We’re going to see how you can play around with equations in such a way that you remember them easily in the exam. It just happens that it’s profitability ratios I’m looking at, but quite frankly, you can try this technique with any equations.

Remember, this is just one way to remember them, But I thought it worth sharing it with you so that you’ve got it as an option.

I still reckon, the best way to approach equations is to try very hard to really understand the subject: where the different elements of the equation have come from, to understand what the equation is for and to really relate it to its context.

I didn’t learn my maths or physics equations at school. Learning parrot fashion isn’t how my brain likes to process and store info. I reckon it’s probably the same for most of us. My brain prefers to understand. And when it does, it remembers effortlessly.

In fact, the more you thoroughly understand and make sense of what you’re trying to learn – the easier it is. I found that I had to really understand equations to make sense of them – where the different elements came from, what they were for, and how they were related to each other. What actually happened was that I would create equations on the spot as I needed them.

Maybe that sounds awfully clever! But I can assure you it’s really not. It was more a question of that being the easiest way for me to do it. I didn’t have to think about it. As long as I understood what I was trying to achieve, what I was trying to do – then it all came together for me when I needed it.

Of course, we all process, store and retrieve information in different ways, but I really think that you’ll find, if you really spend some time getting to the bottom of what the equations are all about, where the different elements have come from, how they’re put together, and what they’re related to, I think you’ll find it much easier. Much, much easier.

When you understand something and can explain it convincingly to someone else – you know you really do understand it. Sometimes we think we know something and it’s not until we open our mouths to tell somebody else – we realise that the ideas aren’t quite as coherent as we first thought.

Financial Services is definitely not my area of expertise, so if I were to have to learn those ratios, I’d have to find some other way to remember them, that didn’t include making sense of them, as per my usual approach.

So I turned them into something, that despite the fact that I really don’t know where the different elements have come from, and I really don’t know how they all relate to each other, I can still recite these equations parrot fashion, having gone to the trouble of making brain-friendly notes. Hopefully this will be useful to you too.

By the way, I’d just got back from playing tennis when I decided to put my mind to these equations. You’d never guess, from the ideas that sprang forth! ☺

The formula was about Profitability ratios. Return on capital employed. Net profit margin and Gross profit margin.

And by way of explanation for what’s coming next – remember – the more ridiculous, the more vivid your images – the more memorable. So with no apology then….

Return on capital employed

I created a stick man returning the tennis ball that’s been served to him. Return on capital employed. And his racket, like mine, is strung with multi-coloured strings. It’s supposed to put the opposition off, though oddly, it doesn’t always work that ways round!

Why have I mentioned that? Surely that’s off-point? Well, no. I’m using my power of association. These are my associations and all help me to remember what I’m learning. You need to use yours, of course.

I drew a surgeon performing an operation, fantasising about how he’ll spend all the money he makes – in other words his profit. Profit from operations!

The third part is: capital employed. I drew something that represented London – our capital. Houses of Parliament, The London Eye and the Gherkin…. And of course, a city gent in his bowler hat, going off to work. He’s employed you see…

So when I put this equation together, or rather, my drawings, representing the different elements of the equation, you’ve got: profit from operations, over, capital employed.

And bingo! Because you’ve used more areas of your brain, being creative, humourous, quirky, inventive, and you’ve ended up with something highly visual, there’ll be a good chance you’ll remember it. Easily.

Try it and see for yourself.