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The Definitive Guide to Business Finance: What smart managers do with the numbers, Second Edition

Book Description

‘Aspiring managers who have trouble with crunching numbers may have found a saviour in Richard Stutely.’

The Guardian

‘… a powerful tool for anyone involved with practical financial management issues. It is a superb balance between practical tips and hints and sufficient level of detail to enable you to challenge and make progress in improving the financial and operational performance of your organisation. It consciously avoids the sterile academic debates and focuses clearly on value added ideas and initiatives. The 10 questions sections are incredibly powerful.’

Simon Rogers,Senior Consultant in Big 4 Global Professional Services Firm

Don’t let a fear of finance hold you back. Play the numbers game … and win.

If you’re a manager or entrepreneur and you’re not proficient in the basics of business finance, you simply can't do your job well. If you need to get to grips with essentials like P&L accounts, budgets and forecasting, this is the only book you'll ever need. The Definitive Guide to Business Finance is focused on getting you up to speed - fast. Richard Stutely achieves what you might think is impossible, making business finance easy with an amusing, wry and common sense style that will make you wonder what you ever worried about. 

This book is a survival toolkit on the financial essentials. It assumes no specialised prior knowledge of finance and takes a guided step-by-step approach to all the techniques and concepts you need to understand, explaining the hows, whats and whys along the way. To make things even easier, it shows you how to use basic Excel spreadsheets to do all the calculations for you. Throughout the book, Richard Stutely shoes you how to crack the jargon and unveils shortcuts, tips and tricks that will make you look like a financial wizard.

If you're not yet a whiz with the numbers, you can definitely use this book to your advantage. If you're already a whiz, you will still find something new to improve your skills. Make the numbers add up for you.

