Basic math and statistics.

Course Description

This course is designed for accountants who must have financial knowledge but have not had formal training in finance. Topics include: the Sarbanes-Oxley Act financial reporting requirements, uses and analysis of financial statements, financial forecasting and cash budgeting, risk and return, valuation of stocks and bonds, time value of money, investing and financing, leverage, optimal capital structure, portfolio selection, management of financial resources, and international finance. This course will help you understand the fundamentals of financial decision making and strategy that can be applied in the day-to-day jobs of accountants and managers. Examples and illustrations emphasize the practical application of financial concepts, tools, and methodology.


Delta Publishing

For many years, Delta Publishing has offered a wide variety of continuing education courses for financial professionals. Topics covered by Delta’s courses include accounting, financial management, budgeting, investments, financial statement reporting, business management, IFRS, ethics, valuations, real estate, and business writing. The diversity and breadth of Delta’s course offerings make the company a prolific and unique contributor to the CPE world. Delta’s well-credentialed authors and contributors have also been published in numerous academic and professional journals and quoted by some of the leading financial media outlets.

Course Specifics

Nov 27, 2017
Basic math and statistics.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Discuss managerial finance objectives, distinguish between profit maximization and stockholder wealth maximization, and explain how agency problems may interfere with the goal of stockholder wealth maximization
  • Describe the scope and role of finance, key finance terms, and the relationship between accounting and finance
  • Explain the role of financial managers, and the financial and operating environment in which they operate
  • Compare the various legal forms of business organization

Chapter 2

  • Read and interpret basic financial statements, including how the balance sheet portrays a company's financial position, and how the income statement reveals the entity's operating performance
  • Outline the many types of accounts that may exist in the accounting system and determine/assess a company's cash inflows and cash outflows
  • Explain what the annual report is and read and list its components, including the financial statements, footnotes, review of operations, auditor's report, and supplementary schedules
  • Describe what management's discussion and analysis (MD&A) involves
  • Summarize how the Sarbanes-Oxley 404 reporting differs from traditional reporting

Chapter 3

  • Explain what financial statement analysis is and why it is important
  • Compare horizontal analysis and vertical analysis
  • List and discuss the basic components of ratio analysis including limitations
  • Distinguish between trend analysis and industry comparison
  • Calculate a comprehensive set of financial ratios and interpret them

Chapter 4

  • Discuss ROI, identifying the basic components of the Du Pont formula and explaining how it can be used for profit improvement
  • Analyze how financial leverage affects the stockholder's return

Chapter 5

  • Apply the percent-of-sales method to determine the amount of external financing needed
  • Diagram the firm's budgetary system, including the cash budget and the forecasted (pro forma) income statement and balance sheet
  • Calculate a firm's sustainable rate of growth
  • Formulate the master budget, step by step
  • Discuss why budgeting is used for profit planning and 'what-if' analysis

Chapter 6

  • Outline the concept of future value, with both annual and intrayear compounding
  • Distinguish between future value and present value concepts
  • Calculate the future value of a single payment and an annuity, and the present value of a single payment and an annuity
  • Compare and contrast future value and present value tables
  • Determine important financial variables such as a sinking fund amount, the monthly payment of an amortized loan, and annual percentage rate (APR)

Chapter 7

  • Define return, describe how it is measured, and distinguish between arithmetic return and geometric return
  • Calculate and state risk statistics: the variance, standard deviation, and coefficient of variation
  • Identify the types of risk
  • Explain the nature of diversification and how it reduces risk
  • Calculate portfolio return and portfolio risk
  • Compare the Capital Asset Pricing Model (CAPM) and the Arbitrage Pricing Model (APM)
  • Calculate a beta value and describe its use in designing a portfolio

Chapter 8

  • Outline the key inputs and concepts underlying the security valuation process
  • Determine the value of bonds, identify and calculate various yields on a bond, and distinguish between preferred stock and common stock
  • Describe the various methods of common stock valuation, and determine the investor's expected rate of return on preferred stock and common stock

