OxBowBusiness

Vodafone and a Profit and Loss Account

VODAFONE

If you read the materials on ratio analysis I wrote for biz/ed a few years ago (and they are excellent, by the way) you will know that I used the Carphone Warehouse and Vodafone as a basis for the ratio calculations. You will have seen there that Vodafone was in trouble.

Vodafone is still in serious trouble and now we know it's in deep trouble because the Chief Executive is using optimistic sounding phrases in his reports to shareholders in spite of the fact that the company is losing billions and billions of Pounds a year now.

We also know that Vodafone is in deep trouble because it's stressing its use of something called EBITDA: earnings before interest, tax, depreciation and amortisation.

On an EBITDA basis Vodafone has made a PROFIT of several billion. On the proper GAAP basis, Vodafone has made a LOSS of a few billion. From their latest six monthly report:

2005 EBITDA £14,761 million
Operating profit 7,878 million

2006 EBITDA £16,380 million
Operating LOSS £14,084 million

All these things have been reported widely but they seem to be getting away with it. Really strange that. Really strange.

PROFIT AND LOSS ACCOUNT

I have just been sent to a pretty good web site for business studies teachers and students. However, why do business studies people feel the need to change the names and definitions of the things that maybe they don't understand? For example, the profit it and loss account.

What is a profit and loss account?

sales - cost of sales - expenses = net profit? NO ... NO ... NO!

A trading account comprises

sales - cost of sales = gross profit

A profit and loss account comprises

gross profit - expenses = net profit

As Miranda Preistly says in The Devil Wears Prada, 'That's all'!


Duncan Williamson

posted by Duncan Williamson @ 7:56 AM 0 comments links to this post

Time is an illusion

When I say ‘time is an illusion’ I am not talking about pupils whose watches do not seem to show the same time as mine so that when they arrive late for classes they (they claim) are not really ‘late’ but merely ‘their time’ is different to mine.

No, I am not referring to pupils.

Neither am I intending on exploring a philosophical concept.

That may be a surprise to those of you who are familiar with the work of Huw Price :

“He concludes that the idea that the past is not influenced by the future is an anthropocentric illusion, a "projection of our own temporal asymmetry". By allowing signals from the future to play a part in determining the outcome of quantum experiments, he can resolve all the puzzles and paradoxes of the quantum world.”
Source: http://www.lifesci.sussex.ac.uk/home/John_Gribbin/timetrav.htm

No, I am in fact referring to the meaning of time, or more accurately, the meaning of the word ‘immediate’.

Yes, I know that economists go on about a ‘monetary period’ and how supply is perfectly inelastic etc.

But, to the layman, ‘immediate’ means now. Not tomorrow, not the next month but right now.

Yes, ‘immediate’ means just that ‘immediate’.

So if a teacher says, ‘I want you to do this task ‘immediately’ ‘then the teacher means immediately.

It would be disingenuous to pretend otherwise and it would be yet another example of how pupils today are being tricked, lied to, duped by teachers, parents – and society.

‘What?’ I hear you ask, ‘what are you on about? How are parents lying to the young?’

I made that comment because only this week a pupil of mine turned up for lessons having totally disregarded our contract i.e. to bring fees with him. I dispatched the male pupil home. His Mother then saw fit to phone our offices and – on ansaphone – say (summary):

“Feels you treated xxxxxx very badly-he went home crying-is disappointed in the way you played on his emotions- is sure this will affect your reputation-please do not treat other students like that”

That is a terrible accusation, that I should reduce a pupil to tears – especially when all I said was: “You have not brought your fees. You have ignored our contract. Goodbye.’

It was clear from the statement by the Mother that the poor child was immensely distraught and was going through an emotional crisis.

It takes at least 21 minutes for the pupil to leave the classroom and go home – and all that time (it seemed) he had been crying.

I felt like I was such a wicked person – and yet I did have serious doubts about the statement from the Mother.

But then, a parent wouldn’t lie, surely? The message on the OSL ansaphone was very clear though: “My son came home crying …you played on his emotions…”

As it happens someone else was in the class at the time when the cause of the crying, the swift ‘goodbye’ was said.

Was I really such a wicked teacher?

