Possible Turnaround Strategies for the Business Essay

Possible Turnaround Strategies for the Business - Essay Example The paper tells with the understanding that the business operation is based on a quality product as the explanation, increasing the presence of the business in the local market would help to create a good name and a household brand which can be easily sold to outside world. With the brand now famous in the home country, it would be easy even to partner with the international companies and market the products since they would be acting as ambassadors based on the good name built in the local market. However, this would be a wise decision because of the local competition and the possible saturation of the local market. Increase competition or saturation of the local market would make the operation and expansion strategy difficult for the business. According to Audley, the other strategy can through going international at once. This is probably the most efficient way of expanding a local SME to attain international standard. However, this would be a tricky move also very involving. It w ould require proper preparation in terms of capital investment and also in terms of management. Going international for an SME is quite involving but very rewarding in case it is executed accurately. Having seen at the two possible turnaround strategies for the business, let us now look at the requirements that would help in the expansion process. First, it would require a huge amount of capital investment. This is needed in for licenses and business premises. Perhaps the most important thing to understand here is that the owner must first become conversant with the international laws governing international business. This is important in order to understand the terms of payment and transfer of money. The owner of the business needs to establish an account to receive all payments depending on the mode of operation. Having a sound financial backing is of crucial importance before venturing into international business as the business requires huge inputs.

What Guides Ethical Decision Making Essay Example for Free

What Guides Ethical Decision Making Essay A processor manufacturing company who are currently facing financial troubles completed an order about three months ago for newly designed high-powered processors that are smaller than and four times as powerful as its predecessor. These processors are to be placed into cutting edge cellular phones by a leading cellular phone manufacturer whose release date is a mere month away. A design inconsistency was recently discovered that essentially meant that the processors would work but would be no more powerful than its predecessor in certain conditions. A flaw that would only to be discerned when extraordinary load was placed on the device component whilst it was exposed to ambient temperatures of over 85 degrees Fahrenheit. The company’s CEO is now faced with the difficult decision of either doing nothing or replacing all the processors. Doing nothing, allows the company to keep its doors open, grants access to potential future earnings and saves the jobs of over 1000 employees. A decision that clearly seeks to ensure the common good of the company by giving them the ability to remain competitive while remaining silent on an issue that poses substantial risks to the cellular phone manufacturers earnings and reputation. The alternative, replacing all the processors would undoubtedly ensure that the processors function as advertised, but doing so would be at a significant cost to the company and may likely result in massive downsizing or the company’s declaration of insolvency. Though this option speaks positively to the moral character of the company, it may also lead to the company’s demise and leave over 1000 employees jobless. Both decisions, in light of the situation presented, may be considered to be ethical. A predicament which may undoubtedly lead a person to question how does one choose between several ethical options and more importantly what exactly guides this choice. The answer to these questions can be found in a branch of philosophy called theoretical ethics. Theoretical ethics is the rational reflection on what is right, what is wrong, what is just, what is unjust, what is good, and what is bad in terms of human behaviour according to [https://www.boundless.com/marketing /textbooks/boundless-marketing-textbook/social-responsibility-ethics-in-marketing-16/ethics-an-overview-101/definition-  of-ethics-498-8310/]. This branch of philosophy is exercised via the application the application of ethical theory. Ethical theories are those that represent the grand ideas which guide ethical principles and systematically attempt to answer the fundamental practical ethical questions [Ethical Theories http://www.medindia.net/education/familymedicine/biomedical-ethics-theories.htm#ixzz3H84Tlgi3] Ethical theories can be categorized according to how they justify ethical judgments [https://ethics.journalism.wisc.edu/resources/ethics-in-a-nutshell/#theoretical ] and as such the particular ethical theory utilized can influence the decision made. This essay will therefore seek to examine the concepts of the common good and moral character and fundamental human virtue, their supportive ethical theories and explain how they are applied to making ethical decisions in businesses. Common Good Also referred to as the human good, public good or commonweal, the concept of the common good is one that has evolved over time. As human society developed, so too did the concept, as articulated by the philosophers of the day. Originating with the Greek Philosopher Aristotle who, on the topic wrote â€Å"Every skill and every enquiry, and similarly every action and rational choice, is thought to aim at some good; and so the good has been aptly described as that at which everything aims†. He went on to reason that â€Å"since political science employs the other sciences, and also lays down the laws about what we should do and refrain from, its end will include the ends of the others, and will therefore be the human good.