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Introduction to Finance, Accounting, Modeling and Valuation

Learn Finance & Accounting from Scratch by an Award Winning MBA Professor, Ivy Grad, worked @ Goldman & VC
Instructor:
Chris Haroun
149,839 students enrolled
English More
#1 Best Selling Accounting Course on Udemy (Learn Finance and Accounting the Easy Way)!​
Analyze and understand an income statement (even if you have no experience with income statements).
Analyze and understand a balance sheet (even if you have no experience with balance sheets).
Analyze and understand a cash flow statement (even if you have no experience with cash flow statements).
Understand and use modeling best practices so you can create financial models.
Know where to get data in order to build a financial model (in depth understanding of identifying and using/navigating the best free websites and sources to build your financial model)!
Create a financial model (projecting the future) for an income statement.
Create a financial model (projecting the future) for a balance sheet.
Create a financial model (projecting the future) for a cash flow statement.
Understand valuation best practices so you can create target prices based on your financial models.
How to use Discounted Cash Flow (DCF) and how to create the Weighted Average Cost of Capital and Terminal values in order to pick target prices.
How to use P/E in order to pick target prices.
How to use P/R in order to pick target prices.
Other valuation methodologies, including EV/Sales, EV/EBITDA, P/B, EV/FCF, etc.
Come up with a target price based on an average of several different valuation methodologies.
Analyze the total addressable market for a company you are doing research on.
Analyze financial statements using profitability ratios: Gross Margin (Cost of Goods Sold / Revenue), Operating Margin (EBITDA/ Revenue), Net Profit Margin (Net Income / Revenue), Return on Assets (Net Income / Assets) and Return on Equity (Net Income / Equity).
Analyze financial statements using debt and inventory formulas: Debt to Assets (Total Liabilities/ Total Assets), Debt to Equity (Total Liabilities/ Total Equity), Interest Coverage Ratio (EBITDA / Interest) and Inventory Days on Hand (Inventory / Cost of Good Sold) * 365.
Analyze and compare companies using the following formulas: Price / Earnings, PEG (P/E / Growth), Price / Revenue, EV/EBITDA, EV/Sales, Price/Free Cash Flow and Price / Book.
We will do an extremely in depth professional accounting, finance, modeling and valuation analysis of LinkedIn using the accounting and finance methodologies used in this course (you will also have many exercises to complete that will help you understand accounting, finance, valuation and modeling).

#1 Best Selling Accounting Course on Udemy (Learn Finance and Accounting the Easy Way)!     ** ACCORDING TO BUSINESS INSIDER: “Haroun is one of the highest rated professors on Udemy, so you can expect to be in good hands through the course of your education.” **  He is the author of the best selling business course on Udemy this year called ‘An Entire MBA in 1 Course’

This course will help you understand accounting, finance, financial modeling and valuation from scratch (no prior accounting, finance, modeling or valuation experience is required).

After taking this course you will understand how to create, analyze and forecast an income statement, balance sheet and cash flow statement. 

By the end of his course you will also know how to value companies using several different valuation methodologies that I have used during my Wall Street career so you can come up with target prices for the companies that you are analyzing.

By the end of this course you will also know how to analyze financial statements using many different financial ratios/formulas that I have used in my hedge fund, Goldman Sachs and venture capital career.

Lastly, I am teaching this course in a much more visual and entertaining way; I hope you  enjoy the course as I always use an ‘edutainment’ and visualization teaching approach to make complex topics simple/easy to understand. 

Please note that if you already signed up for my course called “Hedge and Mutual Fund Careers: The Complete Guide,” some of the accounting and finance topics in this course were already covered in the Hedge and Mutual Fund Careers: The Complete Guide course.

Thanks

Course Introduction

1
Thank You Message from Chris
2
Course Introduction & Who is this Course For?

This course is for:

  • anyone interested in how accounting works (no prior accounting experience is needed). 

  • anyone interested in how finance works (no prior finance experience is needed). 

  • anyone interested in how modeling works (no prior modeling experience is needed). 

  • anyone interested in how valuation works (no prior valuation experience is needed). 

  • anyone interested in how financial ratios works (no prior financial ratios experience is needed).

Accounting Part 1 of 3: Income Statement Analysis

1
Why is the Income Statement Important & How Can It Help You Achieve Your Goals

Why is the income statement important and how can it help you achieve your goals? Once you understand the income statement, balance sheet and cash flow statements (all explained in this course), then we can move on to the modeling and then the valuation section of this course. 

2
Income Statement Explanation

An explanation of the income statement (assumes you have no experience with this topic). 

