Nature Of Scandals Perpetrators And Their Roles Accounting Essay

A figure of accounting dirts have occurred within the past old ages, the consequence of which will go on to be remembered by the general populace. These dirts were blamed on series of factors, runing from hapless corporate administration to the compensation-plan of top direction. Two of the most dramatic and popular dirts were Polly Peck in the UK in 1990 and Enron in the US in 2001. These two dirts where different in their ain ways, but they end-results were similar – distraught stockholders lost their full life nest eggs, employees lost their occupations, creditors did non acquire paid back, and tonss more.NATURE OF SCANDALS, PERPETRATORS AND THEIR ROLESIn 1980, a company known as Restro Investment which was controlled by Asil Nadir bought 58 % of the portions of Polly Peck, a little company in the fabric industry for ?270,000. With this, he had control over the company and within 10 old ages of purchase, Polly Peck grew into a large company ( Wearing, 2005 ) . Within the ol d ages 1982 – 1989, turnover, pre-tax net income, and net assets rose from ?21 million to ?1.16 billion, ?9 million to ?161 million, and ?12 million to ?845 million severally ( Jones, 2011 ) . However, despite its first-class consequences, Polly Peck was unable to pay its creditors. What was surprising was that although Nadir had merely 25 % of the portions as at 1989, he still controlled and dominated the board and the company as a whole. Nadir extracted hard currency from Polly Peck and transferred it into its subordinate companies like Uni-Pac before he finally transferred it out for his personal usage. These backdowns would look in Polly Peck ‘s histories as sum owed by subordinates and would later be cancelled out as inter-company balance ( Jones, 2011 ) . An probe by the Serious Fraud Office ( SFO ) besides revealed that Polly Peck cooked up its assets in some of its subordinates so as to call off out the sum owed by these subordinates to Polly Peck. What besides made the dirt worse were the accounting policies adopted by Polly Peck which were in conformity to the demand of accounting criterions at that clip. In 1983, Polly Peck adopted the SSAP 20 ( Foreign Currency Translation ) and take to utilize the mean rate to interpret its profitless points. Therefore, when it restated its 1982 fiscal statement in line with SSAP, there was an addition of ?2.7 million in turnover and ?1.5 million in net assets for that twelvemonth merely. Hence, Polly Peck continued with its mean method in interpreting net income and loss points, and from 1983-1989, Polly Peck made a net income before involvement and revenue enhancement of ?599 million and within the same period, debited ?415 million to the net income and loss history due to the motions on exchange. Of this ?415 million, ?56 million was as a consequence of the usage of the mean method in change overing its net income and loss points, while the balance was due to the interlingual rendition of its openi ng net investings. Hence, Polly Peck continued to turn each twelvemonth, as motion on the exchange was inauspicious. Andrew Fastow, the CFO at Enron, was behind the creative activity of Particular Purpose Entities ( entities set up to transport out certain activities ) into which Enron could dump debts and generate income, thereby lead oning investors on the existent nature of their capital construction. With this, he was able to conceal debt worth over $ 1 billion in the SPEs. Besides, due to the fact that the US GAAP stipulated that such SPEs need non be consolidated if at least 3 % of its entire funding came from independent equity holders, Enron had the perfect alibi non to consolidate their statements with those of their SPEs. However, it was subsequently discovered that the equity was non really owned by independent 3rd party, but by Enron itself. Therefore, Enron should hold consolidated the SPEs in the first case. Besides, Enron ‘s CEO, Jeffrey Skilling pleaded with regulators to enable the company utilize the mark- to-market accounting method, thereby enabling him to set down $ 65 mi llion of net income for his section. This was entirely done to enable him run into analysts ‘ outlook and besides obtain the promised compensation of 3 % of the value of his section ‘s concern. Enron ‘s board of managers fell abruptly of their duties by puting aside the codification of moralss and leting illegal partnership to take topographic point. Besides, the board did non follow through the probe carried out by the finance section sing the compensation of Fastow. Although the board argued that they had no cognition about what was traveling on, the Powers Report stated that the board had failed in its oversight responsibilities ( Gown & A ; Abelson, 2002 ) . The audit commission at Enron had every right to look into the traffics that Enron was traveling into in order to halt it from the oncoming. However, they did non inquire any inquiries nor did they size up the boards ( Peel & A ; Hill, 2002 ) . Analysts on the other manus compounded the fraud by endorsing Enron and promoting people to purchase their portions even when the stock monetary value was falling. Whenever analysts opted to state otherwise, they would run into jobs with their employers. This was the instance of Chung Wu who was sacked by his director Price Webber because Chung sent an electronic mail to Enron ‘s investors stating them to â€Å" take some money off the tabular array † as the fiscal state of affairs at Enron was non looking good.Detriments TO STAKEHOLDERS OF THE ENTITIESOne of the negative effects of accounting frauds is the disadvantage it normally has on stakeholders like creditors, employees, stockholders, and any other individual or group of people who have a good involvement in the house. As respects Polly Peck, it was revealed that they owed over 1.3 billion to creditors. And to do affairs worse, these creditors merely received 4 pence for every lb they were owed. Besides, most stoc kholders every bit good as 1000 s of pensionaries lost all of their investing. Ten 1000s of employees besides lost their occupations. As with employees at Enron, they were deceived into believing that the company was still making good and were farther prevented from selling their stock or diversifying their portfolio even while the top executives were selling theirs. They watched haplessly as their life nest eggs vanished from their eyes. As a consequence of the dirt, the repute of top direction was destroyed and it led to some of them like Jeffery Skilling, Andrew Fastow, and Kenneth Ley being persecuted and later imprisoned. Sing the investors at Enron, both institutional and single investors lost a immense sum of their investing because they were deceived into believing that the house was still executing well.Regarding executives and senior direction, unethical patterns were paramount in Enron whereby those who played along were showered in compensations and wagess, while those who challenged the traffics were persecuted.GOVERNANCE ROLES THE BOARDS HAVE OVER THE ENTITIESThe board of managers are those who are re sponsible for guaranting that the company is being managed by the directors in the involvement of the stockholders, and they are responsible for keeping the ethical codification of the organisation. Board of managers are besides meant to supervise accounting patterns in order to guarantee conformity with accounting criterions, reappraisal wage strategies of top executives in order to forestall struggle of involvement arising, and guarantee independency of company ‘s hearers by revolving the audit house after every few old ages and forestalling the audit house from supplying both internal and external audit services.This was non the instance at Enron as the improper administration of its board of managers was one of the major jobs which led to its autumn. It can besides be said that there was weak administration at Polly Peck as Nadir was able to travel big amounts of money without any employees or managers oppugning him. This was likely due to the fact that Nadir was moving as both president and CEO, thereby giving him absolute power and control and besides due to the deficiency of effectual control system within Polly Peck ‘s caput office in London. The control systems were so weak to the extent that even the demand for double signatures on bank backdowns was absent.ROLE OF EXTERNAL AUDITORS AND AN ASSESSMENT AS TO WHETHER THEIR AUDIT DUTIES WERE FULFILLEDThe hearers of Polly Peck were Erdal & A ; co. ( Turkish subordinates hearers ) and Stoy Hayward ( UK- based group hearers ) . Erdal & A ; co. collaborated with Polly Peck in the uses of their histories and this led to the exclusion of Erdal spouses from the Institute of Charted Accountants of England and Wales, while Stoy Hayward was criticized on the footing of inefficiency in the appraisal of Erdal in transporting out the audit of the Turkish subordinates of Polly Peck ; inefficiency in reexamining Erdal ‘s working documents ; and failure to look into the causes of the unnatural growing in its subordinates. SAS 82 requires external hearers to look for fiscal and non-financial inducements as indexs of fraud while transporting out their audit responsibilities. Harmonizing to Apostolo et Al ( 2001 ) , there were two of these non-financial inducements present at Enron which were ignored by Andersen. They were: compensation being linked to aggressive accounting patterns, and direction ‘s casual attitude over the internal controls. Besides, Andersen did non describe the revenue enhancement turning away strategy used by Enron. From another point of position, the drastic alterations in the fiscal statements of Enron were supposed to hold made the external hearers leery. Such as: Why the operating income, Earnings per portion ( EPS ) , and gross borders fluctuated greatly between the old ages 1997- 2000 Why the stock monetary value increased enormously in 2000, when the EPS merely increased by a small per centum, and in fact gross border per centum dropped from 13.3 % to 6 % . With all this, it can be said that both Stoy Hayward and Andersen did non take a close expression at the ruddy flags which suggested that there could be fraud at Polly Peck and Enron severally.AUDITORS CONFLICT OF INTERESTSHearers ‘ struggle of involvement refers to a state of affairs whereby the personal involvement of hearers struggles with their fiducial responsibilities, therefore holding undue influence on their duties and forestalling them from moving in the best involvement of stockholders. This struggle of involvement can be existent or perceived. Arthur Andersen was Enron ‘s external hearer, supplying it with external audit services, internal audit services and consultancy services. Coupled with the fact that a big sum of the house ‘s fee was from its non-audit work instead than its audit work, it can be stipulated that there was a menace to the independency of Arthur Andersen, thereby taking to a struggle of involvement. In add-on, the relationship between Enron and Andersen ‘s employees was so close that at Enron ‘s office in Houston, it was hard to distinguish Enron ‘s employees from Andersen ‘s. To decline the state of affairs, Enron ‘s internal audit staff became Andersen ‘s staff when Enron ‘s internal audit division was taken over by Andersen. This depicts a true scenario of struggle of involvement as the independency place of the hearers has been compromised. Though Andersen argued that this relationship did non in any manner affect their independency place, it still was against the AICPA ‘s ( American Institute of Certified Public Accountants ) codification of professional behavior demand that external hearers should at all times give the â€Å" visual aspect of independency † in order to give credibleness to their work. In the instance of Polly Peck, the struggle of involvement that arose was on the portion of Coopers & A ; Lybrand, who were responsible for the disposal and receivership of Polly Peck. There was a struggle of involvement as they had portions in Polly Peck, audited its subordinates, served as advisers to the managers and reported on the company ‘s prospectus ( Sikka, 2004 ) . Besides as Polly Peck was one of Stoy Hayward ‘s most established clients, there was the possibility of struggle of involvement as Stoy Hayward would non desire to lose a major beginning of their income.LESSONS LEARNT FROM THE SCANDALSBefore the prostration of Polly Peck, stakeholders and the general populace found it difficult to understand how the company was doing its money even though it had no hard currency, but no 1 was making or stating anything about it, and there were no inquiries asked. Therefore, an of import lesson learnt is that inquiries should be raised and probes should be carried out when there is uncertainty, in order to place the possibility of a fraud before it ‘s excessively late. Besides, Asil Nadir was moving as both the president and CEO of Polly Peck, thereby holding so much authorization and power which means there was barely any segregation of responsibilities, doing it hard to acknowledge the fraud from the beginning. Hence, another lesson learnt is to hold two different persons moving as CEO and president, as stated in the Cadbury study. One of the lessons learnt from the Enron dirt is that hearers should be rotated after a certain figure of old ages so as to keep their independency. In the instance of Enron, Andersen was its hearer since its origin in 1983, hence, the stopping point relationship between Andersen and Enron. This likely led to Andersen overlooking the abnormalities of Enron. Besides, it was learnt that there should be a cheque on bonus-based compensation for employees, as this could hold made them beg any agencies to accomplish the declared fillip, even though it could be to the hurt of the company in the long tally.How were these lessons incorporated into subsequent codifications on corporate administration? Explain what these codifications aimed to accomplishAs a disincentive for the dirt in Enron happening in future, the Sarbanes Oxley act 2002 ( SOX ) was introduced. This SOX does non undertake the issue of corporate administration by implementing codification of best pattern or rule, but by puting more duties on managers and senior direction. For illustration, the CEO and CFO must attest that to the best of their cognition that the one-year study and quarterly studies do non incorporate an untrue statement or skip of immaterial fact and that the fiscal statements and fiscal information reasonably represent, in all stuff facets, the true fiscal statu s and consequences of operations of the company. Therefore, one of the purposes of the SOX is to do the CEO and CFO guarantee that fraud does non happen, otherwise they will be held responsible and penalized. The act requires all listed companies to hold audit commissions which will be responsible for finding their audit fees and naming hearers, thereby guaranting they carry out their work decently. These audit commissions must dwell of independent managers who must non, in whatsoever circumstance, obtain confer withing and non-board fees from the company, thereby beef uping their independency from the company. Audited account houses are prohibited from functioning as hearers of a peculiar house for a twelvemonth, if it so occurred that the CEO, CFO, or main accounting officer of the audited house has in any manner participated in the company ‘s audit while employed by the audit house, thereby avoiding any struggle of involvement on the portion of hearers. Another measure taken was the constitution of PCAOB ( Public Company Accounting Oversight Board ) for the debut of stiff processs that will safeguard the hearers ‘ independency from direction and the ordinance of the profession. Besides, the PCAOB was put to supervise the audit of public companies in order to protect the involvement of investors. The Cadbury study was published in 1992 after the prostration of some outstanding UK companies, including Polly Peck. The prostration was chiefly as a consequence of board inadvertence and weak administration systems. The Cadbury study is a study of a commission chaired by Adrian Cadbury which focuses on the agreement of company boards and accounting systems to cut down corporate administration hazards and failures. It recommends the constitution of a non-statutory codification of best pattern and administration issues in listed companies. This was known as the combined codification which was to go the anchor of corporate administration. The codification recommends that board of UK corporations or publically traded companies should include at least three outside non-executive managers effectual internal control systems should be put in topographic point, there should be transparence in its fiscal coverage, and that places of Chairman of the Board ( COB ) and Chief Executive Officer ( CEO ) be held by two different persons.PRINCIPLE BASED CODES VERSUS RULES BASED CODESIt can be said that the codifications under the US Code of Corporate Governance ( for illustration, Sarbanes Oxley Act ) are regulations based while those under the UK Code of Corporate Governance ( for illustration, Cadbury study ) are principle based. The US Code of Corporate Governance focuses on quantitative steps such as audit commission and outside managers while the UK Code of Corporate Governance focuses on qualitative steps such as transparence and due diligence. This can be seen in the instance of Enron – although it met the quantitative steps of corporate administration, it failed to run into the qualitative steps. The regulations based codifications can be said to be regulator-led as the SEC are apt for implementing, implementing and supervising codifications of corporate administration, hence, have a one-size-fits all attack and gives small or no room for creativeness, while the rule based codifications on the other manus can be said to be shareholders-led as the stockholders have the right to make up one's mind on what codifications are indispensable and suited to guard their involvement. Harmonizing to Rezaee ( 2008 ) , the rules based attack is seen to be more effectual than the regulations based attack due to the fact that it is more flexible and enables the participants of corporate administration, for illustration hearers, audit commission and managers exercise their professional opinion, thereby, keeping the dependability and quality of the corporate administration system.Your positions as to whether the corporate administration codifications have addressed all the issues raised or whether other countries need to be addressed either through codifications or through companies ain corporate administration processsIt can be concluded that though most of the issues sing the Polly Peck and Enron dirts have been addressed in the codifications of corporate administration, the issue of the audit commission has non been to the full addressed. Although the SEC requires listed companies to hold audit commissions, we believe they should be held more responsible and penalize d if there is a corporate administration failure in the company which they are supervising.

