Financial Accounting Part 2

- Hi I'm Jim Stice, I'm a professor of accounting at Brigham Young University, this is my brother Kay. - I am also a professor of accounting at Brigham Young University, we are an accounting family. - Absolutely, we love numbers, we love financial statements, and we love using financial reports to gain insights into how companies work. - This course introduces you to the methods of financial ratio analysis that allow you to use a company's financial reports to identify the company's strengths and weaknesses. - [Jim] You can use a company's financial reports to identify areas for improvement as well as areas of risk. - [Kay] Financial ratio analysis is the process of using the relationships among a company's financial numbers to gain insights into that company's operations. - Now in this course, we also address the important topic of cash flow analysis. - Many good businesses have died a premature death because they didn't properly manage their cash flow. - Loans, employees, suppliers, and taxes are paid with cash. A company can't live very long when it doesn't properly manage it's cash flows. - We also provide an introduction to business valuation. - Business valuation brings together the fields of accounting and finance. - From accounting we obtain data that are important inputs into many valuation models. These data include net income, sales, and cash flows. - [Jim] From finance we draw from the concepts of risk, returns, and the time value of money. - Also in this course we introduce two basic valuation approaches. Valuation using multiples and the more challenging valuation using discounted cash flow analysis. - And in a Capstone example, we will use several different models to estimate the value of McDonald's. - Before taking this course you might consider taking our Financial Accounting 1 course here in LinkedIn Learning. That course introduces you to the processes and financial statements that are the foundation of financial accounting. - But with that said, we've designed this Financial Accounting Course 2 to be self contained and we carefully explain any accounting terminology that we use. - So let's go! - Let's go!