Foundations of Finance and Accounting

Hello. Welcome to Career Readiness, sponsored by UCI Extension Programs. In this module, we’re going to be looking at finance for non-financial professionals. People in the business world whose jobs entail something other than finance and accounting. And probably aren’t familiar with process of accounting and the way that business finances run today. So in this module we’re gonna build a general overview of the basics of accounting and finance. This is going to include terminology, this is going to include rules as I’ve said, regulations. Standards. We’re then going to move on and look at the four financial statements. Because the four financial statements are the building blocks of accounting. But they’re also the building blocks of finance. We use these four financial statements for everything. So what are they? How are they put together? What do they tell us? And how do we use them? From the financial statements, we’re then going to look into costing, how do we determine the costs of things. And this is very important and this actually gets its own module, because costs are an intricate part of our financial strategy. What something costs many times determines whether a business is feasible. It also determines. Our leeway in pricing. What can we price things at? And that of course is determined by the cost. So how do we arrive at true cost? Can be more complicated than it seems on the surface. From there, we’re going to go on to financial ratios. Financial ratios are a great tool. To help us quickly, easily,

evaluate not only financial statements, but what the financial statements mean. Actually evaluate, how a business is doing. And we can use these ratios to kinda get in deeper than you might you might think. To get into certain aspects of the business. How liquid is the business? How able are they to pay off their, their upcoming debts? What’s this business what’s this business’ strengths? What are the business’ weaknesses?

Many of these ratios are going to, work together to kinda give us a bigger overall picture of how a business is doing, and more importantly, to be able to evaluate, and compare similar businesses, or businesses in the sector. Is, is Honda really outperforming Toyota, or is Nissan outperforming them both, right? We look at certain things like growth sales, or net sales, things like that. But depending on the size of the company, maybe something, maybe we need to compare apples to apples, right, and bring them down to a, a, a common denominator, and that’s what we use ratios for. Ratios are gonna be very important to us, very helpful. And then, we’re gonna take those ratios into the next session, section, and we’re going to look at the valuation of a business, a business opportunity, or an investment. What is a business worth? What is an investment worth? What’s a business opportunity worth? And this kind of is the, the pinnacle of finance where we start to, to value things and say this is what it’s going to be worth. So that’s the general road map we’re going to follow on this course. And I will see you. In the next section. And we are going to talk a bit about accounting and finance. What are they? How are they different? [BLANK AUDIO]