† http://catdir.loc.gov/catdir/samples/cam032/99036947.pdf . Aristotle firstly explained his idea of the good, which according to his writings can then be understood to mean the purpose, reason, desire or benefit of things and actions. The idea of the good sets the premise for understanding the human good, the good that yields the most benefit to human existence. The human good, in Aristotle’s view, was the science of politics since it was the science charged with managing all other sciences and their respective ends for a single purpose; the betterment of the polity. The underlying premise of Aristotle’s definition of the common good is utility. It involves a multiplicity of agents working towards a single shared purpose that would  satisfy or be of benefit to all involved. This single purpose, shared by many, for the benefit of many is therefore what is understood to be the common good; a concept that shares an ideal that is similar to utilitarian theory as developed by Jeremy Bentham and John Stuart Mills. UTILITARIANISM AND THE COMMON GOOD The basic premise of utilitarianism is the achievement of happiness for the greatest sum of people [ethics in action Domenec Mele]. This principle places the interest of the many over the interest of the few and as such the rightness or wrongness of an act is based only on the perceived or expected outcomes of that act as it relates to the utility obtained. http://caae.phil.cmu.edu/cavalier/80130/part2/sect9.html Jeremy Bentham and John Stuart Mills were the main proponents of this ideology, and though they had differing views on which outcome of act (happiness vs. pleasure) was worth measuring in order to determine the rightness or wrongness of an act they both held that human wellbeing was salient. http://caae.phil.cmu.edu/cavalier/80130/part2/sect9.html Utilitarianism can be considered to be an ethical theory. It represents a grand idea; achievement of maximum utility for most, and at the same time, assesses the rightness or wrongness of an action through the lenses of this idea. The utilitarian principle can therefore be used to ethically guide or judge the ethicality of decisions and actions. Utilitarianism as an ethical theory acts in pursuance to the common good https://philosophynow.org/issues/64/Presidential_Decision-Making_Utilitarianism_vs_Duty_Ethics . As previously expressed, a single purpose, shared by many, for the benefit of many is therefore what is understood to be the common good. This concept is similar to utilitarianism as is evident by the mutual aim of achieving maximum utility for many. As such, decisions and actions resulting from utilitarian theory are made based on the consequences of those decision and actions, and how they affect majority with an aim to always increase utility. Utilitarianism as a theory may then be seen as the tool through which the common good may be achieved. https://philosophynow.org/issues/64/Presidential_Decision-Making_Utilitarianism_vs_Duty_Ethics COMMON GOOD OF BUSINESSES The theories of the common good and utilitarianism although initially conceptualized on a societal scale are also applicable to smaller groups that occur within society. Both concepts are formulated purely on the idea that it is best to achieve utility for the majority of stakeholders and as such the size of the group is not an important attribute for consideration when applying these ideas. Utilitarian as a theory and the common good as a concept can therefore be viewed as reducible and as such be applied to virtually any group in society including a business. The common good of a business is to seek particular goods through its activities http://www.iese.edu/es/files/Paper_Antonio%20Argando%C3%B1a_tcm5-36013.pdf . These goods are extrinsic, intrinsic and transcendent in nature and are used to provide utility to stakeholders by satisfying their needs http://www.iese.edu/research/pdfs/DI-0777-E.pdf . These goods are interdependent of each other, but through their collective contributions, work towards the achievement of the vision and mission of a business. The vision and mission of a business may then be considered to be that business’s common good [domenec mele bookl]. Interestingly however, a business seeking its own common good also works towards the common good of society [domenec mele bookl]. As suggested by Adam Smith’s metaphor of the invisible hand, a business in pursuit of its own interests tends to also promote the good of society as a whole [domenec mele bookl]. Therefore the activities of a business: 1. creating added economic value with justice and distributing it with equity 2. supplying useful goods and services efficiently and fairly 3. providing jobs, opportunities and organizational conditions in accordance with human dignity and human rights 4. Promoting the necessary relationships between the firm and its constitutive stakeholders, fostering rec iprocity, collaboration and cooperation among them 5. Striving for the continuity and sustainability of the firm and 6. being a good corporate citizen  may be viewed as contributing to not only its own common good but also to the common good of society. [domenec mele bookl] COMMON GOOD DECISION MAKING IN A BUSINESS A common good decision in a business is any decision that is pursuant its own common good and, at the same time, is aimed at achieving maximum utility for  the majority of stakeholders. This type of decision making applies a mission driven approach to corporate governance where the organization is seen as one entity that achieves multiple ends. In applying this approach the corporate governing body