Adonis Diaries

Archive for November 30th, 2008

Revised economic fundamentals for enterprises (November 29, 2008)

Revisiting the essential criteria in financial sheets for stock evaluation

Within a month of the Wall Street financial crash, major EU industries (excluding the financial, real estates, and insurance institutions) have laid off over 62, 000 jobs and the USA over 77, 000 jobs.

There is no end in the forthcoming months and the jobless rate has broken all record high.  The communication, auto, computer hardware, retail stores, airline, and chemical companies are the hardest hit so far.

As the jobless rate increases then society would drift into unstable climate of insecurity in individual health and safety and retention of their properties.

Without a climate of security no influx of investment can repair the long-term malaise in the slow moving society to recovery. It is a definite pattern that in any downturn the workers, elderly and new employees, are the first to be laid off. 

As if it is the manpower was the culprit and not the management.  Consequently, a revised understanding of what constitute the worst case impact on a society should be evaluated.

Economical models for the productivity of enterprises need to be revised to include the sustainability of enterprises under fluctuating and cyclical financial crisis that is fast becoming the norm.

The working capital should be able to remain intact for the demand cycle and the value added in manpower quality of the main industry units unaffected by the flux of capitals.  Consequently, I suggest tackling two fundamental concepts.

First, the working capital should be managed differently from the general acceptable accounting procedures to resist fluctuation in central rate and money devaluation.

It is very reasonable that the retirement funds of the manpower and the stocks purchased in the company by the manpower be within the working capital management.  The manpower should then feel highly active to evaluating and discussing how the working capital is allocated and invested.

Second, we need to start a new field for defining added-values and how to measure it concretely instead of rationalizing it as a proxy ratio.

Added values should be measured accurately because it is intrinsically related to the quality of manpower.

Added-value is what makes an industry viable economically to the workers, stakeholders, and society in general.  It would not be a piece of cake to operation value-adding parameters; otherwise I would not be suggesting a new economic field for the characterization of what we mean by value-adding economy.

Every industry would have to define its value adding element such as in the service industry, hardware products, software products, chemical, car, heavy duty machineries, tourism industry, commercial banking, and financial investment banking, and so on.

Every industry has it proper cyclical market demands and its competitors, localized or multinational, dependent or not on cyclical supplies of raw materials or manpower.

I am afraid that the first criterion that would jump to mind is for the concept of value-added economy to be represented in monetary terms, which is not the proper criterion.

Value-added economy is the investment in the manpower; for example, programs in continuing education, acquiring new skills, versatility and flexibility to fill vacancies, knowledge of the competition, the products, the tools, and the equipment.

Value-added economy is raising the quality of the manpower so that a large company would aid in subsidizing private complementary companies, from among its qualified personnel, when the tough gets going.

Value-added economy is elevating the knowledge of the personnel and assisting them to find new jobs during harsh downturns.  The only monetary value or ratio associated with added value would be the expense (value added capital) invested for manpower quality relative to working capital (VAC/ WC) for raising the quality and professionalism of the manpower.

When this ratio diminishes then a company has gotten lax and is turning away from the new fundamentals.  Obviously, an independent team should be hired to prepare, control, manage, and evaluate the effective progress in manpower quality at all levels of skills.

Quantifying the quality of workers and employees is the main task in measuring value-added industries; it is feasible and its time has finally come and it should be the optimizing factor in equations instead of rates in profit, shareholders equity, return on capital and so forth.

Inevitably most of the variables used in current optimizing model of financial and economic problems would still be effective, many with significant re-definitions, but when the re-orientation is based on the added value of manpower then a new picture would emerge and standard financial analysis re-discovered. 

The quality level of the manpower can be defined as the potential added value (PAV) in time of crisis and the working added value (WAV) in normal business cycles.

WAV is the criterion that stocks in the market are valuated in addition to other financial criteria; PAV would have critical significance in times of hardships, especially, if the company recorded the events when this potential was managed and directed in previous situations to overcome serious market or natural conditions.

As armies conduct maneuvers to test the readiness of its effective so companies have the duty to conduct maneuvering re-organizations of potentials to test and evaluate its field readiness and re-evaluate its programs for value adding quality in manpower. 

I think that the more credible and frequent the organizational maneuverings the higher the market value of the company.  The more frequent the maneuverings the more evident would be the needs for downsizing and decentralizing and retaining coherent and manageable number in work force.

Wild Goose Chase

Conclusion

The presumed impotent Artax the Monarch, who had gotten the throne by usurpation long before the usurping “Khosro the Magnificent” reigned, suddenly contracted malaria and regained partial consciousness six days later.

Artax tried to walk and visit his favorite garden in order to recover from his ill health but was carried back to bed after each outing.  His close assistants were worried to death about his health status and many army officers hurried to his side expecting some rewards in his death testament.

