IN THIS CHAPTER
Recognizing the managerial limits of external financial statements
Examining the additional information needed for managing assets and liabilities
Identifying the in-depth information needed for managing profit
Providing additional information for managing cash flow
If you’re a business manager, I strongly suggest that you read the preceding chapter before continuing with this one. Chapter 10 discusses how a business’s external, nonmanagerial lenders and investors read an external financial report. These stakeholders are entitled to regular financial reports so they can determine whether the business is making good use of their money. The chapter explains key ratios that the external stakeholders use for interpreting the financial condition, profit performance, and cash flows of a business — which are equally relevant for the managers of the business.