(Political) Gridlock is Good!

It seems that there is always much dialogue about how lack of action on the part of congress is to blame for the economic problems of the USA; if only this or that politician was elected, then America would rise back to prosperity and everything would be peaches and cream again. Many people believe that the government can/should do the following:

-make people’s lives better
-“create jobs”
-stimulate economic growth
-decide moral values of the people

These are ideas that go against everything this country was founded on. Do you think the Founding Fathers of the US would have identified as either “Republican” or “Democrat”? I would strongly disagree. Read the constitution: I think you’ll find it basically says “live and let live” and “people need to be protected FROM the government, not BY the government”.

The preceding paragraph aside, let’s think for a moment about the idea that the government has the ability to stimulate growth. Really? Think about who is in congress/the white house/local governments. These people are generally not brilliant scientists, innovators, or business owners; those who add to society and ultimately stimulate economic growth. The less time that politicians spend decision-making lowers the chance that they’ll make stupid policy choices (which is quite frequent).

That’s all I’ve got.

(Days Sales Outstanding) and its Importance in Credit Analysis

DSO: = (A/R/Credit Sales)*#of days since credit was issued

Where A/R=accounts receivable (the money owed to the borrower by its respective customers) and Credit Sales (what you, creditor, are owed by borrower).  This formula is a gauge of the average collection period as it tells you how efficient a company is at turning sales into cash.  If they are efficient, it means they more likely to be able to repay their creditors. 

So: Low DSO=Healthier company=Happy creditors


That’s all I got.


I recently got a job with Daltile, a subsidiary of Mohawk Industries, as a credit analyst.  My job duties (as far as I have learned) will consist of determining the creditworthiness of borrowers (tile/flooring subcontractors) and giving out credit lines based on that analysis.  I plan on learning the theory behind this credit research in order to provide more useful information in terms of business skills for this blog.  This job seems like a good foundation for banking/finance so I’m very intrigued and confident that I will be able to learn a lot and pass on some lessons to the website…