Bank Julius Baer Case Essay

Before the arrival and leadership of Stuart Adam (â€Å"Adam†), Bank Julius Baer, North America (â€Å"BJB-NA† or the â€Å"Company†), the largest independently-owned European private bank in the United States, faced financial difficulties. By mid-2001, a worldwide market downturn caused a significant decline in Julius Baer Group’s (â€Å"JB† or the â€Å"Parent†) performance. In 2001, JB’s stock price was down by over 40% while the Parent experienced a 39% decline in net profits, 9% increase in operating expenses and an increase of 14% in employee headcount. BJB-NA, the â€Å"crown jewel† of JB, was barely profitable but no one inside the Company knew its true financial condition. JB had always been led by a member of the Baer family until January 2001. Despite significant family ties at JB, BJB-NA did not have a strong leader to drive the company. There was a lack of clear vision or direction for the Company. BJB-NA did not focus on profitability as a measurement of success. The attitude around BJB-NA was more about â€Å"keeping the peace† than creating any conflict or hostility. Even with a passive work environment, employee morale was low. Employees tended to blame other parts of the Company for their problems. The competitive environment in the High Net Individual (â€Å"HNI†) private banking sector increased dramatically during the 1990’s. BJB-NA was a boutique private bank in a business where bulge bracket firms dominated the competitive landscape. As such, the key factors for success in the HNI market were now recognized as differentiation (not cost leadership), improved client relationship management, broad product range and strong client-responsiveness. BJB-NA strived to be a partner organization that differentiated itself from the competition by satisfying the needs of its clients. The existing organization structure consisted of BJB-NA organized into four regionally-based â€Å"teams. † Poor communication existed throughout the Company as the staff didn’t know what was going on and there was little cohesion among units. BJB-NA operated on a â€Å"need to know† basis. Team leaders were not responsible for their own budgets, as it was not known if their teams were profitable or not. To further support the lack of accountability at BJB-NA, the Company did not have a systematic performance valuation system and lacked a compensation system tied to customer growth and returns. Bonuses were virtually guaranteed and all bonus decisions were made by Bank’s top leadership. Most likely, there were employees who â€Å"flew under the radar† if they underperformed since the Company never laid anyone off. Adamà ¢â‚¬â„¢s Changes and Evaluation Adam arrived at BJB-NA and immediately laid out an action plan to turn around the Company. One of Adam’s best early moves was his selection of Denise Downey to head the Segmentation Study Team. Downey was well respected by the employees that she led and was able to thoroughly evaluate the organization and deliver results to the Company and Adam. Based on the Segmentation Study, Adam wanted BJB-NA to really stand-behind its promises to be a partner organization. He encouraged full transparency and a strong focus on measurable results and accountability. Specifically, he focused on the following three initiatives: Refocus the Company strategy: Adam emphasized that BJB-NA shift its focus to Europeans, Asians, Canadians and Latin Americas who live outside the U. S. who had U. S. based asset management needs. By targeting specific geographic and customer segments, it allowed the Company to specifically focus its strategy and resources rather than spread itself too thin to satisfy a larger, diverse customer base. In addition, he asked some longstanding personal clients who were not profitable to close their accounts. Not only did this change the Company’s customer focus, but also, it signaled to employees that Adam had confidence and high expectations for BJB-NA. Establish new performance expectations: Adam developed productivity assumptions that would hold employees more accountable. He established measurable criteria related to book value, relationships and accounts. Previously, Company employees truly did not know their clients. As a result, it was difficult for management to identify top and low performers. Adam’s established criteria that pushed Relationship Managers past their comfort zone. Before Adam took the helm at BJB-NA, almost everyone received bonuses regardless of their performance. Tying a bonus program with a structure performance evaluation system incentivizes those who bring success and growth potential to the Company. Modify the organization structure: Adam slightly altered the structure of BJB-NA by having a client-segment focus within existing geographic areas. As such, the decision making processes were now decentralized to each of the regional teams. Previously, the advisory and product services departments worked with all regions. After Adam took charge, he assigned advisory teams to each of the different regions to further strengthen customer relationships. Recommendations BJB-NA recognizes that its future success hinges on one important factor: its clients. Our consulting firm wants the Company to further expand and impact its clients beyond what Adam has already planned. Our approach is a client-centric strategy that focuses on two key initiatives: (1) Aggressively recruiting top talent to enhance client acquisition and performance (2) Overhauling the compensation scheme and performance measures. Each initiative, accompanied by supporting tactics, will align to elevate the client experience, resulting in deepening wallet share, increasing warm referrals, and building the BJB-NA brand in supreme customer service. I. Recruiting the Right Talent. Recruiting the right people to manage and advise BJB-NA’s clients will be critical to sustaining long-term growth and increasing assets-under-management. Recruiting will align with the Company’s geographic approach to segmentation by adopting three tactics:  · Local talent recruitment – a successful private banker needs an outgoing, service-orientated personality, and the ability to connect with potential and existing clients. In connecting with clients, it becomes mandatory that future private bankers will be recruited from local regions. This strategy will generate bankers who know the local customs and cultures, speak the language, and are involved in the community. As a result, it creates comfort and familiarity for potential clients.  · Recruit from bulge bracket private banks –Company acquisition is not a feasible option at this time. However, employee/talent acquisition is an even better method to help improve the Company. Bulge bracket private banks are typically a part of much larger conglomerates, often weighed down high-level corporate strategies and â€Å"red tape. To attract bulge bracket private bankers, BJB-NA should promote an entrepreneurial environment that offers autonomy and flexibility while still offering resources found at larger firms. Recruit from ultra-boutique private banks – BJB-NA should actively target private bankers from smaller, boutique firms that have larger books, but have a need for a more global reach. Private bank clients are becoming more global, and with that, have a specific need for banks that have an international presence. BJB-NA provides a solution with offices in Asia, Western Europe, Eastern Europe, and the United States. At the same time, by aggressively recruiting boutique bankers, BJB-NA will be able to expand its presence by acquiring the books of these bankers who may have a strong presence in untapped markets within the targeted regions. II. Restructuring Compensation and Performance Measures BJB-NA should introduce a compensation scheme that will not only be more beneficial for keeping clients’ interests first, but also offer higher potential incentives for the Company’s bankers. First and foremost, bankers will be paid based on client portfolio performance. No one will be paid on the basis of commission. While this tactic may seem counter-intuitive in the short-term, especially in the midst of a struggling economy, it acknowledges BJB-NA’s long-term commitment to its clients. Other positive externalities resulting from a new compenstation structure include: differentiation from competition, potential referrals from clients, and attention to BCB-NA’s innovative thinking. In short, BJB-NA’s message is: â€Å"We make money only when our clients make money†. Second, standard annual bonuses will be foregone. Employees would be accountable for their performance and compensated accordingly. BJB-NA will incentivize bankers by the value they add to their clients and related portfolio performances. This compensation structure ultimately rewards bankers who take of their clients and strive to grow their assets under management. Finally, BJB-NA should revise the position title of its company leaders. To accurately reflect the duties of the position, the title †Team Leader† should be changed to â€Å"Managing Director (MD)†. MD’s would have full P&L and people-management responsibilities of his/her respective branch. In addition, MD’s could receive an additional bonus based on the branch’s bottom-line performance. This change will push decision-making down to MD level, promoting entrepreneurship and autonomy. III. Management and Leadership Since Adam decided to resign from his position as the leader of BJB-NA, it is vital for the Board of Directors to select a successor that will be able to implement the changes initiated under Adam’s tenure. As discussed, BJB-NA needs to aggressively put its clients before anything else in its business. The new successor should be an experienced professional who deeply understands the Company’s clients and industry. Taking these requirements into consideration, we recommend that the Board of Directors pick Adam’s successor from a list of internal candidates only. Currently, the firm is in a state of fragility. Employees are stressed and morale is low. With the initial round of layoffs that included six people, any move will be highly scrutinized and may have a long-term impact on the organization. Employees were already caught off guard with Adam’s resignation, especially after he led the restructuring efforts at an off-site meeting that seemed to build positive momentum. To replace Adam’s with an external candidate may put the Company in a state of flux. An external candidate would not have attended the restructuring meetings and participated in the Segmentation Study. He/she may have different views of how the organization should be changed. In addition, the HNI private banking industry is built around relationships. To bring on a new leader who hasn’t built a strong rapport with a majority of the Company’s clients would make the leadership transition a difficult process. One potential internal candidate BJB-NA should consider is Denise Downey. Downey is currently the Head of U. S. Domestic Clients, but more importantly she led the Segmentation Study that evaluated areas of improvement needed at BJB-NA. Employees viewed Downey as a strong, effective leader who always delivers results. As a sign of trust, Adam gave Downey significant autonomy during her time leading the study. Elevating Downey to the C-suite level would be a fairly seamless transition. Downey has significant experience understanding the clientele of BJB-NA since she already leads U. S. client group. With all of the â€Å"client-focused† changes that need to be implemented by Adam, Downey will be best candidate to effectively communicate the steps needed during the transition period. For example, during her time as the Segmentation Study leader, Downey took the initiative to send updates to the entire bank. Alternate Approaches Deviating from a client-centric strategic plan could negatively impact BCB-NA’s future success. Nonetheless, two other alternate approaches were considered. The first approach considered a compensation system where bankers would be paid variable commissions based on fee-based transactions. The variable in commissions would depend on the type of investment vehicles clients would invest in. This viable approach guarantees cash flows from transactions with no dramatic culture change. However, after careful consideration, this alternative was rejected since bankers would be incentivized more by selling a diversity of investment vehicles to clients rather than working for clients’ best interests. The second approach considered but rejected involved an overhaul of the organization structure. After the Segmentation findings, Adam seemed adamant about moving away from the geographic-focused organizational structure of the Company. As such, an alternative approach considered was to eliminate geographic departments and implement an organizational structure focused on client-type. One of the key success factors for companies in the private banking industry is to customize services based on the needs of customers. A BJB-NA client-focused structure based on client characteristics (such as wealth, age, income level) may be more advantageous, especially with raised expectations now required by Adam on bankers’ book of clients. Additionally, within a geographic organization, conflict may occur between local regional management and the executives at corporate. As such, this may hurt the opportunity for knowledge sharing and collaboration, values emphasized by the Baer family. However, as much as a client-focused structure might have its advantages, a geographic organizational structure still is the most effective for BJB-NA. Communication is much more personal in geographic organizational structures. Instead of calling or videoconferencing with olleagues across the globe, it forces employees to sit next to each other to form collaborative teams, values preached by the Baer family. In addition, it allows employees to understand each other’s personalities and work styles. Besides the human capital element, geographic work teams allow BJB-NA to hire leaders familiar with the local business environment, something vital for the relationship-focused private banking industry. Not only will employees understand the client better but the clients will be more comfortable around employees who share similar interests and culture.

