The guidelines and regulations of Dividend Policies - Free Essay Example

Dividend policies are the guidelines and regulations that companies develop and implement as the means of arranging to make dividend payments to shareholders. Establishing a specific dividend policy is to the advantage of both the company and the shareholder. In order to make sure the policy is workable, a company should develop a viable policy and then run this policy through a number of test scenarios in order to determine what impact the dividend policy would have on the operation of the business. A first assumption in much of the academic finance literature is that managers work to maximize the wealth of the firms shareholders. Shareholders, the owners of the firm, elect the board of directors that, in turn, hires, promotes, compensates, and fires managers. Through this board linkage, managers, at least in theory, work on behalf of the shareholders. Firms are always searching for an optimal dividend policy, one that strikes a balance between current dividends and future growth and maximizes the firms stock prices. Dividend policy is needed as erratic dividend policy would mean surprises to market participants which will result in a drop in the firms stock price when there is selling off. Thus, a well-planned dividend policy could prevent these surprises and preserve or even enhance stock price. Dividend policy of a firm has implications for various stakeholders such as investors, managers and lenders. For investors, dividends are not only a means of regular income, but also an important input in valuation of a firm. As for managers, the more dividends paid would mean fewer funds available for investment. Lenders may also have interest in the amount of dividend a firm declares, as more dividend means less money available for servicing and redemption of their claims. In the process of maximizing the wealth of shareholders, managers must constantly be concerned with how their decisions influence the price of their firms shares. Share price is the critical determinant of shareholder wealth. Managers dividend policy decisions affect common stock share prices and, therefore, the wealth of shareholders. By dividend policy, we mean the payout policy that management follows in determining the size and pattern of cash distributions to shareholders over time. 2.0 Organisation of literature review Does Anyone Really Pay Attention to Dividends? According to Ronald C. Lease. (2000). To provide a glimpse of what the real world thinks about the importance of dividends and dividend policy, we have drawn the following excerpts from the popular financial press. Income managers are worst-off in the hunt for new investments. Since early 1995, the dividend yield [dividends per share divided by share price] on the Standard Poors 500-stock index has plunged to 1.6% from 2.9%, as companies buy back stock rather than boosting dividends. To be sure, investors themselves favor capital appreciation rather than income, thanks in part to capital-gains tax cuts in the new tax laws. But strategists and investors argue a sizable number of investors still hunt-in vain-for yield. Individual investors, with high net worth, or people who are coming close to retirement, want something in their portfolios that will give them yield or income, says Greg Smith, chief investment strategist at Pruden tial Securities. Theyve been part of a wonderful three years in the stock market, but its left them asset rich and cash poor. (Wall Street Journal, October 22, 1997, p. C1) Corporate managers around the world are clearly attuned to the tax consequences of repurchases as compared with dividends. Consider the case of Reuters Holdings, the London-based media giant, which suspended its move to effectively buy back 5% of its shares in October 1996, after the British government announced it would toughen tax laws on such deals. Instead of using the special dividend structure, Reuters might consider doubling up its regular dividend. (Wall Street Journal, October 9, 1996, p. A18) Dividend changes historically are a lagging indication of corporate profitability and at the same time a sign that corporate boards have confidence in the future. Because dividend reductions are seen as a very bad sign, companies hate to raise payouts to an unsustainable level. (New York Times, January 3, 199 7, Section D, p. 4) One big disadvantage of larger dividends is that they erode a companys cash cushion for recessions. All of the Big Three auto makers quickly burned through their cash reserves during the last recession five years ago, and they have been determined not to repeat the experience. Larger dividends and lower cash reserves also mean slightly less assurance to bondholders that a company will be able to repay them in hard times. As a result, companies with generous dividends tend to have slightly lower credit ratings, which raise their borrowing costs. (New York Times, May 17, 1996, Section D, p.1) Changes in dividend policy tend to coincide with the release of other important news concerning the company. Some firms, like Microsoft, pay no dividend because they can generate higher returns for shareholders investing their profits back in the company. Interestingly, there is evidence that investors typically underestimate the full importance of fluctuating dividends. In a number of recent studies, economists were not surprised to find that the share prices of firms that cut dividends underperformed firms that increased dividends in the 12-month period preceding the announcement of the cut. (Detroit News, August 4, 1996, p. F2) Elisabeth Goth, a dissident member of the family that controls Dow Jones Co., raises questions about its dividend policy, contends Dow Jones has increased its dividends at the expense of reinvesting its earnings to fuel future growth. (Wall Street Journal, March 13, 1997, p. B15) Financial theory says that share splits, buybacks, and dividend cuts should not affect share prices, but they do because investors believe that managers are trying to convey information with these actions. [A] dividend cut suggests that insiders expect profits to languish for years. These moves have gained their signaling power partly because investors do not trust managers to tell them the truth. (Economist, August 15, 1992, p. 14) Div idend Coverage Ratio According to article from www.investopedia.com. When you evaluate a companys dividend-paying practices, ask yourself if the company can afford to pay the dividend. The ratio between a companys earnings and net dividend paid to shareholders known as dividend coverage remains a well-used tool for measuring whether earnings are sufficient to cover dividend obligations. The ratio is calculated as  earnings per share  divided by the dividend per share. When coverage is getting thin, odds are good that there will be a dividend cut, which can have a dire impact on valuation. Investors can feel safe with a  coverage ratio  of 2 or 3. In practice, however, the coverage ratio becomes a pressing indicator when coverage slips below about 1.5, at which point prospects start to look risky. If the ratio is under 1, the company is using its retained earnings from last year to pay this years dividend. At the same time, if the payout gets very high, say above 5, investors should ask whether management is withholding excess earnings, not paying enough cash to shareholders. Managers who raise their dividends are telling investors that the course of business over the coming 12 months or more will be stable. 3.0 Methodology and Analysis of Dividend Policy and Performance among 3 sector Firms: Technology, Consumer Product and Construction As requirement of assignment given, three sector which are mentioned above and five firms from each sector has been successfully identified and collected from Bursa Malaysia website. The tabulations of data will be presented in this report. 