Business Basics

Business Basics provides a clear and logical introduction to the field of business finance. It is suitable for managers and business professionals in any company providing a good introduction to the financial knowledge and skills necessary for making business decisions.

This course includes the following modules:

– Business Perspectives
– Sources of Financial Information
– Understanding the Business
– Planning for the Future

Please Note: These modules are also available separately.

Business Basics Overview
Business Perspectives aims to give the learner an overview into why people are in business: what their rewards and objectives are, and how those objectives are achieved through the use of planning and budgeting processes. It covers:

– Stakeholders
– Mission, Strategy, Plans
– Business Finances
– Looking into the Future

Sources of Financial Information aims to give the learner an introduction to the three financial statements: Profit and Loss Account, Balance Sheet and Cash Flow statement. It covers:

– Introduction
– Profit and Loss Account
– Balance Sheet
– Cash Flow Statement

Understanding the Business aims to introduce the learner to the tools used in analysing the information contained within financial statements, and so allow a greater understanding of the state of the business. It covers:

– Introduction
– Horizontal and Vertical Analysis
– Ratio Analysis – Introduction
– Sales Ratios
– Productivity and Efficiency Ratios
– Profitability Ratios
– Liquidity and Gearing Ratios

Planning for the Future aims to give the learner an overview of the budgeting process: how to go about it, the types of budgets that should be drawn up, and the control procedures needed to stick to them. It covers:
– Short Term Planning
– How to Budget
– The Interlinked Nature of Budgets
– Subsidiary Budgets
– Cash Budgets
– Master Budget
– Budget Control

Business Basics Objectives
Business Perspectives
– Appreciate the business as a group of stakeholders with Interdependent objectives and reward
– Define the business’ objectives in terms of a hierarchical decision-making model
– Understand, in broad terms, the underlying business concepts within financial statements
– Place budgeting within the context of overall business planning and business processes

Sources of Financial Information
– Understand the general underlying objectives of financial statements
– Understand the primary objectives of the Profit and Loss Account and appreciate its common presentation
– Demonstrate a familiarity with different presentations of the Balance Sheet and the different objectives they each address
– Identify the three sources of cash flow and appreciate the underlying principles of cash management

Understanding the Business
– Perform simple vertical and horizontal analysis
– Appreciate the benefits of using ratio analysis
– Understand the relevant ratios, their sources and applications

Planning for the Future
– List the key characteristics of short-term plans
– Understand the six stages in the budgeting process
– Understand the interlinked nature of budgets
– Understand the role of subsidiary budgets, divided into 4 categories: sales, production, services, and corporate policy
– Understand the construction of cash management
– Understand the construction of the Master Budget and its role in the Budgeting Process