“To predict the
future we must refer to the past”. This
makes a lot of sense as we all use this logic without even knowing it in most
decisions we make everyday – not just in business. To judge how much time we will need to fight
the traffic in the morning to get to work….how long has it taken in the
past. Similarly, we look for past
trends in business and make decisions moving forward using this information as
an ‘educated guess’. Nothing in the
future is written in stone but this is a good starting point.
For me chapter 4 has been the most challenging as I feel it has the most information
crammed into one topic. My understanding
of the fundamental message being portrayed is breaking up each of the financial
statements into operational and financial to pinpoint the drivers of a business
which in turn identifies how it is adding (or destroying) value.
See the rationalisations behind my thoughts on this chapter:
Megan
