Written specifically for CEOs of small companies, Smart Financial Management is an essential tool for the non-finance major executive. When it comes to finances, the authors state, the CEO has three responsibilities: keep cash-positive, allocate financial resources wisely, and begin thinking of ways to capture the company's value when it comes time to exit the business.
Topics broadly concern financial planning and asset management (ratio tools, forecasting, inventories, budgeting, and so on), funding growth (equity and non-equity financing), and exiting the business (unsuccessful as well as successful enterprises). But it's not just the obvious that is included. A subchapter on credit management does a nice job of explaining the pros and cons of granting and accepting discounts for prompt payment. On this, the book notes, "The cost of granting discounts for prompt payment can be considerable, and the cost of failing to take those terms can be equally expensive."
The material is adopted from financial courses taught at the University of Virginia's Darden Graduate School of Business—two of the authors teach at Darden—and is tailored for small-business executives of fast-growing concerns.
In the end, the authors say, a company's financial management program must agree with company strategy and help ensure that the strategy is financially feasible. At that, this book hits the mark admirably.
The material here is well presented and clearly written without sinking to the level of Financial Management for Dummies.—Sean Silverthorne