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Assets and liabilities: How are your numbers?

By: Dr. James Philpot

James Philpot photo
James Philpot

Professional athletes are constantly evaluated by their numbers. A quarterback has a completion percentage, a pitcher an ERA. So how are your personal financial numbers?  In my previous column (Sept. 27), I discussed the mechanics of constructing a personal balance sheet. In this column, I address common financial ratios for evaluating your personal balance sheet.

As in sports, ratios allow us to summarize two or more numbers into a statistic that we can interpret and use in financial decision making. Typically we compute a financial ratio from our balance sheet, then interpret it relative to a common benchmark and/or our own financial goal or position in life. Four useful numbers in evaluating your balance sheet are: net worth, debt-to-assets ratio, emergency fund ratio and the investment assets-to-gross pay ratio.

The only absolute dollar value among our four measures, net worth equals total assets minus total liabilities. Net worth represents the total value of equity an individual or family has accumulated and is often the first stop for analysis by professional financial planners, with higher always preferred to lower. The Federal Reserve’s 2013 Survey of Consumer Finances reported that the median household net worth in the U.S. was $81,200, down slightly from the previous survey in 2010.

The proper way to evaluate net worth is relative to your financial goals and position in life. If you are 62 years old and planning for a long retirement, $81,200 is a troublingly low net worth because this amount will not support much of a retirement. Conversely, let’s say you are a 26-year-old medical resident with negative net worth (perhaps due to student loan debt). In this case even a reasonable negative net worth is not troubling, because you are young and have high expected earning capacity to build net worth. Net worth grows when we spend less than our take-home pay and/or when we invest in appreciating assets.

The debt-to-assets ratio indicates the proportion of our total asset value claimed by all of our creditors and equals total debt divided by total assets. Financial planners consider lower values of this ratio to be better. Ideally as we age, we will pay off student, home and other loans and also have invested in appreciating assets — thus reducing the value of this ratio over time.

The emergency fund ratio measures our ability to use cash assets to weather a short-term financial setback like a job loss or unexpected expenses. This ratio is computed as total cash assets divided by expected monthly expenses, and the output unit is number of months. Most experts recommend 3-6 months as a benchmark for this ratio, as it allows continuation of a standard of living for a reasonable period of time.

Finally, the investment assets-to-gross pay ratio measures progress toward a long-term savings goal like retirement. This ratio equals total cash and total investment assets divided by annual gross pay. Planners interpret this ratio as an index, with a larger number indicating better goal progress. For example, in evaluating a 30 year-old’s retirement savings, a ratio value of 0.6-0.8 is reasonable; a 55 year-old’s value should be closer to 10.

These ratios can be computed annually and compared to their prior year’s values to mark your progress toward financial goals.

This article appeared in the November 28th edition of the News-Leader and can be accessed online here.

Dr. James Philpot is a certified financial planner and is associate professor of finance at Missouri State University.

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Bears Business Brief: Exploring master limited partnerships

By: Dr. Jeff Jones 

Jeff Jones, Ph.D.
Jeff Jones, Ph.D.

As interest rates have hovered near record lows for nearly a decade, many investors have increasingly sought alternatives to fixed-income securities in order to provide them with steady cash flow. One such investment alternative is something called a master limited partnership, or MLP.

MLPs are an alternative to the traditional corporate form. To qualify to use the MLP organizational form under IRS guidelines, an entity must derive at least 90 percent of its income from specific sources. Among these sources are activities related to the mining, transportation and storage of natural resources. As such, the majority of MLPs in the U.S. are formed in the energy sector.


There are several advantages to investing in MLPs. The first benefit, which is perhaps the most attractive feature to many investors, is that MLPs typically pay very high yields.  This may provide the investor with a relatively stable series of cash flows that is higher than what can be achieved by investing in bonds or dividend-paying stocks.

A second benefit is the potential tax advantages of the MLP. Since MLPs are organized as a partnership (instead of a traditional corporation), they avoid the issue of double taxation. The MLP does not pay income taxes, but the gains are instead passed through to the partners (which are called “unitholders” in the case of MLPs). Moreover, the structure of MLPs can often lead to a majority of the cash flow received by investors being treated as a return of capital (instead of dividends), and frequently the cash flow received can be offset by other tax deductions such as depreciation or energy tax breaks.

A third advantage is that MLPs are generally publicly listed securities that trade on major stock exchanges, such as the NYSE and NASDAQ. Since MLPs are publicly listed, it is generally much easier for an investor to sell their interest in an MLP versus an interest in a traditional partnership.


