Let there be light

Learn the language of finance and you’ll be able to participate in business at an entirely new level.

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I think Joseph Mabila’s IQ was near genius level. His capacity to remember detail and his creativity were amazing. He was a man on whom you could completely and utterly rely. He was our cook. His meals were legendary. His problem was that he was illiterate. Swaziland generally gets a bad press, but there are many outstanding success stories in the country which set standards well beyond anything else in Africa.

One of these is the Sebenta adult literacy and life skills programme. Established in 1960, it is still active, despite the fact that the call on its services has diminished as schooling has grown. Joe attended a Sebenta programme, and we had the privilege of witnessing the change. It was as if he had been blind all his life and could suddenly see. Street signs which he’d always recognised took on a new meaning. Newspaper headlines, billboards, his own pay slip were things of wonder to him.

Not to mention the recipe books, of which he’d been in awe, standing on the kitchen shelf. My wife had to help with many of the words, but he experienced an explosion of culinary creativity. His value as a chef – as opposed to a mere ‘domestic cook’ – shot up. Not long after, and quite correctly, he moved to a local restaurant. I was delighted for Joe. He deserved it and much more. He died a few years ago, before his time, and we mourn his passing deeply.

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Now – to the point. It’s no oversimplification to say that transformation of this magnitude takes place in the life of anyone who develops literacy skills of any form, including the one I’ve been discussing over the past few weeks – financial literacy. The mysterious numbers and concepts, used routinely by accountants, suddenly take on new meaning and become tangible signals of success or failure.

The newly literate manager is now able to participate in discussions about the business at an entirely new level. Naturally, in a subject as complex as modern finance, developing financial literacy is a process. In the first stages of working at understanding accounting, acronyms and concepts, such as EBIT (earnings before interest and tax), EPS (earnings per share), HEPS (headline earnings per share – totally different from earnings) and OPEX (operating expenditure) – can be hard work.

However, as the light shines through and understanding dawns, these measures become just as exciting as tons per hectare, or milk per cow. Make no mistake, I’m no accountant and still mix up debits and credits. But if someone mentions goodwill, depreciation or amortisation I have a pretty good idea of what they’re talking about. If I don’t, I have the confidence to ask them to give it to me slowly in plain English.

You won’t get financially literate by reading this or any other column on the subject. There’s only one way. Do a course specifically designed to give you the tools you need. One of the best for agriculture is offered by the Johannesburg School of Finance (www.jhbfin.co.za). Start your voyage of discovery into the world of finance!

Contact Peter Hughes at [email protected]. Please state ‘Managing for profit’ in the subject line of your email.