Ahead of the Curve Read Free Page A

inventory and you get a pretty good idea of how fast the company is shifting product. A ratio of one tells you that the company holds exactly as much inventory as it sells in the period covered by the balance sheet. In a fresh foods market, for a balance sheet covering a year, you would expect an extremely high ratio as inventory is replenished on an almost daily basis. But in a high-end jeweler’s, that ratio might be below one, as each item is held for a long time before it finds a buyer.
    “The supermarket’s going to have the highest inventory turnover,” said Jon.
    “Or the meat packer,” said Jake.
    “The commercial bank will probably have the most current assets and liabilities for deposits and withdrawals,” said the Taiwanese. I could tell Justin was as baffled as I was, from the way he kept tugging at his hair and chin.
    “Wow,” I exclaimed. “I wonder who could make 16.7 percent profit margins. Jewelry stores?” I was just trying to say something.
    Everyone kept scanning the numbers, trying to find meaning. We looked at debt over assets. A company with lots of fixed assets, like factories, would most likely have more debt than an advertising agency, whose main assets were human beings. It is one of the least appealing features of company accounts, and perhaps their greatest flaw, that humans appear only as costs on income statements, never as assets on a balance sheet. Unlike a factory, humans, of course, can get up and walk out the door at any time, hence banks’ reluctance to lend to advertising agencies, law firms, or architectural practices. No chemical plant is going to say to hell with it, default on its loan, and go join an ashram.
    We squinted at net sales over net assets, trying to figure out which companies were generating the most sales from their assets. Again, the ad agency, with nothing but some rented office space and few assets, should have had a high ratio, indicating lots of sales from few assets, whereas the manufacturer would have had a lower one. After an hour, we thought we had nailed down half of them. After two hours, we were up to eight. As the third hour rolled by, it felt as if we would never get there. Just when we thought we had identified the airline, it started to look like the automaker again. Or could it be the maker of name-brand quality men’s apparel?
    I was beginning to feel what would become a familiar set of sensations. The life-sapping effect of fluorescent lighting. The vague stench of Styrofoam and Chinese noodles drifting up from the waste basket. Dehydration and itching skin. The realization that half the people in the room were checking e-mail and surfing the Web, which explained why any question lingered in the air for seconds before stimulating an answer. Through the window, I could see the hulking shadow of Harvard Stadium in the blue-black night. What had begun as a rat-a-tat exchange of thoughts had slowed to dreamlike speed. Words and ideas drifted between us in slow motion. It was nearly midnight when we gave up.
    The air was still hot and thick when I walked out to my car. I drove home to our new apartment in West Cambridge, ten minutes from the business school. There was no one on the streets, and for the first time in a decade I wasn’t living in a major city. My dog, Scarlett, greeted me at the door. She had been waiting patiently on the steps in the dark, and the moment I arrived she burst out to pee on the sidewalk. The lock on the front door was broken. It was unsettling sleeping in an empty apartment in a town I barely knew. My life had been reduced to school and this room with an air mattress on the floor and a picnic table from Costco in the corner. I lay there hearing every single noise, a tree branch scratching against my window, the cars passing outside, their lights shining on the ceiling above me. It took me hours to get to sleep that night as a single question churned around my mind: What have I done?
     
 
We rejoined the battle