Despite the advantages, there are several risks associated with MLP investment. First, since MLPs are highly concentrated in the energy sector, an investor should not plan to devote their entire portfolio to MLP investment. Additionally, if energy stocks are also part of an investor’s portfolio, investing in MLPs may lead to overexposure to the energy sector.

Second, despite the fact that units of MLPs are publicly traded, there can still be issues with liquidity. The volume of trading in MLPs is generally much lower than that of stocks, hence investors may not be able to sell their units in a timely fashion at a reasonable price. This is particularly true in times of financial market stress, or when credit markets dry up. MLPs generally distribute most of their cash to investors, so they rely heavily on credit markets to provide them with cash.

Finally, there is added tax complexity for investors with investments in MLPs. Since the investor is technically a partner, they will receive a K-1 partnership form, which is more complex than a Form 1099 used to report the receipt of stock dividends or interest income. Moreover, if the MLP produces its income in multiple states, the investor may be required to file multiple state income tax returns.

To determine if MLPs are an appropriate investment for your situation and portfolio, consult with your financial and tax advisers.

Jeff Jones, CFA, CFP, CPA, CMA, CFM is an assistant professor of finance at Missouri State University. The views expressed in this article reflect those of the author, have been distributed for educational and informational purposes only, and should not be construed as investment advice or a recommendation of any specific security, strategy or investment product. 

This article appeared in the November 21st edition of the News-Leader and can be accessed online here.

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Interior Design Students visit KC Showrooms

students at showroomStudents in the American Society of Interior Designers Student Chapter (ASID) visited Kansas City, November 4-6.  The group visited several interior design companies and showrooms including ISC Surfaces, KDR and Roth.  The group also toured the Nelson Atkins Museum of Art.

“I found the trip very rewarding, especially with the projects I have going on this semester,” states Megan Clause, MSU ASID President.  “ It was great to be exposed to these different products in the showrooms that we often don’t have access to her in Springfield…I also found it helpful getting to talk with different designers at the showrooms and the different vendors from KDR, a design resource room.  Getting the chance to connect and network with people in the field while still in school is so rewarding.”

The Department of Technology and Construction Management hopes to provide more professional opportunities student group photolike this for Interior Design students in the future.

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Student Success – 2015-2016 COB Scholarship Banquet

group photo
Event Emcee Dr. Dale Moore, Dean Bryant, former Dean Bottin, and President Smart welcome students and families to the banquet.

The College of Business is dedicated to highlighting the hard work of its students. Each fall, the COB Scholarship Banquet is held to honor student achievement. The 2015-16 Banquet, held November 13th at White River Conference Center, showcased the high level of academic achievement among College of Business Students.

At this year’s event, 195 scholarships totaling more than $220,000 were awarded. Family, friends, faculty, staff and many generous donors from across the country attended the event. COB is grateful to have such generous donors and appreciates the support they provide to so many students.

Congratulations to all of our well deserving recipients!

Computer Information Systems Departmental Scholarships

  • Dr. Neil E. Swanson Memorial Scholarship: Charles Kovacs
  • Woodfin C. Garrett Scholarship: Charles Kovacs
  • Computer Information Systems Department Scholarship: Dylan Dragon, Micah Meadows, Patricia Richardson
  • Laura Roman Dodd Memorial Scholarship: Madison Avery
  • Mary and Irene Francka Scholarship: Madison Avery