Artax was in no shape to think clearly about the future of his kingdom or his successors.

He stated on many previous circumstances to his close friends that succession should be for the most deserving leader who invested time, effort and good will to better his intellectual potentials, his moral values and learn to be tolerant of diversity in religion and customs.

He used to insist that the best leader of people is the one who listened carefully to the news of change and worked on finding consensus before any decision, that war was the last recourse for intelligent leaders who should reach his objectives through all diplomatic and political channels before committing to the path of destructive wars.

            Artax died within nine days without designating a successor.

Note:  This end the draft of the general structure of the fiction story. If you appreciated the story, please contribute your opinions, ideas, additions, and possible alterations to the sequence and cohesion of the novel that I would like to publish with your generous aid.  Surely, any publishing houses that are interested in finishing the novel are welcomed to come forward and contact me.

Babylon: where all start and end.

 

In order to relieve the pressure on the Northern and Easter bases within the periphery of the Empire Artax decided to open a third front westward.  Many of the navy pirates had defected to Artax for higher returns but the Persian navy was still intact.  Consequently, Artax avoided any maritime confrontation and his ships dispersed in the Indian Ocean met in Adan in Southern Yemen.  The ships navigated around the Arab Peninsula and landed in the fishing town of Akaba in southern Jordan. 

Instead of taking the long regular route to Babylon, the troops headed by Artax crossed a difficult desert to Basra.  A mutiny in the inner circle of the Imperial guards assassinated “Khosro the Magnificent”.  It was not that the Magnificent was more inept than his army commanders but the reaction of the guards was a traditional exit means to vent frustration on the leading scapegoat.  The next day, the mutineers realized that they put an end to the only symbol that held the Empire still united.  Chaos reigned in the Empire.

Artax army resumed its fast advance toward Babylon. The Persian Empire was as ripe as a rotten apple and the gates of Souze needed a light kick to disintegrate. The way to regaining the throne was open to Artax and post-war plans for reconciliation, reform, and reconstruction were being readied in Babylon.

The peripheral uprising catching fire

In the Wild Goose Chase: Uprising

(fiction, continue 34)

For two years since the disaster of the Southern Army, the bases of Artax authority in the North and East of the Kingdom were flourishing and disseminating the new spirit.

The authority of “Khosro the Magnificent” was shrinking around his two Capitals.  The Persian people were not excited of joining the army of the Eldest-Son of God.  The economy inside Persia was in trouble because the trade routes were becoming dangerous.

As the usurping King was entrenching himself in his two Capitals of Souze and Persepolis, the two main cities close to the Persian Gulf, Artax armies were gaining grounds in their advances from the North and East of the Kingdom.

Killing the Gold Goose

 

            Now that the High Priests had firm proofs that Artax is very much intent on politics and had crossed the red line in military incursions and harassment tactics, then it was time to play hard balls.  Two Persian army contingents were dispatched toward Balkh and Kandahar.  The High Priests figured that more profit could be made if they monopolized the trade business; as if a well oiled machine would continue to lay Gold Eggs if tampered with.  Afghanistan was turned into a battle field and military kind of curfew ordered in all that Estate.  Caravans stopped going into the Persian Empire, from land and from seas.

            Special spices, rare kinds of incense, and silk got scarce.  It was not unusual for properties to be sold not in gold coins but in exchange of these most precious products.  Girls’ dowries were bartered in these precious products.

            The upper strata of the Persian society could no longer suffer the humiliation to their palate, sensible noses, and fashionable attires.  They pressed upon “Khosro the Magnificent” to win the war very soon and thus more mistakes and errors in planning and logistics bogged down the progress of the war.  Consequently, the malaise within the upper and medium upper strata of society turned into serious horror of the future state of affairs.

With central authority engaged far up east then the Western Estates in Turkey and Syria were disintegrating into smaller kingdoms of warlords, loosely linked to the central authority and supplying nominal recruits who made it a point of honor to desert along the long trail.  Caravans heading west were loath taking that route because the taxes on their goods increased at each warlord principality and prices attained unprecedented height in the western Estates.

 

Tales of the riches of India gave wings to the adventurous spirits, the marginalized nobles, little merchants, and whoever could join caravans going east.  It was a period of mass exodus from Persia that emptied the Empire from its youngest and most promising elements in education and commerce. Since that period, Persia or present Iran turned eastward toward India for commerce, culture, civilization, philosophy, and religious alternatives.  The commerce with the western Estates of Turkey and Syria and their civilizations were forgotten for many centuries.


adonis49

adonis49

adonis49

November 2008
M T W T F S S
 12
3456789
10111213141516
17181920212223
24252627282930

Blog Stats

  • 1,408,121 hits

Enter your email address to subscribe to this blog and receive notifications of new posts by email.adonisbouh@gmail.com

Join 758 other followers

%d bloggers like this: