Financial Intelligence, Revised Edition: A Manager's Guide to Knowing What the Numbers Really Mean: Book Review

by PCC

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.

Genres: Business, Finance, Nonfiction, Leadership

32 pages, Kindle Edition

Published August 27, 2018

Reviews

[Lidik · Rating 5 out of 5]

Just a STEM girly starting her first job out of college in capital markets data services✨

[Anissa Kuhar · Rating 5 out of 5]

Insightful! This is my new favorite financial handbook to access when deciphering small business financials. It’s perfect for non-financial professionals. It’s easy to read and provides many examples to help you understand the concepts. Here are a few key points any business leader could pick up.

1. Revenue is not profit. Pretty basic financial knowledge, but the book reminds us that profit is an estimates on a particular day. Revenue differs based on how and when it is reported. Consistency in reporting is key.

2. Cash is king. Revenue and profit are the key metrics financial executives elevate, but cash drives the business’ ability to be solvent and pay bills.

3. Ratio analysis builds understanding. Income statements and balance sheets report the financial picture. Ratios allow employees to examine the change in profit, debt, liquidity, and activity over time. Companies are affected by their environment, and ratios show employees how to assess status change.

4. Working capital is current assets minus current liabilities. Long term company success depends on managing cash flow today. Helping employees see how their role affects accounts receivable, inventory, and accounts payable is a smart move in inviting people to be part of a financially sound company.

5. Educate employees. Offer monthly training on foundational financial concepts. Have management share regularly progress reports with two or three key metrics and a visual dashboard.

[Jim · Rating 5 out of 5]

This book is a fantastic crash course introduction to accounting and finance. I picked it up to see if it would be a good book to buy for the engineering managers I work with and I think it will start good conversation about how the company makes money and makes decisions about money. It may also do a good job defusing contentious conversations around capex projects with our IT department so I'll probably pick up a couple extra copies. Books like this one and Great Game of Business are good reads for finance and accounting professionals with roles that interact a lot with non-finance professionals because there seems to be a lot of confusion (but also curiosity) around company financials. If you're working for a company that doesn't disclose financials to a broad internal audience but you're curious to learn more, this book will help you generate good questions for the finance department. You'll be taken seriously because you'll be asking better questions than half the accountants I've interviewed.

[E · Rating 5 out of 5]

Revenue is not cash-flow. The customer has not paid. The lines between opex and capex is grey. The income statement, the balance sheet and the cash-flow works like a 3-stroke engine (if there is such a thing). In one stroke it buys assets using liabilities and equity, and in the next stroke it does the work to earn revenue, and in the next stroke the revenue becomes cash-flow, and the cycle starts again.

[Isa Almoawda · Rating 5 out of 5]

Read it you're not a finance person but have to take part in financial decisions. Good for non-finance managers and business owners to put them in track to read and understand financial statements and such.

[Anthony · Rating 3 out of 5]

Good book to learn and understand the basics of accounting and finance

[Temple Dog · Rating 3 out of 5]

Financial Intelligence should be on the must-read list for anyone who wants to solidify their financial acumen.

If you took finance and accounting in B-school, the fundamentals will be a refresher.

If you have little or no finance knowledge, this should be your primer.
It's a quick, accessible read. I enjoyed the real-world examples, although, I would like to see the authors update the next addition to focus more on SaaS and AI companies. The financial models for those companies with hyper valuation view financial metric through a slightly different lens, as do their shareholders.

TD highly recommends.

[Louis · Rating 4 out of 5]

Interesting perspective on why understanding the finances of an organization matters. Showed how a poorly performing organization can legally show externally that they are doing well. Example of Waste Management altering the lifespan of their garbage trucks which then had them reduce depreciation each year which showed an increase in profits. Listened to on Audible.

[Erik · Rating 4 out of 5]

Read to increase business acumen now that I sell finance software. Learned a lot and was helpful, but wouldn't recommend to read unless you have a reason to read (i.e. you sell finance software or you want to increase your organizational financial acumen).

[Doug Scott · Rating 5 out of 5]

Solid coverage of all key financial elements of a business. Easy to ready and understand.

[Jan Riethmayer · Rating 5 out of 5]

Never thought finance is such an art form, wow.

[Justin Whitlock · Rating 4 out of 5]

Practical, readable, instructive.

[Anirudh Mallem · Rating 4 out of 5]

A beautiful explanation on the art of finance without going into heavy usage of jargons. Provides a unique perspective into business decisions made by leaders.

[Katie Lukes · Rating 3 out of 5]

listened to while painting walls. cash is king, look at the cash flow statement. the balance sheet = overall GPA and the income statement = grade for that semester.