Finance
Financial analysis, cash flows, investment and financial planning
Sensitivity analysis: if one assumption in the annual budget turns out wrong, which one cuts profit the most — price, volume or raw materials?
A bakery's budget plans for a profit of 700 million soum. If the price comes out 10 percent lower, profit falls by 71 percent; if raw materials become 10 percent more expensive, it falls by 31 percent. How to change each assumption in turn to find the most dangerous one, how to calculate each indicator's "safety margin" and what happens when two things get worse at the same time.
What are savings and how are they built up?
The ninth Basics lesson: if a schoolgirl who dreams of a bicycle puts money aside every week, when will she reach her goal; and how does a family build a reserve for an unexpected day. With a table of weeks and months.
Debt: lending and borrowing
The eighth Basics lesson: the credit notebook of a neighbourhood shop, how the shopkeeper himself owes someone too, and the charge paid on top of a loan. We look at both sides of a debt in a simple table.
The cheap mixer lasts 3 years, the expensive one 6: which costs less per year? The equivalent annual cost method
One dough mixer costs 90 million soums and lasts 3 years, the other 150 million and 6 years. The present value of costs is much lower for the first, but this comparison is wrong: the lifespans differ. Equivalent annual cost brings both machines to a "price per year", and the answer comes out the other way round. The calculation, a check and the limits of the method.
What is money and why do we need it?
The first Basics lesson: how hard it would be to get bread without money, what three jobs money does, and how pocket money can turn into a big purchase. For a reader who knows nothing yet.
The three functions of money and the first terms of finance: inflation, interest and liquidity shown on a family's savings
The second lesson of the course: which three functions money performs, seven key terms of finance (money, currency, inflation, interest rate, time value of money, liquidity, cash flow), and three ways to keep a year's savings in hypothetical figures.
What is finance: from the family purse to the state treasury, the root of the word and a first step for beginners
The first lesson of the course: what finance is in plain words, how it differs from accounting, the roots of the Uzbek word «moliya» and the English word «finance», and a simple example of planning money in a family budget.
From the soum-coupon to the soum: how was Uzbekistan's national currency introduced?
In autumn 1993, wallets held both the old Soviet rouble and the new soum-coupon at the same time. Nearly eight months later, on 1 July 1994, the soum entered circulation. A step-by-step history of the national currency, the official dates, and an example of restating a shop's balance sheet in the new money.
A 13-week cash forecast: how can you see in advance when the money in the bank account will run out?
For three months more money comes into a furniture workshop than goes out. Even so, in week 4 the bank account goes into the minus, and in week 6 the gap reaches 135 million soum. A weekly cash forecast shows this problem in advance, and four simple decisions close the gap without changing the total.
Leasing or a bank loan: which way of acquiring equipment works out cheaper?
Total payments came to 408 million soum under the loan and 425 million soum under the lease. So is the loan cheaper? Not always: once the time value of money is taken into account, the answer comes to depend on how valuable the company's spare cash is. A full calculation on the example of a sewing workshop, with the journal entries for both routes.
Financial ratios reference: solvency, liquidity groups (A1–P4), stability and profitability
Solvency, balance sheet liquidity (groups A1–A4 and P1–P4), financial stability and profitability ratios in one reference: for each, the formula in words and by balance sheet line codes from Order No. 181. Everything is calculated on the figures of the hypothetical «Bo'stonliq Suv» LLC, with the links between the ratios.
What is a share, and how does an ordinary share differ from a preference share?
What a shareholder actually owns, why face value differs from market price, and where ordinary and preference shares part ways. Using «Zarafshon Keramika» JSC as an example: on which balance sheet lines (410, 420, 440) and accounts (8310, 8320, 8410, 8610) shares appear.
What is a bond: coupon, face value, maturity and how it differs from a share
A bond is a debt security: what face value, coupon, maturity, discount and premium mean, and why the price moves opposite to interest rates. A calculation using a «Chorvoq Energiya» JSC bond, a comparison table with shares and the tax on bond interest (Tax Code, Articles 41, 304, 344, 378, 381, 483).
