I enjoyed reading the way perceiving a firm’s strategy is not as sure a train reaching its destination, as they usually do without diversion. It makes sense that the train would take the passenger to the destination intended, otherwise why would anyone get on a train with no destination? Businesses are not so reliable in reality and there are many aspects which could occur and change the destination the business intended to go on. It reminded me of the time I went to Japan with my daughter where the train schedule is usually correct down to the very minute. You do not want to be late to the station, otherwise your train would have left before you reached the platform. How are we going to find out our firm’s intended destination? I am intrigued to find this out during the course of this unit.
Our firm’s strategy might not be clear cut and is our own interpretation of what the firm’s dreams for the future are. When we have our annual goals day at work, I believe that my ultimate goal is to get through my workload while meeting deadlines and supporting our schools. There is usually a lot of “fluffy” interpretation from our directors when the final strategic goals are published with some of the goals not applying to our department (maybe they do but it is my perception). I am hoping I can articulate my perception of my firm’s strategy as I struggle putting my thoughts down on paper at the best of times. Will my interpretation make sense to someone reading it? Will I be successful in deciphering my firm’s strategy? Only time will tell.
The financial statements of a firm only tell us part of the story of that firm. There are qualitative components, or environmental factors, affecting every firm which are not necessarily available in the quantitative sense and will not form part of the financial statements. This is something I can relate to in my working life. I work for Catholic Schools in Townsville, so we do not have equity investors in the traditional sense, any profits made go back to the schools. At this point in time there are certain provisions we must include in our liabilities which is making life hard for our schools with restricted budgets. This environmental factor will continue into the unforeseeable future and is an uncertain factor with a lot of judgements being assumed by management.
While reading about Pythagoras I was wondering if I was going to have to re-learn my Year 12 studies from many, many moons ago in 1991. Thank goodness that wasn’t the case and Martin was just using Pythagoras’ theorem as an analogy between the relationships of numbers.
As an investor in a company, receiving dividends is the ultimate goal of owning shares. However, this is dependent upon many factors including the management style of directors which can affect the dividend paid to an investor (if they receive anything at all). The relationship between the value of the dividend paid and the value of a firm means nothing due to this factor along with the way a firm operates and calculates free cash flow. This all makes sense to me in theory, but I have still not been game enough to become an investor myself as I need more information before parting with my hard earned cash. Will learning how to analyse financial statements help me to become an investor in the future? I definitely hope so. My husband has recently started delving into the Crypto currency world which makes me very nervous as we have worked hard to achieve our current lifestyle goals and I don’t want to lose the money he has invested. He has started small so hopefully it will all work out.
The formulas for the discounted cash flows and economic profit are straight forward but do not ask me to repeat what I have read. Will I be able to remember which formula to use at the correct time? When I work on my assessment will I be equipped to provide a feasible answer? I will have to make a note to go back and study these formulas as I feel they have jumbled up in my mind. I find this a little bit unsettling as I received a high distinction for Business Finance and worked hard to receive that mark, but I didn’t work any harder than any other unit I have studied at CQUniversity. I was only studying one unit that term so maybe the extra time I was able to concentrate on the unit helped me achieve that grade.
I look forward to continuing to read the study guide in Chapter 4, and discovering what my firm’s strategy is for its future.
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