Tag: finance

Senior defensive backs Nate Lowis and Andrew Ralph reflected on the past four years at WashU with Assistant AD for Communications Chris Mitchell.

What made you come to WashU?
NL: I came to Wash U because I could participate in a high level of athletics while receiving a world class education and remaining close to home.

Andrew Ralph

AR: I came to WashU for the chance to play college football and to receive a great education. WashU gave me the opportunity to excel both on and off the field, and I knew from the people I met that WashU was a great fit for me.

What have you learned from playing under head coach Larry Kindbom for four years?
NL: I have learned to always trust yourself.

AR: Coach K was a big part of my decision to play at WashU in the first place. While I’ve learned a lot from him about football (probably more special teams’ info than I could have imagined), he’s taught me a lot more about how to be a great man. The thing that’s always stuck with me is how much Coach K cares for each of us, not only as players but as people.

What is your favorite part of playing defense?
NL: I get to be the one making the hits.

AR: I love the energy and emotion that go into every play of defense. Whereas offense is a bit more composed, a lot of defense is effort and will. I’m a pretty passionate player, and being on the defensive side of the ball allows me to play with my personality all the time.

How special is it to be named a team captain?
NL: It is an honor and a very humbling experience to be named team captain.

AR: It was really special to be named a captain for this football team. These guys are some of the brightest and best people I’ve been around, and for them to choose me as a captain is an honor.

What is your favorite football memory at WashU?
NL: My favorite memory of Wash U football is making the playoffs last year.

AR: My favorite WashU football memory came from last year. After beating Chicago on their field, we found out that we had won both the UAA and the SAA, the latter giving us an automatic birth to the playoffs. For all that to happen in front of family/friends was a really cool moment.

What are your future plans upon graduation from WashU?
NL: I plan on attending law school next year. I am currently in the process of applying and I hope to remain in St. Louis.

AR: After graduating from WashU, I hope to work for a consulting firm. I’m also interested in the business side of sports.

Guest Blogger: By Caroline Ballard, Sports Information Intern

Perhaps you’re a marketing manager eager to launch a new campaign to freshen up an existing product. Or maybe you run a manufacturing operation and believe a second production line would boost the bottom line by increasing output.

In both of these scenarios, you would need to get your ideas past someone in finance.

Todd Milbourn

“The finance function in most organizations is often viewed as the area that always says ‘no’ to resource requests,” said Todd Milbourn, Olin’s vice dean and Hubert C. and Dorothy R. Moog Professor of Finance.

Unfortunately, one way non-financial managers can assure they get a “no” would be to misunderstand what their counterparts in finance actually do.

“It is important to have a perspective on what finance managers are trying to achieve,” Milbourn said. Toward that end, he teaches a daylong seminar aimed directly at the non-financial manager titled, appropriately enough, “Finance for Non-Financial Managers.”

The idea: Bridge the gap in understanding between the finance function and other corporate leaders. “Having this bridge is critical as finance touches everyone in the organization,” he said.

Once managers take the course, Milbourn can’t guarantee participants will always get a “yes” on their requests, “but they’ll know how to better position their own requests to increase their odds of getting funded.”

How non-financial managers can “increase their odds”

• Become conversant in the language.

  “Managers from outside of finance are often intimidated by the language and terminology of finance,” Milbourn said. “That limits their effectiveness in the organization.” If you can speak the language, you work from a common frame of reference. Milbourn’s course walks participants through a variety of scenarios demystifying concepts such as “shareholder value,” “cost of capital” and “return on investment.”

• Understand your company’s big picture.

  Know how to read and interpret a balance sheet and other financial statements. Learn how to relate the company’s strategy to the numbers. Milbourn walks participants through the financing, performance, and continuation decision of a company that participants will help finance themselves, putting them in the shoes of actual investors.

• Understand what finance managers are trying to achieve.

  “The finance function is responsible for allocating resources to a number of initiatives,” Milbourn said. “This balancing act is typically one that cannot say yes to every request.” An appreciation for how finance tracks a company’s historical performance and forecasts its future performance can help you frame your initiatives for the finance manager.

• Appreciate why sometimes, the answer is “no.”

  You can’t win ’em all. Understanding the components of value creation for shareholders means you may learn how to pick your battles when you have an idea. “This seminar will give participants a sense of the ‘portfolio problem’ financial managers face,” Milbourn said.

The next session of “Finance for Non-Financial Managers” is set for Sept. 19, 8 a.m. to 4 p.m. at the Knight Center. Visit Olin’s website for registration information and for our other executive education offerings.

Guest blogger: Kurt Greenbaum

Operational risk can have a crippling effect on a company if not managed properly. This is especially true in the financial services industry. Banks and investment firms must pay close attention to variables that have the potential to impact their operations, not only from the breakdown of technology and processes, but also from a personnel perspective. The responsibility of managing one’s money is great, and the inability to properly anticipate and manage potential risk factors can have a devastating effect, all the way up to the industry level. A case in point was the subprime mortgage crisis of the late 2000s, which led to a nationwide economic recession.

Mike Pinedo, the Julius Schlesinger Professor of Operations Management at New York University’s Stern School of Business, is an expert in risk management research, particularly in the context of the financial services industry. In his presentation at The Boeing Center’s 13th annual Meir Rosenblatt Memorial Lecture, he described the main types of primary risks in a financial services company: market risk, credit risk, and operational risk. Ops risk, which is the risk of a loss resulting from inadequate or failed internal processes, people, or external events, may be the most important factor, he claimed.

