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Essay Question Topic For Exam 2 Is Mechanism And Purpose Of Immunization Vaccines And Booster Shots
Tuesday, August 25, 2020
Traditional Versus Activity Based Costing-Free-Samples for Students
Question: Contrast Traditional Costing and Activity Based Costing (ABC). Do you feel ABC is an improvement over conventional costing? Answer: Presentation In business there is event of various expenses in assembling of products or rendering of administrations. The assembling associations need to convey the expense happened for crude material,, work, and overhead to the merchandise delivered so as to decide the general expense of the fabricated products. In costing there are different techniques for designating the all the expenses to the products and ventures. Some of significant cost designation techniques are conventional costing strategy and movement based costing technique. In this article, there will conversation on both of these costing techniques and contrast between them will likewise be clarified. The conventional costing strategy and movement based costing technique both are utilized to assign the aberrant expense caused during the assembling of products or offering the types of assistance. The primary job of both these costing techniques is to figure the overhead expenses and assign them to the items utilizing the specific c ost drivers. Examination of Traditional costing technique and movement based costing strategy The customary costing technique for cost assignment is generally simple and every now and again utilized strategy for designating the processing plant overhead to the items. The fundamental motivation behind why the customary costing technique is much of the time utilized is a result of its straightforwardness and simple to apply qualities. Under this costing strategy, all the overhead cost (processing plant overhead) are apportioned to the various items utilizing the single cost driver, for example, direct work hour technique or machine hour technique or direct material utilized strategy (Cooper and Kaplan,1991). There are numerous potential issues related under this strategy like utilization of single recuperation cost driver to apportion all the overhead regardless of overhead devoured under individual item or not. This difficult offer ascent to basic cost gives that can hurt the companys execution. Under customary costing technique, the cost allotment happens in two phases. In fi rst stage, all the overheads are determined by detailing all the overhead expense to the cost places. In second stage, all the overheads cost are conveyed structure the cost place to the various items in the extent of cost driver utilized by every one of the item in the individual time frame (Hayden, 2017). The customary costing technique for cost designation doesn't help in compelling working administration execution framework that will assist administrators with obtaining the significant data about the items to help in progress of business execution. The clients of the conventional costing technique make ridiculous presumption that volume metric is the most widely recognized hidden driver of the assembling overhead expense. Under the customary costing doles out a wide range of overheads utilizing the single recuperation rate among the items made by the organization. The conventional costing technique for cost distribution has bombed after organization has begun utilizing the machines and other various apparatuses for assembling of items. The advanced assembling process includes numerous exercises to deliver any item and it is totally off-base to apportion the overhead costs utilizing the allotment base that has no connection with the exercises utilized in the assembling of items. To t ake care of every one of these issues, the new costing strategy has been presented known as action based costing framework (Bromwich and Bhimani, 2005). The action based costing strategy is interesting and most precise technique for cost distribution as this technique totally dependent on the genuine utilization premise. According to this technique the total assembling process has been isolated into numerous stages and each stage expends a few expenses. The specific exercises can contrast contingent on the items produced by the organization. Each action utilized in the assembling procedure basically dependent on some cost driver, for example, if item is prepared through certain machine than the cost driver will be machine hours. The movement based costing framework distinguishes the exercises that are performed to make the item fit for the utilization and afterward distribute overhead cost connected with specific action to the items utilizing the recuperation rate that characterize cost driver in separate action. For instance, the overhead expense related with the utilization of machines will be allocated among the items utilizing th e machine hour rate recuperation rate not by the work hour recuperation rate (Cooper and Kaplan, 1991). The significant bit of leeway of this technique is that it