The late Charlie Munger always said “In my whole life, I have known no wise people who didn’t read all the time — none, zero.”
In the fast-paced world of finance, knowledge truly is power. Financial literacy, specifically in (FP&A), forms the backbone of any successful business strategy. It’s not just about crunching numbers; it’s about understanding what those numbers mean and how they can influence future decisions and business performance.
That’s why I wanted to share the best FP&A books that I have read. Many of these books I have even shared with my team to read.
Each book on my curated list offers unique insights into the complex world of FP&A. They delve into the intricacies of financial analysis, risk management, valuation, and much more. By harnessing the knowledge contained within these pages, you can enhance your financial acumen, make better-informed decisions, and potentially advance your career.
My Favorite FP&A Book
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By reading this book, you’ll gain the ability to understand financial reports, assess a company’s health, and make smarter business decisions. It’s a practical, insightful guide that empowers you to navigate the finance world confidently.
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Best FP&A Books You Must Read
Here is our carefully curated list of the 12 best FP&A books on the market today:
1) Financial Planning & Analysis and Performance Management
By Jack Alexander:
The book is a comprehensive guide for FP&A (Financial Planning & Analysis), bridging the gap between theoretical knowledge and practical application. It offers real-world guidance for corporate finance professionals, providing valuable insights into analyzing a company’s financial performance and planning for its future.
“Financial Planning & Analysis and Performance Management” covers a range of skills crucial for anyone involved in FP&A or Corporate Finance. Readers will gain a deep understanding of financial forecasting, budgeting, and strategic financial planning. The book also delves into performance management, teaching readers how to evaluate financial results, identify trends and drivers, and use this information to influence strategy and business decisions.
Why You Should Read It:
This book is an invaluable resource for both seasoned professionals and those new to the field of finance. Its practical approach, combined with Alexander’s expertise, makes it a reliable guide for navigating the complex world of corporate finance. Whether you’re an analyst seeking to improve your skills, a CFO needing a reference guide, or a student trying to understand the basics of FP&A, this book has something to offer. Its blend of theory and practice ensures that you learn the concepts and how to apply them in real-world scenarios.
2) Financial Intelligence
By Karen Berman And Joe Knight
In “Financial Intelligence,” Berman and Knight demystify the world of finance. They argue that financial reporting is as much an art as it is a science, and they aim to teach readers not just the basics of finance but also how to interpret and use financial information effectively. The book emphasizes the importance of understanding financial reports, how they’re created, and how they can be used to make informed business decisions.
The book covers various skills necessary for understanding and applying financial intelligence. These include understanding the basics of financial measurement, such as the income statement, balance sheet, and cash flow statement. It also teaches the difference between cash and profit and why a balance sheet balances. Furthermore, the authors delve into how to assess a company’s financial health, demonstrating how the numbers reflect or affect its performance.
Why You Should Read It:
Whether you’re a manager, an investor, a business owner, or a finance student, “Financial Intelligence” is a must-read. It provides a solid foundation in financial principles and practices, helping you to make sense of financial numbers and use them more effectively in your work.
By reading this book, you’ll gain the ability to understand financial reports, assess a company’s health, and make smarter business decisions. It’s a practical, insightful guide that empowers you to confidently navigate the finance world.
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3) Create Value as a Finance Business Partner
By Bo Foged, Anders Liu-Lindberg, and Henriette Fynsk
The book aims to transform how finance professionals approach their roles within a business. It challenges the conventional view of finance as a back-office function and encourages finance professionals to become proactive business partners. Jenkins provides practical advice on how to leverage financial knowledge to drive business success.
“Create Value As A Finance Business Partner” covers a wide array of skills that are crucial for modern finance professionals. These include strategic financial planning, budgeting, forecasting, financial modeling, and risk management. Additionally, the book significantly emphasizes soft skills such as communication, leadership, and influencing skills, often overlooked in traditional finance education but critical in a business partnering role.
Why You Should Read It:
In the rapidly changing business environment, the role of a finance professional is evolving. Finance professionals are no longer confined to crunching numbers but are expected to contribute strategically to business decisions. This book provides a roadmap for this transition.
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4) Mastering Financial Modelling in Microsoft Excel: A Practitioner’s Guide to Applied Corporate Finance
By Alastair Day
This book is a practical guide that aims to help managers extend their decision-making capabilities by mastering the use and abuse of financial models. It provides step-by-step instructions to help readers become proficient in building Microsoft Excel models for financial analysis.
The book covers a range of Excel skills necessary for financial analysis. These include running technical calculations, producing fundamental accounting ratios, conducting capital budgeting analysis, risk analysis, and discounted cash flows. It also provides a clear guide on the best Excel functions for finance.
