Financial Intelligence, Revised Edition by Karen Berman and Joe Knight. Here is the summary and extract of the book, as well as direct access to the book.
Financial Intelligence, Revised Edition: A Manager’s Guide to Knowing What the Numbers Really Mean.
Before discovering the summary and an extract from the book, here are a few words about the authors.
Karen Berman and Joseph Knight are the founders of the Los Angeles-based Business Literacy Institute. They train managers at organizations such as American Express, P&G, Pacific Life, GM and Tyco International. They have been interviewed in a wide range of print media including BusinessWeek, USA Today and the Los Angeles Times.
Here’s a summary of the book, which Inc. magazine calls « the best guide to numbers » on the market.
Financial Intelligence, the summary:
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. Because 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 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 gives nonfinancial managers the financial knowledge and confidence for their everyday work.
What they think:
Inc. magazine calls it one of « the best, clearest guides to the numbers » on the market. Readers agree, saying it’s exactly « what I need to know » and calling it a « must-read » for decision makers without expertise in finance.
Since its release in 2006, Financial Intelligence has become a favorite among managers who need a guided tour through the numbers–helping them to understand not only what the numbers really mean, but also why they matter.
This new, completely updated edition brings the numbers up to date and continues to teach the basics of finance to managers who need to use financial data to drive their business. It also addresses issues that have become even more important in recent years–including questions around the financial crisis and those around broader financial and accounting literacy.
Accessible, jargon-free, and filled with entertaining stories of real companies, Financial Intelligence gives nonfinancial managers the confidence to understand the nuance beyond the numbers–to help bring everyday work to a new level.
Extract:
If you read the news regularly, you have learned a good deal in recent years about all the wonderful ways people find to cook their companies’ books. They record phantom sales – They hide expenses – They sequester some of their properties and debts in a mysterious place known as off balance sheet. Some of the techniques are pleasantly simple, like the software company a few years back that boosted revenues by shipping its customers empty cartons just before the end of a quarter. (The customers sent the cartons back, of course—but not until the following quarter.) Other techniques are complex to the point of near-incomprehensibility. (Remember Enron? It took years for accountants and prosecutors to sort out all …
