Skip to 0 minutes and 24 secondsWe all wonder what the point of paperwork is. It is time consuming to keep formal business records of all of the work you do. Yet these records play a vital role in companies. Suppose you want to start your own business venture. You have to source the capital. Once you have sourced the capital you may have to rent a premises, you have got to consider that you will be incurring the expenses. Also, if your business is big enough, you may have to hire somebody to assist you. In this case, you pay them wages. This relentless cycle of buying and selling goods and paying expenses will continue until the business ceases.

Skip to 1 minute and 16 secondsBut until that time, you will need to understand in what state this cycle has left you. How much you have sold and how much it cost you. This is the importance of financial statements. They are the backbone of any well-functioning company. In the next two weeks we will be exploring in detail the content and perform analysis of this financial status. Welcome to financial statement analysis.

Welcome to the course

Watch Dr Isaiah Oino Senior Lecturer in Accounting at Coventry University, introduce you to the key topics that you will be exploring in this course.

Every business maintains records that provide insight into the state of its finances. These records, or financial statements, are seen as the ‘window into a business’. Understanding the importance of these statements and what they can tell us about a company will be our main focus over the next two weeks.

This course not only introduces you to the different types of financial statement and branches of accounting, but will also provide you with the knowledge required to interpret these statements and the confidence to make informed decisions.

This week

Through this week’s activities you will:

  • be introduced to accounting and its different branches
  • identify the users of accounting information and their requirements
  • explore financial statements and their purpose
  • focus on the income statement, its purpose and content
  • calculate the profit from a given case

Checking your progress

When you reach the end of a step and have understood everything, click the ‘Mark as complete’ button. This will update your progress page, and will help you to keep track of which steps you’ve done. Any steps you’ve completed will turn blue on your ‘To do’ list.

You can check your progress page by clicking the icon at the top of the step, where you’ll see what percentage of the course steps you’ve marked as complete.

Getting started

Over the next two weeks you will be working closely with your colleagues on the course, so take this chance to introduce yourself to both your educators and your colleagues. If you wish, you may share what has brought you to take part in the course through Coventry.

Your task

What are you most looking forward to during this course?

What are you hoping to achieve through this week of learning?

Share your thoughts with your fellow learners in the comments area.

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This video is from the free online course:

Understanding Financial Statements

Coventry University