I suspect I'm about to regret this, but here comes the electricity analogies for accounting, the appendix to your 8 lines.
A balance sheet is like charge on an array of loosely connected capacitors (or batteries). I know I got a pile of electrons (and holes) stacked up somewheres, and the balance sheet shows where. All "accounting circuits" are electrically neutral and the number of electrons and holes on your balance sheet MUST match.
A income sheet is like looking at the individual cell results from a solar array in parallel. So you got 10 aH out of that entire array, now which cells contributed more or less of their share, and which battery cells soaked up more or less than their share of charge?
The cash flow sheet tells you how fast electricity energy moved, essentially a power. So your 99 watt-hour laptop battery holds 99 watt-hours, but how many times did you fill and empty it in a year, how many times did you turn over the energy in the battery?
Once you learn op-amps you can do some hideous analog computing analogies, but don't call up what ye can't put down, so I'm not even trying that. So a financial derivative is like a sample and hold ckt connected to a four quadrant analog multiplier and a log/antilog ckt, or maybe this is just too far of an analogy not to be nonsense.
The purpose of accounting (aside from mere control fraud prevention, at least optimistically) is to squirt out some ratios to help make management decisions. Much like the transistor collector current is not terribly interesting nor is the emitter current at a large enough scale, but the ratio is exciting because back in the old days people made management decisions to select one transistor over the other based on the ratio of those currents, which is essentially how good of an amplifier it is. Much as income statment vs cash flow ratio tells you a lot about a retail establishment compared to its peers, how long "stuff" is sitting on shelves before getting sold. That current ratio is a bipolar transistor alpha ratio which no one uses anymore. Kind of like how people used to make investment decisions based on the ratios in the famous Graham and Dodd book, but no one has invested on fundamental ratios in, gosh I donno, 30 years? Its been a long credit bubble and fundamentals don't matter in a credit bubble.
I have no idea what a credit bubble is in EE terms. Some twisted analogy of trapped charge on a Teflon dielectric resulting in an integrator getting saturated eventually, but until it does the ride is pretty exciting.
I would extend this post with my traditional HN automobile analogy but I'm not sure there's enough liquor in the world to achieve that level of debauchery. So ... Keynesian economics policy sees the role of the government as like an electronic speed control on the automobile, uh, kinda.
A balance sheet is like charge on an array of loosely connected capacitors (or batteries). I know I got a pile of electrons (and holes) stacked up somewheres, and the balance sheet shows where. All "accounting circuits" are electrically neutral and the number of electrons and holes on your balance sheet MUST match.
A income sheet is like looking at the individual cell results from a solar array in parallel. So you got 10 aH out of that entire array, now which cells contributed more or less of their share, and which battery cells soaked up more or less than their share of charge?
The cash flow sheet tells you how fast electricity energy moved, essentially a power. So your 99 watt-hour laptop battery holds 99 watt-hours, but how many times did you fill and empty it in a year, how many times did you turn over the energy in the battery?
Once you learn op-amps you can do some hideous analog computing analogies, but don't call up what ye can't put down, so I'm not even trying that. So a financial derivative is like a sample and hold ckt connected to a four quadrant analog multiplier and a log/antilog ckt, or maybe this is just too far of an analogy not to be nonsense.
The purpose of accounting (aside from mere control fraud prevention, at least optimistically) is to squirt out some ratios to help make management decisions. Much like the transistor collector current is not terribly interesting nor is the emitter current at a large enough scale, but the ratio is exciting because back in the old days people made management decisions to select one transistor over the other based on the ratio of those currents, which is essentially how good of an amplifier it is. Much as income statment vs cash flow ratio tells you a lot about a retail establishment compared to its peers, how long "stuff" is sitting on shelves before getting sold. That current ratio is a bipolar transistor alpha ratio which no one uses anymore. Kind of like how people used to make investment decisions based on the ratios in the famous Graham and Dodd book, but no one has invested on fundamental ratios in, gosh I donno, 30 years? Its been a long credit bubble and fundamentals don't matter in a credit bubble.
I have no idea what a credit bubble is in EE terms. Some twisted analogy of trapped charge on a Teflon dielectric resulting in an integrator getting saturated eventually, but until it does the ride is pretty exciting.
I would extend this post with my traditional HN automobile analogy but I'm not sure there's enough liquor in the world to achieve that level of debauchery. So ... Keynesian economics policy sees the role of the government as like an electronic speed control on the automobile, uh, kinda.