Chapter 9

  • Compute individual costs of financing including long-term debt, bonds, preferred stock, common stock, and retained earnings
  • Determine the overall cost of capital
  • Discuss the various weighting schemes, and explain how the weighted marginal cost of capital can be used with the investment opportunity schedule to find the optimal capital budget

Chapter 10

  • Describe the types and special features of capital budgeting decisions
  • Calculate, interpret, and evaluate five capital budgeting techniques
  • Select the best mix of projects with a limited capital spending budget
  • Discuss how income tax factors affect investment decisions
  • Explain the types of depreciation methods
  • Discuss the effect of Modified Accelerated Cost Recovery System (MACRS) on capital budgeting decisions

Chapter 11

  • Discuss the basics of break-even analysis and operating leverage and how they relate to each other
  • Measure operating leverage and financial leverage and distinguish between them
  • Apply the EBIT-EPS approach to evaluate alternative financing plans
  • Explain how to determine the best capital structure

Chapter 12

  • Accelerate cash receipts, delay cash payments, and determine an optimal cash balance
  • Identify the types of marketable securities
  • Explain how to manage accounts receivable
  • Describe what credit and discount policies may be advisable
  • Outline ways to manage inventory, compute the carrying cost and ordering cost of inventory, and determine how much inventory to order and when to order

Chapter 13

  • Explain the different short term financing instruments and when each one is most appropriate
  • List the advantages of trade credit
  • Identify the types of bank loans and how they work
  • Compute interest
  • Outline the attributes of commercial paper financing
  • Finance using receivables and inventory as collateral
  • Distinguish between short term and long term financing
  • List the advantages and disadvantages of leasing

Chapter 14

  • Identify the types of bonds that can be issued
  • Outline the advantages of using bonds for long term financing
  • Discuss how bond interest is calculated and paid
  • Decide if a bond issue should be refunded before maturity

Chapter 15

  • Outline the advantages and disadvantages of the different kinds of stock and other equity securities
  • List the characteristics of the different classes of stock
  • Describe the role of the investment banker
  • Explain the importance of making wise capital structure decisions
  • Distinguish difference between a private and public placement of securities

Chapter 16

  • Outline the key features of the financial management of a multinational corporation (MNC) and describe popular financial goals of MNCs
  • Distinguish between spot and forward foreign exchange rate
  • Explain ways to control currency risk
  • Outline three different types of foreign exchange exposure
  • Explain long versus short position
  • List some key questions to ask that help to identify foreign exchange risk
  • Identify the ways to forecast foreign exchange rates
  • Analyze foreign investments
  • Measure political risk and deal with political risk
  • Identify various international sources of financing

Table of Contents

Chapter 1 – An Overview of Financial Management

Learning Objectives

Objectives of Managerial Finance

Profit Maximization vs. Stockholder Wealth Maximization

Agency Problems

Shareholders vs. Managers

Creditors vs. Shareholders

Finance Decisions and Risk-Return Trade-Off

Portfolio Risk and Return

Time Value of Money

Importance of Finance

Scope and Role of Finance

The Language and Decision Making of Finance

Why and What of Finance

What Do Financial Managers Do?

Controller vs. Treasurer

Relationship between Accounting and Finance

Financial and Operating Environment

Financial Institutions and Markets


Subchapter S Corporation


Chapter 1 Review Questions

Chapter 2 – Financial Statements and Cash Flow

Learning Objectives

What and Why of Financial Statements

More on the Income Statement

Classified Financial Statements

Classified Income Statement

Classified Balance Sheet


Liabilities and Stockholders' Equity

Statement of Cash Flows

Contents of the Statement of Cash Flows

Investing Activities

Financing Activities

Operating Activities

Cash Flow Analysis

Operating Section

Investing Section

Financing Section

Preparing and Analyzing the Statement of Cash Flows

Statement of Cash Flows and Corporate Planning

Other Sections of the Annual Report


Review of Operations

Auditor’s Report

Notes to the Financial Statements (Footnotes)