3.1 Firms of Technology sector  Company financial year revenue RM000 profit after tax RM000 dividend(sen) EPS(sen) 1 Mesiniaga Berhad 2009 263,896 8,557 19 11.46   2008 263,154 8,970 19 12.34 2 Unisem Msia Berhad 2009 1,036,309 60,745 2.5 11.92   2008 1,233,381 18,336 2.5 4.21 3 Kobay Technology Berhad 2009 2,921,581 1,428,534 2 2.47   2008 7,394,795 3,361,206 2 11.56 4 KESM Industries Berhad 2009 41,862 7,938 3    2008 55,132 20,099 3  5 Malaysian Pacific Industries Berhad 2009 1,150,630 -65,897 20 -20   2008 1,539,126 147,299 37 58 Figure 3.1: Financial performance of Technology sector in Bursa Malaysia for the year 2008 and 2009 Constant Nominal Dividends (Regular Dividends) This type of policy claims that a firm maintains a nominal amount (fixed ringgit dividend) of dividend irrespective of a firms level of income. This is also called a regular dividend, which is a level that the board of directors hopes to maintain in the future. However, regular dividend could be increased (decreased) if proven increases (decreases) in earnings are reported. This type of dividend is much sought by investors as this gives a consistent kind of income to shareholders hence reducing the uncertainty of their dividend income. Base on analysis of Technology sector in Bursa Malaysia shows in figure 3.1, it found that, majority of the company (4 out of 5) has a same type which is Constant Nominal Dividends policy. The amount of dividends (sen) in both years (2009 and 2008) are remained same, regardless of performanc e in revenue and Profit after tax on both years. Financial Performance against Dividend Policy. Base on analysis in figure 3.1, Malaysia Pacific Industries Berhad has turned lost in profit in a year 2009, but still capable to pay 20(sen) dividends, a little bit less if compare to (37)sen in 2008. In their Annual Report 2009 said that the financial year ended 30 June 2009 (FY 2009) had started with a strong performance in the first quarter. However, the subsequent two quarters experienced a sharp reduction in revenue, but this was followed by a gradual recovery in the last quarter. The volatile performance reflected continued uncertainties in the global economic conditions. Revenue for FY 2009 was RM1,151 million, representing a 25% decline from the previous financial year ended 30 June 2008 (FY 2008). Loss attributable to equity holders of the parent was at RM40 million, compared with a profit of RM112 million recorded in FY 2008. Reflecting the unfavourable business enviro nment, capital expenditure was significantly reduced to RM129 million from RM267 million. However, the Group continued to pay out a total dividend. The sudden and dramatic fall in revenue had caused the Group to focus on managing its cash. Capital investments were postponed with the Group spending RM129 million, the lowest for many years and compared with RM267 million for FY 2008. The Groups debt fell by RM48 million from FY 2008 and a dividend of 20 sen per share was declared for FY 2009. 3.2 Firms of Consumer Product sector  Company financial year revenue RM000 profit after tax RM000 dividend(sen) EPS(sen) 1 Panasonic Manufacturing (m) Berhad 2009 600,868 43,247 105 71   2008 562,490 48,478 115 80 2 Proton Holdings Berhad 2009 6,486.60 -301.8 5 -54.9   2008 5,621.60 184.6 33.6 3 Tan Chong Motor Holdings Berhad 2009 2,856,886 154,304 11 23.42   2008 3,195,826 245,721 10 36.9 4 UMW Holdings Berhad 2009 10,720,861 647,212 20 34.6   2008 12,769,581 955,813 29.8 52.3 5 KHIND Holdings Berhad 2009 183,601 8,061 10 20.12   2008 185,361 7,637 3.7 19.12 Figure 3.2: Financial performance of Consumer Product sector in Bursa Malaysia for the year 2008 and 2009 Financial Performance against Dividend Policy. Figure 3.2 illustrated that, Proton Holdings Berhad has turned lost in profit in a year 2009, but still capable to pay 5(sen) dividends, compare to none in 2008. In their Annual Report 2009 said, in view of the need to ensure that PROTON is viably strengthened and able to achieve long-term and sustainable growth, the Board of Directors are not recommending the declaration of any dividends for the financial year ended 31 March 2008. With improved profitability in the future, the Board expects to once again be able to recommend a suitable dividend payment. Thus, No dividend has been paid or declared by the Company. In 2009, the company paid Interim dividend of 5 sen per share less tax at 25%,it has been paid on 14 January 2009 even though the result of profit after tax has lost about -301.8 million. This is due to gain confidents to shareholder about better performance will achieved in the next coming financial year. Special Dividend Payout Policy The special dividend payout policy was implemented by PANASONIC. As a result of analysis in the financial year ended 31 March 2009, the Companys revenue of RM600.9 million increased by RM38.4 million or 6.8% compared with RM562.5 million recorded in the previous financial year. The combined entitys profit before taxation for the financial year was recorded at RM60.8 million. This was however, RM4.1 million or 6.3% lower than the previous financial years combined entitys profit before taxation of RM64.9 million mainly due to the gain from disposal of property amounting to RM3.5 million recognised in the previous financial year. With the prudent and steady cash flow management, the Company was able to maintain a solid cash position and strong Balance Sheet against the market turmoil. The Company continues to develop strong returns for its stakeholde rs, in particular, maximising shareholders wealth via dividend distribution. In a year 2008, The Board of Directors is pleased to recommend a final dividend of 35 sen per ordinary share of RM1.00 and a special dividend of 65 sen per ordinary share of RM1.00 less 25% income tax, payable on 22 September 2008. An interim tax-exempt dividend of 15 sen was paid on 25 January 2008. This brings to a total gross dividend of 115 sen per ordinary share of RM1.00 in respect of financial year ended 31 March 2008. In respect of the financial year ended 31 March 2009, the Board of Directors is pleased to recommend a final dividend of 35 sen per ordinary share and a special dividend of 55 sen per ordinary share less 25% income tax, payable on 18 September 2009. Together with an interim dividend of 15 sen per ordinary share which was paid on 20 January 2009, this brings to total gross dividends of 105 sen per ordinary share for the financial year ended 31 March 2009. 3.3 Firms of Construction sector  Company financial year revenue RM000 profit after tax RM000 dividend(sen) EPS(sen) 1 YTL CORPORATION BERHAD 2009 8,892,125 1,401,615 2.5 54.1   2008 6,549,860 1,376,487 25 51.54 2 Gamuda Berhad 2009 2,727,302 204,154 6 9.65   2008 2,403,660 338,928 18 16.27 3 IREKA Corporation Berhad 2009 12,584,923 252,651 10 0.05   2008 10,900,784 39,387,288 10 1.34 4 EKOVEST Berhad 2009 277,759 6,822 3.75 4.82   2008 441,992 16,757 3.75 11.83 5 Bina Goodyear Berhad 2009 333,764,272 -24,241,042 2.22 -51.9   2008 276,773,368 442,247 3.65 0.7 Figure 3.3: Financial performance of Construction sector in Bursa Malaysia for the year 2008 and 2009 Financial Performance affected Dividend Payment Base on figure 3.3, Gamuda Berhad will be representative of this statement analysis. According to the Annual Report 2009, the company claimed, to overcome the backdrop of a global economic meltdown, the group has managed to achieve a commendable financial performance in FY2009. Net profit of the group came in at RM193.7m, down 40% from the previous year, despite revenue gaining 13% to RM2.7 billion. Both the construction and property development divisions recorded weaker performances as a result of the challenging economic condition. For the most part of FY2009, the group switched to a defensive strategy which meant that efforts were focussed on surviving the economic meltdown. This entailed taking drastic measures to curb expenses, consolidate operations, streamline capex programs and defer expansion plans. Managing cash flows became a primary focus, and financial prudence necessitated a drastic cut in dividend payments. As such, the group paid out a total of 8 sen a share in FY2009 compared with 25 sen a share the previous year. Thus, the dividend payment has been dropped to 6 sen in FY2009 from 18 sen in FY2008. Figure 3.4: Dividend payment method of interim dividend of Gamuda Berhad. (www.klse.com.my) Cash Dividend Payments and Payment Mechanisms With referring at figure 3.4, the method of dividend payment is called Interim dividend which means the company paid dividend in 2 times in a year. The cash dividend is paid on the payment date to all shareholders of record on the record date. To be a shareholder of record, and thus receive a dividend, one must have purchased the stock before the ex-dividend date. Instead of cash dividends, many companies have automatic reinvestment plans in which additional shares of stock are purchased. Thus, the business keeps the cash and shares are given t o shareholders. Dividend  Declaration Most firms in the United States pay  dividends  quarterly. After making the  dividend  decision during a board meeting, a firms board of directors releases information on the size of the  dividend  on the  announcement date. Further, the announcement states that the cash payment will be made to shareholders of record as of a specific  record date. However, because of delays in the share transfer process, the stock goes ex-dividend two business days before the record date, or the  ex-dividend  date. After the stock goes ex-dividend, the shares trade  without  the rights to the forthcoming  quarterly  dividend. The  dividend  checks are mailed to shareholders of record on the  payment date, which is about two weeks after the record date.  Figure HYPERLINK https://library.books24x7.com/book/id_3455/viewer.asp?bo okid=3455chunkid=219644075#ch01fig043.5  below shows the time line of the period from the board meeting through the mailing of the  dividend  checks.( Ronald C. Lease, 2000)  Figure 3.5:  Dividend  Time Line. (Ronald C. Lease, 2000) 4.0 Conclusion From the research analysis finding, it found that the most of Technology sector firms practising a Constant Nominal Dividends Policy whereas the others sector are inconsistence and heavily relied on the company financial performance. If performance better, then the dividend better. Dividend policy  can  have an impact on shareholder wealth due of various market imperfections. Bear in mind, dividend arent guaranteed, a company can decide to reduce or eliminate its dividend in time of financial hardship.

