Financial Intelligence for Entrepreneurs: What You Really Need to Know About the Numbers
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...
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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 teamAuthoritative 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.
Preface: What This Book Is About xi Part 1 The Art of Finance (and Why It Matters)1 What Is Financial Intelligence? 32 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 Statement3 Profit Is an Estimate 254 Cracking the Code of the Income Statement 305 Revenue: The Issue Is Recognition 386 Costs and Expenses: No Hard-and-Fast Rules 437 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 Most8 Understanding Balance Sheet Basics 659 Assets: More Estimates and Assumptions (Except for Cash) 7110 On the Other Side: Liabilities and Equity 8111 Why the Balance Sheet Balances 8612 The Income Statement Affects the Balance Sheet 89 Part 3 Toolbox: Employees as assets; Expense vs. capital expenditure 94 Part 4 Cash is King13 Cash Is a Reality Check 9914 Profit [not equal] Cash (and You Need Both) 10315 The Language of Cash Flow 11016 How Cash Connects with Everything Else 11417 Why Cash Matters 122 Part 4 Toolbox: Cash accounting; Free cash flow 125 Part 5 Ratios: Learning what the Numbers are Really Telling You18 The Power of Ratios 12919 Profitability Ratios: The Higher the Better (Mostly) 13520 Leverage Ratios: The Balancing Act 14121 Liquidity Ratios: Can We Pay Our Bills? 14522 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 Investment23 The Building Blocks of ROI 16124 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 Management25 The Magic of Managing the Balance Sheet 18326 Your Balance Sheet Levers 18627 Homing In on Cash Conversion 191 Part 7 Toolbox: Working with your banker; Accounts receivable aging 195 Part 8 Creating a Financially Intelligent Company28 Financial Literacy, Transparency, and Your Business's Performance 19929 Financial Literacy Strategies 20530 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
