Financial Intelligence for Entrepreneurs: What You Really Need to Know About the Numbers

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Using the groundbreaking formula they introduced in their book Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean, Karen Berman and Joe Knight present the essentials of finance specifically for entrepreneurial managers.

Drawing on their work training tens of thousands of people at leading organizations worldwide, the authors provide a deep understanding of the basics of financial management and measurement, along with hands-on activities to practice what you are reading. You'll discover:

Why the assumptions behind financial data matter
- What income statements, balance sheets, and cash flow statements really reveal
- How to use ratios to assess your venture's financial health
- How to calculate return on your investments in your enterprise
- Ways to use financial information to do your own job better
- How to instill financial intelligence throughout your team

Authoritative and accessible, Financial Intelligence for Entrepreneurs empowers you to "talk numbers" confidently with colleagues, partners, and employees— and fully understand how to use financial data to make better decisions for your business.

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Editorial Reviews

From the Publisher
“the best, clearest guides to the numbers that I know of.” – Inc. Magazine
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Product Details

  • ISBN-13: 9781422119150
  • Publisher: Harvard Business Review Press
  • Publication date: 10/7/2008
  • Series: Financial Intelligence
  • Pages: 304
  • Sales rank: 201,695
  • Product dimensions: 9.14 (w) x 11.14 (h) x 0.84 (d)

Meet the Author

Karen Berman and Joe Knight founded the Business Literacy Institute. They train managers at some of America's biggest and best-known companies. John Case has written or collaborated on several successful books. He has also written for Inc., Harvard Business Review, and other business publications.

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Table of Contents

Preface: What This Book Is About xi Part 1 The Art of Finance (and Why It Matters)
1 What Is Financial Intelligence? 3
2 A Primer on the Art of Finance 11 Part 1 Toolbox: Financing your business; Building a financial staff 19 Part 2 The (Many) Peculiarities of the Income Statement
3 Profit Is an Estimate 25
4 Cracking the Code of the Income Statement 30
5 Revenue: The Issue Is Recognition 38
6 Costs and Expenses: No Hard-and-Fast Rules 43
7 The Many Forms of Profit 54 Part 2 Toolbox: Understanding variance; Calculating percent of and percent change 60 Part 3 The Balance Sheet Reveals the Most
8 Understanding Balance Sheet Basics 65
9 Assets: More Estimates and Assumptions (Except for Cash) 71
10 On the Other Side: Liabilities and Equity 81
11 Why the Balance Sheet Balances 86
12 The Income Statement Affects the Balance Sheet 89 Part 3 Toolbox: Employees as assets; Expense vs. capital expenditure 94 Part 4 Cash is King
13 Cash Is a Reality Check 99
14 Profit [not equal] Cash (and You Need Both) 103
15 The Language of Cash Flow 110
16 How Cash Connects with Everything Else 114
17 Why Cash Matters 122 Part 4 Toolbox: Cash accounting; Free cash flow 125 Part 5 Ratios: Learning what the Numbers are Really Telling You
18 The Power of Ratios 129
19 Profitability Ratios: The Higher the Better (Mostly) 135
20 Leverage Ratios: The Balancing Act 141
21 Liquidity Ratios: Can We Pay Our Bills? 145
22 Efficiency Ratios: Making the Most of Your Assets 148 Part 5 Toolbox: Which ratios are most important?; The power of percent of sales; Sustainable growth rate 154 Part 6 How toCalculate (and Really Understand) Return on Investment
23 The Building Blocks of ROI 161
24 Figuring ROI: The Nitty-Gritty 168 Part 6 Toolbox: A step-by-step guide to analyzing capital expenditures 178 Part 7 Applied Financial Intelligence: Working Capital Management
25 The Magic of Managing the Balance Sheet 183
26 Your Balance Sheet Levers 186
27 Homing In on Cash Conversion 191 Part 7 Toolbox: Working with your banker; Accounts receivable aging 195 Part 8 Creating a Financially Intelligent Company
28 Financial Literacy, Transparency, and Your Business's Performance 199
29 Financial Literacy Strategies 205
30 Putting Financial Intelligence to Work: Growing Your Business 211 Part 8 Toolbox: Open-book management; Understanding Sarbanes-Oxley 218 Appendix A Sample Financials 221 Appendix B Exercises to Build Your Financial Intelligence-Income Statement; Balance Sheet; Cash Flow Statement; Ratios 225 Appendix C Under Armour and eBay Financial Statements 255 Notes 263 Acknowledgments 265 Index 269 About the Authors 285
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