3
Income Statement Example and Analysis

An example of an income statement (attached is an excel version of this statement). 

4
Income Statement Analysis Exercise

Please find attached the income statement exercise. The instructions for the exercise are listed on the first tab in the attached Excel spreadsheet. When you have completed the exercise, please watch the next lecture for an explanation of the answers. Thanks

5
Income Statement Analysis Exercise Answers Explanations

A discussion of the income statement exercise results. 

Accounting Part 2 of 3: Balance Sheet Analysis

1
Why is the Balance Sheet Important & How Can It Help You Achieve Your Goals

Why is the balance sheet important & how can it help you achieve your goals? Once you understand the income statement, balance sheet and cash flow statements (all explained in this course), then we can move on to the modeling and then the valuation section of this course. 

2
Balance Sheet Explanation

An explanation of the balance sheet (assumes you have no experience with this topic). 

3
Balance Sheet Example and Analysis

An example of a balance sheet (attached is an excel version of this statement). 

4
Balance Sheet Analysis Exercise

Please find attached the balance sheet exercise. The instructions for the exercise are listed on the first tab in the attached Excel spreadsheet. When you have completed the exercise, please watch the next lecture for an explanation of the answers. Thanks

5
Balance Sheet Analysis Exercise Answer Explanations

A discussion of the balance sheet exercise results. 

Accounting Part 3 of 3: Cash Flow Statement Analysis

1
Why is the Cash Flow Statement Important+How Can It Help You Achieve Your Goals

Why is the cash flow statement important & how can it help you achieve your goals? Once you understand the income statement, balance sheet and cash flow statements (all explained in this course), then we can move on to the modeling and then the valuation section of this course. 

2
Cash Flow Statement Explanation

An explanation of the cash flow statement (assumes you have no experience with this topic). 

3
Cash Flow Statement Example and Analysis

An example of a cash flows statement (attached is an excel version of this statement). 

4
Cash Flow Statement Analysis Exercise

Please find attached the cash flow statement exercise. The instructions for the exercise are listed on the first tab in the attached Excel spreadsheet. When you have completed the exercise, please watch the next lecture for an explanation of the answers. Thanks

5
Cash Flow Statement Analysis Exercise Answer Explanations

A  discussion of the cash flow statement exercise results. 

6
Financial Statement Analysis Conclusion (How All 3 Statements Are Related)

How are the cash flow statement, balance sheet and income statement connected? 

Financial Modeling Part 1 of 4: Introduction and Best Practices

1
Why is Financial Modeling Important & How Can It Help You Achieve Your Goals

Why is financial modeling important & how can it help you achieve your goals? Now that we understand how to analyze and create an income statement, balance sheet and cash flow statement, we can project the aforementioned financial statements. Once we are finished with the 4 valuation sections, then we will learn how to come up with the appropriate target prices for companies we are doing research on. 

2
Financial Modeling Best Practices

Please find attached a 1 page document containing 25 of my modeling and valuation best practices. Thanks

3
Financial Modeling Introduction & Best Practices Quiz

Financial Modeling Part 2 of 4: Where Do I Get Historical Data From?

1
Why is Investor Relations+SEC.Gov Important & How Can It Help Me Build Models?

An introduction to 3 crucial (and free) sources where we can get data to create our financial model forecasts. 

2
Introduction to Investor Relations (A Great Model Data Source)

What is investor relations and how can the investor relations function help us to better understand companies we are considering investing in? 

3
SEC.gov is Another Great Model Resource

All investors can now get access to information at the exact same time. This lecture will explain exactly where to get this information and how to navigate several online documents, including the 10-K, 10-Q, S-1 IPO filings etc. 

4
Yahoo Finance is Also a Great Model Resource

I used to pay thousands of dollars per month/year for Bloomberg access. I will teach you how to get almost all of that information for free!

5
What Quarterly Earnings Call & Why Is It Important for Modeling Purposes?

Learn what a quarterly earnings call is and how it can help you understand investment ideas better. 

6
Financial Modeling Data Sources Quiz

Financial Modeling Part 3 of 4: Case Study: Building a Model for LinkedIn

1
Case Study Introduction and What You Will Learn in this Section

This section is an extremely in depth overview of how I analyze LinkedIn (ticker: LNKD), including creating financials, forecasting financials and several different valuation methodologies, including discounted cash flow (DCF), P/E, P/R, terminal value calculation, weighted average cost of capital calculation, total addressable market analysis and more. 

2
Qualitative Analysis on LinkedIn

How can I research what a company does? What are the best resources?