perceives the connection between the costs, exercises and items, and by utilizing this relationship it distribute the all the overhead expenses to the items utilizing the most genuine designation strategy which helps he administrator in improving the business execution and take out any non-esteem included exercises (Hayden, 2017). The underneath table obviously shows the contrast between the conventional costing technique and action based costing strategy: Premise of Difference Conventional Costing Method Action based costing strategy Cost Pool Conventional costing strategy utilized one cost driver or most extreme two Action based costing strategy utilized various cost driver that itself speaks to the exercises attempted in the creation Rate applied This costing strategy utilizes volume based cost driver This costing technique utilizes movement based costing driver which is non-monetary in nature Advantages Straightforward, cheap and simple to apply Give precise item costing and help in execution assessment It is critical to comprehend the contrast between the conventional costing strategy and action based costing technique utilizing the numerical model. Model: Following the expense acquired of the assembling of the two items P and Q by ABC Company. Direct Material expense $ 15,000.00 Direct Labor cost $ 45,000.00 Overhead Costs Arrangement the machine $ 9,500.00 Material accepting expense $ 5,500.00 Other data Work hours 450 Hours (P: 60hrs and Q: 40 hrs) Number of Setups 95 (P: 45 and Q: 50) Number of Requisite 55 (P: 35 and Q: 20) Material P: $ 10000 Q: $ 5000 Cost Allocation utilizing the conventional costing strategy Conventional Costing Method Points of interest P Q Direct Material expense $ 10,000.00 $ 5,000.00 Direct Labor cost $ 25,000.00 $ 20,000.00 Overhead expense $ 8,333.33 $ 6,666.67 All out Cost $ 43,333.33 $ 31,666.67 Cost Allocation under action based costing Action Based Costing Method Specifics P Q Direct Material expense $ 10,000.00 $ 5,000.00 Direct Labor cost $ 25,000.00 $ 20,000.00 Overhead Costs Arrangement the machine $ 4,500.00 $ 5,000.00 Material accepting expense $ 3,500.00 $ 2,000.00 Absolute Cost $ 43,000.00 $ 32,000.00 End It tends to be said that customary cost strategy gives just the premise to cost distribution not the exhibition estimating technique according to costing strategies. Then again movement based costing is helpful technique for cost allotment as it can likewise be utilized for execution estimation. References Bromwich, M. furthermore, Bhimani, A., 2005.Management bookkeeping: Pathways to advance. Cima distributing. Cooper, R. furthermore, Kaplan, R.S. 1991. Benefit Priorities from Activity-Based Costing. [Online]. Accessible from: https://hbr.org/1991/05/benefit needs from-movement put together costing [Accessed with respect to: 28 February, 2018]. Hayden, A. 2017. Movement Based versus Conventional Costing. [Online]. Accessible from: https://quickbooks.intuit.com/r/valuing system/movement based-versus customary costing/[Accessed on: 28 February, 2018]
Saturday, August 22, 2020
Manufacturing engineering application Personal Statement
Assembling building application - Personal Statement Example This will be a decent open door for me to develop in this field and addition all the understanding I need as a designer. Assembling Engineering is my obsession and I experience never had any difficulty recognizing my desire. What I appreciate most about the program is the decent variety the course presents me. Ventures are shifted, wide, and every last one of them particular which are each reason I locate the subject intriguing. A degree in assembling designing is appropriate to my future profession, it is one of those subjects that will brace my building information and furnish me with the abilities I requirement for fruitful employments consummation in future. I am sure that a degree on a similar will give me the ability I require for an expert activity in a plenty of areas such asâ industry, consultancy, account, and open administrations. Adjacent to my fantasy to seek after assembling designing, the foundation I have on business building the board makes me a qualified understudy for the program. I have picked fabricating building since I need to be a piece of structure innovation that will see the expense of vitality underway cut and ozone exhaustion decreased. To me, a vocation in material designing is all I need as it will place me in the bleeding edge of battling for the improvement of the worldwide condition and counter environmental change. This subject doesn't just energize yet interest me and I believe I need to ace it sooner rather than later. Designing requests a couple of more abilities for an expanded efficiency. Such incorporate relational abilities and greatness in a group based work approach. It requests thankfulness and comprehension of the way that all encompassing methodology is indispensable in fruitful assembling building. I give full consideration to detail, promptly acknowledge obligation, and I have been complimented for practicing decision making ability. The experience I have had in school and in the field has given me the comprehension of
