Duncan's Diacritical Discussion

The Bankers Bone Us

2012-01-30T08:35:00.002Z

Thanks to PK Munro for the inspiration for the title of this post!

The RBS, OUR bank, was ready to shell out millions of Pounds in bonuses in spite of the fact that they seem not to have been earned and were among the least popular things to have done in recent weeks.

These people took jobs whose aims must have been to build and rebuild the bank: their normal duties. These people took jobs KNOWING that the bank is essentially a public sector bank and public sector people do not normally earn private sector bonuses.

I heard this morning that the contracts of these people are in the public domain but I have to say that I have not looked for them and have not read them. However, I would have liked one or more journalists and/or politicians to have set out the terms in these people's contracts that have triggered the potential for the bonuses that had been announced.

The most important thing for everyone to appreciate is that we need these banks to be planning for LONG TERM stability and prosperity. So if there are bonuses paid in three or four years' time then no one will object I think.

Paying bonuses in shares, however, is a bad idea as share prices rise over time, on average: this means that even if the bankers do a poor job the shares they are awarded will be worth a lot more in a couple of years and they will be paid a bonus far in excess of the merit of their recipients!

More nonsense from the banking world

Duncan Williamson

Managing and Interfering

2012-01-26T17:13:00.003Z

Nick Edwards has written a very engaging autobiography that I recommend everyone to read.

Edwards is a doctor in an A&E department at a General Hospital somewhere in the UK. The book discusses two main themes:

medical stories

management and interference stories

I enjoyed the book and reviewed it in full for my own web site: http://www.duncanwil.co.uk/book_reviews/edw.html

There are many business, management and even commercial lessons to learn in this book.

Happy New Year

2012-01-01T15:17:00.001Z

Dear All,

There aren’t many of you because I don’t post to this blog anywhere near as much as I want to. My resolution this year is to post here at least once a week.

Happy new year to you all anyway.

Duncan

Happy New Year

2012-01-01T15:12:00.001Z

Dear All,

There aren’t many of you because I don’t post to this blog wnywhere near as much as I want to. My resolution this year is to post here at least once a week.

Happy new year to you all anyway.

Duncan

Don't Trust the Office of Budget Responsibility!

2011-12-01T21:25:00.001Z

Don't trust them and here is why ... this is simulcast on Duncan's Diurnal Diatribe blog too

It was autumn budget statement time in the House of Commons the other day and the Chancellor of the Exchequer went on and on about how bad it's going to be be for you and me!

Cut a long story short: if you know the HOCKEY STICK EFFECT then what you are about to see will shock you. The OBR data that I have seen and on which the Chancellor's statement and financial policies are based contain many hockey stick effect examples: here are just two.

In case you think I made these two charts up for a joke or for a more nefarious reason, take a look at my excel master.co.uk blog post from earlier today where you will see more evidence and a link to the source of the data I have used: go here ... http://excel2007master.wordpress.com/ and look for the post entitled UK Government Spoke the Words, here is some Excel Analysis.

I think it's possibly shocking and potentially massively damaging for all of us.

Gulf Airlines: must read

2010-09-05T15:26:00.001+01:00

I am a gold card holder on Emirates because my work and leisure travel normally take me further afield than Bradford and Birmingham.

As a result I like to see what is happening to Emirates from time to time and have just come across the following article as I was doing a bit of research into international expansion for a colleague.

Not only Emirates but Qatar Airways and Etihad are also going for broke in the world of civil aviation.

The figures are stunning, the competition livid: read the article and make up your own mind!

Here are a couple of diagrams from that article, too, to whet your appetite:

http://www.economist.com/sites/default/files/images/images-magazine/2010/23/bb/201023bbc564.gif

http://www.economist.com/sites/default/files/images/images-magazine/2010/23/bb/201023bbc569.gif

Find the article itself at http://www.economist.com/node/16271573?story_id=16271573, published on 3rd June 2010 by The Economist

Duncan Williamson

Cameron: no thanks

2010-05-07T05:05:00.001+01:00

Looks like the Tories are doing what I predicted, gaining the most seats in the House of Commons.

Here's another prediction: this will be a failure government. The Tories' team is inexperienced and filled with oafs. All they have ever done is blether for a living. Probably clever lads but not good enough.

