The Manager's Pocket Calculator: A Quick Guide to Essential Business Formulas and Ratios

Contents......Page 6
INTRODUCTION: The Basic Problem with Numbers......Page 10
CHAPTER 1: Compound Interest: The Power of Money......Page 18
Time Value of Money: The Concept......Page 19
Accumulated Value of a Series of Deposits......Page 36
Looking Ahead......Page 39
CHAPTER 2: Present Value and Sinking Funds......Page 40
Present Value of a Single Deposit......Page 41
Sinking Fund Payments and Present Value per Period......Page 44
Loan Amortization......Page 48
Reading Loan Amortization Tables......Page 55
Annual Percentage Rate......Page 61
Looking Ahead......Page 62
Return on Revenue and Equity......Page 63
Cash Return and Cash Flow......Page 70
Returns on Purchases and Sales......Page 75
Investment-Based Returns......Page 78
Annualized Return......Page 82
Looking Ahead......Page 84
Hidden Costs......Page 85
The Inflation Effect......Page 90
Taxes in the Profitability Equation......Page 93
Breakeven Calculations: Inflation and Taxes......Page 96
Calculating Cash Flow......Page 100
Looking Ahead......Page 103
Balance Sheet Basics......Page 104
Working Capital Ratios......Page 108
Ratios Showing Management of Working Capital......Page 111
Capitalization Ratios......Page 116
Combined Ratios......Page 122
Looking Ahead......Page 125
CHAPTER 6: Financial Reporting Formulas: The Income Statement......Page 126
Income Statement Basics......Page 128
Dollar and Percentage Reporting......Page 132
Cost of Goods Sold Relationships......Page 138
Revenue and Profitability Trends......Page 142
Core Earnings......Page 144
Looking Ahead......Page 145
CHAPTER 7: Depreciation Calculations......Page 147
Basic Depreciation Rules......Page 148
Straight-Line and Declining Balance Depreciation......Page 149
Class Lives and Recovery Periods......Page 153
Depreciation Calculations for Real Estate......Page 157
Home Office Depreciation......Page 162
Amortization......Page 164
Looking Ahead......Page 166
CHAPTER 8: Bringing Reports to Life: Powerful Arguments with the Numbers......Page 167
Picking Your Report Format......Page 168
Narrative Sections......Page 170
Financial Sections......Page 175
Combining Narrative and Financial Content......Page 178
Graphics in Reports......Page 181
Looking Ahead......Page 183
CHAPTER 9: Budgeting Calculations: Assumptions and Prorations......Page 185
Documenting Your Assumptions......Page 186
Addressing the Expense Issues......Page 189
Prorating Expense Estimates......Page 192
Calculating Variances......Page 194
Revising Budgets......Page 197
The Nature of Revenue Forecasts......Page 199
Looking Ahead......Page 202
Management Application of Statistics......Page 203
Statistical Averages......Page 207
Dispersion, Variance, and Deviation......Page 213
Accuracy in Statistics......Page 219
Looking Ahead......Page 223
Addition Shortcuts......Page 224
Subtraction Shortcuts......Page 228
Logical Rules......Page 231
Multiplication Shortcuts......Page 233
Division Shortcuts......Page 242
Looking Ahead......Page 243
Conversion......Page 244
Measurements......Page 253
Time Shortcuts......Page 258
APPENDIX: Summary of Formulas......Page 262
E......Page 286
R......Page 287
W......Page 288