Financial Ratios for Executives: How to Assess Company Strength, Fix Problems, and Make Better Decisions

Financial Ratios for Executives is written specifically with today’s global executive in mind. It makes financial ratios easy to understand and use effectively. This short book will prove invaluable to both financial and non-financial executives looking for easy, intuitive methods to assess corporate health and assist in strategic decision making.

Financial Ratios for Executives contains over 100 financial ratios and other useful calculations. It includes ratios that are commonly used, such as return on investment (ROI), return on assets (ROA), return on equity (ROE), economic value added (EVA), and debt-to-equity ratio, just to name a few. It also includes many less-well known—yet powerful—ratios that can provide unparalleled insight into operations, financial management, sales and marketing efforts, and overall performance, among other areas. Using realistic financial and operational data from two fictional companies, the explanation of each ratio includes:

• Type of ratio
• Formula for calculating the ratio
• Description of the ratio
• Example based on ABC Company or XYZ Company
• Additional comments or insights

In addition to the section on financial ratios, financial experts Michael Rist and Albert Pizzica have included a section on capital budgeting, an understanding of which is essential for both the financial and non-financial executives before they take part in an annual budget meeting or any other business meeting where capital allocation is discussed. It includes the most important tools of finance, such as net present value (NPV), internal rate of return (IRR), payback method, and total cost of ownership.

Who gets ahead in the business world? Those who understand the numbers. It’s as simple as that. Financial Ratios for Executives is for those who want to understand how to use financial data to support their initiatives, solve persistent problems, uncover opportunities, bolster company health, and shine in corporate meetings.

What you’ll learn

• The most useful financial ratios and how to use them
• What you need to know about capital budgeting
• How to use ratios to find out what’s going on in all parts of the company
• How to mine financial statements for the most useful information
• How to use ratios to assess a company’s financial strength
• How to use Excel to help you make capital allocation decisions

Who this book is for

Managers and executives, finance and accounting professionals, MBA students, and investors looking for an easy-to-use reference book on financial ratios and capital allocation.

About the Authors

Albert Pizzica has been an entrepreneur, executive, and consultant in a variety of industries for the last fifteen years. He is the principal at Pizzica Industries LLC, a business plan strategy and consulting company. Al previously served as an officer in the U.S. Navy’s nuclear submarine program. He is a graduate of the Executive MBA Program at Villanova University and obtained his B.S. in Mechanical Engineering from Cornell University.

Michael Rist has more than 20 years of international business experience and a record of success in financial leadership roles within corporate finance for public and private companies and Big 4 public accounting firms. He has worked in several industries including telecommunication, technology, pharmaceutical, industrial manufacturing, and education. Michael holds a B.S. in Accounting and Finance from Copenhagen Business School and an MBA from the Villanova School of Business. He is a Certified Public Accountant and active in a number of professional organizations.