Preface

We wrote this book specifically for today’s global financial and nonfinancial executives who are looking for an easy-to-use reference book on financial ratios and capital allocation to assist them in operational and strategic decision making. our aim is to make financial ratios simple and intuitive for everyone to understand.

This book contains over one hundred financial ratios and other calculations commonly used in businesses around the world—including return on investment (Roi), return on assets (Roa), return on equity (RoE), economic value added (Eva), and debt ratio just to name a few.

We have also included a section on what financial and nonfinancial executives need to understand about capital allocation before entering the annual budget meeting or any other business meeting in which capital allocation is discussed. this section describes tools such as net present value (nPv), internal rate of return (iRR), the payback method, and total cost of ownership.

Given that a good understanding of financial ratios, valuation tools, and return on investment calculations are important components of any business system, we set out to create a simplified handbook with short descriptions, calculations, and examples for each of the ratios.


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