Wednesday, August 5, 2020
The Unreliable Narrator Definition, Examples, and How to Make It Work
The Unreliable Narrator Definition, Examples, and How to Make It Work From Edgar Allan Poes Tell-Tale Heart to Gillian Flynns Gone Girl, the authors use of an unreliable narrator is one of the most fascinating literary devices used in storytelling. While there have been unreliable narrators dating back to the work of the Ancient Greek playwright, Aristophanes, the term was coined by Wayne C. Booth in his book, The Rhetoric of Fiction.What is an unreliable narrator?An unreliable narrator is one that is not to be fully believed. His or her credibility is compromised due to some admission of insanity or an obviously false claim that the reader knows is incorrect, or due to the story revealing information about the narrator that makes the reader question the believability of claims made.The unreliable narrator as a literary device can be used for dramatic effect to create an ending with a twist (such as Gone Girl), or can be merely hinted at by other characters as a way to make the reader question if the narrator should be trusted. However it is used and r evealed, having an unreliable narrator is an excellent way for an author to psychologically thrill his or her audience. Nothing can be taken at face value. And if the narrator, the primary voice of the story cant be trustedâ"then who can?The use of the unreliable narrator is also a reminder that any story told from first person point of view has limitations. In reality, all humans are unreliable narrators. Whenever a person recalls an experience, the recollection is subjective and might not include all relevant detailsâ"either because the details were missed entirely, or were forgotten in the time that passed between the event and the later description of it. Some people forget or omit details as a type of self-preservation. Others do it to avoid negative consequences. Still others omit details simply because they didnt notice them.Gillian Flynns Gone Girl is an example of an unreliable narrator.Types of unreliable narratorsIn his book Picaros, Madmen, Naifs, and Clowns: The Unrel iable First-Person Narrator, author William Riggan explored the types of first-person unreliable narrators often seen in literature. He narrowed it down to the following list:The PÃcaroThis is a narrator who is prone to exaggeration and bragging and is unreliable due to his or her tendency for tall tales. Some examples include Moll Flanders in the novel by the same name written by Daniel Defoe, Simplicius Simplicissimus by Hans Jakob Christoffel von Grimmelshausen, and Felix Krull from the unfinished German novel, Confessions of Felix Krull by Thomas Mann.The MadmanThis is a narrator who has a mental disorder resulting in dissociation, schizophrenia or paranoia. Fight Club by Chuck Palahniuk gave us one of the best examples of this type of unreliable narrator in the discovery that the insomniac narrator and Tyler Durden were one and the same. Some other examples are Franz Kafkas narrators, Barbara Covett in Notes on a Scandal, Charles Kinbote in Pale Fire, and Patrick Bateman in Br et Easton Ellis American Psycho.The ClownThis is a narrator who toys with the truth and the readers expectations. Examples of this type of unreliable narrator include Tristram Shandy in The Life and Opinions of Tristram Shandy, Gentleman by Laurence Sterne.The NaïfThis type of unreliable narrator is a narrator with a limited understanding or point of view. One of the best examples of this is Rebecca by Daphne du Maurier. Other examples of naïves include Mark Twains Huckleberry Finn, Holden Caulfield, from J. D. Salingers 1951 novel The Catcher in the Rye, and Jack from Emma Donoghues novel, Room.The LiarThis is a narrator who purposefully lies to the audience. John Dowell in Ford Madox Fords The Good Soldier is an example of this type of unreliable narrator.Some unreliable narrators are a mix of several of these categories. For example, in A Clockwork Orange by Anthony Burgess, the narrator is Alex, a depraved and violent psychopathic adolescent who has no desire to change. In thi s sense, he is the antihero of the story and represents an unreliable narrator who admits to his deception, so is The Liar (based on Riggans types). Its made clear that he is manipulating the reader, especially with his use of the term brothers when addressing his audience. His constant drug use and seeming mental instability, along with a fictional jargon called Nasdat to manipulate and lie to other characters, paints him as unreliable from the beginning of the narration (and thus, also The Madman).Alex from Anthony Burgess A Clockwork Orange is an unreliable narrator on many different levels.Outside of Riggans types of unreliable narrators, the following can also be found in modern literature.The narrator who evades the truth out of self-preservationA good example of this type of unreliable narrator is Pi Patel, the narrator of Yann Martels Life of Pi. He tells a story of