Category: Business Center

Financial Statements, Stock Price, and Truth

~ MD Harris Institute ~ Leave a comment

Financial statements provide the most important details about the financial health of a company. In aggregate, they indicate how a whole sector is doing. How do you read them? What do they contain? What useful information should be in financial statements, but is not? How can management manipulate financial statements to deceive outsiders? Learn it all here!

By Mark D. Harris

Introduction

The US Securities and Exchange Commission (SEC) requires annual statements (10K) and quarterly statements (10Q) from all publicly traded companies. These reports inform stakeholders about the company’s earnings and other key factors that influence the behavior of lenders, investors, employees, analysts, ratings agencies, governments, and others. These stakeholders rely on company management to report accurately.

Stock price, at least in theory, encapsulates all the pertinent factors of a company, such as management, product, demand, and other internal and external factors, and summarizes everything stakeholders need to know about a company. In the real world, however, stock price can be affected by firm characteristics and can be manipulated by managers seeking their own interests over the interests of shareholders.

Continue reading “Financial Statements, Stock Price, and Truth” →

Maximizing Customer Value and Engagement

~ MD Harris Institute ~ Leave a comment

Businesses exist to serve their customers. Self-perpetuation, environmental sustenance, social issues, and even shareholder value maximization are of little importance if the customer is not served. How can companies, and other organizations, give their customers their best?

By Mark D. Harris

The rug dealer at the Grand Bazaar in Istanbul carefully poured the Turkish apple chi into a small cup. “Here, my friend,” he said as he handed the cup to me. He sat down close by and asked, “How is your family?” Thus began ten minutes of chit chat before we even mentioned the silk rug that I had admired when I came in. The small talk would have gone on longer, but my American impatience cut it short. By the time we were done, the rug dealer had $500 of my hard-earned dollars, and I walked out with a beautiful rug that probably cost less than half that to make. The dealer may have congratulated himself for fleecing another rich American. I congratulated myself on buying a rug that my wife would like, having a fascinating experience, and helping support a Turkish businessman and the economy of a third world nation. A fair deal, I figure.

Buying and selling across the world

Americans walk into a store, find what they want, check to see if the price is reasonable to them, and if it is, they buy the item. Rarely is there any dickering between buyer and seller over price. My experience in northern and western Europe has been the same.

Continue reading “Maximizing Customer Value and Engagement” →

Task Automation and Jobs

~ MD Harris Institute ~ Leave a comment

Will automation and robotics replace most workers across the world? Which industries are at the greatest risk? What will societies do with and for people who lose their jobs? What can individuals, families, churches, and communities do to help?

By Mark D. Harris

By the 1920s, the automated production line, new tools, and the principles of “scientific management” had dramatically increased worker productivity in the US. In 1930, John Maynard Keynes predicted that productivity would increase so much that in 100 years, his grandchildren would need to work only 15 hours per week (Bessen, 2020). This has not happened, of course, because of the vaster array of goods and services now produced, the much larger number of people those products are produced for, and the skyrocketing expectations of consumers throughout the world.

More recently, voices in business, labor, and the general population, have decried automation and robotics as job killing. CNBC reported in 2019 that 25% of US jobs, especially the “boring and repetitive ones,” were at risk for vanishing due to automation (Nova, 2019). Such predictions frighten workers and introduce a list of questions and policy problems. Whose jobs are likely to go? How can we retrain these people into jobs through which they and their families can thrive? What degree of safety net do we need to have for these people in the meantime? Will robots and other types of automation decrease the human need to work so much that in the future, Keynes will be right? Will we all be working 15 hours per week, or less?

Continue reading “Task Automation and Jobs” →