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Book Description

Intimidated by corporate finance? The numbers (and the jargon) can feel overwhelming—but you have to understand them to manage effectively. Finance Basics explains the fundamentals simply and quickly, introducing you to key terms and concepts such as:

• How to navigate financial statements
• How to weigh costs and benefits
• What’s involved in budgeting and forecasting
• How to gauge a company’s financial health


About HBR's 20-Minute Manager Series:
Don't have much time? Get up to speed fast on the most essential business skills with HBR's 20-Minute Manager series. Whether you need a crash course or a brief refresher, each book in the series is a concise, practical primer that will help you brush up on a key management topic.

Advice you can quickly read and apply, for ambitious professionals and aspiring executives—from the most trusted source in business. Also available as an ebook.

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Contents
  5. Why Understand Finance?
  6. Navigating the Three Major Financial Statements
    1. Accounting methods
    2. The income statement
    3. The balance sheet
    4. The cash flow statement
  7. Using the Statements to Measure Financial Health
    1. Profitability ratios
    2. Efficiency ratios
    3. Liquidity ratios
    4. Leverage ratios
    5. Other ways to measure financial health
  8. Preparing a Budget
    1. Top-down versus bottom-up budgeting
    2. Getting started
    3. Articulating your assumptions
    4. Quantifying your assumptions
  9. Calculating Return on Investment
    1. Costs and benefits
    2. Payback period
    3. Net present value and internal rate of return
    4. Break-even analysis
    5. Sensitivity analysis
    6. Evaluating unquantifiable costs and benefits
  10. Tracking Performance
    1. Performance of an investment
    2. Performance of an existing unit
    3. Forecasts
  11. Test Yourself
    1. Answers to Test Questions
  12. Key Terms
  13. Learn More
  14. Sources
  15. Index
  16. Back Cover