A guide to books and Web sites dedicated to helping entrepreneurs brush up on their financial-management skills.
Analyzing Financials Plenty of entrepreneurs have had little formal financial training. Others learned some accounting theory in school, but by now the details have gotten a bit hazy. Publishers know this--and fill bookstore shelves with guides promising to teach nonfinancial types everything they ever wanted to know about small-business finance (but were afraid to ask). If you'd like to brush up on your financial-management skills, here's our guide to some of those resources. Each item is rated on a scale ranging from five stars (we love it) to no stars (we hate it).
The Complete Idiot's Guide to Finance and Accounting We really do recommend this book (from Simon & Schuster/MacMillan, 800-428-5331, 1998, $16.95) by Michael Muckian--as long as you're not put off by the title. Muckian, a financial manager who is clearly no idiot, has written a guide that is well constructed and facilitates easy scanning of any topic that is currently driving you to distraction. Chapters 7, 8, and 9 (on accounts receivable, accounts payable, and general cash-flow issues, respectively) are particularly worth a careful read. Pay special attention to the shortcuts and red flags that are highlighted in small boxes; in many instances, they can save your company big headaches. One especially helpful shortcut box: a discussion of receivables-system design, on page 68. *****
What Every Manager Should Know About Financial Analysis In this relatively short paperback (from Simon & Schuster, 800-223-2336, 1989, $8.95), Alan S. Donnahoe offers a more sophisticated take on many of the same issues mentioned above. But his book has one big advantage: it's written by an experienced financial executive, rather than an accountant or a writer for hire. Author Donnahoe is vice-chairman and director of Media General, which started small and grew big during his 19 years as CEO. This book is an insightful read that manages to straddle both practical issues (for instance, how to calculate breakeven points) and more-provocative ones (why stock indexes, for example, can be misleading). It isn't as comprehensive as some of the other titles we examined, but it offers a wealth of fascinating detail and management insights about the subjects it does cover. ****
How to Read a Financial Report This 47-page brochure, put out by Merrill Lynch (call 800-MERRILL, ext. 1745), is one of those freebies that's too good to miss. The brochure offers invaluable insights to understanding (and thus, preparing and using) corporate financial statements. ****
www.sba.gov/starting For beginners, this part of the U.S. Small Business Administration Web site is definitely worth a visit. Here you can gain free access to a range of resources, including some good basic answers to commonly asked accounting questions.
*** if you're a financial novice ** if you know more
Accounting for Dummies Certified public accountant John A. Tracy has written a book (from IDG Books Worldwide, 800-762-2974, 1997, $19.99) that falls somewhere between the good, the bad, and the just plain useless. The book suffers from information overload, but it does have some valuable chapters. Our favorite: "Bookkeeping 101: From Shoe Boxes to Computers." **
Business Finance for the Numerically Challenged This book (from Career Press, 800-CAREER-1, 1998, $11.99), by the editors of Career Press, demonstrates how condescending efforts like this can be. The book's math review suggests its readers may be junior-high-school dropouts. No stars
Accounting and Financial Fundamentals for Nonfinancial Executives Consultant Robert Rachlin and former corporate executive Allen Sweeny have written a book (from AMACOM, 800-538-4761, 1996, $19.95) that's soundly grounded, but its style and approach are off-putting. Many readers will get lost somewhere in the murk between chapter 1 ("The Dual Aspect Principle") and chapter 2 ("The Accrual Concept"). *--Jill Andresky Fraser