Corporate Finance #4 Leverage & Break-Even Analysis
What you'll learn
- Define the concept of leverage and its significance in corporate finance decision-making.
- Analyze the different types of leverage, including operating leverage, financial leverage, and combined leverage, and their impact on business growth.
- Apply leverage ratios and formulas to assess the optimal level of leverage for a business.
- Evaluate the benefits and risks associated with leverage and make informed decisions based on leverage analysis.
- Understand the concept of break-even analysis and its importance in decision-making.
- Differentiate between fixed costs and variable costs and classify costs accordingly for break-even analysis.
- Calculate the break-even point and cash break-even point using relevant formulas and techniques.
- Analyze and interpret the results of break-even analysis to determine the financial viability of a business.
- Apply nonlinear break-even analysis methods to assess the impact of changing variables on break-even points.
- Utilize Excel worksheets and financial modeling techniques to conduct leverage and break-even analysis efficiently.
- Basic understanding of financial statements, including familiarity with balance sheets, income statements, and cash flow statements.
- Access to a computer or laptop with internet connectivity to access course materials and practice exercises.
- Eagerness to learn and apply leverage and break-even analysis concepts in a corporate finance context.
- Openness to hands-on practice and willingness to work with Microsoft Excel or similar software to solve practice problems.
- Curiosity and a desire to enhance financial decision-making skills and optimize business growth and profitability.
In this comprehensive course, we will delve into the essential concepts of leverage and break-even analysis from a corporate finance perspective, equipping you with the skills to make informed decisions that drive growth and maximize profitability.
Leverage plays a pivotal role in corporate finance decision-making, and finding the optimal level of leverage is a subject of ongoing debate. By understanding and applying leverage effectively, businesses can accelerate their growth and financial success. Throughout the course, we will explore the concepts of operating leverage, financial leverage, and combined leverage, providing practical practice problems that reinforce these critical concepts.
Break-even analysis is a fundamental tool in decision-making, enabling us to assess the point at which costs and revenues are in equilibrium. You will gain a deep understanding of break-even analysis, including the categorization of costs as fixed costs and variable costs based on their behavior. This approach, though different from the traditional functional categorization, allows us to assess cost changes in relation to production levels and make informed projections for the future.
We will guide you through the calculation of the break-even point and the cash break-even point, offering insights into nonlinear break-even analysis. You will develop proficiency in utilizing these tools to evaluate financial performance, assess risk, and make strategic decisions.
Throughout the course, you will encounter numerous practice problems, many of which include downloadable Excel worksheets. Each Excel worksheet will consist of at least two tabs—one with the answer key and the other preformatted to facilitate step-by-step practice along with instructional videos. This hands-on approach will enhance your learning experience and provide practical application of leverage and break-even analysis concepts.
Join us on this dynamic journey to master leverage and break-even analysis in corporate finance. Enroll today to develop the skills to optimize decision-making, leverage resources effectively, and evaluate financial breakeven points for growth and profitability. By the end of the course, you will be equipped to make informed decisions that drive financial success in a competitive business environment.
Who this course is for:
- Finance professionals and analysts seeking to deepen their knowledge and skills in leverage and break-even analysis for effective financial decision-making.
- Accounting professionals who want to expand their understanding of leverage and break-even analysis concepts and their applications in corporate finance.
- Business owners and entrepreneurs aiming to optimize their financial decision-making and enhance business growth and profitability.
- Financial managers and executives involved in corporate finance, budgeting, and strategic planning, looking to strengthen their expertise in leverage and break-even analysis.
- Students pursuing degrees or certifications in finance, accounting, or related fields, who want to gain practical skills in leverage and break-even analysis.
- Investment professionals interested in evaluating investment opportunities and assessing risk through leverage and break-even analysis.
- Individuals transitioning into finance or accounting roles who want to develop a solid foundation in leverage and break-even analysis techniques.
- Anyone with an interest in corporate finance, financial decision-making, and maximizing profitability through effective analysis and decision-making.
Through working with students from many different schools, Mr. Steele has learned best practices for helping people understand accounting fast. Learning new skills and finding the best way to share knowledge with people who can benefit from it is a passion of his.
Mr. Steele has experience working as a practicing Certified Public Accountant (CPA), an accounting and business instructor, and curriculum developer. He has enjoyed putting together quality tools to improve learning and has been teaching, making instructional resources, and building curriculum since 2009. He has been a practicing CPA since 2005. Mr. Steele is a practicing CPA, has a Certified Post-Secondary Instructor (CPI) credential, a Master of Science in taxation from Golden Gate University, a Bachelor’s Degree in Business Economics with an emphasis in accounting from The University of California Santa Barbara, and a Global Management Accounting Designation (CGMA) from The American Institute of CPA (AICPA).
Mr. Steele has also authored five books that can be found on Amazon or in audiobook format on Audible. He has developed bestselling courses in accounting topics including financial accounting and QuickBooks accounting software.
In addition to working as an accountant, teaching, and developing courses Mr. Steele has helped create an accounting website at accountinginstruction, a YouTube channel called Accounting Instruction, Help, and How Too, and has developed supplemental resources including a Facebook Page, Twitter Page, and Podcasts that can be found on I-tunes, Stitcher, or Soundcloud. Mr. Steele's teaching philosophy is to make content applicable, understandable, and accessible.
Adult learners are looking for application when they learn new skills. In other words, learners want to be able to apply skills in the real world to help their lives. Mr. Steele’s formal accounting education, practical work experience, and substantial teaching experience allow him to create a curriculum that combines traditional accounting education with practical knowledge and application. He accomplishes the goals of making accounting useful and applicable by combining theory with real-world software like Excel and QuickBooks.
Many courses teach QuickBooks data entry or Excel functions but are not providing the real value learners want. Real value is a result of learning technical skills like applications, in conjunction with specific goals, like accounting goals, including being able to interpret the performance of a business.
Mr. Steele makes knowledge understandable by breaking down complex concepts into smaller units with specific objectives and using step by step learning processes to understand each unit. Many accounting textbooks cram way too much information into a course, making it impossible to understand any unit fully. By breaking the content down into digestible chunks, we can move forward much faster.
Mr. Steele also makes use of color association in both presentations and Excel worksheets, a learning tool often overlooked in the accounting field, but one that can vastly improve the speed and comprehension of learning accounting concepts.
The material is also made understandable through the application of concepts learned. Courses will typically demonstrate the accounting concepts and then provide an Excel worksheet or practice problems to work through the concepts covered. The practice problems will be accompanied by an instructional video to work through the problem in step by step format. Excel worksheets will be preformatted, usually including an answer tab that shows the completed problem, and a practice tab where learners can complete the problem along with a step by step presentation video.
Mr. Steele makes learning accounting accessible by making use of technology and partnering with teaching platforms that have a vision of spreading knowledge like Udemy.