[MUSIC] In this model, we'll start talking about investments. Investments are, of course, essential for companies, right? They need investments to be able to survive and grow. All right, so a very important topic of corporate finance is the financing of these investments. And to think about how companies make decisions about whether to undertake an investment or not. We tend to divide investments into long-term and short-term investments. When we're thinking about long-term investments, we're thinking about investments such as capital expenditures, R&D, research and development, and acquisitions, which are investments that might take a while, might take a long time to generate cash flow. So we tend to think of those as long term investments, and in contrast, we also have short term investments that are investments that generate cash in the short term, that the company has to manage on a short term basis, like inventory and accounts payable. And we're going to talk about both in this course. Okay, starting in this module, in this module what we're gonna talk about is the financing of these investments. Okay, we're going to learn how to forecast financing needs, and how to manage a company's liquidity, given a certain investment plan. Given investments that a company has to make in capital expenditure, inventory, and all of those. There are very important decisions that a financial manager has to take about the long term and short term financing of these investments. So we're gonna be talking about long-term financial planning, which is the funding of long-term investments such as capital expenditures. And then we're gonna talk about short-term financial planning, which, as we are going to learn, is mostly related to working capital management. Okay, and we're gonna be talking a lot about the implications of working capital management for cash generation in companies, and how do companies manage their short-term financial planning, okay? So what we are not going to talk about in this module, which is coming up next, is whether an investment should be made or not, okay? So the idea is in this module, we will take investments as given, and talk about the financing, the funding of these investments. In the next two modules, we will talk about whether companies should make new investments or not. Which financial tools do we have to make decisions about whether new investments should be made or not, okay? So in Module 3, we will talk about tools that allow us to measure whether a new investment in the company increases shareholder value or not. And then in Module 4, we will talk about whether acquisitions increase shareholder value or not, okay? What we will learn in this model is, as I said the financing, the financial planning that goes behind these short-term and long-term investments. So the first thing we're gonna to talk about is the forecasting of financial statements. As we're going to learn, we need to forecast financial statements to estimate the long-term financing needs that companies have. Okay, and then we're gonna talk about working capital management that relates to short-term investments like receivables and inventory. And as we are going to learn, working capital management has very important implications for cash generation in companies in the short-term. So we're going to learn how to calculate and analyze working capital ratios, how to measure cash conversion cycles. And then we're going to have several examples that illustrate the importance of working capital management for short-term cash generation in companies. So we're gonna have one example that talks about inventory management when sales growth rates are very high. And then we're gonna have another example when we talk about seasonality in sales. And finally, we're gonna be talking about liquidity risk, a very important notion of liquidity risk specifically arising from short-term financial planning specifically from accounts payable. So those are the topics we're going to be talking about in our financial planning module.