IO – I differentiate between ‘financial attitudes’ and ‘financial expert’.
The person who has financial expertise is not necessarily a ‘financial character’. It is not necessary to hold a ‘financial attitude’ or be a ‘financial expert’.
Best is a financial expert who has ‘financial attitudes’.
I was amazed by the acts of the Finance Director of PT Garuda Indonesia. He must have been a financial expert. Otherwise, how could he manage it? In such circumstances a businesses like Garuda could turn a profit of Rp 70 billion, as indicated in the 2018 financial statements that he submitted.
I want to launch the following mantra:
“They may be smart, but we should not be stupid”. This mantra that I give is good quotes for anyone.
Moreover, trade relations with China. Or with anyone. Never blame them for being clever. But we also must remember: we must not be stupid!
We must recognize how clever the Finance Director of Garuda was, a highly-skilled financial expert: how to make Garuda see a profit of Rp 70 billion, against a loss of Rp 2.4 trillion. Really clever.
But the FSA (Financial Services Authority) is not stupid.
BPK (Supreme Audit Agency) is not stupid.
The Minister of Finance is not stupid.
Two Garuda Commissioners were not stupid.
They rejected the 2018 Garuda financial statements. FSA and capital markets authority imposed penalties: a fine of Rp 100 million for the Company. A fine of Rp 100 million for the entire Board of Directors. And a fine of Rp 100 million, to be shared by the Boards of Directors and Commissioners who signed the 2018 financial statements.
The cleverness of the Finance Director can be seen here: future income plans were classed as “revenue last year.
The value is also large. More than Rp 2 trillion.
Planned revenues “derive from long-term contracts. Signed last year.
Cooperation is – smart again – not carried out directly by Garuda, but rather by a subsidiary: Citilink. Hence Citilink passengers already know: there will be wifi service on the plane. Soon. Very encouraging. Also boasting.
Perhaps many thought wifi was free later. As in the airport terminal.
It would not be free.
Can wifi service make Rp 2 trillion in 10 years time?
I lost count. Not yet available on air revenue data from wifi sector.
I often get on a plane that already has wifi service, over in America. Or on long-haul flights. But only used it once. It was only because I wanted to try it out: there was never been any urgency. It’s too expensive, according to my opinion, especially for Citilink flights within the country, on a flight of only one to two hours. Are there such important affairs that cannot be delayed up to two hours? Have to use expensive wifi service?
For the service I just still feel it is too expensive. Moreover, as a public service. I do not know – maybe I had the wrong attitude, although my financial people have already contracted for a “financial aspect”.
Perhaps also because Citilink had a great consultant, one who knows how to calculate future income. Mainly revenue from wifi . Maybe they got the use of wifi in planes from another country.
Or is there a more special type of contract? Surer. For Citilink. For example: a contract with a system of take or pay . The private company was obliged to pay Rp 2 trillion, over the past 10 years. No matter how much wifi is used . Risks exist in the private sector. A loss, or private windfall, if lucky.
Not until finished making a forecast, I hurried to read the new news: the cooperation was canceled.
Still, I admit, financial experts are terrific: how could they make company profit and loss become visible. He that finds his way. How. Tactics.
It was he who found the powder and lipstick.
For a man who has an “attitude” of finance he will not do it. Instead, he will remind his superiors, regarding the risk to the Company. If such a thing is to be done.
There are several motives that are usually behind such an action.
For public companies, the intelligence is merely to deceive the market and pump up its share price.
For a state company it could be because the attitude of keeping the boss happy. Or political reasons.
For Management, it can be because the pursuit of bonuses. Big profits mean big bonuses.
Garuda is a public company, state, and has a system of bonuses (bonuses) for management.
In private, there is another “bonus”, also seen from the profits. But in fact the “profit” is not the same as a real “profit”. There is a profit with good quality. There are also inferior earnings quality.
Low-quality earnings before I have often referred to as “profit full of fat and cholesterol”.
It may look like profit, but in fact it can be deadly.
One type of cholesterol is “receivables”, especially “doubtful accounts”, which cannot really be called “income”.
It could be as sudden as a person dies. Or goes bankrupt. Or even sues.
The reason could also be the administration: the invoice was wrong, the sound of the contract was not clear, or not until the bills come in.
Receivables boils down to profit. A source of tax income and bonuses – or the basis of a salary increase.
Taxes are already paid. Bonuses have been paid. Salaries have increased.
Revenue has been recorded – but it turns out the money does not come in, after all.
There can be many other types of “fat” and “cholesterol” in a financial report. The source of the disease is sometimes not visible when it is management itself which orders the inclusion of fats. And LDL-cholesterol.
Forgive me: such as an accounting class at the kindergarten level.
Which is better: the financial expert who has finance or a financial attitude?
The best thing is: the financial expert who has the financial attitude as well.
If I am faced with only one choice inter alia about financial experts and who has the attitude of financial services, I will choose which one?
You surely know which is my choice.