Table of Contents

Contents

INTRODUCTION:

The Basic Problem with Numbers

CHAPTER 1:

Compound Interest: The Power of Money

Time Value of Money: The Concept

Accumulated Value of a Series of Deposits

Looking Ahead

CHAPTER 2:

Present Value and Sinking Funds

Present Value of a Single Deposit

Sinking Fund Payments and Present Value per Period

Loan Amortization

Reading Loan Amortization Tables

Annual Percentage Rate

Cash Return and Cash Flow

Returns on Purchases and Sales

Investment-Based Returns

Annualized Return

Looking Ahead

CHAPTER 4

Calculating Breakeven and After-Tax Profit

Hidden Costs

The Inflation Effect

Taxes in the Profitability Equation

Breakeven Calculations: Inflation and Taxes

Calculating Cash Flow

Looking Ahead

CHAPTER 5:

Financial Reporting Formulas: The Balance Sheet

Balance Sheet Basics

Working Capital Ratios

Ratios Showing Management of Working Capital

Capitalization Ratios

Combined Ratios

Looking Ahead

CHAPTER 6:

Financial Reporting Formulas: The Income Statement

Income Statement Basics

Dollar and Percentage Reportin

Core Earnings

Looking Ahead

CHAPTER 7:

Depreciation Calculations

Basic Depreciation Rules

Straight-Line and Declining Balance Depreciation

Class Lives and Recovery Periods

Depreciation Calculations for Real Estate

Home Office Depreciation

Amortization

Looking Ahead

CHAPTER 8:

Bringing Reports to Life: Powerful Arguments with the

Numbers

Picking Your Report Format

Narrative Sections

Financial Sections

Combining Narrative and Financial Content

Graphics in Reports

Looking Ahead

CHAPTER 9:

Budgeting Calculations: Assumptions and Prorations

Documenting Your Assumptions

Addressing the Expense Issues

Prorating Expense Estimates

Calculating Variances

Revising Budgets

The Nature of Revenue Forecasts

Looking Ahead

CHAPTER 10:

Statistics for Effective Reporting

Management Application of Statistics

Statistical Averages

Dispersion, Variance, and Deviation

Accuracy in Statistics

Looking Ahead

CHAPTER 11:

Incredible Math Shortcuts

Addition Shortcuts

Subtraction Shortcuts

Logical Rules

Multiplication Shortcuts

Division Shortcuts

Looking Ahead

CHAPTER 12:

Incredible Conversion, Measurement, and Time Shortcuts

Conversion

Measurements

Time Shortcuts

APPENDIX:

Summary of Formulas

INDEX

About the Author

ANDREW J. SHERMAN is a partner in the Washington, D.C., office of Jones Day and an internationally recognized authority on the legal and strategic issues of emerging and established companies. He has been interviewed by The Wall Street Journal, USA Today, Forbes, Time, and other publications, and is the author of Raising Capital (978-0-8144-0856-8).

Reviews

"Manager's Pocket Calculator...won't turn non-financial managers into accountants, but it will help them be better businesspeople." --Accounting Today

"If you find preparing and justifying budgets, or even sitting down with accountants and financial advisors intimidating, pick up The Manager's Pocket Calculator." --Niche magazine