Below are the links to
Sportech PLC’s three latest annual reports:
My Top 3 Blogs
Renae’s blog is definitely one of the
friendliest I’ve come across so far - she’s put a lot of effort into it and it
shows. There’s a lot of interesting
information and I feel like I know a lot about Renae, the lady of ledgers (very
clever!), already. I agree with a lot of
the things Renae has said – structure is important, accounting is not boring as
so many people think! I also enjoyed the
layout, it was well set out and easy to read, and the stars gave it almost a
dreamy ethereal quality. Overall, I
thought it was not only a very thoughtful and heartfelt blog, but also one that
I could relate to. I look forward to
reading more from Renae.
Mia’s was another favourite blog of
mine. She has had experience running another
blog and I think that’s reflected in this one, as it is very well planned
out. It is very neat and tidy and easy
to read. It’s also well worded and
concise, making the information about her company easy to understand. You can tell Mia is a lover of social media –
she seems to have a natural flare and talent for it. This blog definitely puts mine to shame and
is somewhere I will be coming for inspiration if needed.
I found Jason’s blog to be very
interesting and insightful. His
introduction was detailed and it was great to read about the journey that led
him to where he is today, studying accounting and working full time in the
hospitality industry, as well as moving!
I really enjoyed the way the company information was laid out. Instead of reading paragraphs and paragraphs
of information, there were dot points, photos and symbols to represent the
aims, values etc. This was very clever I
thought, and a refreshing way to view information. One more thing that I liked was the
background/template with the raindrops, although I could be biased in this
because it was one of the layouts I was going to choose.
Step 4 – Study Guide Chapters
Chapter 1
At first glance of the
study guide, I thought ‘ugh, so much reading,’ but at second glance I saw that
it was not your typical study guide and someone had put a lot of time and
effort into it. I was really blown away
by it and thought that this might be a much more interesting and engaging read
than usual. It did prove to be much more
interesting but I came away thinking that I hadn’t really learnt much. After pondering on it for a while, I realised
that I had learnt a lot. It was just not
your typical definitions and formulas, but information and concepts that could
actually apply and could help me in the real world. Much more subtle, almost tricking you into
learning.
What is
accounting? I’ve been working at an
accounting firm for two years now, and whenever I’m doing a company’s
financials, all I’m really worried about is entering the debits and credits and
making sure everything matches, and I’m on my way. But it really is more than that. You can see how well a company is doing, areas they’re spending more or less money in,
and compare the figures to the previous year.
Comparing to prior amounts, you can tell if there’s a discrepancy in the
coding (or somewhere else) if one figure is a lot larger than the others. This is something, like Maria in her lecture,
I had never looked at when I first started and was pulled up on when it was checked
by a partner.
I also do think that
accounting doesn’t always help you connect with the business realities of a
firm. Simply going by the numbers
doesn’t always tell you what the firm does or how they operate. I could be doing a job and wouldn’t even know
what industry they were in or what their company actually did, if it wasn’t in
the title of their name or if I didn’t ask.
Last week one of my seniors sat in on a meeting with one of our clients,
and said that she learnt more about the company in that hour than she had in
the many years she had done their work.
I suppose that’s part of the point of the annual report, though, to give
readers background knowledge?
I think it’s
interesting that many directors in Australia and New Zealand have backgrounds
in accounting. The more I think about it
the more it makes sense – how can you have a good understanding about business
if you know nothing about numbers and money?
It is also interesting and a little mind blowing that every single
business would need accounting. Whether
it’s a whole team of in-house accountants or just one out-sourced for a few
hours a week, every firm needs accounting.
I must admit I did just skim through the Businesses Are Everywhere
section, and I was glad to see two pages of photos because it meant two less
pages I had to read. It does make it
less boring to have all this real life stuff, but I don’t think I’ll need to
know all of the businesses in Yeppoon for this course, so I don’t want to spend
too much time on it.
I feel like I’ve done
a million courses that go over the different types of entities so I was going
to skim over that section, too, but I decided not to as it’s always good to
have a refresher. That was all
information I thought I already knew so it wasn’t until the next section some
new information started to pop up for me.
I like the quote here from Charlie Munger. The first part probably explains why many
directors have backgrounds in accounting – it is the language of practical
business life. Apart from that, I think
it sort of explains why I decided to do accounting in the first place- you have
to know it. I didn’t previously know
what dividends were or anything about finances or investing, and I thought it
was something I really should be savvy about.
I didn’t want to go my whole life being clueless and having to rely on
someone else to look after my finances.
Something that stuck
out to me in the next section was the concept that we weren’t born into a world
with a blank page in front of us. It’s
hard to imagine that anything would come from each generation if the previous
one hadn’t left anything behind. How
much could you achieve in one lifetime if you had to begin from scratch each
time? Moving on, I had no idea that the
QWERTY keyboard came about because the typewriter arms would get too tangled if
the letters were in a more obvious layout.