Finance and General Business Departmental Scholarships

  • Risk and Insurance Management Society (RIMS) Scholarship – Ozark Area Chapter: Jared Huffman, Tracy Luzadder, Charles McIntyre
  • Risk and Insurance Management Society (RIMS) – Ozarks Chapter Annual Scholarship: Alexander Karns
  • David L. Hadler, Energy Insurance Mutual Risk Management & Insurance Scholarship: Alexander Karns
  • John E. and Mary Jo Patton Insurance Scholarship: Annabelle Kacmar
  • John E. Patton Outstanding Student Leadership Scholarship: Elizabeth Sivill
  • Ozark Chapter Society of CPCU Scholarship: Kathleen McCaffrey, Trese Roediger
  • Robert and Edith I. Garst Scholarship (Baker Chair of Insurance): Gavin Hall, John Talarico
  • American Family Insurance Scholarship: Trese Roediger
  • Baker Insurance Chair Scholarship (William G. and Retha Stone Baker): Lindsay Dill
  • Clair Plank, CLU, ChFC, MSFS Scholarship: Gavin Hall
  • Retha S. Baker – Baker Chair of Insurance Scholarship: Gavin Hall, Annabelle Kacmar, Trese Roediger, Lana Wheelus, Christopher Willingham
  • H. Jr. and Earlene Coleman Scholarship: Spencer Adams
  • Insurance Association of the Ozarks Scholarship: Kathleen McCaffrey
  •  MO PRIMA Risk Management Scholarship: Lindsay Dill
  • Missouri Employers Mutual Scholarship for Risk Management and Insurance: Caileb Newby
  • American National Property and Casualty Companies Actuarial/Insurance Scholarship: John Talarico
  • Vencil J. Bixler Professional Insurance Scholarship: Charles McIntyre
  • Missouri Insurance Education Foundation Scholarship: Mallory Chapman
  • State Farm – Baker Chair of Insurance Scholarship Gavin Hall
  • Robert L. Sanditz, CLU, Insurance Scholarship: Cameron Anielak
  • CPCU Society of St. Louis Insurance Scholarship: Lana Wheelus
  •  National Association of Insurance and Financial Advisors – Springfield Scholarship: Andrew Parker
  • BKD Wealth Advisors Aspiring Chartered Financial Analyst Scholarship: Mengdi Yang
  • Financial Management Association (FMA) Scholarship: Erik Stratman, Pete Timmerman
  • Greater Springfield Board of Realtors Career Development Award: Chelsea Classick
  • Manley Real Estate Scholarship: Chelsea Classick
  • Floyd L. and Martha L. Sweeney Scholarship for Real Estate Studies:Austin Fuemmeler
  • St. Louis Chapter of the Risk and Insurance Management Society Scholarship: Spencer Adams, Mallory Chapman, Gavin Hall, John Talarico, Christopher Willingham

Management Departmental Scholarships

  •  Robert L. Trewatha International Scholarship: Lauren Cassell
  • Robert L. Trewatha Management Scholarship: Kathleen Haarmann, Audrey Mathis
  • Ralph and Carol Williams Management Scholarship: Audrey Mathis
  • Don Wessel Management Scholarship: Daniel Sikora
  • Management Faculty Scholarship: Alyssa Howe, Vincent Mantia, Aimee Mitchem, Matthew Ward

Marketing Departmental Scholarships:banquet room

  • Marketing Department Scholarship: Noah Hendel, Aaron Moutray
  • Robert B. Noble Award for Excellence in Advertising: Noah Hendel
  • Robert E. Low Scholarship:   Julie Dix
  • Springfield-Branson National Airport Logistics and Transportation Scholarship: Julie Dix
  • Fred J. Mertz Scholarship: Julie Dix, Brandon Johnson
  • William D. Perry Scholarship in Marketing: Madison Upton
  • Office Concepts of Missouri – Steven W. Moore Sr. and Shanda L. Moore Scholarship: James Freihofer
  • Precious Moments Marketing Research Scholarship: Cody Applegarth
  • John J. Brinkmann Marketing Scholarship: Andrew Beavers

Merchandising and Fashion Design Departmental Scholarships

  •  Paula Kindrick Hartsfield Family and Consumer Sciences Education Scholarship: James DeGreif
  • Dr. Joyce J. Waldron Family and Consumer Sciences Education Scholarship: James DeGreif
  • Floy T. Burgess Memorial Scholarship: James DeGreif
  • Association of Clothing and Textiles Scholarship: Ramona Perkins
  • Family and Consumer Sciences Education Scholarship: Sidney Johnston
  • Gertrude Altemiller Nelson Endowed Scholarship Fund: Nicole Mease
  • Jacquelyn Ledbetter-Freshman Scholarship:Loren Berner
  • Jo Anne B. Booher Scholarship: Rachel Livesay

 Technology and Construction Management Departmental Scholarships

  •  James W. Gardner, Jr. Memorial Scholarship: Victor Mitchell
  • Missouri Concrete Association (MCA) Scholarship: Dustin Steiro
  • Ted Smith Endowment Scholarship: Ronald Antonini
  • Doyle Kemper Memorial Scholarship: Brendon Mueller
  • EFCO Corporation Scholarship: Siyu Shen
  • Howard Moore Group, Inc. Scholarship: Ryan Barnoski
  • Orin R Robinson Scholarship: Amber Struemph
  • Wilbur Shank Memorial Scholarship: Terry Campbell
  • Kansas City Area Healthcare Engineers Scholarship: Lucas Mueller, Brandon Bodenhamer
  • Strong Memorial Scholarship: Cody Stout
  • Technology and Construction Management Department Scholarship: Jordan Ford
  • Roger G. Killian Memorial Scholarship: Seth Sherertz

Graduate Student Scholarships

  •  Dr. James C. and Mary Lee Snapp Graduate Scholarship: Ronald Hill, Tyler Andrews, Kelsey Bagwill, Stella Falconer
  • Carr Foundation – MBA Scholarship: Stephany Lebron Garcia, Ann Murrell
  • The Robert W. and Charlotte Bitter Graduate Scholarship:Ronald Hill

