What The Numbers Mean
What The Numbers Mean
Financial Intelligence & Commercial Awareness ...for aspiring Technologists
About the Book
‘Techies doing ‘bean counting’, surely that is the role of the Finance Department - definitely not that of a technologist? Correct, but think again...
As more and more companies become increasingly digitally driven, the trend is that smart companies are investing more in their digital strategies and the conversion of technology innovation into revenue earning products and services. Leading businesses in this technology age, will be the technologist, the IT leaders of today is becoming the business leaders of the future.
This book provides a concise overview of the most important financial functions, statements, terms, practical application guidelines and performance measures.
- It explains the different financial statements in more detail, the data that make-up the information provided within financial accounts.
- It provides an overview of the underlying financials in business and technology operations, project management, marketing and sales.
- You will gain insight into how to identify and understand your target audience within the market you operate and how to measure up against your opposition.
- You’ll learn the value that commercial awareness and financial intelligence bring to setting strategy, increasing productivity and efficiency and how it can support you in making more effective decisions.
- You’ll learn what the numbers really mean.
About the Author
Table of Contents
Preface............................................................................................... 7
Acknowledgements.......................................................................... 11
Introduction....................................................................................... 12
Commercial Awareness................................................................... 15
Financial Statements........................................................................ 17
Financial Governance...................................................................... 17
Accounting Principles...................................................................... 18
3 Key Financial Statements............................................................. 19
Income Statement............................................................................. 20
What goes into an Income Statement and what does the
different profit lines tell us?.......................................................24
Balance Sheet................................................................................... 28
Sections of the Balance Sheet................................................ 30
Cash Flow.......................................................................................... 40
How to manage the Cash Flow................................................ 42
Financial Information Building Blocks........................................... 44
Supplier Cost.................................................................................... 45
Staff Cost........................................................................................... 46
Freelancers.............................................................................. 46
Permanent Staff....................................................................... 47
Timesheet.......................................................................................... 48
Why do we need to track time?............................................... 49
What are the arguments against the use of time capturing?... 52
Responsible implementation and use of time tracking............ 53
Typical information captured within a timesheet...................... 55
Timesheets in Business Operations........................................ 55
Rate Card........................................................................................... 58
What are Rate Cards used for?............................................... 58
What information does a rate card provide?............................ 59
How do you compile a Rate Card – A Methodology?.............. 60
Financial Performance Measurement............................................. 72
Ratios and Key Performance Indicators (KPIs)............................. 72
What is a Ratio?...................................................................... 74
What is KPIs?.......................................................................... 74
How to compile a KPI?............................................................ 75
Why use KPIs and Ratios?...................................................... 75
Leading and Lagging Indicators?............................................. 77
Useful Ratios..................................................................................... 78
Profitability Ratios/KPIs............................................................ 78
Liquidity Ratios......................................................................... 86
Debt or Leverage Ratios........................................................... 90
Operational Efficiency Ratios.................................................... 94
Project Efficiency Ratios........................................................... 96
Resource Management Ratio....................................................99
Sales Ratios.............................................................................102
Shareholder and Investor related Ratios..................................103
Commercial Market Awareness....................................................... 106
Understanding the Marketplace and Customer.............................. 106
Target market............................................................................ 107
Three types of markets..............................................................107
Define the Customer’s need for your product/service................108
Market Segmentation................................................................ 108
How do you go about segmenting your market place?............. 109
Frequently Repeat the Market Analysis.................................... 110
Understanding the Competition....................................................... 111
Gathering information about the competition............................ 111
Ask these questions to better understand your competition..... 112
Draw up a Competitors Table.................................................... 113
Net -Promoter Score (NPS)....................................................... 115
Frequently Repeat the Competitor Analysis.............................. 116
Financial Planning.............................................................................. 117
Why do we need to do Financial Planning?..................................... 117
Strategic Planning Process............................................................... 119
Actions in compiling a Strategic Plan........................................ 119
Budgeting Process............................................................................. 124
STAGE 1: Compile the Wish Lis................................................ 124
STAGE 2: Compile the Technology Strategic Plan.................... 126
STAGE 3: Compile the Technology Budget............................... 127
STAGE 4: Review and Approval................................................ 129
Forecasting during the financial year............................................... 129
Financials in Practice......................................................................... 131
Using Financial Statements to make decisions.............................. 132
Interpreting the Income Statement............................................ 132
Interpreting the Balance Sheet.................................................. 143
Interpreting the Cash Flow......................................................... 148
Financial Reconciliation............................................................. 151
Abbreviations (WIP)........................................................................... 152
Definitions (WIP)................................................................................ 155
References.......................................................................................... 159
About the Author................................................................................ 161
Bio....................................................................................................... 161
Renier’s career story in His Own Words......................................... 162
Appendixes (WIP).............................................................................. 168
COPYRIGHT........................................................................................ 170
The Leanpub 45-day 100% Happiness Guarantee
Within 45 days of purchase you can get a 100% refund on any Leanpub purchase, in two clicks.
See full terms
Do Well. Do Good.
Authors have earned$10,894,929writing, publishing and selling on Leanpub, earning 80% royalties while saving up to 25 million pounds of CO2 and up to 46,000 trees.
Learn more about writing on Leanpub
Free Updates. DRM Free.
If you buy a Leanpub book, you get free updates for as long as the author updates the book! Many authors use Leanpub to publish their books in-progress, while they are writing them. All readers get free updates, regardless of when they bought the book or how much they paid (including free).