3
What is the Total Addressable Market for LinkedIn and Why is this Important?

How do I calculate the size of the total addressable market for LinkedIn's products, what does this mean and why is this important when analyzing a company or creating a financial model? 

4
LinkedIn Model Introduction

This lecture explains how to navigate and set up a professional financial model. 

5
LinkedIn Model Discussion in More Detail (Historical Data Only)

Please open the attached PDF of the LinkedIn earnings press release before viewing this lecture. Thanks

6
Forecasting the LinkedIn Model

Basics on how to forecast the income statement, cash flow statement and balance sheet for my LinkedIn model. 

Financial Modeling Part 4 of 4: Financial Model Exercise

1
Financial Modeling Exercises Introduction

An introduction to financial modeling (used so we can come up with target prices for the companies we analyze). 

2
Financial Modeling Exercise

Please find attached the financial modeling exercise. The instructions for the exercise are listed on the first tab in the attached Excel spreadsheet. When you have completed the exercise, please watch the next lecture for an explanation of the answers. Thanks

3
Modeling Exercise Answer Explanations

An in depth discussion of the answers to the financial modeling exercise. "Learn to read financial statements like a good book!"

Valuation Part 1 of 6: Introduction and Best Practices

1
Introduction to Valuation

Now that we know how to create and model financial statements, we can learn how to value companies based on the financial statements that we created. 

2
More Detail on Growth Versus Value and P/E + P/R + DCF Overview

It is crucial that we understand what kind of investors we are or work for as growth investors value companies in different ways than value investors do. 

3
25 Valuation and Modeling Best Practices

Please find attached the 25 Valuation and Modeling Best Practices PDF. Thanks

4
Exercise: Valuation Best Practices Quiz

Valuation Part 2 of 6: Discounted Cash Flow (DCF)

1
What is DCF, Why is it Important and How Does it Work?

What does discounted cash flow (DCF) mean and why is it important to helping us value companies? How can we create a DCF? 

2
Calculating the Terminal Value

What is the terminal value and why is it crucial for us in order to value a company based on discounted cash flow analysis?

3
Calculating the Weighted Average Cost of Capital (WACC)

How can we calculate what rate to discount our future cash flows at? We will discuss the cost of equity and the cost of debt as part of the W.A.C.C. (weighted average cost of capital) for our target price analysis. 

4
DCF Example

An example of DCF valuation applied to my LinkedIn model. 

5
DCF Exercise


Please find attached the DCF exercise. The instructions for the exercise are listed on the first tab in the attached Excel spreadsheet. When you have completed the exercise, please watch the next lecture for an explanation of the answers. Thanks

6
DCF Exercise Answer Explanations Part 1 of 2

An extremely in depth discussion of the DCF valuation exercise from the previous lesson (part 1 of 2). 

7
DCF Exercise Answer Explanations Part 2 of 2

An extremely in depth discussion of the DCF valuation exercise from the previous lesson (part 2 of 2). 

Valuation Part 3 of 6: Price to Revenue

1
What is Price / Revenue and Why Do We Need to Base a Target Price on this Ratio?

This section discusses how we can value companies that don't yet have earnings. 

2
Price to Revenue Example

This lecture shows how we can calculate a target price for LinkedIn using a price to revenue target price methodology. 

3
Price to Revenue Valuation Exercise

Please find attached the Price / Revenue exercise. The instructions for the exercise are listed on the first tab in the attached Excel spreadsheet. When you have completed the exercise, please watch the next lecture for an explanation of the answers. Thanks

4
Price to Revenue Exercise Answer Explanations

A discussion of the answers to the price to revenue valuation exercise. 

Valuation Part 4 of 6: Price to Earnings & Additional Valuation Methodologies

1
Introduction to P/E and Why it Matters

Why do almost all investors love valuing companies using a price to earnings valuation methodology (growth and value investors)? How can we value companies with different earnings growth rates using price to earnings? 

2
Price to Earnings Example

How to pick a target price for LinkedIn using price to earnings. 

3
Price to Earnings Valuation Exercise

Please find attached the Price / Earnings valuation exercise. The instructions for the exercise are listed on the first tab in the attached Excel spreadsheet. When you have completed the exercise, please watch the next lecture for an explanation of the answers. Thanks

4
Price to Earnings Exercise Answer Explanations

An in depth explanation of the answers to the price to earnings valuation exercise. 

5
Additional Valuation Methodologies

Additional valuation methodologies, including EV/EBITDA, EV/Sales, price to book, cash flow, etc. 

