Another week and another run after the elusive Athletic Shoe Merchandising Goal.  We’re making headway.  Our team has moved up again this week, but not as much as we had hoped.  Man, the guys in this class are OUTRAGEOUSLY aggressive!  I mean, they are dropping prices, raising advertising, and going crazy – but can their balance sheet keep up?  Who knows?  Maybe they can at least last ’til the end of the competition this week.  We have one more week to try to make the target numbers and keep moving forward.  It is so hard with two world class teams in our group!  Anyone got a little cheese to go with that WHINE?!!

It’s just another week in the life of an MBA student.  Do a little BSG, work the team Final Presentation, go to your regular job, take some time to go hiking with the family, work in the yard, etc.  Yes, you do have time to have a life while in an advanced MBA program if you learn to schedule, prioritize and focus.  (Getting by on 3 hours of sleep each night doesn’t hurt either).  Just kidding, you can get at least 4 hours if you get to sleep quickly.

We are finishing up Strategic Management, we’ll have a week off and then we’ll start our Research Class.  I understand this is primarily an individual effort class as opposed to the team projects we have been working on.  I think I’m going to like the individual class but will certainly miss my teammates.

So, what have I learned this week to make my life more interesting and prepare me to be a better leader?  Where do I start?!  First, let’s start with the effects that mark-to-market accounting has had on the economy.  In most cases, you are going to sit on one side of the accounting fence or the other; either you are historical accounting minded or you are market accounting minded.  Now, there is room for both, but where to draw the line?  Who gets to decide?  Historical based accounting has been the standard but allows for companies to “sit” on a known impaired asset while mark-to-market accounting requires the asset to be valued at its current value.  As we all know, this directly affects the profitability of the company and ultimately the share price.  Remember, Assets (things you own) – Liabilities (things you owe) =  Equity (how much you get to keep).  So, if your asset value goes down, your company value goes down, but nothing actually happened to your asset.  It is still there and in the same condition you left it when it was worth 20-30% more than it is now.

Great – but who gets to decide the new value of your asset?  If you think my 2005 Yukon is worth $10,000.00 and you want to buy it, and I say it is worth $15,000.00 and I want to sell it, then what is the truck worth?  The answer is always, “whatever someone is willing to pay for it” and thus my friend, the nature of the market.  It is an “it depends” market.  It also depends on which side of the negotiation you are on and so goes the controversy over historical verses market accounting.  More questions.  I thought we were here to get answers.  Nope, just new ways to look at the questions…Until next time.

Kevin Fleming
Owner of KTF Consulting
MBA Concentration: Undecided
Graduating: May 2011