Foundations of Finance from edX

This course provides a rigorous, but straightforward, introduction to the key concepts of financial understanding. Using real-world case studies and practitioner interviews, as well as timely knowledge checks, you will integrate your new knowledge and problem solving skills with practical application.

No prior knowledge is required or assumed, and the course will be particularly beneficial if:

you engage with/need to engage with financial specialists, and want to collaborate more effectively;
you are self-employed or are considering self-employment;
you are considering a career or secondment in finance; you are interested in corporate finance, financial management, or business finance;
you are simply interested in the subject and wish to know more

What you'll learn

Money and Capital
Cash flows and Cash flow forecasting
Financial reporting
Interest and Return
Risk and Risk management

What's inside

Syllabus

Money and Capital

Money is a short term store of value, in the form of a promise to pay the bearer on demand. While money used to be backed by silver or gold, modern money has no inherent value. Its value derives instead from the trust and the confidence that its users have toward issuer of the promise to pay – usually a central government.

Financial capital is a longer term store of value, usually in the form of a promise to pay later. Financial capital may be backed by other assets, but not always. Whether or not the financial capital is backed by other assets, trust toward its issuer is a fundamentally important component of its value. High levels of well-founded confidence are essential in a modern economy.

Cash flows and Cash flow forecasting

Cash is an enormously important asset for most organisations and individuals, most of the time. The less cash we have, the more important it becomes. If we run out of short term cash to pay our liabilities we can go bust, even if we still have value tied up in our longer term assets.

Cash flows are the changes in our reserves of cash. Cash flow forecasting is making projections of our cash flows and cash reserves, and taking timely action to cover potential shortfalls. Related cash flow statements are a key building block of financial reporting.

Financial reporting

External financial reports are accounts – also known as financial statements – prepared by the managers of organisations to answer the legitimate questions of different stakeholders in the organisation’s activities. Stakeholders in companies include its owners (shareholders) who want to know, “What have you managers been doing with our money and our other assets?” Other stakeholders include tax authorities, who want to know, “How much tax should the company be paying?”

External financial statements are produced in standard formats, including cash flow statements, balance sheets, income statements and other information. Internal financial reports will – ideally – include all the other information the managers need to run the business from day to day, as well as strategically

Interest and Return

Investors in financial capital include depositors in banks, lenders, and shareholders. In all cases the investor wants their original invested capital to be safe. They also expect a surplus on top of the amount they orginally invested. This surplus is known as a return, often expressed as an annual percentage rate of return, to enable comparisons between different capital assets.

Interest is one form of return, generally calculated as a percentage of the amount orginally deposited, loaned or borrowed – or sometimes on an accumulating balance rolling up over time, or on a reducing balance being paid off over time. Interest is a form of income. Total returns may include capital gains as well as income. Returns can be negative, as well as positive.

Risk and Risk management

For investors in organisations, key risks they are concerned about include: losses in the capital value of their invested money, and reductions in the returns that they expected when they made their investments. Managers have fiduciary and stewardship responsibilities for the owners’ assets that they are managing on their behalf. This includes responsibilities for identifying, responding to, and reporting on the significant risks to which the organisation is exposed. Managers also have responsibilities to wider – and longer term – stakeholder interests.

Key dimensions of risk management include identifying – and prioritising – the most significant risks and focusing on general organisational robustness and resilience, as well as specific sources of risk. Competent risk management and reporting will raise the market’s well-founded confidence in our organisation and the financial capital it is issuing.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Explores financial reporting, which is standard in business and industry

Examines risk and risk management, a core concept for most financial professionals

Develops understanding of money and capital, a fundamental concept for financial management

Teaches cash flow concepts and forecasting, critical skills for managing organizational finances

Covers interest and return, essential concepts for evaluating financial performance

Taught by experienced instructors Doug Williamson, providing credibility to the course

This course requires no prior knowledge, making it widely accessible

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Foundations of Finance with these activities:

Form a study group

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Collaborate with peers to learn from each other and reinforce understanding.

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Find a group of classmates with similar goals and schedules.
Meet regularly to discuss the course material.
Take turns leading discussions and presenting concepts.

Create a study guide

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Improve retention and understanding by creating a comprehensive study guide.

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Organize your notes and materials into a logical structure.
Highlight important concepts and definitions.
Summarize the key points of each chapter or topic.

Solve practice problems

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Strengthen problem-solving skills by working through practice problems and case studies.

