The Best Finance & Analysis Books

The Personal MBA Recommended Reading List

2008 Edition: Revised and Updated

Top MBA programs don't have a monopoly on advanced business knowledge: you can teach yourself everything you need to know to succeed in life and at work. The Personal MBA Recommended Reading List features only the very best business books available, based on thousands of hours of research. So skip b-school and the $100,000 loan: you can get a world-class business education simply by reading these books.

About This Category:

The Finance & Analysis category will help you understand and improve your business operations. The books in this category will teach you:

How to understand business accounting and finance.
How to collect, analyze, and present business information.
How to avoid costly mistakes when analyzing business data.

Essentials of Accounting (9th Edition) by Robert N. Anthony and Leslie K. Breitner

Accounting is the language of business, but it's often difficult and tedious to learn. Essentials of Accounting teaches you accounting by having you actually work through the process of creating and analyzing accounting statements, a simple and relatively enjoyable way to learn an often confusing subject.

Essentials of Accounting is actually two books: a textbook and a workbook. The textbook contains samples of basic accounting statements: balance sheets, cash flow statements, journal entries, etc. The workbook contains a double-sided set of fill-in-the-blank worksheets that guide you through analysis of the statements in the textbook.

You'll learn how to construct balance sheets, income statements, and cash flow statements, as well as understand debits, credits, assets, liabilities, equity, and depreciation.

After working through Essentials of Accounting, you'll have a much better understanding of how businesses actually manage money.

The McGraw-Hill 36-Hour Course in Finance (2nd edition) by Robert A. Cooke

Like accounting, finance is a subject best understood by working through examples.

Instead of assaulting the reader with a never-ending stream of formulas, The McGraw-Hill 36-Hour Course in Finance uses stories and humor to illustrate how corporate finance works and why it is important to learn.

The thing that impresses me most about this book is how enjoyable it is to read. Drawing on over thirty years of experience as a CPA, Cooke knows how to explain financial concepts clearly using non-technical language. In addition, he happens to be a master storyteller. The text is structured as a collection of twelve units, making it ideal for self-study.

The 2nd edition of The McGraw-Hill 36-Hour Course in Finance contains an additional chapter on the function and role of auditors, an important subject in the wake of corporate accounting scandals and the introduction of Sarbanes-Oxley in the US.

(Tip: to get the most out of this book, work your way through Essentials of Accounting first - a bit of accounting knowledge will make it easier to focus on learning the financial concepts.)

How to Read a Financial Report by John A. Tracy

Since finance and accounting are such important and challenging parts of business, the better we understand them, the better off we’ll be. How to Read a Financial Report is a concise, well-written guide to navigating the three core business accounting reports: the income statement, balance sheet, and cash flow statement.

In each chapter, Tracy is careful to explain how each statement is developed, how the statements relate to each other, and what each report tells you about the health of the business in question. The book is clearly and logically structured, making it easy to find answers to specific financial questions.

After reading How to Read a Financial Report, you’ll be better equipped to understand the financial strength of any company, whether it's a publicly-traded business or your own firm.

Turning Numbers Into Knowledge by Jonathan Koomey

I hold books that teach the reader how to think clearly and simply about a specific topic in extremely high regard. Turning Numbers into Knowledge is a masterful book about how to use data to solve real problems.

Jonathan Koomey is a Project Scientist at Lawrence Berkley National Laboratory and Professor at Stanford University. Under Koomey's expert guidance, you'll learn how to collect accurate data, how to identify potential bias, how to create hypotheses and models, and how to use the data to come to solid conclusions.

Turning Numbers into Knowledge isn't simply a book about number-crunching: it's ultimately about critical thinking, problem solving, and asking good questions. By using the information taught in this book, you will have all the tools you need to solve even your most challenging business problems.

Show Me The Numbers by Stephen Few

It's rare to find a business analysis that doesn't feature at least one table, chart, or graph. Unfortunately, bad information design practices mean these elements often create more confusion for the reader, not less.

