Environmental Research Paper Example | Topics and Well Written Essays - 250 words

Natural - Research Paper Example They have been generalized as malicious, psychological militants, hostile and preferences assaulting. What's more, the Americans have seen them as senseless, boorish, anxious, and harsh to ladies. Every one of these perspectives make a fracture between the two gatherings of individuals. In the narrative â€Å"Reel Bad Arabs†, Sut Jhally exhibits the degree to which Hollywood has undermined the picture of the Arabs subsequently making individuals to put stock in the recommendation. Every one of these perspectives that have made this break are politically persuaded. It is clear that there is profound connection among Israel and the United States. In any case, this ought not ensure loss of Palestinian’s lives. As per Wilson Woodrow, the way that the 111th United States Congress is commanded by Jews and by expansion the Zionists is a proof enough for the specific enthusiasm for Israel. They rule the Committees as well, which are the most dynamic organs of the Congress. Furthermore, in excess of 52 significant American Jewish associations are intended to campaign for the enthusiasm of Israel/Jews. The American Jews additionally shape their situation by financing people who consequently help to keep their inclinations

Douglas Crockford Essay Example | Topics and Well Written Essays - 250 words

Douglas Crockford - Essay Example The framework which is found in our cerebrum makes us helpless against promoting and makes publicity which additionally impacts our programming styles. This discussion fundamentally looks logically the advancement of programming style which improves the unwavering quality of projects. Models given in JavaScript, a programming language with uncommonly enormous quantities of terrible parts, yet the standards are appropriate in the various programming language. I do concur with Douglas Crock portage when he says we should configuration programs which can be utilized to make other confounded projects, this will make it simpler for up and coming software engineers being acquainted with programming methods all the more effectively when making programs, on other structured stages (Crockford p 68). For instance, I favor planning sites utilizing net beans as opposed to, utilizing scratch pads which may be tedious. Taking everything into account, it is clear that, planning software engineers on any stage every a lot simpler and direct, it is demonstrated by practically all developers are utilizing different projects to make their

Jargon

Jargon Putting the definition of punt at the end of my last entry got me skimming through the glossary of my current edition of How to Get Around MIT (alternatively How To GAMIT or HoToGAMIT). Since youre reading blogs of MIT students and alums, you should learn a bunch of the jargon that we MIT folks sometimes use (a small selection from How To GAMITs glossary) armadillo A small set of drawers common to a select few dorms. beaver The MIT mascot, engineer of the animal kingdom. Bruno A unit of volume resulting from a piano falling six stories onto Amherst Alley from the roof of Baker House. CP Campus Police. cruft Old equipment; junk. Being able to take cruft again and make it work again, or do something new and useful, is a badge of honor. drop (1) v. To de-register for a subject during a term. (2) n. Network access point. (3) n. Type of sodium experiment performed by Third East. Flammschmeisser A gas-fired device used for spreading burning iron particles when creating a hoax crop circle. FSILG Fraternity, Sorority, or Independent Living Group. GIR General Institute Requirement. A class that all undergraduates must pass in order to get their degree. hack (1) n. A trick or prank. For example, having a balloon pop out of the field in the middle of the Hahvahd-Yale football game or getting elected Undergraduate Association President are fine hacks. (2) n. An inelegant shortcut to get something done quickly, for example in a computer program. (3) v. To use or operate something in a manner outside its design or published documentation; see kludge. (4) v. To explore ordinarily inaccessible or unknown places; equivalent to go hacking. (5) v. To apply oneself with utmost dedication in order to understand or become proficient in something. Example: a computer hacker. Also connotes fanaticism. hacker n. (1) One who hacks. (2) One who pulls hacks. (3) One who goes hacking. hosed Bogged down with work. IAP Independent Activities Period. The month of January at MIT, and the most fun time to be on campus. intuitively obvious aj. (1) Too simpleminded to deserve explanation. (2) More often, too abstruse to explain, if the speaker even understands it at all. kludge [rhymes with stooge] n. (1) A Rube Goldberg-style device which appears unlikely to work but does anyhow. (2) A method by which something is effectively but inelegantly made to perform a function for which it was not designed. (3) Something complex that doesnt work, e.g., this definition. Mystery Hunt The famous annual weekend-long puzzle competition held during IAP (q.v.). nerd [pronounced gnurd] n. (1) Someone with a high level of expertise in an esoteric, usually technical field. A badge of honor at the Institute, e.g., Nerd Pride. (2) Someone who studies too much. See tool. punt (1) v.t. To determine after analytical deliberation not to do something often academic in nature. (2) v.i. To be in the process of not doing something. Smoot A unit of length equal to the height of Oliver Smoot 62, most commonly used for the Harvard Bridge (364.4 Smoots plus 1 ear). tomb An enclosed space, often created when a new building is put next to an old one without fully coordinating the floorplans. They tend to be named by the first hackers who find them. tool (1) v. To study. (2) n. One who studies to an extreme. Connotes over-concentration on problem sets. Supertool: an extreme extreme. (3) n. MIT student. Slightly derogatory. See nerd. Bonus points for using these in your comments, or, even better, as many as possible in one sentence ;)

The Buddha, The Dharma, And The Sangha - 873 Words

Starting out in the Indian subcontinent, Buddhism grew to be a dominant religion that spread throughout Asia. Buddhism is rooted in the three elements known as the â€Å"Three Jewels†: the Buddha, the Dharma, and the Sangha. Through these elements, followers practice meditation and self-control in order to reach the state of enlightenment, or nirvana. The religion was pioneered by The Buddha, whose last reincarnation was named Siddhartha in Nepal around 600 B.C.E. He was a human who transcended to a state of enlightenment, understanding and practicing the three elements of Buddhism. Unlike the main figure in many other world religions, Buddha did not deem himself God or a prophet, but just a regular man who learned the teachings of nonviolence, inner peace, and balance. Siddhartha was born as a prince and lived a lavish life growing up. However he eventually realized that his life would not be fulfilled by material belongings, and abdicated his position. Siddhartha went on to study meditation and yoga, eventually reaching enlightenment. The pervasiveness and inevitability of suffering in human life was a main topic contemplated by Buddha throughout his life. The sources of suffering are key in the path to enlightenment, and Buddha realized this in his quest to enlightenment as well. These topics, among other core teachings of Buddhism, are substantiated and outlined by the experiences of the last Buddha. One of the most core topics explored by Buddhism, the pervasiveness andShow MoreRelatedBuddhism : What Kind Of Rituals Do You Prefer?1490 Words   |  6 Pagesthe world. One among them is Buddhism. It is fourth largest religion in the world. A person who had his own philosophy on life, how it should be lived, and how to procure enlightenment, commenced this religion. The person was none other than Lord Buddha, also known as Siddhartha Gautama. He was born in a royal family and was the prince of the Magadha- a region in northern India. Gautama’s parents loved him very much; in fact, they never let him visually perceive the down side of the life. For instanceRead MoreWhat Kind Of Rituals Do You Prefer?1137 Words   |  5 Pagesthe world. One of the religions is Buddhism, and is fourth largest religion in the world. A person had his own philosophy on life, how it should be lived, and how to procure enlightenment, started this religion. The person was none other than Lord Buddha , also known as Siddhartha Gautama. He was born in a royal family and was the prince of the Magadha- a region in northern India. Gautama’s parents loved him very much; in fact, they never let him visually perceive the down side of the life. For instanceRead MoreA Relationship Between Monastics And Lay Followers1699 Words   |  7 Pagesand lay followers is vital in ensuring that the Buddhist community, the Sangha, is run smoothly. A lay follower may be viewed as someone who isn’t completely devoted to Buddhism because they aren’t living the monastic lifestyle, obeying all the strict rules set forth in the Sekhiya Dhamma, such as â€Å"with downcast eye will I take a seat amidst the houses† and â€Å"not with too large balls will I make (up my food)†¦Ã¢â‚¬  but the Sangha would not thrive without the vital help of lay followers who provide foodRead MoreThe And Lay Followers And The Buddhist World933 Words   |  4 Pagesfollowers are both essenti al in ensuring that the Buddhist community, the Sangha, is run smoothly. A lay follower may be looked at as someone who isn’t completely devoted to Buddhism because they aren’t living the monastic lifestyle, obeying all the strict rules set forth in the Sekhiya Dhamma, such as â€Å"with downcast eye will I take a seat amidst the houses† and â€Å"not with too large balls will I make (up my food)†¦Ã¢â‚¬  but the Sangha would not thrive without the vital help of lay followers who provide theRead MoreThe, The Buddhist Monastic Order1692 Words   |  7 PagesThe Sangha, the Buddhist monastic order, comprises Bhikku (monks), Bhikkuni (nuns), laymen, and laywomen. While the Bhikku and Bhikkuni depend upon the laywomen and men for economic support, the lay community depends on them for spiritual guidance and ritualistic practices. This well-rounded mutual relationship is clearly a division not only amongst religious status, but determined by gender as well. T his is quite a contradiction with the Buddhist belief that your physical self is impermanent andRead MoreDescribe the formation of the Sangha and identify the importance of the first two councils in the600 Words   |  3 PagesDescribe the formation of the Sangha and identify the importance of the first two councils in the development of Buddhism. The formation of the Sangha began with Buddhas journey to Deer Park in northern India, to get Enlightenment. Buddha and 5 monks who discarded Buddha before he got Enlightenment are formatting the first Sangha. With the conversing of Yasa and fifty four of his friends, the figure of arahants increased to sixty within the first two monks. The relocate of the three Kassapa brothersRead MoreThe Orange County Buddhist Church Essay1698 Words   |  7 Pagesmade by Siddhartha Gautmama. According to the minister, Gautmama’s goal was to surpass duhkha, a human condition where they experienced, difficulty, frustration, or suffering. He became the first awakened person who is also referred to as Amida, the Buddha of Immeasurable Life and Light, after he accepted the truth of oneness and the interconnection all aspects have with one another (Jodo Shinshu Buddhist Temples of Canada 2015). Soon after, Shinran Shonin became a Buddhist monk and hoped to reach enlightenmentRead MoreBuddhism A nd Its Impact On The World1604 Words   |  7 Pagesarray of basic Buddhist principles to his kingdom and most notably a policy of Dharma or ‘the way of righteousness’ which though some believe do not necessarily connect to Buddhism, undeniably emulate Buddha’s teachings and philosophies. Asoka s development of the Dharma, central to modern expressions of Buddhism, served as one of his several contributions to Buddhism which remain evident today. Asoka s policy of Dharma included concepts such as ecological awareness, morality, equality and emphasisedRead MoreThe Philosophical Object Of Buddhism1060 Words   |  5 Pagesrecognised as such. The protagonist of the poem, Who Are You, attempts to define his identity in the manner that most humans fall victim to. The inquirer, assumed to be Buddhist, is unsatisfied with his response as it contradicts the Dharma of the enlightened Buddha. Peter, when asked, â€Å"Who are you?† endeavors to label himself by the people that surround him, the place in which he was born, and the traits that he feels connected to. The question, however, is a deception used in the hopes of unveilingRead MoreMark Diamond s Interreligious Experience And Engagement Class Essay1526 Words   |  7 Pagesteaching of the Pure Land†. Jodo Shinshu Buddhism teaches of being born into Buddha’s Land and to be a Buddha who is enlightened to the universal truth. The founder of Jodo Shinshu Buddhism is Shinran Shonin (1173-1262). This religion’s primary principles are about attainting the â€Å"entrusting heart† and the awakening/enlightenment of the Buddha. Buddhists achieve t his by listening to the calling of their Buddha, Amida Tathagata, and by reciting the Nembutsu. The Nembutsu is a daily chant that is recited to

