Introduction and Courser Overview

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From the course by Indian School of Business

Accounting and Finance for IT professionals

57 ratings

Indian School of Business

Accounting and Finance for IT professionals

57 ratings

Course 3 of 6 in the Specialization Business Technology Management

This course presents an introduction to the basics of financial accounting and finance for IT professionals. The first part of the course will focus on understanding the most important financial statements, namely, the balance sheet, the income statement, and the statement of cash flows. We will then focus on how we can understand the financial health and performance of the company by examining a number of important financial ratios that are derived from the financial statements of the company. The second part of the course will focus on the basics of finance. This includes the concept of time value of money, discounting cash flows, and capital budgeting. The course will also introduce the idea of real options, how they affect a project’s NPV, and their impact of the decision to accept/reject a project. Lectures on concepts will be supplemented with numerical examples.

From the lesson

Basics of Financial Statements

This module provides a brief introduction to financial statements and various common filings. These are the most important sources for obtaining information regarding a company's performance. Most strategies are indeed based on financial statements. After completing this module you will be able to get the important details from the balance sheets.

Introduction and Courser Overview2:31

Business Organizations4:57

Role of Financial Manager4:20

Introduction to Accounting5:08

The Balance Sheet3:12

Liabilities4:45

Shareholders' Equity4:30

Income Statement4:20

Statement of Cash Flows4:02

Cash Flows from Operations9:19

Cash Flows from Investments and Financing6:20

Meet the Instructors

Ramabhadran Thirumalai
Assistant Professor
Indian School of Business

[MUSIC]

Hi, I'm Ramabhadran Thirumalai.

I'm a clinical assistant professor of finance at the Indian School of Business.

Welcome to this course on accounting and finance for IT professionals.

In this course you will learn about the basics of financial accounting and

finance.

Specifically, we will cover the following topics.

One, reading and understanding financial statements, specifically the balance

sheet, the income statement, and the statement of cash flows.

These will focus on the definition of various items that

make up these financial statements.

We will also discuss the difference between accrual and cash basis.

Two, using information from the financial statements,

we will define, calculate, and interpret some common financial ratios.

We will look at the falling such as financial ratios.

A, liquidity ratios.

B, solvency ratios.

C, profitability ratios.

D, market price ratios.

Three, we will then focus on the concept of time value of money and

value of different types of cash flow streams.

Four, this will lead us to the concept of capital budgeting, which is the framework

used to value projects and then decide whether to accept or reject them.

Under this, we will discuss the different decision tools,

namely net present value, internal rate of return, and payback period.

We will also discuss the drawbacks of each of these methods.

Five, to value a project,

we need to determine cash flows related to the project, as well as the discount rate.

Under this, we will briefly discuss what drives the discount rate,

and talk about estimating at a discount rate.

We will also discuss what free cash flows are and how to estimate them.

Six, the free cash flows are based on assumptions.

Some assumptions are more critical to the project value than others.

Sensitivity analysis will focus on identifying which assumptions

are critical.

Finally we will talk about real options.

How to introduce flexibility to projects, and

impact the value as well as the decision to accept or reject projects.

By the end of this course, you should had the good understanding of how to lead and

understand the company's key financial statements.

As well as how to decide whether an investment in a project must be

made or not.

[MUSIC]

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