Leverage financial data to make informed decisions.
The interpretation of financial data requires looking beyond what’s in a spreadsheet. Within financial reports, a wealth of information exists that can help you make decisions regarding your organization’s operations, planning, strategies, and future direction. In this course, you’ll begin to understand how to interpret financial reports to move your enterprise forward.
The basic functions of management include planning, organizing, controlling, and evaluating the results of operations. Each of these functions relies on information expressed in specific financial terms.
After reviewing the basic concepts of financial reporting, you’ll explore cost classifications and income statement formats. You’ll see how costs are applied to inventory, how overhead costs are considered, and how schedules of Cost of Goods Manufactured and Cost of Goods Sold are organized. Profits will change with fluctuations in selling prices, sales volumes, and costs, and you’ll gain insight into Cost-Volume-Profit (C-V-P) analysis as well as the concept of operating leverage.
Your ability to interpret current financial information is as vital as understanding budgeting. You’ll examine how financial plans are created, what is included in a master budget, and how activity and spending variances are accounted for.
As you consider how to measure an organization’s performance against its financial plan, you’ll learn how profit, investment, and cost centers are each evaluated. You’ll become familiar with classic types of decisions made using financial information, including outsourcing, dropping or retaining a segment, and evaluating special orders.
Throughout this course, you’ll focus on core topics or themes.
- There is more than one way to identify it
- It costs what?
- Planning tools
- Building a master budget
- Performance vs. plan
- Evaluating performance
- The key to decision-making
You’ll work as part of a team and choose a publicly traded company for which at least five years of financial information is readily available. Your team will develop and deliver an executive summary of your chosen company. This completes part one of the project. Part two will be expanded on and finalized in BUS 622, Financial Fluency II.
You’ll improve your ability to leverage financial information in BUS 621.
- Assemble and organize the information needed to perform financial analysis.
- Analyze a firm’s operations to understand and explain its underlying cost structure.
- Forecast the impact of operating volume and cost structure on a firm’s profitability using both simple models (e.g., C-V-P analysis) and more detailed models (e.g., preparing an operating budget).
- Explain a firm’s operational performance by determining and analyzing flexible budget variances.
- Evaluate which segments of a firm contribute to its profitability, and to what extent.
- Assess short-term (operational) decisions in terms of their impact on a firm’s profitability.
- Diagnose the performance of a company and support your conclusions in oral and written formats.