Exploring The Balance Sheet and Cash Flow Statements

This is part two of a four part Back to Basics in Corporate Finance series. This module focuses on two of the three common financial tools used in business - the balance sheet and the cash flow statement.  These two statements, used in combination, measure your worth by showing what you own, what you owe, and reconciling the changes in cash as it flows in and out of the business. Whereas managers in a business look mostly at the income statement, owners, bankers and investors prefer to look more closely at these statements when assessing the health of an organization.

Expect to learn:

• What the return-on-equity, current, and the debt-to-equity ratios tell us.

• Why you should join bankers and investors in the practice of looking closely at the balance sheet and cash flow statement.

• What free cash flow is, and why it’s important.

• What the three sections of the cash flow statement are, and what they show us.

• What the difference is between equity and profitability, and why you should care.

Enhance your financial knowledge through examples and exercises using real numbers from well-known companies, as well as learning about how the dot-com bubble burst. Walk through financial statements and calculate ratios to understand the story the numbers tell us.