Financial Intelligence: A Manager's Guide to Knowing What the Numbers Really Mean [Hardcover]

Karen Berman (Author), Joe Knight (Author), John Case (Author)

Book Description

Publication Date: January 12, 2006 | ISBN-10: 1591397642 | ISBN-13: 978-1591397649 | Edition: 1

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. 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. Co-author John Case has written several popular books on management.

Editorial Reviews

Review

“the best, clearest guides to the numbers that I know of.” – Inc. Magazine

About the Author

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 LA Times.

John Case has written several successful books including Open-Book Management (HarperBusiness, 1995) and The Open-Book Experience (Addison Wesley,1998). He is a contributing writer for Inc. magazine and has written for HBR and a variety of other business publications.

Product Details

• Hardcover: 288 pages
• Publisher: Harvard Business Review Press; 1 edition (January 12, 2006)
• Language: English
• ISBN-10: 1591397642
• ISBN-13: 978-1591397649
• Product Dimensions: 6.4 x 1.1 x 9.4 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 4.6 out of 5 stars  See all reviews (70 customer reviews)
• Amazon Best Sellers Rank: #13,063 in Books (See Top 100 in Books)
  • #10 in Books > Business & Investing > Skills > Business Writing
  • #59 in Books > Business & Investing > Finance
  • #80 in Books > Business & Investing > Accounting

Most Helpful Customer Reviews

68 of 71 people found the following review helpful

5.0 out of 5 stars A MUST-READ FOR EVERY DECISION-MAKER WITHOUT EXPERTISE IN FINANCE. December 31, 2005

By Yvette Borcia and Gerry Stern

Format:Hardcover

A MUST-READ FOR EVERY DECISION-MAKER WITHOUT EXPERTISE IN FINANCE

This book is MORE than a concise, highly readable, jargon-free introduction to the fundamentals of finance for nonfinancial managers. Beyond the basics, the authors enable readers to gain a solid understanding of financial intelligence which, in essence, consists of four skill sets that help the reader understand:
1) The basics of financial measurement
2) The art and science of finance
3) How to analyze the numbers in greater depth
4) How to view financial results in context

The authors also aim to enable nonfinancial managers to:
1) speak the language
2) ask questions to figure out the what, why and how of the numbers
3) use the information in doing their jobs and see their connection with financial performance

The book's eight major sections are:
1) the art of finance and why it matters
2) the (many) peculiarities of the income statement
3) the balance sheet reveals the most
4) cash is king
5) ratios: learning what the numbers are really telling you
6) how to calculate (and really understand) return on investment
7) applied financial intelligence: working capital management
8) creating a financially intelligent department (and organization).

Excellent illustrative stories are skillfully woven into the text. The writing is superb, making the book a pleasure to read.

This is, fundamentally, a first-rate course in finance. To create a stronger (MUCH stronger) company, CEOs would be well-advised to have every nonfinancial decision-maker read this book.

28 of 31 people found the following review helpful

5.0 out of 5 stars Makes sense of the "murkier" areas of financial statements and other aspects of finance February 6, 2006

By K. Corn TOP 100 REVIEWERVINE™ VOICE

Format:Hardcover

What I particularly liked about this book was how the author revealed that knowing the basics of finance is just a start. What is often NOT covered is how to deal with the areas that can't be so easily quanitifed -and, when push comes to shove, have to be estimated and/or assumed.

In short, there is a certain amount of judgment that goes into many income statements and balance sheets. Author Joe Knight gives valuable tips on recognizing and understanding potential biases in financial information and advises readers how to correct for them...or even challenge them.

Those who know the basics will find a lot they've read before but KNOWING the basics is not the same as having true financial literacy, the kind that makes the difference between knowing what is on paper and being able to "read between the lines."

Nonfinancial managers will gain a new understanding of how to build their company's success, with solid financials.

What I particularly liked were the real stories from actual companies, proving that this book is not mere theory but actual, tested information. It is also written in a very, very accessible style. You won't need a distionary to get through it.

18 of 19 people found the following review helpful

5.0 out of 5 stars What I need to know January 12, 2006

By Gregory Wilde

Format:Hardcover

I am a non-financial SVP in a large credit union. This book helps me understand what the CFO is talking about. I can even add my two-cents to the ALM discussion. My contribution to the organization will never be financial brilliance but in the financial services world I need the back ground this book provides. Its clear, well organized, and right on point. I hope that all of my non-financial managers will read it.