From the Book - Second edition, revised and expanded.
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 rules accountants follow-- and why you don't always have to --
Part one toolbox: getting what you want; the players and what they do; reporting obligations of public companies --
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 --
Part two toolbox: Understanding variance; profit at non-profits; a quick review: "percent of" and "percent change" --
The balance sheet reveals the most. Understanding balance sheets 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 --
Part three toolbox: Expense? or capital expenditure?; the impact of mark-to-mark accounting --
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 --
Part four toolbox: Free cash flow; even the big guys can run out of cash --
Ratios: learning what the numbers are really telling you. The power of ratios --
Profitability ratios: the higer the better (mostly) --
Leverage ratios: the balancing act --
Liquidity ratios: can we pay our bills? --
Efficiency ratios: making the most of your assets --
The investor's perspective: the "big five" numbers and shareholder value --
Part five toolbox: Which ratios are most important to your business?; the power of percent of sales; ratio relationships; different companies, different calculations --
How to calculate (and really understand) return on investment. The building blocks of ROI --
Figuring the ROI: the nitty-gritty --
Part six toolbox: a step-by-step guide to analyzing capital expenditures; calculating the cost of capital; economic value added and economic profit--putting it all together --
Applied financial intelligence: working capital management. The magic of managing the balance sheet --
Your balance sheet levers --
Homing in on cash conversion --
Part seven toolbox: Accounts receivable aging --
Creating a financially intelligent company. Financial literacy and corporate performance --
Financial literacy strategies --
Financial transparency: our ultimate goal --
Part eight toolbox: understanding Sarbanes-Oxley.
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