Business Finance Basics for finance professionals

Course Content 

1.The Basics of Bookkeeping

• What is double entry bookkeeping?

• Categories of accounts: which are debits and which are credits?

• Entering transactions into the accounts with VAT and on credit

• Customer and supplier accounts

• Trial balance

• Common errors: omission, principle, commission, reversal of entries, original entry

2.The Basics of Financial Statements

• Five categories of accounts: assets, liabilities, expenses, revenue, capital/equity

• The accounting equation

• Elements of financial statements: current and non-current assets and liabilities, capitalisation threshold, capital/equity

• Calculating profits

• The accruals concept

• Layouts of financial statement

• 3. How to Analyse Financial Statements 

  • Profitability ratios

  • Liquidity and efficiency

  • Financial position

  • Limitations of ratio analysis – what it tells us and what it doesn’t say

4.The Basics of Cash Flow

• Cash flow cycle

• Cash and non-cash transactions

• Operational and non-operational cash flows

• Cash vs profit

• Calculating cash positions: changes from one period to next and compare to profit, reconcile the difference

• Maintaining cash flow through the cash budget

• Including lagging because of credit transactions

• Reducing the risk of granting credit

5.The Basics of Budgeting

• Vision and strategy

• Who plans and writes the budget?

• Types of budgets: capital, revenue and cash; capitalisation threshold

• Performance: targets, slack, contingency, budget holder’s rivalry, suboptimal

• Methods: incremental, zero based, priority based