Fooled by Randomness
You've come here because you are interested in something to do with business. Must be true.
This means that you
must read the book
Fooled by Randomness by Nassim Nicholas Taleb. It's basically a book on probabilities and Wall Street and things like that. However, Nassim reads a lot and he adds a very large number of ideas to his basic story.
I think the book is easy to read and there are many scary, wacky and straightforward stories that you just need to read.
The book's controversial, too, as you'll see ... if only from my review of the book, to be found on my own web site:
www.duncanwil.co.uk/bookrev.htmand click on the menu to read what I thought of it.
Duncan Williamson
Oodles of Noodles!
I have often said to Business Studies pupils that virtually anything can be used to illustrate something in business – indeed I have written four volumes about using football quotations to illustrate key elements.“Most of my money I spent on wine and women. The rest I squandered'”This can be used to illustrate budgeting, elasticity, planning etc.You get the drift.To prove a point I asked one of my Chinese pupils to pick a word/phrase and I’d Google it and from the results we’d have a business studies topic. He said nothing – he was having his lunch at the time. (I often let pupils eat during lessons – it helps with concentration).I suggested ‘bicycle’ or ‘football’ (thinking of the World Cup industry) but he didn’t seem interested.‘Well how about Noodles then,’ I said, ‘as you are eating them.’He looked at me if I was from another planet - but then I often find that I have that effect on pupils…So, I googled ‘noodles’ and found an article about them on the Brand Republic site: http://www.brandrepublic.com/This site is concerned with…branding.According to an article on the 17th May:“Pot Noodle remains the brand we love to hate, according to research exclusively revealed by Marketing. The online survey of almost 3000 UK consumers, carried out by marketing agency Joshua, showed that the snack-food brand drew even more votes this year than in the previous 'Brands we love and hate' report. It retains its status as the UK's most-hated brand, ahead of shopping channel QVC. Search engine Google led the most-loved brands with 31.6%; Tesco and Nokia swapped their previous rankings, second and third place respectively. 'One noticeable trend was the rise of technology companies among the most-loved brands,' says Joshua director Matthew Howells. 'Amazon entered the top 50 at number 17 while eBay has come straight in as the fourth-favourite brand”Just this snippet is easily enough for:- Market research
- Branding
- Loyalty
- Technology
But I decided to look some more and found this in The Times:“Love, hate - and Pot NoodlesBy Alan HamiltonWHAT’S the thing we most love to hate? Why, it’s Pot Noodles. And what do we love best? Easy, it’s the Google search engine. Google is brilliant, because you can look up Pot Noodles on it, and discover that the dried snack beloved of impoverished students is suitable for vegetarians. Perhaps widely it steers clear of any other nutritional claims. In this context, love and hate is all about brand image. According to the latest annual survey by Marketing, the advertising trade magazine, we also detest, in descending order, the QVC shopping channel, Sainsbury’s Novon washing powder and McDonald’s. What we perceive does not necessarily have anything to do with what we consume. Pot Noodles are heavily and often wittily advertised, and the factory in South Wales that produces them churns out 175 million pots every year. But among the 3,000 consumers interviewed for the survey, the image grates. It may simply be snobbery; who wants to admit that they eat Pot Noodles? In its survey, Marketing reported that what helped to endear a particular brand image to the consumer was good service, customer loyalty, tradition, and a good online offering. But the magazine cautioned: “While these sentiments may be encouraging for brands, preference and consideration do not necessarily translate into sales.” Advertising expenditure might also have something to do with it. According to the latest figures, Unilever Bestfoods, owner of Pot Noodle, only had Britain’s 22nd largest annual advertising budget at £44 million, with some of that going on more cherished brands such as Marmite. McDonald’s spent a paltry £41 million on its annual advertising budget. Britain’s biggest advertiser is Procter & Gamble, which spends £199 million, £40 million more than its nearest rival, the Government. Money, in this instance, cannot buy silence; the company’s Head and Shoulders shampoo is well up the hate-list. Other detested retail names include Sunny Delight, Manchester United, Loyd Grossman sauces, the airlines Ryanair and easyJet, the computer companies Tiny and Time, and, rather more oddly, the Financial Times. Our best-loved brands after Google are Tesco, Nokia, eBay and Persil. We also love Nike, adidas and Stella Artois. The Government does not appear as one of the most hated brands, whatever the reality away from the world of marketing may be. Surely that £159 million spent annually through the Central Office of Information cannot have bought the nation’s silence?“Plenty of material there:- Advertising
- Location
- Mass production
- Budgets
- Niche marketing
- Segments
- Government
In fact if you put ‘Pot Noodle’ into Google you get 1.85m hits. Plenty of scope for future lessons …for example, fancy digressing into pornography?In which case read the case study about semiotics and Pot Noodle:“ Greg has been working with the Pot Noodle team at Unilever since April 2001, providing semiotic analysis and development of the brand. The first major audit threw up some interesting ideas which have served the brand well (see below) as well as some new product and branding concepts which are currently in the pipeline. In addition to the bigger picture, we also help with variant names and concepts, as well as script and packaging development. Now banned in its original form 'The Slag of All Snacks' has made a huge impact on popular culture, from the Sun to The Guardian. It was inspired by semiotic analysis which suggested that Pot Noodle represented a form of Food Pornography - the idea that Pot took something wholesome like food and made it overly intense, objectified and rather sleazy. Apart from being funny, this ad campaign also built on Pot Noodle's distinctive honest and unpretentious heritage. “Source: http://www.semiotic.co.uk/case-study/pot-noodle/Also of interest is what is not covered in articles. The Times article mentions the placing of several brands but left out The Sun (www.the-sun.co.uk) which was at number 10 and Sky Sports (http://home.skysports.com/) at number 13.Mind you, they’re both owned by News International – owners of The Times…So that means we can also add ‘ethics’ and ‘bias’ to the list!Chris SivewrightPSThe Pot Noodle site: http://www.fuelofbritain.co.uk/ is well worth a visit!