Police Operations Essay

There are different levels of law enforcement which include local, state and federal levels. We are told by The National District Attorneys Association that (NDAA, p. 1) â€Å"As federal authorities are obliged to investigate all incidents that may be federal civil rights crimes, and local and state authorities have independent jurisdiction over such cases under their own criminal statutes, this MOU also should improve the reporting of all such violations to local, state and federal authorities. We are also educated from the same source that this will â€Å"increase public confidence in this critical law enforcement areas. † This demonstrates that all levels of law enforcement can work more effectively together in their efforts at maintaining peace but many times these different levels work alone when the situation falls under one category that is controlled by a specific are of law enforcement. The local law enforcement agency is a level which involves city and county sheriff departments which include domestic violence situations, traffic stops and basically all citizen laws within city or county limits. State law enforcement agencies is a level of law enforcement where state troopers usually enforce interstate commerce traffic and they also have a division within the state detective agencies that investigate crimes as well as respond to local and county calls when local law enforcement agencies are backed up and aren’t able to take care of the calls received. Federal law enforcement agencies handle a wide variety of felony crimes which usually take over the local and state jurisdiction boundaries when federal crimes are committed. They also investigate counterfeit currency and bank robberies. Any time there is a kidnapping crime to be handled, the federal law enforcement level will investigate where local and state agencies have fulfilled their duties. All levels of law enforcement will generally work together for one cause in solving cases where the law has been broken. Each level of law enforcement is extremely important where the local level handles lesser crimes and federal handle major offenses where federal offenses such as bank robberies, illegal felony possession of firearms, distribution of drugs over state lines and cases where federal laws are offended. August Vollmer was a pioneer in law enforcement who contributed to the development of criminal investigative techniques. We are told by Jim Fisher (Fisher, p. 1) that â€Å"In 1905, the citizens of Berkeley, California, banded together to rid themselves of the prostitutes, gambling houses, and opium dens operating openly in their town. The man they elected to do the job was a 29-year-old uneducated mail carrier who promised to clean things up. † Vollmer dedicated much of his time to making changes in law enforcement by changing the way officers were trained, thought and acted as law enforcement officials. He was well-known for using good judgment skills and his own common sense. Another pioneer in law enforcement was Officer James Foreman. We are told that (Lieberman, 2002) Foreman was our first African-American police officer. â€Å"Senator Joe Lieberman today paid tribute to Stamford, Connecticut’s first African-American police officer, James Foreman. † He is one of the many who were pioneers in law enforcement who made a huge difference is our country through their dedication.

A Road Map to Rising in the Consumer Satisfaction Index Essay

A Road Map to Rising in the Consumer Satisfaction Index - Essay Example Such an outlet could have a day's inventory of sales for each product, which could be replenished on a daily basis, and have an additional provision for special real-time deliveries from relevant plants for any products that may be out of stock. The latter should be a most uncommon incident, since time series data of sales of mature products should help us predict daily sales by product with reasonable accuracy. The second immediate step would be to introduce apron control for vehicle movement within the site, with radio communications with each driver. A person from stores could control all vehicular movement within the site, with priority for deliveries to the finished goods store which I have proposed. Each plant should receive its full bills of materials in time for every batch of production. The finished goods inventory and the provision of the bills of materials at plants can both be achieved by a standard enterprise resource plan (ERP) software. We would need to train sales, stores and production personnel to operate the ERP, and maintenance responsibility could rest with the IT function. It is a fairly well established system that does not need top management time.

Fibonacci numbers and the golden section Article

Fibonacci numbers and the golden section - Article Example Recall that an integer is prime if it has no proper divisors. Some Fibonacci numbers are prime, for example 514229, but it is still unknown whether there exist infinitely many prime Fibonacci numbers. The problem of finding prime numbers with many digits is crucial for the find a very large prime number, you are able to write a secret code that is reasonably safe (this principle is the basis of the Public Key Cryptography, nowadays used by banks and governments all over the world). Suggested readings. We suggest, as a first reading, the following website: http://www.mcs.surrey.ac.uk/Personal/R.Knott/Fibonacci/fib.html. It is well written, in elementary terms, contains a number of illustrations and it explains clearly some applications of Fibonacci numbers to natural sciences. It contains also several links to other websites on the same topic. We suggest to follow the link "Fibonacci numbers in nature": there, you will find applications to family trees of rabbits, cows, geometry, flowers, and vegetables! It is a short, fascinating walk in the real world seen through the mathematicians' eyes. As a further, more technical reading, one can read the material contained in the website: http://en.wikipedia.org/wiki/Fibonacci_number. ... It is well written, in elementary terms, contains a number of illustrations and it explains clearly some applications of Fibonacci numbers to natural sciences. It contains also several links to other websites on the same topic. We suggest to follow the link "Fibonacci numbers in nature": there, you will find applications to family trees of rabbits, cows, geometry, flowers, and vegetables! It is a short, fascinating walk in the real world seen through the mathematicians' eyes. At the bottom of the page there are suggestions on the paths to follow to explore further the site. As a further, more technical reading, one can read the material contained in the website: http://en.wikipedia.org/wiki/Fibonacci_number. Part of this site is probably too advanced for a non-specialist, but most of its content is certainly accessible. These readings can be the opportunity to learn a little, but very useful, piece of mathematics: the difference equations. A difference equation is a function whose value at n is defined linearly by the value at n-1 and n-2, as in the case of Fibonacci numbers. For such functions, there exist always a closed formula, that is, a formula giving the value at n only as a function of n, with no knowledge of the values at n-1 and n-2. The method is explained at the beginning of http://en.wikipedia.org/wiki/Recurrence_relation. In the bibliography, we suggest some elementary books for a further reading. To conclude, I think that this suggested reading is accessible to everybody, it doesn't require any special knowledge in mathematics and it has sufficiently many practical applications in arts and science, to be a fascinating and intriguing subject. BIBLIOGRAPHY [1] Dunlap, R. The Golden Ratio and

Smart card Case Study Example | Topics and Well Written Essays - 500 words

Smart card - Case Study Example This proved to be a hindrance to the growth of the car because of the high waiting time. 2. There were 4 models of the car: Smart fortwo pure model for $11,590; Smart fortwo Passion Coupà © for $13,590; Smart fortwo Passion Cabriolet for $16,590; and smart fortwo BRABUS for 17,990 (smart fortwo, 2009). The advantages of owning a Smart Car includes low price, and low expenditure on fuel. However, the disadvantage is that only 2 people can be seated in the basic versions. The target customers for Smart Car are the small sized-families with no or one child with low budget. Those who have high travelling requirements also may intend to buy this car. This is because of its high fuel efficiency and low price. Before purchasing the car, it should be made sure that the car follows the safety features of USA. 3. In order to market the product, the company conducted city-tours, introduced the concept of Smart Towers in order to build the brand image. The car is marketed as a fuel-efficient, affordable stylish smart vehicle. The strategies shall be very effective in countries such as China because of the price range, and the fuel-efficiency of the car. Road shows in the major cities will help it get focus. The company shall try to get more mileage in road shows, have celebrity endorsers and the focus shall be to highlight the high fuel-efficiency and low price range aspect of the car. 4. The Smart Car which witnessed high demands during the time of launch has taken a drop in demand owing to similar launches by other companies. Various reasons can be attributed to this drop: Economic slowdown; Availability of more such products; poor distribution network. In order to boost the sales, the company needs to improve its marketing and branding exercises. The company also needs to improve its distribution channels. The company shall try to include Mercedes-Benz and smart car centers in the overall distribution channels rather than just relying on the

