A practical and accessible overview of the fundamentals of business financenow in its third edition.
Managers are constantly expected to make decisions that reflect a full understanding of the financial consequences. In the absence of formal training, few people are prepared for the responsibilities of dealing with management reports, budgets, and capital proposals, and find themselves embarrassed by their lack of understanding.
This book is a practical guide to understanding and managing financial responsibilities. Each chapter examines actual tasks managers have to do, from "how to assemble a budget," "how to read variances on a report," to "how to construct a proposal to invest in new equipment," exploring the principles that can be applied to each task, illustrating practical ways these principles are used, and providing guidance for implementation.
Guide to Financial Management will help readers understand financial jargon, financial statements, management accounts, performance measures, budgeting, costing, pricing, decision-making, and investment appraisal. This third edition has been fully revised and expanded with detailed examples from 100 leading businesses around the world.
About the Author
John Tennent is a coauthor of The Economist Guide to Business Modelling and The Economist Guide to Cash Management. He is an accountant, who for the past twenty years has been involved in training and consultancy with firms such as Unilever, BOC, BAE, Kraft, Thomson Corp, Cable & Wireless, BT, St Gobain, and EMI.
Table of Contents
1 Defining a successful business 1
2 Business structures 13
3 The role of the finance department 20
4 Financial statements and accounting systems 30
5 Accounting concepts and principles 51
6 Investors 77
7 Treasury management 106
8 Cost to serve 120
9 Product pricing and profitability 145
10 Portfolio management 162
11 Investment appraisal 179
12 Business planning, budgeting and reporting 219
13 Cash flow forecasting 251
14 Operational ratios and measures 278
15 Stockmarket and investor measures 306
16 Working capital management 325
17 Published reports and accounts 349
18 Accounting complexities 362
Glossary of financial terms 375
List of companies cited 386