I think it’s so true that even though double-entry accounting is a thing
of the past, it is unlikely that it will ever change because people are so used
to it. This made me think of when I
first started my job (or really when I’d done anything new) and I came in with
fresh eyes and a fresh perspective, and saw things that could be done in a
better way. Sometimes you think things
would work so much better if certain things were different, but everyone is usually so stuck in their
ways, that’s it’s just easier to keep doing what’s always been done. I am in no way an exception to this, we are
creatures of habit. Often an overhaul of
old ways would just be too time consuming, too costly or just too hard.
I am really quite
grateful that we have computers now and do not have to do our accounting
manually with books. In saying that, it
is easy to get caught up with the numbers and coding and not even realise what it
is you’re actually doing and the meaning behind it all. I had never thought of journals and ledgers
the way it was explained here, and the same with owner’s equity. I’m sure it’s something that I learnt long
ago at the beginning of my degree but have since forgotten. It is basic stuff and I definitely do need to
make more of an effort to remember it because it will actually help me in my
real working life. This goes for the
remainder of my degree, I think. I need
to make an effort to learn and remember, not just forget after exams. I think this course has been a powerful
reminder of that so far.
Chapter 3
I really like how
Martin compared introducing financial statements to introducing two people at a
party. I found myself eager to hear more
about Sarah and Chris and felt a little jolt of excitement every time I saw
their names coming up. I’m also glad
that it was pointed out that a firm’s annual reports are a marketing document,
and why wouldn’t they be? Although I’d
never thought of them like that, it makes complete sense. Of course they are going to want to present
the best image they can to get people to invest and inspire confidence in their
company.
I really like the way
the balance sheet and income statement were explained, and I find myself having
a lot of ‘duhhh’ moments. These are
probably the ‘ah-hah’ moments – they really are mini life revelations. Like the fact that the balance sheet is shown
at one date. I already knew this but I’d
never really given any thought to it, and I’m feeling very unobservant. How else could you show the balance of your
bank account, though? What if it’s
looking really low on that day and you would prefer it showed a month before
when you had plenty of cash in your bank?
To hopefully answer my own question, it shouldn’t really make a
difference because if you are low in cash it probably means you’ve paid off a
liability or purchased an asset, which would be reflected in the balance sheet. The section about trust relationships in
business really helped me as well. I
sometimes think equity isn’t really anything I need to bother about, but
without someone outside the firm believing in it and the IOU concept, it could
hardly exist.
As for the income
statement, I’d never made the connection that ‘bottom line’ is just the line at
the bottom, duh! I’m a little
embarrassed to also say that after studying accounting for three years and
working in accounting for two years, I STILL get confused as to which of the
elements make up the balance sheet and which make up the income statement. I really have to think about it – profit and
loss = income and expenses. Everything
else is on the balance sheet – bank accounts (assets), GST and PAYG withheld
(liabilities) and drawings (equity). If
I’m talking to my senior about it, I usually go blank and just refer to the
trial balance rather than either of the two.
I think the author really helped me here, not only in making the
distinction more clear but also in remembering that they are more than just
numbers, it is someone’s actual business and livelihood.
Looking at my
company’s statement of changes in equity, there were a lot of terms I didn’t
understand. What is financial instrument
reserve movement, share option credit, employment taxes paid on vestings in the
year and shares issued in relation to PSP and reserve transfer? I know what shares and taxes are but that’s
not enough to piece together the meanings...
I don’t really understand the importance of this statement yet, but as
Martin said, it will happen over time, so that is a little reassuring.
The explanations for
the cash flow statement were interesting to me.
Again, I had only focused on getting the figures correct at work, and
not bothered to analyse the meaning and what the figures represent. It’s a little hard to get my head around the
idea that if a company runs out of money they can go broke/into
liquidation. Obviously an employee probably
wouldn’t accept an office chair, but couldn’t a building be sold for lots of
cash? I suppose the point is that that
would take lots of time and not all companies would have assets that would sell
easily and quickly? Even though
questions keep popping up in my head, reading or thinking back on the section
gives me the answers – cash really is king.
The meanings of ratios
were quite confusing to me, so I was glad to learn that they might not be that
useful or accurate in analyzing financials.
Doing what ‘works’ sounds like me all over – just looking at the numbers
and not how the numbers are connected to a firm’s performance. Maybe this comes with more experience,
though, and for starters you actually do need to focus on the numbers and
getting them right before you can look any deeper? The last section on values and dividends and
cash flows was a little difficult to grasp.
Maybe because it’s at the end of the study guide or maybe I’m just
getting tired. Either way I think it
might take reading over a few times, and maybe putting into practice, to really
understand it properly.
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