MBA "financial analysis" as taught by BSBAALJR
BSBAALSR, the incarnation of MBA program quantity and alleged-quality, values the subjects of global competitive strategy, marketing, operations management, leadership, and financial management more highly than he values the subject of financial analysis.
The five subjects he values more highly than financial analysis, are subjects in which BSBAALJR, the incarnation of MBA programs regardless of alleged-quality, can play around with without having to work his brain hard, subjects in which it is relatively easy for BSBAALJR to avoid hard science and babble.
See, BSBAALJR does not like hard science. He likes to relax, read books that are fun to read like his favorite novels, and then babble about these books; he likes to avoid the stress and fatigue and boredom that are part and parcel of hard science.
But there comes a point where subjects that are relatively inescapably linked to hard science, can no longer be avoided, such as financial analysis. So what does BSBAALJR do when it comes to approaching financial analysis? He brings in a fun book by a celebrity ("Financial Statement Analysis" by Merrill Lynch Managing Director Martin Fridson http://www.amazon.com/gp/reader/0471409154/ref=sib_dp_bod_ex/002-6320582-2337641?%5Fencoding=UTF8&p=S00J#reader-link ) that looks at financial statements of company X from the point of view of an investor who is considering buying company X stock or loaning money to company X.
BSBAALJR is able to avoid another dreaded collision with the hard science of transforming numbers on pages into info demanded from the financial analysis department by the management, by getting into playing genius detective ferreting out fraud in financial statements that the fraudulent authors hope will sucker fools into loaning them money and buying their stock.
BSBAALJR's whole emphasis in the areas he values most highly such as strategy operations marketing leadership and financial management, is on skills utilized by management of company Y in efforts to improve the functioning of company Y, but then, all of a sudden, when it comes to financial analysis, he gets into skills used by investors when looking at company Y from the outside and trying to decide whether to loan company Y money or buy company Y's stock; this despite the fact that most companies, are not primarily in the business of loaning other companies money and buying their stock.
BSBAALJR, is like a computer producing company, that needs a financial analyst who is able to turn data in financial statements etc. into info that management needs in order to increase sales and reduce operating costs, that has instead a financial analyst who wanders around looking into pressing questions such as whether triple AAA Brassieres is a company worth buying stock in or loaning money to.
Why would BSBAALJR's financial analyst so to speak in such fashion go on vacation, when he is needed at home? It has to do with how the priests of BSBAALJR are in a state of terminological confusion (overlapping definitions) regarding precisely what the fields of "financial analysis", "financial management", and "finance" are. It would be wise to distinguish "finance", meaning companies investing in other companies and seeking investment in their own company, from "financial analysis", meaning the transformation of financial-statement-type data into useable information; but what one BSBAAL guru considers the field of "financial analysis", another BSBAAL guru considers the field of "finance"; and plenty of them think each includes the other.
BSBAALJR speaks to us through his favorite gurus re topics that interest BSBAALJR more than financial management; through them he tells us, that we (as a given company) must move beyond a focus on data found in traditional financial statements (Robert Kaplan/Harvard B-School); we must learn from what other companies are doing (JC Collins); (we must study ourselves to learn what we do best and why (Gerstner, JC Collins); we must understand our past (Gerstner, Collins) we must be different from others ("be like everyone by doing what I say but you have to be different to succeed"). But, inconsistently, BSBAALJR's instructional programs do nothing to create the kind of financial analyst who would be able to carry out these initiatives that he, BSBAALJR, promotes.
In this sense BSBAALJR himself is a classic example of the exponential damage suffered by a company due to a weak link in a production chain, a classic example of what his own favorite operations management gurus ("The Goal" by Eliyahu M. Goldratt http://www.amazon.com/gp/reader/0884270610/ref=sib_dp_bod_fc/002-6320582-2337641?%5Fencoding=UTF8&p=S001#reader-link ) decry.
The strategically inclined CEO gets together with the Marketing guys who have some data and the operations management guys and the financial management gal. They discuss things and the financial management gal instructs the BSBAALJR trained financial analyst to come up with data tables containing so and so data in various rows and columns. But the BSBAALJR trained financial analyst is unskilled when it comes to turning data in pdf files and text files and excel files into one big database that provides the kinds of tables management wants.
Sure the BSBAALJR trained financial analyst under the tutelage of BSBAALJR dabbled a little in the study of the wonderful things that a company can accomplish by studying its own spreadsheet ( "Analysis of Financial Statements" by Leopold A. Bernstein http://www.amazon.com/gp/reader/0070945047/ref=sib_dp_bod_ex/002-6320582-2337641?%5Fencoding=UTF8&p=S010#reader-link ); but does does he know the most efficient method for putting together data from a company's reports over the past thirty years, which might by in paper, pdf, excel, text, word, or html format, together into one database? Does he know the best method for putting together such data from several different companies into one database? Given an order to find info table Z or transform data into info table Z, is he able to determine which databases produce info table Z? If no such databases exist, does he understand the best methods for using programming and software to tweak a database(s) so as to get it to cough up info table Z? The way BSBAALJR teaches financial analysis to his students, the answer is probably no.