Diminishing Returns
In about five hours time I start a week-long half term course for pupils studying Business Studies and Economics. Students are coming from several different parts of the country to have one-to-one tuition as final preparation for their examinations.I have just glanced at my timetable as I finish off the preparation. In total over the next 7 days I am teaching 100 hours. Tomorrow I teach 16 hours as the first pupil arrives at 6.30 am and the last one leaves at 10.30 pm. That’s a lot of hours – and something I haven’t done for over fifteen years. I have worked weeks that long, yes, but of course 100 hours of tuition generates a fair amount of marking too.Hopefully in 7 days time I’ll be able to say that I have done a good job – however, thinking back to criticisms made in the late 80s and 90s as to the amount of hours some people teach, in theory diminishing returns will set in and pupils will get a rough deal. After all who on earth could maintain concentration for so many hours?Naturally, I beg to differ. Economics and Business Studies have enough differences to make delivery different. For example, tomorrow I go through S4U and also Unit 1,4,5 and 6. I also cover some OCR Business Studies. In Economics I am covering OCR, Edexcel and AQA. For AQA we are concentrating solely on the European Case Study.That’s enough variety to keep me interested and alert – and also where students are having 5 hours of consecutive 1-1 tuition (as is the case on Wednesday) it’s enough for them too.The key is preparation. With the internet, preparation is a lot easier now – and there is far wider scope for different approaches to the same point.Interestingly one of the students is starting Business Studies. He’s read the articles blah, blah and wants to ‘do the A level in a week’ as I have been banging on for years about this. I trust he will be a glorious success.Now these two activities –a rushed A level and a cramming course – tend to invite criticism. That criticism appears in Forums and no doubt – as it is half-term – will be muttered about when teachers return. I remember when I was a full-time teacher the period during exams was often the easiest -with a timetable reduced to perhaps 3 hours of cover per week – and that’s all.Funnily enough you don’t hear teachers criticising that!This lack of impartiality made me think about www.nuclearspin.org. This is an organisation that states:“The Nuclear Spin website is designed to help people find out more about the individuals involved in the push for new nuclear power stations in the UK. Some of them are advocates of nuclear power, while others are key advisors or ministers in government who will be making decisions about nuclear in the coming weeks and months. The website documents some of the public relations tactics being used by the industry to fool the public into believing that Britain's future is nuclear.”The website names and shames various ‘pro-nuclear people’ – most of whom seem to be Labourites. This lack of Tories being ‘named’ is a bit odd as surely many Tories are pro-nuclear?I looked at the financing of the site:“The Nuclear Spin Website has been funded by a small grant of under £2,500 from the JMG Foundation and £1,500 from Greenpeace.”That would seem to make it impartial BUT if you dig a bit deeper you’ll know that the JMG Foundation was created by Zak Goldsmith.Zak Goldsmith advises…David Cameron.I wonder if this has anything to do with the non-naming?This made me think a bit more about the criticisms received concerning the cramming etc tec. Doubtless some teachers have issues with this – as they do with the ‘sit A level in ½ an hour’ type of conversation.But some teachers also have isses with Chief Examiners running/speaking on commercialised courses, writing books and marketing them through magazines etc etc. For that teachers may well look to an independent organisation to voice such criticisms after all aren’t we all worries about the ‘commercialisation’ of Exam Boards.I can only think of one independent organisation that represents Business Studies teachers and that’s the EBEA: http://www.ebea.org.uk/ebea/ (I used to be a Member of the AEB but I suspect not many other teachers were.)Will they voice criticisms of the ‘marketing’ of Chief Examiners I wonder? Certainly having spoken/communicated with many other teachers they seem to think it’s ‘not quite right’ what has happened in the past – and may well be continuing to happen.So I wonder if the EBEA will have an opinion – that’s what made me look at their list of Officers:http://www.ebea.org.uk/ebea/about/ebeaOfficerDetails.htmlInteresting reading!Chris Sivewright
Anti Smoking Campaign
On the news this morning, there was a piece that said that people are about to be asked which images they would like to see on the front and back of cigarette packets. Pictures aimed at discouraging people from smoking.