Show Me The Numbers is a comprehensive and practical introduction to information design that will help you communicate business data with clarity and precision.

Good information design is about making choices about what to include and what to leave out. Building on the work of the renowned information designer Edward Tufte, Stephen Few shows the reader how to apply good information design practices to business reporting and analysis. By emphasizing only a few important elements and eliminating the unimportant, your tables and graphs will powerfully illustrate your findings without confusing the reader.

After reading Show Me The Numbers, you'll be well-equipped to make your business reports and presentations clear and persuasive.

Marketing Metrics: 50+ Metrics Every Executive Should Master by Paul Farris, Neil Bendle, Phillip Pfeifer, & David Reibstein

Generating and closing leads is the lifeblood of every business, and measuring the results of your marketing activity is critically important to your success. Marketing Metrics will help you understand your current business process and craft a set of metrics that will keep your attention on the most important issues facing your business.

Major topics include measuring customer perception, market share, competitive analysis, revenue, cost structure, profitability, awareness, trial, growth, repeat, cannibalization, brand equity, customer profitability, margin, market coverage, operations and logistics, price sensitivity, promotional activity, reach, frequency, and impressions.

In the immortal words of Peter Drucker, "what gets measured gets managed." Marketing Metrics will help you measure everything in your business that matters.

(Special thanks to PMBA member Tyler Martin for recommending this book.)

Web Analytics: An Hour a Day by Avinash Kaushik

Chances are, your business has a website. Do you understand how people are using it and how their actions affect your business?

In Web Analytics: An Hour a Day, you'll learn how to measure website activity in a way that's directly related to your business objectives.

Website statistics can sometimes be a very technical topic, but this book's step-by-step approach makes web analytics very approachable. Formerly the director of analytics at Intuit and currently Analytics Evangelist for Google, Avinash Kaushik's deep experience and robust sense of humor shine through in this book, making it an informative and enjoyable read.

In Web Analytics: An Hour a Day, you'll learn how to choose the right tool to collect website data, clearly define your objectives, identify key performance indicators, make clear decisions and recommendations, and test new programs that will improve the effectiveness of your website.

After reading this book, you'll be ready to tackle the challenge of improving any website, large or small.

The 80/20 Principle by Richard Koch

Would you like to learn how to get more done with less effort, eliminate wasteful activities, and sell more to your best customers? This book can show you how.

In The 80/20 Principle, Richard Koch thoroughly examines Pareto's Law – the observation that, in any given context, "a minority of causes, inputs, or effort usually leads to a majority of the results, outputs, or rewards." This inherent nonlinearity is present in all aspects of life, and by paying attention to your efforts and results, you can identify major opportunities for improvement in every aspect of your life and business.

By identifying the critical 20% of causes and focusing time and resources on optimizing them, it is possible to realize enormous gains in productivity in relatively short order. While Pareto's Law is typically used for sales, customer, or inventory analysis, The 80/20 Principle examines personal and management applications as well, including priority setting and work/life balance.

Focusing on the 20% of efforts that create 80% of results isn't always easy, but it can revolutionize your business and the quality of your life.

How to Lie With Statistics by Darrell Huff

Every day, statistics are used to tell stories about what's happening in the world and in your business. There's only one problem: most of them are designed to mislead you.

How to Lie with Statistics is a truly timeless book: originally written in 1954, this book shows you how easy it to be mislead through statistical manipulation, giving you the knowledge necessary to intelligently question and understand the story behind the numbers.

Using stories and examples, Darrel Huff shows you how easy it is to be mislead by poorly crafted statistics, covering sample bias, improper use of averages, statistical significance, probable error, chart scale, distorted graphical proportion, lack of proper context, biased polling questions, correlation vs. causation, and unwarranted precision.

The examples are entertainingly old-fashioned, but the principles taught in How to Lie with Statistics are just as important today as they were 50 years ago.

(Tip: to learn how to calculate statistics using your own data, check out Principles of Statistics by M.G. Bulmer in the Business Reference category.)