Friday, February 27, 2009

Goodwill - simple way to Value

Pepsi used a very simple and effective way of calculating Goodwill. After the Satyam issue Goodwill Valuation by using the financial statements seems to be less reliable.
Pepsi did a survey where it went to people and asked will they buy a Rs 10 Pepsi cold drink bottle. When the reply was 'Yes'. They asked the same person by showing another bottle will he buy it for Rs 10 (This bottle was the same cold drink bottle as one shown before with a difference that it didn't have a Pepsi tag on the bottle).He said NO. Then they reduced the price and asked if he will buy at Rs 9. Again the answer was NO. They reduced the price and finally the person said he will buy the cola bottle at Rs 5. So Pepsi said Goodwill of the company is Rs 5 per bottle. By putting a tag of Pepsi people are ready to pay an extra ampunt of Rs 5 every bottle.
What an innovative way to value Goodwill!!!

Saturday, February 14, 2009

Prayers

A boy was admitted in a hospital for high temperature. The next day in the hospital he asked his mother for a cup of ice cream. Since he was suffering from high temperature mother refused as it would have made matters worse. Boy was pretty adamant on having an ice cream at that instance. Boy was upset with his mother. Mother did the right thing and yet had to see her child upset with her.

Many times we pray to god for certain things but get upset when we don't get what we had demanded for. God always does the right thing for us in that particular situation. We need to have faith in God and continue with our prayers and let him give us in a way which may trouble us in the short run but will always be beneficial in the long run.

What we think is the correct solution for the problem very often is not the right solution. Many of us get upset if we don't get the desired results. What we desire may not be the correct solution for the problem.