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 60-day 100% Happiness Guarantee
Within 60 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$12,136,230writing, 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) and EPUB (for phones, tablets and 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
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.
- #2
Jetpack Compose internals
Jorge CastilloJetpack Compose is the future of Android UI. Master how it works internally and become a more efficient developer with it. You'll also find it valuable if you are not an Android dev. This book provides all the details to understand how the Compose compiler & runtime work, and how to create a client library using them.
- #3
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.
- #4
Windows 11 Field Guide
Rafael Rivera and Paul ThurrottThe Windows 11 Field Guide is a full-length e-book about the latest version of Microsoft Windows, aimed at those users who will upgrade from Windows 10 or acquire Windows 11 with a new PC.
- #5
Mastering STM32 - Second Edition
Carmine NovielloWith more than 1200 microcontrollers, STM32 is probably the most complete ARM Cortex-M platform on the market. This book aims to be the most complete guide around introducing the reader to this exciting MCU portfolio from ST Microelectronics and its official CubeHAL and STM32CubeIDE development environment.
- #6
Getting to Know IntelliJ IDEA
Trisha Gee and Helen ScottIf we treat our IDE as a text editor, we are doing ourselves a disservice. Using a combination of tutorials and a questions-and-answers approach, Getting to Know IntelliJ IDEA will help you find ways to use IntelliJ IDEA that enable you to work comfortably and productively as a professional developer.
- #7
node-opcua by example
Etienne RossignonGet the best out of node-opcua through a set of documented examples by the author himself that will allow you to create stunning OPCUA Servers or Clients.
- #8
R Programming for Data Science
Roger D. PengThis book brings the fundamentals of R programming to you, using the same material developed as part of the industry-leading Johns Hopkins Data Science Specialization. The skills taught in this book will lay the foundation for you to begin your journey learning data science. Printed copies of this book are available through Lulu.
- #9
C# for Babies
Maarten Balliauw, Khalid Abuhakmeh, and Arina KovrizhkinaAn illustrated book perfect for teaching your little ones the basics of the C# programming language!
- #10
Introducing EventStorming
Alberto BrandoliniThe deepest tutorial and explanation about EventStorming, straight from the inventor.
Top Bundles
- #1
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... - #3
Pattern-Oriented Memory Forensics and Malware Detection
2 Books
This training bundle for security engineers and researchers, malware and memory forensics analysts includes two accelerated training courses for Windows memory dump analysis using WinDbg. It is also useful for technical support and escalation engineers who analyze memory dumps from complex software environments and need to check for possible... - #4
Software Architecture
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... - #5
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 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... - #6
1500 QUIZ COMMENTATI (3 libri)
3 Books
Tre libri dei QUIZ MMG Commentati al prezzo di DUE! I QUIZ dei concorsi ufficiali di Medicina Generale relativi agli anni: 2000-2001-2003-2012-2013-2014-2015-2016-2017-2018-2019-2020-2021 +100 inediti Raccolti in unico bundle per aiutarvi nello studio e nella preparazione al concorso. All'interno di ogni libro i quiz sono stati suddivisi per... - #7
Growing Agile: The Complete Coach's Guide
7 Books
Growing Agile: Coach's Guide Series This bundle provides a collection of training and workshop plans for a variety of agile topics. The series is aimed at agile coaches, trainers and ScrumMasters who often find themselves needing to help teams understand agile concepts. Each book in the series provides the plans, slides, handouts and activity...
