Organizational Finance Basics

Submitted by mauzenne on Thu, 03/04/2010 - 23:31.
in

This cast recommends what every professional ought to know about your organization's basic financial health.

There are some things everybody ought to know about the financial health of the place where you work. It's really that simple. We've heard too many stories about people being surprised by layoffs, or reduced bonuses, or lack of pay raises, or tighter budgets to believe that everyone seeks out and learns what they need to know about how healthy their firm is financially.

We know it's hard to connect what you might be doing to the larger picture. On the other hand, if you're a manager, if you don't know that you better figure it out and you damn well better figure it out for your directs too. So if it's hard to see your connection to the big picture, we do understand that it's hard to recognize the impact of the big picture on you. [Until tighter budgets, flatter pay, smaller bonuses or layoffs suggest a hint of it.]

On the other hand, it's not that hard to find out. Here's what to know and how to know it.

  1. Need To Know: Annual and Quarterly Revenue
  2. Need To Know: Annual and Quarterly Profits
  3. Need To Know: Annual and Quarterly Industry Norms
  4. How To Know: Public Company
  5. How To Know: Small Company, Or a Private Company?


  [Play in Popup]

Extra Content
Legend:
    Members Only    Manager Tools Individual License
    Career Tools Individual License    Interviewing Series
    First Job Fundamentals   
Bookmark and Share
gurusimran's picture
Submitted by gurusimran on Wed, 03/10/2010 - 05:54.

Working in state government, what should I know?

Hi everyone,

Thank you Mike & Mark for another great cast. 

I'm looking I worked for a privately held company for 13 years and everything discussed in the cast made perfect sense in that light, however, now I work for a state governmental agency and I'm not sure what to look at. 

I know some of the big picture, like our state has a $600 million budget deficit and that has impacted our budgets (though not as much as it would have in the private sector).  But the thing I keep thinking is that our an agency (and almost all govt) is just a cost center so I can't figure out how to think this through.

I would love to hear everyone's input on this.  Thank you in advance!

Gurusimran

jib88's picture
Submitted by jib88 on Wed, 03/17/2010 - 01:50.

Looking forward to more on finance

I enjoyed this cast, but was actually expecting something different when I first read the title.

One of the things I struggle with is understanding some of the finance language used in my company, and I am occasionally caught off guard by discussions involving capital vs revenue expenditures, internal vs external spend, etc. It would be good to have a cast that covers finance or accounting language that every manager should know (even if they don't manage a budget).

 

jkable's picture
Submitted by jkable on Fri, 03/19/2010 - 14:00.

Useful online content - Financial Accounting

Thank you Mike & Mark for other very insightful podcast.

In terms of content which could be of assistance to those of us whom are not financial experts I recommend the following 'freemium' content:

1.) Investopedia - A great resource with plenty of content for the beginner and expert alike

 http://www.investopedia.com/articles/04/022504.asp

2.) The Khan Academy - A not-for-profit organisation with various online educational content.

Navigate to: http://www.khanacademy.org/#Banking%20and%20Money

Then navigate to the section entitled Valuation and Investing, 9th tab down on the left of the page.

Video topics include:

Price and Market Capitalization
Introduction to the Income Statement
Earnings and EPS
Introduction to the Price-to-Earnings Ratio
P/E Discussion
ROA Discussion 1
ROA Discussion 2
Depreciation
Amortization
P/E Conundrum
Enterprise Value
EBITDA

Hope it helps
Jason

 

afterwop's picture
Submitted by afterwop on Thu, 04/22/2010 - 14:40.

Hi Mike & Mark My name is

Hi Mike & Mark

My name is Kim Beyer, and I've been an entrepreneur and manager for the past 15 years. I started with my own company importing various food, and selling it at my convenience store. In the first 2 years my business grew, and sooner than I knew it I had 12 employees and 3 stores. Then I thought it was time to apply for a loan and further enlarge my business. I was convinced it was the right thing to do, and for the next year things were looking great but due to poor debt management and to my ambition to succeed without the necessary know-how, I went bankrupt.

I spent the next two years in business school, learning data I had previously discarded as "over-rated" and then I started another business with an associate. So far it's been working great and i would like to thank you for posting these finance basics, because they can save many entrepreneurs from bankruptcy.

Kim Beyer

cdman's picture
Submitted by cdman on Sun, 05/02/2010 - 09:04.

How to find financial data about Romanian companies

Hello.

Having been inspired by your cast, I thought that I post the following link: http://apt1.mfinante.ro/site/contribuabili/link.jsp?body=/contribuabili/...

This site (belonging to the Romanian Ministry of Finance) gives information about companies operating in Romania. You can either search by county and name (http://apt1.mfinante.ro/site/contribuabili/link.jsp?body=/contribuabili/...) or by CAEN - unique registry number (http://apt1.mfinante.ro/site/contribuabili/link.jsp?body=/contribuabili/...). For example to see the details for Coca Cola GMBH, search for the code 7381840.

Unfortunately I wasn't able to find an English version of the page. Neither did I find the forum thread discussing this particular episode, although I would be interested in other sites offering similar information, especially in the USA or Japan.

Best regards.

ecineko's picture
Submitted by ecineko on Wed, 12/01/2010 - 17:05.

Clarification sorted

During the finance basics podcast, Mark said " A company can be profitable on papers but may not have cash to pay for the business and that is why cash is king".

Can someone please help me understand this statement?