DW
Sent from my BlackBerry® wireless device

Try Doing Business Online at Holiday Time

2010-04-03T04:37:00.002+01:00

This is a simulcast with Duncan's Diurnal Diatribe
Have you ever had a problem and tried to solve it online over a bank holiday weekend? For the last few bank holidays I have had something to try to resolve that surfaced just as the holiday had started or was about to start. Something different each time.
In all faith and with confidence you write to the support line, help line ... and explain everything. Then sudden death. Nothing happens. Nothing.
So this has happened again: I got an email on Thursday to tell me that the latest upgrade to some software that I want to upgrade has arrived. Yesterday, Good Friday, I tried to upgrade but for some reason it won't accept any of my email addresses as my registered address even though my copy is fully registered.
So I wrote yesterday morning to ask how to resolve this and pay for the upgrade. Death by silence.
If I complain about this or make a suggestion when they do reply, which effectively will be Wednesday because it's American software and I am more than a working day ahead of them, they will ignore it as a whinging Limey's rant!!
End of rant!
DW

How NOT to dismiss someone

2010-03-18T16:06:00.001Z

If you’re a moral coward and you have been advised to dismiss some people, this is how you will do it:

start a rumour that some people are to lose their jobs and refuse to confirm or deny it
when the time comes, send them an email
tell everyone who’s left that they MIGHT be next if they don’t behave

What’s the right way to do it? Be a man and interview everyone, the exit interview, to find out what they know and think about everything and to explain to them the why and wherefore of their dismissal. The exit interview is also a chance to offer help if they need it or ask for it.

Duncan Williamson

If you must Prepare a Forecast ...

2010-02-19T07:36:00.001Z

... do it right!

I have just read a report by the IDB (International Development Bank) on estimates of reparation costs for putting Haiti back together again. The headline figure is that it will cost $13.9 billion to rebuild homes, hospitals, schools, roads and other infrastructural elements. The question is, where did they get that figure from? Well, here's the warning, they did it by using regression analysis.

Using historical data and regression analysis can be fine but in this case I seem to see that historical data is probably not sufficient in the case of Haiti. Secondly, that $13.9 billion is at the top end of the confidence limits for just one of their estimates.

Here's the URL: read it and see if you agree with me ... you might not. Why not give me your comments? Happy to hear them.

http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=35072649

Duncan Williamson

Bankers' Fees

2010-02-05T13:00:00.001Z

There's a lot of talk about the bonuses that bankers are being paid these days. There's also a question that no one is asking, however, which is: where do these bonuses come from? After all, even if I pay, say, 5% or even 10% on my overdraft, it's going to take a lot of very big overdrafts to finance some of the bonus payments we keep hearing about.

At least part of the answer to the question of where these bonuses come from can be found in recent articles in The Financial Times newspaper:

Floating: but plain sailing cannot be guaranteed By Jennifer Hughes, Senior Markets Correspondent 2^nd February 2010
The real deal: Why it still takes courage to go Dutch By Lina Saigol 2^nd February 2010

In these articles we find that in 2009 the total equity raised worldwide amounted to $892.4 billion and in 2008 total equity raised worldwide amounted to $635.1 billion.

Moreover, we are told that the following are the rates that bankers charge their customers to take their company public.

Fees	%
USA	6.7%
Europe	3.2%
Asia	2.5%

The FT provides us with the regional breakdown of where all of this equity was raised and by making some assumptions as to which fee rates apply to which region, I have come up with the following analysis and estimates:

Equity Raised (from the FT)

$bn	2009	2008
North America	294.7	265.7
Europe	274.6	205.4
Northern Asia	115.8	30.8
SE Asia	21.8	14.1
Japan	62.7	15
Caribbean	0	1.2
Latin America	29.1	25.8
Africa	4.4	11.5
Middle East	4.6	13.4
Indian Subcontinent	22.1	14.1
Australasia	62.7	38.1
Total	892.5	635.1

Estimated Fees (my estimates)

$bn	2009	2008
North America	19.74	17.80
Europe	8.79	6.57
Northern Asia	2.90	0.77
SE Asia	0.55	0.35
Japan	1.57	0.38
Caribbean	0.00	0.08
Latin America	1.95	1.73
Africa	0.14	0.37
Middle East	0.15	0.43
Indian Subcontinent	0.55	0.35
Australasia	1.57	0.95
Total	37.90	29.78

There you are: in 2009 I have estimated that the total fees that banks have charged for helping companies to raise their equity by $892.4 billion amounts to $37.9 billion. Of course, the fees do not represent pure profit and they are not the only basis on which bonuses are calculated. However, you now have a better idea of where the bonus calculation begins.

Duncan Williamson

US Double Standards

2010-02-04T06:40:00.000Z

Remember when there was the US tyre company scandal, just a couple years ago. Goodyear was it? Everyone in the industry knew the problem and knew that many accidents had been caused by some rubbish tyres. There was a cover up initially and many denials.

Now Toyota has found a problem with the accelerator pedal on millions of its cars. Problem identified, solution worked one, repairs scheduled ... No expense spared.

Today I read that the US government has advised Toyota drivers in the USA to stop driving their cars and to demand a repair.

Well, that's one way to boost the image of your own companies: pour rubbish on the competition. Especially when the competition usually runs rings round you.