Royal Mint Production Management Case Study Example | Topics and Well Written Essays - 3000 words

Royal Mint Production Management - Case Study Example It is clear that Royal Mint wants to establish itself as a low cost producer through economies of scales i.e. Mass Production at a reduced cost. Companies plan and forecast the demand according to the future needs of the market. Forecasting demand assists in decision making with respect to investment in plant and machinery, market planning and future sales. Some of the popular forecasting methods include In this Case, Royal Mint Estimates the demand on Time series basis. In the UK, the Treasury contracts with Royal Mint on an annual basis for the likely requirements for coin in 12 months. The Mint meets every three months with executives from the UK clearing banks to discuss their currency requirements in the shorter term. These estimates are then updated at weekly planning meetings and the demand is forecasted and Royal Mint follows a Just in time work schedule. Based on these estimates, the raw material is procured and safety stock is maintained. Agile manufacturing is the ability to accomplish rapid changeover between the manufacture of different assemblies. Rapid changeover is further defined as the ability to move from the assembly of one product to the assembly of a similar product with a minimum of change in tooling and software. Rapid changeover enables the production of small lot sizes, allowing for just-in-time' production. Inventory Control - Safety Stock Inventory control is a planned approach of determining what to order, when to order and how to order and how much to stock so that costs associated with buying and storing are optimal without interrupting production and sales. Safety stock is an important measure to be calculated regarding inventory. This ensures efficient purchasing, storing, consumption and accounting for materials. This also ensures that there is no shortage of product and there is adequate supply of product to customers. This improves delivery time and increases the reliability measure of a company. Inventory Control must be established to avoid huge accumulation of inventory. The Order level and Order quantity must be estimated prior to avoid shortages and reduce the customer lead time. These estimations in practical aspects are not accurate to the core. The estimations might be either higher or in some cases below the exact demand. To avoid this discrepancy, Safety stock is determined. In order to ensure that additional stock is maintained to meet the customer demand, the Safety stock level can be calculated as per the following formula. Safety stock = (Maximum Lead time - Normal Lead time) * Consumption rate Q2.Explain the criteria which the Mint will need to take into account when it designs newcoinage. The criteria which

On Dreams by Aristotle Essay Example | Topics and Well Written Essays - 750 words

On Dreams by Aristotle - Essay Example Among other phenomena of life, Aristotle interpreted dreams too. Early Greek impression of dreams was that they are from God and are seen during sleep to provide guidance from divine spirits. Aristotle, on the contrary, studied dreams in a more rational way, by saying that dreams are not from God as animals can have dreams too; rather they are the reflections of our daily life activities. He said that we can interpret dreams analogous to the reflections seen in water. According to him, all of the external effects are nullified when we are asleep, but our internal keeps open its eyes and remain aware of our general activities and thoughts, which then we see as a dream. Dreams are mostly consists of fantasies is due to the fact that our common sense does not work while we are asleep, thus we cannot distinguish between a reality and a fantasy in our dreams. He correctly recognized that what we see or hear in our dreams is quite different than what we actually perceive and think. Apart f rom internal awareness, dreams can also be a mixture of events we experience while awakening, thus we dream these events as we want the things to happen in actual. He interpreted this by using the term â€Å"lucid dreaming†, which means to have a clear view in dreams and he explained that due to our unconscious who remains asleep, we can see dreams clearly, but these dreams can be termed as an after-image of everything we go through in day time (On Dreams By Aristotle. 2011, Bixler. Thomas. 1998). Aristotle also claimed that not everybody dreams during sleep, the very likely case is of children who may never dream. He also said that we have dreams during sleep because we are in a sense gets cut-off with the rest of happenings around us. In this process, our sensory organs also respond less than the time when we are awake. These organs develop the after images of objects which remained in-touch with any of the sensory organ in day’s activity. These after images then com bine with our imagination and create dreams. When we are asleep and dreaming, we are thinking as this is the actual reality because according to Aristotle, all logics of real world like reason or judgment do not exist. But sometimes it happens too that dream become an illusion. It happens when we become able to differentiate between the reality and our dream and recognize dream as a dream itself. In addition to this, he also claimed that dreams reflect the condition of health of a person and can be used as a source to determine and cure illness, if any. Many doctors and physicians who followed him proved this by treating their patients in the light of this theory (Aristotle, Gallop. 1996). By reading all these views of Aristotle, I personally agree with him. Most of the times I myself dreamt of such things which I want to happen or occur, and these things keep residing in my thoughts until either I achieve the goal or it does not come up with me. Aristotle’s overall interpret ation is exactly according to human psychology, dreams are not from divine forces, they are there to make us certain about our wanting and needs, and they definitely reflect all activities which happen during whole day. I myself have almost the same views regarding dreams, but the article made me clearer and provided me more knowledge in interpreting my own dreams. Dreams are natural to occur, most of us have dreams in sleep, it is not at all

Billy Graham and His Impact Research Paper Example | Topics and Well Written Essays - 4000 words

Billy Graham and His Impact - Research Paper Example Leading an extraordinary and remarkable life, Billy Graham’s name will forever be remembered as the man who has influenced and shaped the world of Evangelism and Christianity in all of the United States of America. His life is the account of the impact he has made in the world. Born as the eldest on the seventh day in the month of November in 1918, Billy Graham was raised on their family’s dairy farmland in close proximity to the largest city in the state of North Carolina by his parents, William Franklin Graham I who was a successful cultivator and entrepreneur and Morrow Coffey. As he was growing up with his four other siblings namely Katherine, Melvin, and Jean, he was already surrounded by the Christian upbringing in the Associate Reformed Presbyterian Church. When the Noble Experiment was imposed in 1933, when he was only a young man at the age of about fifteen years old, Graham’s father had forced him as well as his sister Katherine into drinking and engaging in alcoholic beverages to the point where they would start throwing up. This event that happened early in his life, only as a young teenager, has caused him and his sister a strong feeling of hatred and abhorrence for alcohol and intoxicating drinks and beverages as well as drugs. Graham, a year after the incident, was converted when he was only sixteen years of age at that time when he was attending a series of several revivals and renewal meeting in which Mordecai Fowler Ham an American Independent Baptist evangelist and temperance movement leader, a social movement that insists on the reduction of in taking and drinking alcoholic beverages, was in charge of. He enthused up quite a number of different issues and controversies when he was charged and accused of ethical negligence and lack of discipline while he was attending and studying at his local high school.

Critique of Psychoanalytic Literacy Criticism Research Paper

Critique of Psychoanalytic Literacy Criticism - Research Paper Example In psychoanalytic criticism, the intention of the analyst is the overall background of the author and how it might have speculatively influenced the work of the same author. It also identifies the fact that the difference between these subjects of psychological and psychoanalytic criticisms is broadly similar and could be addressed by three main facts about this form of analysis. The facts are to do with the unconscious mental process of an individual. This includes the fact that human behavior is being motivated by own sexuality and the norm that are associated with sexuality in different cultures shaping or repressing the desire of these individuals. In Freud’s original argument, the process of dreaming is controlled by the sub-conscious mind and cannot be manifested in the wake status of an individual. However, according to Lacan, one of the proponents and developers of the psychoanalytic criticism, the sub-conscious mind can be manifested in the wake status. This can be derived from the comments that individuals joke with or the slips of the tongue or other unintended actions like puns. The works by Lacan further developed the concept of psyc hoanalytic criticisms that has evolved over time to be employed in different forms of art. The concept of psychoanalytic literary criticism is the psychoanalysis of the author or a particular interesting character is a given work. Just like other forms of literary criticism, psychoanalytic criticism can results to important clues to the something baffling symbols actions and setting s of literary work. Early psychoanalytic literary criticism most of the time treat the text as if it were a kind of a dream. That is; the text inhibits its original content beyond obvious content. It is worth noting that this process of changing the text is regarded as dream work and is characterized by concentration and displacement. Critics consider language and symbolism of a text to reverse the process of the dream and instead

Portrait Photography Survey Essay Example | Topics and Well Written Essays - 500 words

Portrait Photography Survey - Essay Example Markets of portrait photography include restaurants, taverns, stores and business premises. These organizations use portrait photos to reach out to their consumers (Kelby 36). This is because portrait photos are more appealing and conspicuous to motorists, pedestrians and other road users as they are normally attractive. Portrait photographers make money by making saleable portraits which they sale them to businesses which use them for advertisement purposes their websites and in local television programs. On the other hand portrait photographers make sales when they are hired to make photo shoots in institutions’ events such as graduations and in special occasions such as in church weddings. Requirements of a portrait photography business is photography equipment which should be modest, several pieces of cloth for backdrop ,lenses with good magnification, some sources of light and a tripod stand (Wilsh 47). These equipments should be of lightest weight so as to make them more portable thereby easing movement. Portrait photography has undergone a list of trends over the past years. A few decades ago, images were in a black and white portrays, that evolved to hand coloring pencils then to hand coloring paints. Currently, images are taken using digital cameras, which produce neat colored photographs. These advancements are attributed to progress in the new technology which has been given abreast. Location of portrait photography is mostly influenced by the subject; this is the intention of the photographer. If the intended expression involves environmental aspects like natural features, then a rain forest would be the best location. However if the photographer is new to the business then simplicity should guide him or her. He/she should look for the simplest places. To enhance more effects, studio photographers should concentrate more on improving the background of the