A few nights later the ‘crying pupil’ and the other pupil ‘chatted’ to each other via MSN – and the chat was saved.

Pupil: Did you really go bursting into tears when you got home?
Crying pupil: Who the hell said that?
Pupil: That’s what your Mum said in a message to OSL
Crying pupil: I did not cry. Why would I cry over a guy?
Pupil: Your Mum rang up OSL and said you burst into tears
Crying pupil: If my Mum said that I’m going to be vexed.
Pupil: Your Mum said you were crying
Crying pupil: My Mum lies too much. It annoys me. She always does it man. She lies to get her way. She lies all the time.
Pupil: I have a duty to tell OSL this.
Crying pupil: Every time she lies I say don’t lie – I say it every day.

I don’t know about you but this strikes me as being very sad – a pupil whose Mother deliberately lies about him to cause trouble for his school/teacher.

What sort of attitude will this ‘crying pupil’ have about life? He will know that it’s OK to lie; it’s OK to do anything to get his way.

Which brings me back to the word ‘immediate’.

To me that means ‘now’.

And yet there is a vacancy at Padworth College for an Economics teacher. What is interesting is that this is an ‘immediate vacancy’.

That means that the vacancy is ‘now’ – not tomorrow or next year but now.

And yet … the closing date is (incredibly) 25/12/2006

That’s not ‘now’.

It’s not ‘immediate’ but ‘sometime in the future – in fact ‘next year’.

Why can’t schools tell the truth?
Why can’t Mothers tell the truth?

I looked at other vacancies and saw one: “ECONOMICS Teacher of A level Economics required. Immediate start”

Where is this?

The ‘immediate start’ vacancy is at Bales College

The closing date is SIX WEEKS FROM NOW - so what happened to this ‘immediate start’?

So, if that’s how schools want to play, when you next get homework to hand in tomorrow, hand it in in 2 years time as surely, if ‘immediate’ means next year then ‘tomorrow’ probably never comes.

Truly time is an illusion …


Chris Sivewright

posted by Duncan Williamson @ 7:21 PM 2 comments links to this post

Don’t give to Children in Need

Now you’re probably thinking that the topic title is a bit mean. After all surely giving to Children in Need helps children?

Ah, perhaps I was not clear.

I meant that you should not give to Children in Need – but instead give to another charity.

The choice of charity is yours – of course – but surely when you give to a charity you’re intending the gift actually arrives at the intended recipient’s?

In my own case I run a support group for those with DYSTONIA and every single penny given goes to someone, somewhere with dystonia. No expenses. No administration costs – none of that nonsense.

But, I am not a charity.

So in that case why not give to The Dystonia Society?

Maybe their administration costs are low?

In fact I am emailing them to draw their attention to this blog and I am asking them for comment.

So, to return to Children in Need

Yes, don’t give to them because your money may not actually get to the children …
Last year their administration costs were £2.4million , out of a total of £33million raised.
In fact the independent site Intelligent Giving has this to say:

“LOATH AS WE ARE TO knock the stuffing out of a one-eyed teddy, the fact is that supporting Children in Need is a lazy and inefficient way of giving. Here are the four reasons why: 1. Pudsey will spend your cash on administration Giving your cash to a grant-giving charity like Children in Need is, 90 per cent of the time, a bad idea. Why? Because, with a grant-giver, you pay two sets of admin costs: one to run the grant-giver itself, and the other to run the charity which actually does the work. Pudsey's website implies that this isn't an issue, claiming that 'every penny you give' will go towards charitable work. But that's just clever wording. CIN does just the same as all the other big (clever) charities: it invests your pennies (for six months or longer sometimes - do you want that?) and uses the interest to cover costs.

2. With Pudsey, you lose control over where your money's going This is another problem all grant-givers face. If you give to Children in Need, then some of your cash will support projects you wouldn't normally give to. Hands up people in Gateshead who'd like to see their cash spent on projects in Guildford.

3. He's lazy The law requires Children in Need to submit two documents to the Charity Commission each year. Neither of them need be long or complicated. So this makes it all the more surprising that, last year, it made a monumental hash of the shorter one. Its 'Summary Information Return' contained information that was in some parts incomplete, in others plain false. How could the CIN bigwigs let this happen? We asked Pudsey's chief money-man, David Howley, but all he could say was that they had some 'staffing issues' last year. We're pretty understanding people, but for a big charity this lack of attention to detail just isn't good enough.

