Contents
Introduction x
1 The executive précis 3
Introduction 4
2 What is it and what do I need to know? 7
Introduction 8
Adjustments to cashflow 9
The clarity of cash 11
Liquidity 12
Shareholder value 14
The efficient market hypothesis 15
Why accounts don’t help in valuation 17
Profit improvement 18
Capital allocation 21
Financial risk 24
3 Why do it? The risks and rewards 29
Cashflow 30
Liquidity 31
Shareholder value 33
Profit improvement 35
Capital allocation 36
Financial risk 40
4 Who’s doing it and who has done it? 43
Introduction and examples 44
What do success and failure look like? 50
Identifying success 63
PART ONE In brief 1
CO NTEN TS
viii
5 How to do it: the critical financial issues 67
Cashflow choices 68
Liquidity 68
Shareholder value 70
Profit improvement 71
Capital allocation 72
Financial risk 73
6 How to measure the critical financial issues 77
Cashflow 78
Liquidity
78
Other indicators 80
Shareholder value 81
Profit improvement 85
Capital allocation 87
Financial risk 90
7 How to manage the critical financial issues 99
Cashflow management 100
Liquidity 101
Shareholder value
103
Profit improvement 107
Capital allocation 109
Financial risk 109
8 How to justify addressing the critical financial issues:
the business case 111
Introduction 112
9 How to talk about the critical financial issues 115
Involving all employees 116
Profit improvement through collaboration 119
The language of capital allocation 120
Talking about financial risk 121
PART TWO In practice 65
CO NTEN TS
ix
10 Executive intervention 125
What questions should I ask? 126
When is my intervention needed? 132
What are the make or break decisions? 135
What levers should I pull? 142
How do we know whether we’ve succeeded or failed? 150
11 Additional resources 157
Books 158
Online references 159
Advisers and consultants 160
Courses 160
Index 163
PART THREE Intervention 123
PART FOUR In depth 155

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