Financial Fundamentals provides a thorough grounding in the basics of financial accounting. It explains in a clear and concise manner the principles underlying the recording of financial data. If the data is to be interrogated and used as the foundation of future strategy then understanding these principles and obtaining accurate data becomes crucial.

Prerequisites

Global Objectives

• Explain why financial statements exist.
• Identify the different roles played by management accounts and financial accounts.
• Identify the four main account types in which financial transactions are recorded.
• Identify and describe the use of the four main accounting conventions.
• Demonstrate the different ways in which account items are handled by each of the three Balance Sheet formats and describe their relative merits.
• Identify the main components of the Income Statement.
• Explain the functions of the components in the Income Statement.
• Identify the costs presented in the Income Statement.
• Discuss the value of classifying costs as either fixed or variable in order to associate costs with units of output.
• Define variable and fixed costs.
• Demonstrate the effect of sales on profit in companies with different cost structures.
• Define marginal contribution.
• Calculate break-even in terms of variable costing.
• Adapt the break-even formula to answer various enquiries.
• Demonstrate the use of marginal contribution ratio in deciding the product mix that yields the optimum financial return.
• Describe the difference between profit and cash.
• Describe the three sources of cash flow.
• Explain the differences between operating and non-operating cash-flow.
• Explain the need for long and short term management of cash and loans.
• Calculate cash flow from figures given in an Income Statement and a Balance Sheet.

Target Audience

Target Time