Very shabby.

Duncan Williamson
Sent from my BlackBerry® wireless device

Read that Graph CAREFULLY

2010-01-21T05:14:00.001Z

Everyone here knows that I find it difficult to respect a man who feels able to spend $1,600,000,000 on his own job interview expenses but even Obama needs some protection from the badly drawn graphs and charts. Even the Financial Times can get it wrong!

Here is a graph cut and pasted from yesterday's Financial Times:

How about the corrected version where the vertical axis is NOT chopped off just below the half way point ... no such a drastic change over the year is it?

This post was also uploaded to Duncan's Diurnal Diatribe

Follow your own advice laddie

2010-01-09T14:51:00.001Z

I wish I had!

Just before he set off on a monster trip of the Far East, my nephew asked me for some advice. He wanted to know the best strategy for foreign exchange for his trip: he asked about taking dollars, traveller's cheques and so on. I told him, whatever you do DO NOT get your currency here in the UK.

As I was leaving Dubai I checked the rates there as I had a little bit of foreign currency with me. Why oh why did I not follow my own advice? I ran out of time and opportunity to change my money in the end although I did change a little bet at Dubai International Airport. The rate there was a bit worse than I would have got in town but I changed it.

Anyway, when I got to the bank here at home I found their rate was £:$ of 1.74 ... in Dubai the rate at the time I SHOULD have changed my money was £:$ 1.61.

Just imagine I was changing $1,000 ... in Dubai I would have got £621, here in Halifax I would have got £575, a difference of £46.

Don't do what I do, do what I say! What a clot I am!!

Fantastic Communication of Numbers

2009-12-22T18:51:00.001Z

Part of the way through reading the FT I came to a pointer that said, take a look at CEO pay in the oil and gas industry. The link that follows takes you to that page and it's excellent.

An apparently basic and simple chart but you can change the axes in real time, as they say. You can sort the order in which information is presented and clicking on a bubble in the chart will open up and page that flies in to give you a lot more information about the CEO you just click on!

Take a look at www.ft.com/ceo-pay and see what you think.

Duncan Williamson

The Financial Times REALLY Comes Alive

2009-12-18T06:55:00.001Z

I have been a premium subscriber of the FT for quite a while now and have benefitted from online access, daily emails, an iPod FT Reader and so on ever since. Now, though, I can read a full facsimile version of the paper online every day.

Looks like a fantastic service.

Duncan Williamson

Here's a Tip!

2009-12-06T07:14:00.001Z

There is some excellent news for anyone connected with an industry where it is traditional to give someone a tip for services.

I only learned relatively recently that it was accepted that people in pubs, restaurants and hotels who receive tips can be paid less than the minimum wage with the difference being made up with the tips they receive.

The benefit of that system was that employers gained and any advantage gained by the employees was stolen from them.

Well, there is good news from 1st October 2009! This is from the UK Government web site, direct.gov.uk

Changes to the law on tips

It will now be illegal for businesses to bring staff pay up to minimum wage levels using tips.

Derek Simpson, Unite joint-general secretary, said:"The Code launched today will help consumers see where the money left for good service is going. Unite wants to see all employers sign up to the Code and ensure that their staff and customers can be confident that staff are treated fairly."

The code of practice will be monitored with a review in one year's time.

See http://www.direct.gov.uk/en/Nl1/Newsroom/DG_181003

It is a disgrace that the previous situation was ever allowed to exist but now it has gone.

Duncan Williamson

T Rex to take over at M&S

2009-11-19T07:04:00.001Z

At last that very ordinary man at M&S, Stuart Rose, has found a successor but it's rather an odd choice. While the British press is calling Marc Bolland the £1 billion man, people of my age will know him as a singer with the pop group T Rex from the 1970s.

And here he is: Marc Bolan, the photo ... sorry but the usually reliable Live Writer won't let me add a hyperlink here apart from this one ... http://i.realone.com/assets/rn/img/7/9/7/5/16295797-16295800-slarge.jpg

Duncan Williamson

A Smoother and more Productive POSITIVE Meeting

2009-11-02T17:46:00.001Z

We had a meeting at work today on a topic that not everyone knew much about at the beginning of the meeting. Knowing that the topic could have been buried under a welter of negativity I suggested to the chairman that we split the meeting into two parts:

positive comments only
negative comments allowed

That is what we did and everyone stuck to the spirit of the split and the negative aspects of the meeting were relegated to the final 5% of it. The outcome was that the meeting was much more productive and, shall we say, positive?

I was very happy with that!

Duncan Williamson

RBS and Bradford and Bingley Class Actions

2009-10-10T21:09:00.001+01:00

Interesting developments worthy of a mention are that some shareholders in the Royal Bank of Scotland and Bradford and Bingley are working on a class action for misleading them in prospectuses leading shareholders to subscribe to rights issues.

