Financial intelligence: a manager's guide to knowing what the numbers really mean

What is financial intelligence?

The art of finance (and why it matters)

You can't always trust the numbers

Spotting assumptions, estimates, and biases

Why increase your financial intelligence?

The (many) peculiarities of the income statement

Profit is an estimate

Cracking the code of the income statement

Revenue: the issue is recognition

Costs and expenses: no hard and fast rules

The many forms of profit

The balance sheet reveals the most

Understanding balance-sheet basics

Assets: more estimates and assumptions (except for cash)

On the other side: liabilities and equity

Why the balance sheet balances

The income statement affects the balance sheet

Cash is king

Cash is a reality check

Profit [does not equal] cash (and you need both)

The language of cash flow

How cash connects with everything else

Why cash matters

Ratios: learning what the numbers are really telling you

The power of ratios

Profitability ratios: the higher the better (mostly)

Leverage ratios: the balancing act

Liquidity ratios: can we pay our bills?

Efficiency ratios: making the most of your assets

How to calculate (and really understand) return on investment

The building blocks of ROI

Figuring ROI: the nitty gritty

Applied financial intelligence: working capital management

The magic of managing the balance sheet

Your balance sheet levers

Homing in on cash conversion

Creating a financially intelligent department (and organization)

Financial literacy and corporate performance

Financial literacy strategies

Financial transparency: our ultimate goal

Sample financials.

Part one: The art of finance (and why it matters). You can't always trust the numbers

Part two: The (many) peculiarities of the income statement. Profit is an estimate

Part three: The balance sheet. Understanding balance sheets basics

Part four: Cash is king. Part five: Ratios: learning what the numbers are really telling you.

Part five toolbox: Which ratios are most important to your business?; the power of percent of sales; ratio relationships; different companies, different calculations

Part six: How to calculate (and really understand) return on investment.

Part six toolbox: a step-by-step guide to analyzing capital expenditures; calculating the cost capital; economic value added and economic profit-putting it all together

Part seven: Applied financial intelligence: working capital management.

Part seven toolbox: Accounts receivable aging

Part eight: Creating a financially intelligent company.

Part eight toolbox: Understanding Sarbanes-Oxley

Appendix: Sample financials.