.

13 lessons · 41 exercises · about 4 hours · 4 free lessons

You will be able to

  • Explain the difference between profit, cash and value
  • Build and read the three financial statements and trace how they connect
  • Calculate margins, break-even points and the cash conversion cycle
  • Measure growth and returns correctly

Designed for: Complete beginners, students starting finance or business degrees, and career changers.

Finance Fundamentals Essentials

Module 1 · How finance works

  1. What finance is forThe three decisions finance makes, why profit is not cash, and why time and risk change what money is worth.15 minFree
  2. Risk and returnMeasure what an investment earned and how risky it was, and see why riskier assets must promise more.20 minMembers
  3. Markets, banks and instrumentsFollow savings to the businesses that use them, through a bank and through a bond and share issue, and see how debt and equity claims differ.22 minMembers

Module 2 · The three financial statements

  1. The income statementBuild a company's profit and loss from revenue down to net income, and read its margins.18 minFree
  2. The balance sheetWhat a business owns, what it owes, and what belongs to its owners, at a single date.18 minMembers
  3. The cash flow statementFollow the cash: turn net income into operating cash flow, and see where the rest of the money went.22 minMembers
  4. How the statements connectTrace transactions through all three statements and roll a balance sheet forward until it balances.22 minMembers

Module 3 · Business economics

  1. Revenue, costs and marginsSeparate fixed from variable costs, calculate contribution, and see how it differs from gross margin.18 minFree
  2. Break-even and operating leverageFind the volume where profit starts, measure your safety cushion, and see why fixed costs magnify swings.20 minMembers
  3. Working capital and the cash cycleWhy growing businesses run short of cash, and how to measure the days cash is tied up.22 minMembers
  4. Unit economicsWork out what one subscriber is worth: contribution per month, the cost of winning them, how fast that cost is earned back, and their lifetime value.24 minMembers

Module 4 · Numbers every analyst uses

  1. Percentages, growth and CAGRMeasure growth correctly: period growth, compound annual growth, and percentage points versus percent.18 minFree
  2. Inflation and real returnsSeparate how many riyals you have from what they can buy: convert between nominal and real rates with the Fisher relationship, and value cash flows consistently.20 minMembers