We launched our first cohort of HBX CORe in June 2014. Two years later, we checked in with a few members of our pioneer cohort to see how CORe has made a difference in their lives.

Opening Doors in the Building Industry

I study Architecture, Construction Engineering and Management at Illinois Tech in Chicago. I also work as a design and construction intern at the Duchossois Group. CORe was instrumental in my decision to study construction management and helped me to better understand the potential roles I could play within the building industry.

A plethora of possibilities started to open up after taking the course. Previously, I had only truly imagined myself practicing the technical aspects of my education but CORe helped me see and start to work towards my place as a leader within the building and infrastructure industry.

Economics for Managers was influential in helping me understand how leadership within various industries could make strategic decisions to create value. It was incredibly fascinating to finally understand the constant balance of proactive and reactive decisions and strategies business leaders used to understand markets and as a result people.

Rounding Out Liberal Arts Educations 

CORe enabled me to become more business-focused; I always knew that I wanted to enter the business world, but coming from a liberal arts background I needed to expand upon my experience to understand what that really meant. Competing against undergraduates from business institutions can be intimidating, but understanding even basic terminology can help put your mind at ease.

CORe gave me the background and confidence to pursue a business career after college. It even helped shape an independent study that I conducted during my senior year at Bowdoin, looking at Corporate Social Responsibility Initiatives at four major banks in the United States. I do not think I would have applied this interest to corporate banks had I not had an introduction to the foundations of the business world from HBX CORe.

As I began interviewing for full-time positions during my senior year, HBX CORe definitely helped me stand out among my peers. I truly understand the value of a liberal arts education, and that is something that I would never replace. However, coming out of a liberal arts institution with some sort of an introduction to the business world is unbelievably valuable.

Since HBX CORe was still so new when I completed the program, I really caught the eye of many interviewers and companies interested in learning more about it. The knowledge that I gained helped me tremendously as I interviewed and looked into different companies to join upon graduation.

I know that CORe has set me up well for a future in the business world and I would love to pursue an MBA in the future.

Giving Engineers a Competitive Edge 

When I took HBX CORe, I was in my sophomore year of college and had begun actively thinking about my future career. I had heard of all of the great advantages of having both a science and business background but I was worried that I would struggle if I took business classes in school.

CORe really broke down all of the business concepts I had vaguely heard of and introduced new material in the clearest way with unique examples. My experience with the CORe program gave me the confidence to pursue my Business Administration minor and I plan to apply for an MBA in the future.

Having CORe listed on my resume has really helped me stand out to potential employers. Every internship interview I have had since participating in this program has involved me explaining this program and its benefits. Most employers are surprised to find an engineering student with a background in business so it usually makes me seem more impressive and gets me closer to getting through the door.

I plan to become an Industrial Engineer and explore how to improve complex systems and processes. I know that pursuing knowledge of business with my background in engineering will shape my career path in unexpected ways.

Instilling Confidence to Pursue Careers in Financial Consulting

CORe helped me solidify my knowledge of financial analysis and introduced me to the world of business analytics. Coming from a primarily non-finance background, HBX definitely provided me with the confidence needed to continue pursuing a career in financial analysis and consulting.

HBX has been discussed in every single interview I’ve had since completing the program and I’m fairly certain that the HBS brand helped me land a few of those interviews. A few times the program has been met with skepticism, but when you begin to explain how the structure of the program and the platform itself are unique compared to traditional online coursework people begin to warm up to it and ask more questions. It really boils down to it being the best online replication of a real-life classroom that I’ve ever experienced. When I reflect upon the experience, it actually feels like I was in a real classroom.

Creating Relevant Conversations with Prospective Employers

I took CORe for an introduction into the language of business that would complement my STEM education. I was doing mostly technical classes at school, but I was interested in business as well. After the program, I realized I wanted to pursue a career in technical management and business.

I actually decided to apply for my upcoming position partly because of CORe. I got interested in Amazon after the case study about them in one of the program modules. Learning about some of the principles behind their operations motivated me to do in-depth research about the company.