@2005 David Virgil Hobbs
The five subjects he values more highly than financial analysis, are subjects in which BSBAALJR, the incarnation of MBA programs regardless of alleged-quality, can play around with without having to work his brain hard, subjects in which it is relatively easy for BSBAALJR to avoid hard science and babble.
See, BSBAALJR does not like hard science. He likes to relax, read books that are fun to read like his favorite novels, and then babble about these books; he likes to avoid the stress and fatigue and boredom that are part and parcel of hard science.
But there comes a point where subjects that are relatively inescapably linked to hard science, can no longer be avoided, such as financial analysis. So what does BSBAALJR do when it comes to approaching financial analysis? He brings in a fun book by a celebrity ("Financial Statement Analysis" by Merrill Lynch Managing Director Martin Fridson http://www.amazon.com/gp/reader/0471409154/ref=sib_dp_bod_ex/002-6320582-2337641?%5Fencoding=UTF8&p=S00J#reader-link ) that looks at financial statements of company X from the point of view of an investor who is considering buying company X stock or loaning money to company X.
BSBAALJR is able to avoid another dreaded collision with the hard science of transforming numbers on pages into info demanded from the financial analysis department by the management, by getting into playing genius detective ferreting out fraud in financial statements that the fraudulent authors hope will sucker fools into loaning them money and buying their stock.
BSBAALJR's whole emphasis in the areas he values most highly such as strategy operations marketing leadership and financial management, is on skills utilized by management of company Y in efforts to improve the functioning of company Y, but then, all of a sudden, when it comes to financial analysis, he gets into skills used by investors when looking at company Y from the outside and trying to decide whether to loan company Y money or buy company Y's stock; this despite the fact that most companies, are not primarily in the business of loaning other companies money and buying their stock.
BSBAALJR, is like a computer producing company, that needs a financial analyst who is able to turn data in financial statements etc. into info that management needs in order to increase sales and reduce operating costs, that has instead a financial analyst who wanders around looking into pressing questions such as whether triple AAA Brassieres is a company worth buying stock in or loaning money to.
Why would BSBAALJR's financial analyst so to speak in such fashion go on vacation, when he is needed at home? It has to do with how the priests of BSBAALJR are in a state of terminological confusion (overlapping definitions) regarding precisely what the fields of "financial analysis", "financial management", and "finance" are. It would be wise to distinguish "finance", meaning companies investing in other companies and seeking investment in their own company, from "financial analysis", meaning the transformation of financial-statement-type data into useable information; but what one BSBAAL guru considers the field of "financial analysis", another BSBAAL guru considers the field of "finance"; and plenty of them think each includes the other.
BSBAALJR speaks to us through his favorite gurus re topics that interest BSBAALJR more than financial management; through them he tells us, that we (as a given company) must move beyond a focus on data found in traditional financial statements (Robert Kaplan/Harvard B-School); we must learn from what other companies are doing (JC Collins); (we must study ourselves to learn what we do best and why (Gerstner, JC Collins); we must understand our past (Gerstner, Collins) we must be different from others ("be like everyone by doing what I say but you have to be different to succeed"). But, inconsistently, BSBAALJR's instructional programs do nothing to create the kind of financial analyst who would be able to carry out these initiatives that he, BSBAALJR, promotes.
In this sense BSBAALJR himself is a classic example of the exponential damage suffered by a company due to a weak link in a production chain, a classic example of what his own favorite operations management gurus ("The Goal" by Eliyahu M. Goldratt http://www.amazon.com/gp/reader/0884270610/ref=sib_dp_bod_fc/002-6320582-2337641?%5Fencoding=UTF8&p=S001#reader-link ) decry.
The strategically inclined CEO gets together with the Marketing guys who have some data and the operations management guys and the financial management gal. They discuss things and the financial management gal instructs the BSBAALJR trained financial analyst to come up with data tables containing so and so data in various rows and columns. But the BSBAALJR trained financial analyst is unskilled when it comes to turning data in pdf files and text files and excel files into one big database that provides the kinds of tables management wants.
Sure the BSBAALJR trained financial analyst under the tutelage of BSBAALJR dabbled a little in the study of the wonderful things that a company can accomplish by studying its own spreadsheet ( "Analysis of Financial Statements" by Leopold A. Bernstein http://www.amazon.com/gp/reader/0070945047/ref=sib_dp_bod_ex/002-6320582-2337641?%5Fencoding=UTF8&p=S010#reader-link ); but does does he know the most efficient method for putting together data from a company's reports over the past thirty years, which might by in paper, pdf, excel, text, word, or html format, together into one database? Does he know the best method for putting together such data from several different companies into one database? Given an order to find info table Z or transform data into info table Z, is he able to determine which databases produce info table Z? If no such databases exist, does he understand the best methods for using programming and software to tweak a database(s) so as to get it to cough up info table Z? The way BSBAALJR teaches financial analysis to his students, the answer is probably no.
@2005 David Virgil Hobbs
These are my opinions at the present time they may not coincide exactly with fact
posted by David Virgil at 12:41 AM
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