Friday, December 28, 2018

Happy New Year! And Forget Your Resolutions

This year has been full of fruit and frustration. With a new year just days away, I'm going to recap some things that happened this year and refocus some goals for next year.

Resolutions the Continuous Way

For the past two years, I've been doing resolutions a bit differently. I do them the Continuous Improvement way. A whole year to do one thing is a bit much, this is why they usually fail.

Instead, take it one month at a time and do smaller things. For example, I'd like to try CSA (Community Supported Agriculture) this year. I'll keep it in mind and make sure to take that on in some specific month. Other months will be dedicated to some other improvement. The key is to take on one key thing per month. In the past, I've worked on posture, starting grad school, and even kicking off this blog. I'll consider what accomplishments I'd like to make this year just after a quick recap of this year.

This Year In Review

There were ups and downs for this year. The biggest positive is starting graduate school in August. Swinging back the other way, the lowlight is when TagStation closed up shop and left the team of talented folks out of work...and just before the holidays. Between these two extremes, there's been a ton of growth!

I started blogging semi-professionally in May when HitSubscribe put out a call for authors. I've been busy as a beehive writing posts.

This year, I paid off the family car. That's a big deal for anyone who's experienced the joys of concluding monthly car payments!

I finally learned how to make good bread! I've made some baguette style bread and some fantastic whole-wheat loaves this year. The trick is to put a cast iron pan on the bottom rack of the oven and preheat that guy. When you put in your loaves, go ahead and put 1/2 cup water in the pan. Watch out though! It's going to steam up fast. DON'T GET BURNED! That steam causes the bread to form a really nice crust. I cut out the sugar too, I've been putting too much sugar in my breads in the past.

In global news, the stock market took a huge turn for the worst after peaking out. I won't get into politics on this one but it makes a lot of sense why this would happen if you understand a bit about economics.

In tech news, there's always a bunch of cover-fire on this topic. Reddit should have you covered to no end on this topic. I gave a talk this year on how we developers would do well to focus more on business concerns. Sure tech news has some impact on this, but not as much as knowing where the economy will head next year.

Next Year

Speaking of next year...2019 already? I have some goals lined up for next year.

I've already mentioned the CSA. And, my wife got me a home cheese-making kit for Christmas. 

That's a good excuse to try raw milk. In my state, it's now legal to purchase raw milk from a dairy. See, the cheese kit says the best results come from raw milk. I can make fresh Mozzarella or Ricotta. But the former will not work if I use ultra-pasteurized milk. The best results will come from raw milk.

Monthly Actionables

But, I won't be making some fell-resolution to do some grand thing next year. Instead, I'll break down what I really want to do into actionables for each month. January and February are all about career focus. If things go well in that domain, I'll be all set to work on some home improvement goals for later in the year.

Before that, I'm thinking March, April, and May for the CSA resolutions. I'll start this by buying into a month's share of food from a local CSA farm. If it works out, I'll go for broke the next month and buy-in for a year.

Late in the year, I'll be thinking about revisiting some past goals like practicing good posture. I do believe that things change so rapidly that it's going to be tough to call out any resolutions for later in the year. I've been meaning to improve my social media presence. If it fits in later in 2019, that's just one thing I'll get started on.

Lesson Learned

I know as well as you do that documenting and tracking progress is important for goalkeeping. Making the goals SMART is supposed to be a good way to make this happen. However, some things like "apply to grad school" are binary. So...the measurement is just true or false. I'd love to say I tracked my monthly resolves for this year, but I didn't. I was a bit loose with it. Still, I did a whole lot. Unfortunately, I only have my memory to serve these. Had I documented them I'd be able to account for the whole year. Maybe that'll be my new year's resolution...only kidding!

Perhaps that can be something for Jan or Feb.

Wednesday, December 12, 2018

And Now...A Lesson In Accounting: Indirect Method Computing Cash Flows From Operating Activities

A small departure from the usual technical topics. As many of you know, I'm studying business these days. The lesson of the day is about how accountants arrive at the cash flows from operating activities for the cash flow statement.
The statement of cash flows is useful in understanding how cash moves (flows) through a company. You use it to evaluate the company's ability to repay debts. That will determine how much investors and creditors they're willing to invest or lend the company.

Indirect Method For Operating  Cash Flows

If the first section of the statement of cash flows seems odd, the accountant is probably using the indirect method of computing cash flows from operations. See, it's difficult to compute cash flows from operations directly. Instead, they start with your net income and factor out changes in current operating assets and liabilities that are not cash.

For example, let's say your company has a current asset of $100,000 in accounts receivable. In that case, you don't have the $100,000 in cash — at least not yet — so you can't count that as cash inflows. Your accountant subtracts it from your net income to factor it out.

For other types of non-cash accounts that contribute to net income, the balance may be added or subtracted depending on the type of account. Depreciation expense is added to net income. And, any gains on the sale of assets are subtracted from (losses are added to) net income. After all these adjustments are made, the result is the net cash flows from operating activities.

Direct Method for Investing and Financing Cash Flows

After the cash flows from operating activities, you should see the cash flows from investing activities followed by the cash flows from financing activities. These are shown using the direct method. The records for changes in cash due to investing and financing activities are readily available.

The Bottom Line

Once you have an understanding of how the statement of cash flows works, you should find it useful in understanding how a business is receiving (inflows) and using (outflows) cash.

Warren C., Reeve J. M. & Duchac J. (2016). Financial and managerial accounting (14th Ed.). Boston, MA: Cengage Learning.

Tuesday, December 4, 2018

New Page With External Blog Posts

Some folks have requested links to the blog work I've done for clients. I added a new page with some of my work. I'll update it maybe each quarter. In lieu of that, I'm thinking about cross-posting the work I do here as well so look for that in the near future. In the meantime, check out the posts I've added to the new page!