Financial skills

Purpose of the program

This module will enable the learner to understand the basic financial principles, evaluate financial statements and to understand the contents and working of budgets.

Learning modules

Module 1: Understanding Financial statements

Module 2: Analysing Financial statements

Module 3: Operating Capital

Module 4: Budgeting


  • Describe the contents of a company’s financial statements
  • Describe the difference between income and expenditure
  • Explain the difference between Assets, liability and equity and to distinguish
  • between long term and short-term assets and liability
  • To practically demonstrate the double entry system and to apply the formula E= A-L
  • Describe the difference/ relationship between income/ turnover, cost of sales,
  • Gross profit, operating expenses and net profit.
  • After completing this unit you should be able to calculate the following financial ratios and explain the use of each one:
    • Liquidity ratio
    • Activity ratio
    • Debt ratio
    • Times interest earn ratio
    • Different profit margins
    • Difference between mark up and gross profit
  • Understand the difference between fixed and variable cost
  • Cost – volume – profit analysis
  • Break-even point
  • Calculate the cash conversion cycle of a business.
  • Explain the importance of the management of the cash conversion cycle
  • Explain the importance of managing debtors, stock levels and creditors

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