John Locke The Father Of Classical Liberalism - 1790 Words

Ideologies are often born out of a minority view conceived upon a critique on the functioning of the current state of society and epoch. These ideologies each contain specific and unique ideas and beliefs that are never universally accepted, for if they were no other form of ideology would ever manifest. Liberalism is perhaps one of the most commonly accepted political ideologies that frequents present society; this ideology revolves around individual freedoms and equality under our current capitalistic economic relations. John Locke is often noted as the father of classical liberalism – of which other forms of liberalism came from – due to his influential works in favour of ideas that reflect what is now known as liberalism. Alongside†¦show more content†¦Firstly, the concept of common property refers to land, resources, buildings, etc., that can be used by anyone, and that one has the right from exclusion of said property; under both liberal and socialist sys tems these kinds of properties exist (such as roads, parks, beaches). State property refers to land, resources, buildings, etc., that the state decides who can make use of (such as state libraries, postal services, or land for potential development), again, both ideologies believe in the retainment of this (an exception may be extended to some branches of socialism/communism, like anarcho-communism, which advocates the abolition of the state entirely). The divide of property rights between socialism and liberalism arises once we reach the concept of private property, this will be the main focus of this essay in comparing and contrasting liberalism and socialism. Private property arouse out of the changing social system from feudalism to capitalism. C.B Macpherson (1973) regarded private property as the right of an individual or institution to exclude others from using or benefitting from something, such as land, resources, buildings, or machines. Of course, many different proponents of liberalism and socialism have differing conceptions on how private property should or should not exist. As such, this essay will attempt to compare, contrast, and evaluate the differing ideas and evolution of bothShow MoreRelatedLiberal Ideas Of Equality And The Right Of Law1591 Words   |  7 Pagesrationality in opposition to the central authority of the Catholic Church (Fielding et al., 2009, p. 106). Later, political liberalism was said to be a result of the growing middle class in a period where growing capitalism took the place of medieval feudalism and reflected the middle class interests against the â€Å"absolutism† of monarchy. (Heywood 2007, p. 24) In summary, classical liberalism is a tradition of greater emphasis in autonomy of the individual with less authority the ruler and, at the time, furtherRead MoreJohn Locke s The Second Treatise Of Government918 Words   |  4 PagesJohn Locke’s ‘The Second Treatise of Government’, is a book whi ch narrates his key ideologies, helping to underscore the primary reason for being regarded as the â€Å"father of Classical Liberalism†. Classical Liberalism, although having been on the rise for some time, was given its concrete foundation by Locke. Essentially, in his text, Locke conveys his interpretation of what certain aspects of classical liberalism, such as liberty, property, and entail. A fundamental principle of Locke’s book isRead MoreTo What Extent Does Modern Liberalism Depart from Classical Liberalism1624 Words   |  7 PagesThe classical liberal ideology emerged as a result of the Enlightenment period, which brought about new philosophies, challenging the existing assumptions about the nature of humankind and society. Modern liberalism developed around 1870 as a result of both philosophical and practical changes, including mass industrialisation. Classical liberals argue that modern liberalism has broken the principles of doctrines central to liberal thought whilst modern liberals claim that they are simply adaptingRead MoreLiberalism Is Defined by a Desire to Minimise the Role of the State890 Words   |  4 PagesLiberalism is defined by the desire to minimise the role of the state Liberalism’s view over the years has evolved and so as a result different liberals have different views on the state and how â€Å"large† it should be. Over the years the trend has fir liberals to become more â€Å"state-friendly† moving from classical liberals who preached for fragmented government to modern liberals who were state friendly, however since the 1960’s/70’s Neo liberals have tried to reverse this trend. Classical liberalsRead MoreLiberalism And Its Impact On International Relations Essay1427 Words   |  6 PagesAbstract Liberalism is more of a dominant philosophy in modern world more concentrating to European and American political system. Liberalism have many variations and many proposal for state. In this essay I will try to discourse different views towards liberalism is viewed. This essay views liberalism in more surficial manner but will try to touch the essential values and norms regarding liberalism. Liberalism is based on human experience and habit absorbed from society. So in same manner in thisRead More Classical Liberalism VS Classical Conservatism Essay2055 Words   |  9 Pages Are you Republican or Democrat? Maybe you are Conservative or Liberal? What do these terms mean and how did they begin? Classical Conservatism is defined as â€Å"a political philosophy emphasizing the need for the principles of natural law and transcendent moral order.†(Frohnen, Beer, and Nelson, 2006) Classical Liberalism is described as â€Å"a philosophy committed to the ideal of limited government and liberty of individuals including freedom of religion, speech, press, assembly, and free markets.† (HudelsonRead MoreClassical Liberalism vs Classical Conservatism2089 Words   |  9 PagesClassical Liberalism VS Classical Conservatism Are you Republican or Democrat? Maybe you are Conservative or Liberal? What do these terms mean and how did they begin? Classical Conservatism is defined as â€Å"a political philosophy emphasizing the need for the principles of natural law and transcendent moral order.†(Frohnen, Beer, and Nelson, 2006) Classical Liberalism is described as â€Å"a philosophy committed to the ideal of limited government and liberty of individuals including freedom of religionRead MoreThe Contributions of Nicolo Machiavelli and John Locke to Political Thought1763 Words   |  8 PagesThe Contributions of Nicolo Machiavelli and John Locke to Political Thought In political thought, there have been many people that have progressed political theory. Nicolo Machiavelli and John Locke are two of those famous individuals. The research here will be focused on them. Each Machiavelli and John Locke support a different political theory. At first, the background and relevant contexts will be discussed. Each person has written something that has influencedRead MoreEssay on Classical Liberalism Vs. Classical Conservatism1392 Words   |  6 PagesClassical Liberalism vs. Classical Conservatism In todays society, most people are unable to explain the differences between the Democratic Party and the Republican Party. In fact, the two parties ideologies seem to be very much alike; and therefore, people tend to believe that a Republican candidate and a Democratic candidate running for the same office will not make a large difference from one another. Furthermore, both Democrats, the supposedly liberal party, and Republicans, the supposedlyRead MoreClassical Liberalism vs. Classical Conservatism Essay1422 Words   |  6 PagesClassical Liberalism vs. Classical Conservatism In todays society, most people are unable to explain the differences between the Democratic Party and the Republican Party. In fact, the two parties ideologies seem to be very much alike; and therefore, people tend to believe that a Republican candidate and a Democratic candidate running for the same office will not make a large difference from one another. Furthermore, both Democrats, the supposedly liberal party, and Republicans, the supposedly

Royal Danish Bearings Marketing Key Terms Free Essays

Royal Danish Bearings – Marketing Key Terms Business and Management Keyword| Definition| Relation to RDB| Market Size| The number of individuals in a certain market who are potential buyers and/or sellers of a product or service. Companies are interested in knowing the market size before launching a new product or service in an area. | The ball bearings industry has a quite large market size given the development of the automobile industry. We will write a custom essay sample on Royal Danish Bearings Marketing Key Terms or any similar topic only for you Order Now | Market Share| A percentage of total sales volume in a market captured by a brand, product, or company. RDB’s market share in the business is quite large, justifying its great expansion and organic growth. | Consumer Needs| Problems that customers intend to solve with the purchase of a good or service. | Indirect consumers need automobiles, however; automobile factories require ball bearings, resulting in RDB’s business opportunity. | Unique Selling Point| Real or perceived benefit of a good or service that differentiates it from the competing brands and gives its buyer a logical reason to prefer it over other brands. USP is often a critical component of a promotional theme around which an advertising campaign is built. | RDB’s USP is its highly technologically advanced ball bearings, which are also environmentally friendly. | Competitive Advantage| A superiority gained by an organization when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. Competitive advantage results from matching core competencies to the opportunities. RDB’s competitive advantage is that they are an already globally known company and they are about to invest in their Research and Development department. | Brand Loyalty| The extent of the faithfulness of consumers to a particular brand, expressed through their repeat purchases, irrespective of the marketing pressure generated by the competing brands. | Given logical assumptions, automobile factories and companies remain loyal to RDB’s ball bearings, given their high quality product. | Demand| Desire for certain good or service supported by the capacity to purchase it. The aggregate quantity of a product or service estimated to be bought at a particular price. | RDB’s ball bearing demand is decreasing in Europe, however increasing in Brazil, China and India. | Marketing| The management process through which goods and services move from concept to the customer. It includes the 4Ps; Product, Price, Place and Promotion. | RDB plans to expand their marketing reach with the use of modern and technologically advanced media, in order to reach new customers and create brand awareness. Advertising| The activity or profession of producing information for promoting the sale of commercial products or services. | RDB is currently promoting their sales throughout their plans to expand into different countries with smaller environmentally friendly factories. | Promotion| The advancement of a product, idea, or point of view through publicity and/or advertising. | RDB plans to advertise in a greater scale. | ICT| Stands for â€Å"Information and Communicati on Technologies. ICT refers to technologies that provide access to information through telecommunications. It is similar to Information Technology (IT), but focuses primarily on communication technologies. This includes the Internet, wireless networks, cell phones, and other communication mediums. | This company is currently planning to establish a higher range of their information and communications technologies given that they require a higher advertising range. Brand Awareness| Extent to which a brand is recognized by potential customers, and is correctly associated with a particular product. Expressed usually as a percentage of target market, brand awareness is the primary goal of advertising in the early months or years of a product’s introduction. | RDB has managed to create brand awareness, given that they have been in the market for quite a while. They are old occupants of the market niche and their brand awareness is high. | How to cite Royal Danish Bearings Marketing Key Terms, Essay examples