ENRON Case Study - 1572 Words

1. The Enron debacle created what one public official reported was a â€Å"crisis of confidence† on the part of the public in the accounting profession. List the parties who you believe are most responsible for that crisis. Briefly justify each of your choices. Following parties are believed to be the most responsible for the crisis. With any big organization going so bad, the blame starts with the top level executives, there was no different in this case. For Enron the blame started with Enron’s executives, Kenneth Lay, Jeffrey Skilling, and Andrew Fastow. Their goal was to make Enron into the world’s greatest company. To make this goal a reality, they created a company culture that encouraged â€Å"rule breaking† and went so far as to†¦show more content†¦As we can see with cases happening in and around, there are probable circumstances that there have been significant changes in the auditing process over the past several decades. Moreover, with the tightening of governmental regulated norms and reforms, auditing and the professional seal attached to accounting also have rather gone in for a change. However, the disappointing fact is that despite tightening governmental regulation and the likes, the increasing ethical issues attached to the profession of accounting are increasing, which is indeed a sort state of affairs. But the concepts of professional accounting and the large spread frauds and scams which are attached to accounting profession also are subject to public criticisms in all forms. Moreover, there is no denying the fact that when it matter to the concepts of professionalism as it relates to public accounting discipline there is some factor that have rather gone for a dramatic change all around, especially the involvement of independent governmental agency to review the audit process. And interestingly, auditing also have gone a notch above, given that laws in that regards are also passed with necessary reforms in order to propagate an image of the professional concepts as it relates to accounting discipline. Policy and Research Implications of Evolving Independence Rules focuses on the relationship between auditors and their clients. In addition to focusing onShow MoreRelatedEnron Case Study2596 Words   |  11 PagesEnron a Case Study Enron, once known as the worldwide leader in energy trading, began as a natural gas pipeline company. â€Å"At its peak, Enron brokered up to 20 percent of America’s energy transactions. These included basic contracts to deliver natural gas from wells to pipelines for distribution to homes, contracts for the purchase of electrical power facility out port, and more complex financial contracts, which allowed power companies to manage price and market risk† (Ackman)Read MoreEnron Case Study4789 Words   |  20 PagesEXECUTIVE SUMMARY This report will analyse the groupthink’s concerns in the collapse of Enron. The collapse of Enron is less than three months, which Enron from a very prosperous company to a bankrupt enterprise. The collapse of Enron is one of the most grievous business failures in United States. This disastrous business failure had causes a large number of employees lost their jobs and retirement savings. Groupthink leads groups to make faulty judgments. Groupthink occurs when a group makeRead MoreEnron Case Study5921 Words   |  24 PagesEnron Case Study [pic] Part A: Problem Focused Analysis and Recommendations. 1. Brief Case Background. List key events, use timeline. Case Background At one time Enron was one of the world’s largest producers of natural gas, oil, and electricity. It also appeared to be one of the most profitable companies, taking shareholders from $19.10 in 1999 to $90.80 by the end of 2000. Enron’s top management answered to a Board of Directors whose responsibility was to question and challenge new partnershipsRead MoreEnron case study1195 Words   |  5 Pagesï » ¿Q 1: Evaluate Enron profit and cash flow performance during the period 1998 – 2000? Profitability Measures Enron’s reported net income grew from $703 million in 1998 to $979 million in 2000, totaling 35.1% profit growth for the three-year period. Enron was among the leading of â€Å"high performing† companies by sustaining a high earnings growth insight. However, as Table 1 indicates, Enron’s reported profits were microscopic relation to revenues. Net income did not grow at anything near the sameRead MoreEnron Case Study Analysis1699 Words   |  7 PagesBusiness Strategy Enron Case Study 09/08/12 Enron Case Study: From Company to Conspiracy 1. What is the History of Enron, and what current situation does it find itself in? Enron was created by a combination of companies. These companies were Houston Natural Gas and InterNorth. These companies were merged together in July 1985. CEO of Houston Natural Gas, Kenneth Lay became chairman and CEO of the combined company. This happened in February 1986. The company changed its name to Enron on April 10thRead MoreEnron Case Study Summary976 Words   |  4 PagesEnron Case Study The case of Enron is a fascinating one. United States is a country where auditing and accounting principles are so strong. How can something take place on such high level in the United States? The Enron case demonstrates the need to reform the accounting and corporate governance practices in the United States. Moreover, the Enron case made government officials to pay close attention to deregulated energy market. Some of the aspects that struck me are discussed below. One of theRead MoreEnron Case Study1472 Words   |  6 PagesQ 1: Evaluate Enron profit and cash flow performance during the period 1998 – 2000? Profitability Measures Enron’s reported net income grew from $703 million in 1998 to $979 million in 2000, totaling 35.1% profit growth for the three-year period. Enron was among the leading of â€Å"high performing† companies by sustaining a high earnings growth insight. However, as Table 1 indicates, Enron’s reported profits were microscopic relation to revenues. Net income did not grow at anything near the sameRead MoreEnron Tyco Case Studies2163 Words   |  9 PagesRunning head: CASE STUDIES: ENRON’S FALL AND TYCO INTERNATIONAL’S LEADERSHIP CRISIS Case Studies: Enron’s Fall and Tyco International’s Leadership Crisis Grand Canyon University BUS 604 November 4, 2009 Case Study: Enron’s Fall and Tyco International’s Leadership Crisis The tight Federal regulations now governing businesses and their accounting practices came about because one corporation, Enron, took risks their company could not withstand without taking some rather extreme measures inRead MoreEnron and Worldcom Case Study1225 Words   |  5 PagesEnron and WorldCom Case Study This report is based on the demise of Enron Corporation and WorldCom. Both the firms are demised due to the ethical lapses. These ethical lapses come into existence when managements of the firm, uses unethical practices to accomplish the goals of the firm. Maintaining financial and accounting standards in the business practices are necessary. The profession of accounting has become a mockery due to the accounting scandals that took place all over the world in theRead MoreCase Study: Accounting for Enron4415 Words   |  18 Pagesï » ¿ Case Study 9 Kim Chau California Southern University MKT 86519 Dec 19, 2014 N. Papazian Accounting for Enron Introduction In the case of Accounting for Enron, the case concerned one of the largest corporate bankruptcies in the US history at the turn of the 21st century. It was Enron Corporation, a one time seventh largest most successful US company, sixth largest energy company in the world, valued at over $70 Billion; they filed for chapter 11 on December 2, 2001. Just the year before

Public And Private Sector Banks Essay Example Pdf - Free Essay Example

Sample details Pages: 12 Words: 3608 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Compare and contrast essay Did you like this example? In this part we will comparatively analyze the public and private sector banks. So for the purpose of analysis we will use a sample of two banks from each public sector and private sector banks. Public sector banks Private sector banks National bank of Pakistan limited Habib bank limited Don’t waste time! Our writers will create an original "Public And Private Sector Banks Essay Example Pdf" essay for you Create order Bank of Punjab United bank limited As explained in the methodology part, we will analyze the bank by using the camel framework. And after analyze the bank we will rate each of them according to the results comes from analysis. In camel framework there are five different heads. We will take into consideration each of them one by one. Capital adequacy: In this part we have analyze capital portion of public sector anf private sector banks. Capital is most important part of banks balance sheet, because on the basis of capital banks issues the loans and advances. Capital portion also helps the bank in rainy days or recession. The Tier 1 capital postion of all four banks is shown in following chart. Tier 1 Capital: 2005 2006 2007 2008 2009 NBPL 32734347 48320611 64296830 73770137 85467027 BOP 5 6,585,03 10,475,865 14,357,020 3,361,351 - HBL 2 7,912,159 4 1,240,457 46,206,272 53,703,224 6 2,076,889 UBL 14,650,820 24,108,631 29,908,666 27,679,109 43,908,353 In public sector, NBP outperforms in tier 1 capital, as shown in the graph; tier 1 capital of the NBP is highest among the other three banks. In financial year 2009 the tier 1 capital of the is increased by 15.84%. NBP tier 1 capital is raised because in financial Year 2009 they have added the 9 billion inappropriate profits. On the other hand BOP Tier 1 capital is lower among the all, as we all familiar with the BOP is currently in different controversies due to which banks overall performance is under average so this all effect the banks Tier 1 capital .in financial year 2008 the bank Tier 1 capital is decreased by 76% because of the fact that 7 billion accumulated loss is deducted from Tier 1 capital. In private sector HBL, tier 1 capital is shows an continuous increasing trend over the five financial years. In financial year 2009 the tier 1 capital is increased by 15.59%. In HBL tier 1 capital, funds are t o raised through unapproapirte profit. In FY09 the 6 billion unapproate profit is added in tier 1 capital. In comparison with the public sector bank , HBL tier 1 capital is less as compared to NBP. But better as compared to the UBL and the BOP. The UBL tier 1 capital shows a mix trend over the five financial years. In financial year 2009 the tier 1 capital 58% , again due to the same reason unapproprited profit of 6 billion is added in tier 1 capital. Capital adequacy ratio: 2005 2006 2007 2008 2009 NBPL 15.59% 16.50% 17.72% 16.61% 16.88% BOP 12.78% 10.09% 9.69% 1.92% 0 HBL 9.93% 12.81% 12.33% 11.60% 13.07% UBL 9.25% 11.10% 10.85% 9.96% 13.18% CAR is a ratio of capital to risk weighted assets. The state bank of Pakistan in financial year prescribes a minimum CAR ratio of 10% to the banks. Capital adequacy