weighs the positive and negative consequences of an action with an aim towards increasing overall utility for the many with the business’s vision and mission as its main goal [domenec mele]. It would then stand to reason that a common good business decision would be any decision that is utilitarian in nature, which is also in accordance with any of the 6 mentioned activities of a business. Common good business decisions are made through the application of utilitarian theory. Utilitarian theory provides a straightforward method for making decisions that would provide the greatest benefits and the least harm to the business. To arrive at such a decision, one must firstly identify the each of the various options that can be chosen http://www.sme.ie/articles/business_ethics/thinking_ethically.pdf . After the options are identified, the foreseeable benefits and harms that may result from each option are determined http://www.sme.ie/articles/business_ethics/thinking_ethically.pdf . Lastly, one compares the options and chooses the option that provides the greatest benefits and the least amount of harm to the business http://www.sme.ie/articles/business_ethics/thinking_ethically.pdf . In the utilitarian view, an option chosen via this ethical theory is considered to be morally right http://www.sme.ie/articles/business_ethics/thinking_ethically.pdf and is therefore ethical. This decision making process may be likened to the cost benefit analysis, a commonly used business decision making tool. Although one may arrive at ethical decisions through the application of utilitarian theory, there are several disadvantages of using this ethical theory. Utilitarianism suggests that the decision maker assigns values to benefits and harms and subsequently compares these benefits and harms, this makes the utilitarian decision making process highly subjective http://www.sme.ie/articles/business_ethics/thinking_ethically.pdf . Predicting all the consequences of an action is difficult and as such it is possible that consequences which may cause great benefit or harm to the business are not factored into the decision making process. This method also, ignores the concept of justice and as such may cause several  particular groups to be repeatedly disadvantaged for the betterment of the organization. Because of the critiques of this ethical theory it can be reasoned tha t it is best used in situations that are amoral or situations where the rightness or wrongness of a decision is not in question. An example or an ideal amoral situation is a situation where all the available options are moral. The application of this ethical approach in such situations removes the need for the consideration of justice and therefore addresses a major flaw of the utilitarian process. MORAL CHARACTER AND FUNDAMENTAL HUMAN VIRTUES Another concept that informs ethical decision making is moral character and fundamental human virtues. The idea of Moral character and virtues has always been a prominent topic of philosophical discussion among ancient philosophers. The foundation of these discussions was centralized in the goodness of humans and in particular, trying to discern what makes a person good http://plato.stanford.edu/entries/moral-character/ . As such, a person’s character became the logical starting point in the resolution of this issue http://plato.stanford.edu/entries/moral-character/#WhyChaMat . One’s traits and actions is what determines one’s character. Character, which is understood to mean the assemblage of qualities that distinguishes one individual from another http://plato.stanford.edu/entries/moral-character/#WhyChaMat is comprised of the relatively stable traits or behaviours that a person consistently exhibits. Although all of these traits are not moral nature, they may have a significant impact on a person’s moral characterhttp://www.iep.utm.edu/moral-ch/#SH1a . A person’s Moral Character is influenced by moral character traits and practical wisdom. A moral character trait is a disposition of character for which a person is morally responsible or is deserving of the resultant reactive attitudes. http://www.iep.utm.edu/moral-ch/#SH1a. Virtues, traits that are deserving of positive reactive attitudes such as praise or gratitude and vices, traits that are deserving of negative reactive attitudes, when combined with proper reasoning about the matter at hand, collectively inform moral character http://www.iep.utm.edu/moral-ch/#SH1a. In other words; virtues, vices and by extension moral character is not only influenced by the disposition of  character, but also by practical wisdom. http://www.iep.utm.edu/moral-ch/#SH1a Practical wisdom is an intellectual virtue that is required for the development of virtues of character. This intellectual virtue is acquired through learning general rules and practice. Throughout the course of one’ s life, we encounter situations that require reasoning to determine what actions are appropriate. It is through these experiences that practical wisdom is developed. Practical wisdom, when combined with â€Å"proper habits† fuels the development of virtues such as justice, courage and temperance. [http://plato.stanford.edu/entries/aristotle-ethics/] Justice, courage and temperance are virtues which provide us with the interior strength to act well [domenec mele]. Justice governs relationships and it regulates one’s inclination to possess, to share and to give whilst, courage, the virtue of preserving or pursuing what is good despite the obstacles, regulates one’s inclination to overcome the obstacles to doing â€Å"good†. Lastly temperance regulates one’s inclination towards pleasure and is that virtue which provides self-mastery and avoidance of immoderate attachments [domenec mele]. These virtues each have common characteristics of providing a self-regulatory feature and encouraging behaviours