Analyse and compare the following two texts Essay Example for Free

Analyse and compare the following two texts Essay Discuss the similarities and differences between the texts and their theme(s). Include comments on the ways the authors use elements such as structure, tone, images, and other stylic devices to communicate their puposes. Death as the permanent ending of all life in a person has been treated as an enigmatic subject. As birth is marked by engaging pleasure, death sometimes is either celebrated as the beginning of a new life, or totally the contrary, is commemorated with condolence and pain. Through life, death is a monotonous experience that we live every day, and as a result, literature could not cast it away as an invisible theme. Instead many pieces of literature have been fantasized by the theme of death, in which they try to discover new meanings and try to give it new boundaries. These two texts, No one wore black (Daily Mirror, Saturday, August 12, 1995) and the fragment taken from The Orton Diaries (edited by John Lahr, 1986.) are examples of how literates have been attracted and involved by the enchants of this phenomenon. These two text with a common theme, death and its celebration as a funeral, share many similarities and simultaneously are allotted as separate individuals. The structure of the two texts is crucial, no only to the effect that is produced, but also, by the tone that both the authors are trying to generate. Firstly, in No one wore black, the interrelation of all the parts as a whole are dealt in a highly stylistic manner. Although the texts target is to function as a descriptive journalistic report, the author writes in such way that it seems to be a rhythmical composition, sometimes rhymed, expressing experiences, ideas, or emotions in concentrated imaginative and powerful style than that of disseminating news. He strictly structures it in a poetic form in which paragraphs are more like verses since they only are composed by one sentence each. It is separated into individuals segments yielding a more rhythmic flow through the text and creating a more strait forward statements. Meanwhile, the other text is organized in a prosaic way with a much more ordinary form of written language lacking rhyme or meter. It certainly lacks sensibility of eloquence. However, the sentences here are similarly arranged in a short manner. The text contain short sentences that are direct, straight and not interrupted. For example, in line 3 and line 5: I couldnt get flowers and the funeral is at ten express a simple idea. Likewise, just as in the first text were the author introduces it with: The children were in sneakers and carried daisies. The manner of writing, in these two texts, that show a certain attitude on the writers, consisting in the choice of words and the phrasing, is totally unparallel; the subject of death is addressed in different ways. First in No one wore black the authors tone in certain cases is very optimistic, while in others, is tragic and dramatic. As it was mentioned before, the position that the author takes is that of a funeral to be a celebration of the child who had danced and laughed and loved (line 4-6). He even describes that the order of service was printed in purple and decorated with butterflies and flowers creating an atmosphere of great beauty conditioned with perfect satisfaction, happiness and delight. It can also be appreciated when there is an allusion to paradise: along the village lanes where the curly-haired child should have been learning to ride her bike. Through the sundrenched gardens where she should have shouting and laughing with her friends. (line 30-36). The reference to paradise made here suggest a continuity of Sophies life after death, nevertheless, it is also increases the tragic mood, since it is described as the place of how it should have been and how the child should had enjoyed her life. Moreover, the narrative doesnt stop to characterize more the suffering and great undergoing of pain, and its best described in when its said, But Sophie had been cruelly snatched from among them and there was no escaping the grim reminder of the bell. (line 15-18). Simultaneously, the author doest abandon totally his descriptive and factual writing when he firmly reveals that Sophiewas found strangles at Llandudno, North Wales, 13 days ago after disappearing from the tent in her uncles garden (line 41-44), with a more crude and insipid language. However, the authors tone doesnt give up his tendency to take the most hopeful and cheerful view of matters and retakes the optimistic tone by saying Heaven must have been missing an angel (line 71-7 2). As for the other passage, the tone here is a monotonous pessimistic, with a tendency of sentimental carelessness. We are first introduced into a normal and a routine situation, just descriptive without any sensation or profound thought: I made a cup of tea and shaved. Then I went out to try and buy some flowers. I had no intention of getting a wreath (line 1-2). It is the same with the anterior described anterior, where it is also introduced with a very simple sentences, The children were in sneakers and carried daisies (line 1-2), expressing no emotion, or at least is not known until the reader doesnt continue to read the passage. As the second text continues, the author achieves a fatalistic tone were he sarcastically expresses Actually when I read the dreadful, sickening wording on the other wreaths: To a dear Mum. At peace at last with little Tony' (line 5-6). At the same time, later on in the passage the sarcastic and superficial tone is taken by the author again: My Aunt Lucy was upset because strict protocol wasnt observed. Theyre all walking all wrong'. This phrase clearly makes the reader to categorize the theme of death under a celebration that is institutionalized by the high social class. On the other hand, there is a piece of this fragment that can be compared side by side with the first text where the author states the womans last wish by saying Her last wish was to be buried with Tony, my nephew who was drowned, aged seven, eighteen months ago (line 23-25). The description of Tonys death is similarly a factual description of a crude reality, just as the one made in line 45 to line 48 in the first text, where the death of the child is delineated. The two authors to communicate their purposes, they make use of various images. In the first text, the first image made is to daisies, wild flowers, which relate to the paradise image made later on, where the author creates this utopist atmosphere for the girl and mentions, Through the sundrenched gardens where she should have been (line 33-34). Another image that creates the dramatic and tragic mood is the use of the bell. Through the first sentences of the text the author explicitly creates a feeling of optimism by describing the funeral as a celebration, but he then roughly introduces the feeling of pain and remembrance of grief when he states And all the while, the terrible bell tolled (line 10-11) and continuing One low note, deep and soft like sadness; one higher note, harsh and sharp like pain (line 22-24). Simultaneously, in the second text there is another image made with flowers, since usually in funerals flower represent revival and are used to decorate or lighten up the dull atmosphere. However, in this passage the lack of flowers at the beginning of the passage emphasizes the environment of grief. Also in this passage the image of paradise is made when it said Several women were at their garden gates as the cortà ¯Ã‚ ¿Ã‚ ½ge passed (line 16-17). The image of garden reminds us the garden of Eden, and the gate refers to the doors of heaven. It clearly explains how this woman is passing from one life to the next one. Another way which the writers communicates with the reader is by the use of stylistic devices. The use of these figures of speech are essential more in the first text than the second, since the in No one wore black is written in a more poetic way. To begin with, the author creates rhythm by the use of alliteration and repetition: the child who had danced, and laughed and loved (line 5-6) or in soft like sadness; harsh and sharp (line 22-24). A further device of rythm is the triple effect that the author produces when he lists word in group of threes: again in line 5 to 6 danced, laughed, loved and also when he describes how the family had dressed, in bright yellow and white and red (line 8-9). There is also a slight use of smiles in which one thing is likened to another, for example when the author says So they came dressed as if for a family picnic (line 7-8) and again in line 22 to 24 One low note, deep and soft like sadness; one higher note, harsh and sharp like pain. In the other hand, the second passage is not surrounded by stylistic devices, better, the author decides to make his language simple and descriptive. The only element that sometimes is also used in poetry is the overuse of adjectives. For example here the author uses adjectives to make the scene much more explicit: I read the dreadful, sickening wording (line 5) or very young and hearty (line 21). Seen through comparison and contrast, it can be said that death is given a new way of delimitation. Firstly because, the authors have a totally different attitudes to this phenomenon. On strictly denotes it as a celebration, while the other describes it as an institutionalized ceremony, in which is not the feelings of grief, suffering, pain or even happiness in some cases, is included. By this commentary describing the ways in which both the authors use elements such as structure, tone, images and stylistic devices, the reader can get a better approach of the theme, and at the same time find the purposes which the writers are try to communicate. As for this theme, related to death and its commemoration, it clearly shows how this mystery has been set up with new boundaries in the means of its discovery.

Childs future life chances

Childs future life chances Your life chances and opportunities depend on the social circumstances of the family you were born into. discuss drawing upon academic literature and research examples The likelihood of a child succeeding in life is still largely determined by their familys income and social position. This essay will begin by introducing the debates which centre around this topic. It will then go on to examine four key domains which affect a Childs future life chances: family income, education, class status and family background. The concept of life chances was originally introduced by Max Weber who believed that factors such as low, economic position, status and power were interlinked and together presented the problem of poorer life chances in the future. In current literature life chances signifies the opportunities which are available for people to improve there quality of life in the future for example access to quality education. Some of these influences are likely to be affected by the social circumstances of the family to which they are born into. This could be directly: well educated parents, all things being equal, will probably provide a more intellectually stimulating home-life than those parents who left school early. Other influences will be indirect: better-educated parents may have higher than average incomes and hence be able to finance educational excursions, or in other ways to provide life enhancing experiences for their offspring. some of these additional opportunities will be cumulative, reinforcing other positive characteristics, while others may serve to compensate for some forms of disadvantage. Some people believe that it is strictly genes that affect our opportunities in life. Research focusing on the causal relationship between genes and subsequent IQ, range from 0 to 80% this provides inconsistent results. Recent research, has suggested that genetic and environmental factors are not distinct determinants of intelligence and life chances. Instead it is the interaction between these two factors which gives rise to a childs intelligence levels. The role that nurture has to play in developing intelligence is clearly demonstrated from data published by Inequality in the early cognitive development of British children. The data suggested that the social circumstances of the family influenced future educational attainment. Those children brought up in families with low Socio-economic Status (SES) with attainment levels ranked as low, at 22 months, were also prone to have low attainment at age ten. On the other hand those children from a high SES background were as likely to sho w high attainment at age ten, even if their attainment was ranked low at 22 months. This data suggests that it is nurture and the social circumstances of the family which influences the future chances of these children and not their initial genetic abilities. Mayer notes that children who are born into low income parents also seem to have less success than those parents who have more money. Children from low income families also tend to score lower on measurers of cognitive ability, more likely to drop put of school, to have behavioural problems and essentially earn less in later life. This is drastically demonstrated in a 1970 British cohort survey showing that at age 26 young adults experience an earnings penalty of 9% if they were brought up in a household with an income below half the average (after controlling for educational attainment) therefore this suggests that young people from poor backgrounds are disproportionately observed at the lower end of the earnings distribution when they are in work. Further research in the US by Isaac (2007) which focused on the intergenerational aspect of income focusing on families economic position and how this is influenced by that of there parents: He found that 42 percent of children born to pa rents in the bottom fifth of the economic distribution remain in this section as adults with only 23 percent rising to the second fifth, meanwhile 39 percent of children born to parents at the top of the income distribution remain at the top, with only 23 percent moving downwards to the second fifth. From this research alone it is clear to see that a parents income is influencing there childrens future income opportunities. One possible reason for this difference is that of social class. The role of SES is well-documented in the literature concerning life chances. Using the National Child Development Stufies and the British Cohort study, Carneiro et al (2007) and Blanden et al (2006) illustrated that there is clearly a strong relationship between a childs social and cognitive abilities and their parents SES. This has been demonstrated by Fienstein (2003) who found that those children who were originally brought up in low socio economic status background who scored poorly on cognitive tests at an early age were more likely to remain with low scores as they grew through the life course, however those children from a higher socio economic status with lowe scores were much more likely to catch up. These results from the NCDS and the BCS do allow for informative feedback However in order to test the validity of these findings it is very important that these relationships are tested throughout generations. This recent research has been carried out by Sylva et al (2007) who analysed data from a recent programme the Effective Pre-School and Primary Education (EPPE) programme which aimed to test childrens cognitive attainment (reading and mathematics) from that age of three to the end of Key Stage 2.

