Financial Management for Small Businesses: Financial Statements & Present Value Models

Reviewed by Anh Nguyen, Instructor, University of Texas at Arlington on 6/9/21

Comprehensiveness rating: 4 see less

The book is fairly comprehensive regarding financial statements and present value models

Content Accuracy rating: 5

The book is accurate in terms of the financial models

Relevance/Longevity rating: 1

I would say it does not completely target the small business owner

Clarity rating: 2

The initial chapters are very well written. However, starting from chapter 7, the content is not as well written.

Consistency rating: 4

The terminology and models are consistent.

Modularity rating: 4

The text is easily and readily divisible into smaller reading sections.

Organization/Structure/Flow rating: 5

The topics in the text are presented in a logical, clear fashion.

Interface rating: 5

The text is free of significant interface issues, for example navigation problems

Grammatical Errors rating: 5

The text contains no grammatical errors.

Cultural Relevance rating: 5

The text is not culturally insensitive or offensive in any way.

Comments

I would highly recommend the first 2 parts (up to chapter 6) for small business owners. The content in Chapters 1 through 6 is excellent and very readable.
Starting with the advantages and disadvantages of different forms of business organization, the author explains very well. Then, he provides helpful up-to-date information about the tax system and basis and advances financial analysis (financial statements and financial ratios).
However, materials from chapter 7 toward those later chapters focus more on technically advanced models which are not relevant to small business owners.
I would simply recommend the author to avoid using the "small businesses" term in the book title.

Reviewed by Shreesh Deshpande, Professor of Finance, University of San Diego on 5/17/21

Comprehensiveness rating: 3 see less

The book is not comprehensive given the subject of the book -- Financial Management for Small Businesses

Content Accuracy rating: 5

The book is accurate in terms of the mathematical financial models

Relevance/Longevity rating: 1

The book is not relevant to a small business owner or a would be entrepreneur.

Clarity rating: 2

The initial chapters are very well written. Subsequent chapters have content that is not as well written.

Consistency rating: 5

The book is consistent.

Modularity rating: 5

The book is modular.

Organization/Structure/Flow rating: 2

The organization is puzzling -- the initial chapters are relevant to financial management of small businesses. After that the book chapters cover content that is not relevant to small businesses.

Interface rating: 5

The interface is good.

Grammatical Errors rating: 5

The writing is very good -- I did not find any grammatical errors.

Cultural Relevance rating: 5

There are no negative cultural issues in the book. I noticed that the book has too many examples related to businesses in the agricultural/farming sector. It would be a good idea to broaden the types of firms used as examples in the chapter discussions.

Comments

In reviewing the book, my expectation was that with “Financial Management for Small Businesses” in the title, the book content would help educate small business owners and aspiring entrepreneurs on the necessary financial knowledge in business decision making.

The content in Chapters 1 through 5 is excellent and very readable, especially for a would-be small business owner. The authors explain the benefits and drawbacks of various business organizations, the tax issues that are relevant to a particular ownership structure and basic financial statements analysis. The discussion of the concept of Present Value in a part of a later chapter is good. All of this is very relevant knowledge for small business ownership and managers. The authors use examples to discuss financial concepts by relating content to family farms and the agricultural sector.

Unfortunately, starting from Chapters 6 through the end, the content of the book veers off into to granular intricacies of financial valuation models which would be of no practical interest to professionals who manage small businesses (or to individuals who aspire to own small businesses).

Most financial managers of a small businesses are unlikely to ever want to use the financial models presented, for example, see equations 8.14, 8.15, 9.12, 10.6. Some models are simply too esoteric to have any practical use for businesses – small or large.

Overall, the book was a disappointment.