being adrift at sea and sharing his lifeboat with a zebra, orangutan, hyena, and tiger. When his story is ques tioned for its implausibility, his rescuers (and thus, the reader) learns of another version of the story in which he is adrift at sea with his mother, a sailor, and the ships cook. The rescuers find connections between the two versions of the story and choose to accept the version with the animals, understanding that the alternative (and more likely version) would have been extremely traumatic for the boy.The narrator who doesnt know all of the truthRachel in The Girl on the Train by Paula Hawkins is an example of this type of unreliable narrator due to her frequent alcohol-induced blackouts and her lies to other characters. Her explanation of her whereabouts is unreliable and her connection to the mystery of the novel is questioned due to her loss of memory due to drinking. In this sense, she doesnt quite fall into Riggans category of The Naïf, but her perspective and memory are indeed limited.How to use the unreliable narrator in your writingIf youve chosen to write a story with an unreliable narrator, youre on the right track. Writers have been using this exciting literary device to create blockbuster stories for centuries, and it is still as exciting as it has ever been for readers to discover that the narrator might not be trustworthy (or might be completely crazy). Put simplyâ"its a great way to hook your audience and create a compelling, memorable character.Here are a few tips for using an unreliable narrator as a literary device in your writing:Make your narrator seem very cleverWe all know that for a lie to work, careful planning is often needed. Liars have to cover all the bases and intuit how their lies might be discovered, by whom, and how to avoid that happening. This is why, particularly if your narrator is the type who lies on purpose, making him or her incredibly clever and intelligent is the easiest way to pull off turning them into a memorable unreliable narrator. In the real world (as in, outside of fiction), liars must work hard and plan carefully to keep their lie from being discovered.Make your narrator do something out of characterWhen your narrator, who is normally a fine, upstanding citizen, suddenly does something out of character, their reliability is immediately called into question. Having them do something that surprises the reader is a great way to set up an unreliable narratorâ"especially if you dont plan to wait until the end to make the unreliability part of the storys twist.Consider making your narrator the bad guyFrom A Clockwork Orange to American Psycho, having an unreliable narrator who is also a villain is a great way to set up a fascinating story. The trick to this is making sure your narrator is also likable. There have to be some redeeming qualities or some reason for your audience to keep turning pages, otherwise youll lose your readers attention quickly.Make your narrator authenticIf you are toying with the trust of your readers by using an unreliable narrator, it is especially important t o keep your narrator authentic and believable. While many unreliable narrators are narcissists, pathological liars, and/or mentally unstable, staying within an authentic framework when creating them will keep your readers engaged. Even narcissists have a predictable pattern, and various mental illnesses display certain symptoms that should be evident if this is the direction you plan to take with your narrator as a character.However you plan to use an unreliable narrator, whether to add depth to his or her character or to create a surprise twist at the end of your story, dont reveal too much too soon. Readers automatically assume that the narrator is telling the truth and enjoy the surprise when they learn their preconceived notions arent exactly correct. The unreliable narrator is a great storytelling device when used correctly and should be explored by every writer at some point in his or her writing career. Youll have as much fun creating one as your readers will have reading his or her unreliable tales.
Saturday, May 23, 2020
The Lombards A Germanic Tribe in Northern Italy
The Lombards were a Germanic tribe best known for establishing a kingdom in Italy. They were also known asà Langobard or Langobards (long-beard); in Latin,à Langobardus,à pluralà Langobardi. Beginnings in Northwestern Germany In the first century C.E., the Lombards made their home in northwestern Germany. They were one of the tribes that made up the Suebi, and though this occasionally brought them into conflict with other Germanic and Celtic tribes, as well as with the Romans, for the most part the greater number of Lombards led a fairly peaceful existence, both sedentary and agricultural. Then, in the fourth century C.E., the Lombards began a great southward migration that took them through present-day Germany and into what is now Austria. By the end of the fifth century C.E., they had established themselves fairly firmly in the region north of the Danube River. A New Royal Dynasty In the mid-sixth century, a