History and Overview of Pulse Oximetry

History and Overview of Pulse Oximetry Pulse Oximetery Leslie Bruchey Introduction to Pulse Oximetry Pulse oximetry has changed the medical field for eternity. The ability to be able to monitor a patient’s oxygen saturation noninvasively has become a standard of care for those who are in the hospital. Pulse oximetry is the ability to measure the oxygen saturation of arterial blood using a pulse oximeter (Pulse oximetry,n.d†). This allows the body to be externally monitored and help maintain the oxygen saturation. The pulse oximeter allows for someone’s oxygen saturation to be measured in a matter of seconds instead of drawling an arterial blood gas which requires a needle and about fifteen minutes to have the results (Arterial Blood Gas, n.d.). History of the Pulse Oximeter A pulse oximeter is a device that allows for noninvasive measurement of a person’s oxygen saturation within their body to make sure their body has adequate oxygenation to prevent fatigue, shortness of breath, becoming disoriented or even leave the body with permanent damage (Brite, 2010). Glenn Milikan was able to create a â€Å"light-weight optical device† that was able to be placed on the earlobe to monitor pilots oxygen levels while flying during World War II (Tremper, n.d). When Milikan developed this device he used Beer- Lambert’s law which believes that using light and wave length can determine that concentration of a solution (Tremper, n.d). In this case, this theory was able to revolutionize the pulse oximeter. This new technology was able to help give doctors and scientists the ability to look inside the body without making the person uncomfortable, or affect their performance in the pilot’s case. In 1964 a surgeon in San Francisco continued to de velop the pulse oximeter and then it started to be distributed by Hewlett Packard in the 1970’s. This pulse oximeter was the first one to be used in a hospital setting and was a large, bulky 35lbs piece of equipment. Not only was it large and bulky, it also cost about ten thousand dollars. (History of Pulse Oximetry, 2002).The pulse oximeter has come a long way over the years and has become crucial in the medical field. How the Pulse Oximeter Works When thinking about pulse oximetry, one may wonder how a pulse oximeter works. This technology allows the health care professionals to see how well someone is oxygenating their blood. The blood is oxygenated through the lungs and then the blood is pumped from the heart throughout the body to organs and tissues to provide the needed oxygenation (A Patients Guide to Heart, n.d.). The way the pulse oximeter works is it looks at how oxygenated the blood is. Blood that is holding onto more hemoglobin absorbs more of the light that is provided by the pulse oximeter and allows more red light to pass through. Blood that has less oxygen will not absorb as much, leading to a lower oxygen saturation percentage (Principles of Pulse Oximetry, 2002). Types of Pulse Oximeters Today’s society, pulse oximeters can come in all different shapes and sizes. In the hospital setting, they can be portable with just as big as a D battery. This type just slips on a finger or ear and then is turned on to have a reading of the person’s oxygen saturation and pulse rate. Another type that is common in a hospital setting is one that is hooked to a monitor in the room and is a piece of tape that can be wrapped around the finger to continuously monitor the oxygen situation. This type is great in an Intensive Care Unit or someone who needs to be monitored closely. Not only are pulse oximeters used in the health care facility, but there also used for personal use, especially for someone who already has compromised lungs and needs to be able to monitor their own oxygen saturation whenever they may feel short of breath or are experiencing other symptoms of low oxygenation. Pulse oximters are easy to obtain online or through a medical supply company. Online a port able pulse oximeter can range from twenty dollars to several hundreds of dollars depending on the brand and the other options that not only pertain to measuring oxygen saturation (How Much Does a Pulse, n.d.). Reasons to Monitor Oxygen Saturation Some of the reasons that oxygen saturation would be tested is for surgery, procedures that involve sedation, diseases such as COPD, anemia, lung cancer and anything that may compromise the effectiveness of the lungs that would prevent adequate oxygenation of the blood (Oximetry, n.d.).With the health care professionals being able to monitor someone’s oxygen saturation, they are able to intervene sooner and prevent further complications. Oxygen Saturation The normal range for a person’s oxygen saturation should be between 96% to 99% in someone who has no respiratory issues. For someone who has mild respiratory trouble, their range should be anywhere from 90% and above. When one’s oxygen level becomes less than 90 for an extended period of time, they need to seek medical attention to prevent further complications (Pulse oximeter readings, 2010). If someone is experiencing low oxygen saturation, some of the symptoms they could be experiencing are shortness of breath and cyanosis which means the skin may have a blue appearance due to the lack of oxygen rich blood (Veach, 2011). If someone is experiencing these symptoms, they should seek medical attention. Interventions for Low Oxygen Saturations If someone is suffering from inadequate oxygenation, there a few different ways to intervene. One way is to place an oxygen mask on the patient. This will allow extra oxygen to support the persons lungs in providing more oxygen and preventing them from working harder to breath (Bateman Leach, 1998). Also if the situation is not remedied, other inventions may include an invasive arterial blood gas, BIPAP/ CPAP, which will push air into the lungs and support the lungs. All these interventions are imitated based on pulse oximetry monitoring of a patient’s oxygen saturation. Conclusion Pulse oximetery has become a revolutionary change in medicine over the years. Now that health care professionals are able to monitor a patient’s oxygen saturation noninvasively at any given time, early intervention can be put in place such as supplemental oxygen to prevent complications or even death. With the invention of the pulse oximeter and the ability to monitor the oxygen saturation without being invasive to the person has become a great contribution. If pulse oximetery and the pulse oximeter were never invented, what would happen to people in the hospital? Would everyone have to be stuck just to find out a basic measurement every few hours? This invention, has allowed people to keep their comfort, while allowing others to have access to needed data to treat them properly. The pulse oximeter has changed the way hospitals and the health care professionals monitor oxygen saturation forever. Works Cited A patients guide to heart surgery. (n.d.). Retrieved from University of Southern California website: http://www.cts.usc.edu/ Arterial blood gas. (n.d.). Retrieved from http://almostadoctor.co.uk Bateman, N., Leach, R. (1998). Acute oxygen therapy. Retrieved from http://www.ncbi.nlm.nih.gov Brite, S. (2010). Importance of oxygen monitoring. Retrieved from http://ezinearticles.com/ History of pulse oximetry. (2002, September 10). Retrieved from Oximetry.org website: http://www.oximetry.org/ How much does a pulse oximeter cost. (n.d.). Retrieved January 19, 2014, from Google website: http://www.google.com Oximetry. (n.d.). Retrieved from http://www.hopkinsmedicine.org Principles of pulse oximetry technology. (2002, September 10). Retrieved from Oximetry.org website: http://www.oximetry.org Pulse oximetry. (n.d.). Retrieved from http://medical-dictionary.thefreedictionary.com Pulse oximeter readings. (2010). Retrieved from http://www.amperorassociates.co.uk Tremper, K. n.d. Pulse oximetry. Retrieved from http://journal.publications.chestnet.org Veach, M. (2011, March 10). What are effects of low blood oxygen levels?. Retrieved from www.livestrong.com

Dickens employs a rich variety of settings and characters to embody :: English Literature

Dickens employs a rich variety of settings and characters to embody the continual struggle between darkness and light central to his novel Great Expectations. Examine how the author has captured this symbolic battle â€Å"Great Expectations† By Charles Dickens Dickens employs a rich variety of settings and characters to embody the continual struggle between darkness and light central to his novel Great Expectations. Examine how the author has captured this symbolic battle, and how it has been dramatically linked to Pip’s ever-changing fortunes. Dickens captures the symbolic battle between the darkness and the light by employing a wide diversity of settings and characters to represent the ever-changing situations that Pip is in. The characters are always correlated to the background to convey the lessons that Dickens wants to show and he uses the characters to (more or less) tell the story, which gives the novel an almost theatrical, feel like the backgrounds are painted to suit the event. The author makes it easy for us to imagine the setting which creates these very dramatic, colourful backdrops in our imagination, by creating the mood and the atmosphere of the book. A continual question that is kept throughout the story is whether Pip’s aggressive side has anything to do with his working class background and how uneducated he is? As the reader we can only conclude this question right at the end of the novel, when Pip essentially aspires to his â€Å"Great Expectations† and his new status. Pip has two sides to his ever-changing character, a good side and a bad side which is very much influenced by where he is or what is happening. It becomes clear as the novel progresses that whenever Pip is with Mr Joe Gargery his, loving, kind side is always brought out. Joe is always linked to the brighter side of nature, a man who never thinks or talks ill of anyone. It is Joe’s influence and presence that is evidently replicated upon Pip in this quote â€Å"There I stood, for minutes, looking at Joe, already at work with a glow of health and strength upon his face that made it show as if the bright sun of the life in store for him were shining on it.† Whereas whenever Pip is in the company of Miss Havisham who is forever linked to darkness, death and decay †I saw Miss Havisham going along it in a ghostly manner, making a low cry†, â€Å"She sat, corpse-like† we are given the impression that Pip becomes torn between the two different worlds. This is due to the fact there is this bright star, Estella who brings light into

Arrhythmia :: essays research papers

Arrhythmia   Ã‚  Ã‚  Ã‚  Ã‚  I am doing my report on Arrhythmia. It affects the cardiac muscle, the heart. Arrhythmia causes three types of problems. It causes the heart to pump too slowly (bradycardia), it causes the heart to pump too fast (tachycardis), and it causes the heart to skip beats (palipations).   Ã‚  Ã‚  Ã‚  Ã‚  Bradycardia can be very serious. Some of the symptoms are loss of consciousness, heart failure, or death. Slow heart rates are caused by heart block. The hearts natural pace-maker fails to be conducted to the ventricles, the hearts main pumping chambers. Some treatments can be used. An electronic pace-maker can be inserted and it will send electronic impulse to the heart stimulating it to beat at a normal rhythm. Pace-makers are only inserted when the heart beats too slow.   Ã‚  Ã‚  Ã‚  Ã‚  Tachycardis can also be very serious. It can lead to disabling symptoms and even death. When you have Tachycardis your heart rate is above 100 beats per minute. Tachycardis is caused by heart injuries from past times. Tachycardis usually occurs months or years after a heart attack. A treatment for Tachycardis can be inserting a device called a defibrillator. A defibrillator will detect and treat abnormally fast heart rhythms. The defibrillator monitors the heart and automatically gives electric shocks before Arrhythmia causes permanent damage. If the person does not have a defibrillator a strong electric shock will be given. The cause of Tachycardis is by something not functioning properly in the atria. They are sometimes stimulated by anxiety. Too much caffeine or alcohol and certain drugs can also be the cause. Attacks might last a few minutes or several days. They can be serious and sometimes not serious.   Ã‚  Ã‚  Ã‚  Ã‚  Palpitations happen when your heart skips beats. Palpitations have many different symptoms. Some of these symptoms are dizziness, fatigue or fainting as a result of the brain not getting enough oxygen rich blood, chest pain, shortness of breath, and death (which occurs rarely). Palpitations are caused by high blood pressure, mistral valve prolapse, Hyperthyroidism, Anemia, coronary artery disease, or stress, Anxiety, panic attacks, stimulants such as caffine, nicotine, and alcohol, heavy excursus, high consumption of nutmeg. There some treatments which you can do. You could try to hold your breath briefly, take a slow drink of cold water, wash your face in cold water, cough several times, and hold your nose and blow (it will pop