Financial Accounting Cost Accounting

Questions: Describe the company that you currently work for, have previously worked for, or would like to work for in the future. Determine at least two (2) compelling reasons that this company should prepare and manage a budget. Predict the two (2) most likely positive and negative financial outcomes for this company if it properly or improperly performs effective budgeting. Outline a high-level budget plan for the company. In your high-level budget plan, recommend the most appropriate budgeting phases for the company. Propose two (2) methods and techniques that the company should use to manage its budget over time in preparation for the fact that budgets are ever changing. Justify your response. Imagine that the company is facing a financial challenge that is causing the actual amounts of money that it spends to become significantly off target from its budgeted amounts. Prepare an action plan to resolve the budget misalignment. In your action plan, recommend at least one (1) budgeting technique to resolve the budget and actual discrepancies. Provide a rationale for your response. Answers: Introduction Budget can be stated as a financial plan that aids the company like an estimate and helps in evaluating the future scenario of the business. Hence, it is an estimation of future cost. In reality, budgetary control is linked to the budget. Effective budget is the need of the hour and an ongoing process. Beyond question, a wise budget is one that keeps on moving and brings positive yield to the organization. Going by my specialization, I will prefer to join Cisco. In reality, there are many deficiencies when it comes to comparison with other companies owing to the budget. The inefficiency in the system does not lead to full resource utilization. This highlights the significance of budget. I prefer Cisco owing to the wide range of products, services, and solutions delivered by it. As I am from the IT background therefore joining Cisco would be an added advantage because it is engaged in designing and manufacturing of internet protocol and various other products that are linked to information technology. The company group its products into many categories like Switching, collaboration, wireless, data center, etc. Reason for having Budget It is important for Cisco to have a budget into practice. Firstly, the performance needs to be enhanced and in order to do that it is essential to have a strong budget into practice. This will helps to keep a strong note of the income and expenses (Albrecht et. al, 2011). As Cisco is catering to wide range of products therefore, budget is important, as it will help in providing a detailed plan. Execution will becomes better and there will be a strong awareness regarding the expenses. This will lead to fulfillment of goals. Secondly, in order to grow and bring further progress it is important to have a strong budget into operation. Budget helps to track the deficiencies and steer the business in the correct direction and for healthcare, it is of utmost importance as it helps in meeting the needs. Positive and Negative Outcomes If the budget is properly implemented then it will bring positive result to the division. It will act as a mechanism for evaluation, as well as performance management. This will aid the management in taking proper and relevant steps and will act as a control for the organization. This will helps in regulating the activities of the entire organization. Secondly, if the budget is followed properly it will lead to conformity of the plans and policies thereby providing a valid direction. Planning and coordinating will be easily done with the help of budget. In short, it can be said that budget will act as a performance evaluation because the present action will be compared with the pre-determined ones (Williams, 2012). On the hand there are negative implications too if the company performs the part of the budget in an improper manner. The expenses will be left unchecked that may lead to potent issues and hence, the cash flow will be impacted. Moreover, it might lead to serious dent in the income statement (Horngren, 2011). Secondly, the desired goal of the healthcare will not be achieved, as there will be deviation from the proposed goal. High-level Budget Plan Budget Phases for Cisco A high- level budget plan can help Cisco in backing up the strategies and working. The new model or the plan can help the company in identification of new opportunities and even generating funds for the business. Managing Cash Flows Management of cash flow is one of the toughest challenges that help the business to manage the cash flow. For Cisco, cash flow statement is vital because it will enable the company to maintain the cash flow and pay the bills at the specified time. The projection, evaluation and of cash flow will help the manager in managing the business performance (Williams, 2012). Budget Deviation Analysis Budget projects the figures that are needed to be spent and earnings that will be received during a specified period. Budget deviation analysis is important in comparison of the effects and compares what is expected. This analysis will help in stating whether the plans are adhered to and what steps can be taken into consideration for adjusting the budget in future (Durry, 2011). For Cisco, it is important, as it needs to maintain a strong hold in the market. Budget Phases The four phases of budget are formulation of budget, Approval of budget, execution of budget and oversight of budget. From my point of view, the oversight of the budget and its execution are the two important phases. Oversight of the budget is vital because it is audited in this step and needs strong action by the executives to strengthen the findings of the audit. Secondly, budget execution is the most important because money allocation is done in this step (Horngren, 2011). In the light of changing circumstances the two techniques that can be used is incremental budgeting and flexed budgeting. The incremental budgeting is one that merges the cost traced from the past accounting period with certain additions (Spiceland, 2011). The additions are used to focus two main segments that are purchase costs and business volume. Secondly, the flexed budgeting is needed to flex the normal budget. It is accurate in nature and helpful for the managers (Horngren, 2011). For Cisco, this will help in great way as the budgets tend to change and this will act as cushion. Action Plan If the actual money is more than the budgeted plan, it signifies that there is non-alignment. In this scenario, corrective actions need to be taken. The payment, receivable cycle needs to be checked and set accordingly. Secondly, the weak area needs to be noted and assessed that will help in removing the deficiency. Thirdly, the problem can be removed by following an alternative plan and ensuring that the system of cash is not affected (Drury, 2011). Flexed budget is the technique that can be used in the changing scenario and when the budget mismatch. In this technique, managers can provide vital news that leads to an achievable budget and an optimistic one (Drury, 2011). The good and worst result is evaluated on a bigger perspective and better decision making arrives from here. Therefore, flexed budgeting provides the managers to control the scenario and leads to a better outcome in the light of changing situations. It is settled in the changing scenario and hence, the most important technique when it comes to changes. By considering the financing options and the availability of resources, Cisco can implement a strong budget. It needs to assess the solution that is available and can develop a strong relationship with the customers. Moreover, the management must be made aware of the plans and should be evaluated periodically that helps to drive the business. Control mechanism along with strong plan will help the company to rectify the deficiencies, if any. This will bring a positive momentum and helps the company to grow in the long run. Conclusion From the discussion, it is clear that Cisco needs to implement a strong budget so that the management is done with ease and flexibility. The budget must correspond to the current situation and leads to strong benefits. More importantly, the utilization of budgeted techniques comes to the forefront and flexed is vital in the light of changing circumstances and external situations. By considering the............ References Albrecht, W., Stice, E. and Stice, J. (2011).Financial accounting. Mason, OH: Thomson/South-Western. Brealey, R., Myers, S. and Allen, F. (2011). Principles of corporate finance. New York: McGraw-Hill/Irwin. Drury, C. (2011).Cost and management accounting. Andover, Hampshire, UK: South-Western Cengage Learning. Horngren, C. (2011).Cost accounting. Frenchs Forest, N.S.W.: Pearson Australia. Williams, J. (2012).Financial accounting. New York: McGraw-Hill/Irwin. Spiceland, J., Thomas, W. and Herrmann, D. (2011). Financial accounting. New York: McGraw-Hill/Irwin, University Press

