HBR Guide to Finance Basics for Managers

Making GoodDecisions—and MovingThose Numbers

Part of your job as a manager is to help your company reach its financial goals—in other words, to help move the key numbers in the right direction. You should now have a good idea of what those numbers are. The income statement shows revenue, the various costs and expenses, subtotals such as gross profit and operating profit, and of course the bottom line—net profit. The balance sheet shows assets and liabilities, including accounts receivable and accounts payable. The cash flow statement shows how well the company is turning its profits into cash and what it’s doing with that cash. All three statements reflect the daily actions of managers and employees throughout the organization. The company will ...