ratio of the National bank of Pakistan is highest among the others in financial year 2009. From the financial year 2005 to 2009 the capital of the bank is increased with the average rate of 16%. And the risk weighted assets are also increased with same trend. Due to this CAR ratio will also show an increased trend over the year. The reasons to increase are the last year bank has raised an amount of 7 billion from unapropriated profit in capital. HBL has also maintained the higher ratio as compared to prescribe by the SBP. In financial year 2006 the ratio is increased by 29% due to the increase in the tier 1 capital. And in financial year 2009 again the ratio is increased by 12.6%. beacuaes of the increment in tier 1 capital by 6 billion. United bank limited has a CAR ratio of 9.25 % in financial year 2005 and its is increased to 13.18% in 2009.total capital is increased almost 2 times. The reason for the increment is the bank arranged funds through the revaulation reserve under the tier 2 capital head and the unapproaprate profit under the head of tier 1 capital. The bank of Punjab had a 12.78% CAR in 2005, but this was decreased to 1.92% in financial year 2009. The reason of decrese is the accumulated loss of 7 billion in financial year 2007. Which is to be carried forward in 2008 capital. Due to which capital is to be decresed by 58% in financial year 2008. This ulitimatily affects the CAR ratio of BOP. Debt to equity ratio: 2005 2006 2007 2008 2009 UBL 15.02 13.18 11.5 12.79 8.51 HBL 14.08541421 12.86186746 11.42424796 10.28144063 10.04877 NBP 8.27 6.69 6.05 6.22 6.94 BOP 14.12658301 13.65737077 13.94726359 35.11725574 The debt to equity ratio means that how much money bank is securely able to borrow over a longer period of time. According to general guidelines any bank debt to equity ratio above 50% should be looked more carefully that no liquidity problem arises. National bank of Pakistan debt to equity ratio shows a almost constant trend over the five years. And could not make any fluctuations above the average. In financial year 2005 the debt to equity ratio is 8.27% which is better than the industry average. Afterwards in financial year 2009 the ratio decreased by 16%. It was all due to increase in profits by 17%, these profits helps the bank to pay off its liabilities .If we compared the national bank debt to equity ratio with the private sector banks. In financial year 2009, the HBL debt to equity ratio is 10% and the debt to equity ratio of UBL is 8.51%. Bank of Punjab debt to equity ratio is almost constant till financial year 2007, after the year its will reached to highest level of 35%. And increased by 150% it was all due to loss of 7 billion in financial year 2007. Due to this loss capital decreased was also decreased by 56%. All these factors contribute to highest debt to equity ratio. In private sector the Habib bank limited, debt to equity ratio contiounly shows a decreasing trend over the five financial years. It was all due to increasing profits, this will help the bank to pay off its liabilities. From financial year 2005 to 2009 HBL profits are increased with an average rate of 11.90%. United bank limited, debt to equity ratio shows a mix trend over the five financial years. In financial year 2005, the ratio is 15% which is ultimately decreased to 8.51%. There is a continuous increment in reserves and surplus so that the ratio was continuously decreases and in the year 2009 it was decreased by 33%. Total advances to total assets: 2005 2006 2007 2008 2009 UBL 0.59014865 0.584289707 0.56468779 0.61290762 0.571351532 HBL 0.607829171 0.595803214 0.5523621 0.60744401 0.526544957 NBP 0.465345383 0.497707645 0.44649933 0.50502312 0.503125242 BOP 0.572391485 0.61459992 0.56975727 0.70857825 Total advances to total assets ratio shows that how much amount the bank hold in opposition to its assets. Here in NBPL, from 2005 to 2009, the ratio shows an increasing trend over the five financial years, except the FY07. The reason behind this the advances are shows an increases, but they could not meet up with the increasing rate of assets. In financial year 2007, the assets are increased by 20%. Except the financial year 2007, the ratio shows an increasing trend because of constantly increase in the advances. If we compare this ratio with private sector banks, overall private sector banks outperform this ratio. It was all due to better marketing skills and the customer service provided by the private sector banks. Bank of Punjab overall total advances to total assets ratio improved. But due to decrrrese in assets this ratio improved. In financial year 2007 assets are droped by the amount of 16 billion. Asset qualit y: NPL to advances: Asset quality of any bank is to be measured by the degree of nonperforming loans. This ratio clearly reflects the performance of the banks. A high level of NPLs ratio depicts the higher probability of credit defaults. National bank of Pakistan limited, NPLs to total advances ratio shows the mix trend over the five financial years. In finical year 2006, the ratio decreased by 16%. And afterwards in finical year 2009 the ratio shows an increase of 13.9%. if we compare this with private sector banks, it clearly depicts from the graph, that private sector banks will outperform in this ratio. Both the UBL and HBL NPLs to total advances ratio shows a decreasing return. BOP non performing loans shows a good percentage till financial year 2007. But afterwards due to haris steel mill case and due to such other cases. The ratio increased by 1600% and reached to the total level of 16.1% in financial year 2008. 2005 2006 2007 2008 2009 UBL 8.28 6.57 7.35 7.5 10.8 HBL 11.60% 8.00% 8% 7% 7% NBPL 14.26 11.97 11.35 12.58 14.34 BOP 1.3 1.13% 1.96% 16.31% Growth in non performing loans: Growth in non performing loans shows that every year how much loans adds to bad debts. National bank of Pakistan growth non performing graph shows a mix trend. In financial year 2005 the ratio decreased by 6.54% and afterwards shows an again upward trend. From 2007 onwards the state bank of Pakistan is asking different banks to implement the internal rating based approach under Basel accord II. But now of them with the exception of Habib bank limited have applied this approach till now.beacuse of the application of this approach habib bank limited is able control its non performing loans. In financial year 2009 habib bank limited has a lowest growth in non performing loans as compared to the industry. 2005 2006 2007 2008 2009 UBL -15.63% -4.16% 35.42% 26.47% 40.45% HBL -7.40% -24.40% 7.80% -1.20% 9.40% NBPL -6.54% 7.48% 5.68% 47.35% 25.61% BOP 60.75% 38.67% 129.10% 715% Management quality: The management quality of any bank is to be measured by decisions taken by the managements during the operations. Total advances to total deposit ratio: 2005 2006 2007 2008 2009 UBL 0.70813225 0.738066918 0.746567941 0.767515153 0.719646 HBL 0.738359363 0.68051225 0.711729091 0.761197203 0.661538 NBP 0.580110805 0.629862301 0.574952957 0.660843465 0.653287 BOP 0.719195934 0.735654652 0.697475366 0.802883678 This ratio shows the investment of the bank through approving the loans and through approving the loans against accepting the loan. In National bank of Pakistan , this ratio shows a mix trend over the years. In FY06 its is increased by 8%, due to the increase in the advances by 11%. Afterwards ratio shows the ups and downs over the years and in financial year 2009 the ratio again falls by the 3%. In financial year 2009 the advances shows an increase but can not match with rate of increase of deposits. If we compare NBPL ratios trend with the private sector banks. Private sector banks are outperform in this ratio, again due to better marketing skills and customer service helps private sector banks to gain more deposits and advances. Banks of Punjab this ratio is constantly increased except financial year 2007, in financial year 2007 this ratio shows an downturn of 5%.Afterwards in financial year 2008 the both the advnces and the deposits falls due to which this ratio shows a bett er results over the year. Business per employee: 2005 2006 2007 2008 2009 UBL 1892.03934 1658.94489 1894.996946 2042.389157 2270.593263 HBL 1753.26645 2090.81826 2386.89973 2615.383513 3200.221994 NBPL 2209.15227 2849.35174 3015.241139 2792.132334 2813.440801 BOP 274.595329 1745.18604 1830.829099 -3346.528393 Business per employee is a measure of how effienctily a bank is uilizizing its employees. Ideally every banks to be a highest Business per employee ratio because its donates a higher productivity. This is the positive sign for a bank that if business per employee ratio shows an increasing trend overtime. In National bank of Pakistan , this ratio shows an mix trend over the year. From financial year 2005 to 2007 shows an increasing trend. But after this till 2009, business per employee ratio drops by 6%. Even in financial year 2009 revenues are increased by 22%. But due to unnecessary hiring of employees companies overall productivity is decreased. In financial year 2009 , the no of employees are increased by 12%. If we compare, this performance with the private sector banks, private sector banks outperform in this ratio. In private sector banks mostly hiring is to be done on merit basis and hire the optimal number of employees, due to this overall productivity of the private sector banks is improved in FY09. The business per employee ratio of the Bank of Punjab shows a very different trend with the industry. From financial year 2005 t0 2007, the banks business per employee ratio shows an increasing trend. But after 2007 due to acculmatled loss of 7 billion companies overall business per employee ratio drops by 282%. It was all due to the internal controversies such Hamish khan case and due to the 150% increase in the non performing loans. Overall in this ration HBL outperform due to contiouns increasing trend over the five financial years. Then UBL also follows him in this ratio. Profit per employee: 2005 2006 2007 2008 2009 UBL 635.987973 616.060349 596.8172811 559.1196659 657.4657774 HBL 549.431261 555.039757 833.2998064 713.1840548 937.2536961 NBPL 919.375253 1214.23397 1351.926451 1251.89243 1118.388971 BOP 146.43881 146.43881 1140.779702 -2420.477623 Profit per employee is a measure of how resourcefully a particular bank is using its employees. In national bank of Pakistan, this ratio again shows an mix trend .due to unnecessary hiring in financial year 2007, the companys overall profit per employee ratio declines 7.4%. in financial year 2009 the companys overall number of employees are increased by 8%.If we compare this ratio with the private sector banks both the private sector banks shows less profit per employee ratio .But shows an overall increasing trend. HBL profit per employee ratio is 549 in FY05 which is to be increased by 70% in FY09. If we compare this performance with BOP, the BOP ratio again shows an downturn in FY07 and then in financial year 2008 the companys profit per employee turns to