Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Ed Stitches Up An Accountant
‘I’m a Napoleon,’ Ed writes in his diary, ‘without any C-Class execs to question my decisions I’m an Emperor – my word is law. I can do as I like and I’ve concocted a great wheeze.’
‘One of our biggest drags on profitability and growth is the interest we have to pay on the enormous debt imposed on us by those bastards – a k a our sponsors – the private equity company which owns us’, writes Ed.
Two days later, the diary entry reads: “I had one of the accountancy team in today – I picked the thinnest most miserable looking one of the lot on the assumption he’d be the one who wants the CFO job the most.’
‘”I want you to adopt the most rigorous accountancy standards for reporting results there are,” I tell him, ‘”no more of this EBITDA bollox, I want our numbers to look as bad as possible. Capisce?”‘
‘”Yes,” replies the streak of misery, adding “may I ask why?”‘
‘”You may,” I reply “and, on this occasion, I’m going to tell you. Because I want to depress the value of our bonds. The only reason why, as a privately owned company, we have to report our results at all is because some of our bonds are publicly held. If I can depress their value, I can redeem them cheaply and reduce our debt interest”.’
‘”And I want low numbers – understood?”.’
‘”If we artificially depress our numbers to manipulate the market, you and I are liable to go to jail,” responds the streak of misery.’
‘”Don’t you worry. I’ll protect you from that,” I tell him.’
‘After he’s gone I get an email put on the system, but not delivered, telling the streak of misery to recognise some revenue streams earlier than usual to make the EBITDA figures look good for a few quarters. If anyone’s going to jail it’ll not be me.’
‘Roll on my $25 mill.’Tags: accountant, c class, diary entry, misery, stitches