I gather that the pictures will include all kinds of gore.
I would like to see the following:
* a picture of the 65 year old wo/man who hasn't smoked set against the picture of the wo/man who has smoked for decades ... they will look different and the smoker will look older, more wizened ...
* the sound of the smoker getting up in the morning: both of my parents were relatively heavy smokers and both had hacking early morning coughs
* smoking and therefore poor youngsters looking in a shop window at the latest fashions or a new iPod or something else they desire but can't afford and other, smarter and non smoking and therefore richer, youngsters walking out of the shop sporting what they want and can afford.
I understand that cigarettes are around £6 for a packet of 20 now so for the young smoker to be able to acquire their dreams, they need debt or a sponsor.
When I was at school, a teacher stopped smoking in middle age when he finally realised that he had smoked away the equivalent of an entire house. Do the arithmetic for yourself, assuming a packet of 20 a day ... adjust accordingly:
every week = £6 * 7 = £42
every year = £6 * 365 = £2,190
every five years = £2,190 * 5 = £10,950
every 30 years = £2,190 * 30 = £65,700
All of that ignores the opportunity costs, lost interest ... whatever you want to compare it with.
Imagine the family where husband and wife or mother and father are both smokers: double what I have just written!
One really good thing that all smokers MUST do is to run upstairs NOW. Then stop smoking for just 24 hours and run upstairs again. If you don't notice a major difference, it's already too late.
One quarter to a third of youngster smoke these days: many more girls than boys for some reason, too.
Duncan Williamson
M&S again
I have now put together a file on M&S and its latest results. I think it's interesting from an accounting and a business point of view.
The file is
hosted on my own web site but visitors here will benefit too: it's not aimed at GCSE or even A level I should say as it contains ideas and techniques from more advanced financial management.
I am reading a book called
Fooled by Randomness at the moment: written by a Wall Street chappie but far from being along the lines of 'how I became filthy rich' it contains all sorts of insights and philosophies. On pages 64 -65, the author quotes Philostratus, which I think applies here I think:
For the Gods perceive things in the future, ordinary people perceive things in the present; but the wise perceive things about to happen.Duncan Williamson
The BBC says that M&S has turned in Profits of £745 million ... WRONG!
SOMETHING REALLY ODD IS GOING ON.
I followed all of the links in the M&S Web site and they have led me a merry dance. Very peculiar too that there seems to be a profit figure of £745 million both this year and last ... they have yet to update their annual reports area though so my analysis of their profits will change and I will report back more fully later once their information comes on line.
I've got it! I think the UK has just been duped by the first IFRS v FRS report.
Here is the text of an email I have just sent to Declan Curry at the BBC since he and I exchanged a few words over M&S yesterday:
My big problem with M&S is that they restated their P&L account and time didn't allow me to say why yesterday but I have just spent a few minutes looking at their latest results again and think you might do so too.
If you take the ARA from last year, eg, turnover was stated to be £7,942.3 million after exceptionals and including discontinued operations. Yesterday they showed sales of £7,490.5 million for the same period ... Restated. Then everyone got carried away and said that on the basis of sales of £7,490.5 for 2005 and sales of £7,797.7 million for 2006, there has been an x% increase ...
Hasn't everyone failed to read the small print?
From the ARA 2005: 1 ACCOUNTING POLICIES Basis of preparation The financial statements have been prepared in accordance with applicable accounting standards in the United Kingdom.
From yesterday's UNAUDITED statements contained in their Press Release: Note 1 General information and basis of preparation The results comprise those of Marks and Spencer Group pic and its subsidiaries for the 52 week year ended 1 April 2006 and have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the EU, and those parts of the Companies Act 1985 applicable to those companies under IFRS. The summary of results does not constitute the full financial statements within the meaning of s240 of the Companies Act 1985.
Haven't we all been mislead by something that could wreak havoc everywhere this year as IFRS based statements come pouring out of PLCs? In this case my guess is that when the FRS based statements come out of M&S they will tell a completely different story.
Any thoughts you'd like to share?I wonder if this will turn into a scandal and I really can't wait for the FRS based figures now.
Duncan Williamson
Record passes in June 2006
OK perhaps it’s a bit early to say this – but we all know it’s going to happen.
Teachers are already discussing this on the TES website. Some of the predictions are so accurate that it would be funny if it were not so serious. They predict the following will happen/there will be news about …
Why various handouts were missing from various exams.
