Financial Intelligence, Revised Edition: A Manager’s Guide to Knowing What the Numbers Really Mean

Review Financial Intelligence, Revised Edition: A Manager’s Guide to Knowing What the Numbers Really Mean


Financial Intelligence, Revised Edition: A Manager’s Guide to Knowing What the Numbers Really Mean


Financial Intelligence is hailed by Inc. magazine as one of the best, clearest guides to the numbers on the financial market.

Money managers have found solace in this book as it thoroughly gives a practical guide through the numbers, giving them the meaning behind the numbers and pointing out implications of the numbers.

The Revised Edition of Financial Intelligence features updated teaching of the numbers as well as retaining the rudiments of finance to business managers who are utilizing financial figures and pertinent data to make necessary business developments. It also includes financial issues that continue to resurface concerning financial crises. 

This book is written in a way that even non-managers would understand the science behind the numbers. It also injected stories of some firms that give a relatable element to it. 

About the Author

Karen Berman and Joe Knight founded the Business Literacy Institute in Los Angeles. This institution was established with the purpose of being a training center for managers at different organizations, which include American Express, P&G, GM, etc. 

Table of Contents

Financial Intelligence has eight parts with each part containing several subtopics. Here are the contents of the book:

Part One The Art of Finance (And Why It Matters)

  1. You Can’t Always Trust the Numbers
  2. Spotting Assumptions, Estimates, and Biases
  3. Why Increase Your Financial Intelligence?
  4. The Rules Accountants Follow – and Why You Don’t Always Have To

Part Two The (Many) Peculiarities of the Income Statement

  1. Profit Is an Estimate
  2. Cracking the Code of the Income Statement
  3. Revenue: The Issue Is Recognition
  4. Costs and Expenses: No Hard-and-Fast Rules
  5. The Many Forms of Profit

Part Three The Balance Sheet Reveals The Most

  1. Understanding the Balance Sheet Basics
  2. Assets: More Estimates and Assumptions (Except for Cash)
  3. On the Other Side: Liabilities and Equity
  4. Why the Balance Sheet Balances
  5. The Income Statement Affects the Balance Sheet

Part Four Cash is King

  1. Cash Is a Reality Check
  2. Profit ≠Cash (and You Need Both)
  3. The Language of Cash Flow
  4. How Cash Connects with Everything Else
  5. Why Cash Matters

Part Five Ratios: Learning What The Numbers Are Really Telling You

  1. The Power of Ratios
  2. Profitability Ratios: The Higher the Better (Mostly)
  3. Leverage Ratios: The Balancing Act
  4. Liquidity Ratios: Can We Pay Our Bills?
  5. Efficiency Ratios: Making The Most of Your Assets
  6. The Investor’s Perspective: “The Big Five” Numbers and Shareholder Value

Part Six How To Calculate (and Really Understand) Return on Investment

  1. The Building Blocks of ROI
  2. Figuring ROI: The Nitty-Gritty

Part Seven Applied Financial Intelligence: Working Capital Management\

  1. The Magic of Managing the Balance Sheet
  2. Your Balance Sheet Levers
  3. Homing In on Cash Conversion

Part Eight Creating A Financially Intelligent Company

  1. Financial Literacy and Corporate Performance
  2. Financial Literacy Strategies
  3. Financial Transparency: Our Ultimate Goal

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