Product Description

Companies expect managers to use financial data to allocate resources and run their departments. But many managers can’t read a balance sheet, wouldn’t recognize a liquidity ratio, and don’t know how to calculate return on investment. Worse, they don’t have any idea where the numbers come from or how reliable they really are.

In Financial Intelligence, Karen Berman and Joe Knight teach the basics of finance—but with a twist. Financial reporting, they argue, is as much art as science. Since nobody can quantify everything, accountants always rely on estimates, assumptions, and judgment calls. Savvy managers need to know how those sources of possible bias can affect the financials—and they need to know that sometimes the numbers can be challenged.

While providing the foundation for a deep understanding of the financial side of business, the book also arms managers with practical strategies for improving their companies’ performance—strategies such as “managing the balance sheet” that are well understood by financial professionals but rarely shared with their nonfinancial colleagues.

Accessible, jargon-free, and filled with entertaining stories of real companies, Financial Intelligence will help nonfinancial managers be smarter and more confident in their everyday work.

Product Details

• Amazon Sales Rank: #7485 in Books
• Published on: 2006-01-12
• Number of items: 1
• Binding: Hardcover
• 288 pages

CFO.com
"It's like The Elements of Style of finance."

About the Author
Karen Berman and Joe Knight are the owners of the Los Angeles–based Business Literacy Institute and have trained tens of thousands of managers at many leading organizations. Coauthor John Case has written several popular books on management.

Customer Reviews

Financial Intelligence
I would highly recommend this book to anyone who desires to understand financial concepts. If you are considering opening or starting a business this should be a must read for you.

Manager directed
I like the book, but it is very basic. If that is what you are looking for, then it does its job. I was looking for a little more meat, but overall a good book. Also, the real-life examples are excellent.

Excellent guide to becoming a financially literate manager!
The concepts are presented clearly. I have a solid background in accounting and finance and this was a welcome refresher. I learned some new things in the process as well.

There are several chapters that I think need further elaboration. These are the ones that deal with cash flows and the Statement of Cash Flows. The latter is the last of the four financial statements (after the Income Statement, the Statement of Retained Earnings, and the Balance Sheet, in that order).

The Statement of Cash Flows has always been the most difficult one to prepare and, yet, in one sense, it is probably the most important one. Managers have leeway to fudge their numbers with the first three statements but they can't with the Statement of Cash Flows. Analysts recognize this and make significant conclusions from their interpretation of this statement.

Warren Buffett, arguably history's most astute investor, begins with this statement and emphasizes it so much that he coined his own term to describe it: "Owner Earnings." According to the book, "Owner earnings is a measure of the company's ability to generate cash over a period of time. ... is an important measure because it allows for the continuing capital expenditure that will be necessary to maintain a healthy business."

Read it if you want a layman's level of comprehending financial statements. Its more important than you might think!