Thoughts and Feelings on Step 3

Well what a feat… I can say I struggled enormously with this chapter. I think in total I read Chapter 4 at least 5 times. Three of those times was on holidays at Bargara Beach. There was so many different terminologies and formulas that I found I had to try and re-instate my company to understand them. This helped me immensely. I worked through each concept and every time I came to the terminology of FCF, economic profit or Operating Income (OI) or Net Operating Assets (NOA) I would work through re-instatement of my financial statements to understand these terminologies.

 A wonderful joint venture was the videos that Maria posted on re-instating the financial statements. I watched one of these (over Easter and eating chocolate) each night and at the same time re-instated my company financial statements. I don’t think I could have done the cash (split between O&F) or worked out the tax benefit/expense without the help of these videos. I found the footnotes really helpful in my annual report as they break down each component at the end of the report. Hopefully I have allocated them all correctly as I must admit I went through each line item a few times. I also used the free space at the bottom of my spread sheet to work out each hint to ensure that the figures balanced to either the original statements or as mentioned in the videos. I also used this space to practice with the different formulas of FCF, Economic profits etc.

I am a numbers person and love the surge of excitement when the numbers balanced. Maria gave some great hints about matching the debits to the credits. It took me a while to understand this concept and I had to change the formula to match the below as it was a different scenario to Maria’s company.

I also find as I give feedback on other peers re-instated financials, I am also learning how other companies operate and interpret their financial realities.

I have also got back into the swing of peerwise. I slackened off while I was madly trying to concentrate on this chapter.

Very exciting we are over half way through this term. I can see the light …

Happy learning 😊