Managing Employee Relations Essay Example

Managing Employee Relations Essay Section 1: Evaluate three major external constraints placed upon your Organisation’s approach to employee relations (1,018 words) Section 2: Analyse management’s approach to employee relations in your organisation making reference to appropriate academics models (1,023 words) Section 3: Evaluate whether the approaches identified in Section 2 above are the most effective for your organisation in the near future (3-5 years), justify any recommendations you make for a different approach (1,043 words) Introduction This report is in three sections. The first section outlines the external constraints that impact upon employee relations within the organisation. A brief summary of this organisation can be found within Appendix 1. The second section outlines management’s approach to employee relations and the final section evaluates the effectiveness of this approach. External Constraints on Employee Relations Three key external constraints on employee relations within the organisation are recognised trade unions, legislation and competition. These constraints have been chosen as they are all very different to each other and impact upon the organisation in very different ways. Trade Unions Trade unions are recognised within an organisation as representing of all, or a group of employees for the purpose of jointly determining the terms and conditions of employment (Salamon, 2001). There are three unions that are recognised by the organisation for the purposes of collective bargaining. These unions represent the 3 main groups of staff. Those on a local contract are not represented by a recognised union. We will write a custom essay sample on Managing Employee Relations specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Managing Employee Relations specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Managing Employee Relations specifically for you FOR ONLY $16.38 $13.9/page Hire Writer These unions negotiate on a national basis to determine the national framework of pay and conditions of members. (Farnham, 2000) These negotiations are an external constraint to the university, as they determine amongst other things, the level of the annual pay award. The impact on employee relations of these negotiations depends upon whether the university wishes to adopt national recommendations or choose to negotiate locally on a variation. For example if the pay award could not be afforded by the organisation. Should funding be available, then relations between employee and employer will not be affected, however should the funding not be available for the size of the award agreed, then this can cause problems with employee relations and can lead to the unions going into dispute with the university. (Farnham, 2000) This can lead to industrial sanctions being taken by the union and its members. This occurs because it is believed that this is the only by imposing their unilateral power on the management that the unions can achieve their employee relations objectives. The form of industrial sanctions can include * Working to contract Going Slow * Strikes The impact of these industrial sanctions on the organisation would be that students do not get the lectures they require for their degrees or that assignments go unmarked or marks unrecorded. In the long-term this may impact upon reputation and have a long term effect on recruitment and marketing as well as impacting on relations between emplo yees, employers and unions. Legislation Legislation is an external constraint that affects organisations. It is concerned with * the relationship between employer and employee * the relationship between employer and union and the relationship between the union and its membership (Rose, 2001) One recent piece of legislation that has recently come into affect is that of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. This legislation, which came into force on 1st October 2002, required institutions to reduce significantly the use of these contracts. The Bett Report (The Report of the Independent Review of Higher Education Pay and Conditions – June 1999) recommended that institutions review carefully the reasons for such contracts in order to limit their use. The purpose of this legislation is: to protect employees on fixed-term contracts from being treated less favourably than comparable employees on indefinite contracts * to prevent the pot ential abuse of continuous use of fixed-term contracts by limiting the overall duration of a series of fixed term contracts to 4 continuous years after which the contract automatically becomes indefinite The organisation depends on a range of funding sources, all of them variable and insecure. It needs to make full use of modern and flexible work organisation and to adopt patterns of work that will fit challenges in the future. One group of staff that this affects particularly is sessional lecturers (hourly paid teaching staff). These staff are employed year on year to deliver an agreed number of teaching hours. This group of staff is used to give the university flexibility. Sessional lecturers have commonly been used to cover absences. The impact of this legislation is that sessional staff, who have been with the university for over 4 years, have been offered indefinite contracts, whereas staff that have durations of less than 4 years have not. The impact of this is to cause a poor relationship between employer and employee and as such the number of grievances are on the increase. Competition The extent to which the market influences employee relations and styles depends upon competitive pressure and customer pressure (Marchington amp; Parker, 1990; cited by Rose, 2001). Lack of competitive pressure can dictate terms to the customer because of the absence of alternative suppliers. The existence of competitive pressure may influence management styles as the organisation may have to make decisions affecting the workforce, including possible redundancies (Rose 2001). Customer pressure is dependent upon customer demand and customer profile. The more stable the demand by customer, and the more predictable the customer profile, the easier it is for managers to predict what is going to happen and therefore make the necessary changes to the workforce (Rose 2001). For many years The organisation has been the sole provider of business courses within the city. From September 2002, a competitor has emerged. This now means that the two organisations are now offering similar courses and thus competing for the same students. There are only a certain number of students wanting to go to study. Given this, it means that there will be a risk of fewer students going to the organisation to study their business courses. As Rose stated above, the competitive pressure is being increased on the university and this in turn will have an impact on employee relations. Fewer students on courses would mean less funding for the university. One option may include reducing the number of staff, or the number of hours each member of staff works. Analysis of Managements Approach to Employee Relations This section of the report will identify the current approach by management to employee relations within the organisation. Employee relations can be defined as â€Å"the study of the regulation of the employment relationship between employer and employee, both collectively and individually, and the determination of substantive and procedural issues at industrial, organisational and workplace levels† (Rose, 2001) Management style can be defined as â€Å"a distinctive set of guiding principles, written or otherwise, which set parameters to signposts for management action in the way employees are treated and particular events handled. Management style is therefore akin to business policy and its strategic derivatives. † (Purcell, 1987; cited by Salamon, 2000) Therefore it is management style that dictates the boundaries and direction of acceptable management action in its dealing with employees (Feltham, 2000). Pluralist Approach Management approach within the organisation has a pluralist perspective. A pluralist perspective believes that * there are rival sources of leadership and attachment within organisations * conflict can be functional if recognised and contained within the organisations procedures e. . ‘creative tensions’ * trade unions are legitimate, useful and an integral part of the organisation (Feltham, 2000) The staff within the organisation are made of 4 staff groups. Each of these staff groups have different terms and conditions and as such the organisation is in a ‘permanent state of dynamic tension’ (Salamon, 2000), this, together with perception of role, purpose a nd value (teaching versus non-teaching, faculty versus centre, school versus faculty) result in the conflict of interest between the various groups of staff. Within the organisation, there are 3 recognised unions; these unions represent the different groups of staff with the organisation. Local contract staff are not represented collectively by a union, it is up to individuals to join a union on an individual basis and as such do not have any collective bargaining rights with the organisation. Individual bargaining is in effect. The unions negotiate nationally the pay awards for their members and agree the best terms and conditions for their members The model defined by Dunlop (1958) and later modified by Woods (1975) identified the inputs that go into employee relations, including the actors, contexts and ideology that form the employee relations system. The processes which have been implemented and the outputs that exist are highlighted by the model. Internal and external conflicts are represented by the inputs, whereas conflict resolution is represented by the outputs. With reference to the organisation, the actors are the managers, the employees and the various legal bodies. The political, legal and economic contexts influence the various processes that happen within employee relations, such as conciliation, arbitration, negotiation and bargaining. Sources of conflict within the university could include new working practices (for example those introduced because of the use of new technology), rising absence levels, bullying and harassment. the organisation have very clear employment relations policies, including disciplinary, grievance and capability. These policies are written to promote good practice, to comply with legislation, and to provide a positive ethos. Soft Approach the organisation has a soft approach human resource management. The soft approach sees employees as valued assets and are proactive and capable of development, worthy of trust and collaboration, through participation and informed choice. (Legge, 1996) This is because the organisation has a strong emphasis on developing and multi-skilling its staff; it recognises unions and values them as assets of the organisation. Management expects employee commitment and gains this through strong leadership, communication and motivation. Rose 2000) the organisation is currently in the process of realigning its staffing profile, to meet the needs of the students, its customers. For example, the demand for one type of degree programmes is declining, whilst the demand for another is on the increase. To overcome this problem, the organisation would first consider the re-training of lecturers from one discipline to another, in preference to a harder solution such as redundancy. Descriptiv e-Functional Model Personnel management within the organisation can be described as following the ‘descriptive-functional’ model (Rose, 2001). This model defines personnel management in terms of the functions it actually serves, rather than what these functions should be. Torrington and Hall (1987) describe this as a series of activities which: enable working people and their employing organisations to agree about the nature of their working relationships and it also ensures the agreement is fulfilled. This model is most common in a pluralist organisation. Under this model, the personnel department is a mainly administrative based personnel department that is more reactive rather than pro-active. Consultative Style Purcell and Sissons (1983) identified five typical management styles; authoritarian, paternalistic, consultative, and constitutional and opportunist. The consultative style describes an organisation that operates through a mixture of formal and informal mechanisms in its employee relations, but both are based upon forward planning and pro-activity in managing people. Trade unions are considered to be partners and are central to communication process as well as representing employees’ opinions. the organisation fits into the consultative style where trade unions are used on a regular basis to assist with problem solving. Staff are consulted and asked for their opinions through the use of staff questionnaires and focus groups. In summary the organisation, as a pluralist organisation recognises trade unions as being a useful part of large organisations. Conflict is inevitable, but is functional within the context of the university, it is therefore necessary to structure and accept it. Sophisticated Modern Approach Fox (1974) identified six sub-categories of patterns of employee relations management. The style the best represents the organisation is that of ‘Sophisticated Modern’. Sophisticated Moderns are described as accepting a trade union presence, even though this may limit managements’ perceived freedom of decision making. There is a strong emphasis upon the development and operation of formal and informal procedures on order to handle and resolve conflicts of interests. (Rose 2001) Procedures are in place within the organisation for dealing with issues such as poor attendance, managing performance, capability or gross misconduct. These procedures are detailed in the employment handbook and require a series of meetings between managers, employees and personnel staff. Evaluation of the Effectiveness of Managements Approach to Employee Relations in the Near Future In order to evaluate managements approach to employee relations in the next 3 to 5 years, the challenges and factors that will affect employee relations need to be identified. These challenges can be summarised as financial pressures, implementation of a new HR Strategy (including job evaluation and a reward strategy) and EU and government regulations. Hard versus Soft Approach Funding from the government, within the sector is likely to follow the trend of gradual decline over the coming years. With less money, the soft approach (Legge, 1996) to employee resourcing becomes under pressure. the organisation would have to start looking at a hard approach, and to start treating its employees as expense of the organisation. The ‘hard’ model emphasises the importance of integrating human resource policies with the business strategy. (Rose, 2001) The hard approach sees human resources as passive and reactive rather than creative and proactive. (Storey, 1987; cited by Rose, 2001). This approach is used by organisations to become more competitive, to become a market leader. Management would put the business first and the employees second. In this situation, re-profiling of staff through retraining and natural wastage would not be able to continue in the current fashion. Management would need to consider downsizing issues such as effectiveness, value etc. (Staff are the highest cost within the organisation ? 65m, from a turnover of ? 110m) Other methods that management may look at, as a way of saving money, include not paying the cost of living award to staff and not paying overtime. All these methods heavily impact upon the employee relations within the organisation. The impact of this approach could be a loss in motivation by staff, an increase in staff turnover and an increase in the sickness levels. The hard approach may also be adopted to increase the organisation’s position competitively within the higher education sector, together with an improved marketing strategy, which would in turn improve student numbers, and thus increase funding. (Funding for universities is directly related to the number of students) Recommendation: That a harder approach to human resources be implemented, through integration of the human resource strategy with the business strategy. This will give the university competitive advantage, should the funding continue to decline. Pluralistic versus Unitary Approach The continuing involvement of EU and UK legislation in the areas of employee rights and allocation of financial resources requires the organisation to operate a pluralist approach to employee relations, in order to agree policies and processes with the unions. This is the process used to implement new legislation. Moving towards a unitary perspective would require the organisation to take on a paternalistic approach. However, the paternalistic approach requires the employer to take a ‘fatherly’ interest in its workforce. These organisations are described by Rose (2001) as neo-paternalistic. This is practised by organisations such as Marks and Spencers and tends to be the style of non-union companies which display a sense of caring, high growth, single status and profit sharing (Blyton and Turnbull, 1998 cited by Rose, 2001). the organisation has a heavily unionised workforce, a lack of profit and as such would not be able to fully adopt this paternalistic/unitary approach. However, the organisation should strive to build a more effective, â€Å"high performing† culture over the coming few years, by smoothing the differences between teaching and non-teaching staff, to see each others as equals, to make things better. Recommendation: That the organisation begins a move towards a more unitary approach by removing some of the differences that are apparent between the teaching and non-teaching community’s. the organisation currently has 3 unions representing various groups of staff. These unions currently represent the organisation staff independently of each other, negotiating separately for their own staff. This is a time consuming method and one way forward for the university is for these unions to form a single bargaining unit and to operate single table bargaining. Single-table bargaining is the process whereby there is one set of negotiations between unions and the employer, in a multi-union setting, covering both manual an non-manual workers. (Rose, 2001) Single-table bargaining allows for all unions to keep their recognition status. The single bargaining unit would consist of representatives from each union and could be used for information and consultation. Single-table bargaining would give management the following advantages:- * To make the bargaining process more efficient, remove potential sources of conflict within the organisation and to build trust and co-operation of between management and the unions * To support changes in working practices * To achieve consistency between different groups of staff (Salamon, 2000) This process would look at harmonisation of terms and conditions between the groups of staff, for example the hours per week, holidays and sick leave and would reflect what is happening nationally. However the problems that may be encountered if single table bargaining is bought in, include:- * Unions needing to have a common bargaining strategy, which would mean that, any differences that existed between them would have to be resolved. * The status differences that exist between groups of staff; academics and non-academics; manuals and non-manuals * Management not being able to reward specific groups of staff who are making above average contributions to the organisation As many of these issues are those that nationally are trying to be resolved, then single table bargaining seems a natural way forward at the organisation. Recommendation: That single table bargaining be considered at the organisation, to facilitate the process of harmonization of terms and conditions. Consultative Style There is pressure from the sector for all institutions to implement a job evaluation scheme. National negotiations between unions are also working towards a new pay modernisation framework. The outcomes of these negotiations will need to be implemented within the next 5 years. The effect of these changes on employee relations will depend upon the individual concerned. Some staff may gain an increase in pay, whilst others may have their pay frozen for a period of time. the organisation currently has a consultative style (Purcell amp; Sissons, 1983), whereby the unions are central to the communication process. This will need to continue, in order that these outcomes are implemented. Recommendation: That the consultative style of management be continued. Conclusion From this report it can be seen that managements approach to employee relations over the next 3 to 5 years may need to change in order to increase he competitive advantage of the organisation. These changes can only be implemented if management, staff and unions all work together for the benefit of the organisation. Bibliography Blyton, P. amp; Turnbull, P. (1998) The Dynamics of Employee Relations. London, Macmillan Fox, A. (1974) Beyond Contract: Work Power and Trust Relations. London, Faber and Faber Feltham, D. (2000) Employee Relations in Context, 2nd edition, CIPD Legge, K. (1995) Hu man Resource Management: Rhetorics and Realities, London, Macmillan Marchington, M. amp; Parker, P. (1990) Changing Patterns of Employee Relations. London, Harvester, Wheatsheaf Purcell, J. amp; Sisson, K. (1983) Strategies and Practice in the Management of Industrial Relations, Journal of Management Studies Purcell, J. (1987) Mapping Management Styles in Employment relations, Journal of Management Studies, 24(5) September Rose, E. (2001) Employment Relations, London, Financial Times Prentice-Hall Salamon, M. (2000) Industrial Relations, London, 4th edition, Financial Times Prentice-Hall Storey, J. 1987) Developments in the Management of Human Resource Management: an interim report, Warwick Papers in Industrial Relations, no 17. Coventry, University of Warwick Torrington, D. amp; Hall, L. (1987) Personnel Management: A New Approach, London, Prentice-Hall Tyson, S. (1987) The management of the personnel function, Journal of Management Studies, 24(5) Woods, S. J. , Wagner, A. , Armstr ong, E. G. A , Goodman, J. F. B. amp; Davis, J. E. (1975) The Industrial Relations System concept as a basis for theory in industrial relations, British Journal of Industrial Relations, vol 13, p295

Free Essays on The Yellow Wallpaper - A Reaction

, men controlled the society opposing female equality. Women of the 19th century were considered far inferior to males and most people seemed to be content with this feeling, or at least didn’t do anything drastic to change it. Men had control at the time and they did their best to keep it that way by suppressing women by any means possible. For example, limiting them in activities such as reading or w... Free Essays on The Yellow Wallpaper - A Reaction Free Essays on The Yellow Wallpaper - A Reaction Charlotte Perkins Gilman’s 19th century literary story, â€Å"The Yellow Wallpaper†, has had many minds pondering her thoughts and ideas about the women â€Å"role† for over one hundred years. Works such as this piece are quite unique in the array of different views and perceptions an individual could take from their interpretation of the reading. Seeing the true meaning of the story and relating it to the proper time period proves to show a clear correlation between the story and people in the 1800’s. A brief look at this story tells the reader of a woman, believed to be sick, staying in an â€Å"institution†. This isn’t a normal looking institution though because it is concealed as a summer home possibly for the reason to soften the ‘institutionalized feeling’ for the patient. The woman’s name is believed to be Jane and she has a passion for writing. She yearns to write as much as she possibly could in a day, if only her condition didn’t exhaust her of energy. John is Jane’s caring, loving husband who is also her physician. He diagnoses her and treats her for â€Å"temporary nervous depression† (Gilman 42). Staying in the old summer home, Jane begins to have strange thoughts toward the wallpaper in the room that she is staying in. Movements, images, and people begin to appear to her in the walls at night. The story comes to a conclusion with Jane completely losing her mind from hallucinations that she sees in the wallp aper. In the 19th century, societies were based upon patriarchal groundwork. In other words, men controlled the society opposing female equality. Women of the 19th century were considered far inferior to males and most people seemed to be content with this feeling, or at least didn’t do anything drastic to change it. Men had control at the time and they did their best to keep it that way by suppressing women by any means possible. For example, limiting them in activities such as reading or w...

Psychotherapy for Immigrants and Refugees Term Paper

Psychotherapy for Immigrants and Refugees - Term Paper Example Social workers and psychotherapists have a duty to respond to the needs of each of these immigrants and refugees in order to lessen their burden. Social training skills and psychotherapy support go a long way in ensuring that this group of people have an easy transition from the lives that they are used to their adopted lives (Pumariega, Rothe and Pumariega, 2005). One of the major challenges that face psychotherapy for the immigrants and psychotherapists is communication problems. In the US, many of the refugees who come to the country hardly ever know English, making communication a daunting task (Balgopal, 2000). This lack of clear communication between the psychotherapists and the immigrants makes it hard for the professional counselors to help the immigrants cope with their new life. Without proper communication channels, it becomes hard to understand the needs, fears and expectations of the immigrants. However in some instances, there are some immigrants who and understand mult iple languages, including the language spoken in the host country. This makes it possible for the psychotherapists to have them as translators. Although this is better than not communicating at all, it has its limitations. The translator may not put the message across as it is supposed to be, hence meaning might be lost between the psychotherapist and the immigrant that he is supposed to be helping (Fong, 2004). Another challenge that immigrants, refugees and psychotherapists normally face is the problem of cultural differences. Concepts of psychotherapy for immigrants and refugees emphasizes on the importance of understanding the various cultures involved (Ryan, 1992). However, doing so is not very easy as most people are inclined to think in terms of their own cultures and in total disregard of the other person’s culture. In many cases psychotherapists do not have any idea of how to deal with all the different cultures that they face in their line of work. The immigrants th emselves are also mostly adamant to let go of their worldview in support of another new one. The ensuing conflict that results form cultural misunderstandings may impact negatively on the work of social psychotherapists (Corey, 2009). The psychotherapy process for the immigrant might seem like a very long and time consuming activity, and this impacts negatively on what the psychotherapists are trying to achieve. Many immigrants and refugees normally flee from their own countries of origin to new ones in search of a better life (Chang-Muy and Congress, 2009). If anything comes between them and the attainment of their new status, they are bound to consider it a waste of time. Acculturation and integration are hardly some the things that come top on the immigrants’ priority lists. Getting them to understand the importance of psychotherapy to help them fit in may be difficult and some of them might even resist any attempt to help them adopt smoothly into their new lives (Pumarieg a, Rothe and Pumariega, 2005). Psychotherapists need to be given enough training before dealing with immigrants and refugees. They should be trained on cross-cultural communication and acceptance as it plays a big role in how successful any psychotherapy process is. There is need for the development of psychotherapy and counseling techniques that should focus on skills that are influential to the integration, assimilation and acculturation of immigrants and refugees (Pumariega, Rothe and Pumariega, 2005). Training programs for counselors should include skill development for the incorporation of the family and/or the

