Operational Finance: Finance for Managers

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  • Paid plan: Commit to earning a Certificate—it's a trusted, shareable way to showcase your new skills.

About this course: When it comes to numbers, there is always more than meets the eye. In operational finance, you will learn how to read the “story” that the balance sheet and income statement tells about the company’s operations. The insights you gain from this “financial story” will then become a tool for short-term decision-making at the top management level relating to current assets, current liabilities and the management of working capital. Finally, by the end of the course you will understand the financial consequences of managerial decisions on operations, marketing, etc.

Who is this class for: This course if primarily aimed at recent college graduates just beginning their …

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Didn't find what you were looking for? See also: Business Finance, Balance Sheet, Business Administration, Leadership, and Decision Making.

When you enroll for courses through Coursera you get to choose for a paid plan or for a free plan

  • Free plan: No certicification and/or audit only. You will have access to all course materials except graded items.
  • Paid plan: Commit to earning a Certificate—it's a trusted, shareable way to showcase your new skills.

About this course: When it comes to numbers, there is always more than meets the eye. In operational finance, you will learn how to read the “story” that the balance sheet and income statement tells about the company’s operations. The insights you gain from this “financial story” will then become a tool for short-term decision-making at the top management level relating to current assets, current liabilities and the management of working capital. Finally, by the end of the course you will understand the financial consequences of managerial decisions on operations, marketing, etc.

Who is this class for: This course if primarily aimed at recent college graduates just beginning their career and anyone (managers, entrepreneurs, etc.) who needs to understand basic financial concepts.

Created by:  IESE Business School
  • Taught by:  Miguel Antón, Assistant Professor

    Financial Management
Basic Info Course 2 of 5 in the Foundations of Management Specialization Commitment 4 weeks of study, 3-5 hours/week Language English How To Pass Pass all graded assignments to complete the course. User Ratings 4.8 stars Average User Rating 4.8See what learners said Coursework

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Syllabus


WEEK 1


Course Overview & Week 1



Welcome to Operational Finance: Finance for Managers. In this course you will learn the basics of operational finance to help you make sound financial decision or to run a robust business! Before you get started with this week's video content, please have a look at the course syllabus. In this first week, we'll discuss what operational finance is all about by looking at a business case. What do the numbers on the Balance Sheet and P&L Statement tell us about its performance and future prospects? If you were a bank, would you approve a half million euro loan for this business? Why or why not? Course objective: To get an overview of operational finance and the types of analyses necessary to develop solid financing decisions.


16 videos, 6 readings expand


  1. Reading: Course Overview & Syllabus
  2. Reading: About Week 1
  3. Reading: Required Reading Week 1
  4. Reading: Optional Reading
  5. Reading: Financial Terms & Definitions
  6. Video: Welcome to the Course: Intro Video
  7. Video: 1.- Operational Finance: Course Outline
  8. Video: 2.- Introduction: Operational Finance
  9. Video: 3.- Polypanel Case: What to do?
  10. Video: 4.- Polypanel Case: What to do? (continued)
  11. Video: 5.- Business Analysis Part 1: Sales
  12. Video: 6.- Business Analysis Part 1: Sales, (continued)
  13. Video: 7.- Business Analysis Part 2: Strategy and Management
  14. Video: 8.- P&L Analysis Part 1: Sales and Gross Margin
  15. Video: 9.- P&L Analysis Part 1: Sales and Gross Margin, (continued)
  16. Video: 10.- P&L Analysis Part 2: OPEX, EBITDA and Financial Results
  17. Video: 11.- P&L Analysis Part 2: OPEX, EBITDA and Financial Results, (continued)
  18. Video: 12.- What is a Balance Sheet?
  19. Video: 13.- Polypanel's Balance Sheet
  20. Video: 14.- Polypanel's Balance Sheet, (continued)
  21. Video: 15.- Brief Recap
  22. Reading: Quiz Week 1 Solutions & Explanations

Graded: Quiz 1

WEEK 2


Week 2: Operational Ratios and Forecasting



In week 1, we looked at Polypanel’s Balance Sheet and P&L Statement. In the Balance Sheet, we noted that receivables increased from €188,000 in 2004 to €649,000 in 2007. We left off with the question: Is this difference due to an increase in sales or delays in payments from customers? In week 2, we will introduce operational ratios, the tools we need to disentangle both effects and understand what’s going on below the surface. We will also conduct a forecasting exercise of Polypanel to understand how well it will be positioned to pay back a potential credit line in the future. Objectives: By the end of the session you will understand the different types of operational ratios (Days of Collection, Days of Inventory and Days of Payables) in order to analyze how well a business is performing. You will also learn how to use forecasting to support financing decisions.