that are in keeping with human excellence. As such, these virtues are considered to be fundamental [domenec mele]. FUNDAMENTAL VIRTUES AND DEONTOLOGY The theory of deontology states we are morally obligated to act in accordance with a certain set of principles and rules regardless of outcome. Deontological theories holds that some acts are always wrong, even if the act leads to an admirable outcome and as such, in deontology the morality of an action is judged without regard for the outcome of that action. Deontology is based on the view of the human being having the unique capacity for rationality and it is exactly this ability that requires human beings to act in accordance with moral law or duty. http://sevenpillarsinstitute.org/morality-101/kantian-duty-based-deontological-ethics In the deontological view, morality and moral character is primarily a function of acting in accordance with duties or obligations, regardless of the consequences of acting in accordance with those duties http://www.iep.utm.edu/moral-ch/ . Deontological theory goes on to apply  this categorical imperative to making all decision â€Å"Act only on that maxim whereby thou canst at the same time will that it should become a universal law† http://caae.phil.cmu.edu/Cavalier/80130/part2/sect8.html . This categorical imperative is Kant’s only guideline to making decisions. Simply explained it states that one should decide on an action only if they agree that everyone else should perform that action in all the time. To be able to act in accordance with duty, fundamental virtues are required. Duties may be either perfect (precise, specifiable and enforceable) or imperfect (unspecific and unenforceable) in nature. Perfect duties require that one forgoes certain actions in order to be able to act in accordance with such a duty. Imperfect duties on the other hand, are duties to adopt certain ends and because of its unenforceable nature require self-mastery and strength of will. Continence therefore becomes a necessity for acting in accordance with duty. http://plato.stanford.edu/entries/moral-character/#Kan Continence or self-control requires the exercise of virtues, namely those of practical wisdom, temperance, courage and justice. http://classics.mit.edu/Aristotle/nicomachaen.7.vii.html MORAL CHARACTER OF COMPANIES The ideas of moral character and fundamental virtues, though originally conceptualized to examine the ‘goodness’ of a person, can also be expanded to analyse the moral character of groups particularly businesses. Moral character is assessed as previously indicated by evaluating a person’s commitment to virtues or exercise of duty. The same method of assessment can be applied to a business. The moral character of a company may be determined through its duty based activities. The perfect duties of a company are those to which it is legally obligated whereas its imperfect duties deals are those where the company isn’t legally obligated but are duty bond to adopt particular ends. As such, the company’s adherence to the laws of the land, how the company treats with contractual agreements, examination of the company’s ethical policy or code and review of the company’s decision to ensure that they are in accordance with the company’s duties are the factors that influence the moral character of a company.

A Nineteenth Century Ghost Story in The Turn of The Screw by Henry Jame

A Nineteenth Century Ghost Story in The Turn of The Screw by Henry James The Turn of The Screw is a classic Gothic ghost novella with a wicket twist set in a grand old house at Bly. The story is ambiguous; we never fully know whether the apparitions exist or not and we are left with many more questions than answers. The Governess is left in charge of two young children, Miles and Flora, of whom she later becomes obsessed with, describing them as 'angelic'. She has no contact with her employer from London, the children's enigmatic uncle once there, sparking suspicions of the children being unwanted. The anonymous Governess' obsessive nature is taken to another level, with the darker side of Bly appearing. Her sanity is called into question with her continued revelations of apparitions around the family's country residence. The story itself could not have had a bigger twist in it, from being overwhelmed by the beauty and innocence of the two orphans under he care to being convinced that ghosts of her predecessor and the master's former valet, Miss Jessel and Peter Quint, both who die in mysterious circumstances, have come to possess the souls of her charges. The Governess begins to take ever more desperate measures to protect them, but is it enough? A typical Gothic story in many respects, The Turn of the Screw conforms to our expectations by sharing many key features, style and themes typical to nineteenth century horror fiction. A gothic story is a type of romantic fiction that predominated in English Literature in the last third of the 18th century and the first two decades of the 19th century. The setting for this type of st... ...riously wrong with her. Taking all of these points into account all of these points, I am sure that you now agree that The Turn of the Screw is a typical 19th century gothic ghost story. The story itself has many characteristics typical of a gothic story and it is based around two apparitions, which is a necessity in any ghost story. Gothic stories were very popular during this period due to Darwin's book, 'The Origin of Species' which hugely questioned Christian beliefs. People were no longer sure of religion, and became very superstitious, with Ghost stories becoming very popular. They had always thought god came first; now science was starting to take over. In the 19th century people were unsure about what was real in the world. The Victorians did not know what to believe about in their world and spirituality.