The case study was part of the conversation when I first connected with recruiters during a career fair and CORe also came up during an on-site interview. I explained how the certificate would help me transition from a very technical background into a more business oriented position, and it must have worked because I got the job!

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What can CORe do for you?

Balance sheets are one of the primary statements used to determine the net worth of a company and get a quick overview of it's financial health. The ability to read and understand a balance sheet is a crucial skill for anyone involved in business, but it's one that many people lack.

When it comes down to it, the balance sheet is just a more detailed version of the fundamental accounting equation:

Assets = Liabilities + Equity

You've probably heard at least some of these terms before but what do they actually mean? Let's break it down:

Assets

The assets are the operational side of the company, basically a list of what the company owns. Everything listed there is an item that the company has control over and can use to run the business. 

In a sense, the left side of the balance sheet is the business itself – the buildings, the inventory for sale, the cash from selling goods, etc. If you were to take a clipboard and record everything you found in a company, you would end up with a list that looks remarkably like the left side of the Balance Sheet. The assets are what allow the company to run.

Liabilities 

Liabilities and equity make up the right side of the balance sheet and cover the financial side of the company. This is a list of what the company owes. With liabilities, this is obvious – you owe loans to a bank, or repayment of bonds to holders of debt, etc. The interest rates are fixed and the amounts owed are clear. These are also listed on the top because, in case of bankruptcy, these are paid back first before any other funds are given out.

Equity

Below liabilities on the balance sheet, you'll find equity, the amount owed to the owners of the company. Since they own the entire company, this amount is intuitively based on the accounting equation – whatever is left over of the Assets after the liabilities have been accounted for must be owned by the owners, by equity. These are listed on the bottom, because the owners are paid back second, only after all liabilities have been paid. 

However, unlike liabilities, equity is not a fixed amount with a fixed interest rate. This means that any time the value of assets change – perhaps you receive more in cash from a sale than the value of the inventory you sold, or you were forced to write-down a truck that was involved in a collision and no longer works – the value of equity changes. 

Because the value of liabilities is constant, all changes to assets must be reflected with a change in equity. This is also why all revenue and expense accounts are equity accounts, because they represent changes to the value of assets. 

Make sense?

So, to recap, you'll find the assets (what's owned) on the left of the balance sheet, liabilities (what's owed) and equity (the owner's share) on the right, and the two sides remain balanced by adjusting the value of equity. And there you have it!

Want to dive deeper into balance sheets, assets, liabilities, and equity? Check out HBX CORe, the online fundamentals of business program from Harvard Business School!

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For centuries, the p-value has been the gold standard of statistical testing. Whether it’s determining whether a specific result is significant, or deciding whether a study is publishable, the science and business communities have used p-values as a main criterion. If the p-value is less than 0.05, we reject the null and conclude that something is going on. If the p-value is greater than 0.05, we fail to reject the null and conclude that there’s nothing to see here; move along.

However, over the past few years, more and more disciplines have been questioning the validity of the p-value. For example, most of the major psychology journals have either stopped using the p-value as a criterion for publication, or have banned its use entirely.

The p-value doesn’t give any indication of how important the results are (that is, it doesn’t measure the magnitude of the effect); it doesn’t even give an indication of how likely it is that the results are due to more than random chance. All a p-value communicates is how likely a result would be IF the phenomenon under review WASN’T there. If you find this confusing, you’re not alone; it’s a very peculiar way of looking at a question.

Let’s take a concrete example. Imagine scientists wanted to find a connection between jelly beans and cancer. They could collect a lot of data about people’s jelly bean consumption habits and the incidence of cancer, and then perform statistical analysis to see if there’s a relationship. Well, spurious correlations are abundant in the real world, so we’d expect at least a slight connection, just by random chance.

The question is: are the patterns we’re seeing in the data GREATER than what we’d expect by random chance. If there were no correlation between jelly beans and cancer, each sample would give a slightly different result, but they’d all be pretty close to showing no relationship. At a certain point, they’d be far enough from showing no relationship that we’d say “Hey, it’s REALLY unlikely that we’d see this if there were no relationship; so there probably is one.”