Intellectual and Modern Property Essay Example | Topics and Well Written Essays - 4000 words

Intellectual and Modern Property - Essay Example The protection afforded to intellectual property has been deemed vital to protect innovation and creativity in society, because if this economic incentive is removed, then there will be an erosion of the spur that propels the ingenuity and desire to create new works. Moreover, it protects the inventor from unscrupulous individuals who are able to profit from the innovative elements in the work, while also protecting the moral rights of an author to his own creation. However, conflicts have also been generated through the evolution of the Internet which has facilitated digital copying and modification of previously created works. Moreover, the extension of the duration of protection for copyrighted and patented works has been contested as a measure that interferes with the public rights to fair use of material, especially for information and research purposes. Therefore, it has become difficult to strike an appropriate balance between the protection of the rights of the creators of original works and the rights of the public. The question that will be examined in this research study is the extent to which IPR rights are a benefit to society. The economic incentive provided by IP rights to facilitate the creation of innovative works is undisputed and it also enables the propagation of wealth that is a benefit to society as a whole. Since it allows owners of copyrighted/patented works to earn more from their work, it also allows Government to increase taxes and improves the exchequer so that Government programs can benefit weaker elements of society. It also enables an artist/creator to be protected from unscrupulous elements and thus affords some protection to the vulnerable elements in society. An author is also legally entitled to moral rights to his work, however, in practice, this has not been rigorously upheld in the UK, as demonstrated in further material that follows. The right to ownership of property is the basis for a free and secure society, and by allowing ownership on patents, for example, there is also incentive provided to business to improve their investments.  

