The Entrepreneur's Guide to Financial Statements

by David Worrell

Overview

Like a detailed trail map through the jungle of finance, this book guides readers past small-business financial pitfalls, showing readers how to fine-tune operations and enhance profitability.

Easy to read and full of engaging stories, this book teaches the basics of true financial management—re-made just for small businesses. It's perfect for entrepreneurs who want to get more from their accounting without getting stuck in the details. The author examines each of the three major financial statements and explains both how and why business owners should utilize these powerful tools to create a more stable, more profitable business. Whether one's business has one employee or 100, the small business owner will gain a deeper understanding of why finance is so critical to survival and growth. Written by an experienced CFO and entrepreneur, The Entrepreneur's Guide to Financial Statements uses illustrations, real-life stories, and crystal-clear writing to show business owners the importance of "the numbers" and the critical nature of finance to the survival, profitability, and growth of their small businesses.

Product Details

ISBN-13:	9781440829352
Publisher:	Bloomsbury Academic
Publication date:	01/22/2014
Series:	The Entrepreneur's Guide
Pages:	288
Product dimensions:	6.20(w) x 9.30(h) x 1.00(d)

About the Author

David Worrell is an award-winning entrepreneur and small business expert.

Table of Contents

Tables and Figures vii

Preface xi

Acknowledgments xvii

Part 1 The Income Statement

1 Income Statement Basics 3

2 Revenue 13

3 Expenses and Profits 25

4 Making a P&L Work for You 43

Part 2 The Balance Sheet

5 Balance Sheet Basics 57

6 How a P&L and a Balance Sheet Work Together 67

7 Games People Play by Manipulating the Balance Sheet and P&L 85

8 Equity and Capitalization 93

Part 3 The Cash Flow Statement

9 Cash Flow Statement Basics 107

10 The Cash Cycle 123

Part 4 Ratios and Analysis

11 Answering Questions Using Trends and Ratios 139

12 Analysis in Action 173

13 How Bankers and Investors Evaluate a Business 185

Part 5 Managing by the Numbers

14 Dashboards 203

15 Models, Forecasts, and Budgets 219

Afterword 235

Appendix 1 Calculating Dell Computer's Cash Cycle (Case Study) 237

Appendix 2 Other Resources 239

Appendix 3 Debits and Credits 243

Appendix 4 State of Nevada Corporate Filing Fees 245

Appendix 5 Glossary of Accounting Terms 247

Bibliography 263

Index 265

What People are Saying About This

René Lacerte

"Cash is the lifeblood of every business, and knowing how to optimize it is an essential part of being a successful entrepreneur. Worrell understands this basic tenet and shows entrepreneurs how to leverage their financial reporting and their systems to become expert managers. Read this book and learn what the numbers are really telling you so that you can grow your business even faster."

Jenni Lough Watson

"I will keep this book within arms reach! Worrell presents key concepts every entrepreneur should know about their company’s financials in a simple format that even I can understand. Learn how easy it is to transform useless data into real, meaningful information. You will manage your business more clearly through the practical advice and real-world examples presented in this book."

Marc Pitre

“Fantastic! I never knew that financial statements could be so simple or that they could solve so many of my everyday business challenges.”

Ameet Shah

"The Entrepreneurs Guide to Financial Statements does an amazing job of breaking down the sometimes mystifying world of financial statements into terms that anyone can understand and apply to their business. This is a go-to resource for business owners navigating the often uncertain waters of building a business and sustaining business growth."

Rieva Lesonsky

"Worrell’s rock-solid foundation in entrepreneurship gives him an edge in providing simple, actionable advice. After reading this book, small business owners will be able to understand financial statements and apply financial analysis to overcome roadblocks, solve problems, and build strong, profitable, and rewarding businesses."

Bill Manby

"This book is required reading for every business owner I work with. There is some kind of magic in David’s writing that makes powerful financial tools not just easy to understand, but also easy to use in any small business. This is a seriously important book for entrepreneurs."

Chris Younger

"Finally a book that explains how to manage a small business by the numbers! Financial information should guide every business decision—and Worrell proves that finance does not have to be difficult or mysterious. If every small business owner had read this book, there would be a great many more large businesses!"

Rajeev Kulkarni

"David has explained key financial concepts that are critical for an entrepreneur in a story-like format, making the reading enjoyable and fun! All entrepreneurs who have a passion for creation, but are not so financially apt, will benefit from reading this book."

Jordan D. Lipton

“Worrell’s book is a fantastic overview of financial statements and economics, geared particularly to entrepreneurs. It is incredibly readable, and he frames his topics in a way that is highly relevant to business owners, while being simple enough that anyone can understand.”

René Lacerte

"Cash is the lifeblood of every business, and knowing how to optimize it is an essential part of being a successful entrepreneur. Worrell understands this basic tenet and shows entrepreneurs how to leverage their financial reporting and their systems to become expert managers. Read this book and learn what the numbers are really telling you so that you can grow your business even faster."

Editorial Reviews

A small business expert, Worrell provides a useful reference book and practical introduction to the traditional accounting and financial analytical standards of a variety of enterprises. For both the neophyte and seasoned entrepreneur, the author demystifies the often arcane financial and performance measures critical to the success and sustainability of a business. . . . Recommended.” —Choice

From the Publisher