Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean
  • Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean
  • Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean

Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean

3.9 13
by Karen Berman, Joe Knight, John Case
     
 

Companies expect managers to use financial data to allocate resources and run their departments. But many managers can't read a balance sheet, wouldn't recognize a liquidity ratio, and don't know how to calculate return on investment. Worse, they don't have any idea where the numbers come from or how reliable they really are. In Financial Intelligence, Karen Berman

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Overview

Companies expect managers to use financial data to allocate resources and run their departments. But many managers can't read a balance sheet, wouldn't recognize a liquidity ratio, and don't know how to calculate return on investment. Worse, they don't have any idea where the numbers come from or how reliable they really are. In Financial Intelligence, Karen Berman and Joe Knight teach the basics of finance--but with a twist. Financial reporting, they argue, is as much art as science. Because nobody can quantify everything, accountants always rely on estimates, assumptions, and judgment calls. Savvy managers need to know how those sources of possible bias can affect the financials and that sometimes the numbers can be challenged. While providing the foundation for a deep understanding of the financial side of business, the book also arms managers with practical strategies for improving their companies' performance--strategies, such as "managing the balance sheet," that are well understood by financial professionals but rarely shared with their nonfinancial colleagues. Accessible, jargon-free, and filled with entertaining stories of real companies, Financial Intelligence gives nonfinancial managers the financial knowledge and confidence for their everyday work. Karen Berman and Joe Knight are the owners of the Los Angeles-based Business Literacy Institute and have trained tens of thousands of managers at many leading organizations. Co-author John Case has written several popular books on management.

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Product Details

ISBN-13:
9781591397649
Publisher:
Harvard Business Review Press
Publication date:
01/12/2006
Pages:
257
Product dimensions:
6.46(w) x 9.32(h) x 1.00(d)

Table of Contents

1You can't always trust the numbers3
2Spotting assumptions, estimates, and biases10
3Why increase your financial intelligence?18
4Profit is an estimate33
5Cracking the code of the income statement38
6Revenue : the issue is recognition46
7Costs and expenses : no hard-and-fast-rules52
8The many forms of profit64
9Understanding balance sheet basics75
10Assets : more estimates and assumptions (except for cash)82
11On the other side : liabilities and equity93
12Why the balance sheet balances99
13The income statement affects the balance sheet102
14Cash is a reality check113
15Profit [actual symbol not reproducible] cash (and you need both)117
16The language of cash flow124
17How cash connects with everything else128
18Why cash matters137
19The power of ratios145
20Profitability ratios : the higher the better (mostly)151
21Leverage ratios : the balancing act158
22Liquidity ratios : can we pay our bills?162
23Efficiency ratios : making the most of your assets165
24The building blocks of ROI177
25Figuring ROI : the nitty-gritty184
26The magic of managing the balance sheet199
27Your balance sheet levers203
28Homing in on cash conversion209
29Financial literacy and corporate performance217
30Financial literacy strategies223
31Financial transparency : our ultimate goal228

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