You are previewing Finance for Nonfinancial Managers, Second Edition (Briefcase Books Series), 2nd Edition.
O'Reilly logo
Finance for Nonfinancial Managers, Second Edition (Briefcase Books Series), 2nd Edition

Book Description


Financial decisions impact virtually every area of your company. As a manager, it's up to you to understand how and why.

Finance for Nonfinancial Managers helps you understand the information in essential financial reports and then shows you how to use that understanding to make informed, intelligent decisions. It provides a solid working knowledge of:

  • Basic Financial Reports--All about balance sheets, income statements, cash flow statements, and more
  • Cost Accounting--Methods to assess which products or services are most profitable to your firm
  • Operational Planning and Budgeting--Ways to use financial knowledge to strengthen your company

Briefcase Books, written specifically for today's busy manager, feature eye-catching icons, checklists, and sidebars to guide managers step-by-step through everyday workplace situations. Look for these innovative design features to help you navigate through each page:

Key Terms: Clear defi nitions of key terms and concepts

Smart Managing: Tactics and strategies for managing change

Tricks of the Trade: Tips for executing the tactics in the book

Mistake Proofing: Practical advice for minimizing the possibility of error

Caution: Warning signs for when things are about to go wrong

For Example: Examples of successful change-management tactics

Tools: Specific planning procedures, tactics, and hands-on techniques

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright Page
  4. Contents
  5. Acknowledgments
  6. Introduction
  7. 1. Counting the Beans: Why Good Financial Information Is Critical to You
    1. Managing a Company in Today’s Business Environment
    2. The Role of the Finance Department
    3. The Wonder Widget Company Is Our Guide
    4. The “Rules” of Financial Reporting
    5. The Relationship of Finance and Accounting to the Other Departments
    6. Manager’s Checklist for Chapter 1
  8. 2. The Structure and Interrelationship of Financial Statements
    1. Tracking a Company’s Lifecycle
    2. Accounting Is Like a Football Game on Your DVR
    3. The Chart of Accounts: A Collection of Buckets
    4. The General Ledger: Balancing the Buckets
    5. Accrual Accounting: Say What?
    6. The Principal Financial Statements Defined
    7. Manager’s Checklist for Chapter 2
  9. 3. The Balance Sheet: A Basic Summary of Value and Ownership
    1. Assets and Ownership: They Really Do Balance!
    2. Current Assets: Liquidity Makes Things Flow
    3. Fixed Assets: Property and Possessions
    4. Other Assets: The “Everything Else” Category
    5. Current Liabilities: Repayment Is Key
    6. Long-Term Liabilities: Borrowed Capital
    7. Ownership Comes in Various Forms
    8. Capital Stock Comes in Several Flavors
    9. Using This Report Effectively
    10. Manager’s Checklist for Chapter 3
  10. 4. The Income Statement: The Flow of Progress
    1. They Say Timing Is Everything—And They’re Right!
    2. Sales: Grease for the Engine
    3. Cost of Sales: What It Takes to Earn the Sale
    4. Gross Profit: The First Measure of Profitability
    5. Operating Expenses: Running the Business
    6. Operating Income: The Basic Business Bottom Line
    7. EBITDA—He Bit Who?
    8. Other Income and Expenses: Not Just Odds and Ends
    9. Income Before Taxes, Income Taxes, and Net Income
    10. Earnings per Share, Before and After Dilution—What?
    11. Using This Report Effectively
    12. Manager’s Checklist for Chapter 4
  11. 5. Profit versus Cash Flow: What’s the Difference—and Who Cares?
    1. The Cash Flow Cycle
    2. Cash Basis versus Accrual Basis
    3. Net Profit versus Cash Flow in Your Financial Reports
    4. Manager’s Checklist for Chapter 5
  12. 6. The Statement of Cash Flow: Tracking the King
