The Essentials Of Finance And Budgeting

by Harvard Business School Press

• ISBN13: 9781591395720
• ISBN10: 1591395720
• Format: Paperback
• Copyright: 2005-04-30
• Publisher: Harvard Business School Pr

Summary

This series will help HR professionals to become more influential strategic partners in their organizations by educating them in the core principles, practices, and processes of business and management. The purpose of the series is to help HR professionals develop knowledge and skills related to, but outside, the HR domain in order to make more strategic contributions to their organizations. These books will help HR professionals "have a seat at the table" by becoming more proficient and literate in critical business and management arenas such as finance, negotiation, strategy, change management, etc.SHRM is the world's largest professional association devoted to human resource management. Representing more than 170,000 individual members, the Society's mission is to serve the needs of HR professionals by providing the most essential and comprehensive resources available.

Table of Contents

Introduction	xiii
Finance and the HR Professional	1	(20)
A Crucial Competency
Minding Your Business	2	(3)
Applying Your Financial Knowledge	5	(13)
Summing Up	18	(1)
Leveraging Chapter Insights: Critical Questions	19	(2)
Financial Statements	21	(22)
The Elements of Managerial Finance
Why Financial Statements?	22	(1)
The Balance Sheet	23	(9)
The Income Statement	32	(4)
The Cash Flow Statement	36	(3)
Where to Find Financial Information	39	(1)
Using Financial Statements to Enhance HR Service Quality	40	(1)
Summing Up	41	(1)
Leveraging Chapter Insights: Critical Questions	41	(2)
Finding Meaning in Financial Statements	43	(18)
A Look Behind the Numbers
Ratio Analysis	44	(12)
Percentage-Format Financial Statements	56	(2)
Summing Up	58	(1)
Leveraging Chapter Insights: Critical Questions	59	(2)
From Financial Measures to a Balanced Scorecard	61	(16)
Measuring Activities That Drive Future Financial Performance
What Is a Balanced Scorecard?	62	(4)
Implementing a Balanced Scorecard Program	66	(3)
Creating an HR Scorecard	69	(3)
Summing Up	72	(2)
Leveraging Chapter Insights: Critical Questions	74	(3)
Important Accounting Concepts	77	(26)
The Rules That Shape Financial Statements
Generally Accepted Accounting Principles	78	(1)
Cash Versus Accrual Accounting	79	(1)
Accounting for Inventory	80	(6)
Depreciation	86	(5)
Accounting for Leases	91	(2)
Historic Cost and Its Implications	93	(1)
Cost Accounting	94	(7)
Summing Up	101	(1)
Leveraging Chapter Insights: Critical Questions	102	(1)
Taxes	103	(16)
Important Details You Should Know
Taxes and the Legal Form of the Business	105	(6)
Progressive Tax Rates	111	(2)
Marginal Tax Rate	113	(1)
Credits Versus Deductions	114	(1)
Tax Loss Carryback and Carryforward	115	(1)
Summing Up	115	(1)
Leveraging Chapter Insights: Critical Questions	116	(3)
Financing Operations and Growth	119	(20)
Funding the Different Stages of Growth
Start-Up Financing	120	(5)
Financing Growth	125	(5)
Other Forms of External Financing	130	(1)
The Matching of Assets and Financing	131	(2)
A Life-Cycle View of Financing	133	(4)
Summing Up	137	(1)
Leveraging Chapter Insights: Critical Questions	138	(1)
Money and Capital Markets	139	(16)
Another Option for Funding Growth
Money Markets	141	(1)
Capital Markets	142	(5)
Capital Market Securities	147	(5)
Summing Up	152	(1)
Leveraging Chapter Insights: Critical Questions	153	(2)
Budgeting	155	(36)
Forecasting Your Company's Financial Future
What Is Budgeting?	157	(1)
Budget Functions	157	(4)
Types of Budgets	161	(3)
The Master Budget	164	(13)
The Human Side of Budgeting	177	(5)
Developing an HR Department Budget	182	(6)
Summing Up	188	(1)
Leveraging Chapter Insights: Critical Questions	188	(3)
Practical Tools for Management Decisions	191	(14)
Making the Numbers Work for You
Cost-Benefit Analysis	192	(2)
Accounting Return on Investment	194	(3)
Payback Period	197	(1)
Breakeven Analysis	198	(4)
Estimating Nonquantifiable Benefits and Costs	202	(1)
Tracking Performance	202	(1)
Summing Up	203	(1)
Leveraging Chapter Insights: Critical Questions	204	(1)
Measuring and Reporting Human Capital	205	(16)
A Vital Exercise
What Is Human Capital?	206	(4)
Measuring Human Capital: Techniques and Challenges	210	(2)
Launching or Enhancing a Human-Capital Measurement System in Your Firm	212	(4)
Reporting Human Capital	216	(2)
Summing Up	218	(1)
Leveraging Chapter Insights: Critical Questions	218	(3)
The Time Value of Money	221	(24)
Calculating the Real Value of Your Investment
What Is Time Value?	223	(2)
Present Value and Net Present Value	225	(11)
Internal Rate of Return	236	(3)
Sensitivity Analysis	239	(2)
Economic Value Added	241	(2)
Summing Up	243	(1)
Leveraging Chapter Insights: Critical Questions	244	(1)
Business Valuation Concepts	245	(16)
Evaluating Opportunity
An Uncertain Science	246	(2)
Asset-Based Valuations	248	(3)
Earnings-Based Valuations	251	(4)
Discounted Cash Flow Method	255	(3)
Summing Up	258	(1)
Leveraging Chapter Insights: Critical Questions	259	(2)
Developing and Using Your Financial Know-How	261	(14)
Next Steps for You and Your Firm's HR Department
Enhancing Your Financial Know-How	262	(1)
Serving as a Strategic Business Partner	263	(4)
Creating a Positive Working Relationship Between HR and Finance	267	(3)
Operating Your HR Department as a Profit Center	270	(1)
Summing Up	271	(3)
Leveraging Chapter Insights: Critical Questions	274	(1)
Appendix A Activity-Based Budgeting	275	(6)
Appendix B Balance-Sheet Template	281	(2)
Appendix C Income Statement Template	283	(2)
Appendix D Cash-Flow Statement Template	285	(2)
Appendix E Cash Budget Template	287	(2)
Appendix F HR Department Budget Template	289	(2)
Notes	291	(4)
Glossary	295	(10)
For Further Reading	305	(6)
Index	311	(12)
About the Series Adviser	323	(2)
About the Subject Adviser	325	(2)
About the Writers	327	(2)
About the Society for Human Resource Management	329