Why 40% of the markers aren't teachers and don't even have the subject knowledge to see what pupils are trying to say. Why the pass rate for a C in Maths is only 19% this year. Media Studies and why it isn't a Mickey Mouse subject.Exam papers are for sale. Coursework is on the Internet (although they know this already, they just stick their head in the sand and say it isn't a problem).I bet they get the date for an exam mixed up so loads of pupils miss it.
Everyone will pass and the Government will say this proves standards are rising - it couldn't be down to cheating in coursework, could it?I predict that that the Exam Boards will have to explain why there is a question in science like "Is a human a mammal or a reptile?" And they will have to try and explain that the exam must cater for E grade candidates as well.I predict that two phrases will be talked about a lot over the months following exam results being released:a. We now teach "the template generation".b. The "lollipops for everyone" mentality will hit new heights with such great results.
Cheating will continue and nothing will ever be done.
Teachers will continue to be too frightened to say anything
If that is not enough the inefficiencies have already started. Only recently I was at a school where they told me that the exam board had posted a ‘sample paper’ on the internet on their homepage and – lo and behold – ‘extremely similar’ questions came up in the exam! Is this ‘institutionalised cheating?
Consider these following snippets from posts on the TES site:
We got a letter today from AQA saying there was an isolated case of some anthologies with irregularities and to check them - well yes, the first 25 pages are missing and 4 of the 7 stories are missing and some of the poems have the wrong words...the exam is tomorrow morning at 9am - AQA aren't having a good year and it's only day 1!!! (Noja)
I'm getting to the stage where I just can't cope with it any more. Seriously, the scale of cheating that's going on is so professionally offensive I'm not sure I can last much longer in a system where the pressure on teachers and schools is so great to do this.What would happen if they examined what was going on in these secondary schools which have 'miraculously' put 30-40% (sometimes more!) on their 5 A*-C rate within two or three years? But they won't examine it, will they, because the house of cards would come tumbling down (Middlemarch)
Done it, Middlemarch, as I've said before. Nobody is interested. I outed myself and the school, and provided actual examples. I got a series of clone letters and emails that said they relied ion the professionalism of teachers to maintain the integrity of the system. Even though I'd just demonstrated that the system has no integrity. (Lilyofthefield)
Edexcel have managed to print the wrong date on their paper that is to be released to the students a week in advance. Small message appeared on the website stating earlier date after many, many phone calls and emails (Woozle)
So we have widespread cheating – somewhat institutionalised – plus the spread of ‘cheat’ sites … sorry, essay-selling sites. What about the ethics of the Exam Boards?
Well, we have Chief Examiners who are busy building their own commercial empire, marketing courses, changing the syllabus to suit the book they’ve just written etc. But still schools do nothing. I was at a school where they openly told me that the Chief Examiner had visited them and told them what not to revise as it wasn’t in the exam! No…they wouldn’t confirm that in writing.
Another school told me how the Chief Examiner had spent ages with them telling them how awful a person I am, how it is no terrible that I go round telling people Business Studies is easy and how I should be ‘forced out of education’.
(Nice to know I am having some effect)
Why not set your pupils some homework on ethics, exam boards and the like? Now that would be ‘education’ instead of the current ‘training’.
You could start off here:
" Sixteen Y12 students went to this year’s Enterprise day at Didcot Girls’ School for a day full of activities and presentations by business people focused on how to start and run your own successful business. Another mini-bus load of A Level Business Studies students spent the day at Bradfield College in December, joining their students in a conference on improving examination performance led by the AQA chief examiner and textbook guru Ian Marcouse. "
http://www.thealegreen.org.uk/news/news0405/newsletterdecember.htm "
Bruce Heil, Assistant Principal of Edinburgh's Telford College, shows how locally produced materials must be made to meet closely local learners' needs.
Ian Marcouse produces interactive business case-studies for the BBC. He sees huge scope for courseware as a supplement to conventional publishing, and believes well-targeted materials can always find a national market. "
http://www.keynoteseminars.co.uk/6dec.html and ESPECIALLY post two:
http://www.tes.co.uk/section/staffroom/thread.aspx?story_id=2059806&path=/business+studies/&threadPage=12On the OSL site (
www.osl-ltd.co.uk) I have placed details of our Ethics – plus the responses from LSE about cheating. Most universities didn’t bother to reply when I asked them to outline the steps they were taking to stop cheating.
This year I have several foreign students who have been unconditional offers for University – in fact they don’t even have to have the A levels anymore! Last year a Language School passed the entire class on the Foundation Course – when the average mark was in fact 15% in the exams. But – who cares?
No-one.
So to really educate your pupils:
a. give them market research so that they can compare the various cheat sites
b. maker sure you lick the boots of the relevant Chief Examiner so you can glean some, nudge, nudge, comments – perhaps meet him at one of the Nuremberg rallies I have mentioned before?
c. make sure you are an Examiner so you get the paper in advance
I am sure you can think of other exercises.
