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Business- Introduction to Accounting and Finance (BS102)
Version 1 and 2: 42 hours.
Version 1: November 2017 – January 2023. Version 2: February 2023 - Present.
Version 1 and 2: Upon successful completion of the course, students will be able to: explain foundational principles of accounting; apply the accounting equation to transform business transactions into usable information; identify the foundational accounting concepts and principles through analyzing certain business situations; locate public company financial statements and read and analyze financial statements; examine and compare income statements, balance sheets, and statement of cash flows; define and apply the accounting elements associated with accounts receivables and payables; identify and distinguish property, plant and equipment; distinguish between current and noncurrent assets; recognize and describe the differences between debt and equity; account for bonds and capital stock; describe the types of business transactions that are included in operating, investing, and financing activities on the statement of cash flows; identify approaches for evaluating investment opportunities; and describe the valuation process for company stocks.
Version 1 and 2: Instruction is offered online through video lectures, study guides, required and supplemental readings, quizzes, homework, and final exams. Major topics include: definition of accounting and finance, annual report components, GAAP requirements, components of a balance sheet, reading a balance sheet for clues on financial stability, risk, and liquidity, assets, liabilities, shareholders’ equity, capital expenditures, the basic accounting equation, components of an income statement, income statement under general accounting principles, revenue, gross profit, operating expenses, questions to ask for income statement review, components of statements of cash flows, revenues versus profits versus cash flows, analyzing cash flow statements, common size analysis, trend analysis, ratio analysis, liquidity ratios versus market ratios, components of cost-volume-profit analysis, basic breakeven mode versus more advanced variations, fixed costs versus mixed cost, unit contribution margin, price inelasticity, time value of money, risk and present/future value, compounding, discounting and discount rate, five types of cash flows, lump sums versus annuities versus perpetuities, the tradeoffs between risk and return, the definition of beta and alpha, the capital asset pricing model, security market line, approaches for evaluating investment opportunities, the payback method vs. the book rate of return method versus net present value, evaluating investment opportunities beyond net present value, the shortcomings of net present value, internal rate of return, profitability index, equity multiple, the cost of debt versus the cost of equity, the weighted average cost of capital, convertible bonds, valuation of company stocks, fundamental analysis, market capitalization, enterprise value, EBITDA, price-earnings ratio, and price-to-EBITDA ratio.
Version 1: In the lower division baccalaureate/associate degree category, 3 semester hours in Introduction to Accounting, Business Administration, Economics, Introduction to Finance, Principles of Finance, or Human Resources (2/18). Version 2: In the associate/certificate degree category OR in the lower division baccalaureate/associate degree category, 3 semester hours in Introduction to Accounting, Business Administration, Economics, Introduction to Finance, Principles of Finance, or Human Resources (2/23 revalidation).