Company Analysis for Investment Opportunities

Company Analysis for Investment Opportunities 1 Introduction We have organised a shareholders club which we have called 6IM. There are six members within 6IM of which we all have  £1000 each to invest. As part of our Investment process we have decided to choose three companies in different sectors and conduct an in depth financial analysis. Due to the three companies working in different sectors we have also analysed key financial data of a major competitor to that particular company. We feel this will enable us to gain a greater understanding of the industry of which the three companies are working in and also a direct financial comparison with our chosen companies. Our report will begin with a brief profile of the three companies followed by a SWOT analysis to enable us to paint a picture of where the company currently sit and the potential investment opportunities and risks associated with that particular company. In addition to this we will conduct a five forces investigation to understand the industries competitiveness. In respect of financials we will gain an understanding of the numbers in the annual reports of both our targeted three companies and also our competitors. We will use a number of investment ratios to quantify the numbers which will help us review the performance of our chosen companies against our competitors and in addition devise a brief explanation as to what aspects of the business have made a positive or negative impact on the ratio in which we are assessing. The ratios that we will choose will be independent of each other due to the fact that some ratios are more relevant than others in certain industries. The ratios will be conducted for each of the last 3 financial years for both our targeted companies and competitors. The ratios will be split into four categories liquidity, profitability, financing and investment. Finally we will then standardise the ratios and compare our three chosen companies. We will use a marking system to identify which company we feel excel in each ratio to help us arrive at our chosen investment vehicle. The three companies in which we will be conducting the report on are: 1) MGM Grand Sector: Leisure Tourism Fiscal year: Jan 01st – Dec 31st 2) Rio Tinto Sector: Mining Fiscal year: Jan 01st – Dec 31st 3) Toyota Sector: Car manufacturing Fiscal year: April 01st – March 31st Investment Objective A medium term investment of 5 years Provide income through dividends Provide capital growth at the end of the term We would be looking at an annual expected return of between 8% and 10% Tax Implications 6IM discussed about the tax implications of our investment objectives. We felt that as we were all basic rate taxpayers receiving a dividend would be beneficial as we would not be impeded by the non reclaimable 10% tax credit or would we have a further liability of 22.5% due to the fact we were not higher rate tax payers. Regarding capital growth it was decided that if our money had grown substantially over the five years and the profit was above the capital gains tax annual exemption we would realise the gains over two tax years to ensure we would utilise as much of the gain tax free as possible. According to Tax Facts 2009-2010 (2009), Current Capital Gains Tax annual exemption is:  £ 10,100 (2009-10) Current Capital Gains Tax subject to being over the exemption is: 18% Attitude to Risk 6IM have agreed that we will adopt a moderately adventurous attitude to risk. As part of our risk assessment, collectively we decided to assess ourselves using a risk attitude profiling questionnaire as per Appendix II which was designed by Scottish Life a leading Life Pension investment provider. We discussed our views on ethical investments and we concluded that whilst our opinions were not strong enough to adopt negative screening criteria which would be to completely disregard any unethical company, we would look to see if the companies are trying to improve the way they work. In respect of the three companies chosen we also discussed that we would need to be aware of currency risk, political risk, market risk and inflation risk which would be in addition to the business risk and investment specific risk of the company. Finally our thoughts were if we felt that each of the companies were viable in respect of investment we would be happy to spilt our money and invest in all three which would gain potentially reduce our risk through diversification. 2 Marketing and industry data 2.1 MGM GRAND 2.1.1 Background and mission Background MGM operates in a very competitive entertainment and hospitality industry and is located on the New York Stock Exchange. The company owns, develops and operates casino and non casino resorts. The majority of MGMs hotels are located in Nevada where they own approximately 700 acres of land on the Las Vegas strip. Whilst MGM have a variety of hotels that occupies this land they also have a meaningful proportion that is considered undeveloped and could offer future investment opportunities. As well as resorts in Las Vegas, MGM also have operations in Michigan, Mississippi, Macau, Atlantic City and Illinois. One of their latest developments is the MGM Grand Ho Tram which will consist of a 4.2 billion multi property resort complex along the beaches of Southern China. In addition to this MGM will also open in December 2009 on the Las Vegas strip a project called City Centre which is a joint venture with Dubai World. MGM as at 31st December 2008 employ approximately 46,000 full time staff and 15,000 part time staff, they pride themselves on offering excellent customer service which has been demonstrated by many accolades, including AAA five diamond and 4 diamond awards at hotels and restaurants across their portfolio. There quality and reputation was enhanced further in October this year when 7 of MGMs restaurants were honoured with at least one Michelin star which demonstrates the quality they strive for. MGMs revenue in 2008 decreased by 6.27% which was largely down to the economic conditions and with MGM having the vast majority of its portfolio in Las Vegas this could be demonstrated by the reduction in visitor volumes during the time period (Appendix I). MGM feel whilst times are currently tough James J. Murren Chairman and CEO states â€Å"There company is well positioned to face the future thanks to our dedicated management team and work force, premier brands and best in class resorts. When the cycle changes, we will be stronger, with a foundation of experienced operators and an efficient operating profile that is not only business ready but has been battle tested.† (MGM Annual Report, 2008 p.8) Mission MGM Mirage Mission Statement, â€Å"Our mission is to deliver our winning combination of quality entertainment, luxurious facilities and exceptional customer service to every corner of the world in order to enhance a shareholder value and to sustain employee, customer and community relationships† (MGM Mirage, 2009). 2.1.2 SWOT analysis Strength Quality Employees: MGM have invested heavily in recruiting, training and maintaining employees. They run a variety of programs for example a diversity program which looks at unique strengths of individuals and being able to blend them to work together to achieve greater performance. In addition to training, to ensure they maintain their employees in August 2007 MGM entered into an agreement with 21,000 thousand of its Las Vegas employees to provide an increase in wages and benefits of approximately 4% annually. Diversified Offering: MGM would be expected to earn the majority of its revenues from gaming however this is not the case with over half of its net revenue derived from non gaming activities. MGM offer a complete resort experience for its guests, with their non-gaming activities being offered at a premium due to the quality of their offering. Brand Name Awareness: MGM is one of the leading hotel and leisure companies as at December 31st 2008 their operations consisted of 17 wholly owned casino resorts and a 50% investment in 4 other casino resorts. This high brand name awareness gives MGM a distinct advantage when competing against other casino brands and helps enable them to draw more customers. Weaknesses Financial Strength: In February 2009 all of the major credit rating agencies – Moodys, Standard Poors and Fitch downgraded MGMs rating on long term debt, there was a further downgrade by Moodys in March 2009. These downgrades will again potentially make it very difficult for MGM to obtain debt finance and may even increase the cost of any future debt financing. Amount of Indebtedness: As at the 31st December 2008, MGM had long term debt totalling approximately US$ 13.5 billion dollars. The amount of debt and the inability of MGM to take on further debt could have a catastrophic impact on its business. It is uncertain that the sources of credit they have available will be sufficient to fund current financial commitments, whilst MGM have received a waiver that they do not have to comply with certain financial covenants this has led to further restrictions and requirements for them to adhere to. Weak Returns: In 2008 MGM have seen a reduction in the majority of their financial ratios compared with its 2007 figures. The figures can be seen in our ratio analysis section of the report and whilst an explanation of the figures have been discussed, the reduced ratios can only cause investors concern and a reduction in confidence in placing investment into MGM. Opportunities Joint Ventures to co-develop resorts and Casinos. Expansion in developing countries. Threats Legal and Regulatory Threat: The gaming industry is highly regulated in which MGM must pay gaming taxes and maintain their licenses to continue their operations. A change in tax laws could adversely affect the profitability of their organization, in addition to tax changes if a regulation is violated in one jurisdiction this could result in disciplinary actions in other jurisdictions. Economic Market: Hotel revenue decreased by 10% in 2008 due to decreased occupancy and lower average room rates. The customers however that do make it to the resorts are spending less, which MGM believe is due to their inability to access near term credit which has led to a shift in spending from discretionary items to more fundamental costs (MGM Annual Report, 2008). A direct impact on MGM is the weak housing and real estate market both generally and in Nevada. 2.1.3 Leisure Tourism industry Five Forces analysis Threat of new entrant Due to the current economy recession, hotel industry suffered a setback in revenue. Hence, this industry is viewed as unattractive. Excessive initial setup investment. Extensive regulation generally concerns the firms responsibility, financial stability and character of the owners. Also, high license maintenance fee and gaming taxes discourages new entrants. New entrants to such markets must then spend heavily on advertising and promotion to gain levels of brand awareness of the existing players. Intensity of rivalry among competitors Hotel, resort and gaming business, especially in Las Vegas and Macau, had became increasingly intense where there is rivalry to build the â€Å"biggest and best† hotel/casino. Between 1996 and 2000, the number of hotel rooms at Las Vegas casinos doubled and due to the current economic conditions, the demand for rooms had dropped significantly and resulted in reductions to average room rates due to competitive pressures. Competition between casino companies involved ever more ambitious differentiation. The new casinos in Las Vegas broke fresh ground in innovative entertainment and design features. Threat of substitute products There had been a growing substitute competition for gaming which included an increasing number of state lotteries and offshore gambling on cruise ships. The installation of slot machines in unorthodox gambling area such as horse tracks. The growth of internet gambling. Bargaining power of buyers In the entertainment industry, buyers (consumer) usually have relatively high bargaining power as there is a practically negligible switching cost. The tendency of buyers to explore different hotel for a different experience. Accessibility of information via internet on hotel packages, consumers are now more informed and prepared for the wide range of available hotels specifically in Las Vegas and Macau. Bargaining power of supplier The main sources of supplier power in the service industry are labour unions. The unions cover approximately half of their total employees (30,000 of 61,000 employees) and had successfully negotiated for increases in wages and benefits of approximately 4% annually via the newly signed 5 year collective bargaining agreement in August 2007. The other supplies to hotel consist of food and beverage, retail merchandise and operating supplies. Due to economies of scale, big buyers like MGM would have an advantage over their suppliers as they can easily switch due to the wide availability of the supplies and its continuous stream of demand. 2.2 RIO TINTO 2.2.1 Background and mission Background Rio Tinto is a leading international mining business headquartered in London. Rio Tinto Group combines Rio Tinto Plc (listed on London Stock Exchange) and Rio Tinto Limited (listed on the Australian Securities Exchange) and operates as a single entity. The group is involved in mining and supply of minerals and metals including aluminium, coal, copper, diamonds, gold, iron ore, uranium and other industrial minerals. It operates in more than 50 countries and employs approximately 106,000 people (Rio Tinto, 2008). The companys main production areas are in Australia and North America however there are significant businesses in South America, Asia, Europe and southern Africa. Rio Tinto concentrates on large scale mining operations that have a long life and are cost effective. The company recorded revenue of US$ 54,264 million in 2008, an increase of 83% over 2007. Annual production records set for iron ore, bauxite and alumina. The business had a record net capital expenditure of US$ 8.5 billion, a 71% rise over 2007 (Rio Tinto, 2008). Mission â€Å"Rio Tinto aimsto maximise the overall return to its shareholders by sustainably finding, mining and processing mineral resources areas of expertise in which we have a clear competitive advantage.A fundamental part ofthis is to deliver value while operating in an ethically and socially responsible manner, and remaining committed to long term sustainable development.† (Rio Tinto, 2009) 2.2.2 SWOT analysis Strength International mining group ranks amongst top five commodities producers. Rio Tinto has extensive line of business (Iron ore, Copper, Energy, Aluminium, Industrial Minerals and Diamond) and each division provides its services to different industries. Company is well diversified in terms of the products and the markets. Geographically companies operations are spread over six continents. Globally number one producer of Aluminium because of recent acquisition of Alcan in October 2007. Alcan was ranked globally among top three producers of Aluminium and Bauxite. Worlds largest Uranium supplier. Weaknesses Majority of Iron ore and coal contracts are sold at annual contract price rather than the spot market. There is a significant deterioration in the pricing environment of these commodities. Production of zinc and silver by the company has been decreasing in recent times. Opportunities BP and Rio Tinto entered into partnership for the formation of a new jointly owned company, Hydrogen Energy, which will develop decarbonised energy projects around the world and lead the path for sustainable future uses of coal. The growing importance of uranium as a resource for future energy needs. Threats In the recent time there is a significant reduction in the commodity prices and the demand of the market especially because of the global economic crisis. Rising concern for environmental issues, health and safety standards across the globe. Especially for the industry to meet standards and quotes agreed in the KYOTO Protocol. 2.2.3 Mining industry Five Forces analysis Threat of new entrant High demand of capital as entry cost makes it tough for new entrant to enter in this field. Very low availability of new mining areas (mines) and risk on capital involved in searching for new mining areas restricts new entry in this field. Requirement of high, sophisticated and costly technology is again an entry barrier for new entrant. High government and environmental regulations. Intensity of rivalry among competitors High demand and optimum supply leads to limited rivalry amongst competitors. Threat of substitute products Being a standardised product (commodities) and basic raw material to the industry or to the end customers, there is no availability of substitute. Prices are fixed at macro level generally by external authorities (government) so the variability in prices of different suppliers is absent. Bargaining power of buyers Strong control on Pricing by government leads to low bargaining power of customers. Unavailability of substitute products shifts the favour towards the supplier from the customers. Customers (Industries) dependency on existing channel of distribution and product is very high; therefore the customers power is again low. Bargaining power of supplier Bargaining power of suppliers supplying technology is high because of the sophisticated technology requirement and reduced availability of specialist suppliers. Skilled labour requirements are high and availability is lower because of less lucrative future prospects that shift the favour towards suppliers. 