14 videos, 4 readings expand


  1. Reading: About Week 2
  2. Reading: Required Reading Week 2
  3. Reading: Optional Reading
  4. Video: 1.- Recap from Week 1
  5. Video: 2.- Recap from Week 1, (continued)
  6. Video: 3.- Operational Ratios: Days of Collection
  7. Video: 4.- Operational Ratios: Days of Collection, (continued)
  8. Video: 5.- Operational Ratios: Days of Inventory
  9. Video: 6.- Operational Ratios: Days of Inventory, (continued)
  10. Video: 7.- Operational Ratios: Days of Payment
  11. Video: 8.- Operational Ratios: Days of Payment, (continued)
  12. Video: 9.- Forecast of the P&L
  13. Video: 10.- Forecast of the Balance Sheet (Theory)
  14. Video: 11.- Forecast of the Balance Sheet (Theory), (continued)
  15. Video: 12.- Forecast of the Balance Sheet (Polypanel)
  16. Video: 13.- Forecast of the Balance Sheet (Polypanel), (continued)
  17. Video: 14.- Brief Recap
  18. Reading: Quiz Week 2 Solutions & Explanations

Graded: Quiz 2

WEEK 3


Week 3: Diagnosis and Action Plan



By now you have a pretty good grasp of the Polypanel case and the main issues that could impact future financing. This week, it’s time to roll up our sleeves and work out a diagnosis for these issues. We’ll discuss Need of Funds for Operations (NFO) and Working Capital (WC), two concepts that will help us better understand the company’s problems. Finally, with a solid diagnosis we can develop an action plan that will lead to sustainable growth. Objectives: By the end of the session you will have a framework for diagnosing a company’s financial health. You’ll also gain insights into how to develop an action plan to address its problems.


13 videos, 3 readings expand


  1. Reading: About Week 3
  2. Reading: Required Reading Week 3
  3. Video: 1.- Recap from Week 2
  4. Video: 2.- Recap from Week 2, (continued)
  5. Video: 3.- Diagnosis (I)
  6. Video: 4.- Need of Funds (NFO) and Working Capital (WC)
  7. Video: 5.- Need of Funds (NFO) and Working Capital (WC), (continued)
  8. Video: 6.- Diagnosis (II)
  9. Video: 7.- Action Plan (I)
  10. Video: 8.- Action Plan (I), (continued)
  11. Video: 9.- Action Plan (II)
  12. Video: 10.- Action Plan (II), (continued)
  13. Video: 11.- Sustainable Growth
  14. Video: 12.- Sustainable Growth, (continued)
  15. Video: 13.- Brief Recap
  16. Reading: PolyPanel Balance Sheet and P&L with Forecast & Solutions to Quiz 3

Graded: Quiz 3

WEEK 4


Week 4: Negative NFO and DuPont Analysis



In this final week, we will introduce the final pieces of the puzzle to give you a complete overview of operational finance. We’ll discuss tools like sensitivity analysis that will help you consider the potential outcome of a decision given different variables. In this session we will also look at other crucial concerns for the firm and its shareholders like sustainable growth and ROE (Return On Equity) plus revisit NFO (Need of Funds for Operations) and other topics. Objectives: By the end of this session, you should have a complete overview of the key aspects of operational finance. You will also understand what tools financial professionals use in order to make decisions to strengthen a company’s position.


16 videos, 3 readings expand


  1. Reading: About Week 4
  2. Video: Course Conclusion & Congratulations
  3. Video: 1.- Recap from Week 3
  4. Video: 2.- Recap from Week 3 (Part 2)
  5. Video: 3.- Sensitivity Analysis
  6. Video: 4.- Sensitivity Analysis (Part 2)
  7. Video: 5.- An Example of Sustainable Growth
  8. Video: 6.- Minimum Cash and Other Elements in the NFO
  9. Video: 7.- Seasonal Companies
  10. Video: 8.- Building up the ROE (Part 1)
  11. Video: 9.- Building up the ROE (Part 2)
  12. Video: 10.- Building up the ROE (Part 3)
  13. Video: 11.- Blind Financial Statements
  14. Video: 12.- Blind Financial Statements (Part2)
  15. Video: 13.- Blind Financial Statements (Part 3)
  16. Video: 14.- Brief Recap
  17. Video: 15.- Course Conclusions
  18. Reading: Considerations for Final Exam Parts I & II - Week 4
  19. Reading: Final Quiz Week 4 Part I Solutions

Graded: Quiz Week 4 - Part 1
Graded: Quiz Week 4 - Part 2
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