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WorldCom inflated its profit to the extent of $US 4 billion by booking repair expenses as capital improvements. This had the impact of understating expenses and inflating their assets. Double entry at its best.

Xerox reclassified $US 6.4 billion income from equipment rental, service contracts and consumables to show in their books as revenue from sale of equipment. This piece of creative accounting to boost profits earned a $US 10 million fine.

Those practices go unchallenged because of a lack of basic commercial / financial literacy and bankrupt corporate values.

It is estimated that less than 8% of the workforce has any idea of the significance of June 30th.

In an effort to expand our Competitive edge we are demanding that employees make sound Commercial decisions without a clue about how their organisations actually spend and make money.

We don't need an army of amateur accountants but what we do need is employees to at least understand:

bpur.gif (807 bytes) What supplies, labour, raw materials etc. cost
bpur.gif (807 bytes) The price of products / services
bpur.gif (807 bytes) Who are our valued clients and why
bpur.gif (807 bytes) The levers of profit they can influence
bpur.gif (807 bytes) The cost of Capital and Assets
bpur.gif (807 bytes) The need to make a return on assets
bpur.gif (807 bytes) What happens to profits

Organisations such as Fosters, Queensland Rail and BOC are starting to appreciate the productivity impact gained by employees knowing how their business really works. Imagine the power of an organisation of business minded people.

So go on, celebrate June 30th – it's reconciliation time.

What Next?

If you are interested in more information please give us a call on +61 412 026 909 and ask to speak to one of our consultants. 

Alternatively e-mail us at info@emdgroup.com.au or use the form on our Contact Us page.


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