Corporate Finance for Non-Financial Professionals

Finance is empowering. It enables innovation. It empowers big risk takers and bold builders and makes the world better. Finance pulls the future forward. Financial Intelligence for Entrepreneurs (and other non-financial types)How to Read a Financial ReportLearn: What Is an Asset? Profit Profit Margin Valuation Cash Flow Statement Income Statement Balance Sheet Financial Ratios Cost-Benefit Analysis Lifetime Value Overhead Costs: Fixed and Variable Breakeven Amortization Depreciation Time Value of Money Compounding Leverage Bootstrapping Return on Investment (ROI) Sunk Costs Internal ControlsKnowing finance is power. The most fundamental atomic unit of business is the asset. Understanding what an asset is, why it matters, and why investors paradoxically like asset-light businesses is critical to career success. This is the way I wish I was taught finance! The tax law is a series of incentives for entrepreneurs and investors. The tax laws favor entrepreneurs and investors. Thats because entrepreneurs and investors generally put money into the economy to produce rather than consume. But, paying taxes is less expensive than failing at business. Be sure to get educated before you begin. Start acting like an entrepreneur or an investor. That means the first thing you need to do is to increase your financial intelligence by investing in financial education. Simple Numbers, Straight Talk, Big Profits! Finance is a critical in-demand career skill. It starts with being able to read and understand financial statements. Becoming familiar with financial statements and how they are interconnected and flow is a critical skill set for enhancing your career and understanding of business. Financial statements also underlay Discounted Cash Flow analysis, NPV, IRR, and all the valuation techniques of finance. Therefore, we should spend some time thoroughly understanding financial statements. Knowing how to read and understand financial statements is a business skill you can’t ignore. Understanding finance fundamentals can help you work your way up the corporate ladder by communicating with others in your company and understanding the big picture. Knowing where your efforts and work can make the most impact is also a helpful skill that financial decision-making tools enable. When you are thinking about possibly changing jobs and working for a company, you can check their financials and make sure they are a healthy organization. Likewise, if you consider starting your own company, you will need to have your accountant’s financials prepared to talk to investors, bankers, and vendors. If you want to invest wisely in the stock market, analyze the competition or benchmark your performance, you can look up the financials of any publicly traded company at the Securities and Exchange Commission website’s EDGAR filings and get an idea of how they are doing. But, first, check out any public company’s most recent 10K filing there. A 10K is the Annual Report of the company and its most important business and financial disclosure document. Becoming familiar with financial statements and how they are interconnected and flow is a critical skill set for enhancing your career and understanding of business. Financial statements also underlay Discounted Cash Flow analysis, NPV, IRR, and all the valuation techniques of finance. We will now spend some time thoroughly understanding financial statements. Knowing how to read and understand financial statements is a business skill you cant ignore. It can help working your way up the corporate ladder by communicating with others in your company and understanding the big picture. It is also a useful skill in order to understand where your efforts and work can make the most impact. When you are thinking about possibly changing jobs and working for a company you can check their financials and make sure they are a healthy organization. If you are considering starting your own company you will need to have financials prepared by your accountant in order to talk to investors, bankers and vendors. If you want to invest wisely in the stock market, analyze the competition or benchmark your performance, you can look up the financials of any publicly traded company at the Securities and Exchange Commission websites EDGAR filings and get an idea of how they are doing. Check out any public companys most recent 10K filing there. A 10K is the Annual Report of the company and its most important business and financial disclosure document.