2.3 TOYOTA 2.3.1 Background and mission Background Toyota Motor, the worlds largest automotive manufacturer, has a powerful aspiration to become ‘Greener. The company makes a hybrid-powered (petrol and electric) sedan – the ‘Prius that is being snapped up in US and European markets. Its petrol-powered cars, pickups, minivans, and SUVs include such models as Camry, Corolla, 4Runner, Land Cruiser, Sienna, the Scion brand, and a full-sized pickup truck, the V-8 Tundra. Toyota also makes forklifts, manufactured housing and offers financial services. Once a dark horse in the global automotive game, Toyota overtook Chrysler and Ford in worldwide sales and surpassed General Motors in 2008. The company gets nearly half of its sales from Asia (Just Auto, 2009). Mission Toyotas management value has developed from the companys origins and has been contemplated in the termsâ€Å"Just in Time Production† and Lean Manufacturing, which it was instrumental in developing (Strategonic, 2009). The Toyota Way has five mechanisms (Liker Jeffrey K., 2003): Perfecting business process. Eliminating wasted time and resources Building quality into workplace systems Building a learning culture for continuous improvement. Finding low-cost but reliable alternatives to expensive new technology 2.3.2 SWOT analysis Strength Toyota has become the lead name in the global market. People have a lot of trust for their name and this is why Toyota is the leader in automobile industry. The important edge over the companys competitors is the ample availability of the spare parts in the markets. Toyota is a financially strong company. This can be demonstrated by the analysis of the financial reports. Toyota vehicles have got a much stronger resale value than any other car in the global markets. This is why people prefer to buy a Toyota. Toyota is proud to have a successful team of competent managers and skilled workers. Extensive training has enabled the employees to perform outstandingly. Toyota is the only company having the most sophisticated network of dealerships where customers are treated by professional dealers. Weaknesses Being big has its own problems. The World market for cars is in a condition of oversupply and so car manufacturers need to make sure that it is their models that consumers want. Toyota markets most of its products in the US and in Japan therefore it is exposed to fluctuating economic and political conditions in those markets. Perhaps that is why the company is beginning to shift its attentions to the emerging India and Chinese markets. Movements in exchange rates could see the already narrow margins in the car market being reduced. There are some weaknesses in the dealership network. The dealers sometimes tend to deviate from the recommended course of action and principles of Toyota. This can result in customer complaints. A lot of effort is put into the sales forecasting because of the changing political and economic scenarios. For these reasons inventory has to be kept low. Opportunities Export is a major opportunity for Toyota Motors. Toyota can do better by focusing on segments much more than what is presently being done. Toyota is to target the urban youth market. The company has launched its Aygo, which is targeted at the streetwise youth market and captures (or attempts to) the nature of dance and DJ culture in a very competitive segment. The vehicle itself is a unique convertible, with models extending at the rear. The narrow segment is notorious for it narrows margins and difficulties for branding. Switching diesel market toward petrol and CNG market. Threats Even though Toyota enjoys the position of being the no.1 automobile company, still it faces some threat from competitors especially Honda. Honda has adopted aggressive strategies for capturing the market. In 2005 the recall of 80,000 SUVs negatively impacted on the brand of Toyota and posed a threat to its future reliability and sales. Even though Toyota keeps a careful eye on the changing trends, still the changing customer needs and trends can prove to be a threat. 2.3.3 Automobile industry Five Forces analysis Threat of new entrant Slow lethargic state of economy resulting in low per capita income leads to declined consumption. Hence, the productivity decreased at manufacturing level. Automobile sector is already over saturated market for the provided demand base. Initial cost of capital is very large. Industry requires highly specialised technology or plants and equipments. Constant RD: Patent and proprietary of auto designs restrict the entry into an industry. Intensity of rivalry among competitors Due to high cost of competition automobile industry earns low returns. Competition has intensified rivalry by offering rebates, long-term warranties and preferred financing to lure the customers which have put pressure on the profit margins. Foreign Trade increased the degree of rivalry. Export becomes essential for expansion and competition. High exit barrier: Entrants are reluctant to commit to acquiring specialised assets that cannot be sold or converted into other uses if the venture fails. Threat of substitute products Consumer seek substitute like bus, train or aeroplane to reach their destination. Peoples likeliness to seek alternative transportation depends upon the cost of operating a vehicle. Higher the operating cost less likely people will buy the automobile. Consumers decision to buy vehicles largely depends upon the price of petrol. Emergence of very small and economical car segment in automobile sector. Bargaining power of buyers Consumers are highly price sensitive and generally dont hold much buying power as they never do bulk purchase of cars. Wider range of product, negligible switching cost, readily available. More shrewd customers: Customers are very particular in terms of brand selection, technology and price of product. Dealers are cherishing the freedom of selling more than one brand at any time. Bargaining power of supplier Due to the fragmented automobile industry, most of the suppliers depend on just one or two automakers to buy majority of the products. Switching the supplier is devastating to the business of previous supplier. Long term supplier relationship in the automobile sector, which is considered to be an oligopoly, makes the relationship obligatory for suppliers and hence the supplier has lower grip on the prices Suppliers provide secondary material and have little responsibility over the design and assembly of automakers. Therefore, essentially little power is given to suppliers. 3 Financial Analysis The report describes a financial statement analysis between companies of our choice with their closest competitor which is followed by a 3 year trend analysis to provide an indication of the consistency of the companys performance. Assessment of performance will focus on 4 main areas namely profitability, liquidity, financing and investment. In order to provide comparability, relevant financial figures are converted to US dollar as per exchange rate stated in respective annual report. 3.1 MGM GRAND 3.1.1 Profitability Gross Operating Margin According to Walton and Aerts (2009) gross operating margin is the preferred ratio to measure operation efficiency. In the hotel industry, cost of sales revolve around payroll related expenses, gaming related taxes, room, convention, retails and other expenses. In year 2008, MGMs gross operating profit had dropped from 48% to 44%, due to drop in room occupancy by 10% affecting sales with no reduction in Cost of Sales in comparison to 2007. Stagnant Cost of Sales could be explained as there are several fixed expenses like payroll, electricity, food, etc would still be maintained regardless of room occupancy and further to that, in August 2007, there are total of 21,000 MGM employees entered into a 5 year agreement which provides approximately 4% annual increment in wages and benefits. This had contributed to the increase of the payroll expenses in 2008. As for Las Vegas Sands, through the opening of new hotels like Venetian Macao, The Palazzo and Four Seasons in 2008 it had increased its sales, however there were a substantial amount of additional payroll, advertising and promotion as part of opening activities related expenses and the launching of new passenger ferry service operations in Macao where it had an additional US$100 million in operating expenses. This had affected its gross operating profit margin to drop from 40% to 36% in 2008. In terms of gross operating profit margin, MGM had been observed as a better company in controlling cost as its margin had been higher than competitor Las Vegas Sands by 7% on annual basis. Net Profit Margin According to Walton and Aerts (2009), net profit margin explains that the ratio shows how successful the management is in creating profit from a given quantity of sales. MGM has steadily increased its net profit margin except in 2008, this compares favourably to its competitor Las Vegas Sands who has shown a trend of reducing profits since 2006. The size of the loss however in 2008 was far greater for MGM. Whilst the revenues for MGM have remained fairly constant, the reduction in profit was largely down to certain areas of its operating expenses in particular US$1.2 billion impairment charge related to goodwill and an indefinite lived intangible asset recognised in the Mandalay acquisition in 2005. Having reviewed the accounts, we would also address an area of caution in the MGM profit margin in 2007 as there was a one off recognition of a US$1.03 billion gain in relation to the City Centre Project. Due to the fluctuation in MGM net profit margin due to several onetime adjustments in the years 2007 and 2008 which makes it insufficient for comparison against Las Vegas Sands, hence only figures from 2006 would be taken for assessment where Las Vegas Sands net profit margin seems more favourable than MGM. Return on capital employed (ROCE) Return on capital employed (ROCE) is a performance ratio that demonstrates how much the company has earned on invested long-term funds (Walton and Aerts, 2009). In 2008, MGM board of directors had announced 20 million share repurchase which caused the total shareholder equity to drop by 34%. With this drop, we would be expecting an increase in ROCE ratio from 0.17 to 0.19 if income before tax and long debt remains the same in 2008. However due to the loss in 2008, the actual ROCE ratio indicates a negative return of 0.79% in relation to equity. On the other hand, Las Vegas Sands ROCE ratio in 2008 had dropped by 2% due to the increased of total asset by 33% due to the distribution of common share and preference stock amounting US$ 2.56 billion, which increased the stockholder equity by 50% and additional long term debts amounting US$ 2.84 billion. Despite the fact that Las Vegas Sands ROCE ratio had dropped in 2008, Las Vegas Sands still stand a better position than MGM as there are still positive returns. Return on shareholders equity (ROECE) MGM over the three years have had a very volatile ROECE which saw progression from 2006 to 2007 but in 2008 produced a negative 5.22% return in relation to Shareholder Equity. The components that make up the ROECE are very similar to the ROCE except that the ROECE is after interest and tax but before payments of dividends. In respect of MGM dividends are irrelevant as they have not paid a dividend in the last three years. The negative return in 2008 was solely down to their losses of US$670 million from their continuing operations before income tax. This loss was further inflated by US$186 million provision for income tax expense even though the company made a loss. The provision was for a non deductable good Company Analysis for Investment Opportunities Company Analysis for Investment Opportunities 1 Introduction We have organised a shareholders club which we have called 6IM. There are six members within 6IM of which we all have  £1000 each to invest. As part of our Investment process we have decided to choose three companies in different sectors and conduct an in depth financial analysis. Due to the three companies working in different sectors we have also analysed key financial data of a major competitor to that particular company. We feel this will enable us to gain a greater understanding of the industry of which the three companies are working in and also a direct financial comparison with our chosen companies. Our report will begin with a brief profile of the three companies followed by a SWOT analysis to enable us to paint a picture of where the company currently sit and the potential investment opportunities and risks associated with that particular company. In addition to this we will conduct a five forces investigation to understand the industries competitiveness. In respect of financials we will gain an understanding of the numbers in the annual reports of both our targeted three companies and also our competitors. We will use a number of investment ratios to quantify the numbers which will help us review the performance of our chosen companies against our competitors and in addition devise a brief explanation as to what aspects of the business have made a positive or negative impact on the ratio in which we are assessing. The ratios that we will choose will be independent of each other due to the fact that some ratios are more relevant than others in certain industries. The ratios will be conducted for each of the last 3 financial years for both our targeted companies and competitors. The ratios will be split into four categories liquidity, profitability, financing and investment. Finally we will then standardise the ratios and compare our three chosen companies. We will use a marking system to identify which company we feel excel in each ratio to help us arrive at our chosen investment vehicle. The three companies in which we will be conducting the report on are: 1) MGM Grand Sector: Leisure Tourism Fiscal year: Jan 01st – Dec 31st 2) Rio Tinto Sector: Mining Fiscal year: Jan 01st – Dec 31st 3) Toyota Sector: Car manufacturing Fiscal year: April 01st – March 31st Investment Objective A medium term investment of 5 years Provide income through dividends Provide capital growth at the end of the term We would be looking at an annual expected return of between 8% and 10% Tax Implications 6IM discussed about the tax implications of our investment objectives. We felt that as we were all basic rate taxpayers receiving a dividend would be beneficial as we would not be impeded by the non reclaimable 10% tax credit or would we have a further liability of 22.5% due to the fact we were not higher rate tax payers. Regarding capital growth it was decided that if our money had grown substantially over the five years and the profit was above the capital gains tax annual exemption we would realise the gains over two tax years to ensure we would utilise as much of the gain tax free as possible. According to Tax Facts 2009-2010 (2009), Current Capital Gains Tax annual exemption is:  £ 10,100 (2009-10) Current Capital Gains Tax subject to being over the exemption is: 18% Attitude to Risk 6IM have agreed that we will adopt a moderately adventurous attitude to risk. As part of our risk assessment, collectively we decided to assess ourselves using a risk attitude profiling questionnaire as per Appendix II which was designed by Scottish Life a leading Life Pension investment provider. We discussed our views on ethical investments and we concluded that whilst our opinions were not strong enough to adopt negative screening criteria which would be to completely disregard any unethical company, we would look to see if the companies are trying to improve the way they work. In respect of the three companies chosen we also discussed that we would need to be aware of currency risk, political risk, market risk and inflation risk which would be in addition to the business risk and investment specific risk of the company. Finally our thoughts were if we felt that each of the companies were viable in respect of investment we would be happy to spilt our money and invest in all three which would gain potentially reduce our risk through diversification. 2 Marketing and industry data 2.1 MGM GRAND 2.1.1 Background and mission Background MGM operates in a very competitive entertainment and hospitality industry and is located on the New York Stock Exchange. The company owns, develops and operates casino and non casino resorts. The majority of MGMs hotels are located in Nevada where they own approximately 700 acres of land on the Las Vegas strip. Whilst MGM have a variety of hotels that occupies this land they also have a meaningful proportion that is considered undeveloped and could offer future investment opportunities. As well as resorts in Las Vegas, MGM also have operations in Michigan, Mississippi, Macau, Atlantic City and Illinois. One of their latest developments is the MGM Grand Ho Tram which will consist of a 4.2 billion multi property resort complex along the beaches of Southern China. In addition to this MGM will also open in December 2009 on the Las Vegas strip a project called City Centre which is a joint venture with Dubai World. MGM as at 31st December 2008 employ approximately 46,000 full time staff and 15,000 part time staff, they pride themselves on offering excellent customer service which has been demonstrated by many accolades, including AAA five diamond and 4 diamond awards at hotels and restaurants across their portfolio. There quality and reputation was enhanced further in October this year when 7 of MGMs restaurants were honoured with at least one Michelin star which demonstrates the quality they strive for. MGMs revenue in 2008 decreased by 6.27% which was largely down to the economic conditions and with MGM having the vast majority of its portfolio in Las Vegas this could be demonstrated by the reduction in visitor volumes during the time period (Appendix I). MGM feel whilst times are currently tough James J. Murren Chairman and CEO states â€Å"There company is well positioned to face the future thanks to our dedicated management team and work force, premier brands and best in class resorts. When the cycle changes, we will be stronger, with a foundation of experienced operators and an efficient operating profile that is not only business ready but has been battle tested.† (MGM Annual Report, 2008 p.8) Mission MGM Mirage Mission Statement, â€Å"Our mission is to deliver our winning combination of quality entertainment, luxurious facilities and exceptional customer service to every corner of the world in order to enhance a shareholder value and to sustain employee, customer and community relationships† (MGM Mirage, 2009). 2.1.2 SWOT analysis Strength Quality Employees: MGM have invested heavily in recruiting, training and maintaining employees. They run a variety of programs for example a diversity program which looks at unique strengths of individuals and being able to blend them to work together to achieve greater performance. In addition to training, to ensure they maintain their employees in August 2007 MGM entered into an agreement with 21,000 thousand of its Las Vegas employees to provide an increase in wages and benefits of approximately 4% annually. Diversified Offering: MGM would be expected to earn the majority of its revenues from gaming however this is not the case with over half of its net revenue derived from non gaming activities. MGM offer a complete resort experience for its guests, with their non-gaming activities being offered at a premium due to the quality of their offering. Brand Name Awareness: MGM is one of the leading hotel and leisure companies as at December 31st 2008 their operations consisted of 17 wholly owned casino resorts and a 50% investment in 4 other casino resorts. This high brand name awareness gives MGM a distinct advantage when competing against other casino brands and helps enable them to draw more customers. Weaknesses Financial Strength: In February 2009 all of the major credit rating agencies – Moodys, Standard Poors and Fitch downgraded MGMs rating on long term debt, there was a further downgrade by Moodys in March 2009. These downgrades will again potentially make it very difficult for MGM to obtain debt finance and may even increase the cost of any future debt financing. Amount of Indebtedness: As at the 31st December 2008, MGM had long term debt totalling approximately US$ 13.5 billion dollars. The amount of debt and the inability of MGM to take on further debt could have a catastrophic impact on its business. It is uncertain that the sources of credit they have available will be sufficient to fund current financial commitments, whilst MGM have received a waiver that they do not have to comply with certain financial covenants this has led to further restrictions and requirements for them to adhere to. Weak Returns: In 2008 MGM have seen a reduction in the majority of their financial ratios compared with its 2007 figures. The figures can be seen in our ratio analysis section of the report and whilst an explanation of the figures have been discussed, the reduced ratios can only cause investors concern and a reduction in confidence in placing investment into MGM. Opportunities Joint Ventures to co-develop resorts and Casinos. Expansion in developing countries. Threats Legal and Regulatory Threat: The gaming industry is highly regulated in which MGM must pay gaming taxes and maintain their licenses to continue their operations. A change in tax laws could adversely affect the profitability of their organization, in addition to tax changes if a regulation is violated in one jurisdiction this could result in disciplinary actions in other jurisdictions. Economic Market: Hotel revenue decreased by 10% in 2008 due to decreased occupancy and lower average room rates. The customers however that do make it to the resorts are spending less, which MGM believe is due to their inability to access near term credit which has led to a shift in spending from discretionary items to more fundamental costs (MGM Annual Report, 2008). A direct impact on MGM is the weak housing and real estate market both generally and in Nevada. 