negative. UBL profit per employee ratio shows a mix trend over the years. In FY05 the profit per employee is 635 which is to be declined in FY06 and FY07 due to the extra hiring of employees. Ratio shows an downturn. But i n FY09 the banks profits per employee ratio shows an increased return of 17% . its was all due to improved profits in financial year 2009. Earning and profitability: Earning and profitability of bank is the very important measure, in order to know about the actual position of the bank. banks overall earning depends upon the advances and the investments made by the bank during the financial year. Return on average assets: 2005 2006 2007 2008 2009 UBL 1.71 2.24 1.59 1.38 1.48 HBL 1.84 2.67 2.9 2.99 3.12 NBPL 2.25 2.81 2.72 1.96 2.07 BOP 2.65 2.76 2.22 0.05 Return on average assets means how much profits is to be earned during the years with the average assets. Higher ROA is good for the bank , because if it is higher we can say that the return of the bank is high. In national bank of Pakistan , return on average assets shows mix trend over the years . in financial year 2006 the ratio is increased due to by the 24%. Because the profit after tax of the banks shows an increase of 5 billion. Than after wards the increase in profits could not match with the increase in average assets due to this ratio shows an declining trend over the next two financial years . In financial year 2009, the ratio shows an increase of 5% due to the increase in profits by 3 billion. If we compare NBPL returns with private sector banks. HBL shows an constantly increasing returns over the five financial years. In financial year 2009 the ROA is increased by 5%. HBL return on average assets returns are smooth with respect to other private sector banks. UBL overall returns shows a mix trend in financial year 2006 shows an increase of 30% due to the increase in profits after tax. After 2006 returns moves towards down phase and in financial year 2009 the return on average ass ets falls to 1.48%. BOP return on average assets shows a smooth return till 2007, but in financial year 2008 due to acculmated loss of 7 billion, the returns falls below average and return on assets reached to the level of 0.05%. Return on average equity: Return on equity means how much return is to be earned with the given equity. National bank of Pakistan, ROE shows an mix trend over the five financial years. In 2006 ROE drops by 13% and then shows an increase of 35%. In financial year 2009 ROE drops by the 3%.If we compare the performance of NBPL with private sector banks. Privte sector banks outperform in this average due better profits in private sector. And also the rate of increase of profits. BOP shows an better ROE than the industry till 2007, but the after 2007 due to downfall of profits by 7 billion the ROE fall below average and reached to the level of 1%. 2005 2006 2007 2008 2009 UBL 14.09 19 19.81 31.71 27.46 HBL 37.3 25 30.8 28.3 25.4 NBPL 16.41 14.13 19.2 21.58 20.82 BOP 42.03 43.64 34.5 1 Interest income to the total income: 2005 2006 2007 2008 2009 UBL 0.716748 0.72747491 0.66295105 0.64915587 0.632425076 HBL 0.747858 0.736826581 0.7777721 0.71816306 0.763233446 NBPL 0.692451 0.695509498 0.68093425 0.6137724 0.584726766 BOP 0.701361 0.555791363 0.23994536 1.30074592 Interest income to the total income ratio shows that how much income is to be earned through earning assets. This ratio was continuously decreased from financial year 2005 to 2009 in NBPL. Due to this its shows bad effects on profits because interest income is major income of the bank. the growth of net interest income is attributed from the earning assets. The NBPL earning assets are reduced over the five financial years, due to this it affects the overall interest income. In financial year 2009 the earning assets are increased but the interest bearing liabilities are also shows an increasing trend over the years due to this overall interest income shows a down turn. If we compare this ratio of NBPL with the private sector banks. HBL interest income to total income ratio shows an increasing trend over the years. Because of the fact that HBL overall earning assets are increased by 56% in financial year 2009. On the other hand UBL interest income to the total income ratio shows an decreasing return over the years. But still better than the industry average. And if we compare with the public sector banks. UBL interest income to total income ratio shows better results. BOP interest income to the total income ratio shows an decreasing return. Due to controversies attached with the BOP , this will seriously effect the banks overall interest income. And In financial year 2009 the banks ratio drops to the point 1.30% below than the average. Other income to the total income: 2005 2006 2007 2008 2009 UBL 0.283252 0.27252509 0.33704895 0.35084413 0.367574924 HBL 0.252142 0.263173419 0.2222279 0.28183694 0.236766554 NBPL 0.307549 0.304490502 0.31906575 0.3862276 0.415273234 BOP 0.298639 0.444208637 0.76005464 -0.30074592 Fee based income and dividend income is major banks other income portion. The bank generates high fee and commission income through innovative products and by adapting new technology. The higher ratio indicates higher fee based income. The ratio in NBPL increased from 30% to 41% in financial year 2005 to 2009 which shows an earning from government securities and through providing innovative products are to be increased. From financial year 2007 to 2009 this ratio increased by 30%. If we compare this ratio with private sector banks, its clearly shown in graph that NBPL out performs in this ratio. HBL, other income to total income ratio is improved over the financial years. But still falls behind the NBPL ratio. After NBPL the bank which performs better is UBL, UBL other income to total income ratio is improved over the five finical years. From financial year 2005 to financial year 2009. The ratio will increase from 28% to 36%. BOP again shows the same results, in financial year 2005 the ratio is 29%.and after wards in 2006 the ratio increased and reached to level of 44% . this shows that BOP interest income share drops 40% in just one year. After in financial year 2009 the ratio turns to negative portion in the graph. Due to decrease in total income by 205%. Liquidity: Liquidity for a bank means the banks ability to meet to financial obligations as they come due. In order to meet the short term obliagations its very necessary for every bank to maintain some ratio of liquid assets. Liquid assets to total assets: Liquidity for a bank means ability to meet the financial oblilagations. Higher the ratio higher the ability to manage liquidity risk. In NBPL this shows mix trend over the five financial years. In financial year 2006 due to the decrese in market tressury bills by 15%, the ratio falls by 23%. Afterwards in 2008 ratio increased by 53% due to the 55% increase in pakistan investment bonds and 34 % increase in the market tressuryy bills. If we compare this performance with the private sector banks, private sector banks can also depicts the same trend. From financial year 2005 to 2007 the ratio shows an increasing trend. After ulitimatily ratios falls. And in financial 2009 both the UBL and HBL ratio falls to 16%. BOP, liquid assets to total assets ratio shows a different trend with respect to the industry. In financial year 2005 the ratio is 4%. Which is to be increased to 21% in financial year 2007. But again in financial year 2008 drops to 3% below than average. In finical year 2008 ratio falls by 600% .it was all due to the fall of market tressury bills from 44 billion to 1 billion. 2005 2006 2007 2008 2009 UBL 12% 11% 18% 18% 16% HBL 17% 18% 22% 14% 16% NBPL 17% 13% 20% 16% 15% BOP 4% 8% 21% 3% Liquid assets to total deposits: The ratio shows how much part of the deposits is invested by the bank in the liquid assets. Again this is ratio is very important in order to know about the liquidity risk position of the bank. In NBPL, the ratio was 20% in financial year 2005 and after some flucations its was 19% in financial year 2009. The deposits were increased by 34% and the liquid assets are increased by 23%. Due to this ratio drops by 1.1 % in financial year 2009. If we compare this performance with the private sector banks. HBL liquid assets to total deposits ratio shows a mix trend over the year. In financial year 2005 ratio is 20% and after wards in financial year 2009 the again drops to 20.3%.UBL overall ratio shows a mix return over the years. In financial year 2005 the ratio is 14% and afterwards in financial year 2009 the reached to level of 20%. Bank of Punjab overall ratio trend as again opposite to the industry. In financial year 2005 the ratio is 5% and in financial year 2007, the ratio reac hed to the level of 25% due to the unexpected decrease in the deposits. The ratio increases and shows and unexpected result in 2007. After wards in financial 2008 the ratio again drops to 3%. 2005 2006 2007 2008 2009 UBL 14% 14% 24% 22% 20% HBL 21% 20% 28% 18% 20% NBPL 21% 17% 26% 20% 20% BOP 6% 10% 25% 3% Government securities to total assets: 2005 2006 2007 2008 2009 UBL 8% 9% 10% 11% 10% HBL 9% 11% 13% 14% 14% NBPL 10% 12% 13.50% 14% 14.90% BOP 6% 7% 19% 2.5% Government securities is the very important liquid assets for bank. This will help them to maintain the liquidity position of the bank. This ratio shows that percentage of government securities in total assets. If this ratio is higher its clearly shown that bank is investing more in government securities. In national bank, the ratio is 10% in financial year 2005 and constantly shows an increasing trend over the years .in financial year 2009 the ratio is 14.90 so this is clearly shown that national bank management is investing more in liquid assets in order to maintain liquidity position. If we compare the performance with the private sector banks, the ratios depicts that HBL is also constantly investing more towards government securities. From financial year 2005 to 2009 the ratio increased from 9 % to 14%. But still 6% less than the public sector bank. United bank limited, government securities to total assets ratio depicts mix trend over the five financial years . in financial year 2005 ratio is 8%.which is to be increased to 10% in financial year 2009. Bank of Punjab, ratio overall depicts different trend as compared to the industry average. In financial year 2005 ratio is 6% and financial year 2008 the ratio drops to 2.5%. Due to the drop in assets value by 21%.

RT Definition in Chemistry

RT Definition: RT stands for room temperature.Room temperature is actually a range of temperatures from 15 to 25 deg;C corresponding to temperatures comfortable to people. 300 K is a generally accepted value for room temperature to simplify calculations.The abbreviations RT, rt, or r.t. are commonly used in chemical equations to denote the reaction can be run at room temperature. Because room temperature does not have a fixed value, its better to record the temperature at the time data is taken.

