v CoNteNts 01 Learning about finance 1 Introduction 1 Who will find this book useful? 1 What is `difficult' about learning finance? 2 Finance and mathematics 3 Open and closed questions ­ concepts and calculations 4 Finance and reality 5 Problems with language 6 The approach this book will take 6 The numbers 7 Coping with formulae and calculations 7 The rest of the book 10 02 types of business 13 Trading as a sole trader 13 Trading as a partnership 16 Trading as a company (corporation) 18 Other possibilities 20 03 How business is financed 23 Equity 23 Debt 27 The Miller Modigliani Theory 31 The Theory of the Efficient Firm 31 04 Accounting basics (1): the balance sheet Financial accounting: the basics 35 Management accounts: the basics 36 Financial accounts 37 Balance sheet 39 Valuation 44 Auditing 45 35