2.1.3 Leisure Tourism industry Five Forces analysis Threat of new entrant Due to the current economy recession, hotel industry suffered a setback in revenue. Hence, this industry is viewed as unattractive. Excessive initial setup investment. Extensive regulation generally concerns the firms responsibility, financial stability and character of the owners. Also, high license maintenance fee and gaming taxes discourages new entrants. New entrants to such markets must then spend heavily on advertising and promotion to gain levels of brand awareness of the existing players. Intensity of rivalry among competitors Hotel, resort and gaming business, especially in Las Vegas and Macau, had became increasingly intense where there is rivalry to build the â€Å"biggest and best† hotel/casino. Between 1996 and 2000, the number of hotel rooms at Las Vegas casinos doubled and due to the current economic conditions, the demand for rooms had dropped significantly and resulted in reductions to average room rates due to competitive pressures. Competition between casino companies involved ever more ambitious differentiation. The new casinos in Las Vegas broke fresh ground in innovative entertainment and design features. Threat of substitute products There had been a growing substitute competition for gaming which included an increasing number of state lotteries and offshore gambling on cruise ships. The installation of slot machines in unorthodox gambling area such as horse tracks. The growth of internet gambling. Bargaining power of buyers In the entertainment industry, buyers (consumer) usually have relatively high bargaining power as there is a practically negligible switching cost. The tendency of buyers to explore different hotel for a different experience. Accessibility of information via internet on hotel packages, consumers are now more informed and prepared for the wide range of available hotels specifically in Las Vegas and Macau. Bargaining power of supplier The main sources of supplier power in the service industry are labour unions. The unions cover approximately half of their total employees (30,000 of 61,000 employees) and had successfully negotiated for increases in wages and benefits of approximately 4% annually via the newly signed 5 year collective bargaining agreement in August 2007. The other supplies to hotel consist of food and beverage, retail merchandise and operating supplies. Due to economies of scale, big buyers like MGM would have an advantage over their suppliers as they can easily switch due to the wide availability of the supplies and its continuous stream of demand. 2.2 RIO TINTO 2.2.1 Background and mission Background Rio Tinto is a leading international mining business headquartered in London. Rio Tinto Group combines Rio Tinto Plc (listed on London Stock Exchange) and Rio Tinto Limited (listed on the Australian Securities Exchange) and operates as a single entity. The group is involved in mining and supply of minerals and metals including aluminium, coal, copper, diamonds, gold, iron ore, uranium and other industrial minerals. It operates in more than 50 countries and employs approximately 106,000 people (Rio Tinto, 2008). The companys main production areas are in Australia and North America however there are significant businesses in South America, Asia, Europe and southern Africa. Rio Tinto concentrates on large scale mining operations that have a long life and are cost effective. The company recorded revenue of US$ 54,264 million in 2008, an increase of 83% over 2007. Annual production records set for iron ore, bauxite and alumina. The business had a record net capital expenditure of US$ 8.5 billion, a 71% rise over 2007 (Rio Tinto, 2008). Mission â€Å"Rio Tinto aimsto maximise the overall return to its shareholders by sustainably finding, mining and processing mineral resources areas of expertise in which we have a clear competitive advantage.A fundamental part ofthis is to deliver value while operating in an ethically and socially responsible manner, and remaining committed to long term sustainable development.† (Rio Tinto, 2009) 2.2.2 SWOT analysis Strength International mining group ranks amongst top five commodities producers. Rio Tinto has extensive line of business (Iron ore, Copper, Energy, Aluminium, Industrial Minerals and Diamond) and each division provides its services to different industries. Company is well diversified in terms of the products and the markets. Geographically companies operations are spread over six continents. Globally number one producer of Aluminium because of recent acquisition of Alcan in October 2007. Alcan was ranked globally among top three producers of Aluminium and Bauxite. Worlds largest Uranium supplier. Weaknesses Majority of Iron ore and coal contracts are sold at annual contract price rather than the spot market. There is a significant deterioration in the pricing environment of these commodities. Production of zinc and silver by the company has been decreasing in recent times. Opportunities BP and Rio Tinto entered into partnership for the formation of a new jointly owned company, Hydrogen Energy, which will develop decarbonised energy projects around the world and lead the path for sustainable future uses of coal. The growing importance of uranium as a resource for future energy needs. Threats In the recent time there is a significant reduction in the commodity prices and the demand of the market especially because of the global economic crisis. Rising concern for environmental issues, health and safety standards across the globe. Especially for the industry to meet standards and quotes agreed in the KYOTO Protocol. 2.2.3 Mining industry Five Forces analysis Threat of new entrant High demand of capital as entry cost makes it tough for new entrant to enter in this field. Very low availability of new mining areas (mines) and risk on capital involved in searching for new mining areas restricts new entry in this field. Requirement of high, sophisticated and costly technology is again an entry barrier for new entrant. High government and environmental regulations. Intensity of rivalry among competitors High demand and optimum supply leads to limited rivalry amongst competitors. Threat of substitute products Being a standardised product (commodities) and basic raw material to the industry or to the end customers, there is no availability of substitute. Prices are fixed at macro level generally by external authorities (government) so the variability in prices of different suppliers is absent. Bargaining power of buyers Strong control on Pricing by government leads to low bargaining power of customers. Unavailability of substitute products shifts the favour towards the supplier from the customers. Customers (Industries) dependency on existing channel of distribution and product is very high; therefore the customers power is again low. Bargaining power of supplier Bargaining power of suppliers supplying technology is high because of the sophisticated technology requirement and reduced availability of specialist suppliers. Skilled labour requirements are high and availability is lower because of less lucrative future prospects that shift the favour towards suppliers. 2.3 TOYOTA 2.3.1 Background and mission Background Toyota Motor, the worlds largest automotive manufacturer, has a powerful aspiration to become ‘Greener. The company makes a hybrid-powered (petrol and electric) sedan – the ‘Prius that is being snapped up in US and European markets. Its petrol-powered cars, pickups, minivans, and SUVs include such models as Camry, Corolla, 4Runner, Land Cruiser, Sienna, the Scion brand, and a full-sized pickup truck, the V-8 Tundra. Toyota also makes forklifts, manufactured housing and offers financial services. Once a dark horse in the global automotive game, Toyota overtook Chrysler and Ford in worldwide sales and surpassed General Motors in 2008. The company gets nearly half of its sales from Asia (Just Auto, 2009). Mission Toyotas management value has developed from the companys origins and has been contemplated in the termsâ€Å"Just in Time Production† and Lean Manufacturing, which it was instrumental in developing (Strategonic, 2009). The Toyota Way has five mechanisms (Liker Jeffrey K., 2003): Perfecting business process. Eliminating wasted time and resources Building quality into workplace systems Building a learning culture for continuous improvement. Finding low-cost but reliable alternatives to expensive new technology 2.3.2 SWOT analysis Strength Toyota has become the lead name in the global market. People have a lot of trust for their name and this is why Toyota is the leader in automobile industry. The important edge over the companys competitors is the ample availability of the spare parts in the markets. Toyota is a financially strong company. This can be demonstrated by the analysis of the financial reports. Toyota vehicles have got a much stronger resale value than any other car in the global markets. This is why people prefer to buy a Toyota. Toyota is proud to have a successful team of competent managers and skilled workers. Extensive training has enabled the employees to perform outstandingly. Toyota is the only company having the most sophisticated network of dealerships where customers are treated by professional dealers. Weaknesses Being big has its own problems. The World market for cars is in a condition of oversupply and so car manufacturers need to make sure that it is their models that consumers want. Toyota markets most of its products in the US and in Japan therefore it is exposed to fluctuating economic and political conditions in those markets. Perhaps that is why the company is beginning to shift its attentions to the emerging India and Chinese markets. Movements in exchange rates could see the already narrow margins in the car market being reduced. There are some weaknesses in the dealership network. The dealers sometimes tend to deviate from the recommended course of action and principles of Toyota. This can result in customer complaints. A lot of effort is put into the sales forecasting because of the changing political and economic scenarios. For these reasons inventory has to be kept low. Opportunities Export is a major opportunity for Toyota Motors. Toyota can do better by focusing on segments much more than what is presently being done. Toyota is to target the urban youth market. The company has launched its Aygo, which is targeted at the streetwise youth market and captures (or attempts to) the nature of dance and DJ culture in a very competitive segment. The vehicle itself is a unique convertible, with models extending at the rear. The narrow segment is notorious for it narrows margins and difficulties for branding. Switching diesel market toward petrol and CNG market. Threats Even though Toyota enjoys the position of being the no.1 automobile company, still it faces some threat from competitors especially Honda. Honda has adopted aggressive strategies for capturing the market. In 2005 the recall of 80,000 SUVs negatively impacted on the brand of Toyota and posed a threat to its future reliability and sales. Even though Toyota keeps a careful eye on the changing trends, still the changing customer needs and trends can prove to be a threat. 2.3.3 Automobile industry Five Forces analysis Threat of new entrant Slow lethargic state of economy resulting in low per capita income leads to declined consumption. Hence, the productivity decreased at manufacturing level. Automobile sector is already over saturated market for the provided demand base. Initial cost of capital is very large. Industry requires highly specialised technology or plants and equipments. Constant RD: Patent and proprietary of auto designs restrict the entry into an industry. Intensity of rivalry among competitors Due to high cost of competition automobile industry earns low returns. Competition has intensified rivalry by offering rebates, long-term warranties and preferred financing to lure the customers which have put pressure on the profit margins. Foreign Trade increased the degree of rivalry. Export becomes essential for expansion and competition. High exit barrier: Entrants are reluctant to commit to acquiring specialised assets that cannot be sold or converted into other uses if the venture fails. Threat of substitute products Consumer seek substitute like bus, train or aeroplane to reach their destination. Peoples likeliness to seek alternative transportation depends upon the cost of operating a vehicle. Higher the operating cost less likely people will buy the automobile. Consumers decision to buy vehicles largely depends upon the price of petrol. Emergence of very small and economical car segment in automobile sector. Bargaining power of buyers Consumers are highly price sensitive and generally dont hold much buying power as they never do bulk purchase of cars. Wider range of product, negligible switching cost, readily available. More shrewd customers: Customers are very particular in terms of brand selection, technology and price of product. Dealers are cherishing the freedom of selling more than one brand at any time. Bargaining power of supplier Due to the fragmented automobile industry, most of the suppliers depend on just one or two automakers to buy majority of the products. Switching the supplier is devastating to the business of previous supplier. Long term supplier relationship in the automobile sector, which is considered to be an oligopoly, makes the relationship obligatory for suppliers and hence the supplier has lower grip on the prices Suppliers provide secondary material and have little responsibility over the design and assembly of automakers. Therefore, essentially little power is given to suppliers. 3 Financial Analysis The report describes a financial statement analysis between companies of our choice with their closest competitor which is followed by a 3 year trend analysis to provide an indication of the consistency of the companys performance. Assessment of performance will focus on 4 main areas namely profitability, liquidity, financing and investment. In order to provide comparability, relevant financial figures are converted to US dollar as per exchange rate stated in respective annual report. 3.1 MGM GRAND 3.1.1 Profitability Gross Operating Margin According to Walton and Aerts (2009) gross operating margin is the preferred ratio to measure operation efficiency. In the hotel industry, cost of sales revolve around payroll related expenses, gaming related taxes, room, convention, retails and other expenses. In year 2008, MGMs gross operating profit had dropped from 48% to 44%, due to drop in room occupancy by 10% affecting sales with no reduction in Cost of Sales in comparison to 2007. Stagnant Cost of Sales could be explained as there are several fixed expenses like payroll, electricity, food, etc would still be maintained regardless of room occupancy and further to that, in August 2007, there are total of 21,000 MGM employees entered into a 5 year agreement which provides approximately 4% annual increment in wages and benefits. This had contributed to the increase of the payroll expenses in 2008. As for Las Vegas Sands, through the opening of new hotels like Venetian Macao, The Palazzo and Four Seasons in 2008 it had increased its sales, however there were a substantial amount of additional payroll, advertising and promotion as part of opening activities related expenses and the launching of new passenger ferry service operations in Macao where it had an additional US$100 million in operating expenses. This had affected its gross operating profit margin to drop from 40% to 36% in 2008. In terms of gross operating profit margin, MGM had been observed as a better company in controlling cost as its margin had been higher than competitor Las Vegas Sands by 7% on annual basis. Net Profit Margin According to Walton and Aerts (2009), net profit margin explains that the ratio shows how successful the management is in creating profit from a given quantity of sales. MGM has steadily increased its net profit margin except in 2008, this compares favourably to its competitor Las Vegas Sands who has shown a trend of reducing profits since 2006. The size of the loss however in 2008 was far greater for MGM. Whilst the revenues for MGM have remained fairly constant, the reduction in profit was largely down to certain areas of its operating expenses in particular US$1.2 billion impairment charge related to goodwill and an indefinite lived intangible asset recognised in the Mandalay acquisition in 2005. Having reviewed the accounts, we would also address an area of caution in the MGM profit margin in 2007 as there was a one off recognition of a US$1.03 billion gain in relation to the City Centre Project. Due to the fluctuation in MGM net profit margin due to several onetime adjustments in the years 2007 and 2008 which makes it insufficient for comparison against Las Vegas Sands, hence only figures from 2006 would be taken for assessment where Las Vegas Sands net profit margin seems more favourable than MGM. Return on capital employed (ROCE) Return on capital employed (ROCE) is a performance ratio that demonstrates how much the company has earned on invested long-term funds (Walton and Aerts, 2009). In 2008, MGM board of directors had announced 20 million share repurchase which caused the total shareholder equity to drop by 34%. With this drop, we would be expecting an increase in ROCE ratio from 0.17 to 0.19 if income before tax and long debt remains the same in 2008. However due to the loss in 2008, the actual ROCE ratio indicates a negative return of 0.79% in relation to equity. On the other hand, Las Vegas Sands ROCE ratio in 2008 had dropped by 2% due to the increased of total asset by 33% due to the distribution of common share and preference stock amounting US$ 2.56 billion, which increased the stockholder equity by 50% and additional long term debts amounting US$ 2.84 billion. Despite the fact that Las Vegas Sands ROCE ratio had dropped in 2008, Las Vegas Sands still stand a better position than MGM as there are still positive returns. Return on shareholders equity (ROECE) MGM over the three years have had a very volatile ROECE which saw progression from 2006 to 2007 but in 2008 produced a negative 5.22% return in relation to Shareholder Equity. The components that make up the ROECE are very similar to the ROCE except that the ROECE is after interest and tax but before payments of dividends. In respect of MGM dividends are irrelevant as they have not paid a dividend in the last three years. The negative return in 2008 was solely down to their losses of US$670 million from their continuing operations before income tax. This loss was further inflated by US$186 million provision for income tax expense even though the company made a loss. The provision was for a non deductable good