Stock and bond markets: worldwide and in Uzbekistan
What the primary and secondary markets, a stock exchange and stock indices are; how the London and New York exchanges began, how the Dow Jones and S&P 500 indices are calculated (with our own example). In Uzbekistan: the Republican Stock Exchange «Toshkent», the capital market regulator and sovereign bonds placed on the international market.
There is a profit, yet cash has halved: analysing one company's balance sheet in eight tables (a financial analysis case study)
The hypothetical «Bo'stonliq Suv» LLC closed the year with a net profit of 204 000 thousand soum, but the cash in its bank account halved. Asset and liability structure, condition of fixed assets, working capital, liquidity, financial stability, turnover and profitability: for each indicator, the formula, the calculation, what it means and the takeaway for the manager.
Prices on a tape: what did the stock ticker give investors, and how did prices move onto the screen?
Today a share price updates on your phone within seconds. In the 1860s, to find out a price, people sent a runner boy to the exchange. This is about how the "ticker", which printed prices onto a telegraph tape, changed that picture, and how its successor became the electronic quotation system.
How many days does it take working capital to turn back into cash? Calculating the turnover ratio and the turnover period
Using a furniture workshop's annual figures, we calculate the turnover of working capital, inventories, receivables and payables in days and show how much cash is released if the operating cycle shortens by 15 days.
The gold standard: how was paper money tied to gold for 150 years?
There was a time when you could take a banknote to the bank and ask for gold in exchange. This arrangement was firmly established in Britain in 1821, spread around the world at the end of the 19th century, was eroded during the two world wars and the Great Depression, and came to a complete end in 1971.
Markup and margin: if you add a 25 percent markup, why does your profit come out at 20 percent of the price?
Markup is calculated on cost, while margin is calculated on the selling price. Not knowing the difference can push a shop into a loss when it announces a discount. Formulas, a table and the entries in account 2980.
If a supplier offers a discount for early payment, does it pay to pay even if you have to borrow?
"Pay within 10 days and get a 2% discount" looks like a small number. But on an annual basis it can turn out to be more expensive than many bank loans. We calculate it using a sewing factory as an example.
Al-Khwarizmi's "al-jabr" book: inheritance, trade and land-measurement calculations
"Algebra" brings to mind the x's and y's of school. But the author of the book that gave the subject its name said himself that he wrote it for people's everyday practical calculations. We look at the book's structure and at the operations of "al-jabr" and "al-muqabala" using a market example.
Financial history: how did digital payments and cryptocurrency come about?
Money moved from coins to paper and from paper to an entry in an account. And in 2008 the idea of digital money working without bank intermediation appeared. Today's stage in key points.
Financial history: what was the Bretton Woods system (1944–1971)?
Before the Second World War had ended, representatives of more than 40 countries gathered in a hotel to rebuild the world's monetary system. The birth and end of the Bretton Woods system in key points.
Financial history: how did VOC shares and the Amsterdam exchange come about?
If one ship sinks, one merchant is ruined. What if a thousand people share the risk? About the shares of the Dutch East India Company of 1602 and the first stock market.
Financial history: how did paper money appear in China?
Merchants tired of carrying heavy iron coins switched to paper. The history of the jiaozi and the first lessons in inflation it left behind, in key points.
Financial history: from barter to coins, what did the Lydian coin change?
What if in every deal the metal had to be weighed and checked? The stamped coin cut this work down to a moment. About the first coins and the main functions of money.
How is net working capital calculated and what does it show?
There is profit on the balance sheet, yet there is no money to pay the supplier. The reason often lies in net working capital. We calculate it from a furniture company's balance sheet.
Profit but no cash: why does this happen?
The report shows a 60 million profit, yet there is almost nothing in the bank. We unpack the gap between profit and cash flow step by step using the indirect method from NAS No. 9.