Those without a financial background commonly misunderstand the reality of financial reports and they tend to assume that they are statements of unquestionable fact. Instead, financial reports are very often subjective in nature, in that they allow latitude to those who prepare them.
It has been said that one must measure what they expect to manage and accomplish. Without measurement, one has no reference to work with and thus tends to operate in the dark.
One way of establishing references and managing the financial affairs of an organization is to use ratios. Ratios are simply relationships between two financial balances or financial calculations.These relationships establish our references so we can understand how well we are performing financially. Ratios also extend our traditional way of measuring financial performance; i.e. relying on financial statements.By applying ratios to a set of financial statements, we can better understand financial performance.
In any business environment, a manager has to take decisions and these decisions are mostly based on the financial implications to the business. Hence, it is of utmost importance for managers to understand the concepts of business finance and get to know how to read financial statements, analyze and interpret these statements, perform analysis and know valuation metrics. This course is designed to equip managers with just the right finance skills.