BEST BOOKS ON BUSINESS FINANCE
PUBLISHED ON DEC. 22, 2019 | 21 MIN READ
What are the best books on business finance?
Best Books on Business Finance
1 – The Definitive Guide to Business Finance | By Richard Stutely
You’d assume a book on business finance to be boring, tedious, and tired – that is, an excellent remedy for insomnia. Well, for this book, it is not the case because Richard Stutely’s guidebook on figures for nonfinancial managers makes this topic interesting. This author and business expert perfectly combines anecdotes and humorous in a witty approach to make the introduction to business numbers a lot easier. Furthermore, the emphasis on the details of data and figures to make them understandable. This book, The Definitive Guide to Business Finance: What Smart Managers Do with the Numbers, will surely be beneficial for both novice and expert alike.
Quotes from the book;
“As an entrepreneur or manager, your job is to contribute to the bottom line, to ensure that income exceeds expenditure and happiness ensues.”
“Cooking up a forecast…nearly always boils down to forecasting sales volumes…Once you have this central number, everything else will be estimated, not forecast.”
“With a reasonable command of the figures, you will be able to manage more effectively and efficiently, make better decisions, produce stunning reports, be a better communicator and at least hold your own in difficult meetings.”
“It’s about how you manage the numbers. All of them.”
2 – Liar’s Poker | By Michael Lewis
Back in the 1980s, Silicon Valley was unheard of in the public eye, Wall Street was the dominant force of the financial sector. However, just a few decades ago, the United States experienced an unprecedented wealth boom. Liar’s Poker: Rising Through the Wreckage on Wall Street is the chronicles of the rise and collapse of the Salomon Brothers in its aggressive expansion and decline. Lewis writes from a journalist’s perspective during this crazy period on Wall Street. The book is a historical snapshot of Wal Street. BiggerInvesting.com recommends this book to executives, students, businessmen, and readers alike.
Quotes from the book;
“Making profits on Wall Street is a bit like eating the stuffing from a turkey. Some higher authority must first put the stuffing into the turkey.”
“Because the 41st floor was the chosen home of the firm’s most ambitious people…the men who worked there had a hunted look about them.”
“Year-end bonuses are not tied directly to one’s profitability, but rather to the perception of one’s value by Salomon’s compensation committee.”
“The worst thing a man can do with a telephone without breaking the law is to call someone he doesn’t know and try to sell that person something he doesn’t want.”
“You couldn’t put your finger on why, when two seemingly equal people sat in the same position, one made $20 million and the other lost $20 million.”
“The questions a Liar’s Poker player asks himself are the same a bond trader asks himself. Is this a smart risk? Do I feel lucky?”
3 – Smart Things to Know About Business Finance | By Ken Langdon and Alan Bonham
Many people in the business industry have no intention of being in this sector while they are in college. Corporation has rampant liberal arts majors turned who became entangled with business. However, this goes to show that the greatest weakness of these individuals is in reading a financial statement. Now that that is said, Alan Bohman and Ken Langon’s book will guide you on how to understand numbers in business. All the fundamentals are covered in this book, Smart Things to Know About Business Finance, such as how to understand assets, liabilities, cash flow, margins, and earnings. It also provides a comprehensive overview of financial statements that investors, analysts, and executives use in decision making.
Quotes from the book;
“Companies do not necessarily go bust because they are not making profits; they go out of business, or get taken over, because they do not have the cash to pay their bills.”
“Put simply, companies using their assets efficiently will have a relatively high return compared to less well run businesses.”
“Lack of competitiveness in profit per employee is a signal to the board to review the number of people it employs.”
4 – The Customer-Funded Business | By John Mullins
In 1980, Micheal Dell was in his dorm room, making a computer that he was paid for in advance by costumers. The Banana Republic, which is an apparel retailer, charged $1 per catalog and built its inventory with its proceeds when it first opened. These two companies show what John Mullins named “the customer-funded business.” This strategy is commonsense when it comes to financing a company to avoid the require bank loans and venture capital; Some entrepreneurs utilize the money from their costumers to finance their expansion. In this book, The Customer-Funded Business: Start, Finance, or Grow Your Company with Your Customer’s Cash, Mullins makes a sound argument for his approach as he demonstrates these with real-life examples.
Quotes from the book;
“If your customer-funded business offers something that’s both better and cheaper, it’s a lot more compelling – to customers and investors – than just better or cheaper.”
“The more pressing the customer’s pain, whether for goods or services, the more likely the customer will be to pay you in advance, even for a solution that is not yet fully developed.”
“No customer will fork over money in advance to a provider they don’t trust.”
“One of the possible reasons why subscription models have moved onto the radar is that the software industry has embraced them wholeheartedly.”
5 – The Wisdom of Finance | By Mihir Desai
This book was chosen as a nominee for the Mckinsey Business Book of the year or the 2017 Financial times. It is also one of Amazon’s 2017 top picks in the Business and Leadership category. Aside from that, this has received the Best Business Book of 2017 award from WealthManagement.com. Written by Professor Mihir Desai of Harvard Business school, this book, The Wisdom of Finance: Discovering Humanity in the World of Risk and Return, is considered as his last lecture towards the MBA class of 2015 at Harvard, which restored the faith of humanity in finance. This book contains biting humor and sarcasm as the address drew upon full information of film, literature, philosophy, history to describe the internal operations of finance in a way done by only Professor Desai himself.
Quotes from the book;
“John Henry Newman put it more than 150 years ago, “the general principles of any study you may learn by books at home; but the detail, the color, the tone, the air, the life which makes it live in us, you must catch all these from those in whom it lives already.”
“Finance’s starting point in valuation is that previous accomplishments and what you have today bear little relationship to real value. Finance is completely and ruthlessly forward-looking. The only source of value today is the future.”
6 – Executive Finance and Strategy | By Ralph Tiffin
The financial tactic is a significant component of operating a business. Board members, executives, and Nonfinancial managers must know how this approach increases their entire operations. Ralph Tiffin, who is both a consultant and auditor, has written a guide with comprehensive tables, accounting definitions and examples, and case studies that discusses UK’s accounting rules in contrast with the standards of the United States in a useful manner. He also offers strong tactical knowledge that will help the manager recognize the impact of business approaches, ethic, and behaviors reflected in financial statements. Executive Finance and Strategy: How to Understand and Use Financial Information to Set Strategic Goals is recommended for the finance executive and business professionals.
“An executive must ensure that the organization is able to meet its obligations as they mature.”
“The budget process is the key tool or tactic to be used to deliver the operational strategy.”
“Finance is at the heart of any business – businesses would not exist without the pumping of cash through the business and the consequent recording of the flows.”
“The future economic benefit of an asset is its potential to contribute, directly or indirectly, to the flow of cash and cash equivalents to the entity.”
“There are financial strategies that deliver more by optimizing financial (balance sheet) structure rather than operational performance.”
7 – Behavioral Finance and Wealth Management | By Michael Pompian
This unique, functional model helps you implement behavioral finance knowledge to your wealth management. Michael M. Pompian mainly discusses to a readership of investment advisers personnel, and willing to learn investors will benefit from the understanding of what factors the decision making of investments. Readers have the option between the number book that focuses on cognitive biases, neuroeconomics, and behavioral finance. However, only several books can be considered as a match for this one. In Behavioral Finance and Wealth Management: How to Build Optimal Portfolios for Private Clients, the writer has provided action plans on preferences, which direction to take for coming researches and a concise history of behavioral finance.
Quote from the book;
“If you think you may have made a bad investment decision…confront the problem head on and rectify the situation.”
“We want to identify relevant psychological biases and investigate their influence on asset allocation decisions so that we can manage the effects of those biases on the investment process.”
“One of the best ways to prevent your biases from affecting your decisions is to keep the rational side of your brain engaged as often as possible.”
“Investor irrationality has existed as long as the markets themselves.”
“Women are more susceptible to the hot-hand fallacy than men are; men look at their portfolios more often than women do; men are more likely to cut losses immediately, whereas women are more likely to buy and hold.”
8 – How to Read a Financial Report | By John Tracy
Exerting the time to master the primary of reading corporate financial statements can benefit you to become more educated about your job, business decisions, and finances. Author, John A. Tracy presents a well-written book of necessary financial reports in How to Read a Financial Report: Wringing Vital Signs out of the Numbers. He explains how they work together and why they are essential. Once you read this, you will acquire new found confidence as you go through several concepts that he explains straightforwardly. Although some of these concepts may be complex, Tracy has found a way to simplify them by making it clear and exciting. Anybody who needs to learn how to read financial statements will surely consider this book as a great resource.
Quote from the book;
“Financial statements are the primary and only direct source of information for the profit performance of a business, and for its financial condition.”
“Sellers that extend credit set…prices slightly higher to compensate for the delay in receiving cash…a small but hidden interest charge is built into the cost paid by the purchaser.”
“The three basic financial statements fit together like tongue-in-groove woodwork. The income statement, balance sheet, and cash flows statement…interlock.”
“Financial condition is communicated in an accounting report called the balance sheet, and profit performance is presented in an accounting report called the income statement.”
9 – Simple Numbers, Straight Talk, Big Profits! | By Greg Crabtree and Beverly Blair Harzog
Greg Crabtree, who is a Certified Public Accountant together with Beverly Blair Harzog, who is a business journalist, streamlined “four key” to challenge and help the profitability of small business owners and American entrepreneurs, especially when it comes tho their accounting practices. They explain why owners should earn a pretax profit of at least 10% of profits, obtain the highest productivity out of each dollar they consume on labor, and provide themselves a market-based salary. This book, Simple Numbers, Straight Talk, Big Profits!: 4 Keys to Unlock Your Business Potential, highlights the U.S tax system, which makes it ideal for those who are dealing with U.S based taxation.