College of Business Scholarships

recipients and donors
Student recipients and generous donors take a moment to get a photo.
  • Dr. James C. Snapp Memorial Scholarship: Steven Beyer, Adam Blind, Teiah Clamme, Rebecca Harmon, Marissa White
  • Ronald and Carol Bottin Scholarship: Ashley Lay
  • James W. Dykes Award in Courage and Determination: Patricia Richardson
  • Sandra M. Sullentrup Memorial Scholarship: Matthew Ward, Rachel Wharton
  • Kenneth E. and Jane A. Meyer Scholarship: Laura Conway, Dalton Fischer, Dillon Mattox, Andrew Parker
  • John L. and Rita M. Bangs Scholarship: Christopher Kuhn, Matthew Miller, Katelyn Walter
  • Cleo and Mona Casady Leadership Scholarship:      Rae Sutton
  • Raikos Scholarship: Tara Randles, Brad Okerstrom, Christopher Kuhn, Iliana Rangel
  • Ray and Susie Forsythe – COB Scholarship: Dylan Jones, Jerry Penner
  • Dr. R. Stephen Parker College of Business Scholarship: Joseph Woolford
  • John W. and Nancy R. Cunniff Scholarship Fund: Lamar Colvin, Haylee Ebersole, Amber Struemph
  • Don Calame Student Fund: Jessica Albright, Megan Clause, Alexa Eghbali, Kathleen Haarmann, Bailey Smith, Julia Swoboda, William Thompson
  • Dave and Arlette Elliott Scholarship in Business: Megan Hefner
  • Dave and Rose Heaser Scholarship in Business: Janis Richars
  • College of Business Culturally Diverse Student Scholarship: Azoria Bramlett
  • College of Business Non-Traditional Student Scholarship: Nicole Johnson
  • College of Business-Upper Division Scholarship: Quincy St. Laurent
  • College of Business Transfer Student Scholarship: Kathleen Haarmann
  • Dr. Orie A. Cheatham Scholarship: Julie Tulla
  • Dr. Robert W. and Charlotte K. Bitter Endowed Scholarship: Shelby Adams, Alexandra Dell’orco, Crystal Eastburn, Olivia Fernandez, Benjamin Hogan, Erin Holt, Alex Holtermann, Taylor Johnson, Mark Karlsen, Alexander Lauberth, Taylor Plaster, Haylea Stoker, Kelsey Strauss
  • Ray Love Memorial Scholarship: Crystal Eastburn, Alexander Lauberth
  • Edward Linski Memorial Scholarship: Brittaney Davis
  • Inmon Memorial Annual Endowed Scholarship: Hannah Armato, Luke Johnson, Caileb Newby
  • Jack Henry & Associates, Inc. College of Business Scholarship: Tanner Courtney, Nicholas Coyne, Hannah Hobbs, Campbell Keele, Hannah Longust, Jeremy Wright
  • Joe F. Carroll Memorial Scholarship: Rick Casada
  • Marlyn Graff Rhoades Memorial Scholarship: Chris Choate, James Freihofer, Cameron Griot, Devyn Hale, Weston Marquart
  • Roberta Cope Turner Scholarship: Aaron Parkhurst
  • Steven J. Bengfort Memorial Scholarship: Chase Gabriel
  • Roy T. and Mildred Durr Wilcox Scholarship: Madison Avery, Jordan Bailey, Stephanie Barrett, Dara Delgado, Danielle Evans, Kelsea fink, Charlene Kean, Jamie Lechner-Gibson, Cecelia Reicher, Jonathan Swearengin, Abigail Wardenburg, Erin Watkins

 School of Accountancy Scholarships  

 (Awarded September 24th at the School of Accountancy Scholarship Banquet)