To help I have the ‘cheat essay’ a student bought for Economics coursework – free if anyone wants it. I have also placed a photo of a Chinese cheat on the OSL site – bought his way into University with fake certificates.
Also the CONE website (which lead to 150+ hate emails and threatening phonecalls to staff at OSL) has a good section on cheating:
www.cone-campaign.co.ukOh yes, if anyone needs Business Studies A level classes start soon – we’ll do the whole A level in 2 days this time rather than the usual one day. Free unless you get a grade C or above…
Chris Sivewright
World Cup fever?
There are many sites offering information about the World Cup. Often this information can be used for Business Studies/Economics. Typically this will involve assessing the ‘World Cup effect’ on the economies of, for example, Germany, the UK and Brazil.
Today mad.co.uk has just launched a special feature to coincide with the World Cup which will offer a unique insight into the role of branding in football at its highest level. They invited six top design and branding agencies to rework the logos and kits of Germany, Italy, France, Brazil, Argentina and England. Agencies were also asked to put together a sponsorship package to attract the business of fictional Japanese 3G operator Watatak. Alongside their work, each agency has also provided an in-depth rationale explaining why they did what they did. This week they unveil the work completed by Scottish agency Curious Group which has redesigned the logo and strip of the host nation, Germany.
In 2004 Curious Group rebranded the Scotland international team, and subsequently implemented the first serious marketing campaign to come out from the Scottish FA. Curious Group also works with Celtic Football Club, Celtic TV, Rangers TV and Setanta Sports, along with Interbrew on Tennent's sponsorship of the Tennent's Scottish Cup and Bank of Scotland's sponsorship of the Scottish Premier League.Each week a new piece of work will be displayed in the run up to the World Cup final. In the final week of the project (beginning 3rd July) they will be publishing exclusive commentary from a panel of industry experts from the worlds of advertising, design and football, discussing the work submitted by the agencies and the increasing role of branding in football. They will also be offering you the chance to give your views on the work submitted and, ultimately, to vote for your favourite. It’s fascinating stuff and well worth a look at:
http://www.mad.co.uk//assets/getasset.aspx?uiAssetID=927b1c0e-9547-4eee-8963-f977210277c8Chris Sivewright
All...or only part?
All…or only part?
I was in Tesco’s this morning – I often pop in after my 6 am session in the gym. They have just started a campaign to encourage people to buy more fruit. They have big notices saying ‘Special offer on all packaged fruits. Buy five fruits and the cheapest one is free!’
Many packets have special stickers on announcing this.
Then I noticed something. Not all pre-packaged fruit had these stickers on. In fact the cheaper versions did NOT have stickers on. So a bag of Tesco apples was 70p but a bag of apples with the sticker on was £1.29.
This seemed wrong. It seemed to be coercing people into spending more money than they wished simply to take advantage of the ‘fifth one free’.
But…the notice said ‘all fruits’ and as I know what ‘all’ means I knew there would be no problems. Just to be sure I spoke to a floor manager Jo Liu. “Excuse me, “said I (I am extra polite when I want to complain) “but this package of fruit without a special offer sticker on, if it’s the lowest price of five, will it be free?”
Mr Liu said ‘no as there is not sticker’.
I then drew his attention to the big posters.
He still said ‘no’.
I then asked him what he thought the word ‘all’ meant.
Reluctantly he agreed on my definition of ‘all’ and said that it would be OK to buy the cheaper fruit (with no sticker on) and all would be well at the till – and if not then I should see Customer Services for a refund.
I carried on round the store and saw some oranges packaged in a string net. I asked one of the assistants whether this meant they were ‘pre-packaged’. They said ‘yes’. I then said that this means the oranges must be in the ‘buy five fruits’ scheme.
‘Oh no’ said the staff, ‘it doesn’t have a sticker’.
By then I was somewhat pigged off so with a slight raising of tone I asked the member of staff what they thought ‘all’ meant and why Tesco was lying and deceiving the public.
The member of staff blushed a bright red and admitted that I was right all along and yes, the cheap oranges should be in the deal.
I continued with my shopping, paid for the goods and then went to Customer Services to complain.
They wanted me to fill in a form but I refused as I wanted to see the Manager immediately rather than fill in a form and then await his return call.
The Manager came down and I asked him why Tesco’s were deceiving the public. He said they weren’t – until I asked him what ‘all’ meant.
He then explained that not all the packages had stickers on as ‘it’s a new scheme and we haven’t quite got round to putting stickers on everything BUT each tray of fruit has a sticker on informing the public of the scheme’.
I suggested to him that someone less pushy than me (ie most people) and especially shy, retiring pensioners with poor eye sight wouldn’t see this and certainly wouldn’t complain. Did Tesco’s have a special policy of targeting their deception at pensioners?