Usually, our threshold for REALLY unlikely is 0.05. If the null hypothesis were true (if there were no relationship between jelly beans and cancer), we’d only see results this extreme 5% of the time. We consider that unusual enough that we could say, hey! There’s something going on here.

This means we would imagine that if we do 20 studies where nothing is going on, we’d expect, on average, that one of the studies would end up statistically significant at p<.05, just by chance. Let’s say we do 20 studies, and three of them end up significant. On average, one of the three is just due to chance, and the other two are the result of an actual phenomenon. However, we have no way to identify the one that is just random chance. Furthermore, a result of p=.04999 and result of p=.05001 are virtually identical; but one is “significant” and the other is not.

This doesn’t mean p-values are worthless. But it does mean that researchers (and consumers of research) need to be thoughtful when interpreting them. A p-value by itself doesn’t tell you much, and simply knowing that a result is “significant” tells you even less. More useful is an estimate of the effect size, or a review of multiple studies looking at the same phenomenon.

To learn more, check out this great post from PLOS.

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Taking HBX CORe while working is akin taking up a second job, moonlighting in the glow of your computer screen on Tuesday and Wednesday nights, frantically trying to absorb as much information and contribute enough discussion to stay ahead for the weekly quizzes. Throw in the unforgiving business school application cycle, and you have quite the challenge! The CORe pre-Round 1 crunch of applying to business school, which forces you to truly evaluate your life’s journey and future intentions, transforms itself into yet another full-time job for your already overworked brain to handle.

During the June 2015 cohort of HBX CORe, I jumped into all three – helping a freshly FDA-approved product ramp up for launch at work, preparing applications for five Top-15 business schools, and completing the 2.5-month commitment to enhance my knowledge through HBX CORe. I apparently wanted more stress, and had inadvertently pre-planned a solo trip to Europe right before my HBX final. Through trial by fire I gained a great deal through the process. Here is what I learned about how to best approach applying to business school at the same time as taking HBX CORe.

1. Strategize and know what you’re getting into, early

Applying to business school properly is a grueling, multi-step, multi-month process, and that’s after you get past soul-searching, career-building, and the wonderful GMAT. Starting early made all the difference for me; for Round 1 deadlines in September/October, I began hashing out my application strategy in April. This gave me enough time to thoroughly think about my career and life, read up on application strategies, listen to admissions podcasts, truly consider where and if the MBA would strengthen my path, and figure out my career goals. Having a concrete end-game that I was both excited about and could speak to made the application process far easier. Being prepared early also allowed me to feel comfortable taking on HBX in the middle of the process.

I felt up to it because I was prepping well for applications and learning to prioritize my time. Based on the 10-week course, I knew I’d have to tackle at least two quizzes per week, with variable lengths of time for each module. Since we were only the third public cohort, there wasn’t much previous experience to tap into; one advantage now, however, is more statistics, knowledge and advice floating around from HBX CORe alumni on how to do well in the course. Regardless, juggling multiple commitments like these will never be a cakewalk, so be prepared.

2. Be organized

Once I had my business school goals set, I had to tackle the essays - and everything you've heard about each school’s prompts being drastically different is true. In parallel with all this, I had developed an overly complex spreadsheet to track my goals, brainstorms, school research, essay outlines, and most importantly to manage my time. Because I had HBX CORe mixed in right in the middle of this process, I had to be very efficient with my hours spent after work and during my weekends to make sure I kept everything in line without tearing my hair out. My spreadsheet kept an ideal schedule of when I’d complete the multiple essays per school, fill out each application, and when I’d hit the “Submit” button for each, and even accounted for my vacation. Just having this written down helped ease my mind and keep me on track, even though I didn’t follow it as well as I’d expected.

3. Put yourself out there and interact

I spent time attending MBA networking events and visiting schools in both California and New York, an essential effort to take for the application process. The strongest encouragement and most helpful feedback I received during this process was often from current students. You’ll find that the MBA community is eager to help potential applicants as much as they can, because the whole sphere you’re getting into is a true pay-it-forward type of community. Learn to put yourself out there, meet people, and harness this energy and spirit as much as possible. I was able to get great essay feedback, resume input, interview prep, and decision advice all from current students, who became my best resources.