Lombard leader by the name of Audoin took control of the tribe, beginning a new royal dynasty. Audoin apparently instituted a tribal organization similar to the military system used by other Germanic tribes, in which war bands formed of kinship groups were led by a hierarchy of dukes, counts, and other commanders. By this time, the Lombards were Christian, but they were Arian Christians. Beginning in the mid 540s, the Lombards engaged in war with the Gepidae, a conflict that would last about 20 years. It was Audoins successor, Alboin, who finally put an end to the war with the Gepidae. By allying himself with the eastern neighbors of the Gepidae, the Avars, Alboin was able to destroy his enemies and kill their king, Cunimund, in about 567. He then forced the kings daughter, Rosamund, into marriage. Moving to Italy Alboin realized that the Byzantine Empires overthrow of the Ostrogothic kingdom in northern Italy had left the region nearly defenseless. He judged it an auspicious time to move into Italy and crossed the Alps in the spring of 568. The Lombards met very little resistance, and over the next year and a half they subdued Venice, Milan, Tuscany, and Benevento. While they spread into central and southern parts of the Italian peninsula, they also focused on Pavia, which fell to Alboin and his armies in 572 C.E., and which would later become the capital of the Lombard kingdom. Not long after this, Alboin was murdered, probably by his unwilling bride and possibly with the help of Byzantines. The reign of his successor, Cleph, lasted only 18 months, and was notable for Clephs ruthless dealings with Italian citizens, especially landowners. Rule of the Dukes When Cleph died, the Lombards decided not to choose another king. Instead, military commanders (mostly dukes) each took control of a city and the surrounding territory. However, this rule of the dukes was no less violent than life under Cleph had been, and by 584 the dukes had provoked an invasion by an alliance of Franks and Byzantines. The Lombards set Clephs son Authari on the throne in hopes of unifying their forces and standing against the threat. In so doing, the dukes gave up half of their estates in order to maintain the king and his court. It was at this point that Pavia, where the royal palace was built, became the administrative center of the Lombard kingdom. Upon the death of Authari in 590, Agilulf, duke of Turin, took the throne. It was Agilulf who was able to recapture most of the Italian territory that the Franks and Byzantines had conquered. A Century of Peace Relative peace prevailed for the next century or so, during which time the Lombards converted from Arianism to orthodox Christianity, probably late in the seventh century. Then, in 700 C.E., Aripert II took the throne and reigned cruelly for 12 years. The chaos that resulted was finally ended when Liudprand (or Liutprand) took the throne. Possibly the greatest Lombard king ever, Liudprand focused largely on the peace and security of his kingdom, and did not look to expand until several decades into his reign. When he did look outward, he slowly but steadily pushed out most of the Byzantine governors left in Italy. He is generally considered a powerful and beneficial ruler. Once again the Lombard kingdom saw several decades of relative peace. Then King Aistulf (reigned 749ââ¬â756) and his successor, Desiderius (reigned 756ââ¬â774), began invading papal territory. Pope Adrian I turned to Charlemagne for help. The Frankish king acted swiftly, invading Lombard territory and besieging Pavia; in about a year, he had conquered the Lombard people. Charlemagne styled himself King of the Lombards as well as King of the Franks. By 774 the Lombard kingdom in Italy was no more, but the region in northern Italy where it had flourished is still known as Lombardy. In the late 8th century an important history of the Lombards was written by a Lombard poet known as Paul the Deacon.
Monday, May 11, 2020
The New Eldercare Service Model Must Be One Of Inclusion
Chapter Health Disparities in America The new eldercare service model must be one of inclusion. We can no longer afford to marginalize any group of seniors. ââ¬âAuthor Introduction I n the United States, wealth is the strongest determinant of health; and the strength of this relationship is profound and continues to increase. Wealth confers many benefits that are associated with health and quality of life outcomes. Wealth creates disparities in high quality education, employment, housing, childcare, nutrition, leisure activities, access to quality medical care, and safer and cleaner neighborhoods. Economic studies, the national press, and forward thinking political leaders are reporting on the major wealth disparities that already existâ⬠¦show more contentâ⬠¦The Affordable Care Act is moving us in the right direction, but the social inequities and discrimination remain the same. We canââ¬â¢t purport to have a national goal to ââ¬Å"eliminate health disparitiesâ⬠and continue to accept the social inequities that come from such a major gap in wealth. If we hope to solve the pressing issues of eldercare, these inequities must be addressed head on now and in the future. Otherwise, those who are caregivers now may not have access to the care they will need in the future. Defining Health Disparity The United States Department of Health has an overarching goal ââ¬Å"to eliminate health disparities.