Marriott Corporation: Business Overview

Harvard Business School 9-282-042 Rev. September 15, 1986 Marriott Corporation The idea of repurchasing shares was no stranger to Bill Marriott by January 1980. Almost five million shares of common stock had been repurchased on the open market by Marriott Corporation during 1979 at a total cost of $74 million and an average price of $15. 16 in the belief that they were undervalued—a belief that still was not fully reflected in the market price. At $19 5/8, the stock was selling at only six times cash flow per share; and its price/earnings ratio of nine was a far cry from historical multiples as high as fifty times as recently as 1973.Its low price seemed to offer once again an obvious opportunity to benefit shareholders. However, the proposal to repurchase 10 million of the 32 million still outstanding shares aroused some uneasiness. If successful, it had the potential of enhancing Marriott's EPS and of increasing family and management control from 20% to 29% of outstanding sh ares. However, it represented a move that was almost entirely financial—one that would run the debt well above the levels advocated before the Board of Directors only two years earlier.The repurchase would also necessitate renegotiation of restrictive covenants in existing loan agreements. Lastly, the huge size of the proposed program would require a tender price of $23 1/2, a hefty premium of $4 over the current market price. All of this seemed somewhat out of character for a corporation known for caution and stability. Background Marriott Corporation was founded as a nine-seat A Root Beer Stand in Washington, D. C. , in 1927 by J. Willard Marriott. Mr.Marriott had a gift for anticipating, or helping to create, trends in public eating habits. Shortly after the first stand opened, a second was built, and soon a chain of Hot Shoppes was underway. In 1934, industrial cafeterias were opened at a General Motors plant in Georgia and at the Ford Motor Company plant in Virginia. In 1937, the airline industry was revolutionized when Mr. Marriott established an airline catering service, providing box lunches from a Hot Shoppe next to the old Hoover Airport, on the site of what is now the Pentagon. Seven years later, Mr.Marriott led the company into the hotel field, opening the Marriott Twin Bridges just over the Potomac River from Washington. It became known as a motor-hotel and helped to revolutionize the lodging industry, for it offered a drive-in registration desk, a restaurant on the premises, and a convention center. By 1964, there were 77 restaurants, 4 hotels, and 9,600 employees generating total sales of $85 million. This case was prepared for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.Copyright  © 1981 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www. hbsp. harvard. edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1 282-042 Marriott CorporationBill Marriott assumed the presidency from his father in 1964 and initiated further diversification into theme parks, cruise ships and international host services. In 1967 the company acquired the Big Boy Restaurants franchise based in the Los Angeles area. A year later, Marriott opened its first Roy Rogers Roast Beef Sandwich outlet, which would grow into the Roy Rogers Family Restaurant chain. Since 1964, growth was little short of phenomenal. From sales of $85 million 16 years earlier, sales in 1979 exceeded $1. 5 billion.Operations expanded to 476 company-operated restaurants, 55 hotels and resorts, a cruise ship line, two theme parks , and 66,000 employees. (See Exhibit 1 for financial information on Marriott's various businesses. ) Hotels (35% of sales)—Marriott Hotels was one of the world's leading and most successful operators of hotels and resorts. By 1980, more than 23,000 rooms were offered through 55 hotels and resorts located primarily in the U. S. Approximately 70% of company-operated rooms were owned by outside investors and managed by Marriott under agreements averaging 70 years in length.These management agreements contributed approximately $40 million to operating profits in 1979—profits that tended to rise with inflation. Contract Food Service (32% of sales)—Marriott operated almost 300 contract food units, providing a wide range of food service capabilities to a variety of clients. It was the world's leading supplier of catering services to airlines, with 62 flight kitchens serving domestic and international air travelers. The Food Service Management Division also managed rest aurants, cafeterias, conference centers and other facilities for over 200 clients, including business, health care, and educational institutions.Restaurants (25% of sales)—Marriott's Restaurant Group consisted of 476 company-owned units offering a variety of popularly priced food in 46 states. Roy Rogers fast food restaurants and Big Boy coffee shops accounted for 92% of the total units. Theme Parks and Cruise Ships (8% of sales)—The two Great America theme parks, located in Gurnee, Illinois, between Chicago and, Milwaukee, and in Santa Clara, California, were opened in 1976. Both parks combined a wide variety of thrill and family rides, live musical productions and stage shows, arcades and games, merchandise and food.The attractions were set in five authentically recreated areas of America's past and have strong appeal for the entire family. The Sun Line fleet, consisting of three vessels, offered luxury sailing in both the Aegean/Mediterranean and Caribbean cruise ma rkets, and was widely recognized as the leader in quality in the Aegean market. Past Performance Marriott had always been a strong performer in profit terms. Over the entire 25 years ended 1979, there were only two down years and only three other years in which earnings per share grew at less than a 15% rate.Profits doubled on average every 3 to 4 years. A major return on investment improvement program, initiated in 1975, accelerated the earnings growth. The program consisted of three parts: (1) the sale or liquidation of $92 million of marginal assets, including land, 38 restaurants, a security services business, 2 European airplane flight kitchens, and a travel division, (2) a major effort to turn around the Sun Line operation and to develop volume in the recently opened Theme Parks, and (3) the shift of Marriott's hotel strategy from ownership to leasing and management contracts.The shift in the hotel strategy reflected management's belief that its comparative advantage was in ho tel development and management, and not in long-term hotel ownership. 2 Marriott Corporation 282-042 The results were dramatic. Net income as a percentage of sales rose from 3. 1% to 4. 7%. The company's return on average equity improved from 9. 5% in 1975 to 17. 0% in 1979. Earnings per share soared from 69? to $1. 95. (See Exhibit 2 for a summary of Marriott's historical performance. ) Profitability—An Elusive NotionWhile the trend in profitability seemed clear and encouraging, the actual level was a matter of debate and uncertainty for Marriott, as well as for American business in general. Double-digit inflation cast doubts on the usefulness of numbers based on historical costs, and the Financial Accounting Standards Board (FASB) recently issued guidelines which required firms to present, beginning in 1979, supplemental financial information that reflects the effects of general inflation. Marriott even though they reported these adjustments as required by Financial Account ing Standards No. 3 felt the numbers were misleading since they only adjusted for general inflation. Marriott also reported a second method of adjusting for inflation which they called Current Value and which they explained in the annual report: The Financial Accounting Standards Board has recently addressed the problem of financial reporting during inflationary periods. However, each industry and company is impacted differently by inflation and the choice of measurement must reflect the specific situation. Current Value is the best method for tracking Marriott's economic performance, and it differs from either historic costs or the present FASB definition.According to Current Value accounting, the value of shareholders' equity increased by $125 million in 1979 alone, and the increase would have been $199 million more if not for the $74 million share repurchase. (See Exhibit 3 for Current Value Figures). Current Value accounting differs from historic cost accounting in four areas. F irst, it values most fixed assets on a discounted cash flow basis, net of anticipated future capital requirements, thereby eliminating the valuation distortions caused by conventional depreciation accounting.In contrast with manufacturing facilities, Marriott's high-quality building structures, properly maintained, do not physically wear out at the depreciation rates assumed by industry accounting standards. In fact, Marriott's real estate assets actually increase in value during inflation, as demonstrated by actual property sales. For example, Marriott's Essex House Hotel is 50 years old, yet it remains one of America's finest real estate values due to its location in New York City and its excellent maintenance program.Second, Current Value reports an improved measure of annual economic profit— Discretionary Cash Flow—which disregards accounting depreciation and substitutes the actual required capital expenditures made for maintenance of property, plant and equipment. Third, Current Value accounting recognizes the annual gains in purchasing power from repaying debt in cheaper, inflated dollars. Accounting convention charges the inflation component of interest against current earnings, but does not reflect the benefits of debt.Fourth, Current Value reflects the gains from holding debt borrowed at comparatively low interest rates. According to Marriott's calculations the current value price per share of Marriott's stock was $27. 83 versus the historic book value of $12. 88. Prospects Stock price, of course, is based on more than book or replacement value; it is also based on future earnings potential. Marriott's prospects for growth and profitability seemed excellent. Marriott's major chain competitors were not expanding on an ownership basis and only selectively on 3 282-042 Marriott Corporation management basis; and independents were unable to obtain financing for new hotels without a chain affiliation and a management contract from a successful national operator. This presented management with a major opportunity to accelerate the planned annual hotel room growth to 20%-25% per year. There were already over 50,000 hotel rooms, representing nearly 100 properties, in the development â€Å"pipeline. † This was 2 1/2 times the current number of company-operated rooms. Management was optimistic about the future and expected profitability to improve from an aftertax return on assets of 6. 6% in 1979 to 8. 7% by 1983.Furthermore the company seemed ahead of schedule in achieving its goal of a 20% ROE by 1983. Main contributors would include a continued buildup of attendance at the two Theme Parks and a continued shift from hotel ownership to outside ownership and Marriott management contracts. All management contracts provided at a minimum a constant percentage of hotel profits, and most new contracts would provide Marriott with an increased share in profits after achieving certain targeted levels. Financial Policies Marri ott's success seemed certain to present management with a problem of too much cash and underutilized debt capacity. . . a situation almost totally the reverse of what Gary Wilson, chief financial officer, found when he joined Marriott as treasurer in 1974. At that time, he found a company with a high debt burden, heavy debt repayments due to short maturities, and access to only a limited number of funding sources. Wilson immediately went to work at broadening the potential lenders, opening up the commercial paper market, refinancing with longer maturities, and reducing the total debt load from 55% of total capital in 1975 to 41% at year-end 1979.His financial policy guidelines won approval by the board of directors in 1978 and included the following: 1. Maintain senior funded debt to total capital in the 40%-45% range; maintain this ratio including capitalized financing leases below 50%. 2. Maintain the P-1 Moody's commercial paper rating, as it lends credibility to Marriott's claim of prime credit worthiness and impacts the availability and rate of its commercial bank and privately placed bond debt. Among the 500 companies with P-1 rated commercial paper and rated bond debt, only one has a bond rating of less than â€Å"A. â€Å") 3. Position the company further in the domestic, unsecured, long-term, fixed-rate bond market as the principal source of future debt financing. 