Valuation Part 5 of 6: Final Target Price Calculation & "TAM Sanity Check"

1
Our Final Price Target Calculation

Taking a blended average target price based on several valuation methodologies in order to minimize the valuation margin of error is a smart strategy.

Valuation Part 6 of 6: Valuation Part 6 of 6 Comparing TAM to the Target Price

1
Using the TAM to Verify How Realistic Our Target Price Is

Comparing the total addressable market (T.A.M.) that we calculated for LinkedIn with our model forecast results. 

Assessing Financials with Formulas

1
Introduction to Formulas

Analyzing companies using different formula methodologies from these 4 categories: Profitability Formulas, Time Formulas, Comp. (Competition) Formulas and Debt Formulas. 

2
Amazing Formulas to Assess Financials

A discussion of the following formulas: 

Analyze financial statements using profitability ratios: Gross Margin (Cost of Goods Sold / Revenue), Operating Margin (EBITDA/ Revenue), Net Profit Margin (Net Income / Revenue), Return on Assets (Net Income / Assets) and Return on Equity (Net Income / Equity). Gross Margin (Cost of Goods Sold / Revenue), Operating Margin (EBITDA/ Revenue), Net Profit Margin (Net Income / Revenue), Return on Assets (Net Income / Assets) and Return on Equity (Net Income / Equity).

Analyze financial statements using debt and inventory formulas: Debt to Assets (Total Liabilities/ Total Assets), Debt to Equity (Total Liabilities/ Total Equity), Interest Coverage Ratio (EBITDA / Interest) and Inventory Days on Hand (Inventory / Cost of Good Sold) * 365.

Analyze and compare companies using the following formulas: Price / Earnings, PEG (P/E / Growth), Price / Revenue, EV/EBITDA, EV/Sales, Price/Free Cash Flow and Price / Book.


    3
    Exercise on Using Formulas

    An exercise using the following formulas to analyze financial statements: 

    Analyze financial statements using profitability ratios: Gross Margin (Cost of Goods Sold / Revenue), Operating Margin (EBITDA/ Revenue), Net Profit Margin (Net Income / Revenue), Return on Assets (Net Income / Assets) and Return on Equity (Net Income / Equity). Gross Margin (Cost of Goods Sold / Revenue), Operating Margin (EBITDA/ Revenue), Net Profit Margin (Net Income / Revenue), Return on Assets (Net Income / Assets) and Return on Equity (Net Income / Equity).

    Analyze financial statements using debt and inventory formulas: Debt to Assets (Total Liabilities/ Total Assets), Debt to Equity (Total Liabilities/ Total Equity), Interest Coverage Ratio (EBITDA / Interest) and Inventory Days on Hand (Inventory / Cost of Good Sold) * 365.

    Analyze and compare companies using the following formulas: Price / Earnings, PEG (P/E / Growth), Price / Revenue, EV/EBITDA, EV/Sales, Price/Free Cash Flow and Price / Book.

      4
      Discussion of the Answers to the Formulas Exercise

      A discussion of the answers to the formula questions from the previous exercise: 

      Analyze financial statements using profitability ratios: Gross Margin (Cost of Goods Sold / Revenue), Operating Margin (EBITDA/ Revenue), Net Profit Margin (Net Income / Revenue), Return on Assets (Net Income / Assets) and Return on Equity (Net Income / Equity). Gross Margin (Cost of Goods Sold / Revenue), Operating Margin (EBITDA/ Revenue), Net Profit Margin (Net Income / Revenue), Return on Assets (Net Income / Assets) and Return on Equity (Net Income / Equity).

      Analyze financial statements using debt and inventory formulas: Debt to Assets (Total Liabilities/ Total Assets), Debt to Equity (Total Liabilities/ Total Equity), Interest Coverage Ratio (EBITDA / Interest) and Inventory Days on Hand (Inventory / Cost of Good Sold) * 365.

      Analyze and compare companies using the following formulas: Price / Earnings, PEG (P/E / Growth), Price / Revenue, EV/EBITDA, EV/Sales, Price/Free Cash Flow and Price / Book.

      Course Conclusion

      1
      Conclusion

      Congratulations! You now have a good understanding of Accounting, Finance, Modeling, Valuation and Assessing Financials with Formulas! Thanks

      Bonus Materials

      1
      Bonus Lecture
      You can view and review the lecture materials indefinitely, like an on-demand channel.
      Definitely! If you have an internet connection, courses on Udemy are available on any device at any time. If you don't have an internet connection, some instructors also let their students download course lectures. That's up to the instructor though, so make sure you get on their good side!
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