â⬠This term has no absolute definition. It is most often defined as ââ¬Å"health differences that occur by gender, race or ethnicity, education or income, disability, living in rural localities, or sexual orientation,â⬠or ââ¬Å"population specific difference in the presence of disease, health outcomes, or access to care.â⬠Many factors cause health disparities. Older adults face challenges in one or all of these disparities. Depending on their living conditions and life-time health problems, they may be in double or triple jeopardy, increasing their risk for serious illness and need for eldercare. Defining Health Care Disparities The Institute of Medicine (IOM) defines health care disparities as the ââ¬Å"difference in the quality of care received by minorities and non-minorities who have equal access to care.â⬠Health care disparities can be affected by how
Wednesday, May 6, 2020
British Airways Management of Company Finance Free Essays
Ahoussou kouadio Jean Christian Student number: 2522706 Management of company finance Analysis of the financial structure of British Airways Name of professor: Tony Kilmister British airways is one of the most valuable company in the world that is why I choose her. With the aim to evaluate the proportion of debt in British airways, we will study his financial gearing: income gearing and capital gearing. In order to calculate the companyââ¬â¢s capital gearing according to the book value, we need especially the value of the long-term and short-term borrowings and the value of shareholdersââ¬â¢ funds. We will write a custom essay sample on British Airways Management of Company Finance or any similar topic only for you Order Now But, there is several different formulas which arises some issues: the fact that the book value is lower than the market value (the first formula) and provisions can be considered either as liabilities or assets (the second formula), depending on firm. Then I will calculate the Weighted Average Cost of Capital. In 2004, the way of doing the balance sheets changed thatââ¬â¢s why there are some differences between two reports. Part ââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬â1 Measure of the gearing and income ratio Part ââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬â ââ¬âââ¬âââ¬âââ¬â-2 Measure of the debt and equity based upon the market value Part ââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬âââ¬â3 Estimation of the WACC. I) Measure of gearing and income ratios We will take those expressions: 1. Debt to equity ratio=Long term Liabilities/Shareholdersââ¬â¢funds 2. Debt to debt plus equity ratio=LTL/(LTL+ Shareholdersââ¬â¢funds) 3. Long Term Borrowings/Shareholdersââ¬â¢ funds a) Gearing Ratio Capital Gearing = LTL / Shareholdersââ¬â¢ Funds à |2006 |2005 |2004 | |Capital Gearing |259. 75% |437. 6% |590. 7% | To set an upp er ratio; we can incorporate the LTL at the shareholder value. Capital Gearing = LTL / (LTL + Shareholdersââ¬â¢ Funds) |à |2006 |2005 |2004 | |Capital Gearing |72. 2% |81. 4% |85. 5% | The provision are incorporates in those 2 formulas. We can consider that the provision can be take as liabilities (highly certain) or as equity (ultra-prudence). Capital Gearing = Long Term Borrowing (LTL ââ¬â provisions) / Shareholdersââ¬â¢ Funds |à |2006 |2005 |2004 | |Capital Gearing |193. 5% |341. 4 % |475,40% | Net Debt: Net debt = (Finance debt ââ¬â cash and liquid resources)/ Equity For British Airways, Net debt = (loans, finance leases and hire purchase arrangements + Convertible Capital Bonds, net of other current interest bearing deposits and cash and cash equivalents ââ¬â overdrafts) British Airwaysââ¬â¢ definition from the annual report 2006) |? million |2006 |2005 |2004 | |Capital Gearing |1641 |2922 |4158 | The figures of long term liabilities are higher than the net debt that explain the fact that the ratios are different; The company health seem less vital, because of the cash and those equivalent, and deposits. Overdrafts are not representing a big amount, we include them. Since 2004 a policy of h igh liquidity is developed in order to reduce the debt, they tried to repay the debt earlier. The debt are reduced by the conversion of the 112 millions of convertible bonds. ââ¬Å"The ? 320 million 9 3/4 per cent Convertible Capital Bonds 2005 issued in 1989 matured on June 15, 2005. On that date 47,979,486 ordinary shares were issued in exchange for 112,317,274 Convertible Capital Bonds on the basis of one ordinary share for every 2. 