Essay on In what sense are virtual communities real

In what sense(s) are virtual communities real communities? A virtual community is a network of people who interact through various forms of media, and allow users to obtain support, advice, friendship and sometimes merely just interaction with others. In a world where the internet is becoming ever more important, and social networking sites such as Facebook and Twitter are now a part of many peoples every day lives, there is a strong sense that online, virtual communities are becoming ever more important, perhaps more so than real-life communities. This rise in the virtual communities has led to an intense debate – somewhat ironically, on the internet – as to whether these communities are, or even can be, real. The debates are†¦show more content†¦The place of â€Å"idle talk and banter with acquaintances and friends,† is often where a persons feeling of involvement in a community is achieved and experienced.3 Cafes, parks, and pubs once provided this environment, but in the age of large-scale shopping centres , drive-thru restaurants, shrinking public spaces, and residential isolation, this sense of wanting to be a part of a community is left unfulfilled. Oldenburg argues that modernity has created a culture in which the home and the workplace remain as the only two places people actively interact with others, and believes that it should not be surprising then that millions of people throughout the world turn to the Internet to re-create and re-establish the sense of community which has now been lost inShow MoreRelatedA Virtual Community By Rene Lysloff1505 Words   |  7 PagesA ‘virtual community’ is a type of imagined community and is a difficult concept to define; the ambiguous nature of this concept is highlighted by the many definitions created by researchers. A Virtual Community is when â€Å"Individuals communicate and form a relationship with each other in a computer mediated space with the use of technology. Anthropologists undergo the practice of participation observation on the internet , allowing them to experience a virtual community; this shapes their understandingRead More The Impact Of Online Communities On Physical Social Relationships1310 Words   |  6 Pagestime in online communities to network with virtual friends and play role plays. They provide an advantage for people with special needs who cannot leave the house, because they benefit from the accessibility of the internet. Moreover, they help people who often move to stay in touch with their friends. Nevertheless, spending too much time in online communities leads to drawbacks in the development of the user’s personality. More energy is dedicated to the virtual life than to real life and peopleRead MoreThe Impact of Online Communities on Physica Social Relationships1405 Words   |  6 Pagestime in online communities to network with virtual friends and play role plays. They provide an advantage for people with sp ecial needs who cannot leave the house, because they benefit from the accessibility of the internet. Moreover, they help people who often move to stay in touch with their friends. Nevertheless, spending too much time in online communities leads to drawbacks in the development of the user’s personality. More energy is dedicated to the virtual life than to real life and peopleRead More Diversity of Online Communities Essay1180 Words   |  5 PagesDiversity of Online Communities The article in U.S. News World Report called Go Play-On the Web represents a community of virtual gamers on the Internet. These games are a lot more complex than the online gaming of the past. When these people that belong to this particular community log on to the net they are interacting with each other in huge 3-D virtual worlds. Some of these games focus on a particular subject like playing virtual game shows with others on the net. Some of the new gamesRead More Internet - Exploring Our Inner-self in Cyberspace Essay1556 Words   |  7 PagesExploring Our Inner-self in Cyberspace Cyberspace is a new communication medium which enables us to understand our social behavior. In the ‘real world’ and ‘virtual world,’ we understand ourselves by developing aspects of our identity. However, in the virtual world, we can explore our inner-self without rejection that may be experienced in the real world. Cyberspace is, thus, a psychological ‘space’ to build and form, explore and discover, and accept and understand ourselves. To explain thisRead MoreExamining the Role of Technology in Consumer’s Society1448 Words   |  6 Pagesthat with technology comes social consequences as well. In consumer’s society, Sharon Zukin argues that shopping is a natural part of everyday life. (2004) Alison J. Pugh would argue that parents shop for their kids so they can help them achieve a sense of belonging in their peer groups. In this paper, I will discuss how various forms of consumption, such as online shopping, and parents buying toys, (particularly electronic games) for their kids, have contributed a shift from a collective societyRead More The Nature of Online Communities Essay1449 Words   |  6 PagesNature of Online Communities What brings people together on the internet? Is it the desire to find a friend and a community or is it the other extreme of finding someone to argue with and release all the anger that has built up inside? Do people not like who they are in real life and find the internet as a place to have a new identity, the person that they have always wanted to be? Or, is it what Rheingold states in his article â€Å"The Virtual Community,† â€Å"virtual communities treat them asRead MoreTechnology And Technology : Is It A Sense Of Distance?1750 Words   |  7 Pagesrobots can provide companionships to lonely elders and help children to overcome psychological diseases. However, interactions with the virtual world sometimes enhance individuals’ loneliness and emotional vulnerabilities. When they are busy with connecting to others digitally, they not only isolate themselves from the real world, but also may still feel a sense of distance from their online friends. Sherry Tur kle, in her essay â€Å"Alone Together†, discusses that individuals are over-relied on technologyRead MoreTypes of Virtual Reality: Advantages and Dissadvantages1064 Words   |  5 PagesA description of Virtual Reality can be a bit tricky, and the semantics might be at variance in relation to what age group you ask, for instance, a children’s site describe computer simulated environment as tools which let you to experience and interact with images in a simulated 3D environment, for example, you could plan an area at home on your computer machine and really believe that you are walking around in it, although it was never constructed. According to Aurich, Virtual Reality is a broadRead More Internet - How Real is Cyberspace? Essay1102 Words   |  5 PagesHow Real is Cyberspace? The term ‘Cyberspace’ was first coined by William Gibson and defined as â€Å"a consensual hallucination experienced daily by billions of legitimate operators† (Gibson 1984, 67). This term has come to shape the evolving universe that encompasses today’s society as Cyberspace is a realm which exists on the Internet and is becoming immensely used globally. â€Å"Online experiences challenge what many have traditionally called identity, as on the Internet many people recast identity

Amended Budget Paper And Excel File Free Essays

Riordan Manufacturing Inc is an international company specialized in the manufacturing of plastic products. Based in USA, Riordan Manufacturing has manufacturing plants in Georgia, Michigan, Albany and Pontiac. To achieve international status, and produce high quality products, Riordan Manufacturing has opened another plant in Hang Zhou in China. We will write a custom essay sample on Amended Budget Paper And Excel File or any similar topic only for you Order Now One of the aims of the Riordan manufacturing is to remain competitive in order to achieve market advantages. To achieve this aim, the management of Riordan manufacturing has initiated a policy to constantly change the business environment, and employ latest technology. To achieve global expansion, Riordan manufacturing has decided to initiate global market expansion through the introduction of virtual organization. The Riordan’s virtual organization involves the introduction of electronic commerce in order to sell the company products worldwide through the application of internet. In the present global competitive environment, e-business has become one of the potent tools by which organization achieve competitive market advantages. Thus, Riordan manufacturing has decided to employ e-business to increase efficiency in sales and marketing through the implementation of virtual organization. For the successful implementation of virtual business organization, Riordan manufacturing needs to employ Information Technology (IT) supports in order to install both hardware and software, and efficient implementation of operation costs is very essential. The objective of this paper is to amend the overall budget of FY2004. The amendment will reveal the increase on expenditures on items such as hardware, software and outside IT support by 4%. The paper also amends the budget by decreasing the overall budget by 2%. Finally, the paper provides the rational behind the changes in the budget of Riordan manufacturing FY2004. To achieve the business growth, Riordan intends to implement virtual organization. To achieve efficient virtual organisation for Riordan manufacturing, it is essential to adjust the consolidating operating budget of FY2004. Essentially, paper amends consolidating Operating Budget Cost IT center for Riordan manufacturing FY2004 and in the amendment, the following requirements are reflected. First, there is increase on expenditures on items related to hardware, software, and outside IT support services by 4 percent. Moreover, there is decrease in the overall budget by 2 percents. The paper provides the rational behind the changes on the budget amount in the next section. 1. 2: Rational behind the changes on the budget. First, integration of IT has become of the major objectives of many organisations. In the present contemporary competitive environment, organizations now realise that integration of IT tools has become potent tools by which organizations gain market advantages. With the realization of potential benefits that IT has provided for the success of organization, Riordan manufacturing has also decided to integrate IT tools in its business operation. This has vividly revealed from the company memorandum written by Hugh McCauley, and sent to Michael Riordan, Maria Trinh, and Dale Edgel on September 10, 2003. From this memorandum, the Riordan manufacturing has dedicated to employ the latest technology to support the continuing business operations. Proper integration of latest Information Technology in the business model necessitates the integration of latest hardware and software so that Riordan manufacturing could achieve high competitive advantages for its virtual business organisation. To achieve these aims, there is need to make changes in the budget by increasing the spending on the items related to hardware, software, and items outside IT service by 4% . The increase in the spending on these items is very critical for the successful implementation of virtual organisation that Riordan manufacturing intends to implement. The increase in the spending on the outside IT service is also very critical because there is need to implement employee training for the continuous implementation of web based business of Riordan manufacturing. Employee training is very critical for the smooth running of virtual organization. Employee will be in charge of processing of orders sent by customers online. Moreover, employee will ensure that orders received online are dispatched to clients. Thus, employee training is very critical to ensure that Riordan’s employees are capable to handle these tasks. Thus, increase in spending to achieve this aim is one of the reasons to amend the overall budget. Apart from employee training, maintenance and contract will also be critical for the smooth running of virtual organization, the increase in spending on this item will ensure the smooth continuity of virtual organization. The contact for the virtual organization will consist of Web hosting, off site data storage, and hardware maintenance. The items revealed in the contract are very critical for the virtual organisation. Web hosting is indispensable for web based business. Hardware maintenance is very critical in order to avoid web failure. Offsite data storage is also very critical for web based business, off site data storage is very essential for data security because there may be data loss through theft, fire disaster, and other unforeseen circumstances. Thus, the increase in spending on these items will enhance viability of Riordan virtual organization. Moreover, the changes in overall budget are critical in order to reduce the overall budget by 2%. The reduction in the overall budget by 2% is essential to reduce overall operating costs of Riordan manufacturing. According to Kuzic, Fisher, and Scollary (2002) the advantages of virtual organisation is to achieve the reduction in operating costs. One of the advantages of decrease in the operating costs is to increase the company’s revenue, and this will lead to the increase in the yearly net profit of Riordan manufacturing. 