I have had a look at the RBS shareholders' action group web site and whilst there are some good details there, there does not seem to have been much to report there since August. Still, more power to them if their cases are valid and they make some good progress: this assumes that the shareholders were misled and so on.

For the RBS Action Group web site: http://www.rbsactiongroup.co.uk/

The B&B shareholders' action group has put together a similar case and similar web site and their site seems to contain a lot more up to date information and news. Not that that necessarily means anything. Also, the feel of this site is less professional looking than the RBS action group site: again, that might mean little of substance but I noticed it!

The B&B action group web site is here: http://www.uksa.org.uk/BradfordBingley.htm and you might notice that it is being hosted by the UK Shareholders' Association, which is the leading independent organisation which represents the interests of private shareholders in the United Kingdom.

Now that I have been to the B&B action group site I see there is a site for Lloyds' Bank shareholders as well as for Northern Rock.

Well, could be worth watching this development after all.

Duncan Williamson

Who said railways are dead?

2009-10-01T13:37:00.001+01:00

In the business section of today's Gulf Today newspaper there is an update on the development of a railway network for the Gulf.

Between them the UAE and Saudi Arabia are to spearhead a new $20 - 25 billion railway network that will take in their two territories plus Kuwait, Bahrain, Oman and Qatar.

The proposal is for a 1,940 kilometre network that would run diesel powered rolling stock and carry passengers and freight at speeds of up to 200 kph for the passengers.

Whilst it is not yet clear whether it is part of the larger network, the report infers that the newly opened Dubai Metro network is a beginning of thinking about this new railway network.

All being well, work will start on this new network in 2010 - 2011 and I would love to be a passenger at some stage: a forthcoming great railway journey of the world, no doubt.

Duncan Williamson

Oh! Willie, Willie!

2009-09-28T04:24:00.001+01:00

I've found another Stuart Rose: remember Rose is that unusual man in charge of Marks and Spencer about whom I have written quite a bit.

Well, here's another man in the same mould: Willie Walsh, boss of British Airways.

Over the summer Walsh asked his staff to work for nothing for a month. He needed to save £1 billion and his initiative saved around £10 MILLION.

Anyway, he has gone one better. Taking a leaf from the low cost airlines' book, Walsh is reported to be wanting anyone who wants to pre book their seat to have to pay for the privilege. No one wants to do that. NO ONE!

Hold on, it gets worse: he even wants business class passengers to pay as much as £70 to pre book their seat!! Remember, while you and I pay, say, £200 - £500 for a medium/long haul seat, business class passengers might be paying £1,000 - £5,000 for their seat. Does any rational person think that asking those people to pay even more for less value is an attractive addition to their business model?

Remember also that he is doing this at a time when business class passengers are relatively scarce. What is this man thinking?

Time for a change? I'll do it!

Duncan Williamson

The Bonus Culture

2009-09-25T10:15:00.001+01:00

As the members of the G20 summit in Pittsburgh are about to come to some decision on executive pay and bonuses, I prepared a report for a client on the topic of what I called the bonus culture.

I think it is a good essay that is full of the key ideas with some of my own observations. It is also up to date and thought provoking.

Go here to read what I have written: http://www.duncanwil.co.uk/bonus_culture.html

Duncan Williamson

Excel 2007 with Excel Master

2009-09-14T22:07:00.002+01:00

It's official: I can now reveal the address of my new web site. This is the web site for my up and coming book which will be called Excel 2007 with Excel Master.

The site is up and running but it is a work in progress at the time of writing. There are some good and useful things there already but there are going to be a lot more.

The book is more than half written now and it's going well.

Take a look at the web site: www.excelmaster.co.uk

Let me have your feedback and let me have your ideas: if there's something you want me to do, let me know and I'll do it if I can.

Duncan Williamson

Oh, Oh! I'm in trouble

2009-09-09T23:12:00.001+01:00

Read this semi serious executive summary from the Harvard Business School.

Executive Summary:

The notion of levying higher taxes on tall people—an idea offered largely tongue in cheek—presents an ideal way to highlight the shortcomings of current tax policy and how to make it better. Harvard Business School professorMatthew C. Weinzierl looks at modern trends in taxation. Key concepts include:

Studies show that each inch of height is associated with about a 2 percent higher wage among white males in the United States.
If we as a society are uncomfortable taxing height, maybe we should reconsider our comfort level for taxing ability (as currently happens with the progressive income tax).
For Weinzierl, the key to explaining the apparent disconnect between theory and intuition starts with the particular goal for tax policy assumed in the standard framework. That goal is to minimize the total sacrifice borne by those who pay taxes.
Behind the scenes, important trends are evolving in tax policy. Value-added taxes, for example, are generally seen as efficient by tax economists, but such taxes can bear heavily on the poor if not balanced with other changes to the system.