Not surprisingly, I found the same to be true about my fellow HBX CORe cohort; all of the people I met online or in person were willing to help even the most remote strangers pull through this experience and come out the other side together. The local San Francisco HBX group I set up met once every few weeks to grab drinks and blow off steam, and some of us ended up exchanging questions and answers paired with late-night camaraderie for the rest of the course. It made the experience that much more fulfilling and constructive, especially during the final exam.

4. Be flexible, and be prepared to sacrifice

You will end up sacrificing a lot during this process. For each person it could be different aspects: time, money, sleepy, or sanity. Both applying to business school and HBX CORe will test the limits of how much you can stretch yourself. The last month or two before submission was a chaotic blur. It was a humbling process, as I had to juggle my HBX CORe final, essay drafts, my trip, and an increasingly busy work schedule. I cut my Round 1 school list to five in order to save some sanity, and more importantly to make a better quality application to the schools I truly wanted to target. I took days off work to do school visits and study up for the HBX CORe final, because weekends simply weren’t enough. I also said goodbye to my weekends for two full months.

5. Manage your time

With HBX CORe, even my best time predictions of module length and difficulty would go awry and I’d spend hours marching towards dusk working to advance my module completion percentage bit by bit. Approaching 10-20 hours of lectures and quizzes prior to the Thursday deadlines forced me to budget ample time to avoid a Wednesday night panic. If it was Monday night and I wasn’t at least 75% done with my modules, I learned quickly that I needed to shift into overdrive and later readjust my habits. I set a rule for myself that I would finish everything by Tuesday night, to account for any unforeseen issues - work travel, getting sick, Wednesday happy hours, etc.

For my essays, I set an (admittedly ambitious) schedule of finishing two essay drafts per week, based on three drafts to completion and two to three essays per school. I quickly fell behind on this and learned to re-adjust and prioritize. My scheduling lessons from HBX kicked in and I became efficient with my time, especially after I finished my HBX final. As a result, after September I had completed a decent set of written, peer reviewed, peer destroyed, and rewritten essays for all five schools in time to submit for and conquer Round 1.

6. Maximize the HBX experience and its benefits

I give HBX a great deal of credit for whipping my business school application process into shape. Aside from time management, the constant reflections and discussions within the HBX modules generated a stronger ability to gather my insights and put them into words, which proved especially useful for brainstorming my essay topics and plans of attack. The collaborative nature of the HBX platform fostered a unique community that allowed me to flex my networking chops. Through this, I gained a good snapshot of the diverse field of HBX students and their industries as well, a unique factor to a global course.

HBX also strengthened my application directly. Going through a well-developed course by HBS will catch any adcom’s attention; it shows initiative and interest in the business field, as well as attests to quantitative strength and conceptual understanding of what one would be presented with in the opening months of the MBA program. It gives a stronger basis of knowledge for those of us not from a business or accounting background; being an engineer, I had zero experience with accounting and only a basic economics foundation. HBX presented information in these areas in such an effective way that I came out with a confident understanding of not just the concepts, but the applications of accounting and economic principles.

7. Push towards success!

As is evident, the HBX experience began to pay off even in the middle of the program, working my hard and soft skills to develop myself into a more well-rounded person. It continued paying dividends after completion; it gave me much more confidence going into applications and interviews, and all the interviewers who questioned me about HBX were genuinely intrigued and impressed by both the program and that I had taken the initiative to complete it as a personal and professional experience. I was proud to have completed the rigors of HBX CORe, and I made sure it was known. In the end, I was admitted to my top two choices of programs with scholarships, and am extremely excited to join the UCLA Anderson School of Management, Class of 2018 in the fall!

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Digging through a basement bargain bin of books, who could resist the urge to purchase Ellen Shell’s book, Cheap: The High Cost of Discount Culture, at 50% off of the cover price? A paradox to the book’s title, of course, the decision to purchase the book was an inevitable tango with a good bargain.

