Understanding Finance: Expert Solutions to Everyday Challenges

Understanding Finance: Expert Solutions to Everyday Challenges

by Harvard Business School Press
     
 

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ISBN-10: 1422118835

ISBN-13: 2901422118831

Pub. Date: 09/24/2007

Publisher: Harvard Business Review Press

Assessing the financial health of a business is an important part of any managerial position. This guide explains the essential concepts of finance in a way that nonfinancial managers can quickly grasp. Learn to: Understand basic financial statements, Develop and track a budget, Assess investment opportunities.

Overview

Assessing the financial health of a business is an important part of any managerial position. This guide explains the essential concepts of finance in a way that nonfinancial managers can quickly grasp. Learn to: Understand basic financial statements, Develop and track a budget, Assess investment opportunities.

Product Details

ISBN-13:
2901422118831
Publisher:
Harvard Business Review Press
Publication date:
09/24/2007
Series:
Pocket Mentor
Edition description:
New Edition
Pages:
112

Table of Contents


Mentors' Message: Why Understand Finance?     ix
Understanding Finance: The Basics     1
Understanding Financial Statements     3
Accounting methods     5
The income statement     6
The balance sheet     9
The cash flow statement     12
Using Financial Statements to Measure Financial Health     15
Profitability ratios     17
Operating ratios     18
Liquidity ratios     19
Leverage ratios     20
Other ways to measure financial health     21
The Budget Process     25
Understanding top-down and bottom-up budgeting     27
Preparing a budget     29
Articulating your assumptions     31
Quantifying your assumptions     34
What Is Cost/Benefit Analysis?     39
Steps of cost/benefit analysis     41
Net return and payback period     43
Net present value and internal rate of return     45
Breakeven analysis     49
Sensitivity analysis     51
Estimating unquantifiable benefits and costs     53
Tracking Performance     55
Tracking the performance of an investment     56
Tracking your budget     58
Tips and Tools     61
Tools for Understanding Finance     63
Test Yourself     67
Answers to test questions     70
Key Terms     73
To Learn More     89
Sources for Understanding Finance     93
Notes     95

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