Finance for financially-challenged banking chairmen
We’ve just launched a new version The Balance Sheet Barrier, a financial training video. It’s specifically targeted at non-financial managers but, given recent events at the Co-operative, we thought maybe it was time to get some financial learning out to a wider audience. So, here’s our (alternative) guide to finance for banking professionals…
- Fixed costs
– Not to be confused with the ‘cost of getting a fix’, a fixed cost remains unchanged even with variations in output.
– Again, easily confused with ‘actions involved in getting ‘gear’, ‘blow’ or any other illegal substance’. Gearing is actually a measure of the extent to which a company is funded by debt.
– Certain assets, such as buildings and equipment, depreciate, or decline in value, over time. Embarrassing chairmen depreciate at a faster rate than other assets.
- Current Liabilities
– The board, the regulators, the politicians..? The real definition is: money owed to suppliers, reducing the amount the business itself has had to invest in working capital.
- Acid Test
– To dabble with Class A narcotics…or a measure of a company’s ability to pay its short term debts.