HBR Guide to Finance Basics for Managers

HBR Guide to Finance Basics for Managers

by Harvard Business Review
Released April 2011
Publisher(s): Harvard Business Review Press
ISBN: 9781422143346

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Book description

Where do you begin if your boss asks you to prepare a breakeven analysis? Can you tell the difference between an income statement and a balance sheet? Between gross margin and revenue? Do you understand why a business that's profitable can still go belly-up? Has your grasp of your company's numbers helped--or hurt--your career? If questions like these make you sweat, you've come to the right place. This guide will give you the tools and confidence you need to master the finance basics, as all good managers must. You'll learn how to: speak the language of finance, compare your firm's financials with rivals', size up your vulnerability to industry downturns, shift your unit's focus from revenues to profits, use financial data to defend budget requests, avoid running out of cash--and going out of business, keep costs from killing your bottom line, invest smartly through cost/benefit analysis, sell your brilliant idea with ROI, and avoid putting too much faith in the numbers.

This collection includes: "Finance Quiz: Do You Know the Basics?" "The Key Financial Statements," "The Fundamental Laws of Business," "Using Statements to Measure Financial Health," "Grow Your Profits by Streamlining Your Business," "Working Your Assets to Boost Your Growth," "Profit Does Not Equal Cash (And You Need Both)," "Why Cash Matters," "Your Balance Sheet Levers," "What's Your Working Capital Model? A Case Study," "Learn to Speak the Language of ROI," "Practical Tools for Management Decisions: Making the Numbers Work for You," "What the Financial Statements Don't Tell You," and more.

Harvard Business Review Guides are for busy professionals looking for quick answers to common challenges. They're packed with useful tips and practical advice in a brief, easy-to-read format. Whether you're looking to expand your skills or refresh your existing ones, these guides offer reliable answers to your most pressing problems.

Table of contents

  1. Front Cover
  2. Guide to Finance Basics for Managers
  3. Table of contents
  4. Finance Basics: Don’t Be Afraid
  5. Finance Quiz: Do You Know the Basics?
  6. The Key Financial Statements: Balance Sheet, Income Statement, Cash Flow Statement
    1. The Balance Sheet
      1. Historical Cost
      2. How the Balance Sheet Relates to You
    2. The Income Statement
      1. Multiyear Comparisons
      2. How the Income Statement Relates to You
    3. The Cash Flow Statement
      1. How the Cash Flow Statement Relates to You
      2. Where to Find the Financials
  7. The Fundamental Laws of Business
    1. Understand the Measures of Moneymaking
    2. Think Like an Owner
  8. Making Good Decisions—and Moving Those Numbers
  9. Using Statements to Measure Financial Health
    1. Profitability Ratios
    2. Operating Ratios
    3. Liquidity Ratios
    4. Leverage Ratios
    5. How Ratio Analysis Relates to You
    6. Other Financial Assessments
  10. Grow Your Profits by Streamlining Your Business
  11. Working Your Assets to Boost Your Growth
    1. Embedding Supply Chain Math in Customer-Focused Decisions
    2. How Goodyear’s Customer Focus Improved Sales
  12. Profit ≠ Cash (and You Need Both)
    1. Profit Without Cash
    2. Cash Without Profit
  13. Why Cash Matters
  14. Your Balance Sheet Levers
    1. Managing DSO
    2. Managing Inventory
  15. What’s Your Working Capital Model? A Case Study
    1. Dow Jones Goes Digital
    2. Would Its Subscription-Reliant Working Capital Model Still Work?
    3. Lessons from Dow Jones
  16. Learn to Speak the Language of ROI
    1. Cash Flow Modeling
    2. Getting Your Budget Approved
  17. Practical Tools for Management Decisions: Making the Numbers Work for You
    1. Cost/Benefit Analysis
    2. Accounting Return on Investment
    3. Payback Period
    4. Breakeven Analysis
    5. Operating Leverage
    6. Estimating Nonquantifiable Benefits and Costs
    7. Tracking Performance
  18. The Limits of Financial Data
  19. What the Financial Statements Don’t Tell You
    1. Financial Sleight of Hand
    2. Only One Piece of the Financial Puzzle
    3. Reaching Beyond the Financials
  20. The Five Traps of Performance Measurement
    1. Trap 1: Measuring Against Yourself
    2. Trap 2: Looking Backward
    3. Trap 3: Putting Your Faith in Numbers
    4. Trap 4: Gaming Your Metrics
    5. Trap 5: Sticking to Your Numbers Too Long
  21. Finance Quiz: How Much Have You Learned?
    1. Answers to the Finance Quiz
  22. Glossary
  23. Back Cover

Product information

  • Title: HBR Guide to Finance Basics for Managers
  • Author(s): Harvard Business Review
  • Release date: April 2011
  • Publisher(s): Harvard Business Review Press
  • ISBN: 9781422143346