The term, financial intelligence, is quite new, but it aims at improving financial targets, staff morale and reducing employee turnover. It includes the knowledge and practices from both finance and accounting principles.
This field has not emerged as merely theoretical concepts, it requires the best of both worlds. In practice, executives display financial intelligence by questioning nonsense numbers, scrutinizing financial reports and utilizing financial data to improve a company’s strengths as well as understanding its weaknesses.
So, are you financial intelligent?
There are key understandings that constitute this concept.
Understand that it is an art. Consisting of knowledge and skills from the best of both world, finance and accounting, financial intelligence is an art based on science. Applying it means making the effort to quantify things which is not quantifiable. It also depends on assumptions, rules, and estimates backed by facts and data. It ensures people understand how much art has been applied and how different approaches lead to different outcomes.
Scrutinizing analysis. Financial intelligence means the ability to evaluate number in great depth. It includes popular financial metrics such as leverage, liquidity, profitability and the ability to interpret the meanings of these numbers.