Wednesday, May 21, 2008

Voice of Numbers



Ask any doggedly working Business school student about which are his 3 silent killers and if s/he is seasoned enough, the answer will come pat: Balance sheets, cash-flow stmts and income stmts. Well, there are many others as well , but these three innocent looking tables are sure to give you some headache.


I am emphasizing on "Innocent", because thats what you feel like when you take that nice looking annual report in your hand. You see some smiling faces on the cover page which has lots of colors in it and also some artwork. (Reportedly, one Paris based Big technology consulting firm even hires famous French artists each year to contribute glamourized sketches on its annual reports.) The numbers look all rosy at first sight with double digit growth in everything. So you think, wow, here are the numbers, divide everything by everything else to get your ratios, go to your library to access Moody's and compare your numbers with those of the analysts. Done!


Is there only that much to it? Yes, for the starters.....But then you receive an assignment which states " Please write a report on the Strategy of *** Inc. and critically comment on the management's moves". What the heck !

After ruffling a bit and dawning yourself with the realization that those numbers were just the upper layers, you start worrying. Let's think a bit more about these in an analogical manner. Just compare it with Cricket. On any old cricket ground, you will find a big wooden scoreboard and 2-3 scorekeepers. They hang & sit on that scoreboard in order to keep changing the wooden number plates whenever a run is scored. If there's a dull phase going on in the match and not much changing of the wooden plates is required; those boys also fit in their faces through the holes meant for the number plates and look animatedly towards the whole stadium. Basically speaking, the dumb accountants are just those boys i.e. the scorekeepers who mundanely update the numbers on the wooden manual scorecard. The real match is going on in the dressing room i.e. in the corner office. And the special benefit which is enjoyed by the corporate matches is that you can always manipulate those scores sitting right in the corner office! You can always order your dumb accountant to shift numbers, manipulate depreciation rates et cetra and most of the top management in the world does this.


So, you have just been asked to scratch those bald skulls and write a report on their strategies 'to critically comment on the management'....... Best of luck.....


You have already finished reading each and every number on it and have dug your nose into the Notes section as well. I told you, there's more to those innocent statements. You end up eating, drinking, living and cursing those 3 innocent tables.

Best wishes once again..! Tommorrow is the deadline for your assignment! Spend your night scratching those bald skulls a bit more. In between that, write a blog post to curse the situation.....
But during all this time, keep your ears open : Those numbers might just whisper something to you in a bushy voice.....

Happy hunting the numbers!

1 comment:

Anonymous said...

Well written article.