Browse courses on Cash Flows

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Review the course materials and identify key concepts.
Find practice problems and case studies online or in textbooks.
Solve the problems and review your answers.

Three other activities

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Participate in workshops

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Develop practical skills and knowledge by attending workshops.

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Identify workshops that align with your interests and goals.
Register for workshops and prepare in advance.
Participate actively in the workshops and ask questions.

Attend industry events

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Connect with professionals in the field and learn about the latest trends.

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Research industry events and conferences.
Attend events and introduce yourself to people.
Follow up with people you meet and stay connected.

Develop a financial plan

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Apply your knowledge by creating a financial plan for yourself or a business.

Browse courses on Risk Management

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Gather information about your financial situation.
Set financial goals and objectives.
Develop strategies to achieve your goals.
Create a written financial plan.

Career center

Learners who complete Foundations of Finance will develop knowledge and skills that may be useful to these careers:

Financial Analyst

Financial Analysts forecast financial performance, analyze market trends, and make recommendations for investment. A course on the foundations of finance will help a Financial Analyst build a strong foundation in the principles of finance, including cash flow management, financial reporting, risk management, and return on investment. This knowledge is essential for success in this role.

See salaries and explore the career path for Financial Analyst

Investment Banker

Investment Bankers provide financial advice to corporations and governments, helping them raise capital and manage their finances. A course on the foundations of finance will provide Investment Bankers with a strong foundation in the principles of finance, including financial reporting, risk management, and return on investment. This knowledge is essential for success in this role.

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Portfolio Manager

Portfolio Managers manage investment portfolios for individuals and institutions, making decisions about which investments to buy and sell. A course on the foundations of finance will provide Portfolio Managers with a strong foundation in the principles of finance, including risk management and return on investment. This knowledge is essential for success in this role.

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Commercial Banker

Commercial Bankers provide financial services to businesses, including loans, lines of credit, and cash management. A course on the foundations of finance will provide Commercial Bankers with a strong foundation in the principles of finance, including financial reporting, risk management, and return on investment. This knowledge is essential for success in this role.

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Risk Manager

Risk Managers identify, assess, and mitigate financial risks for organizations. A course on the foundations of finance will provide Risk Managers with a strong foundation in the principles of finance, including financial reporting, risk management, and return on investment. This knowledge is essential for success in this role.

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Financial Planner

Financial Planners help individuals and families plan for their financial future, including retirement, education, and estate planning. A course on the foundations of finance will provide Financial Planners with a strong foundation in the principles of finance, including cash flow management, financial reporting, and return on investment. This knowledge is essential for success in this role.

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Auditor

Auditors examine and evaluate financial records to ensure accuracy and compliance with laws and regulations. A course on the foundations of finance will provide Auditors with a strong foundation in the principles of finance, including financial reporting, risk management, and return on investment. This knowledge is essential for success in this role.

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Management Consultant

Management Consultants provide advice to organizations on how to improve their performance. A course on the foundations of finance may be useful for Management Consultants, providing them with a better understanding of the financial implications of their recommendations.

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Tax Accountant

Tax Accountants prepare and file tax returns for individuals and businesses. A course on the foundations of finance may be useful for Tax Accountants, providing them with a better understanding of the financial implications of tax laws and regulations.

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Financial Journalist

Financial Journalists write and report on financial news and events. A course on the foundations of finance will provide Financial Journalists with a strong foundation in the principles of finance, including financial reporting, risk management, and return on investment. This knowledge is essential for success in this role.

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Budget Analyst

Budget Analysts prepare and manage budgets for organizations. A course on the foundations of finance may be useful for Budget Analysts, providing them with a better understanding of the financial implications of their decisions.

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Loan Officer

Loan Officers evaluate and approve loan applications for individuals and businesses. A course on the foundations of finance will provide Loan Officers with a strong foundation in the principles of finance, including financial reporting, risk management, and return on investment. This knowledge is essential for success in this role.

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Insurance Agent

Insurance Agents sell and manage insurance policies for individuals and businesses. A course on the foundations of finance may be useful for Insurance Agents, providing them with a better understanding of the financial implications of different insurance policies.

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Real Estate Agent

Real Estate Agents help people buy, sell, and rent real estate. A course on the foundations of finance may be useful for Real Estate Agents, providing them with a better understanding of the financial implications of real estate transactions.

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