Business Ratios and Formulas: A Comprehensive Guide [Hardcover]

Steven M. Bragg (Author)

Book Description

Publication Date: September 30, 2002 | ISBN-10: 0471396435 | ISBN-13: 978-0471396437 | Edition: Book

A complete appraisal of analytical tools available to managers to assess performance

"Steve Bragg has created a useful, relevant guide to applying performance measurements across the organization. His practical explanations and examples should enable managers to apply sophisticated performance measures in a straightforward manner. This book will be a great tool for process improvement. It should be well received by managers, accountants, and consultants."
—Clint Davies, Partner (Principal), Berry, Dunn, McNeil & Parker

Business managers require a variety of analytical tools to assess a host of organizational performance standards-from finance, efficiency, capacity, and market share to asset utilization, cash flows, liquidity, and capital structure. Steven Bragg's Business Ratios and Formulas represents a comprehensive resource of nearly 200 operational criteria, allowing managers and auditors to pick and choose the tools they need to best assess their organization's performance. Each cataloged measurement includes a description, an example, and some time-tested troubleshooting. Business Ratios and Formulas proves an authoritative resource for managers wishing to thoroughly assess organizational performance.

Editorial Reviews

Review

"It is an important, Quick Reference item that should be in every business collection." (Choice, April 2003)

From the Inside Flap

Business managers use ratios and formulas to understand not only the financial performance of their departments but also their efficiency, effectiveness, capacity, market share, and a host of other values. Steven Bragg compiles an authoritative compendium of these analytical tools in Business Ratios and Formulas: A Comprehensive Guide, providing managers the full complement of methods to accurately assess their organization's performance.

Business Ratios and Formulas carefully catalogs nearly 200 types of performance measurements, including for each a complete description, an explanation of the calculation, an example, and cautions regarding its use. Bragg emphasizes the importance of understanding these cautions, as they describe those elements of a measurement that can be modified to deliver misleading results, different measurements that may work better in certain situations, usage on a trend line basis, and which other measurements should be used to reinforce indicated results. He also covers performance indicators that are of particular interest to creditors and investors, such as those that assess asset utilization, operating performance, cash flows, liquidity, capital structure, return on investment, and market performance. Chapters include:
* Measurements for the Accounting/Finance Department
* Measurements for the Logistics Department
* Measurements for the Sales and Marketing Department
* Measurement Analysis with an Electronic Spreadsheet

The comprehensive, accessible format of Business Ratios and Formulas allows readers interested in assessing a specific department or a specific function to customize the book to fit their individual needs. By generating only pertinent information, managers can acquire better feedback on strategy initiatives, craft-specific efficiency projects, and conduct targeted performance evaluations.

The appendix itemizes the analysis tools most useful in specific industries, providing a quick and easy reference. Accounting professionals, business managers, and operational consultants will find Bragg's peerless guide to be an ideal tool for critiquing corporate performance.

See all Editorial Reviews

Product Details

• Hardcover: 352 pages
• Publisher: Wiley; Book edition (September 30, 2002)
• Language: English
• ISBN-10: 0471396435
• ISBN-13: 978-0471396437
• Product Dimensions: 9.4 x 6.1 x 1.1 inches
• Shipping Weight: 1.5 pounds
• Average Customer Review: 4.6 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #1,079,205 in Books (See Top 100 in Books)

More About the Author

The primary question I receive is, why would anyone write so many accounting books? The story began in the early 1990s, when my former boss, Jan Roehl-Anderson, asked me to assist in taking over a book called Controllership from Jim Willson (correct spelling), who had been maintaining the book since the early 1950s. I liked the experience, and even found it relaxing (I must have issues!).

So... I had an idea for another book, called Just-in-Time Accounting, which the publisher accepted, and which got me on the track of doing management accounting books. Most accounting books up to that point had primarily dealt with accounting principles and not how to management the department, so this was a rich area for new books.

The Accounting Best Practices book, which is one of the top-selling accounting books in the country, started when I was bouncing around ideas for new books with one of my editors, John DeRemigis. He suggested the accounting best practices idea, and I said, "nah, there's not enough material." Four editions later and over 400+ pages long, it appears that he was right and I was wrong.

Writing became more intense in 2005, when John Wiley & Sons recommended me to the authors of the Wiley GAAP Guide as a new co-author. This is a seriously technical high-end accounting principles guide, and so was nothing like what I had written before. My first assignment was adding a hundred or so new examples to the book, which was absolutely frantic -- imagine becoming an expert on a really far-out accounting topic in one day, writing an esoteric example, and then hurrying on to an entirely different example the next day.