In a society dominated by cheap prices, we are increasingly becoming travelers in a world of foreign and unfamiliar prices. The “Age of Cheap” makes it harder to infer if the price we pay is actually the deal we believe it to be. It’s stressful to constantly renegotiate new norms for what constitutes a fair price while our relationship to pricing is positioned on a slippery slope of value and perception.

The Bottom Line on A Good Bargain

Does paying less make us wealthier? The satisfaction of finding a deal can create great personal joy, but in the long run, cheap prices can point to breaks and flaws in the value chain. The bargain price that we see affixed to clothes, food, or other items could be the result of workers earning below a living wage or materials gathered through unsustainable practices.

Cheap comes at a cost. If the consumer doesn’t pay this cost, who covers it? Workers, suppliers, and the environment are a few easy targets that help carry the burden.

Who is Ultimately Shouldering the Cost

The cost of cheap doesn’t always get paid by something or someone else either. You, as a consumer, might ultimately pay for a cheap price. Maybe you’ve purchased an inexpensive piece of furniture, then spent an entire weekend assembling it. In this case, the cost of cheap has been passed along to you by doing the assembly work. You become an extension of the factory, albeit likely lacking some critical skills and tools.

Consumers work for free, if the price is right, but are inadvertently paying for a cheap price. The initial price might make us more satisfied, but the extra labor doesn’t create wealth.

Let's Reevaluate

It’s hard to put down the 75% off coupon and walk past the deal of a lifetime, but how can we re-evaluate our relationship to price? Knowing that all of our purchases have consequences for ourselves, the environment, and the companies that make our goods, to name a few, we can begin to set our own mandate for how we consume.

We can choose to ignore a bargain and shop with our own standards in mind. The standards we choose are up to us: craftsmanship, quality, sustainability, transparency, etc.

Putting aside the flashy discount sticker, what’s your story with price? What standards guide your decisions to consume?

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Interested to know more about willingness to pay and other fundamental business concepts?

 

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Who do you think the next President of the United States will be? What about the winner of the 2018 World Cup? You probably have a guess, or at least a list of possible results. But no one actually knows for sure. 

Some situations have such complex dynamics that even think tanks and advanced modelling software have trouble understanding them. For example, imagine you are trying to estimate the box office results of an upcoming major film. You have some historical data on how similar films have done at the box office, but every film is different and is released in a different economic climate. You want to incorporate all of the various factors that affect the success of a film: advertising expenditures, the cast, demographic appeal, date of release, and so many other variables that you couldn’t possibly list them all, let alone measure them.

It turns out that one of the best predictors of box office results is the Hollywood Stock Exchange, or HSX. The HSX is a virtual market where anyone (you and I included) can sign up, get H$2 million in fake Hollywood dollars, and start betting on all kinds of Hollywood-related outcomes (e.g. Oscar nominations and box office results). The way it works is simple: The Jungle Book is currently selling for H$187.51 which means that the market expects The Jungle Book to earn $187.51 million in the first four weeks of its release. If I think The Jungle Book will actually make more than this, I can buy this MovieStock® at H$187.51 and then I can cash out my MovieStock four weeks after release for however much the actual box office earnings were (divided by $1 million and in Hollywood dollars). Just like a real stock market, the price of a MovieStock fluctuates with trading and I can always sell my MovieStocks for their current value before the cash out date.

The HSX is a great example of a prediction market. Prediction markets are markets where people can trade stocks that are tied to the outcome of an event. In a prediction market, the current trading value of a particular stock can be interpreted as what the public (or group of traders) collectively predict the outcome of the event to be. 

These prediction markets can be quite powerful. There is a significant amount of literature showing that HSX quickly absorbs new information (such as casting decisions) and accurately predicts box office results. HSX also has a history of correctly predicting Oscar nominations. There are dozens of prediction markets for events ranging from elections to sporting events with thousands of stocks being traded in real time. Many use real money and most are open to the public. While we don’t recommend “gambling” in these markets, we do recommend checking them out and thinking about their value and their limitations.

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Want to learn more about prediction markets as well as other fundamental business topics?

