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.
Taught by: Hyun Han Shin, Professor
School of Business
| Basic Info |
Course 3 of 5 in the
Valuation and Financial Analysis For Startups Specialization.
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| Level | Beginner |
| Language | English, Subtitles: Korean |
| How To Pass | Pass all graded assignments to complete the course. |
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| Audit | Purchase Course | |
|---|---|---|
| Access to course materials | Available | Available |
| Access to graded materials | Not available | Available |
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| Earn a shareable Course Certificate | Not available | Available |
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