The Essentials of Finance and Accounting for Nonfinancial Managers Third Edition book cover

The Essentials of Finance and Accounting for Nonfinancial Managers Third Edition

Author(s): Edward Fields (Author)

Publisher: AMACOM
Publication Date: March 25, 2016
Edition: Third
Language: English
Print length: 336 pages
ISBN-10: 0814436943
ISBN-13: 9780814436943

Book Description

They say that numbers don’t lie, but what if you can’t even read them? Discover how great managers use financial data to guide decisions.

Financial analysis reports, budgeting reports, forecasting and measuring reports–sometimes they all run together, don’t they? The Essentials of Finance and Accounting for Nonfinancial Managers Third Edition is here to help.

This new edition of a business classic demystifies finance and accounting and gives managers the tools they need to make better decisions.

Complete with fresh insights, case studies, and street-level exercises to help non-numbers people master the numbers game, this guide reveals how to:

Understand the fundamentals of financial analysis, budgeting, and forecasting
Interpret balance sheets, income/cash flow statements, and annual reports
Sift through conflicting data to find the most relevant figures
Locate key information about competitors and suppliers
Analyze variances and calculate break-even points and other vital measures

The numbers are too important to allow others to translate for you. The Essentials of Finance and Accounting for Nonfinancial Managers Third Edition shows you how to read them yourself.

Imagine the impact on future decisions when you grasp not only what the numbers mean but can use that insight to drive your business forward.

Editorial Reviews

Review

..”.based on an American Management Association three-day seminar…an excellent primer for professionals.” —Choice

From the Back Cover

You can be a great manager responsible for a valuable department; but if you don’t know how to analyze financial reports and use the data to guide decisions, you’ll quickly hit a ceiling.

Numbers are the language of key players in every organization. But how many managers really know how to read a balance sheet? How many grasp what all those figures can tell you about your organization or unit’s financial health? And how many can confidently talk about P&L statements, capital expenditures, EBITA, and discounted cash flow?

Fortunately, you don’t need an accounting degree to become fluent in the basics of financial analysis, budgeting, and forecasting. This third edition of a popular crash course for managers helps you make sense of financial data, assess performance, and channel efforts into the most promising areas. Packed with the latest information on federal regulations, pertinent GAAP rules, global trends that can impact the financial picture, expanded case studies, and new practice exercises that reinforce the lessons and strengthen skills, this book explains how to:

Interpret balance sheets, income/cash flow statements, and annual reports • Sift through conflicting data to find the most relevant figures • Locate key information about competitors and suppliers • Analyze variances and calculate break-even points and other vital measures • Assess return on assets to evaluate profit centers • Conduct forecasting before launching big projects • Spot “red flags” that might be lurking in the financials • And much more

When you know how to think like a financial analyst, you replace guesswork with hard facts. The Essentials of Finance and Accounting for Nonfinancial Managers Third Edition will give you a clear, solid grounding in how to understand and apply financial data—and make decisions that drive your business forward.

Edward Fields has taught a popular AMA course on finance and accounting fundamentals for decades, and consults on strategic and financial issues.

About the Author

EDWARD FIELDS has taught a popular AMA course on finance and accounting fundamentals for decades and consults with many multinational corporations on strategic and financial issues.

Excerpt. © Reprinted by permission. All rights reserved.

The Essentials of Finance and Accounting for Nonfinancial Managers Third Edition

Name: The Essentials of Finance and Accounting for Nonfinancial Managers Third Edition
Author: Edward Fields (Author)
ISBN: 9780814436943

By Edward Fields

AMACOM

Introduction, 1,
Part 1: Understanding Financial Information,
1. The Balance Sheet, 21,
2. The Income Statement, 60,
3. The Statement of Cash Flows, 70,
4. Generally Accepted Accounting Principles: A Review and Update, 82,
5. The Annual Report and Other Sources of Incredibly Valuable Information, 91,
Part 2: Analysis of Financial Statements,
6. Key Financial Ratios, 123,
7. Using Return on Assets to Measure Profit Centers, 157,
8. Overhead Allocations, 170,
Part 3: Decision Making for Improved Profitability,
9. Analysis of Business Profitability, 185,
10. Return on Investment, 210,
Part 4: Additional Financial Information,
11. Financing the Business, 239,
12. Business Planning and the Budget, 256,
13. Final Thoughts, 269,
Appendix A. Financial Statement Practice, 279,
Appendix B. Finance and Accounting Terms, 285,
Appendix C. Comprehensive Case Study: Paley Products, Inc., 292,
Appendix D. Ratio Matching Challenge, 302,
Appendix E. Comprehensive Case Study: Woodbridge Manufacturing, 308,
Appendix F. Comprehensive Case Study: Bensonhurst Brewery, 314,
Glossary, 319,
Index, 339,
About the Author, 345,
Free Sample from The First-Time Manager by Loren B. Belker, Jim McCormick, and Gary S. Topchik, 346,

CHAPTER 1

The Balance Sheet

The balance sheet is a representation of the company’s financial health. It is presented at a specific point in time, usually the end of the fiscal (accounting) period, which could be a year, a quarter, or a month. It lists the assets that the company owns and the liabilities that the company owes to others; the difference between the two represents the ownership position (stockholders’ equity).

More specifically, the balance sheet tells us about the company’s:

* Liquidity. The company’s ability to meet its current obligations.

* Financial health. The company’s ability to meet its obligations over the longer term; this concept is similar to liquidity, except that it takes a long-term perspective and also incorporates strategic issues.

Financial strength reflects the company’s ability to:

* Secure adequate resources to finance its future.

* Maintain and expand efficient operations.

* Properly support marketing efforts.

* Use technology for profitable advantage.

* Compete successfully.

The balance sheet also helps us to measure the company’s operating performance. This includes the amount of profits and cash flow generated relative to:

* Owners’ investment (stockholders’ equity)

* Total resources available (assets)

* Amount of business generated (revenue)

Analyzing the data in the balance sheet helps us to evaluate the company’s asset management performance. This includes the management of:

* Inventory, measured with an inventory turnover ratio

* Customer credit, measured using an accounts receivable measure known as days’ sales outstanding or collection period

* Total asset turnover, which reflects capital intensity

* Degree of vertical integration, which reflects management efficiency and management of the supply chain

Mathematical formulas called ratios are very valuable in the analytical process. They should be used to compare the company’s performance against:

* Its standards of perform

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The Essentials of Finance and Accounting for Nonfinancial Managers Third Edition