He explained that it way merely a matter of time ie hours, before the stickers were in place?
I then asked him why the staff didn’t know whether the fruit without stickers were in the scheme – was this example of his poor management or was it done deliberately to make sure shoppers were given the wrong information.
He explained that not all staff would have been briefed as some staff – the ones on the fruit counters - might not have been at the briefing last week when the scheme was announced.
I suggested to him that it was his job to make sure customers were not given wrong information and the scheme should not have been launched without at the very least, all members of staff knowing about this. I also suggested that it would take only perhaps 20 minutes to ensure all fruit had stickers on and this could have been done first thing in the morning.
He said he’d take my comments ‘on board’ and would remedy the situation.
It’s important to complain when there’s a ‘mistaken deception’ going on – I’ll be returning to Tesco’s the end of the week …
Chris Sivewright
Online Accounting Resources
I was asked to suggest an online English language tutorial site for someone who wants to learn about accounting. Here are the first few sites that I thought of or found. There are many, many more; and if you need them open up your search engine and search for online accounting + tutorials + UK or whatever it is you want to find.
You have been to my site,
www.duncanwil.co.ukTake a look at
www.oxbow.org.uk, another one of my sites, where you will find a few things of interest.
www.bized.ac.uk is another really useful site that starts many things at the beginning, which might be what you need!
There is a free bookkeeping tutorial that you can find by clicking the link on this page:
http://www.dwmbeancounter.com/ and here’s another one, also free of charge:
http://www.simplestudies.com/ These two tutorials are American. Nothing wrong with that except that their vocabulary is different from the other sites which are British based.
A set of tutorials linked to a text book and again relating to American law and accounting practice starts here:
http://www.mhhe.com/business/accounting/libby3e/ this is very comprehensive.
Please note, my comments re UK v USA are not bias or rudeness or dismissive: the language of accounting is different in many cases between the two countries and the Standards that both countries follow are also different. In the UK, registered companies now follow TWO sets of Standards, whereas they follow just one in the USA.
Any other suggestions that you have will be more than welcome but please don't send us to that site whose own quality standards have publicly been announced to be unable to aspire to the standards that we set and maintain here at OxBowBusiness.
Duncan Williamson
In a Corner Far, Far Away
This appears in the latest edition of The Oxford Times newspaper, page 1.
The Vicar of Cumnor, Clive Gardener, announced to his congregation that he was gay and was moving to Brighton to become an accountant.I kid you not.
Duncan Williamson
Another Successful OxBowBusiness Conference
Chris and I spent a manic and really enjoyable day at Cherwell School in Oxford. 26 great young men and women who were hard working, witty and responsive.
We covered a huge amount of material and I admitted at the end that although I've done a lot of teaching since I finished my Cert Ed, I had not taught in a State secondary school since 1980 ... FE Colleges, Universities, Business Schools and private schools/colleges yes but not a school
We worked on the S4U case study as well as some Finance materials.
Thanks to everyone who took part and not a herd of cattle in sight!
Pictures below, more to follow when we've got full clearance for the pupils.
There is more to come on this conference once we get clearance to publish some more photos of the young men and women who we worked with (with whom we worked if you prefer!) but Chris has pointed out in a comment to this post that our fee (small as it is) will be split between our two charities: Dystonia and Scope.
Duncan Williamson
Here we are with a promotional poster for the Dystonia Society:
Let's beat the drought together
Another letter, this time this just arrived and not as a result of anything I did.
Dear Customer,
As Managing Director, I wanted to update you on the current drought and to ask for your help in continuing to save as much water as possible. Also, to explain why there is a hosepipe ban and what we are doing about leakage from our pipes.
We have just had two very dry winters in a row. During a normal winter the ground soaks up rain like a sponge. Over the summer this groundwater slowly feeds rivers and enables us to keep our reservoirs full with the water that we treat and supply to your taps.
This year, groundwater levels are exceptionally low, so a lot will depend on how much rain we get to top up the rivers. We can't predict this accurately, but April's rainfall was only a little over half what we would normally expect. The situation is serious and a few wet days won't be enough to make a difference. So it really is important that everyone uses water carefully, to ensure that we can provide enough for people's basic needs throughout the year, whatever the weather.
Why is there a hosepipe ban and what does it cover?
We have not had to impose a hosepipe ban for 15 years and understand it is annoying and deeply inconvenient for many customers, and for gardeners in particular. But legally, a hosepipe ban is the first step we have to take to restrict non-essential water use during a drought. We are only allowed to ban the use of sprinklers and hoses to water private gardens and to wash private cars. But of course we want everyone to use as little water as possible, in the home and the garden, and I want to thank everyone who is already doing this.
What happens next if we get a long, hot, dry summer?
