c. myers’ Educational Video Series
January 29, 2020
4 minute read – C. myers’ Napkin Math is an educational video series featuring simple, yet incredibly useful calculations that can be done quickly during conversations.
When brainstorming various ideas with your team, you really want to see the financial impact fast! We created our Napkin Math videos to help keep the conversation moving. The primary purpose of the videos is to show the simple math that people can literally do on a napkin to understand ballpark financial performance.
There are several short videos in this ongoing series. Visit our videos page to take a quick look.
Napkin Math: ROA, Asset Growth & Maintaining Net Worth – Demonstrates how to calculate the return on assets (ROA) required to achieve asset growth goals, while maintaining the current net worth ratio. This calculation can help show how ROA, asset growth, and net worth are all connected, including what their impact on each other is.
Napkin Math: ROA, Asset Growth & Increasing Net Worth – Quick math to show what your ROA needs to be to increase net worth and achieve asset growth goals, building on the Napkin Math we introduced in a previous video to calculate the ROA needed to maintain net worth.
Napkin Math: ROA, Asset Growth & Net Worth – Two additional considerations for ROA, asset growth, and net worth—the ability to calculate the ROA required to increase net worth over multiple years, and how the Napkin Math compares to the actual math. See how the calculations we’ve laid out can be easily adjusted—on the fly—to give you the answers you need to keep the conversation going.
Napkin Math: Change in Value for Treasurys or Other Bullet Investments – Need an easy way to approximate the change in the value of bullet investments? This video helps when reviewing the reasonableness of price changes in different rate environments, particularly when looking at net economic value results or considering purchases.
Napkin Math: Change in Value on Amortizing Products – Whether it’s loans or investments, Napkin Math can be used to quickly approximate the changing value of amortizing products based on their average life. The examples used can help when considering purchases or reviewing the reasonableness of NEV results.
Napkin Math: Impact to ROA – Credit union leaders often need to consider the impact of shifting assets, increasing deposit rates, and changing rate environments. This video shows how to quickly calculate the potential impact to earnings of decisions under consideration.
Napkin Math: Yield vs. Value Volatility – This quick calculation can help you evaluate the risk for return when making choices about how to lend or invest.
Napkin Math: Breakeven Point for Early Withdrawing Member CDs – When interest rate risk pressures are ticking up and liquidity concerns on the rise, many management teams may look to lock-up member CDs as a way to address both risks. As you contemplate your strategy, consider using this calculation to help you understand how much rates would have to rise or how much higher of a rate the competition would need to offer for the member to break even and be enticed to early withdraw their CD.
Napkin Math: Marginal Cost of Funds for CD Promotions – In environments where rates are increasing and liquidity is tighter, CD promotions are a commonly used tool. Being able to quickly calculate the marginal cost of funds of new and cannibalized deposits can help decision-makers understand the actual potential cost of a CD promotion.
Napkin Math: How to Quickly Convert Basis Points to Dollars – Have you ever been in a meeting and the conversation bounces back-and-forth between basis points, percentages, and dollars? Navigating the conversations between basis points and dollars can help the financial impact of decisions come to life for non-financial people. This video shows how you can quickly convert to or estimate between basis points and dollars.
Napkin Math: Average Life on a Napkin – Average life is a term used to generally describe the length of a particular product or category on the balance sheet, based on principal repayment. Learn what the average life tells you, and what it doesn’t.
Napkin Math: Value in the Current Rate Environment – In previous videos, we showed you an easy way to approximate the change in value when interest rates increase or decrease for bullet and amortizing products. In this video, we will show how you can use that same approach to help understand how the value has changed in the current rate environment when market rates have changed.
Napkin Math: ROA Impact of Operating Expense Growth vs. Asset Growth – Know how to calculate the operating expense ratio when expense dollars growth outpaces asset growth. Understanding this calculation can be helpful as you’re having strategic discussions about changing patterns in expense growth and asset growth.