Supplementary Schedules and Tables

History of Market Price

How to Read a Quarterly Report

SEC Reporting Requirements-Integrated Disclosure System

S Forms

Form S-1

Form S-3

Form S-4

Form S-8

Form S-18

Management's Discussion and Analysis (MD&A)

The Sarbanes-Oxley Act


Chapter 2 Review Questions

Chapter 3 – Evaluating a Firm's Financial Performance

Learning Objectives

What and Why of Financial Statement Analysis

Horizontal Analysis

Vertical Analysis

Ratio Analysis

Liquidity Ratios

Activity (Asset Utilization, Turnover) Ratios

Solvency (Leverage, Debt Service, Long-Term Debt) Ratios

Profitability Ratios

Market Value Ratios

Is Ratio Analysis a Panacea?


Chapter 3 Review Questions

Chapter 4 – Improving Financial Performance

Learning Objectives

What is Return on Investment (ROI)?

Is there an Optimal Combination?

How to Use the Du Pont Formula for Profit Improvement

How to Improve Return to Stockholders through Financial Leverage

A Word of Caution


Chapter 4 Review Questions

Chapter 5 – Budgeting, Planning, and Financial Forecasting

Learning Objectives

How Does the Percent-of-Sales Method Work?

The Sustainable Rate of Growth

Calculating the Sustainable Rate of Growth

How to Prepare a Budget

Comprehensive Illustration

The Sales Budget

The Production Budget

The Direct Material Budget

The Direct Labor Budget

The Factory Overhead Budget

The Ending Inventory Budget

The Selling and Administrative Expense Budget

The Cash Budget

The Budgeted Income Statement

The Budgeted Balance Sheet

Some Financial Ratio Calculations


Chapter 5 Review Questions

Chapter 6 – The Time Value of Money

Learning Objectives

How to Calculate Future Values

Intrayear Compounding

Future Value of an Annuity

What Is Present Value—How Much Money Is Worth Now?

Present Value of an Annuity


The Applications of Future Values and Present Values

Deposits to Accumulate a Future Sum (or Sinking Fund)

Amortized Loans

How to Develop Loan Amortization Schedule

Annual Percentage Rate (APR)

Rates of Growth

Bond Values


Chapter 6 Review Questions

Chapter 7 – The Meaning and Measurement of Risk and Rates of Return

Learning Objectives

Return on Investment

How is Return Measured?

Arithmetic Average Return vs. Geometric Average Return

What is Expected Rate of Return?

What is the Risk and the Risk-Return Trade-Off?

How is Risk Measured?

Word of Caution

Types of Risk

How to Reduce Risk: Diversify

Portfolio Theory

Portfolio Return

Portfolio Risk


What is Beta?

How to Read Beta

Betas for some selected corporations

The Arbitrage Pricing Model (APM)


Chapter 7 Review Questions

Chapter 8 – Valuation of Stocks and Bonds

Learning Objectives

How to Value a Security

What is a Bond?

How to Value Bonds

How Do You Calculate Yield (Effective Rate of Return) on a Bond?

What is Preferred Stock?

How to Value Preferred Stock

What is Common Stock?

How to Value Common Stock

Single Holding Period

Multiple Holding Period

What is the Expected Return on Common Stock?


Chapter 8 Review Questions

Chapter 9 – The Cost of Capital

Learning Objectives

Computing Individual Costs of Capital

Cost of Debt

Cost of Equity Capital

Cost of Retained Earnings

Measuring the Overall Cost of Capital

Historical Weights

Target Weights

Marginal Weights

Level of Financing and the Marginal Cost of Capital (MCC)


Chapter 9 Review Questions

Chapter 10 – Capital Budgeting: Techniques and Practice

Learning Objectives

What are the Types of Investment Projects?