If we continue to get low rainfall, without a significant reduction in water use, we will need to apply to the Government for a Drought Order, which would take about 6 weeks. If granted, this would give us the powers to limit water use for a much wider range of activities, such as washing buildings and filling private swimming pools, plus the watering of parks and sports pitches. The water saved would reduce the risk of much more serious restrictions being needed later in the year.
We will only ask for a Drought Order if and when it is absolutely necessary, not least because of the potential impact on some small businesses. The situation currently (4th May) is finely balanced and under constant review, in close liaison with the Environment Agency.
What is Thames Water doing to tackle leakage?
Leakage in London remains unacceptably high. But we are doing all we can to get it down, at a cost of £500,000 every day. We aim to fix the leaks in our pipes as fast as possible. We don't get it right all the time and know how frustrating it is for our customers to see or hear about leaks that continue to run. We are also well aware of the impact on traffic every time we have to dig up a road.
Over 3,000 miles of the water pipes in London are more than 150 years old. So this is a long term problem and finding and fixing leaks is only part of the solution. Three years ago we started the first ever planned redesign and rebuild of whole areas of the water network, to provide large and permanent reductions in leakage. We are working as fast as possible, with new plastic pipes now being fitted in 23 areas of London. By 2010 we will have replaced 1,000 miles of our oldest and leakiest iron pipes.
What more needs to be done?
Big increases in the number of people living in our area, and the impacts of climate change, mean that water is going to become an increasingly scarce and precious resource. So we are stepping up our work to encourage everyone to use water as efficiently as possible, not just when there is a drought, but all the time.
Even with big reductions in leakage and greater water efficiency, we will still need to develop new sources of water. That is why we are appealing against the Mayor of London's decision to block the desalination plant we need to provide water from the Thames in London. We are also looking at the possibility of building a major new reservoir, in Oxfordshire, to give a major boost to supplies across our region.
It is our job to provide you with a safe and reliable water supply, while ensuring that your bills are no higher than they need to be, and bothering you as little as possible. But in the current drought we really need your help. So I want to end by thanking everyone who has already responded to our requests, while also asking all our customers to help us continue to reduce water consumption as much as possible.
Yours sincerely
Jeremy Pelczer
Managing Director
PS Our website at www.thameswater.co.uk gives tips about saving water, where to get water saving devices, a list of the things that could be banned under a Drought Order, how to report a leak and much more information about the drought and water supply. Or Freephone 0800 316 0989.Should you wish to respond to this letter in any way, here are the various coordinates you might need.
Thames Water Utilities Ltd
Registered in England and Wales,
No.2366661,
Registered office,
Clearwater Court,
Vastern Road,
Reading,
Berks,
RG1 8DB
Thames Water Utilities Ltd,
PO Box 3073,
Swindon,
SN38 8WY
Our Ref 973095411
Tel 0845 6410 019
www.thameswater.co.uk Duncan Williamson
Theft by Car Park: the follow up
Remember that I wrote to the local council to ask why they are effectively stealing money by charging car users to park their cars in the town's car parks but failing to provide change if one only has, say a £1 coin when only a 50 pence coin is needed.
This is the reply I received:
Dear Mr Williamson
Thank you for your letter received last week, regarding the Council's pay & display machines. Your letter has been passed to me from the Town Council for reply.
In answer to your points raised, the Council has not installed change machines, nor does it allow patrollers to carry change, as this encourages vandalism and puts the patrollers at great risk. It is for this reason we do allow time to collect change, conditional on the drivers purchasing a valid ticket on their return to the car park. Several minutes is given before an Excess Charge is issued to a vehicle, however this is not a policy that is widely advertised as I am sure you can appreciate that it can be easily abused.
Most pay and display machines in small car park do not give change, only larger manned car parks are able to provide this type of machine.
I trust you will find my comments of assistance.
Yours sincerely
BM
Car Park ManagerWhat would you do now? Do you think this is an acceptable reply and policy?
Duncan Williamson
Williamson of Arabia
I was in Dubai again last week, phew, what a scorcher! I was working for Heriot Watt University this time rather than my normal Dubai employer and their campus is right in the desert.
I couldn't resist taking a photo of me in the desert, suitably attired ... not.
Well, it's me and it's not Southport beach either. Took me an hour to cool down after that tiny sojourn.
Duncan Williamson
Accounting Standards
Now, it's not the main activity of this site to put everyone right as far as International Accounting Standards are concerned; but since I do work in that area a bit and since I do some training in that area too, I thought some of you would like to see some of the presentations I have now prepared and hosted on my
duncanwil web site.
As usual, high quality, free of charge ... the usual high standards you have come to expect.
