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Finance Concepts as a Resource for Your Department
Learn about recording revenues and expenses according to the cash or accrual basis method of accountingPreview the first lesson free — get full access to all 6 lessons.
Intermediate Provider : Ehab Saad 6 Lessons · 16m in Arabic, German, English, Spanish, French, Portuguese, Chinese
Course Description
In this course, you will learn about the process of recording revenues and expenses according to the cash basis or the accrual basis method of accounting. The recording process can be misleading for nonfinance managers depending on the basis your company is using to record its revenues and expenses. You will also learn about the profitability analysis and the key financial budgets, which include financial, capital, and operating budgets.
You must make important decisions every day for your department, and these resources will help you better evaluate the decisions. The profitability analysis measures the company’s ability to generate profit using its resources. It includes key ratios like return on investments, the current ratio, the quick ratio, and the cash ratio. Financial budgets help managers make well-informed decisions based on the company’s cash position, and these budgets include the cash collection budget, the cash disbursement budget, and the master cash budget. Capital budgets help managers decide if a capital investment project will be accepted. Operating budgets create projections of all accounts related to the operations within the period. These budgets can be broken down further into the sales budget, production budget, and material purchase budget. Accurate budgets lead to well-informed decisions for the company.
What You'll Learn
- Understand how revenues and expenses are recorded under the cash basis and accrual basis methods of accounting
- Calculate key financial ratios including return on investment, the current ratio, the quick ratio, and the cash ratio
- Analyze a company's profitability and its ability to generate profit using its resources
- Prepare financial, capital, and operating budgets to support well-informed decisions
- Distinguish operating budgets such as the sales budget, production budget, and material purchase budget
Key Takeaways
- Revenues and expenses can be recorded using either the cash basis or the accrual basis method, and the chosen basis affects how nonfinance managers interpret the records.
- Profitability analysis measures a company's ability to generate profit using its resources through ratios like return on investment, the current ratio, the quick ratio, and the cash ratio.
- Financial budgets, including the cash collection budget, cash disbursement budget, and master cash budget, help managers make decisions based on the company's cash position.
- Capital budgets help managers decide whether a capital investment project will be accepted, while operating budgets project all accounts related to operations within a period.
- Accurate budgets lead to well-informed decisions for the company and its departments.
Frequently Asked Questions
Who is this course designed for?
It is designed for nonfinance managers who must make department decisions and want finance concepts as a resource to better evaluate those decisions.
What topics does this course cover?
It covers recording revenues and expenses under the cash basis and accrual basis methods, profitability analysis, and key financial budgets including financial, capital, and operating budgets.
What financial ratios will I learn about?
The profitability analysis covers key ratios including return on investment, the current ratio, the quick ratio, and the cash ratio.
What types of budgets does the course explain?
It explains financial budgets (cash collection, cash disbursement, and master cash budget), capital budgets, and operating budgets (sales, production, and material purchase budget).
What lessons are included?
Lessons include Introduction, Expenses Recording and Recognition, Revenue Recording and Recognition, Financial Budgets and Analysis for Nonfinance Managers, Capital and Operating Budgets, and Test Your Knowledge.