2: Conclusion The paper provides the amendment of budget for the Riordan manufacturing consolidated operating budget cost IT center for the FY2004. In the amendment, there are changes that reveal the increase in the spending on items related to hardware, software and outside IT items by 4%. Moreover, there is decrease of overall budget by 2%. The paper presents the rational behind the overall changes in budget. The rational provided are to meet the aims of Riordan manufacturing in order to implement the latest technology to achieve competitive market advantages. The overall decrease in budget by 2% is also essential. This is to decrease the operating costs of Riordan manufacturing in order to increase the company’s net profits. Reference Kuzic, J. Fisher,J. Scollary, A. (2002). Electronic Commerce Benefits, Challenges And Success Factors in the Australian Banking and Fina How to cite Amended Budget Paper And Excel File, Papers

Effects of centralized vs. decentralized free essay sample

Collective bargaining is a process that through negotiations establishes terms and conditions that are essential for employment. Collective bargaining facilitates coordination between unions and employers in wage setting and other aspects of industrial relations. Although collective bargaining has the general objective of supplementing or supplanting, the free market, it has not followed a uniform pattern of development in different national or industrial situations. Instead, a variety of institutional arrangements have evolved in implementing bargaining relationships between employers and employees organizations. These differences at the structural level of bargaining brought contrasting consequences in the labour market. The bargaining structure refers to the employers and unions that take part in these negotiations and are responsible for the final content of the collective agreement. The structure of bargaining is also important as it affects a broad range of aspects as: the bargaining outcomes, the roles of unions and management and the types of issues that are brought to the table. 2 There are two structures of collective bargaining that are often implemented: centralized and decentralized. Centralized bargaining refers to agreements made at the group level involving many plants and is aimed to protect the working class in industry and at the national level, while decentralized bargaining occurs when agreements refer to just one plant. On the one hand, centralized bargaining is usually associated with lower and less persistent levels of unemployment, less wage dispersion and fewer strikes, whereas decentralized bargaining is associated with higher and more persistent levels of unemployment, more wage dispersion and more strikes. In the essay I will highlight the effects that this two bargaining structures have on wages, inflation, strikes, the bargaining process, and the negotiation process and their influence on the industrial relations system as a whole. 1. Arnold R. Weber, The Structure of Collective Bargaining and Bargaining Power: Foreign Experiences, (Journal of Law and Economics 1963), 117-151. 2. Katz, Harry C. , Industrial and Labor Relations Review, (np: October 1, 1993), article. A phenomenon that is characteristic for many countries is the wage differentials. These wage differentials are those who can determine the degree of centralization of wage bargaining and also have influence on outcomes. In the centralized bargaining process the government has a great involvement, leading to the uniformity of wages, benefits, and other aspects of employment. The centralised wage bargaining is likely to yield real wage moderation and lower unemployment than decentralized bargaining structures because it internalises the negative external effect of bargaining outcomes on the unemployment rate. Also centralized bargaining arrangements moderate wage settlements, reduce work stoppages, labour costs and consequently reduce product pricing. Another benefit of the centralized structure is that it reduces wage dispersion. If firms trade off the losses from an increase in the wage bill against the gains that a higher relative wage yields in terms of higher individual effort, as postulated by the efficiency-wage hypothesis, centralised wage bargaining hinders effort by reducing inter-firm wage dispersion. Thus taking in consideration all these effects that centralized structure has on wages, I can state that centralization encourage wage equality between workers, without reducing their individual efficiency, and the main objectives of the unions that promote this structure is to improve the welfare and the job security of all workers. The centralized bargaining structure has also notable effects on inflation. This kind of structure is associated to yield lower levels of inflation, thereby moderating settlements. These centralized impacts influence the formation of a different political dynamic at work and lead to the achievement of many political objectives of the labour movement. 3. Giorgio Brunello, European Journal of Political Economy, (np: Volume 14, Issue 2, May 1998), 381-406. 4. Giorgio Brunello, 381-406. There is an interdependent interaction between the effects that centralized bargaining creates on wages and inflation. Greater centralization of wage bargaining causes each union in the coordinating group to internalize the tendency of the central bank to respond towage-bargaining centralization by reducing money growth, thereby reducing the incentive of unions to restrain their coordinated wage demands. 5 As a result to this restrains the labour movement may agree to lower wage settlements for getting in return pensions, a better control of prices and more employment guarantees that advantage both workers and unions. â€Å"The interaction between these effects leads to a hump-shaped relationship between the centralization of wage bargaining and inflation, with inflation initially rising with greater centralization and then declining. †6 Analysing the effects that centralized bargaining has on inflation, we can definitely say that they bring a high level of certitude in the society and increase the workers welfare. Another argument that favours the implementation of centralized bargaining is the fact that it leads to fewer strikes. This aspect is due to the existence of greater similarity of wages, benefits and other terms of employment. â€Å"Such a finding, however, seems almost axiomatic, given that such structures involve many fewer sets of negotiations at any given time than decentralized ones. †7 The negotiations in centralized bargaining are conducted by skilful negotiators that are capable to settle the interests of all parties that take part at the negotiations, thereby diminishing the probability of a conflict or a strike. In a centralized structure workers are more informed and also have an easier access to Daniels, Joseph P. , Nourzad, Farrokh, VanHoose, David D. , Openness, centralized wage bargaining, and inflation, European Journal of Political Economy,(np: Dec 2006, Vol. 22 Issue 4), 970. 6. Daniels, Joseph P. , Nourzad, Farrokh, VanHoose, David D. , 970. 7. Jon Peirce, Karen Joy Bentham, Canadian Industrial Relations, (Toronto 2007), 250. In a centralized structure workers are more informed and also have an easier access to information as demand conditions and wages, thus reducing the likelihood of conflicts, strikes or wild-cat strikes. The influence that the government holds in this structure also has evident effects on strikes, because it can prevent or end them quickly. â€Å"Thus it is not centralization itself, but the shift in the locus of conflict that often accompanies it that seems to be the main reason for reduced industrial conflicts in countries with centralized structure. †8 Concluding the above effects that centralization has on strikes, we can observe that it helps to build in society better working relations and also stimulate unions and employers to find common goals that advantage both parties. The bargaining process is another component on which centralization has influence. It makes the development of this process more smoothly because it is conducted by efficient negotiators and authoritarian managers that can keep the situation under control and achieve positive results. However the big number of unions and manager fractions that are involved in the bargaining process makes it development more slow. When having a centralized bargaining process the parties involved can obtain what they want by combining the interests of both parties. â€Å"Unions need centralized bargaining process either formally, by way of a single agreement, or informally, through pattern bargaining both to standardize labour costs in an industry and to be able to inflict economic damage on employers through strike action. †9 The bargaining process leads the parties to obtain reciprocal gain in the area where they both have interests. Through the development of the bargaining processes in centralized way the unions and the employers try to increase the stability of the industrial relations and to achieve savings. The centralization of this process creates large, heterogeneous and broadly based bargaining units that are thus harder to organize. 8. Jon Peirce, Karen Joy Bentham, Canadian Industrial Relations, (Toronto 2007), 250. 