4. He's not very good at providing information to donors We've given CIN a "Quality of Reporting" score of 64% in their detailed profile, which is frankly underwhelming for a charity this big. Pudsey isn't keen to let you know how he judges the success of the projects, and there's scant information on future plans.”

The site lists six organisations who specialise in finding good charities. There is also a section on choosing a charity (which, oddly enough does not feature The Dystonia Society).

The Intelligent Giving site also says this:

“Around 90 per cent of charities are:

• Dormant or..
• Don't take funds from the public or...
• Represent only a tiny area, interest or number of people
• Only 3000 or so charities might just interest you. Realistically, depending on your breadth of interests, it's 20 or fewer.
• There are too many dormant charities. There aren't enough active charities.“

That got me thinking. How are charities marketed? What are ‘reasonable costs’ in raising finance? Going back to Children in Need £555,000 was spent on costs of generating funds - 7 per cent of the £33million raised. However, in 2004, Children in Need spent just under £42,000 on 'investment management fees'. The Intelligent Giving site says that the returns sent to the Charity Commission by Children in Need incomplete and 'plain false'.

So when Children in Need hits the TV screens think about what you’re giving to and why. Be a consumer - what do you want to see from the charity when you donated? How does one ‘select’ a charity to help?

Most charities are inactive – this dystonia charity - ADDER says on its site:

“The following 10 people were elected to serve on behalf of the members of A.D.D.E.R. at the last AGM held in October 2005 as Management Committee Members and Trustees.”
… and then list THREE people.

Should charities be run like businesses? Are the responsibilities for transparency even greater for a charity? Is the marketing of a charity simply a plea to the heart or should charities also seek intellectual support – praise that the money does indeed go where it was intended?
Just a few things to think about as Christmas approaches and the pleas for us all to give will increase …

Chris Sivewright

posted by Duncan Williamson @ 7:18 PM 1 comments links to this post

Borat the Movie Film ... now updated!

You might not know that there is an error in the Borat Film poster that's. 'Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan

Those of you who know the Russian alphabet will have spotted that the way the title is written on the posters and so on is transcribed into English as Bordt. That's right, Bordt.

Take a look at the Russian alphabet in the fonts you've probably got on your PC or laptop to see that they really did (probably deliberately) use the capital D rather than the capital A.

All a bit weired but then again, so is Bordt, sorry, Borat.

Here's the poster in question:











Duncan Williamson

UPDATE: yes, Carrie the supposed letter A in the word Borat that you can see in the poster really is the Russian letter D. Spooky isn't it and I'm not sure why they didn't write the entire name in Russian since that would have looked better! Here is what it would look like entirely in Russian:







Duncan in Russian looks like this ... I know you're dying to see it:

posted by Duncan Williamson @ 9:54 PM 7 comments links to this post

The old dog and bone: worth a mention ... now updated

It's time to upgrade the old mobile dog and bone again so I went to my provider' site and found the one I'd been told to look at (well, I can't be good at everything!)

I then called the provider and told them what I wanted and he said, 'It's not free, you know.' I confirmed that I did know that then he said, 'It's £99.99' I said, 'Hang on, on the web page I'm looking at from your site, it's just £59.99.'

'Ah, says he. In that case, I'll knock £5 a month off your line rental for the next twelve months and you pay the £99.99. OK?'

What should I have done? Post a comment and I'll confirm what I actually did!

--oo0oo--

Lots of interesting comments on this one. This is what happened next.

I presented exactly what did happen to you but one factor I need to reveal now since even I didn't realise it at the time was that the price I quoted at the man at the end of the phone line was for a HIGHER value contract than the one I'm on AND he didn't check that with me.

So, they didn't mislead anyone but themselves. So I got a good deal here. Over the year I will have paid £99.99 for the phone and be given a discount on the line rental of £12 * 5 = £60. This means that the net cost of the phone will be £39.99.

Of course, I should really go back to the web site and check on the cost of the phone on my plan ... why bother, though?

Duncan Williamson

posted by Duncan Williamson @ 9:19 PM 8 comments links to this post