Understanding Finance

Table of contents

1. Pocket Mentor Series
2. Title Page
3. Copyright Page
4. Table of Contents
5. Mentors’ Message: Why Understand Finance?
6. Understanding Finance: The Basics
   1. Understanding Financial Statements
      1. Accounting methods
      2. The income statement
      3. The balance sheet
      4. The cash flow statement
   2. Using Financial Statements to Measure Financial Health
      1. Profitability ratios
      2. Operating ratios
      3. Liquidity ratios
      4. Leverage ratios
      5. Other ways to measure financial health
   3. The Budget Process
      1. Understanding top-down and bottom-up budgeting
      2. Preparing a budget
      3. Articulating your assumptions
      4. Quantifying your assumptions
   4. What Is Cost/Benefit Analysis?
      1. Steps of cost/benefit analysis
      2. Net return and payback period
      3. Net present value and internal rate of return
      4. Breakeven analysis
      5. Sensitivity analysis
      6. Estimating unquantifiable benefits and costs
   5. Tracking Performance
      1. Tracking the performance of an investment
      2. Tracking your budget
7. Tips and Tools
   1. Tools for Understanding Finance
   2. Test Yourself
      1. Answers to test questions
8. Key Terms
9. To Learn More
10. Sources for Understanding Finance
11. How to Order