Finance Fundamentals

Why sooner is worth more · risk and return · present and future value · annuities and perpetuities · nominal, effective and real rates

1. Why money today is worth more than money later
2. Risk and return — why higher risk asks for higher return
3. Real-life choice: a discount for paying early
4. Future and present value of a single amount
5. Annuities, perpetuities and uneven cash-flow streams
6. Worked case: valuing a shop lease in a spreadsheet
7. Nominal and effective rates — what compounding does
8. Real rates — taking inflation out of the return
9. Reading the rate in a real loan or savings offer

Spreadsheet functions · checking by hand · loan schedules · interest and principal · common mistakes and the checklist

1. The spreadsheet functions: PV, FV, NPV, IRR, RATE and PMT
2. Checking every result against a hand calculation
3. Worked example: pricing a loan offer in a spreadsheet
4. How a loan works — interest, principal and the balance
5. Building an amortization schedule step by step
6. Case: an equipment loan over its whole life
7. Why time-value errors happen
8. The time-value checklist — rates, periods and timing
9. Spot the mistake: three flawed calculations

Fixed, variable and semi-variable costs · contribution margin · the business case · break-even · budgets and variances

1. Fixed, variable and semi-variable costs
2. Contribution margin — what each sale leaves for fixed costs
3. Case: a price and volume decision in a small business
4. The business case — costs, benefits and assumptions
5. Break-even in units and in revenue
6. Case: should the new service launch?
7. Operating and capital budgets — purpose and structure
8. Setting targets and tracking actual against plan
9. Variance analysis — explaining the gap to a budget owner

Savers and borrowers · intermediaries · prices and liquidity · loans, bonds and shares · equity versus debt

1. What financial markets do — from savers to borrowers
2. Prices, liquidity and risk sharing
3. Real-life example: a bank deposit that becomes a business loan
4. Loans, bonds and shares — the claim on cash flows
5. The risk and the typical holders of each instrument
6. Comparison table: one company funded three ways
7. Equity versus debt — cost and control
8. Repayment duties, tax treatment and financial risk
9. Case: choosing how to fund a growth plan

Expected return and variance · diversification · standard deviation · Sharpe ratio · NPV and IRR decisions

1. Expected return and variance from scenarios
2. Diversification — a two-asset example
3. Case: savings in one share or in two
4. Standard deviation as a measure of risk
5. The Sharpe ratio — return for each unit of risk
6. Comparison table: three investments side by side
7. Net present value — the decision rule
8. Internal rate of return — what it means and how to find it
9. Case: appraising a machine purchase with NPV and IRR

Cash-flow drivers · receivable, inventory and payable days · cash conversion cycle · rolling forecast · funding gaps

1. What drives cash in and out of a business
2. Working capital — receivables, inventory and payables
3. Why a profitable business can still run out of cash
4. The cash conversion cycle — the idea and the formula
5. Shortening the cycle — faster collection, tighter stock
6. Case: a wholesaler that frees cash without new funding
7. What a rolling cash forecast shows and why it is updated
8. Building a weekly rolling cash forecast in a spreadsheet
9. Spotting a funding gap early and arranging financing

Pro-forma income statement · pro-forma balance sheet · balance check · growth cash case · plain-language tables and charts

1. From assumptions to a pro-forma income statement
2. The pro-forma balance sheet and the balancing check
3. Worked case: projecting a growing retailer and its cash
4. The case: a growing business that runs short of cash
5. Tracing the cause — working capital and budget variances
6. Funding choices and the recovery plan
7. Plain-language finance — from jargon to clear words
8. Simple tables and charts that make the point
9. A worked example that supports a clear decision

Balanced presentation · conflicts of interest · bias in numbers · links to analysis, capital budgeting and valuation · the next step

1. Honest and balanced presentation of results and forecasts
2. Conflicts of interest — how bias enters the numbers
3. Case: a forecast written to please — review and rewrite
4. How the course tools lead into statement analysis
5. How the course tools lead into capital budgeting and valuation
6. Choosing your next study step for a stated goal