Don't believe that I got that from the HBS? Go to this web site then. http://hbswk.hbs.edu/item/6258.html

Duncan Williamson

This could be the last time

2009-09-05T09:41:00.004+01:00

Here is a post from my Personal Blog: Duncan's Diurnal Diatribe at http://duncanwil.blogspot.com

I am reviewing my online presence as I am now running three web sites. www.duncanwil.co.uk, my original web site; www.excelmaster.co.uk is NEW and I am putting a lot of effort into it; www.oxbow.org.uk is being allowed to die as it was a commercial venture that didn't work I'm afraid.

I also manage two blogs: this one and Duncan's Diacritical Discussion, my business blog.

I have been checking the world's response to this blog and it is woeful: I am gathering readership figures now but no one is linking to it and there are only two followers. If the readership is as low as I fear it might be, this blog will cease to be by the end of this month if not sooner!

In spite of that I do enjoy putting the blog together and will probably continue to do that privately if this one has to go.

My business blog will probably stay as I want to use a blog with excelmaster.co.uk. Alternatively, the business blog will go and a new one, based on Microsoft Excel, will replace it.

The Direct Method

2009-08-13T17:20:00.001+01:00

I think I have seen my first ever published Direct Method Statement of Cash Flows. Galp Energia 2008 annual report and accounts if you want to take a look yourself.

Duncan Williamson

Sent from my BlackBerry® wireless device

Good for Everyone?

2009-08-13T06:03:00.000+01:00

I see a Court in the USA has upheld a ruling that Microsoft has blatantly ignored someone else's Patent as it produced and sold Word 2003 and 2007 and has been given a fine of $240 million plus a cease and desist order.

Good! Let them learn some manners.

Duncan Williamson

Sent from my BlackBerry® wireless device

Rational Behaviour Mr Walsh?

2009-08-01T09:00:00.001+01:00

Willie Walsh must have a bit of a death wish these days. The chairman of British Airways has just worked free of charge for a month and saved his company one twelfth of around £730,000 salary costs plus attendant on costs, I think.

Yesterday I read that the airline has just announced a loss of £94 million for the latest quarter. Moreover, Walsh has bemoaned the loss of Business and First Class passengers over the course of the recession and significant down turn in the numbers of passengers.

Walsh's suggestions for cost cutting? Drop the level of services to business class passengers.

Doh!

All airlines and airline analysts say that business and first class passengers are the source of all airline industry profits (I have never seen the PROOF of that by the way and have some doubts about such a sweeping assertion). To cut the levels of service to such passengers is sheer folly then as I have not seen any related cuts in these passengers' fares.

Anyone care to correct/update/upgrade my knowledge? I would be grateful and would publish it here.

Otherwise, Willie Walsh seems to be settling very firmly into the same mould as that Stuart Rose at M&S.

Duncan Williamson

My Spreadsheet Book

2009-07-23T10:10:00.001+01:00

A few people are asking me about the progress of my latest book: working title is Spreadsheeting with Mr Sprite.

Good news: I have completed around 7 or 8 chapters now and have carried out my research and preparations for a few more. The book is aimed at Excel 2007 and is a comprehensive introduction to it. More than that, it includes a number of practical examples that people can use as templates for real life work. I am collaborating on part of the book with a manpower planning specialist (the world's number one, no less) and he is giving me material and ideas for what to include in that section.

I am aware that Microsoft is within a year or so of releasing Excel 2010 so I am keen to ensure I get in well ahead of that deadline!

Here is the current contents page ... subject to change. If YOU would like me to include something that you cannot see here, please write to me and I will consider all suggestions. duncan at duncanwil dot co dot uk ... please interpret that! I get enough spam in my inbox so don't want to encourage any more.

Contents

Part One: Introductory

1 Basics

Introduction
Pencil and Paper
Basic Functionality
The Ribbon
Screen Resolution
Minimise the Ribbon
The Quick Access Toolbar: the QAT
Basic Rules
Add Subtract Multiply Divide
More Complex Calculations
Try it!
Built in Functions: SUM ... AVERAGE ... MIN ... MAX
Auto Fill
Auto Fill Menu
Formatting Cells
Moving Around your Workbook
Changing Column and Row Sizes
Moving a Column or Row
Formatting Text
Cell Border
Try it!
Consolidation Exercise
Selecting non Contiguous Ranges
Why Select Non contiguous Ranges?
Print Areas
Transposing Data
Cell and Range Addressing
Range Names

