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Posted by mrs. eliza humperdink on January 24, 2008, 11:37 pm
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> Expenses are one-half of the accounting equation. Reducing them is the same
> as earning the same amount. Some exceptions apply, of course.
if an expert accountant can make every company profitable, why doesn't
every company hire themselves some brilliant accountants and become
RICH? why does General Motors hire themselves some better accountants
so they can compete against Toyota?!
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Posted by Paul Thomas, CPA on January 25, 2008, 8:06 am
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> Expenses are one-half of the accounting equation. Reducing them is the
> same
> as earning the same amount. Some exceptions apply, of course.
Yeah, the exceptions are being seen at Circuit City, where they fired all
their experienced salespeople thinking they could cut costs with low-pay
newbies who didn't need to know anything. It backfired.
http://advice.cio.com/bernard_golden/jeffrey_pfeffer_talks_about_evidence
http://www.usatoday.com/money/industries/retail/2007-03-28-circuit-city-layoffs_N.htm
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Posted by mrs. eliza humperdink on January 25, 2008, 11:19 am
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> Yeah, the exceptions are being seen at Circuit City, where they fired all
> their experienced salespeople thinking they could cut costs with low-pay
> newbies who didn't need to know anything. It backfired.
how about they fire all the top salespeople and replace them with more
accountants. that way they would have no revenues but at least the
accountants could cut all their cost, amortize expenses over 25 years,
and cut checks to each other?
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Posted by mrs. eliza humperdink on January 26, 2008, 12:03 am
Please log in for more thread options > A sucessful business - any business - needs to have a variety of people,
> either on staff or on retainer. The major players, besides the
> production/sales people, are management, legal, accounting, marketing, and>
banking.
true, so let's delineate the pecking order amongst these groups of
people:
1) production/sales = top dogs, if no product, you have no business
2) management = visionaries and leadership differentiate winners from
losers
3) marketing = a good marketing gimmick drives up sales and profits.
bad marketing loses sales and kills off a business
4) banking = raising money is important; if stock price drops, key
programmers will quit
And lowest on the pecking order are: secretary, photo copy boy,
accountants, and the undocumented worker who empties the garbage cans
late a night
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Posted by mrs. eliza humperdink on January 28, 2008, 11:59 pm
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> How does management know what what their break even point is?
> How does manangement know what their fixed and variable costs are?
> Oh wait - they ask the accountant.
if you have to rely on highly dubious ad hoc cost allocation rules to
determine whether you are "break even" or not (and whether your
aspirin tablet is costing $2500 or not!), let me tell you something
-- your accounting-based calculation aint worth the paper it's written
on.
> > 3) marketing = a good marketing gimmick drives up sales and profits.
>
> And the marketing budget, their actual expenditures, the accounts payable to
> marketing vendors, etc is managed by and reported on by -------TA DA !!!!!!
yeah, and what happens when you myopically fixate on your numbers?
every few quarters,
you wind up like citicorp and take a $17 BILLION dollar writeoff.
bwahaaahahaha! I guess all those "break even" calculations their
accountants so carefully worked out down to the last penny wasn't
quite as accurate as they thought!!! bwaaaahaahhaaa!
> Besides, you can drive up sales and lose money. That is, if you don't know
> your break even price point.
and with your complicated, ad hoc appreciation and amortization and
cost allocation rules, your calcuation aint worth anything either. At
least I won't be hookwinked into believing a bogus set of senseless
accounting numbers -- like those poor fellas at citibank, enron,
worldcom, tyco, etcetera etcetara!
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