Unit 4: Accounting, Finance, and Banking
Every day, business owners make financial decisions that will affect every phase of the business operation, such as payroll, cash flow, and projecting future growth. A thorough understanding of accounting and financial management allows business owners to find the best sources and use of funds. For example, you can derive an accurate measure of the health of your business from the income statement, balance sheets, and financial ratios. We investigate financing options, how to analyze credit, and the time value of money. We also examine how banks, such as the U.S. Federal Reserve Bank, affect the ability of businesses to obtain financing.
Completing this unit should take you approximately 15 hours.
4.1: Business Accounting
4.1.1: Understanding Financial Statements
4.2: Components of an Income Statement
4.2.1: Key Financial Ratios
4.3: Components of a Balance Sheet
Now, it's time to take a closer look at the balance sheet. The balance sheet provides information about what a business owns and what it owes.
4.3.1: Assets, Liabilities, and Stockholders' Equity
4.3.2: Key Financial Ratios Using the Balance Sheet
4.4: Financial Ratio Analysis
4.5: The Role of Banks in Finance
In order to succeed in managing their finances, business owners must understand how the banking system works – specifically, the role the Federal Reserve plays.
4.5.1 The Role of the Federal Reserve
4.5.2: The Federal Reserve and Interest Rates
4.5.3: The Federal Reserve's Involvement in the Recent Financial Crisis
4.5.4: The Federal Reserve's Monetary Tools
4.6: Finance Considerations
4.6.1: Financing Options
Let's bring the discussion back to owning and operating a business. How do businesses get the money to operate? There are a variety of financing options ranging from owner equity financing to a myriad of debt financing options.
4.6.2: Credit Analysis
4.6.3: The Time Value of Money
4.6.4: Personal Finances
Unit 4 Assessment