Finance for Non-Finance Managers: Reading the Numbers

By the end

What you'll build

• Explain the accrual basis and say which period a given transaction's revenue or cost belongs to
• Read a profit and loss statement line by line and name what each line means
• Calculate gross, operating and net margin, and name the four possible causes of a gross margin move
• Read a balance sheet, explain why it balances, and link net profit to retained earnings
• Bridge net profit to cash from operations and explain how a profitable business runs out of cash
• Calculate days sales outstanding, days inventory, days payables and the cash conversion cycle, and value one day of each
• Work out contribution margin, break-even volume, the volume needed for a target profit, and margin of safety
• Find a loss-making segment hidden inside a healthy average and choose between repricing, re-costing and exiting it
• Build a bottom-up budget where every line is a driver times a rate, and explain a monthly variance in under a minute
• Assess an investment using payback, net present value and internal rate of return, and state the limits of each

Curriculum

What's inside

7 modules · 48 lessons

1. 01

   Why the Numbers Exist

   6 lessons
   • Start Here: What This Course Is and Is Not
   • Cash Moves, Earnings Happen: The Accrual Idea
   • Cash Now, or Earned Now?fill blank
   • Lab: Earned in July, Received in Julyspreadsheet lab
   • Deck: The Vocabulary You Need Firstflashcard sr
   • + 1 more lesson
2. 02

   The Profit and Loss Statement, Line by Line

   7 lessons
   • The Profit and Loss Statement in One Picture
   • Revenue: What Counts, and What Does Not
   • Cost of Goods Sold and Gross Margin
   • From Operating Profit Down to Net Profit
   • Lab: Gross Profit on Kadamba's Full Yearspreadsheet lab
   • + 2 more lessons
3. 03

   The Balance Sheet and the Cash Flow Statement

   7 lessons
   • The Balance Sheet: A Photograph, Not a Film
   • Why the Balance Sheet Balances
   • Depreciation and Amortisation in Plain Terms
   • Profitable and Still Broke: The Cash Flow Statement
   • Lab: From Net Profit to Cash from Operationsspreadsheet lab
   • + 2 more lessons
4. 04

   Working Capital: The Levers You Actually Control

   6 lessons
   • Working Capital: Money Stuck Inside the Business
   • Receivables and Days Sales Outstanding
   • Payables and Inventory: The Other Two Dials
   • Lab: The Cash Conversion Cyclespreadsheet lab
   • Explore: Where Is the Cash Stuck?dataset explorer
   • + 1 more lesson
5. 05

   Cost Behaviour, Break-even and Unit Economics

   7 lessons
   • Fixed Cost, Variable Cost, and Why Managers Confuse Them
   • Contribution Margin: The Number Nobody Hands You
   • Break-even, Worked Twice
   • Lab: Break-even in Packs and in Rupeesspreadsheet lab
   • Graph: Where Profit Crosses Zerograph plot
   • + 2 more lessons
6. 06

   Budgets, Forecasts and Investment Decisions

   8 lessons
   • Building a Budget Bottom-Up
   • Defending a Budget, and the Monthly Variance Conversation
   • A Forecast Is Not a Target
   • Lab: The Variance Table, and the Sign of a Variancespreadsheet lab
   • CapEx and OpEx: Why the Label Changes Who Must Approve
   • + 3 more lessons
7. 07

   Reading Sceptically, and Your Capstone

   7 lessons
   • The Handful of Ratios Worth Knowing, and What Each Hides
   • Lab: Four Ratios on One Set of Numbersspreadsheet lab
   • Reading a Statement Sceptically: Ten Questions
   • How Numbers Get Gamed Near a Period End
   • Lab: The Monthly Review with Your Finance Business Partnerinterview lab
   • + 2 more lessons

The shape of it

How this course works