Pinedo goes on to describe various types of operational costs such as human resources, I.T. investments, and insurance costs, and how they impact corporate risk management. For example, rogue traders can pose a risk if they make inadvisable decisions, so some investment firms choose to take out insurance against that possibility. Other types of ops risk include transaction errors, loss of or damage to assets, theft, and fraud, all of which can pose a catastrophic risk at the industry level. Pinedo adeptly inserted anecdotes into his lecture to provide examples of these risk factors playing out in the real world.

The annual Meir J. Rosenblatt Memorial Lecture brings the “rock stars” of supply chain and operations to the Danforth Campus every fall. Each lecture gives prominent thinkers and practitioners alike the opportunity to hear an expert in the field highlight emerging trends.

This lecture series was established in 2003 to honor the memory of Meir J. Rosenblatt, who taught from 1987 to 2001 at Olin Business School as the Myron Northrop Distinguished Professor of Operations and Manufacturing Management. A leader among faculty, Rosenblatt often won the Teacher of the Year award at Olin and authored the book “Five Times and Still Kicking: A Life with Cancer,” having battled cancer multiple times throughout his life.

For more supply chain digital content and cutting-edge research, check us out on the socials [@theboeingcenter] and our website [olin.wustl.edu/bcsci]

• • •

A Boeing Center digital production

Supply Chain  //  Operational Excellence  //  Risk Management

Website  • LinkedIn  • Subscribe  • Facebook  • Instagram  • Twitter  • YouTube

Investors and analysts were surprised when Chipotle posted a 167 percent jump in earnings for the second quarter on July 25. The fast food burrito chain has been battling bad press and consumer fears after a several outbreaks of food-related illness linked to its franchises.

According to Chipotle’s corporate news release, second quarter diluted earnings per share increased 167%  ($2.32 per share), restaurant sales increased 8.1% and revenue growth jumped 17.1% compared to the same period last year. Revenue for the quarter was $1.17 billion, driven by new restaurant openings, according to the company.

U.S. News & World Report asked Todd Milbourn, Vice Dean and the Hubert C. & Dorothy R. Moog Professor of Finance at Olin, to comment on the beleaguered company’s unexpected earnings rebound:

Milbourn
©Photo by Jerry Naunheim Jr.

“Chipotle posted a second-quarter earnings figure that was apparently more than enough for investors to overcome any negative sentiment,” related to the outbreak, said Milbourn.

U.S. News & World Report claimed Wall Street analysts were expecting EPS of $2.18 on revenue of $1.19 billion.

Chipotle reported that comparable restaurant sales improved primarily due to an increase in customer visits, along with an increase in average check as a result of a reduction in promotional activity. The company opened 50 new restaurants during the quarter, and closed two restaurants, bringing the total restaurant count to 2,339.

Link to U.S. News article

Rich Ryffel, Olin’s senior lecturer in finance is the co-founder and co-chair of the annual Municipal Finance Conference hosted by the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution. This year’s conference will be held July 17-18 in Washington D.C. Olin is partnering with Brookings as well as the Rosenberg Institute of Global Finance at Brandeis International Business School and the Harris School of Public Policy at the University of Chicago to host the 6th annual conference.

Rich Ryffel

The event invites academics, practitioners, issuers and regulators to come together for panel discussions and paper presentations of the latest research in municipal finance. The conference does not charge an attendance fee, but must be attended in person.

To find out more about the muni fin meeting, we asked Rich Ryffel a few questions:

Q: What happens at the Brookings Municipal Finance Conference?

RR: The goal of the conference is to bring researchers and practitioners together to both encourage better research in municipal finance and to encourage the adoption of more scientific policy and practices.

Q: What have been the changes in muni capital markets since the Great Recession?

RR: There have been significant changes in the municipal market since the Great Financial Crisis (GFC).  This includes the consolidation of intermediaries and reduced liquidity, more regulation, more disclosure and less innovation.

Q: Are there ever any surprising revelations from research shared at the conference?

RR: Lots of surprises – practitioners are often surprised to see how the data can reveal conclusions that are not obvious from anecdotal experience. Likewise, researchers are surprised to see how subtleties in the market can be masked when simply crunching large data sets. Thus, the reason to put the two groups together.

Q: Why should people involved in municipal finance attend the conference?

RR: Opportunities abound for education and improvement to better understand market behavior and use that knowledge to create better policy and more efficient government.

Link to more information on the 6th annual Municipal Finance Conference.

Performance-based pay plans for corporate executives are becoming more popular as stockholder activists and board members demand more accountability. Gopalan, tells Nicklaus,”that’s a big step forward from the days when insider-dominated boards often handed out discretionary bonuses based on little more than a desire to keep the big boss happy.” Gopalan also notes that the executive labor market has become more competitive.

Link to article: “It was a good year for St. Louis CEOs, but not for all of them”

In another column, Nicklaus predicts executive pay could become a hot political issue in 2018. A new rule under the Dodd-Frank Act goes into effect next year that requires “companies to compare their chief executive’s pay to that of an average worker.”

Professor Gopalan says the ratio doesn’t have much merit. “It will give political fodder to politicians who don’t like corporations, but I don’t think it’s an economically meaningful number to focus on,” he says.

Link to article: “Pay ratio will be hot political issue next year”