For those of you who have been following my journey through the MBA, you recall that I often spoke about the AAA (Association of Accounting Avoiders) and how I am the association’s national secretary. All that changed when I got to business school and understood that accounting does not necessarily have to be for the accounting department. Thus far, I have learned about the various financial statements, the kind of accounts that are being posted, entering and adjusting journal entries, interpreting accounting transactions, and using all this information to analyze the health of a company. Sounds cool, right?
So all I have learned over the past three months are now put to the test with the CAPSTONE project. I would have loved to tell you what the acronym CAPSTONE meant, but I have no idea. So it’s a project that tends to use all the knowledge thus far to interpret the health of a selected company using just their financial statements. My group in #EMBA27 was assigned the automobile industry for my CAPSTONE project. We are to compare the health of Volkswagen to that of Mercedes using several ratios. The tricky part of this is that we write a 2,000 words article to be posted in a business journal, and boy, am I glad that I have been taking this blogging seriously. I have developed the mental stamina to write comfortably to a general audience about any topic, and I will be sure to share my report on my blog to show just how far I have come.
The instruction of the project is to compare the companies using a maximum of 6 financial ratio categories. It seemed funny to me when I read this part because there are only six financial ratio categories that I know about. The categories are:
- Liquidity Ratios
- Leverage Ratios
- Asset Management Ratios
- Profitability Ratios
- Operating Ratios and
- Market-Based Ratios
All six categories have an average of 3 ratio types, and all tell a different story about the company’s health. I do not know what the information will say to me, but I am willing to take a wide guess that Mercedes will do better than Volkswagen. I intend to make another post after I have submitted the capstone project and inform you of all of my findings.
Looking back at where I started with accounting and how I hated it, I am glad to say that I am excited about this project. I believe it will put the icing on all the knowledge of accounting I have gained throughout my study here.
I will leave you all here so I can get to it, do not think I have one of my usual phrases by some brilliant man to post here, so I will just say one of my own.
‘Do not be afraid to innovate; nothing new comes from copying what someone else has already done.’
Signed: The Prince of Business