2 Charting

Introduction
The Rules of Charting
Setting up a Chart the Easy Way: the F11 key
Default Chart Change
Creating a Template Char
Embedding a Chart with the Chart Wizard
Embedding by Moving
Titles and Axes Labels
Copy Charts: make clones an move them
Other Charts
Category Axis Contains Labels from Three Columns
Conditional Colours
Waterfall Chart
Create a Stacked Column Chart
Finished Waterfall Chart
Alternatives
Percentage Waterfall Chart
Radar Chart
Self Expanding Chart
Excel 2007 Solution 1
Excel 2007 Solution 2a
Excel 2007 Solution 2b
Selecting Data from a Combo Box
Spreadsheet Allowing the User to Highlight Alternative Scenarios
Table and Chart Selection Including a Combobox
Charts with Scroll Bars
Basic Chart and Rates of Change Chart
Ten year financial review of a company
Double Vertical Axes
Additional Charting Exercises
Text to Columns
Deriving Values from Published Charts
Dashboards
More Advanced Chart

3 Introduction to Pivot Tables

Introduction
Definition of a Pivot Table
Why you need a Pivot Table
Example PTs
Copying a Pivot Table
A Copy of a PT is a Clone of a PT
Copying your PT
Changing Sum of to Average of to Count of ...
Moving a Field from Row to Column
Drag and Move Within the PT
Drag and move the chosen field within the Task Pane
Filtering a Field
Sorting a Pivot Table
Formatting Fields
Calculated Fields
Drilling Down
Calculated Item
Other Calculated Item Features
Adjusting the Formula
More Complex Formulas
Forecasting with a Calculated Item
Values
Show Values As
Grouping PT Data
Starting or Setting up a PT
The Grouping Process
When Grouping is a Problem
Pivot Chart
Formatting a Pivot Chart
A Pivot Chart with a Data Table
Formatting
Page Fields
Multiple Page Fields
Reporting with Page Fields
Pivot Table from an External Source
Part Two: Data Analysis

4 Pivot Tables 2

Expense account analysis
Double entry bookkeeping
Trial balance
Final accounts/reports

5 Ratio and Other Company Analysis

Ratio analysis of company information ranging from the simple to the complex
Common size statements
Growth ratios in ratio analysis
Z Score analysis
Using the ToolPak Add-In that comes with Excel
Descriptive statistics
Histograms
Correlation analysis
Ordinary least squares (regression) analysis
There is a database of company data to accompany this chapter and the detail of the chapter will refer to that database throughout.

6 Statistical Analysis

This chapter enhances the work started in chapter 5 above and includes
t statistic
Standard Error
P Value
F statistics
Confidence intervals
Multiple regression analysis
The relevant range
Chi square test
Non parametric tests
The Box and Whisker Plot
More Useful functions for analysis
INDIRECT
INDEX
OFFSET
MATCH

Part Three: Decision Making

7 Behaviour of Costs

Splitting costs into their fixed and variable elements
MINVERSE
MMULT
Non linear costs
The linear treatment of costs: true and fair?

8 Cost Volume Profit Analysis

Building on the work of chapter 1 of this part of the book, we will now explore the practical application of the behaviour of costs under the heading of cost volume profit or break even analysis

9 Marginal Costing and Decision Making

Continuing with the theme of the behaviour of costs and the application of it to management accounting situations, in this chapter we explore how a knowledge of marginal costs can be used in decision making.

10 Traditional and Activity based costing

Traditional overhead analysis: absorption costing
Allocation
Apportionment
Re apportionment
Overhead absorption rates
Absorption costing
Activity Based Costing

11 Budgeting

This chapter concentrates on the preparation of budgets and budgeting reports that include:
Functional budgets
Cash budgets
Master budget
Budget reports
Balanced scorecard reporting
Activity based budgeting

12 Capital Budgeting

Payback
Accounting Rate of Return
Net Present Value
Profitability Index
Internal Rate of Return
Divisibility of Projects

13 Excel Techniques for Analysis and Decision Making

Goal Seek
Scenario Manager
SOLVER

I'm nervous about leaving it at 13 chapters and will probably expand that to accommodate the manpower planning spreadsheet models.

British Airways

2009-07-19T10:44:00.001+01:00

Following on from my recent BA case study, I see the airline is calling on shareholders and creditors to stump up a further £600 million ... I want to take a look at why they are doing this when they have £1 billion in cash on the balance sheet already and a further £2 billion available to pay for their new planes.

Of that £600 million, £300 million is to be taken in one form or another from the Pension Fund. Given that CEO Willie Walsh is talking about BA "fighting for its life" I think any tinkering with the Pension Fund is [virtually] criminal and is a sackable offence.

Duncan Williamson

That Ordinary Chap Again

2009-07-08T05:41:00.001+01:00

Stuart Rose is under threat at last. At the Marks and Spencer Annual General Meeting today there is a motion that he step down from one of his roles of Chairman and Chief Executive Officer.

As you know, I don’t rate this man as a businessman and even less as someone who is riding roughshod over the rules of corporate governance and the whole of Marks and Spencer plc.

Let’s hope the tree huggers don’t prevail and Rose does the right thing at last. A pity he is having to be forced to do this though isn’t it?

Duncan Williamson

Science to the Rescue?

2009-06-12T08:35:00.001+01:00

It's at least twenty years ago that I had a notion: the mathematical and statistical worlds of statistics, mathematics, physics, astronomy, biology and chemistry must have a lot to teach the world of accounting and business. Due to a lack of knowledge of these areas and a lack of time and opportunity to garner such knowledge, I let it lie.

Now, I have been proven prophetic and, I suppose, impotent at the same time. I still know very little of the areas I have just mentioned but articles have appeared over the last twenty years that show how right I was.

For example, I have just read this mini article, officially called a conversation starter, ‘Power curves’: What natural and economic disasters have in common from the McKinsey Quarterly journal. It shows the relationship between frequency and magnitude and so on in terms of power curves. Accountants are wont to use straight lines, with some justification I should add, whilst those of us more gifted can work with power curves, logarithmic curves, exponentials and so on.

Here's one such curve to whet your appetite: the corporate bankruptcy curve

Where X = rank by size of assets; and Y = size of 15 largest US public company bankruptcy filings by assets, 2001 - 2008 in billion real 2000 Dollars

See

http://www.mckinseyquarterly.com/Strategy/Globalization/Power_curves_What_natural_and_economic_disasters_have_in_common_2376 for a much larger version and the whole conversation starter. Forgive me if you need to be a subscriber to the McKinsey site to see this in full ... I am so I never get a message telling me to sign up!

If you can access that page, you can join in the conversation ... one or two very interesting points being made there!

You should also read Using ‘power curves’ to assess industry dynamics. I am pretty sure you need to be a subscriber to read this one. http://www.mckinseyquarterly.com/Using_power_curves_to_assess_industry_dynamics_2222

Gradely as we say in Yorkshire!

Ten Fatal Flaws That Derail Leaders

2009-06-10T10:36:00.001+01:00

Another one from the current issue of the Harvard Business Review. It’s a list along the lines of those things that Tom Peters and his ilk love to tout around the world. Take them for what they are but as you do so, consider whether they are valid, all valid, some valid …

Poor leadership in good times can be hidden, but poor leadership in bad times is a recipe for disaster … Every bad leader had at least one and most had several ... the ineffective leaders we studied were often unaware that they exhibited these behaviours … those who were rated most negatively rated themselves substantially more positively. Leaders should take a very hard look at themselves and ask for candid feedback on performance …

The Worst Leaders:

Lack energy and enthusiasm. They see new initiatives as a burden, rarely volunteer, and fear being overwhelmed. One such leader was described as having the ability to “suck all the energy out of any room.”
Accept their own mediocre performance. They overstate the difficulty of reaching targets so that they look good when they achieve them. They live by the mantra “Underpromise and overdeliver.”
Lack clear vision and direction. They believe their only job is to execute. Like a hiker who sticks close to the trail, they’re fine until they come to a fork.
Have poor judgment. They make decisions that colleagues and subordinates consider to be not in the organization’s best interests.
Don’t collaborate. They avoid peers, act independently, and view other leaders as competitors. As a result, they are set adrift by the very people whose insights and support they need.
Don’t walk the talk. They set standards of behaviour or expectations of performance and then violate them. They’re perceived as lacking integrity.
Resist new ideas. They reject suggestions from subordinates and peers. Good ideas aren’t implemented, and the organization gets stuck.
Don’t learn from mistakes. They may make no more mistakes than their peers, but they fail to use setbacks as opportunities for improvement, hiding their errors and brooding about them instead.
Lack interpersonal skills. They make sins of both commission (they’re abrasive and bullying) and omission (they’re aloof, unavailable, and reluctant to praise).
Fail to develop others. They focus on themselves to the exclusion of developing subordinates, causing individuals and teams to disengage.

Jack Zenger and Joseph Folkman (2009) Ten Fatal Flaws That Derail Leaders Harvard business Review June page 18

Duncan Williamson

Key Factors in Executive Career Advancement

2009-06-10T10:17:00.001+01:00

The title of this post is the heading of the summary of kep points that we need to observe and live by if we are to try to guarantee that we get the promotion(s) we think we deserve. Take a look at this list and see whether you agree with everything you see there: I don’t. I think we can all find examples of people who fall foul of several of these key factors and yet have still made the grade.

Key Factors in Executive Career Advancement

Non negotiables___________________________________

Factors that are absolutely necessary for you to be a contender

Demonstrating consistently strong performance a Displaying ethics, integrity, and character
Being driven to lead and to assume higher levels of responsibility

Deselection Factors________________________________

Characteristics that prevent you from being considered as a serious candidate

Having weak interpersonal skills
Treating others with insensitivity or abrasiveness
Putting self-interest above company good
Holding a narrow, parochial perspective on the business and the organization

Core Selection Factors_____________________________

Capabilities that breed others' confidence in your ability to succeed at the senior executive level

Setting direction and thinking strategically; spotting marketplace trends and developing a winning strategy that differentiates the company
Building and continually upgrading a strong executive team; having a "nose for talent"; establishing an adequate level of team cohesion
Managing implementation without getting involved at too low a level of detail; defining a set of roles, processes, and measures to ensure that things get done reliably
Building the capacity for innovation and change; knowing when new ways of doing business are required; having the courage, tolerance for risk, and change-management skills to bring new ideas to fruition
Getting things done across internal boundaries (lateral management); demonstrating organization savvy; influencing and persuading colleagues; dealing well with conflict
Growing and developing as an executive; soliciting and responding to feedback; adjusting leadership style in light of experience

Source: John Beeson (2009) Why you didn’t get that Promotion Harvard Business Review page 103 June

Duncan Williamson

Pricing Error?

2009-05-13T18:11:00.000+01:00

What do you think of this pricing policy at a cafe in an hotel?

Ice cream choice:

One scoop. 7
Two scoops. 12
Three scoops 20

Answers on a post card please!

DW

Sent from my BlackBerry® wireless device

McCurry

2009-04-30T14:54:00.001+01:00

How about this for some common sense at last?

In the UK a few years ago McDonalds persecuted a poor woman called McDonald from Luton I think it was. Ms McDonald, her real name, by the way, opened a sandwich shop and, perhaps unsurprisingly, called it McDonald's sandwich shop.

No attempt at golden arch copycat, the shop was painted blue as I remember it and there was nothing to suggest that Ms McDonald was trying to do anything other than make an honest living for herself.

Big Mac took Ms McDonald to Court and won so the poor lady had to close her business ... change its name ... evil Big Mac.

The same has just happened in Malaysia apparently except that there the Courts are far more sane and McCurry (I think that's the name), a one outlet organisation providing chicken curries to Malay society, has been allowed to stay open and trade as if Big Mac didn't exist.

Let's hear it for the little guy and the rational Courts of Malaysia.

Duncan

Bonuses: just wait, it's going to get worse

2009-04-27T03:28:00.001+01:00

Here is a prediction I think you won't be seeing anywhere else, for a while anyway.

The Fred Goodwin debacle at RBS has shown that anyone who gets themselves in a position to manipulate their bonus and pension payouts can do virtually what they like. Just wait, it will probably get worse and here is why:

Share prices and so on are probably at or around rock bottom and many managers mistakenly relate their performance as a manager to their company's share price. This has been the case for a long time even though everyone appreciates it is far from a rational thing to do.
Bonuses and possibly pension and even general remuneration packages are probably being set in terms of share prices now.
Put the two together and you will see in the next two to five years or so that many managers and management teams will be "earning" massive bonuses and pension enhancements as a result of what will probably be major increases in share prices over those periods.

What is wrong with this and why am I warning you that it is going to happen? The share prices are going to rise ANYWAY, irrespective of the abilities and actions of the managers, above and beyond the minimum they can do to keep the business working.

Even if a manager is deemed to have failed due to lacklustre profits and weakening balance sheets, if the stock markets marks the shares higher in the future than now, these clowns will be paid their bonuses and pension enhancements.

This is how the Fred Goodwins on this world get away with blue murder. It's so easy.

Duncan

Why GM Needs Massive Reorganisation

2009-04-05T10:06:00.001+01:00

Here's a story I tell quite often even though the full details and source have long since been lost to me. If you know the source of the story I'd be delighted to update my records.

A number of years ago someone asked the major car makers in the USA a very simple question: if you were to make one of all possible combinations of all models of all vehicles you currently make, how long would it take you to do that?

That is, imagine the Dodge Shadow is made as a 1 litre and 1.1 litres and ... 2 litres ... petrol and diesel ... sedan and hatchback ... and so on.

Toyota responded that it would take them 2.5 days
GM responded that it would take them 2.5 billion years

Complexity has been the GM watch word for many a long year!

Duncan

Welcome to Duncan's Diacritical Discussion ... DDD2

2009-04-05T06:44:00.000+01:00

Welcome to Duncan's Diacritical Discussion (DDD2), a brand new blog that will take the business web by storm.

The purpose of this blog is to tease out from my other blog, Duncan's Diurnal Diatribe (DDD1), the business and accounting things that Iwrite about.

Consequently, you will need to bookmark two blogs now or simply to migrate from DDD1 to DDD2 or even ignore DDD2 altogether if all you need are my insights into modern British life.

Duncan