Behind the Numbers



By Jim Thompson

Perhaps this is more about moving your career forward in a macro sense as compared to performing excellent engineering professional work in a micro sense as your only career accomplishment.

This comes from many years of experience. I have seen many projects executed nearly flawlessly only to be shut down in a few years because the management of the company completely had the wrong ideas. At that point, too late, the markets affirmed their bad guesses.

In your role as an engineer, I'll challenge you to dig a little deeper and gain an understanding of what your corporation is trying to do. If this is a public corporation, the data is easily available, often on your company's website.

Read all the press releases and read between the lines. Read all the SEC (Securities & Exchange Commission in the US, other countries have other names for these governing bodies) filings. You may not understand them to start with, but at one point you did not understand calculus, either. You can become fluent in this material.

Then there is one number that rises above all others; Free Cash Flow or FCF. This is the money left over that your company holds and to which no one else has a claim. It tells you plenty.

We track this number here at Paperitalo Publications for many corporations. Just going back to the first quarter of 2023, there were about USD 3.7 billion announced in new projects. Of the group of projects covered here, only 2 of the companies' projects in this first quarter group had current FCF that would cover their costs. In other words, the others were borrowing, and borrowing big, against future projected earnings in order to accomplish their projects. It is something like a government going into debt.

Think about it. They are trusting their strategic marketing data to assure the ultimate success of these projects for they don't have the current cash to cover them.

No wonder I have seen many projects start with hope and end up on the trash pile less than a decade later.

What is your opinion? Drop me a line at jim.thompson@ipulpmedia.com. I would like to hear from you.

And by the way, I come to mills and talk to various departments about many subjects. To arrange my custom visit to your mill, just email me at jim.thompson@ipulpmedia.com or call me at 678-206-6010.