D775 gives business generalists an overview of finance and its context. WGU's guidebook for the Bachelor of Science in Human Resource Management says students gain an understanding of the systems, structure, roles and impact of finance in business, the use of financial ratios, the application of time value of money, and capital budgeting. Its prerequisite is Introduction to Business Accounting.
The course is where numbers start to guide decisions about the future. Students who coped with accounting by following formulas can struggle here, because finance asks you to judge value across time and to explain why a project is or is not worth funding.
Course at a Glance
| Item | Details |
|---|---|
| University | Western Governors University |
| Code | D775 (confirm on your degree plan) |
| Program listed in | Bachelor of Science, Human Resource Management (term 7) |
| Size | 3 competency units |
| Prerequisite | Introduction to Business Accounting (D774) |
What D775 Covers
| Competency (WGU wording, summarized) | Core content |
|---|---|
| Describes capital budgeting | Evaluating long-term projects |
| Describes the systems, structure, roles and impact of finance in business | What a finance function does and how it fits |
| Describes the uses of financial ratios to manage a business | Liquidity, profitability, efficiency and leverage |
| Explains time value of money concepts in business | Present value, future value, discounting |
Key Concepts Explained
Time Value of Money
A dollar today is worth more than a dollar later because it can earn a return. Future value equals present value times (1 + r) to the power n. Present value reverses the calculation.
Example: $1,000 invested at 5 percent for 3 years grows to 1,000 x 1.05 x 1.05 x 1.05 = about $1,157.63. The present value of $1,157.63 received in 3 years at 5 percent is therefore $1,000.
Ratios
Ratios turn statements into comparisons. The current ratio (current assets divided by current liabilities) measures short-term liquidity. Net profit margin (net income divided by revenue) shows how much of each sales dollar becomes profit.
Example: Current assets $80,000 and current liabilities $50,000 give a current ratio of 1.6. Net income $12,000 on revenue $150,000 gives a margin of 8 percent. Say what each means, and compare with last year or an industry figure.
Capital Budgeting
Net present value (NPV) adds the present value of future cash inflows and subtracts the initial outlay. A positive NPV at the required return suggests the project adds value. Payback shows speed of recovery, not total value.
Example: A project costs $10,000 and returns $4,000 a year for 3 years at a 10 percent discount rate. Present value of inflows is 4,000 x 2.4869 = $9,947.60 (using an annuity factor), so NPV is about minus $52. The project is marginally unattractive.
Typical Assignments and How to Approach Them
| Assignment type | What it tests | How to approach it |
|---|---|---|
| Ratio analysis | Calculating and interpreting | Show the formula, the figure and a sentence of meaning |
| Time value problems | Correct use of PV and FV | Identify the unknown and the timeline first |
| Capital budgeting case | Decision-making | Calculate NPV, compare with payback and recommend |
Study Plan by Competency
- Time value: draw a timeline for every problem before calculating.
- Ratios: build a one-page table of formula, meaning and warning for each ratio.
- Capital budgeting: practice NPV with different discount rates.
- Finance function: summarize roles in a short paragraph.
A Ratio Comparison
Ratios become useful when you compare firms or years. Here is a short comparison to practice interpretation.
| Ratio | Year 1 | Year 2 | Reading |
|---|---|---|---|
| Current ratio | 1.8 | 1.3 | Liquidity weakened |
| Net profit margin | 6% | 8% | Profitability improved |
| Debt to equity | 0.5 | 0.9 | More reliance on borrowing |
A balanced reading says the firm earns more per dollar of sales but has taken on more debt and has less cushion for short-term bills. Recommend monitoring cash and the cost of borrowing.
Practice Questions to Try
Test yourself before moving on, then compare with your course materials.
- What is the present value of $2,000 received in 2 years at 8 percent a year?
- Current assets $60,000 and current liabilities $40,000. What is the current ratio and what does it suggest?
- Why might a company reject a project with a quick payback period?
- What does a negative NPV tell a manager?
For the first, the answer is 2,000 / 1.08 squared, about $1,714.68. For the second, 1.5, meaning current assets cover current liabilities one and a half times.
Where Students Get Stuck
- Timeline errors. Place cash flows at the right period.
- Wrong rate or period. Match the rate to the compounding period.
- Ratios without context. A number means little unless compared.
- Treating payback as value. It ignores cash flows after recovery.
Study Tips for D775
- Learn the financial calculator or spreadsheet functions you are allowed to use.
- Check results for reasonableness.
- Rework one example with a different rate to see the effect.
- Look back at D774 notes on statements.
How We Help with D775
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Frequently Asked Questions
Introduction to Business Accounting, per WGU's guidebook.
Describing capital budgeting, the finance function, the uses of ratios, and time value of money.
Check your course resources for tools permitted. A spreadsheet can reproduce the same calculations.
The project is expected to earn more than the required return, so it adds value at that rate.
Many students find time value of money the biggest hurdle; timelines and repeated practice help.
No. We tutor, prepare worked solutions and give feedback. You submit your own work.