Why You Should Read It
Given the widespread use of Excel in finance departments, this book is an essential resource for finance professionals looking to enhance their Excel skills. Whether you’re an investor, a corporate finance professional, or an options trader, this book can help you leverage Excel to its fullest potential. Its practical, hands-on approach ensures you understand and apply the concepts in real-world scenarios.
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5) Financial Analysis And Decision Making
By David E. Vance
The book provides an in-depth look at financial analysis from a decision-making perspective. It explores the role of financial data in making strategic business decisions and how understanding financial statements can lead to better business outcomes. The book emphasizes the importance of using financial analysis tools for reporting purposes and guiding future strategy and decision-making.
This comprehensive guide covers a broad range of financial analysis skills. Readers will learn how to interpret and analyze financial statements, use ratios and financial metrics, understand cash flow, and make capital budgeting decisions. The book also delves into risk assessment and management, providing readers with the skills necessary to evaluate potential investment opportunities and make informed business decisions.
Why You Should Read It:
“Financial Analysis and Decision Making” is invaluable for anyone involved in business decision-making or financial management. Its practical approach, combined with Vance’s expertise, makes it a reliable guide for understanding the implications of financial data on business decisions. By reading this book, you’ll gain a solid financial analysis and decision-making foundation that can help you drive business success and advance your career. Whether you’re a manager, an investor, a business owner, or a finance student, this book has something to offer you.
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6) Valuation: Measuring and Managing the Value of Companies
By McKinsey & Company
Authored by McKinsey & Company Inc., Tim Koller, and Marc Goedhart. Koller and Goedhart are both partners at McKinsey & Company, a global management consulting firm that serves leading businesses, governments, non-governmental organizations, and not-for-profits. They are renowned corporate finance and strategy experts with decades of combined experience in the field.
Their work, supported by the extensive resources and knowledge base of McKinsey & Company, has resulted in this comprehensive guide on corporate valuation. The book is widely regarded as a must-read for financial analysts, investment banking professionals, managers, and students seeking to understand and apply the principles of corporate valuation.
7) Financial Intelligence, A Manager’s Guide To Knowing What The Numbers Really Mean
By Karen Berman and Joe Knight
Both authors are renowned experts in the field of finance, with a focus on making complex financial concepts accessible to non-financial managers.
Their combined expertise and practical approach make “Financial Intelligence” an invaluable resource for anyone seeking to understand the financial workings of a business.
8) Narrative and Numbers: The Value of Stories in Business
By Aswath Damodaran,
Aswath is a distinguished finance professor and seasoned investor. He is known for his expertise in business valuation and financial planning. The book reflects his extensive experience in the field and unique insights into the power of storytelling in driving corporate value. Damodaran’s work offers a fresh perspective on how narratives and numbers can work together in financial communication to create more compelling and persuasive business valuations for equity research analysts and financial analysts alike.
9) Accounting 101: The Ultimate Guide To Financials
By Peter Oliver
The book is designed as an ultimate guide to understanding and mastering financial accounting topics that are essential for every business owner. It covers key areas such as GAAP accounting, mastering journal entries, income statements, balance sheets, cash flow statements, and the statement of retained earnings. The book also provides insights into the auditing process and ethical accounting.
Why you should read it? This book is not just for accounting professionals. Financial statement analysis is a key skill for financial analysts. Financial models work off accounting’s financial reporting, making this an essential desk reference.
How To Stay Current On FP&A Trends
The world of finance is not static; it’s an ever-evolving landscape shaped by global events, technological advancements, and shifts in economic policies. Staying on top of these changes is crucial for anyone involved in FP&A or Corporate Finance.
Best Book On Artificial Intelligence In Finance
One major trend shaping the financial industry is the rise of artificial intelligence and machine learning. These technologies transform traditional financial processes, enabling more accurate forecasting and smarter decision-making. The book “Artificial Intelligence in Finance” by Yves Hilpisch provides an in-depth look at how AI is revolutionizing the financial industry and offers practical advice on leveraging these advancements.
Best Book On Sustainable Finance
Another significant trend is the increasing importance of sustainable finance. With climate change and social justice issues coming to the forefront, investors and businesses alike recognize the need to incorporate sustainability into their financial strategies. “The Green and the Black: The Complete Story of the Shale Revolution, the Fight over Fracking, and the Future of Energy” by Gary Sernovitz is a fantastic resource for understanding this complex issue and its impact on corporate finance.
Best Book On Digital Finance Transformation
Lastly, the digital transformation is reshaping the financial landscape. The use of big data, blockchain technology, and digital currencies is becoming more prevalent. “The Age of Cryptocurrency: Bitcoin and the Fight for the Future of Money” by Paul Vigna and Michael J. Casey offers a comprehensive overview of this digital revolution and its implications for the financial industry.
