Finance
mindmap_unit3.pdfUnit 3: Finance
Irrespective of their size, scope and sector, all organizations need robust accounting systems, making finance a core business function. In unit 3, students examine finance and accounts through both quantitative and qualitative methods. They learn how businesses represent themselves numerically through accounts; they also learn how to construct basic balance sheets and profit and loss accounts themselves. By the end of the unit, students will be able to explain the meaning of these accounts by calculating ratios (for example, gross profit margin, net profit margin and return on capital employed (ROCE)) and interpreting the results.
Read more...download the full syllabus content of unit 3
Suggested BM Tools to integrate
Boston Consulting Group (BCG) matrix
Descriptive statistics
SWOT analysis
Contribution (HL only)
CCES CONNECTIONS:
Suggested inquiry statements to explore:
How cost and revenue management could ensure sustainability.
Why final accounts analysis could be essential in changing stakeholder perspectives.
Why profitable businesses may face insolvency.
How time value of money affects future consumer choice.
How triple bottom line accounting can support the shift towards more ethical business practices.
TOK CONNECTIONS
Suggested theory of knowledge questions
Are objective facts or appeals to emotion more effective when applying for an external source of finance?
How do our expectations and assumptions have an impact on how we read company accounts?
What roles do reason and emotion play when analysing financial performance?
Are the results of some types of ratio analysis less open to interpretation than others?
To what extent are the methods used to gain knowledge in investment appraisal “scientific”?
What assumptions underlie the techniques used when budgeting?
Something to think about when you are learning finance...
Meets Some Finance Managers
We need to be the people who understand the complete value chain...providing clarity on the financial impact of of a business decision or t alternative decision, and its up to finance to make sure that we can make those trade-offs.
Dina, Finance Manager for Sephora: "It's much more than just finance. It's where we're truly a support to all our business partners; we don't just generate reports, but be proactive and help in initiative that drive our company successes."
Brad, CFO of a private school: "It's a balancing act between the needs of the organization and the livelihood of the customers. My least favorite thing is to manage collections, trying to figure how to set plans for families to pay tuition while also managing the livelihood of the school that we are able to pay our bills."
This video provides day-in-the-life information about jobs, occupations, and tasks related to Financial Manager,
Love Finance?
Bill Ackman is one of the top investors in the world. As the CEO of Pershing Square Capital Management, the hedge fund he founded, he oversees $19 billion in assets.
Everything You Need to Know About Finance and Investing in Under an Hour...
Well, not to burst your bubble, watching this video is simply not enough to become an expert over night in finance. In fact, to some of us, this video may make our heads spin!
Watch this video if you are a finance fan and / or know something about it, or curious to know how much you actually know, and / or want a new perspective and learn a few extra things...(Ackman discusses topics that we don't necessarily cover in this unit).
Or, check this video occasionally after we study some of the foundations of finance. This can help grasp the language of finance and, in general, a good use of business terminology.
How does the stock market work?
The stock market is not covered in this syllabus. But, if you're interested to learn more, here's a good start
"In the 1600s, the Dutch East India Company employed hundreds of ships to trade goods around the globe. In order to fund their voyages, the company turned to private citizens to invest money to support trips in exchange for a share of the profits. In doing so, they unknowingly invented the world’s first stock market. So how do companies and investors use the market today? Oliver Elfenbaum explains." TedED Explained by Oliver Elfenbaum