Finance foundations
The vocabulary every other topic uses. These lessons explain what finance is for, how profit is measured, what a business owns and owes, why the two sides of a balance sheet always match, and why a profitable business can still run short of cash.
Each lesson builds a small shop's books with sliders you can move, then opens the same idea in the published accounts of Titan Company, so you can see that nothing in the shop was a simplification of the real thing.
6 lessons, about 2 hours 10 minutes of reading in all. Start at the top and go in order.
After this module you will be able to
- explain what finance is and what accounting adds to it
- read revenue, expenses and profit in a real income statement
- sort items into assets, liabilities and equity, and show why the equation always balances
- bridge from profit to cash, and say why the two differ
- tell cash accounting from accrual accounting and say why companies use accrual
The lessons
- What Is FinanceFinance explained from scratch: personal, business and public finance, money over time, and Titan's three big cash movements in a real year.
- Revenue, Expenses and ProfitBuild a profit and loss account for a small shop with live sliders, then read the same statement in Titan's FY2023-24 accounts.
- Assets, Liabilities and EquitySort fifteen everyday items into assets, liabilities and equity, then read the balance sheet of a real listed company, Titan, line by line.
- The Accounting EquationWhy assets always equal liabilities plus equity: eight events in a new shop recorded live, then checked against Titan's real balance sheet.
- Cash vs ProfitWhy profit and cash differ, with an adjustable shop ledger and a worked bridge from profit to cash using Titan's real FY2023-24 accounts.
- Accrual vs Cash AccountingHow accrual and cash accounting record the same contract differently, with a live ledger and Info Edge's billings, revenue and deferred revenue.