Quotes from the book;
“If you’ve figured out a way to do something faster, better and cheaper, then you’ve added intangible value to your business.”
“When you draw money on a line of credit, you’ve postponed a hard business decision that should have been made a lot sooner.”
“Every business starts with a seed of an idea, but only a few entrepreneurs can visualize the field all the way through harvest, much less through many successive seasons.”
“The higher your tax bill, the better your business is doing. This is your number one key performance indicator.”
“You need to maximize your labor productivity to increase your gross profit, so don’t hire an employee for a function that you can do.”
10 – The Power of Accounting | By Lawrence Lewis
If you happen to fall into the category of people who are horrible in math, hate complex numbers, and do now have any idea with financial knowledge, then this book, The Power of Accounting: What the Numbers Mean and How to Use Them, is tailored made for you. With the help of Professor Lawrence D. Lewis, those who are numerically challenged will be enlighted with the importance and functions of accounting. He demonstrates how decisions make tactical choices using the information derived by accounting practices. He has also made straightforward summaries of complex context and exercise to practice the ideas he explained. Each chapter has humorous quotes and references that make doing debits and credits entertaining and practical.
Quotes from the book;
“Accounting poses as being exact. Not so.”
“Managers, as well as investors and creditors, can improve their understanding and the performance of a firm’s operations and prospects by developing their ability to analyze and understand financial statements.”
“As a manager, a lot of your time probably involves four major activities: planning, organizing, controlling and directing. Accounting plays a central role in each of these activities.”
“The essential difference between short-term and long-term decisions lies in the fact that there is a time value to money. In the short term, the time value can be ignored; in the long term it cannot.”
“If accounting systems are to provide useful information, they must be able to react quickly to changes in the environment.”
11 – A World of Three Zeros | By Muhammad Yunus
Muhammad Yunus, who is a well know Economist, presents examples of how he advocated the good things that are occurring throughout the world. He incorporates the fields of beneficence and business to create a combination: “social business,” which encourages individual self-sufficiency and the mass well being through economic activities. He maintains that even the less fortunate and deficient individuals in society hold a business potential and that for the people. The profit-oriented company is also looking into engaging in social businesses. Yunus claims that the concept of social business concept may occur in a world with three zeros: poverty, unemployment, and carbon emissions in A World of Three Zeros: The New Economics of Zero Poverty, Zero Unemployment, and Zero Net Carbon Emissions.
Quotes from the book;
“Sustainability…means eating the fruits without harming the trees, and in fact making the trees more productive along the way so that over time everybody will be able to enjoy more fruit.”
“One day, I believe, there will be social business banks, social business brokerage firms and social business venture capital funds.”
“Uganda is not alone. In emerging countries all over the world, you’ll find the same burst of entrepreneurship at the bottom of the economy.”
“Thankfully, in the real world, almost no one behaves with the absolute selfishness that is supposed to govern Capitalist Man.”
“When I create a social business, I am allowing the selfless side of my personality to be expressed through business.”
12 – Rich Dad Poor Dad | Robert Kiyosaki
Author Robert T. Kiyosaki has been giving financial advice through his books, seminars, and educational training for several decades. In Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!, considered a classic and perhaps a book that changes many people’s perceptions about money. In this book, Kiyosaki discusses how he had two fathers, his real dad who was an educated poor man and his friend’s father who was a self-made rich dad. Both dad’s taught Roberty Kiyosaki lessons of life that impacted his experience and characters. His poor dad was a loser (in the financial sense) who owned money and never made anything regarding cash flow. And his rich dad who was self-made, financially literate and who was a cash flow machine. Both dad’s had two different philosophies of how to make money. Unfortunately, the poor dad is far too common in most people’s thinking. Most people in society have poor dad’s and become poor dads. Rich Dad Poor Dad will challenge the way you think about finance, money, and wealth. Definitely not a book to be overlooked, in fact, this book must be on your reading list.
Quotes from the book;
“In school, we learn that mistakes are bad, and we are punished for making them. Yet, if you look at the way humans are designed to learn, we learn by making mistakes. We learn to walk by falling down. If we never fell down, we would never walk.”
“Winners are not afraid of losing. But losers are. Failure is part of the process of success. People who avoid failure also avoid success.”
“You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich. You’ve done something.”
“If you’re the kind of person who has no guts, you just give up every time life pushes you. If you’re that kind of person, you’ll live all your life playing it safe, doing the right things, saving yourself for something that never happens. Then, you die a boring old man.”
“The love of money is the root of all evil. The lack of money is the root of all evil.”
This article was an attempt to consolidate the best books on business finance. Obviously, the list is not an exhausted list of every book on the subject. However, the ‘best books on business finance’ list attempt to orchestrate different angles and degrees on business finance.
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