Finance for Nonfinancial Managers, Second Edition (Briefcase Books Series)

AN INTRODUCTION TO FINANCIAL REPORTS--WITH NEW TACTICSFOR BUDGETING AND PINPOINTING KEY FINANCIAL AREAS Financial decisions impact virtually every area of your company. As a manager, it's up to you to understand how and why. Finance for Nonfinancial Managers helps you understand the information in essential financial reportsand then shows you how to use that understanding to make informed, intelligent decisions. It provides a solid working knowledge of: Basic Financial Reports--All about balance sheets, income statements, cash flow statements, and more Cost Accounting--Methods to assess which products or services are most profitable to your firm Operational Planning and Budgeting--Ways to use financial knowledge to strengthen your company Briefcase Books, written specifically for today's busy manager, feature eye-catching icons, checklists, and sidebars to guide managers step-by-step through everyday workplace situations. Look for these innovative design features to help you navigate through each page: Key Terms: Clear defi nitions of key terms and concepts Smart Managing: Tactics and strategies for managing change Tricks of the Trade: Tips for executing the tactics in the book Mistake Proofing: Practical advice for minimizing the possibility of error Caution: Warning signs for when things are about to go wrong For Example: Examples of successful change-management tactics Tools: Specific planning procedures, tactics, and hands-on techniques

Table of Contents:
Introduction ix 1. Counting the Beans: Why Good Financial InformationIs Critical to You 1 Managing a Company in Today's Business Environment 1 The Role of the Finance Department 4 The Wonder Widget Company Is Our Guide 7 The "Rules" of Financial Reporting 8 The Relationship of Finance and Accounting tothe Other Departments 10 Manager's Checklist for Chapter 1 11 2. The Structure and Interrelationship of Financial Statements 13 Tracking a Company's Lifecycle 15 Accounting Is Like a Football Game on Your DVR 16 The Chart of Accounts: A Collection of Buckets 20 The General Ledger: Balancing the Buckets 23 Accrual Accounting: Say What? 25 The Principal Financial Statements Defined 27 Manager's Checklist for Chapter 2 29 3. The Balance Sheet: A Basic Summary of Value and Ownership 31 Assets and Ownership: They Really Do Balance! 31 Current Assets: Liquidity Makes Things Flow 33 Fixed Assets: Property and Possessions 39 Other Assets: The "Everything Else" Category 40 Current Liabilities: Repayment Is Key 41 Long-Term Liabilities: Borrowed Capital 44 Ownership Comes in Various Forms 45 Capital Stock Comes in Several Flavors 46 Using This Report Effectively 48 Manager's Checklist for Chapter 3 48 4. The Income Statement: The Flow of Progress 51 They Say Timing Is Everything-And They're Right! 51 Sales: Grease for the Engine 55 Cost of Sales: What It Takes to Earn the Sale 55 Gross Profit: The First Measure of Profitability 58 Operating Expenses: Running the Business 58 Operating Income: The Basic Business Bottom Line 60 EBITDA-He Bit Who? 61 Other Income and Expenses: Not Just Odds and Ends 62 Income Before Taxes, Income Taxes, and Net Income 63 Earnings per Share, Before and After Dilution-What? 63 Using This Report Effectively 66 Manager's Checklist for Chapter 4 66 5. Profit vs. Cash Flow: What's the Difference-and Who Cares? 67 The Cash Flow Cycle 68 Cash Basis vs. Accrual Basis 74 Net Profit vs. Cash Flow in Your Financial Reports 75 Manager's Checklist for Chapter 5 78 6. The Statement of Cash Flow: Tracking the King 81 Beginning Where the Income Statement Ends 83 Cash from Operations: Running the Business 86 Cash for Investing: Building the Business 90 Cash from Financing: Capitalizing the Business 92 Using This Report Effectively 94 Manager's Checklist for Chapter 6 95 7. Key Performance Indicators: Finding the"Hidden" Information 97 What Are KPIs? Do They Mix with Water? 98 Measures of Financial Condition and Net Worth 98 Measures of Profitability 103 Measures of Financial Leverage 106 Measures of Productivity Metrics 109 Trend Reporting: Using History to Predict the Future 113 Manager's Checklist for Chapter 7 117 8. Cost Accounting: A Really Short Course inManufacturing Productivity 119 The Purpose of Cost Accounting-Strictly for Insiders 120 Fixed and Variable Expenses in the Factory 124 Controllable and Uncontrollable Expenses 127 Standard Costs-Little Things Mean a Lot 129 Manufacturing Cost Variances: Analysis for Action 130 Manager's Checklist for Chapter 8 133 9. Good Investment or Bad? How Do You Decide? 135 Capital Investment: A Game of Choices, Risks, andHoped-For Outcomes 136 Return on Investment: The Concept and the Purpose 137 Payback Period: A Quick and Easy Way to Understandthe Approach 138 The Time Value of Money: Today and in the Future 139 Discounted Cash Flow: Evaluating Long-Term Investments 141 Weighted Average Cost of Capital: Enhancing theReturn to Shareholders 143 Internal Rate of Return: Deciding What ReturnIs Good Enough 145 Risk Management: Assessing the Probability ThatWe Might Be Wrong 146 Manager's Checklist for Chapter 9 147 10. Get to Breakeven First! 149 What Does "Breakeven Point" Really Mean? 150 Why Is This a Critical Factor in Profitability? 151 How to Calculate Breakeven for a New Product 152 What to Do If You Don't Like the Answer 155 Manager's Checklist for Chapter 10 156 11. Business Planning: Creating the Future You Want,Step by Step 159 Why Take Time to Plan? 159 Strategic Planning vs. Operational Planning 162 Vision and Mission: The Starting Point 164 Strategy: Setting Direction 165 Long-Term Goals: The Path to the Mission 167 Short-Term Goals and Milestones: The Operating Plan 168 Manager's Checklist for Chapter 11 174 12. The Annual Budget: Financing Your Plans 177 Tools for Telling the Future: Budgets, Forecasts,Projections, and Tea Leaves 178 How to Budget for Revenues: The "Unpredictable"Starting Point 179 Budgeting Costs: Understanding RelationshipsThat Affect Costs 182 The Budgeting Process: Trial and Error 184 Flexible Budgets: Whatever Happens, We've Got aBudget for It 187 How to Live Within Your Budget 191 Variance Reporting and Taking Action 192 The Capital Expenditure Budget 193 The Cash Flow Budget 194 Integrating the Entire Operating Budget 195 Manager's Checklist for Chapter 12 196 13. Financing the Business: Understanding the Debtvs. Equity Options 199 The Strategy of Borrowing Money 199 How a Business Gets Financed: In the Beginningand Over Time 202 Short-Term Debt: Balancing Working Capital Needs 203 Long-Term Debt: Semipermanent Capital or AssetAcquisition Financing 209 Convertible Debt: The Transition from Debt to Equity 213 Capital Stock: Types and Uses 214 Manager's Checklist for Chapter 11 218 14. Attracting Outside Investors: The Entrepreneur's Path 221 The Start-Up Company: Seed Money and Its Sources 223 Professional Investors: Angels on a Mission 224 Venture Capitalists: What You Need to Know toAttract Them 226 The Initial Public Offering: Heaven or Hell? 230 Strategic Investors: The Path to a Different Party 232 Acquisition: The Strategic Exit 233 Manager's Checklist for Chapter 14 236 Index

About the Author :
Gene Siciliano, C.M.C., C.P.A. (Los Angeles, CA) is founder and president of Western Management Associates, which provides financial management consulting services to corporate clients. He is a member of the National Speakers Association.