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Archive for April, 2012

Why Corporations Undervalue Your Contribution

Capital managers have always viewed companies as collections of assets rather than employees, but over the last 30 years this mentality has become an unfortunate, unquestioned part of our mainstream culture. The viewpoint didn’t really become real for me until I took my MBA finance class, a class which teaches decision-making based on a company’s financial status. I was amazed how different the world looks when you only care about the books.

For those people who are unfamiliar, there are a few basic financial statements that all public companies release quarterly. One is the balance sheet, which shows a snapshot of everything the company owns and how much of those assets can be claimed by creditors versus stockholders. The other major one is the income statement, which matches a company’s revenues to the expenses that generated those revenues.

Here’s what I finally understood from taking this class: if you evaluate a company only by these statements, you have different inclinations than if you work for that company and know the employees personally.

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