LINE NOISE News from Chez Diesel 5 August, 1989 CHANGING NETWORTHS Oh deary, deary me! Haven't you all been getting upset at the sudden rise and fall in your networths - and the consequent change in the Conclave! Loud have been the cries of 'Bug!' and the whinges to 'Bella....!' Well, just stop and think for a moment about how networths are calculated. Up till now, only fixed assets have been included in the equation; stats, ware- houses, spybeams, bank balance etc. But now, one extra factor is used to work out your networth - how well your company has been doing - and THAT is what has been causing these spectacular changes. The value of the shares you own in your company is, obviously, going to change depending upon how well (or how badly!) it performs - just look at the changes seen on the Stock Exchange. Very basically, at the moment your shares at valued at the Profit last cycle multiplied by 10, so if your company made a profit of 2 meg in the last cycle, that's an extra 20 meg going on your networth - and a difference of 2 meg between the profits of one cycle and the next means a 20 meg change in your networth! Now let's look at what has been going on with company cycles. A cycle lasts 10 days. During the first cycle nothing really happened, because the accounting code hadn't been written. In the second cycle, the profit you made from running the factories was enhanced by the command which sucked all the 1 meg factory balances into the company - and then, of course, all of you set your levels at far below that so it was reflected in the profit. In the third cycle, for the first time the profits shown are an accurate reflection of how your company is doing. Therefore, as you enter the fourth cycle (and most of you, who bought your companies as soon as they were implemented, are at this stage in the cycles) the profit last cycle will drop, as it no longer takes into account the false results produced by the factory balances - and hence, your networth will drop by quite a substantial amount. Of course, the way is clear for all kinds of creative accounting to manipulate which cycle you show your profits in. Fed already has its first legal expert - Gizmo - and how long will it be before the first firm of accountants set up business? Now, is everybody clear on what's going on? You all understand why there's been a dramatic change in your networths? You're going to stop whinging and moaning? Good!