Duncan Williamson
The help we give
HI I AM XXXXXX FROM DUBAI I HAV GOT A PROBLEM WITH UNDERSTANDING THE BASIS OF STOCK VALUATION AND THE LIMITATIONS OF TRIAL BALANCE AS WELL AS I WAN TO KNOW THE REASONS OF PREPARING A TRIAL BALANCE I ALSO WANT TO KNOW ABOU HOW TO INCREASE YTHE PROFITABILITY OF THE BUSINESS AND IMPROVE ITS WORKING CAPITAL I WILL REALLY BE THANKFULTO U IF U CAN HELP ME IN UNDERSTANDING ALL OF THESE PROBEMS AND IF U COULD CAN U PLEASE MAIL ME THE ANSWERS TO XXXXXX@HOTMAIL.COM IF U CAN THANKS ALOT HOPE TO RECEIVE YOUR REPLY SOON.
--oo0oo--
My reply:
The trial balance is exactly what its name says: it's a trial, or test, of whether the bookkeeper has done his or her job properly. If the trial balance balances then there is a good chance that all entries have been prepared properly. If it doesn't balance then there is definitely something wrong.
What do you want to know about as far as stock valuation is concerned? FIFO, LIFO and Weighted Average? Please tell me more.
There are many ways of improving the profitability of a business, including
Increasing selling prices
Reducing costs
Selling more products but keeping costs down
Improve working capital by not having too many goods in stock and by not having too many debtors owing too much money. Similarly, make sure that you only give credit to customers who are certain to pay: you don't want bad debts or doubtful debts, do you.
Also using extra credit from your creditors can be a good idea to an extent.
There you are, just a few ideas that I hope you have found helpful.
Best wishesI got this reply:
hi, thanks for replying sir. i wanted to know about fifo and lifo in the stock valuation as well as the reasons of maintaining accounts and about bad debts, bad debts recovered, doubtful debts account how to prepare the and why is it required to make a doubtful debts account thanks again hope to see your reply soon bye.
--oo0oo--
My reply:
What do you want to know about fifo and lifo Ayesha? If you are using international standards, you know that lifo is not allowed now. The Americans still use LIFO, though. Britain doesn't use LIFO.
Bad debts accounts are created to make sure that the accounts show only the true value of debtors. What this means is that at the period end the bad debts are shown as an expense in the profit and loss account and then as a deduction from the debtors in the balance sheet.
Doubtful debts are estimates of debts that MIGHT turn bad and the increase is shown as an expense in the period whilst a decrease is shown as extra revenue. The final balance on this account is also deducted from the debtors account in the balance sheet.
Take a look at the spreadsheet I have attached and work your way through the bad and doubtful debts. It should help but let me know of any other questions you might have.
Best wishesIf YOU would like a copy of that spreadsheet, just ask ... info@oxbow.org.uk ... and it's yours.You do not get this level of personal service from our competitors.
Duncan Williamson
Oil Prices Again
I am now despairing as much over oil prices as I am over Tony Blair's Cabinet colleagues.
The latest pile of poo comes from the normally excellent and reliable
Knowledge@Wharton.
Read this lengthy document and see whether you agree or disagree with what has become conventional wisdom now.
China is the big bogey man now and I believe that China has sorted out its oil requirements to have little or no real effect on oil prices as they affect the rest of us.
Real oil prices are way below 1980s levels so there is scope for even more adjustment there.
I know Kuwait, for example, is working on expanding its long term output by almost 65%. Other oil producers are producing more and more, the Azerbaijan-Turkey pipeline is slowly coming on stream.
The real problem is the Oxbridge conspiracy theory types in the markets who catch cold every time world politics sneeze. The oil price should be taken away from these people.
A fact to get you stirring: a barrel of oil costs $2.25 to produce in Saudi Arabia (more in other countries, less in yet others). The market price is around $74 at the moment.
Can anyone honestly tell me that such a massive differential reflects the above concerns and those wittered on about in the Knowledge@Wharton article? Thought not!
Duncan Williamson
Cattle Market or Caring Approach
You might have seen some photographs from a competitor of ours showing a business studies cattle market. Hundreds of people crammed into large theatres LISTENING to someone rattling on about the S4U case study.
The content of the sessions may have been fine and I know nothing of what happened. Except from an educational point of view, of course.
However, we strongly recommend that if you want to learn properly you follow the OxBoxBusiness approach where you are guaranteed a much smaller class size, one to one attention is possible (see picture below where an ad hoc accounting one to one session broke out), more intimate break time sessions are possible ...
All in all, you get much more of a personal service from OxBowBusiness.
So if you want to work with an organisation that has quality control problems and that is going for maximum growth, carry on and work with them. If you want high quality and personal service, you've come to the right place. Even when you buy our resources, you get a personal message from yours truly: nothing is automated about that even!
By the way we are joining the iPod generation: again, nothing so impersonal as I have seen advertised somewhere else but more of the same from OxBowBusiness: stylised, creative and highly effective!
Duncan Williamson
Here's the one to one accounting session that broke out of our Birmingham conference: one lucky delegate and Shazmin the tutor lock ledgers!
Here's another one!