Most Leanpub books are available in PDF (for computers), EPUB (for phones and tablets) and MOBI (for Kindle). The formats that a book includes are shown at the top right corner of this page.
Finally, Leanpub books don't have any DRM copy-protection nonsense, so you can easily read them on any supported device.
Learn more about Leanpub's ebook formats and where to read them
Top Books
- #1
Functional event-driven architecture: Powered by Scala 3
Gabriel VolpeExplore the event-driven architecture (EDA) in a purely functional way, mainly powered by Fs2 streams in Scala 3!
Leverage your functional programming skills by designing and writing stateless microservices that scale, powered by stateful message brokers.
- #2
Practical FP in Scala: A hands-on approach
Gabriel VolpeA practical book aimed for those familiar with functional programming in Scala who are yet not confident about architecting an application from scratch.
Together, we will develop a purely functional application using the best libraries in the Cats ecosystem, while learning about design patterns and best practices.
- #3
入門 日本語自然言語処理
Masato Hagiwara and Paul O'Leary McCann日本語テキストを処理したい全てのプログラマ・エンジニアの方へ。分かち書きなどの基本から、自然言語生成などの最新の話題までをカバー。動かして学べるコードや、参照文献も付いています。言語学や機械学習の知識が無くても問題ありません。
- #4
Book of Monads
Alejandro Serrano MenaIn functional programming, at the heart of input/output, failure, state, logic, and much more, lies a powerful abstraction called monad. This book provides a journey from the very first concepts, to the myriad of monads available to programmers, down to the categorical foundations.
- #5
Ansible for DevOps
Jeff GeerlingAnsible is a simple, but powerful, server and configuration management tool. Learn to use Ansible effectively, whether you manage one server—or thousands.
- #6
Functional Programming Made Easier
Charles ScalfaniA Functional Programming book from beginner to advanced without skipping a single step along the way.
In my 40 years of programming, I've felt that programming books always let me down, especially Functional Programming books. So, I wrote the book I wish I had 5 years ago.
Functional Programming will never be easy, but it can be easier.
- #7
Visualise, document and explore your software architecture
Simon BrownA short guide to visualising, documenting and exploring your software architecture.
- #8
Introducing EventStorming
Alberto BrandoliniThe deepest tutorial and explanation about EventStorming, straight from the inventor.
- #9
Introduction to Japanese Natural Language Processing
Masato Hagiwara and Paul O'Leary McCannA thorough guide for programmers working with Japanese text, covering fundamental issues like tokenization and recent research topics like generating natural language texts. Working examples are accompanied by extensive reference to allow problem solving even without a background in Japanese or Machine Learning.
- #10
Cloud Strategy
Gregor Hohpe“Strategy is the difference between making a wish and making it come true.” A successful migration to the cloud can transform your organization, but it shouldn’t be driven by wishes. This book tells you how to develop a sound strategy guided by frameworks and decision models without being overly abstract nor getting lost in product details.
Top Bundles
- #1
Software Architecture for Developers: Volumes 1 & 2 - Technical leadership and communication
2 Books
"Software Architecture for Developers" is a practical and pragmatic guide to modern, lightweight software architecture, specifically aimed at developers. You'll learn:The essence of software architecture.Why the software architecture role should include coding, coaching and collaboration.The things that you really need to think about before... - #2
Modern C++ Collection
3 Books
Get All about Modern C++C++ Standard Library, including C++20Concurrency with Modern C++, including C++20C++20Each book has about 200 complete code examples. Updates are included. When I update one of the books, you immediately get the updated bundle. You can expect significant updates to each new C++ standard (C++23, C++26, .. ) and also... - #3
CCIE Service Provider Ultimate Study Bundle
2 Books
Piotr Jablonski, Lukasz Bromirski, and Nick Russo have joined forces to deliver the only CCIE Service Provider training resource you'll ever need. This bundle contains a detailed and challenging collection of workbook labs, plus an extensively detailed technical reference guide. All of us have earned the CCIE Service Provider certification... - #4
All the Books of The Medical Futurist
6 Books
We put together the most popular books from The Medical Futurist to provide a clear picture about the major trends shaping the future of medicine and healthcare. Digital health technologies, artificial intelligence, the future of 20 medical specialties, big pharma, data privacy, digital health investments and how technology giants such as Amazon... - #6
Abandon Your Job - Leaving the Rat Race with Python
8 Books
Now, get all the great Python and Freelancing books from finxter.com in one single bundle!Coffee Break Python - All Python BasicsCoffee Break Python Workbook - Practice the basics of PythonCoffee Break Python Mastery Workouts - Practice advanced Python conceptsCoffee Break Python Slicing - All about SlicingCoffee Break Python NumPy - Get started... - #8
10 Books Bundle - A New Career in Tech 🚀
10 Books
Do you want to create yourself a new and profitable skillset - in one year or less? Do you want to position yourself on the right side of change finally? Do you want to work from home and set your own work schedule while choosing fun and interesting coding projects? Software developers and freelance developersearn six figuresin the US, according... - #9
The Python Craftsman
3 Books
The Python Craftsman series comprises The Python Apprentice, The Python Journeyman, and The Python Master. The first book is primarily suitable for for programmers with some experience of programming in another language. If you don't have any experience with programming this book may be a bit daunting. You'll be learning not just a programming...