4. Issue no convertible debt or preferred stock. In addition, while Marriott had begun paying a cash dividend in 1977 and had increased it twice, the firm's policy was not to increase payout substantially as explained in its Annual Report: 5. The company has a good record of reinvesting cash flow at high returns.Marriott will continue this reinvestment strategy, so that shareholders should profit through share appreciation taxed at advantageous capital gains rates, rather than through higher dividends taxed at ordinary rates. Too Much Cash By 1979, Marriott's four-year-old program of impro ving its returns through hotel management fees and the divestiture of low return operations was working so well that it was producing an embarrassment of cash-flow riches. The company was rapidly moving in the direction of unused debt capacity, which Wilson deemed â€Å"imprudent† in an inflationary environment. 4 Marriott Corporation 82-042 By 1983, the debt to capital ratio would fall to roughly 20% if the projected excess cash flow, $125 million over the 4-year period, were merely used to pay down debt while the equity base continued to grow through the retention of earnings. Wilson explained his dislike for low debt ratios: I'm a great believer in prudent leverage. Many other companies aren’t. But in the next decade, inflation will make them come around to my viewpoint. Leverage is attractive for a very simple reason. Capital, which is the stuff by which investments are made, is comprised of two components—equity and debt.Equity in the case of Marriott costs about 17% after tax; that is, the investor expects to earn 17% on an investment in Marriott's stock. Debt costs only about 5% after tax. Given an investment that earns 10% after tax, it is evident that the more debt that I have in my capital structure, the lower will be the cost of my capital, and the more return I will have left over for the holders of my common stock. Since debt is so cheap relative to equity, it would seem attractive to use as much debt as possible in a capital structure. In fact, if cost were the sole criteria for selection, one would use 100% debt.This brings us to the second component of the determinants of capital structure and that is coverage. Debt unlike equity has a fixed interest charge that must be met or the equity holders' investment will be jeopardized. It is common to speak of the firm's ability to meet its interest payments in terms of coverage, or the number of times the pretax cash flow from the firm meets the interest charges. Coverage is proba bly the most important quantitative measure used in the rating of debt instruments by rating agencies; as coverage rises, so does the bond rating.Highly rated firms also tend to have low debt ratios which are more representative of the fact that these firms tend to be exceedingly large, in mature industries, with limited reinvestment opportunities, rather than demonstrative of prudent financial policy. It can be reasonably argued that growth companies should be positioned in the triple-B range or lower, as opposed to the higher ranges. The firm's annual report expanded on this theme by stating: Maintaining excess debt capacity is inconsistent with the goal of maximizing shareholder wealth for three reasons; (1) Unused debt capacity is comparable to unused plant capacity.Fully utilizing this capacity maximizes shareholder's returns. (2) High proportions of debt reduce a company's weighted cost of capital and increase the real returns to shareholders. (3) Debt-financed real estate pro vides distinct advantages in an inflationary environment. Repurchase of 10 million shares would, with one move, eliminate Wilson's concern. In fact, it would push the debt ratio back above the 1975 high and also above the policy guidelines passed less than two years before. Further, it would result in interest coverage of less than three times—well below the six times deemed necessary for an â€Å"A† rating. See Exhibit 4 for pro forma statements based on the proposed share repurchase. ). Bill Marriott's Concerns Bill Marriott had great respect for the judgment of his financial team. However, a $235 million debt issue used to repurchase 10 million shares would put Marriott's debt ratio well outside the range of other food and lodging firms, and would necessitate renegotiation of several restrictive covenants under existing loan agreements. (See Exhibits 5 and 6 respectively for financial information on competitors and for information on restrictive covenants. ) Repurch ase also seemed to 5 282-042 Marriott Corporation be a negative move. . . a cutting back of resources . . . . very different from the tone of aggressive expansion of operations. Maybe Finance was right about the potential leverage benefits; maybe the proposal to repurchase all shares held outside of the family and management was more than jest. But was it obvious that paying a premium of $4 per share to bring in 10 million shares was wise? What was the correct price for Marriott's stock and would a repurchase help increase it? The Street certainly seemed divided on the attractiveness of the stock at $19 5/8. (See Exhibit 7 for a summary of the forecasts and opinions of several leading analysts on Wall Street. 6 Marriott Corporation 282-042 Exhibit 1 Sales Summary of Operations by Principal Business Segment (dollars in millions) 1975 $238 256 268 – 14 $776 1976 $281 289 296 64 17 $947 1977 $335 342 317 72 24 $1,090 1978 $408 388 347 76 31 $1,250 1979 $535 480 377 84 34 $1,510 Hotel group Contract food Restaurants Theme parks Cruise ships and other Total Operating Profit Hotel Group Contract food Restaurants Theme parks Cruise ships and other Total Interest (net) Corporate expenses Income before taxes $33 19 22 – (3) 71 23 8 $40 $38 19 20 15 1 93 27 13 $53 $54 21 26 10 4 115 30 16 $69 $66 23 28 12 5 134 24 15 $95 87 32 29 17 6 171 28 20 $123 Net Assets 1978 Hotel Group Contract food Restaurants Theme parks Cruise ships and other Corporate Total $304 99 162 161 32 69 $827 Employed 1979 $372 124 175 158 32 31 $892 Capital 1978 $63 11 34 9 0 22 $139 Expenditures 1979 $81 20 45 6 1 5 $158 Depreciation 1978 1979 $15 8 12 9 2 1 $47 $16 8 15 9 1 2 $51 7 282-042 Marriott Corporation Exhibit 2 Summary of Historical Performance (dollars in millions, except per share amounts) 1975 1976 $ 947 32 3. 4% $ 326 378 48% 3. 0 10. 4% $ . 86 0 8. 95 13. 54 36. 5 14,765 52,900 1977 $1,090 39 3. 6% $ 366 370 45% 3. 3 11. 1% $ 1. 04 . 03 10. 02 11. 75 36. 15,383 56,100 1 978 $1,250 54 4. 3% $ 419 310 38% 5. 0 13. 9% $ 1. 43 . 13 11. 40 12. 13 36. 7 17,987 63,600 1979 $1,510 71 4. 7% $ 414 365 41% 5. 4 17. 0% $ 1. 95 . 17 12. 88 17. 38 32. 1 20,956 65,700 Sales Net Income % of sales Shareholders' equity Senior debt and capital lease obligations % of total capitala Times interest earnedb Return on average shareholders' equity after taxes Earnings per sharec Cash dividends per share Book Value per share Year-end market price Number of shares outstanding (millions) Company-operated hotel rooms Employees $ 776 24 3. 1% $ 264 406 55% 2. 7 9. 5% $ . 69 0 7. 68 15. 46 34. 4 12,987 47,600 Total capital is defined as total assets less current liabilities. b Times interest earned is calculated by dividing earnings before interest and taxes by interest expense net of interest on projects under construction. c Fully diluted earnings per share based upon the average number of shares outstanding for the year. 8 Marriott Corporation 282-042 Exhibit 3 Current Value Statement (dollar figures in thousands) Changes in Shareholders' Current Value Equity for 1979 Current value, December 28, 1978 Increase in current value of assets Discretionary cash flow Reduction in current value of debt Cash dividends Purchase of sharesCommon stock issued Current value, December 28, 1979 Change in current value during 1979 Change in current value during 1979 before cash dividends, share repurchase and issuance of new common stock $ 767,719 77,227 99,123 25,287 (5,776) (74,187) 3,810 $ 893,203 $ 125,484 201,637 Shareholders' Equity Historical Cost Non-monetary assets (primarily plant and equipment) Less: net monetary liabilities Senior debt and capital leases Convertible debt Other monetary liabilities Shareholders' equity, December 28, 1979 $ 927,287 365,279 26,918 121,587 $ 413,503 Current Value $1,356,244 320,736 20,718 121,587 $ 893,203 282-042 Marriott Corporation Exhibit 4 Pro Forma Financial Statements Based on Repurchase of 10 Million Shares of Common Stoc k, Funded with a $235 Million Debt Issue (dollar figures in millions, except earnings per share) Year Ended December 28, 1979 Actual Pro Forma Earnings before interest and taxes Interest: existing debt $235 million in new debt Profit before tax Income taxes Net income Average number of shares (millions) Earnings per sharea $ 151 28 – $123 52 $71 36 $1. 96 $151 28 31 $92 36 $56 26 $2. 14 Consolidated Balance Sheet, December 28, 1979 ASSETS Cash & Mkt.Securities Accounts receivable Inventories Other Total current Net fixed assets Other Total Actual $ 21 100 47 10 $ 178 825 77 $1,080 Pro Forma $ 21 100 47 10 $ 178 825 77 $1,080 LIABILITIES & EQUITY Short-term loans Current portion, longterm debt Accounts payable Accrued liabilities Income taxes payable Total current Senior debt Capital lease Subordinated debt Other liabilities Equity Total a Fully diluted based upon the average number of shares outstanding for the year. Actual $ 4 10 72 80 22 $ 188 341 24 27 86 414 $1,080 Pro Fo rma $ 4 10 72 80 22 $ 188 576 24 27 86 179 $1,080 10 Marriott Corporation 282-042 Exhibit 5Financial Information on Competitors Holiday Inns $17 1/4 1. 75 9. 9 3. 50 4. 9 . 66 17. 50 Marriott Stock Price January 1980 1979 epsa P/E Ratio 1979 Cash Flow per share a Price/Cash Flow Dividend per share Book Value per share Avg. Annual Growth (1974-1979) Sales Earnings Return on Equity, 1979a Total Long term debt % Book Capital Times Interest Earned Rating of Senior debt Beta a Estimated Hilton $29 1/2 3. 75 7. 9 4. 80 6. 1 1. 09 14. 91 McDonalds $ 44 4. 70 9. 4 6. 80 6. 4 . 51 23. 69 Disney $ 45 3. 50 12. 9 4. 80 9. 4 . 48 29. 75 $19 5/8 1. 95 10 3. 80 5. 2 . 17 12. 88 18. 7% 23. 4% 17% 45% 5. 4 NR 1. 25 6. 2% 41. % 26% 24% 15. 0 NR 1. 30 2. 45% 11. 4% 9% 33% 5. 6 BBB 1. 45 21. 6% 22. 9% 20% 50% 5. 2 A 1. 05 13. 1% 18. 7% 12% 0% – NR 1. 15 Note: Yields on 91-day Treasury bills, 5 yr. Treasury notes and 30 yr. Treasury Bonds were 12. 5%, 10. 4%, and 10. 1%, respectively, as of Janu ary 1980. 11 282-042 Marriott Corporation Exhibit 6 Selected Restrictive Covenants Under the $40 Million Loan Agreement Dated 1977 With Six Life Insurance Companies, 8-3/4% Rate, Due in 15 Equal Annual Installments Beginning December 15, 1983 1. Total book assets shall be at least 155% of the sum of consolidated funded debt plus consolidated capital leases.Funded debt shall mean all indebtedness having a final maturity of more than one year. 2. Consolidated net working capital shall be at least equal to $6 million. 3. Consolidated senior funded debt shall be less than the sum of 66 2/3% of consolidated net hotel assets plus 50% of all other consolidated assets. 4. Consolidated tangible net worth shall be maintained at all times in an amount of least equal to the sum of $240 million plus 25% of consolidated net income for the period from July 31, 1976. Tangible net worth shall mean shareholders' equity minus all intangible items. 5.Net income available for fixed charges for the past year shall have been at least 175% of pro forma annual fixed charges. Net income available for fixed charges shall mean EBIT plus the imputed interest in all capital leases. Source: Casewriter 12 Marriott Corporation 282-042 Exhibit 7 Summary of Forecasts and Opinions of Several Leading Analysts from Major Investment Firms Firm A Est. 1980 eps Est. 1983 eps Est. 1980 return on equity Est. 1983 return on equity Est. long-term eps growth Riskiness of stock $1. 95 3. 00 14% 14% 15% average Firm B $2. 20 3. 80 16% 17% 20% average Firm C $2. 0 3. 25 14% 15% 16% average Firm D $2. 10 3. 60 15% 16% 20% low Firm E $2. 15 3. 25 15% 15% 15% low Avg. $2. 08 3. 38 14. 8% 15. 4% 17. 2% – Recommendation Long-term Hold Long-term Buy Long-term Hold Hold Long-term Hold – Marriott and Market Information Marriott Return on Equity Earnings per share Dividends per share Price/Earnings (Average) Market value/Book value (Avg. ) Standard & Poor's Industrials Return to Equity Earnings per shar e Dividends per share Price/earnings Market value/Book value Interest Rates (Year-end) 91-Day Treasury Bill 5-Year Treasury Note 30-Year Treasury Bonds 7. % 7. 2% 8. 0% 5. 3% 7. 4% 8. 0% 4. 4% 6. 2% 7. 3% 6. 3% 7. 5% 8. 0% 9. 6% 9. 3% 8. 9% 12. 5% 10. 4% 10. 1% 14. 8% $9. 69 4. 72 10 1. 4 12. 3% $8. 55 3. 78 11 1. 4 14. 5% $10. 68 4. 25 11 1. 5 14. 6% $11. 57 4. 96 9 1. 3 15. 2% $13. 12 5. 35 8 1. 2 17. 1% $16. 08 6. 04 7 1. 2 1974 10. 6% $ . 70 0 18 2. 1 1975 9. 5% $ . 69 0 17 1. 6 1976 10. 4% $ . 86 0 17 1. 8 1977 11. 1% $1. 04 . 03 12 1. 2 1978 13. 9% $1. 43 . 13 10 1. 3 1979 17. 0% $1. 95 . 17 8 1. 2 13