Get a basic introduction to the world of finance, from analyzing risk and return and obtaining financing to understanding how markets and banks operate.
Finance exists in the real world. It impacts everyone: individuals, families, companies, and governments. While it may sound complicated, at its core finance is about deciding what to buy, getting the money you need to buy it, and efficiently managing the resources you already own. In this course, Brigham Young University business professors Jim and Kay Stice provide a comprehensive overview of finance, touching on everything from reading a balance sheet to understanding derivatives and securities. They tackle questions such as "What is the difference between short-term financial management and long-term financing?" and "What is the difference between a traditional bank, an investment bank, and an investment fund?" Along the way, you can get an inside look at financial reports from companies such as Walmart and Toys "R" Us, the IPOs of Microsoft and Facebook, and even the data that go into personal financial decisions, such as deciding whether to buy a car.
The essence of finance
What you should know
1. What Is Finance?
The board of directors discuss finance
Finance inside of companies
Finance outside of companies
2. Understanding Financial Statements
Introducing financial statements
Overview of financial statements
The balance sheet
The income statement
The statement of cash flows
Common ratios: Debt and current ratios
Common ratios: Return on sales, asset turnover, and ROE
Common ratios: Price-earnings ratio
Forecasting financial statements
3. Short-Term Financial Management
Short-term financial management
The operating cycle
Managing receivables and inventory
Obtaining short-term financing
Understanding internal controls
4. Risk and Return
Introducing risk and return
What is risk?
Why we don’t like risk
Reducing risk through diversification
Beta: The concept
Equity risk premium
Capital asset pricing model (CAPM)
5. Obtaining Long-Term Financing
Introducing long-term financing
Does capital structure matter?
Factors influencing optimal capital structure
Cost of capital: All debt or all equity financing
Cost of capital: Split debt-equity financing
Weighted-average cost of capital
6. Understanding Securities Markets
Introducing securities markets
The difference between a stock and a bond
Publicly traded shares: What impacts the share price?
Initial public offering (IPO): Microsoft
Can you pick stocks in the stock market?
7. Financial Institutions
Introducing financial institutions
Investment funds: Index funds
Investment funds: Managed funds, private equity funds, and hedge funds