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In this first MicroMasters course in Accounting and Financial Management, you will gain knowledge of the fundamental concepts of financial accounting, finance, and managerial decision making. This course investigates financial decision making in business, government, and not-for-profit organizations. Emphasis is on the application of financial and nonfinancial information to a wide range of managerial decisions, including the time value of money, financial analysis, budgeting, incremental analysis, long-term planning and cost-volume-profit analysis. A variety of decision-making tools (such as break-even analysis, activity-based costing procedures, and discounted cash flow techniques) are studied. Contemporary managerial practices are explored.
What you'll learn
- How to perform basic financial analyses to support decision-making
- The role financial decisions play in the overall management function
- Methods for applying financial and non-financial information to management decisions
- The relationship between risk and return in publicly-traded corporations
- How to apply discounted cash flow techniques to compare projects costs
Week 1: Foundations of Financial Decision Making for Managers
An introduction to the role of financial management in corporations. Learn how management selects the best type of business formation and ownership, identifies tactical and strategic goals, and balances profits vs. shareholder value.
Week 2: Financial Statements: Make more informed decisions understanding and analyzing financial statements.
Learn how managers use financial information to assist in the management decision-making process, including the relationship between financial statements, financial ratio analysis, financial statement analysis, and other financial metrics to improve managerial decision making.
Week 3: Risk and Return
Learn how managers use discount rates to estimate the risk and return on investments, and compare investment risks and returns to analyze financial challenges and opportunities. In the role of a manager, you will develop an understanding of how the passage of time affects the value of a dollar, investment, assets and liabilities for making investment, divestiture, and other operational decisions.
Week 4: Management Accounting Overview
Managers use managerial reports to operate more effectively their unit of responsibility. Learn how managerial accounting assists management in making more informed operational decisions to maximize shareholder wealth, maintain a competitive market position, and ensure a safe working environment.
Learn the difference between accounting and economic profit, when to consider opportunity costs, use management control systems, understand the value chain, and make decisions from management reports.
Week 5: Activity Based Costing and Cost-Volume-Profit Analysis:
Learn how managers use activity based costing to promote business activities that result in higher profits. Learn to make pricing decisions using various methods, including customer behavior in response to price changes and pricing changes in the competitive market. Learn to compute the cost and volume of sales necessary to break even or achieve a desired profit level. Use cost-volume-profit analysis to make pricing, marketing, and other operational decisions, such as quality control.
Week 6: Budgeting & Forecasting
Learn how to create a master, static, and flexible budget based on historical operational information and desired or projected results in the future. Use your budgets and other financial information for forecasting future economic and financial trends. You will also learn how to create pro forma financial statements.
Week 7: Capital Budgeting:
Learn how managers prepare capital budgets to assist in making better long-term investment decisions. You will learn to compare alternative capital improvement projects to determine whether to accept or reject individual projects and make outsourcing decisions.
Week 8: Final Assessment