34 Bonds heldâ⬠(British Airways Report 2006). The capital gearing of the company is around 65% in almost all gearing indicators and more in som of them, as a conclusion we can say that the financial statement of the company is risky and more the company is weak due to the payment on the debt. We can also highlight the fact that British Airways is finance by debt. Its has a important amount of lease and purchase arrangement, which exceeds the bank loans. b) Income Gearing This ratios show us the security of creditorââ¬â¢s fund and the debt exposure. While using Income Ration we highlight the relation of the companyââ¬â¢s income and its interest commitments. Income Ratio = Interest payable / Profit Before Interest and Tax |% |2006 |2005 |2004 | |Income Gearing |0,17 |0,26 |0,87 | Interest are taking a lower place in the profit (strategy reduction of debt). In fact, we use the Interest cover to see if the company can meet its interest. Interest cover = Profit before interest and tax / Interest charges |Times |2006 |2005 |2004 | |Interest Cover |5,79 |3,80 |1,15 | The company can afford her interest. 1) Because of the decrease of the amount of debt, 2) The profit before tax and interest increased by 269%, the risk is less important. We can also use another formula, which gives a better image of the finance. It based on the fact that cash has not been received. As a conclusion we can says that: :British Airways reduced its long term debt by 28. 5%, and keep their interest payment low and increase the PBIT strongly. From the shareholder point of view, the company takes high risks so they have a good return on investment although reduction of the debt of the company makes the rate of return lower and lower. II) Measure of the debt and equity based on the market value a) Value of Equity Share Price*:Number of Shares*: 2004: ? 2,181 083 845 000 2005: ? ,941 082 903 000 2006: ? 2,791 130 882 000 *I took those which were in the report. *The difference in the number of shares between 2005 and 2006 is the conversion of the 112 millions of Convertible Bonds into 47,979,486 shares. The value of equity is now: |? |2006 |2005 |2004 | |Value of Equity |3 155 160 780 |2 100 831 820 |2 362 782 100 | b)Rating: Value of Debt [pic ] The rating shows that the company take risks for financing because she invest in high return share in the junk bond or high yield market those are really unstable. This means that the company is highly financing by debt, investor need an important rate of return regards to the risk of non payment. In spite of that, British Airwaysââ¬â¢s main source of external funding is less sensitive to credit rating than the unsecured bond. The impact of the credit ration is not important for some parts of the debt. We will use the faire value of the debt to calculate the market value of debt. Because of the ââ¬Å"â⬠fair values of the Euro-Sterling notes and Euro-Sterling Bond 2016 are based on the quoted market values at March 31, 2006. The fair values of floating rate borrowings are deemed to be equal to their carrying values. â⬠British Airways Report Example in March, 31st 2006: [pic] Market value of the debt is: |? million |2006 |2005 |2004 | |Market Value of Debt |4 130 |4 682 |5 954 | |Book Value of Debt |4 081 |4 492 |5 716 | The problem is: Those market values are blending the current liabilities. In the purpose to respect the ratios made before, I will deduct with percentage the current liabilities. The new market value of debt is: |? million |2006 |2005 |2004 | |Market Value of Debt |3645 |4216 |5244 | |Book Value of Debt |3 602 |4 045 |5 034 | There is the a market where Debt are trade daily, that explain the difference between years. ) Measure of gearing based on market values We use here the gearing ratio to compare the book value and the market value of the company: Capital Gearing = LTL / Shareholdersââ¬â¢ Funds |% |2006 |2005 |2004 | |Capital Gearing |115,5 |200,7 |221,9 | We can make a second ratio in order to set an upper limit: Capital Gearing = LTL / (LTL + Shareholdersââ¬â¢ Funds) % |2006 |2005 |2004 | |Capital Gearing |53,6 |66,7 |68,9 | Figures are lower than the one we made with the book value. The equity are valued in the book value at 25p whereas in the market value at an average price of the three years at 230p This divergence makes the ratios lower, t hus with the book values the company seems to be less indebted and also less risky to investors. III) Estimation of the Weighted Average Cost of Capital (WACC) a) Cost of Equity To estimate the cost of equity, we can use two ways: 1) the dividend valuation model 2) the Capital Asset Price Model (CAPM). In this case, we can not use the dividend valuation model because the company did not distribute dividends since 2001, so the cost of equity will be 0 that would lead to irrelevant results. British Airways has not distributed dividends because: -They wants to strengthen the balance sheet by making new investment, then it invests into the company Quantas and also into the 5th Terminal in Heathrow. British Airways is the 13th highest performing company out of the 93 FTSE 100 companies remaining for the performance period April,1st 2003 to March, 31st 2006. The board of director indicated that the payment of dividends will be resumed at an appropriate time. To calculate the cost of equity, the CAPM is the only model available: Ke = Rf + ? (Rm ââ¬â Rf) Rf ( the risk-free return; Rm ( the market risk; ? ( quantitative measure of the volatility of a given stock, mutual fund, or portfolio, relative to the overall market. A beta above 1 is more volatile than the overall market, while a beta below 1 is less volatile. For British Airways, the Beta is, for the three years, 0,91. The risk-free return can be found in the website of the Bank of England for each years and the market risk is the caps of the FTSE 100 of year N less years N-1 divided by the caps year N-1: (Caps N ââ¬â caps N-1) / caps N-1 The risk-free return rate is: 2004: 4,75% 2005: 5,1% 2006: 4,2% The market risk is: |à |31. 