Financial Analysis for Startups

About this course: In the previous two courses, you have learned how to value startups using the discounted cash flow method and multiple methods. However, you have not learned how to estimate cash flows or earnings of startups. In this course, you are going to learn the concepts and usage of financial ratios. Using financial ratios such as profitability, liquidity, leverage, efficiency, and growth, you can tell financial health of a startup. Profitability ratios measure how profitable a firm is by looking at ROS, ROA, and ROE. Liquidity ratios measure how quickly a firm turns assets into cash to pay-off short-term liability and they include Current Ratio, Quick Ratio, and Cash Ratio. Leverage ratios measure how much long-term debt a firm has relative to its assets or equity. Efficiency ratios measure how efficiently a firm utilizes its assets. It is like a physical exam for humans and you can tell the fiscal status of a startup using financial ratios. You can also develop pro forma financial statement using financial ratios. Using pro forma financial statement, you can tell future financial status of a startup as well as cash flows. In addition, using information from pro forma statement and valuation methods, you can do the valuation of a startup.

Who is this class for: The target audience of this Specialization includes venture capitals, angel investors, and entrepreneurs, Particularly, entrepreneurs are wondering the value of their startups and how much ownership they need to give up to raise additional capital. It is same for angel investors. They are wondering how much ownership they need to ask in return for their investment.  Venture capitals may know the value of startups better than entrepreneurs or angel investors but they need to communicate with startups how they value startups. This Specialization helps angel investors, entrepreneurs, and venture capitals understand and communicate the value of startups.

Created by:  Yonsei University

• Taught by:  Hyun Han Shin, Professor

  School of Business

Basic Info Course 3 of 5 in the Valuation and Financial Analysis For Startups Specialization Level Beginner Language English, Subtitles: Korean How To Pass Pass all graded assignments to complete the course. Coursework

Each course is like an interactive textbook, featuring pre-recorded videos, quizzes and projects.

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Yonsei University Yonsei University was established in 1885 and is the oldest private university in Korea. Yonsei’s main campus is situated minutes away from the economic, political, and cultural centers of Seoul’s metropolitan downtown. Yonsei has 3,500 eminent faculty members who are conducting cutting-edge research across all academic disciplines. There are 18 graduate schools, 22 colleges and 133 subsidiary institutions hosting a selective pool of students from around the world. Yonsei is proud of its history and reputation as a leading institution of higher education and research in Asia.

Syllabus


WEEK 1


Financial Ratio Analysis



Financial statements contains a huge amount of information. Thus, financial ratios are used broadly to condense them into a convenient form. In this module, you will learn several key financial ratios that are widely used in company valuation. You can also understand the limitations of financial ratio analysis.


6 videos, 6 readings, 2 practice quizzes expand

1. Video: Welcome Video
2. Video: 1.1 Liquidity Ratio
3. Reading: 1.1 Slide
4. Video: 1.2 Leverage Ratio
5. Reading: 1.2 Slide
6. Practice Quiz: Practice 1.1~1.2
7. Video: 1.3 Efficiency Ratio
8. Reading: 1.3 Slide
9. Video: 1.4 Profitability Ratio, Market Value Ratio
10. Reading: 1.4 Slide
11. Practice Quiz: Practice 1.3~1.4
12. Video: 1.5 Financial Ratio Practice
13. Reading: 1.5 Slide
14. Reading: Financial Ratio Summary
15. Discussion Prompt: Week 1

Graded: Week 1

WEEK 2


Long-term Financial Planning



In this week, you will learn how to make financial planning. In other words, you will examine what the firm can accomplish by developing a long-term financial plan. over, you are going to learn how much financing the firm will need to support the predicted sales growth, which called the percentage of sales approach.


3 videos, 3 readings, 3 practice quizzes expand

1. Video: 2.1 Simple Financial Planning Model
2. Reading: 2.1 Slide
3. Practice Quiz: Practice 2.1
4. Video: 2.2 The Percentage of Sales Approach
5. Reading: 2.2 Slide
6. Practice Quiz: Practice 2.2
7. Video: 2.3 Review
8. Reading: 2.3 Slide
9. Practice Quiz: Practice 2.3

Graded: Week 2

WEEK 3


Pro Forma Statements



In this week, you will construct pro-forma statements, financial ratios and free cash flow using Samsung Electronics historical financial statements. You will use real case for generating pro-forma statements and financial ratios. In addition, you will can estimate external financing needed using Yonsei Corporation case.


3 videos, 4 readings, 1 practice quiz expand

1. Video: 3.1 Pro Forma Statements - Pro Forma Statements
2. Reading: 3.1 Slide
3. Reading: Samsung Excel Template (3.1-3.2)
4. Video: 3.2 Pro Forma Statements - Free Cash Flow
5. Reading: 3.2 Slide
6. Video: 3.3 Pro Forma Statements - EFN and Growth rate Review
7. Reading: 3.3 Slide
8. Practice Quiz: Practice 3.1~3.3
9. Discussion Prompt: Week 3

Graded: Week 3

WEEK 4


Planning for Growth at Ysom Inc.



This week will have two parts. First part will be spent on a short wrap up video or materials. Second part will be peer reviews. You will see Ysom Inc. again. You will design pro forma financial statements (Balance sheet, Income statement, Cash flow statement) and calculate financial ratios, EFN.


2 videos, 3 readings expand

1. Video: 4.1 Review1 - Pro forma Income Statement
2. Reading: 4.1 Slide
3. Video: 4.2 Review2 - Pro forma Balance Sheet
4. Reading: 4.2 Slide
5. Reading: Ysom Inc. Excel Template

Graded: Case Analysis