    1. Beginning Where the Income Statement Ends
    2. Cash from Operations: Running the Business
    3. Cash for Investing: Building the Business
    4. Cash from Financing: Capitalizing the Business
    5. Using This Report Effectively
    6. Manager’s Checklist for Chapter 6
  13. 7. Key Performance Indicators: Finding the “Hidden” Information
    1. What Are KPIs? Do They Mix with Water?
    2. Measures of Financial Condition and Net Worth
    3. Measures of Profitability
    4. Measures of Financial Leverage
    5. Measures of Productivity Metrics
    6. Trend Reporting: Using History to Predict the Future
    7. Manager’s Checklist for Chapter 7
  14. 8. Cost Accounting: A Really Short Course in Manufacturing Productivity
    1. The Purpose of Cost Accounting—Strictly for Insiders
    2. Fixed and Variable Expenses in the Factory
    3. Controllable and Uncontrollable Expenses
    4. Standard Costs—Little Things Mean a Lot
    5. Manufacturing Cost Variances: Analysis for Action
    6. Manager’s Checklist for Chapter 8
  15. 9. Good Investment or Bad? How Do You Decide?
    1. Capital Investment: A Game of Choices, Risks, and Hoped-For Outcomes
    2. Return on Investment: The Concept and the Purpose
    3. Payback Period: A Quick and Easy Way to Understand the Approach
    4. The Time Value of Money: Today and in the Future
    5. Discounted Cash Flow: Evaluating Long-Term Investments
    6. Weighted Average Cost of Capital: Enhancing the Return to Shareholders
    7. Internal Rate of Return: Deciding What Return Is Good Enough
    8. Risk Management: Assessing the Probability That We Might Be Wrong
    9. Manager’s Checklist for Chapter 9
  16. 10. Get to Breakeven First!
    1. What Does “Breakeven Point” Really Mean?
    2. Why Is This a Critical Factor in Profitability?
    3. How to Calculate Breakeven for a New Product
    4. What About the Entire Company’s Breakeven Point?
    5. What to Do If You Don’t Like the Answer
    6. Manager’s Checklist for Chapter 10
  17. 11. Business Planning: Creating the Future You Want, Step-by-Step
    1. Why Take Time to Plan?
    2. Strategic Planning versus Operational Planning
    3. Vision and Mission: The Starting Point
    4. Strategy: Setting Direction
    5. Long-Term Goals: The Path to the Mission
    6. Short-Term Goals and Milestones: The Operating Plan
    7. Manager’s Checklist for Chapter 11
  18. 12. The Annual Budget: Financing Your Plans
    1. Tools for Telling the Future: Budgets, Forecasts, Projections, and Tea Leaves
    2. How to Budget for Revenues: The “Unpredictable” Starting Point
    3. Budgeting Costs: Understanding Relationships That Affect Costs
    4. The Budgeting Process: Trial and Error
    5. Flexible Budgets: Whatever Happens, We’ve Got a Budget for It
    6. How to Live Within Your Budget
    7. Variance Reporting and Taking Action
    8. The Capital Expenditure Budget
    9. The Cash Flow Budget
    10. Integrating the Entire Operating Budget
    11. Manager’s Checklist for Chapter 12
  19. 13. Financing the Business: Understanding the Debt vs. Equity Options
    1. The Strategy of Borrowing Money
    2. How a Business Gets Financed: In the Beginning and Over Time
    3. Short-Term Debt: Balancing Working Capital Needs
    4. Long-Term Debt: Semipermanent Capital or Asset Acquisition Financing
    5. Convertible Debt: The Transition from Debt to Equity
    6. Capital Stock: Types and Uses
    7. Manager’s Checklist for Chapter 13
  20. 14. Attracting Outside Investors: The Entrepreneur’s Path
    1. The Start-Up Company: Seed Money and Its Sources
    2. Professional Investors: Angels on a Mission
    3. Venture Capitalists: What You Need to Know to Attract Them
    4. The Initial Public Offering: Heaven or Hell?
    5. Strategic Investors: The Path to a Different Party
    6. Acquisition: The Strategic Exit
    7. Manager’s Checklist for Chapter 14
  21. Index
  22. About the Author