03. 2006 |31. 03. 2005 |31. 03. 004 | |Caps FTSE 100 |5964,6 |4894,4 |4385,7 | |year N ââ¬â year N-1 |1070,2 |508,7 |772,4 | |Market Risk (%) |21,87 |11,60 |21,38 | The Cost of Equity using the CAPM is: |% |2006 |2005 |2004 | |Cost of Equity |20,1 |10,9 |19,7 | ) Cost of debt In order to obtain the cost of debt, the best ratio is to divide the interest payable by the debt: |% |2006 |2005 |2004 | |Cost Of Debt |2,62 |3,01 |3,50 | They leads to the same conclusion decrease in Debt and interest. We can add that no debt has been taken in 2006. All the purchase have been made by internal cash flow. c) The WACC The Weighted Average Cost of Capital is used to measure the cost of capital. The formula is: Ko = Ke (Ve/Vo) + Kd (Vd/Vo) Where: Ke (the cost of equity Ve (the value of equity Kd (the cost of debt Vd (the value of debt Vo (the total value of the firm: |? million |2006 |2005 |2004 | |Vo |7 236 |6 593 |8 079 | The WACC is: |% |2006 |2005 |2004 | |WACC |10,08 |5,41 |8,04 | The amount of Debt decreased but the WACC stay in the average, that because of the high level of the cost of equity. 2005 is discernible by a share price lower than the two other years. This leads to a lower shareholdersââ¬â¢ funds and also an higher influence of the debtââ¬â¢s drop, therefore the lower WACC. However, the CAPM have some limitations. ââ¬â He is based on several assumptions: ââ¬â The investors are rational and risk-adverse who set a level of risk. ââ¬â The investors have the same single-period planning horizon. ââ¬â The investors have homogeneous expectations on the future yield. The investors can borrow and lend unlimited amounts at a risk-free rate. ââ¬â There is neither taxes nor cost of transactions ââ¬â The investors have all an efficient portfolio which maximize the yield, for a level of risk given. Whole of efficient portfolio form a curve called the efficiency frontierâ⬠¦ To conclude, from the point of view of market value, we can say that British airways succeeded to face its commitments in term of debt and equity. Indeed, they took advantage of an increase in share price. The repayment of share allowing to reduce the gearing in debt capital. How to cite British Airways Management of Company Finance, Essay examples
Friday, May 1, 2020
Global Economic Crisis-Free-Samples for Students-Myassignement
Question: Write a report on Globalization and/or the Current Global Economic Crisis. Answer: The current global economic scenario has been experiencing the implications of an international phenomenon known as the Globalization. The term globalization indicates towards a more open and interconnected global framework, which facilitates the free and easy transfer of goods and services across different countries. As can be gauged from the notion of the term of globalization, the phenomenon is expected to facilitate international trade considerably and is also expected to facilitate the internal cost effectiveness of those industries of the countries in which the country experiences comparative advantages in production, thereby taking the concerned economies on the path of development (Beck, 2015, pp 9-10). However, Globalization, though is expected to have positive effects on the overall international economy, it is however expected to have several negative implications on those countries which are developing or are at low stages of development and in which the condition of the economies are fragile. This may happen because in most of such economies the industrial sectors are either almost non-existent or are at infant state. In such a scenario, Globalization, by opening the countries to entry of foreign efficient companies who can pose a serious threat to the growth and expansion of the domestic industries (Kaplinsky, 2013). Thus, it can be expected that the Globalization may have a distorted and skewed effect on the overall scenario of international economics as the benefits are mainly expected to be accrued to the developed countries. However, the poor and low developed countries face the threat of losing out economic power and growth aspects which may hamper their growth in the long run. The paper tries to analyze the pros and cons of Globalization in this aspect. References Beck, U. (2015).What is globalization?. John Wiley Sons, 9-10. Kaplinsky, R. (2013).Globalization, poverty and inequality: Between a rock and a hard place. John Wiley Sons.
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