financial literacy, financial statements, financial ratios, quantitative literacy


Berman, Karen and Knight, Joe, with John Case. Financial Intelligence for Entrepreneurs: What You Really Need to Know about the Numbers, (Boston MA: Harvard Business Press, 2008). 285 pp. ISBN 978-1-4221-1915-0.

From “The art of finance (and why it matters)” (Part One) through “Creating a financially intelligent company” (Part Eight), Financial Intelligence for Entrepreneurs is an engaging explanation and appreciation of financial statements and financial ratios. Short, easily digested chapters; just-in-time boxes to introduce terminology; easy, direct, in-text calculations from bare-bones, hypothetical financial statements to illustrate concepts; a 44-page appendix of crafted exercises on the income statement, balance sheet, cash-flow statement, and financial ratios from two public companies for deeper understanding; a detailed 19-page index for quick, after-you’ve-read-it navigation – all make for an efficient learning opportunity for readers who want a painless way to know about the numbers used in the world of business. Two quantitative literacy principles emerge as themes. The first is the “art of finance” (social construction): that is, the numbers are not totally objective; to varying extents, they reflect decisions, assumptions, and estimates in the accounting. The second is that ratios provide a window into the story that financial statements are able to tell. Written for entrepreneurs and company owners, the book ends with OBM (open-book management)—a management philosophy based on financial literacy. The vision of this book is businesses in which all employees are financially literate and managers and owners are financially intelligent.



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