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

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Harvard Business Press, 2006 - Business & Economics - 257 pages
31 Reviews
Understanding the Financials—and What Lies Behind Them

Managers in every business are expected to use financial data to make decisions, allocate resources, and budget expenses. But the truth is, many are uncomfortable applying the most basic financial tools in their day-to-day work. Even managers who consider themselves financially savvy may not understand what goes into a financial statement, and so may take the numbers as gospel when they should be questioning them.

In Financial Intelligence, Karen Berman and Joe Knight present the essentials of finance, but with an extra dimension. Succinct, easy-to-read chapters teach the fundamentals in a way that everyone can understand and put to work right away. But the authors also take you behind the scenes, to show where the numbers come from. Since nobody can quantify everything, accountants and finance executives always rely on estimates, assumptions, and judgment calls, which can skew the numbers in one direction or another. This book helps you recognize and understand those biases, challenge or correct for them when necessary, and use this information to be a better manager.

Based on their work training tens of thousands of managers and employees at many leading organizations, Berman and Knight provide readers with a deep understanding of:

The basics of financial measurement: reading income statements, balance sheets, cash flow statements, and moreThe art of finance: separating hard data from assumptions and estimatesThe mechanics of analysis: calculating ratios, return on investment, and working capitalCash and profit: knowing the difference between them, and why cash is suddenly the "hot" number in corporate boardrooms and on Wall StreetFinancial literacy and transparency: recognizing how they can boost performance

Accessible, jargon-free, and filled with entertaining stories from real companies, Financial Intelligence will help nonfinancial managers add substantially more to their companies'—and their own—success. If you have ever wanted to "talk numbers" confidently with your colleagues, this is the book for you.

  

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

User Review  - Cody Cummings - Goodreads

It will sit on my desk henceforth. Read full review

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

User Review  - Venkata Rahul - Goodreads

Awesome! If you want to take a deeper plunge into accounting and Financial control, start with this one. A tad costly but the book is worth every penny. Read full review

Contents

You Cant Always Trust the Numbers
3
Spotting AssumptionsEstimates and Biases
10
Why Increase Your Financial Intelligence?
18
PART
31
Understanding Balance Sheet Basics
75
More Estimates and Assumptions Except for Cash
82
Liabilities and Equity
93
Why the Balance Sheet Balances
99
The Higher the Better Mostly
151
The Balancing Act
158
Making the Most of Your Assets
165
PART
175
PART SEVEN
197
Your Balance Sheet Levers
203
Homing In on Cash Conversion
209
PART EIGHT
215

Cash Is a Reality Check
113
The Language of Cash Flow
124
Why Cash Matters
137
PART FIVE
143
Sample Financials
233
Acknowledgments
239
About the Authors
257
Copyright

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About the author (2006)

Karen Berman and Joseph Knight are the founders of the Los Angeles-based Business Literacy Institute. They train managers at organizations such as American Express, P&G, Pacific Life, GM and Tyco International. They have been interviewed in a wide range of print media including BusinessWeek, USA Today and the LA Times.

John Case has written several successful books including Open-Book Management (HarperBusiness, 1995) and The Open-Book Experience (Addison Wesley,1998). He is a contributing writer for Inc. magazine and has written for HBR and a variety of other business publications.

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