9. Lawrence Mishel, The Structural Determinants of Union Bargaining Power, Industrial and Labour Relations Review, (np: Vol. 40, No. 1, Oct. 1986), 99. In conclusion, analysing the centralized bargaining process and its effects, we denote that there are positive impacts, the process is smooth, and negative impacts, it develops slower, that interfere. So we cannot say to which extent this process is advantageous to implement. The negotiation process in centralized bargaining structure is lead on industry-wide basis. In this process the parties that take part try to influence each other for achieving their purposes. Usually in this kind of centralized process is negotiated a single collective agreement across several different workplaces by the same employer and union. This centralization leads to inefficiency because it addresses to general problems that arise between the parties. â€Å"Centralized negotiations by their nature tend to encompass issues of general importance, thereby omitting issues of local concern. †10 Centralized negotiations are often harder to achieve, mainly because of the great number of members involved in the process. The complex issues that are brought at the table require a great physical and mental implication of the members, leading to possible strikes or lockouts. â€Å"Negotiations between union and management typically address a broader range of issues than most commercial contracts and the issues themselves are often more complex than those raised in the average commercial transactions. †11 The strategies that negotiators choose to implement are influenced in a great part by the goals that they tend to achieve and thus, centralized negotiations enforce parties to decide carefully what main objectives they want to negotiate. Also they have to ensure that the chosen strategy is effective and can influence the other party that expect some sort of give and take proposals that favour the process. Taking in consideration the great responsibilities, risks and influences that centralized negotiation processes imply, there is no doubt that they have important effects on industrial relationships and only experienced people can succeed to achieve positive result for the both parties without causing conflicts and maintaining a good development at he workplace. 10. Jon Peirce, Karen Joy Bentham, Canadian Industrial Relations, (Toronto 2007), 250-251. 11. Jon Peirce, Karen Joy Bentham, 251. Another bargaining structure that has important effects on different aspects of the industrial relations is the decentralized structure. If speaking about the effects of the decentralized structure with regard to wages, than we can observe that this structure generally leads to greater dispersion between higher and lower-paid workers and greater union, non-union wage differentials. †12 In a decentralized collective bargaining the wages are established by each firm thus, the financial decentralized wage gains lead to unemployment. This increase in unemployment creates a very difficult social situation, because finding a job for unemployed people is much harder. â€Å"Wallerstein (1999), reports that â€Å"a lasting move from highly centralized bargaining to a system of industry-level bargaining would raise the predicted wage differential by 50 percent, while a shift in the level at which wages are set from plant-level to industry-level would reduce wage differentials by 30%. †13 Also decentralization brings more wage flexibility and leads to a greater wage dispersion. The existence of this flexibility in the decentralized collective bargaining can be as well manifested through the diversity of specific goals and tactics that are embraced by the individual unions and employers. Unlike centralized structure, in the decentralized structure each union is free to establish its own goals without a great involvement of the government. In this bargaining structure the employer organizations are not usually engaged in alliances or economic blocs, being rather followers of more individual prospects. Assuming all this, we realize that the decentralized collective bargaining structure has more detrimental effects over the wages and the labour market, creating evident distinctions between different classes of workers and thus leading to social conflicts, competitiveness and reduced individual efficiency. 12. Charlotta Groth and Asa Johansson, European Economic Review (np: Volume 48, Issue 6, December 2004), 1349-1365. 13. Golden, Miriam A. and Londregan, John B. , American Journal of Political Science,(np: Vol. 50, Issue 1, Jan 2006), p208-213. The inflation in decentralized bargaining has higher levels and yields negative effects on the labour market. This consequently leads to reinforced lower outcomes and to a bad material situation of the working class. â€Å"A movement to a more decentralized collective bargaining structure would create more inflation while an increase in the weight of the national industry agreements would reduce the rate of inflation. †14 The existence of high levels of inflation will have direct impact on workers benefits, reducing them and thus depriving employees from having tax reforms, vacation benefits, higher pensions or better price control. The wage setting has important effects on the inflation level, as in decentralized bargaining there is a bigger demand of wage increase. â€Å"Inflation initially rises when an increased share of firms have wage setters that coordinate their wage setting activities but then declines with ever increasing centralization of wage bargaining. †15 Where decentralized bargaining structure exists, workers don’t have the willing to accept lower wages in exchange of more benefits, neither want to renounce in an easy manner to their goals. Assuming these effects, we denote that inflation causes big disadvantages for unions as well as for employers, and slackens the development of good relations between them. Unlike in the centralized bargaining where strikes are few, in the decentralized bargaining we have more strikes. This effect is due primarily because of great wage differentials, and dispersion. When the bargaining process takes places between single-employer, single-establishment, single-union, employees don’t have much access to information and don’t benefit of different terms of employment. The fact that government don’t have a great implication in this bargaining process, allow the employer to get rid of the union easier. 14. Jesus Ferreiro, Decentralized versus centralized collective bargaining: is the collective bargaining structure in Spain efficient? , Journal of Post Keynesian Economics, (Armonk: Vol. 26, Iss. 4, 2004), 695. 15. Daniels, Joseph P. , Nourzad, Farrokh, VanHoose, David D. , Openness, centralized wage bargaining, and inflation, European Journal of Political Economy,( np: Dec 2006, Vol. 22 Issue 4), 979. As the structure is decentralized is easy for the employer to force concessions, and the costs of strikes are not so big. â€Å"A strike is more costly to firms whose production processes are labour intensive. †16 If the production processes relies more on capital and are automated, the employers can continue at least partial production process. Making a global analysis on the effects that decentralized bargaining has on strikes, we can assert that they aggravate the relations between union and employers by making harder the finding of a common denominator that could please both parties. The strikes have a long duration and this harm the working process. The bargaining process in the decentralized structure occurs in small, community based, homogenous bargaining units that are easy to organize and to manage. Decentralized negotiations often occur between a single employer and a single union, thereby resulting in a great number of collective agreements that cover relatively few workers. 17 In such structure the parties can bargain based on their own circumstances, thus the development of the process is quicker. Unlike in centralized bargaining where the Employer has full control on the process, in the decentralized one, the employer doesn’t want to surrender control. The bargaining process implies comprehensive change, openness, professionalism and the spending of time and resources, for having finally positive achievements. Single–employer, single-union bargaining are efficient because of the little numbers of people that take part in it and have the possibility to express their desire. Even if many of them have different occupation but work in the same establishment people think that they have enough in common to bargain together. Studying the above information, we are able to say that the decentralized bargaining process is one in which employees can express themselves in a more freely way and can require from their employers more benefits that centralized worker. 16. Jon Peirce, Karen Joy Bentham, Canadian Industrial Relations, (Toronto 2007), 263. 17. Jon Peirce, Karen Joy Bentham, 245. The negotiation process that is a component of the bargaining process, is also affected by the decentralized structure. To some extent it resembles the bargaining process through the great number of collective agreements and the fact that it occurs between single-employer, single-union. A great advantage that decentralized negotiations have is the fact that they encompass not only issues of general importance but also local issues, thus leading to better internal relationships at the workplace. â€Å"Unions must negotiate contracts which cover the relevant workforce either directly, as in industry wide agreements, or indirectly through strong settlement patterns among companies. †18 This action removes the wages of the relevant work force from competition. In the negotiation process, both unions and management negotiators represent different parties involved in the labour process that share diverse opinions and are often implied in conflicts. The union-management negotiation are conducted by representatives of the parties; thus, the negotiators must emerge with a settlement acceptable not just to their bargaining team but to their principals, who were not involved in the actual negotiations but who have the ultimate say as to whether the tentative agreement is accepted or rejected. 19 So we can denote from the. Above information that the negotiation process in the decentralized structure is essential for having a benefic development of the internal as well as external relations between union, managers, employees and employers. It helps to find a consensus and also through this process the parties involved try to respect the rights of the opponent but also meet their obligations thus, we can state that in decentralized structure the negotiation process is more productive and efficient. 18. Lawrence Mishel, The Structural Determinants of Union Bargaining Power, Industrial and Labour Relations Review, (np: Vol. 40, No. 1, Oct. 1986), 94. Jon Peirce, Karen Joy Bentham, Canadian Industrial Relations, (Toronto 2007), 252. Finally, after enumerating and explaining the effects that both centralized and decentralized bargaining structures have on wages, inflation, strikes, the bargaining process and the negotiation process, we can accentuate that they are primordial elements in the domain of industrial relations. We have seen that centralized bargaining has good influences on wage dispersion and wage differentials as it reduces them and leads to equality, whereas decentralized bargaining increases them and creates inequality and competitiveness between workers. Unlike in decentralized bargaining, in centralized structures inflation and strikes they also have reduced levels thus, contributes to the development of a stable society and a good economic level in it. The bargaining and the negotiation processes have a great effectiveness in decentralized structures than in the centralized ones, because they deal with a broader range of local issues and have a quicker development. Although these two structures have different effects on society, we cannot say that they don’t interact in some circumstances, and that the implementation of only one of them can lead to total welfare in the society. Analyzing all these, we realized the great importance that collective bargaining has for unionized workers, offering them the possibility to work in good conditions and to have many employment benefits. â€Å"Unionized workers enjoy a significantly greater voice in the workplace, thanks mainly to the grievance process. †20 Even if this system is far from being perfect, at the present time it’s the best for the determination of pay and working conditions. While the adversarial nature of the process and the length and complexity of most collective agreements are regrettable, they are likely inevitable so long as management continues to resist unions fiercely, and as long as bargaining remains highly decentralized, thus forcing most conflict to be worked out at the bargaining table rather than in the political arena. 21 20. Jon Peirce, Karen Joy Bentham, Canadian Industrial Relations, (Toronto 2007), 265. 21. Jon Peirce, Karen Joy Bentham, 265.