I hit the great mid-west this week. I flew into Chicago and then made the 130 mile drive to Bloomfield, Illinois to speak to a chapter of the National Association of Purchasing Managers. It was a quick trip into a cloudy small mid-western town. I didn’t know this but this little town of 70-80 thousand is the world headquarters of State Farm Insurance. In the class about 1/3 of the attendees were from State Farm.
The town was a small quaint Midwest farming town. The weather was on the cold side and the day and a half I spent there was cloudy. Not a lot of restaurant options that I could find there will be no food review for this one. I did get to take in some March Madness games on the drive back to Chicago the old fashioned was…on the radio. My BYU Cougars got eliminated in the first round but Kara our office manager’s Utah Running Utes survived the 12-5 seed match-up as a 5 seed and won last night. Congratulations Kara.
On yeah I did a finance class. Let me talk about that for a bit here. The class went great. What I was asked to do is present an expanded version of the International Sourcing Management (ISM) program I presented at the ISM national conference for the last 5-6 years. (I’m on the calendar to do ISM again this year in May).
The attendees were great; we had a lot of good discussion and questions. In this session we go through the statements using Apple financials. Then we do a more detailed ratio analysis in two groups. One group does analysis on Microsoft and the other on Oracle. Then we come together and compare our results. This class format is great for purchasing managers and executives. It gives them an opportunity to look at how different businesses in a related industry present their numbers. They also learn that each company uses its own terms in its financial statements. A purchasing manager encounters a lot of vendor statements in the qualification process and this class helps them know what look for and how to read these statements.
The day really went by fast and we were able to cover a lot of ground. Of course, I was able to share with the group the dynamic and exciting tale of the rise and fall of EBITDA as the key number in business and dramatic rise of free cash flow as the new cool number. After all if you are going to spend a day learning finance, you need to have good material to share at home at with family and friends.