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Archive for September, 2010

Corruption around the world

September 20, 2010 4 comments

Here is a map of the world graded by levels of corruption. The league table is on the following link

http://www.worldaudit.org/corruption.htm

The top ten countries are not suprising, barring perhaps Singapore. The other factor that binds theses countries together is their economic success. Coincidence? Well it could be argued that Singapore has developed its power because of the lack of “corruption” (making it an appealing state for businesses) whereas similar economies have been left behind. Singapore certainly has it faults, but on this level it works

The UK and US seem to score good points whereas Italy lags behind Cuba, Namibia and Turkey. Suprising even given the reputation of certain segments of that economy

Also interesting is the high placings given to Uruguay and Chile. In stark contrast with other latin american countries such as Argentina (84). Russia is 117th, which is pretty disgraceful and those “rising superpowers” India and China are just half way down the list. China’s poor rating might suprise some who are not entirely familiar with business there. It didnt suprise me….

Of course India’s difficulties have been in the news recently and no cricket fan will be too suprised at Pakistans position (111)

A very interesting list and may I just suggest that a country credit risk list would more or less mirror these findings?

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Categories: Uncategorized

Connaught collapse

It is a pity that the Times is now subscription only because there was a very strong article on the reasons behind the collapse of Connaught last week. This has brought about a lot of comment but what has been highlighted is the apparent lack of internal costing controls and cashflow management

I am sounding more like an accountant every day….

But this did highlight for me one key inidcator. The Cash conversion KPI. That is the % of profits that are converted into actual cash at the year end.

Connaught converted 55% of its profits into cash and was in itself a warning sign that the management was not all it could have been. it makes perfect sense that a well run business will be converting its profits into cash quickly, but at the same time this is a stat which is best measured over a period of time rather than on a monthly or even quaterly basis. Calculated monthly, a sudden upsurge in sales can be very difficult (impossible really) to convert into cash within 30 days. And that knocks the KPI sideways

Are you still awake?

Categories: Uncategorized