After about half-a-week of having us shadow-box with what was to come, the faculty of IIML finally deemed the third batch of IPMX ready for a spar with the real thing. And what an induction it turned out to be! The professor drew first blood by pulling-out an entire balance-sheet, no less, to introduce the subject of Finance & Accounting, when the 40-odd strong class was predominated by IT professionals, that poor breed of engineers whose only exposure to finance is the paycheck they unquestioningly accept every month, never daring to doubt the wisdom of their bespectacled staff in Compensation. Why, most of us would have a hard time predicting how much they'd get as salary next month, given that the company had declared to pay out variable-incentives at 120%, owing to spectacular performance last quarter, when the operating-margin zoomed more than 7% over expectations.
While most of the class was still wrapping its collective head around terms like EVA, something which would only have meant a stirring Hollywood performance by Madonna a few years back, some of the smarter ones had long since given up on decoding the acronym and sought shelter in the comfort of a 10-variable equation that would be used to calculate the EVA, and were testing their mathematical might against it. Unfortunately, without any significant understanding of the parameters of the equation, they were having a tough time substituting the familiar Greek letters with numbers.
Amongst all the mayhem, the relative minority, the only two brave souls with any real financial background, decided to show off by respectively announcing that the company in question had had Rs. 200 crore blocked in late customer-payments and that it had decided to ploughback Rs. 80 crore as investment for next year. The result of my equation at that time read 3.1417 % (heaven knows percent of what), and short of conniving with the gods or selling my soul to the devil for the answer, I couldn't think of any way by which to arrive at such sacred round-numbers (BTW, I've now earned an appt. with one Mr. Satan, Hellfire St, Down Under, at "any preferable time in the next 50 years").
The professor, meanwhile, was "pleasantly surprised" at the skill of the 'batch', and proceeded to go deeper into theory than he originally intended, conveniently forgetting the case-study most of the class had stayed-up all of last night to prepare for. Eventually, bleary-eyed from the exertions of last night (no pun intended) and drained of energy after having sat through 3 hours of haunch-ache and NPVs and NOPATs (how apt, considering there were no pats for anyone), we emerged from class, none the wiser about balance-sheets and cash-flow statements, but certainly very inclined to make a choice between bringing a pillow to next class or enrolling in the Iyer & Tripathi Mysteries of Accounting Explained over Lunch classes.
While most of the class was still wrapping its collective head around terms like EVA, something which would only have meant a stirring Hollywood performance by Madonna a few years back, some of the smarter ones had long since given up on decoding the acronym and sought shelter in the comfort of a 10-variable equation that would be used to calculate the EVA, and were testing their mathematical might against it. Unfortunately, without any significant understanding of the parameters of the equation, they were having a tough time substituting the familiar Greek letters with numbers.
Amongst all the mayhem, the relative minority, the only two brave souls with any real financial background, decided to show off by respectively announcing that the company in question had had Rs. 200 crore blocked in late customer-payments and that it had decided to ploughback Rs. 80 crore as investment for next year. The result of my equation at that time read 3.1417 % (heaven knows percent of what), and short of conniving with the gods or selling my soul to the devil for the answer, I couldn't think of any way by which to arrive at such sacred round-numbers (BTW, I've now earned an appt. with one Mr. Satan, Hellfire St, Down Under, at "any preferable time in the next 50 years").
The professor, meanwhile, was "pleasantly surprised" at the skill of the 'batch', and proceeded to go deeper into theory than he originally intended, conveniently forgetting the case-study most of the class had stayed-up all of last night to prepare for. Eventually, bleary-eyed from the exertions of last night (no pun intended) and drained of energy after having sat through 3 hours of haunch-ache and NPVs and NOPATs (how apt, considering there were no pats for anyone), we emerged from class, none the wiser about balance-sheets and cash-flow statements, but certainly very inclined to make a choice between bringing a pillow to next class or enrolling in the Iyer & Tripathi Mysteries of Accounting Explained over Lunch classes.
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ReplyDelete"Why, most of us would have a hard time predicting how much they'd get as salary next month, given that the company had declared to pay out variable-incentives at 120%, owing to spectacular performance last quarter, when the operating-margin zoomed more than 7% over expectations."
Only a accounts officer can speak like that..!!!
I'm on my way to being an accounts officer. Don't be too surprised if you next salary statement comes out of my email ID, followed of course, by an apology for the 'ek zero miss ho gaya'.
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