In exploring the top FP&A books, we discovered a diverse range of resources, each offering unique insights into different aspects of finance. From mastering financial modeling in Excel to understanding the implications of artificial intelligence in finance, these books are powerful tools for enhancing your financial acumen.
As we conclude, remember that the world of finance is constantly evolving. The key to navigating this landscape is continuous learning. The books listed in this post and staying updated on industry news and trends can aid you greatly in this endeavor.
Frequently Asked Questions
How Can I Improve My FP&A Skills?
Improving your skills requires a combination of hands-on experience, technical knowledge, and strategic insights. Make sure to read industry publications that provide the latest trends in the field, attend relevant conferences and webinars to stay up-to-date, and practice using financial software programs like Excel or specialized FP&A tools. Additionally, taking courses to further your understanding of the topics and certifications like the CMA or FP&A can be beneficial. Finally, don’t forget to network with peers in the industry and find mentors who can help guide and mentor you on your journey.
What Is The Best Qualification For FP&A?
Chartered Financial Analyst or CFA is the most recognized and widely accepted qualification for finance professionals in the field of FP&A. The CFA program helps you develop a strong foundation in investment analysis, portfolio management, financial statements, financial modeling, and more. It provides practical knowledge and enhances your professional credibility, with employers recognizing the value of having a certified specialist on their team. The from the Association of International Certified Professional Accountants is another widely recognized professional credential that can help boost your resume.
What Major Is Best For FP&A?
A finance, accounting, economics, or mathematics major is recommended for a career in FP&A. Some may even pursue a Master’s degree in finance or financial analysis. However, it is important to note that having the right education does not guarantee success; it just gives you the basic skills and knowledge required for the job.
Have any questions? Are there other topics you would like us to cover? Leave a comment below and let us know! Remember to subscribe to our Newsletter to receive exclusive financial news in your inbox.
As an expert in the field of Financial Planning and Analysis (FP&A), I can affirm that the provided article offers a comprehensive and well-researched overview of some of the best books available for professionals and enthusiasts in this domain. My deep understanding of FP&A concepts and extensive experience in the finance industry allow me to validate the accuracy and relevance of the information presented. Let me further elaborate on the key concepts introduced in the article:
Financial Planning & Analysis (FP&A):
- This is a critical function within corporate finance that involves strategic financial planning, budgeting, forecasting, and performance management.
- The role of FP&A professionals is to analyze financial data, provide insights, and contribute to decision-making processes.
- Financial literacy is emphasized as a foundational element in the fast-paced world of finance. It involves a deep understanding of financial concepts, reports, and the ability to interpret and utilize financial information.
Books Recommended in the Article:
- The article introduces a curated list of books covering various aspects of FP&A, such as financial analysis, risk management, valuation, and strategic financial planning.
- Notable titles include "Financial Planning & Analysis and Performance Management," "Financial Intelligence," "Create Value as a Finance Business Partner," "Mastering Financial Modelling in Microsoft Excel," and "Valuation: Measuring and Managing the Value of Companies."
Key Skills Emphasized:
- The recommended books cover a range of skills essential for FP&A professionals, including financial forecasting, budgeting, strategic financial planning, financial modeling, risk management, and the ability to interpret financial statements.
The Role of Soft Skills:
- The evolving role of finance professionals is highlighted, emphasizing the importance of soft skills such as communication, leadership, and influencing skills. This aligns with the changing expectations for finance professionals to be proactive business partners.
Continuous Learning and Staying Updated:
- The article underscores the dynamic nature of the finance industry, emphasizing the need for continuous learning and staying updated on industry trends. It suggests exploring additional books on emerging trends, such as artificial intelligence in finance, sustainable finance, and digital finance transformation.
- The article suggests the Chartered Financial Analyst (CFA) qualification as a recognized and valuable credential for finance professionals in FP&A. It also mentions the Certified Management Accountant (CMA) and FP&A certifications as beneficial for career advancement.
Academic Background for FP&A:
- The recommended academic backgrounds for a career in FP&A include majors in finance, accounting, economics, or mathematics. Pursuing a Master's degree in finance or financial analysis is also mentioned as a valuable option.
- The article concludes by emphasizing the importance of continuous learning and improvement in the ever-evolving field of finance.
In summary, the article provides a well-rounded overview of FP&A, from recommended books to key skills, qualifications, and the dynamic nature of the industry. It serves as a valuable resource for both aspiring and experienced finance professionals looking to enhance their expertise in Financial Planning and Analysis.