Should Infrastructure Spending Be Centralized?
Donald Trump has raised the issue of America’s crumbling infrastructure during his election campaign. He has periodically mentioned that American economy needs a bout of infrastructure spending. Estimates state that the infrastructure overhaul will cost the Trump government more than $1 trillion. However, the United States is already deeply in debt. Even though they have […]
Has the internet lived up to its promise of an Egalitarian and Just World?
The Emergence of the Internet and the High Hopes that accompanied it For those of you old enough to remember the emergence of the internet in the 1990s, you would have no doubt been taken in by the then prevailing optimism and hope about the medium finally ushering in an egalitarian and a just world. […]
What is Custo Brazil
Brazil is the most expensive country to live in Latin America. The real problem is that Brazil has become more expensive than most countries in Europe and maybe it is expensive when compared to America as well. The real problem is that people in these developed countries make three times the income of an average […]
Why Jet Airway’s Problems are Symptomatic of the Troubles in the Indian Aviation Sector
The Never Ending Problems of Jet Airways Not a day goes by without some news or the other about the beleaguered airline, Jet Airways and its never ending saga of seeking bailouts and restructuring its massive debt. What was once a pioneer and a premium airline in the Indian Skies is now facing humiliation on […]
Indias Angel Tax
Obtaining funding for a startup is extremely difficult. It is said that startups receive money only from friends, fools, and family. However, there is another class of investors which provide money to these organizations. They invest in companies which are at very early stages of their product development. They belong to the same ecosystem as […]
In the modern global and competitive business world, it is very important to the companies to enjoy financial success. This financial success can be achieved through financial discipline, goal setting and periodic reviews. Companies which have enjoyed financial success are likely to see that trust among employees have increased; profit has improved, and employee turnover has decreased. These three factors contribute a lot to stability in company which in turn is the cradle for growth.
Finance intelligence is a combination of art as well as science. Finance intelligence talks about empowering employees with basic finance knowledge so that they can make a sound business decision. Finance intelligence is a skill set which every senior executive needs to have. Finance intelligence help employees’ right question for a business decision.
Finance intelligence is skill set comprising of the following four competencies; understanding the foundation, understanding the art, understanding the analysis and understanding the big picture. All the four competencies need to be put into practice and implemented for whole hearted success of finance intelligence. Finance is the business language recognized and used across all organizations. It is common denominator on which all the organizations are measured.
Organization needs to build on strong foundation for its non-finance manager to understand the concept of finance. The foundation requires basic understanding of income statement, cash flow and balance sheet. Non-finance managers should not be baffled when presented with an array of numbers. The purpose of finance intelligence is to ensure that when non-finance managers are presented numbers, they should be competent enough to make business sense out of them.
Finance as well as accounting is considered science and art. Both the discipline tries to quantify what cannot always be represented as numbers. This quantification of concept is based upon rules, assumption and principles. Non-finance managers should be able to apply this art/science to scenarios and make financial sense out of them. By doing this, they are prepared for any challenging scenarios.
Once the basic idea of finance and its utility is formulated, the application part comes from the picture. Numbers presented to non-finance managers can be better understood, right questions can be asked, and further analysis can be done around that. Finance intelligence equips managers to make sense of various ratio analyses, return on investment, etc. The new understanding helps them make informed and calculated decisions.
It has been observed that the financial numbers alone do not tell the complete story about what is happening within the organization. A financial result or analysis needs to be understood from top level or broader perspective. A financial result should be analyzed considering the macro environment under which the company is operating. The macro factors which influence financial results are competitive environment, government regulations, changing demographics, evolving technologies, etc.
Understanding the finance concepts and finance intelligence competency are first steps in gaining broader financial knowledge. It should prepare managers to look beyond the finance numbers with an analytic eye and make informed decisions.
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Communication Systems and Groupware – Information System Concepts that Apply in All Functional Areas of Business
February 12, 2025
