Principles of Finance

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What is this course is about?

Investing
Welcome to Principles of Finance!

Finances and understanding how money works and flows around the world is a critical tool for life. Unfortunately, it isn't taught in school, or even university for most people. This course will provide a rigorous coverage of the basics of the world of finance and give you the tools and know how to navigate it.

This course is taught by John Bowden, an industry veteran and top rated adjunct professor of finance at Baruch College.

You'll learn a diverse range of topics:
• How to set up a business
• Time value of money
• Different kinds of financial markets
• What are stocks, bonds and other kinds of assets
• Financial history & credit bubbles
• Types of corporations and business

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Syllabus

Finance touches on all our lives in so many ways. And yet, the education system leaves most financially illiterate.
This course will provide a rigorous coverage of the basics of the world of finance and give you the tools and know how to navigate it. All in an approachable and interesting way!

Taught by John Bowden, an industry veteran and top rated adjunct professor of finance at Baruch College, you'll be walked through all the basic elements of the financial world.

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What decisions do finance managers make? If you want to start a business where do you raise money? What are the implications of the money you'll raise? Start your adventure and open a new business - Tic Tac Toe Pizza to start learning.

In this lesson you'll learn:
• How to raise money
• How to spend it!
• What the implications for each of those decisions will be

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You have an idea, you have capita, you're all ready to start your business! But, what kind of business are you starting? A corporation? A partnership or just a small 'mom and pop' shop? What about aligning your CEOs incentives so that they match your own? All of these are important financial questions you'll learn about this lesson.

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Who buys stocks? Who sells bonds? Where does the money in the financial markets come from and why? Why do these markets exist? What kinds of financial markets exist?

In this lesson you'll learn:
• Amazon's financial journey
• Why financial markets exist
• 5 kinds of financial markets

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What's the difference between an investment bank and a commercial bank? What role do they play in financial markets? How do they earn money? This lesson will demystify banks. You'll learn:
• The difference kinds of banks
• The business model for investment and commercial banks
• The role banks play in the financial markets

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How much of the 2007-2008 financial crisis did you really understand? Are you ready to get the full scoop, first hand?

Listen as Professor John Bowden recalls his personal experience watching these dramatic events unfold! Here is his firsthand story as well as his own analysis of the factors that contributed to one of the most shocking financial disasters of our times.

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Modern accounting has its roots in the Italian Renaissance. Without modern accounting we wouldn't be able to know what we owe vs. what we own. Understanding the system behind accounting and the three most important financial statements is key to understanding finance. In this lesson you'll learn:
• How double entry bookkeeping changed accounting forever
• The balance sheet's structure and line items
• Why accounting is important


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The income and cash flow statements are two of the most important financial statements a company reports. Together with the balance sheet they let you properly evaluate a company's performance and health. In this lesson you'll learn:
• How to read and analyze the income and cash flow statements
• What they tell you about a company's performance

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How can you measure how well a company is doing? Is it being well managed? Where can it improve? The answer to all these question lies in a deeper understanding of what the balance sheet, cash flow and income statement can tell us and learning to compare the right metrics. In this lesson you'll learn:
• What financial ratios are and why they're important
• Management ratios: Price to book
• Investment ratios: ROA, ROC and ROE

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How can you measure how efficient your business or your competitors is? How can you know where you can improve? What about measuring the right amount of debt?
Luckily, there are financial ratios you can use to answer all of these questions. In this lesson you'll learn how to measure a businesses efficiency and financial position through four ratios:
• Asset turnover ratio
• Inventory turnover ratio
• Debt to equity
• Interest coverage ratio

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A key concept in finance is that time plays a role in valuing money. Money decreases in value over time. Bow how can you calculate by how much and how that plays a role in your business or investing? In this lesson you'll learn:
Why time plays a role in the value of money
The difference between simple and compound interest
How to calculate future and present value and a discounted cash flow model

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Fixed income, or bonds as they're called, are one of the largest financial markets. They're one of the most basic financial assets out there and they've been around for a long time. Bonds are simply IOU's, but with a bit more that you need to know about them. In this lesson you'll learn:
• Bond basics: maturity, coupons, covenants.
• Valuing a bond using a DCF
• Why bond prices fluctuate based on interest rates and credit ratings

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Stocks for sale! Buy low, sell high! P/E ratios and valuing companies! There's lots to learn when it comes to stocks! But where to start? This lesson will cover the basics of stocks so that you can get off on the right foot. You'll learn:
• What stocks are
• How to value a stock using a P/E ratio and a DCF
• What Warren Buffett recommends for individual investors

Attributions
Warren buffett's interview on CNBC: https://www.cnbc.com/video/2016/03/11/how-warren-buffett-makes-long-term-investments.html

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How do behavioral factors affect investing? What biases are we subject to and do they affect trading? In this lesson Adj. Professor John Bowden is interviewed by Yehoshua, co-founder of Alpe to discuss these topics. You'll learn:
• What behavioral finance is
• Biases that affect traders, both retail and professional
• Ways to deal with the biases we all have

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How can you manage how risky your investments are? How can you make sure you're compensated for the risk you're taking? What is risk in any case and how can you measure it? In our last lesson of the course you'll learn:
• What risk is and how to measure it
• How to mitigate risk
• What specific stock vs market risk is

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Courses Authors

Adjunct Prof. John Bowden

Adjunct Professor of Finance at Baruch College

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