Table of Contents

  1. Copyright
  2. Financial Times Prentice Hall
  3. About the author
  4. Acknowledgements
  5. How to use this book
  6. Introduction
  7. The journey starts here
    1. Chapter survival toolkit
    2. Start here
    3. The website
    4. Divided by a common language
    5. The plan of the book
    6. I want to manage better
  8. Where managers and numbers meet
    1. Chapter survival toolkit
    2. Figuring better ways to manage
    3. Reporting responsibilities
    4. Ten hard questions to ask or be asked
    5. Checklist
    6. Conclusion
  9. How the finance director thinks
    1. Chapter survival toolkit
    2. The second oldest profession?
    3. Hard questions to ask about your finance department
    4. Conclusion
  10. The financial wizard’s toolbox
    1. Chapter survival toolkit
    2. Power on your PC
    3. The power of PCs
    4. What’s in the electronic toolbox?
    5. So what is this spreadsheet thing?
    6. What you need to bring to the party
    7. No rodents
    8. How to excel at numbers
    9. Your first day at the office
    10. Ten hard questions to ask or be asked
    11. Conclusion
  11. Explaining and reporting
    1. Chapter survival toolkit
    2. Understand better, report better
    3. A picture tells a thousand words
    4. How to cheat with charts
    5. Significant accuracy
    6. When numbers talk
    7. When it is worth weighting
    8. Comparisons
    9. Ten hard questions to ask or be asked
    10. What’s next?
  12. How money grows
    1. Chapter survival toolkit
    2. Investment arithmetic
    3. Interesting growth rates
    4. The time value of money
    5. Bumpy trends
    6. Putting it to good use
    7. Growth and inflation
    8. Ten hard questions to ask or be asked
    9. What’s next?
  13. Keeping score
    1. Chapter survival toolkit
    2. Managing the numbers – literally
    3. First buy some shoes
    4. The chart of accounts
    5. Notching the tally stick
    6. The scorecard revisited
    7. Ten hard questions to ask or be asked
    8. What’s next?
  14. Managing money
    1. Chapter survival toolkit
    2. Balancing the books
    3. Reconciling your bank
    4. Controlling cash
    5. Managing expenses claims
    6. Preventing bad debts
    7. Managing cash flow
    8. Cash versus accruals accounting
    9. Ten hard questions to ask or be asked
    10. What’s next?
  15. Tracking trends
    1. Chapter survival toolkit
    2. Why analyse trends?
    3. Pursuing patterns
    4. Cause and effect
    5. Ten hard questions to ask or be asked
    6. Conclusion
  16. How to forecast anything
    1. Chapter survival toolkit
    2. So you need to forecast sales?
    3. History and knowledge
    4. Patterns revisited
    5. Applied knowledge
    6. Making the forecast
    7. Ten hard questions to ask or be asked
    8. What if?
    9. Are you sure?
    10. Conclusion
  17. Counting capital
    1. Chapter survival toolkit
    2. Accounting for the future
    3. Fixed asset arithmetic
    4. Managing capital expenditure
    5. Ten hard questions to ask or be asked
    6. Looking ahead
    7. Conclusion
  18. Controlling costs
    1. Chapter survival toolkit
    2. Where the money goes
    3. Employee costs
    4. Non-employee costs
    5. Other income and costs
    6. Looking ahead: a footnote
    7. How managers assess costs
    8. Ten hard questions to ask or be asked
    9. Conclusion
  19. Getting to gross profit
    1. Chapter survival toolkit
    2. The bottom line near the top of the page
    3. Sales revisited
    4. Cost of sales
    5. Inventory
    6. Looking forward
    7. Record keeping for stockholders
    8. Ten hard questions to ask or be asked
    9. Conclusion
  20. Producing a profit
    1. Chapter survival toolkit
    2. Producing a profit
    3. The income statement, or profit and loss account
    4. Ten hard questions to ask or be asked
    5. What’s next?
  21. Building balance sheets
    1. Chapter survival toolkit
    2. Balancing act
    3. Ten hard questions to ask or be asked
    4. Conclusion
  22. Watching cash flow
    1. Chapter survival toolkit
    2. Cash flow
    3. Ten hard questions to ask or be asked
    4. Cash flow statements – looking ahead
    5. There is more...
  23. Reviewing reports
    1. Chapter survival toolkit
    2. Published reports
    3. Collect the set
    4. Financial statements revisited
    5. Getting value
    6. Ten hard questions to ask or be asked
    7. What’s next?
  24. Figuring financials
    1. Chapter survival toolkit
    2. Analysing the financials
    3. New ways of looking at the figures
    4. Some key performance indicators
    5. Ten hard questions to ask or be asked
    6. Conclusion
  25. Financing and investing
    1. Chapter survival toolkit
    2. The financing imperative
    3. Sources of finance
    4. Demanding debt
    5. Enticing equity
    6. Debt and equity compared
    7. Debt restructuring
    8. Analysing debt
    9. Investment indicators
    10. Mergers, acquisitions and joint ventures
    11. The cost of capital
    12. Other management issues
    13. Ten hard questions to ask or be asked
    14. Moving on
  26. Business across borders
    1. Chapter survival toolkit
    2. New markets
    3. Doing the numbers
    4. Dealing with dealers
    5. How do exchange rates happen?
    6. Coping with uncertainty
    7. Trade finance
    8. Booking foreign currency transactions
    9. Currency translations
    10. Ten hard questions to ask or be asked
    11. Conclusion
  27. Appraising projects
    1. Chapter survival toolkit
    2. Project appraisal and management
    3. Will it pay off?
    4. Project planning
    5. Project management
    6. Ten hard questions to ask or be asked
    7. What’s next?
  28. Brilliant budgets
    1. Chapter survival toolkit
    2. The budget bane
    3. Should you bin the budget?
    4. Ten hard questions to ask or be asked
    5. What’s next?
  29. Making better decisions
    1. Chapter survival toolkit
    2. Understand better, report better
    3. Tough decisions
    4. Break even
    5. Capacity planning
    6. Marginal likelihood of shutting down
    7. Inventory costs
    8. Ten hard questions to ask or be asked
    9. Conclusion
  30. The finance director did it
    1. Chapter survival toolkit
    2. Managing the numbers
    3. Financial reporting
    4. When things go wrong
    5. Ten hard questions to ask or be asked
    6. Whodunnit?
  31. The finance director’s language