This book's more like it! Approachable and easy to read without becoming the dumbed-down nonsense that was What the CEO Wants You To Know. In fact, the information in this book is a superset of the info in the other one. Ratios like inventory turnover and P/E are discussed, but without the cultish worship.
So. Accrual accounting. Weird stuff. An elaborate fiction created to give you an idea of how good your business is doing and going to do. So the books can say that your plan is sound and yet you can suddenly find yourself without cash and needing a loan just to get to those profits your business is bound to make. And yet this fiction is apparently what we all go by. Even the IRS. (Or...they go by a different kind of accrual accounting, because you may choose to run certain things different...) Part of me feels like we're purposely making everything more complicated than it needs to be just to make our lives more interesting. A little like heavy polymorphism or template programming. Ouch! Did I just say that?
So, running a development studio. Almost feels like it's not a real business. You know, one where you make products, and sell them, and hope you sell enough to break even on your overhead. Instead, thanks to this publisher - developer model, where actually getting royalties is something of a pipe dream, we've become work for hire, contractors. (Chapter 11 of the book does go briefly on how to do the accounting for a large project that takes years, but most of the book is focused on more product oriented business.) The indy studios that release online are closer to being "real" businesses than console developers.
One interesting thing about games development. You don't need much in the way of assets to start a development studio. The cost of equipment and software is very low compared to the cost of everyone's salaries. Compared to typical businesses. Which can give you a very high return-on-assets ratio. Compared to typical businesses. It feels like we're making something out of nothing. Like writing a novel. Of course, that just means the return-on-assets ratio is irrelevant to us. Our return-on-investment doesn't look so rosy.
Anyhow, great book, learned a lot, and just in time, too. Been doing a lot of budget talk lately and it's nice to actually know what I'm talking about.
Oh, and, full title: "The McGraw-Hill 36-Hour Course Finance for Nonfinancial Managers" by Robert A. Cooke. Sorry.