The Manager's Pocket Calculator: A Quick Guide to Essential Business Formulas and Ratios

The Manager's Pocket Calculator: A Quick Guide to Essential Business Formulas and Ratios

by Michael C. Thomsett
     
 

Your success or failure is reflected in one number: the bottom line. So you’d better get a handle on the numbers that influence it. The Manager’s Pocket Calculator gives you the essentials of budgeting and forecasting, financial analysis, reporting, interest and rate-of-return calculation, statistics, and more.

…  See more details below

Overview

Your success or failure is reflected in one number: the bottom line. So you’d better get a handle on the numbers that influence it. The Manager’s Pocket Calculator gives you the essentials of budgeting and forecasting, financial analysis, reporting, interest and rate-of-return calculation, statistics, and more.

Not just an overview, the book contains more than 100 formulas and ratios with numerical examples, spreadsheet entries, and step-by-step calculations. The Manager’s Pocket Calculator trains you in the application of mission-critical business fundamentals, better preparing you to:

• Create and justify budgets

• Excel in planning meetings concerning financial performance

• Craft reports and presentations demonstrating financial outcomes

• Communicate with internal and external accounting, auditing and other financial entities

An indispensable, everyday business tool, The Manager’s Pocket Calculator makes you more than a manager. It makes you a powerful architect of your organization’s financial stability.

Editorial Reviews

From the Publisher

"If you find preparing and justifying budgets, or even sitting down with accountants and financial advisors intimidating, pick up The Manager’s Pocket Calculator." --Niche magazine

Manager's Pocket Calculator…won't turn non-financial managers into accountants, but it will help them be better businesspeople.” --Accounting Today

Product Details

ISBN-13:
9780814416358
Publisher:
AMACOM Books
Publication date:
10/06/2010
Pages:
288
Sales rank:
1,223,219
Product dimensions:
5.90(w) x 9.00(h) x 0.80(d)
Age Range:
18 Years

Read an Excerpt

I N T R O D U C T I O N

The Basic Problem with

Numbers

It’s all in the numbers. Everyone has heard this statement and it is

true. Your performance is invariably judged by how much profit you

create or by how much cost you incur in your segment, team, or

department. The so-called bottom line—profit or loss—is the universal

means for monitoring performance and for determining whether an initiative

was worthwhile.

With the dominance of the bottom line in every aspect of how your

performance is graded, you have a distinct advantage if you are skilled

at conveying information in terms of profitability. Conversely, you are at

a distinct disadvantage if you cannot communicate the profit or loss

aspects of your work to management. On a most basic level, just asking

management for something is less effective than demonstrating how an

approval is going to create additional profits or cut costs (related directly

to revenues) and expenses (overhead, not related directly to revenues).

This is the rudimentary distinction between managers with communication

skills and those who struggle every day trying to find the best way

to communicate what they know and what they have achieved.

If you do not have background and education in finance, you probably

struggle with these issues on a daily basis. Even those with training

in accounting may find it difficult to summarize their requests in plain,

simple, and clear terms for management. No one is immune from the

difficulty in matching numerical information with a request or recommendation.

For some, even if the numerical aspects of the job are comfortable,

conveying their significance to management can be very

difficult. For others, even those with exceptional communication skills,

reducing the numbers (‘‘crunching’’) to the basics is the real challenge.

Your purpose in making effective use of numerical information is to

convey the essential data that management needs to make an informed

decision—and to make your case convincingly. Faced with an unending

array of choices, management’s desire is to make choices that are not

only the most profitable but that also involve the least risk. It is not

enough to demonstrate that a decision is likely to be profitable if it also

incurs unacceptable risks: potential liability, supply chain losses, reduced

customer satisfaction, or damage to brand and reputation. When an

esteemed company like Mattel contracted for its manufacturing in China

but failed to properly supervise quality control, toys were sold in the

United States containing harmful lead. The product cost aspects of this

mistake were easily rectified. However, the reputation to the company,

while less tangible, is likely to affect profits at an unknown level and for

an unknown period of time. So the analysis of risk involves both tangible

and intangible considerations, making it difficult to know how much risk

is really involved in creating x profits as the result of y decisions.

What this means for you is that any communication is going to be

based on an evaluation of profit and loss, many forms of risk, and the

time required for return on investment, just to name a few considerations.

How do you communicate the relevant facts to management?

How do you reduce the research to well-supported recommendations or

to caution statements? These are only a few of the issues you face in

managing information and in massaging it to create an effective, simple,

and honest method of communication.

Meet the Author

MICHAEL C. THOMSETT is the author of several books including The Little Black Book of Project Management, The Real Estate Investor’s Pocket Calculator, The Stock Investor’s Pocket Calculator, and Getting Started in Options. He is a former accounting and financial services professional and consultant.

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