 

Kayla Lewkowicz participated in the January 2016 cohort of HBX CORe. This is the final installment of a series of reflections inspired by her experiences. The original post appeared on her blog here, and the whole series is available here.

As my time with my cohort comes to a close, I wanted to pause and reflect on what I learned, and what I'll take with me moving forward in my career. HBX was incredibly time-consuming but ultimately, very rewarding and insightful.

To make a decision, look at all the factors

When you make a decision, you have to know everything that's at stake. Building a team of people that can help you see beyond what you want to see--your inherent bias--is essential to make an informed decision. Economic and market forces, cultural shifts, the political landscape, and how your product is received all impact the financial statements and the data. You can't look at one aspect of your business to know whether or not you're successful, but you do have to know what's most important.

Related: Know What's Most Important

This means that judgment can be more important than data collection or quantitative analysis. Though the numbers may tell one side of the story, they can be just as subjective as survey comments or customer sentiment. As a manager and decision-maker, taking a holistic view of all of the possible data points--qualitative and quantitative--and then looking beyond what the data says to get to the "why," will make you more successful.

Be an experimenter

Rather than going with "what feels right," use data to make a decision.

Most people know this is the right way to do it, but have trouble in practice not because they're data illiterate but because failure is psychologically painful. An experimental mindset--where you're tinkering and tweaking--encourages understanding your customer, your audience, and your performance in a well-rounded way.

Related: When In Doubt, Test & Learning to Experiment

To do this right, we need to ask questions. Experiment. Get curious. Test. Otherwise you'll never learn anything, and never ship products that really innovate.

Relationships matter

Where your business fits in the market matters, because its relationship to other companies matters. As consumers, it's how we figure out what we want; as managers, it's how we know how we're performing. In business, everything is tangled up in so many factors that it's often not clear what's what. After all, you can't find the solution if you don't know the problem.

Related: Kickstart Your Business With Networks & It's All Related

Making decisions isn't always so easy as "because of this, we should do that." Whether that's price, logo, or investing decisions, the world isn't so linear. With such high stakes, we need to separate what's important from what's not, and what's related with what's not. We can do that by experimenting, asking questions, or collecting data. Knowing that relationships matter, and seeking them, helps us make more holistic business decisions (see above) and maybe even predict the future.

Would I recommend HBX?

In short, definitely.

As a liberal arts student with very little in the way of business background, I feel more comfortable and familiar with the language of business. In our quarterly earnings presentation, I understood the CFO for the first time. I've been able to take a new look at social media data and performance for the Twitter handle I manage. And ultimately, I have a better understanding of the principles that make up business decisions.

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Interested to know more?

 

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Imagine a man who sells apples on the side of the road out of a cardboard box. Every morning, he buys some apples at the grocery store, then walks to his corner. He sells the apples for $1 each until he runs out, then heads home for the day.

For the apple seller, accounting is easy. If he wants to know his balance sheet, he looks down in front of him. There are some apples (his inventory) and a cardboard box (his property, plant, and equipment). If he reaches into his pocket and counts the number of dollar bills he has, that’s his cash. Together, those are all of his assets. His equity is exactly equal to his assets – he didn’t borrow any money to buy the apples or the cardboard box in the morning, so he has no liabilities. He can do this whenever he wants to get the current balance sheet of his business. His income statement is just as easy – he remembers how much money he had in his pocket before he left home this morning, and counts how much he has now. The difference is his net income for the day.

One day, a truck of workers passes by and they offer to buy his entire box of apples, but they’ll need to pay him tomorrow. For the apple seller, this is a great deal – he could go home early if he agrees and spend more time with his family, or he could use the money to buy more apples and make a lot more money today. But he would need to keep track of how much the workers owe him for the apples, so he writes a note on the side of his cardboard box. The next day, as he’s buying apples, the man at the counter in the grocery store says, “You know, you buy apples from me every day. You’re my best customer – why not just pay me once a week? That would be easier.” So he starts writing on the side of the box how many apples he buys each day, so he knows how much to pay at the end of the week.