  • Accounting Club Scholarship: Abigail Hailey
  • Barry Lewis Memorial Scholarship: Fangyuan Zheng
  • Bill J. and Helen L. Bass Memorial Scholarship: Maya Scheibal
  • BKD LLP Scholarship: Krista Brooks, Tanner Courtney, Lindsay Dill, Tara Randles
  • Brent J. Bowman Endowed Book Scholarship for the School of Accountancy: Lindsey Carles, Christina Clark, Molly Lucas
  • David and Donna Henderson Scholarship: Ronald Hill, Elizabeth Sivill, Quincy St. Laurent, Alexandrea Usery
  • David B. and Sandra D. Byrd Masters of Accountancy Scholarship: Clint Caselman
  • David H. Covey Memorial Scholarship: Lindsey Carlsen
  • Elliott Robinson & Company Accounting Scholarship: Kelsea Fink
  • Heartland Regional Council of the IMA Scholarship: Cara Debney
  • Jack E. Weimer CPA, P.C. Accounting Scholarship: Kelsea Fink
  • Kathryn and James Golding Scholarship: Veronica Shultz
  • KPM Scholarship: Kara Forrest
  • KPMG Scholarship: Tyler Kleeschulte
  • Pendleton Family Foundation Scholarship: Kelsea Fink
  • School of Accountancy Scholarship: Jiayue Chen, Aaron Dennis, Jacob Hill, Yanpeng Hu, Alex Jefferson, Yufei Kou, Gabrielle McCollum
  • The Whitlock Company Scholarship: John Taylor
  • William K. Parmley Memorial Scholarship: Yuhe Su




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Bears Business Brief: Process of communication can be complex and unsuccessful

By: Amy Stokes, Ph.D.

head shot Amy Stokes

The communication process is complex and often unsuccessful; but when your company’s sales depend on using advertising to connect with potential consumers, it is critically important to get it right. While advertising is somewhat notorious for its failed attempts, there are a few tried-and-true creative strategies to help guide the process.  In the next few paragraphs I will provide an overview of six techniques and explain how to implement them.

Unique selling proposition: This strategy highlights an important distinguishing characteristic that sets your brand apart from competitors. While it may seem self-explanatory, I’m going to say it anyway: In order for this strategy to be appropriate and successful, your brand must actually have a distinguishing characteristic. There is a difference between distinguishing characteristics based on sustainable competitive advantages versus those that can be easily replicated by competitors. For example, price-based sales or promotions are usually not sustainable because they can be easily matched by competitors. Marketable, sustainable competitive advantages include exclusive distribution or licensing agreements, trademarks or patents, customer service or warranties, and employee experience or knowledge.

Brand image: In the absence of an actual or functional difference between your product or service and your competitors’, you can use creative messaging to create a perceived difference. By adopting cultural signs and symbols in order to create a particular image, consumers will believe your product is different based on its positioning and associations. Looking at fitness centers in Springfield, the functionality of Genesis Health Clubs and the Pat Jones YMCA are very similar; however, they have created starkly different brand images with equal success by associating themselves with different workout motivations and life stages.

Emotional: Reaching consumers on an emotional level often leads to higher levels of message retention and brand recall. The great thing about emotional appeals is the variety of emotions that are available to work with. Common emotions evoked in advertising messaging include fear, guilt, humor and accomplishment. To illustrate, retailers and car dealerships frequently use fear appeals when stressing the limited-time nature of their sales. They lead consumers to fear missing out on a great deal or not being able to get the same product at the same price if they don’t buy right then.

Resonance: This strategy involves finding patterns in your target audience’s experiences and matching your communications to those experiences. In other words, telling a story that resonates with your consumers based on previous experiences they have had. Continuing with car dealerships to illustrate this approach, because so many consumers have experienced pushy salespersons and strongly dislike the negotiation process, some dealerships use that experience to communicate their difference in approach by highlighting practices like non-commissioned employees and offering upfront pricing.

Generic: When using a generic approach, you attempt to do the exact opposite of a unique selling proposition and instead attempt to communicate that there is no distinguishable difference between your brand and others in the product category. If this seems nonsensical, it is actually used extensively, but is only appropriate for brands that are not the market leader and want to close the perception gap between them and the dominant brand. When leading brands have created their dominance based on brand image, a generic approach helps to weaken the strength of the market leader. While not a local business, the best example of this is done by 21st Century Insurance comparing themselves to the market leaders Geico and Progressive.

Pre-emptive: A pre-emptive statement is a generic claim that any brand could use, but one brand makes it with superiority, effectively making it seem like a unique selling proposition. It only really works if you are the first one to make the claim so that others attempting to make comparable appeals appear like unoriginal copycats. Chesterfield Eye Works is a good example of a local company using this strategy. While any optometrist can perform exams and write prescriptions in order to enhance student athlete performance, Dr. “Coach” Holmes is the first to really make that claim in his advertising messaging. As a result, he created a perceived differentiation out of functional similarity.

Hopefully these strategies will help guide your creative messaging and support your other branding initiatives.

Amy Watson, Ph.D., is an assistant professor of marketing at Missouri State University and has experience as a media coordinator in private industry. Stokes has a specialty in advertising and media issues and writes about those areas as well as general consumer behavior.

This article appeared in the November 14th edition of the Springfield News-Leader and can be accessed online here.

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