I have just finished writing Accounting Controls Best Practices, which is chock-full of control points for the most common accounting systems, as well as for best practices upgrades to those systems. And now, it is time for a break, if only for a week.

So... I am heading to the Western Pacific for some serious diving off a live aboard dive boat.

Steve Bragg

Customer Reviews

Most Helpful Customer Reviews

28 of 29 people found the following review helpful:

5.0 out of 5 stars An excellent business resource, November 10, 2002

By A Customer

This review is from: Business Ratios and Formulas: A Comprehensive Guide (Hardcover)

Business Ratios and Formulas, A Comprehensive Guide, is the most thorough reference book of its type. Steven Bragg provides a complete explanation of each business ratio and formula and follows each with a scenario example of their applications. Also provided is a discussion of how the resultant calculation can be misleading or should be used in conjunction with other ratios. I have not seen this feature in any other book of its kind.

Another excellent feature of the book is the chapter on "Measurement Analysis with an Electronic Spreadsheet", which describes the use of Microsoft Excel to assist the business professional in automating the analysis. Five types of analyses are included in this chapter: financial statements, project analysis, investment analysis, risk analysis and trend analysis.

In the introduction to the text Mr. Bragg states, "Even if a company has developed a reasonable set of measurements, this does not mean that they should never be changed." As a controller I am in the process of re-examining my company's measurement process. This book is an invaluable resource. Excellent for both the professional and student. A book I wish I had during my MBA studies.

9 of 10 people found the following review helpful:

5.0 out of 5 stars Set up your books so performance can be measured, May 8, 2006

By 

Jeff Lippincott "JLIPPIN" (Princeton, NJ USA) - See all my reviews
(TOP 1000 REVIEWER)    (VINE VOICE)    (REAL NAME)   

This review is from: Business Ratios and Formulas: A Comprehensive Guide (Hardcover)

This is not an easy-read book. It is much like a cookbook - there are all kinds of recipes (formulas) identified and explained. A must-read for anyone who wants to start, run, and grow a business.

After reading this book you should be impressed with the fact that every business can be viewed as a database of numbers (statistics). The quality of the databases will vary, often significantly, but all businesses can build quality databases if they so desire. If they do, then they can take advantage of the priceless information included in this book.

I used to work for a small company that refused to keep accurate accounting records. All they worried about it seemed was the cash flow schedule so they could pay their bills. I tried to impress upon them the importance of well-kept books so the health status of the business could always be identified quickly, and strategic planning could be performed to increase profitability or to pursue growth pursuant to a plan. If they had kept books as I suggested, then they wold have been able to take advantage of the book I'm reviewing here.

By reading this book and taking note of the financial data necessary to plug and chug the formulas, you will be knowledgeable about how to set up your accounting records on Quickbooks Pro or whatever other accounting software your company uses. And the better those accounts are set up, the better you will be able to use the information provided in this book.

5 of 5 people found the following review helpful:

4.0 out of 5 stars Great Ratio Analysis reference book, May 3, 2009

By 

A. Bentley (Somewhere in the USA) - See all my reviews
(REAL NAME)   

This review is from: Business Ratios and Formulas: A Comprehensive Guide (Hardcover)

This is a great reference book for Financial Statement Ratio Analysis. Unlike some other ratio analysis books, this one has more ratios than you would ever need to use even in the most in-depth analysis of a companies financials.

The layout of the book flows naturally, meaning that the book divides the ratios into categories like Liquidity, Solvency, Performance, Return on Investment, etc... the one shortfall here is though you'd expect the ratios to flow from one into the other as you pick a category and investigate it, you'd be wrong. For example, The Current, Quick, and Cash ratios are some of the most important starter ratios for Liquidity test and you'd expect the section on Liquidity to start with them, but it doesn't. It starts with Accounts Receivable Turnover ratio followed by Average Receivable Collection Period. Although that is important, it's not where one typically starts during a liquidity test, so the author could have organized the ratios with a little more thought. Nevertheless, this disadvantage is outweighed by the advantage of having a good explanation of what each ratio means with a hypothetical example for every single ratio.

It's my conclusion that this book is made for people with an existing knowledge of Accounting.

Beginners would have a difficult time with this, as the book is filled with jargon. Accountants and professional analysists would love this, because all the jargon just saves us time. We hate it when books like these try to cater to everyone, including amateurs, and in the end just 'water down' the content. We just want that ratio and a quick explanation in OUR language of what it means and how to interpret it. This book does just that.

If you're looking for a Ratio reference book, you should definitely have this one as part of a larger collection, since having one ratio reference book is not enough and you always need to cross-reference if you get lost along the way.