What are the Features of Investment Projects?

How Do You Measure Investment Worth?

Payback Period

Accounting Rate of Return

Internal Rate of Return

Net Present Value

Can a Computer Help?

How to Select the Best Mix of Projects with a Limited Budget

How to Handle Mutually Exclusive Investments

How Does Income Taxes Affect Investment Decisions?

Types of Depreciation Methods

Straight-Line Method

Sum-of-the-Years-Digits (SYD) Method

Double-Declining-Balance (DDB) Method

How Does MACRS Affect Investment Decisions?


Chapter 10 Review Questions

Chapter 11 – Determining the Financing Mix

Learning Objectives

Break-Even Analysis, Operating Leverage, and Financial Leverage

Break-Even Point

Cash Break-Even Point

Operating Leverage

Financial Leverage

Total Leverage

Tools of Capital Structure Management

EBIT-EPS Approach to Capital Structure Decisions

A Word of Caution

Analysis of Corporate Cash Flows

Coverage Ratios

Capital Structure Decisions in Practice


Chapter 11 Review Questions

Chapter 12 – Managing Liquid Assets

Learning Objectives

Evaluating Working Capital

Cash Management

Acceleration of Cash Inflow

Delay of Cash Outlay

Delay Frequency of Paying Employees

Cash Models

Investing in Marketable Securities

Management of Accounts Receivable

Credit Policies

Monitoring Receivables

Credit Policy

Determining the Investment in Accounts Receivable

Changing Credit Policy

Inventory Management

Quantity Discount

Investment in Inventory

Determining Carrying and Ordering Costs

The Reorder Point

Using the ABC Inventory Control Method

Supply Chain Management


Chapter 12 Review Questions

Chapter 13 – Short-Term Financing

Learning Objectives

Short-Term Financing

Using Trade Credit

Bank Loans


Dealing with the Banker

Commercial Finance Loans

Commercial Paper

Using Receivables for Financing

Using Inventories for Financing

Balance Sheet

Financing with Other Assets

Intermediate-Term Financing: Term Loans and Leasing

Insurance Company Term Loans

Equipment-Backed Financing

Advantages of Leasing

Lease-Purchase Decision


Chapter 13 Review Questions

Chapter 14 – Debt Financing

Learning Objectives

Types of Long-Term Debt



Advantages and Disadvantages to Debt Refinancing.


Chapter 14 Review Questions

Chapter 15 – Equity Financing

Learning Objectives

Issuing Equity Securities

Preferred Stock

Common Stock Issues


Stock Rights

Governmental Regulation

Selecting a Financing Method

Investment Banking

Public vs. Private Placement


Chapter 15 Review Questions

Chapter 16 – International Finance

Learning Objectives

Foreign Operations

What is unique about the financial management of a multinational corporation (MNC)?

What are popular financial goals of MNCs?

What types of foreign operations are right for you?

What are some popular international strategies?

The Foreign Exchange Market

What is the foreign exchange market?

What are spot and forward foreign exchange rates?

What are cross rates?

Example 16-3

Example 16-4

How do you control foreign exchange risk?

Financial Strategies

What are three different types of foreign exchange exposure?

Translation Exposure

Transaction Exposure

What is long vs. short position?

What is your monetary position?

What are some ways to neutralize foreign exchange risk?

Example 16-5

Example 16-6

Operating Exposure

What are some key questions to ask that help to identify foreign exchange risk?

Impacts of Changes in Foreign Exchange Rates

Can you forecast foreign exchange rates?

Interest Rates

Example 16-7


Example 16-8

How do you analyze foreign investments?

Examples of Political Risks

What are the methods for dealing with political risk?

Example 16-9

International Financing

What are international sources of financing?

Figure 16-4

Chapter 16 Review Questions

Review Question Answers and Rationales



Qualified Assessment

Answer Sheet

Course Evaluation


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