Financial Health, Cash Flow, Valuation

This unit examines the financial condition of small businesses by teaching learners to analyze financial statements, measure liquidity, and manage cash flow while applying cost and margin analysis. Students will also learn methods for securing capital, valuing a business, planning for exit or insolvency, and preparing actionable P&L and reporting information to support decision making.

Learning Objectives

• Analyze balance sheets, income statements, and ratio indicators to identify liquidity, solvency, and profitability problems and recommend corrective actions.
• Apply costing techniques to compute cost of goods sold and per-unit product cost and calculate gross margin and contribution margins for product and service businesses.
• Evaluate cash flow statements and liquidity measurement tools, prepare and present a periodic P&L report, and design reporting cadence and internal controls to support cash management.
• Demonstrate methods to secure capital, perform basic business valuation and exit/insolvency planning, and conduct breakeven and sensitivity analyses to inform pricing and volume decisions.