This is an example of accounting in action. The marks on the side of that cardboard box are the beginnings of T-accounts – recording his accounts receivable and his accounts payable – and this apple seller is still running an extremely simple operation. If he opens a bank account, because he’s worried about being robbed while he stands on the side of the street, he’ll need some way to record that. If he decides to hire his son to sell apples two streets over, he’ll need to keep track of how many apples his son has sold and how much to pay him. Suddenly, he can’t generate his balance sheet just by looking in his box.

Very quickly, the benefits to accounting become apparent. Accounting gives us a standardized way to keep track of all of these things, so you can quickly and easily understand your business.

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Want to learn more about accounting, economics, and analytics? Check out HBX CORe, an interactive online program from Harvard Business School! 

 

Some companies have incredibly powerful brands – Forbes calculates the value of Apple’s brand, the most valuable in the world, at $145.3 billion. The value of the next two most valuable brands are much less, but still impressive (Microsoft at $69.3 billion and Google at $65.6 billion). Yet none of these three companies list this incredibly valuable asset - their brand - on their balance sheets. They’ve spent years to make these brands strong – why not record their value?The money measurement principle of accounting suggests that only items that have a certain defined value are tracked in the balance sheet, which is why brands don’t appear. But does that make sense? Forbes has clearly provided a value for these brands, and Forbes is a respectable publication – couldn’t the companies just list this value? 

Not really. First of all, the brand valuation provided by Forbes can fluctuate a lot from year to year. Apple’s valuation has changed by 17% in one year! If Apple tracked this in their Balance Sheet, they would need to make dramatic shifts in their equity from year to year as the value of their brand changed, and that doesn’t provide for very accurate or comparable accounting statements. Secondly, Forbes has nothing to lose by being wrong. If they’re off by a few billion dollars in brand valuation, it isn’t going to hurt the bottom line of Forbes. 

For this reason, valuations of brands are not counted in the balance sheet. However, if a company is acquired, the acquiring company may pay a considerable amount more than the accounting book value of the company, in part to purchase a valuable brand. In this case, the value will not change year-to-year, and the bottom line of the acquiring company will be hurt if they are wrong – so we can be reasonably certain that the value is correct. Now that there’s certainty to the value, this value can be tracked on the balance sheet, as part of the entry known as “goodwill” – a sort of catch-all account for all value that an acquisition holds above and beyond its basic book value (of which brands may only be one part).

Visit Forbes to see more powerful brands: http://www.forbes.com/powerful-brands/list/

I start everyday by doing a crossword puzzle, and I spend most of each day working on statistics (including supporting HBX CORe’s Business Analytics course). So I was excited when fellow crossword and data lover Saul Pwanson starting compiling a database of crossword puzzles published in various venues since 2003.A couple of weeks ago, puzzlemaker Ben Tausig (who edits the wonderful American Value crossword) noticed something interesting about some of the grids. A statistical analysis confirmed his suspicions: a significant number of puzzles published in USA Today or syndicated by Universal Crossword appeared to have been plagiarized. Interestingly, both the USA Today puzzle and Universal are edited by the same person, Timothy Parker.

Regular solvers know that it’s not unusual to see a specific word show up in multiple puzzles, even words like ETUI or ANILE that rarely show up anywhere else. However, the USA Today and Universal puzzles often contained long phrases that had appeared in previous puzzles. In some cases, almost the entire grid was identical to an earlier puzzle. Overall, more than one in six USA Today puzzles contained 25% or more material that had been published elsewhere. So did more than one in twenty of the Universal puzzles. For comparison, less than one in one thousand New York Times crosswords matched other puzzles that closely.

So far Parker, who is known as the most prolific editor in the crossword world, has denied any wrongdoing. However, the scandal continues to gain steam. Even the normally conflict-averse Will Shortz (editor of the New York Times crossword) has called this “an obvious case of plagiarism.” Interestingly, Parker has taken a sabbatical while his employer, Universal Uclick, investigates.

To learn more about the scandal and how crossword puzzles work, check out this great article by FiveThirtyEight: http://fivethirtyeight.com/features/a-plagiarism-scandal-is-unfolding-in-the-crossword-world/

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