What is business acumen?

Business acumen is a mixture of knowledge and skills in business practices and strategies gained through professional experience. It is a broad term that encompasses a number of different skills and diverse knowledge pertaining to business, including:

Financial literacy

This is the ability to understand and utilize a variety of financial skills, such as budgeting, investing, measuring profits or revenue, and financial management. It is critical in context to know how a company uses its resources to achieve certain goals.

Company knowledge

This pertains to the knowledge a financial professional has about the company they work for; how the company works internally and externally as a company in a specific market.

Ambiguity

In business, situations are not always clear, and there can be much ambiguity at times. A financial professional with strong business acumen will know when there is enough information present to make a decision and move forward.

Well-versed in cause and effect

This is useful in both a financial and personal sense.

A financial example is "a 35% discount would mean that the product will not be profitable for the company", while a personal example is "if I don't make this business forecast as accurate as possible, my CEO may not secure the resources we will need next quarter".

Awareness

The ability to know how a professional's actions and decisions impact a company and its employees.

Shareholder awareness

The ability to know how a professional's actions and decisions impact the shareholders of a company and also what the shareholders' needs and interests are.

Contextual knowledge and abilities