Nike Case Study Essay

Kimi Ford, a portfolio manager at North Point Group, is looking into the profitability of investing in the stocks of Nike for her fund that she manages. She is supposed to base her decision the company’s data which was disclosed in the 2001 fiscal reports. While Nike management had addressed several issues that are causing the decrease in market sales and stock price, management presented plans to improve and perform better. Nike revenue has been at a plateau since 1997 yet net income and market share were falling. Supply chain issues and the strong dollar negatively affected revenue too. Plans are in place to address top line growth and operating performance. To boost revenue, the company would develop more athletic shoes in the mid priced segment which has been overlooked by Nike in recent years. They also planned to push their apparel line which under strong leadership had performed very well to control expenses. Revenue growth targets are around 8-10% and earnings targets are above 15%. Analyst reactions were mixed as some of them thought this was too aggressive. Lehman Brothers recommended a strong buy while others expressed misgivings and recommended a hold. At this point, North Point Group decided to do their own analysis in order to decide if Nike shares should be purchased for the fund. The weighted average cost of capital (WACC) is the rate that a company is expected to pay its debt and equity holders to finance its assets. It is the minimum return that a company must earn on existing asset base to satisfy its owners, creditors, and other providers of capital or they will invest somewhere else. Companies raise money from many sources such as common and preferred equity, straight, convertible, and exchangeable debt, options, warrants, pension liabilities, executive stock options, governmental subsidies, and others. Different securities, which represent different sources of finance, are expected to generate different returns. WACC is calculated taking into account the relative weights of each component of the capital structure- equity and debt, and is used to see if the investment is worthwhile to take part in. Management notices the cost of capital while making a financial decision. The concept is very relevant in the following managerial decisions and hence its importance: (1) Capital Budgeting Decision. Cost of capital may be used as the tool for adopting an investment proposal. Naturally, the firm will choose the project which gives a satisfactory return on investment which would never be less than the cost of capital incurred for its financing. In the many methods of capital budgeting, the cost of capital is the main factor in deciding the project out of different proposals pending before the management. It determines the acceptability of all investment opportunities by measuring financial performance. (2) Designing the Corporate Financial Structure. The cost of capital is a significant factor in designing the firm’s capital structure. The cost of capital is influenced by changes in capital structure. Financial executives keep an eye on capital market fluctuations and try to achieve the economical and sound capital structure for the firm. They may try to substitute the various methods of finance in an attempt to minimize the cost of capital a nd to increase the market price and the earning per share. (3) Deciding about the Method of Financing. Financial executives must have knowledge of fluctuations in the capital market and should analyze the rate of interest on loans and normal dividend rates in the market from time to time. Whenever company requires additional finance there are better choices of the source of finance which bears the minimum cost of capital. Although cost of capital is an important factor in such decisions, but equally important are the considerations of relating control and of avoiding risk. (4) Performance of Top Management. The cost of capital can be used to evaluate top executive financial performance. Evaluation of the financial performance will involve a comparison of actual profitability’s of the projects and along with the projected overall cost of capital and an appraisal of the actual cost incurred in raising the required funds. (5) Other Areas. The concept of cost of capital is also important in others areas of decision making, such as dividen d decisions, working capital policy, and more. WACC CALCULATION: [pic] One important question is if Joanna Cohen should use a single or multiple of capital for each of Nike’s footwear and apparel divisions? We agree with the use of single cost rather than multiple costs of capital. The reason of estimating WACC is to value the cash flows of the entire company that is provided by Kimi Ford. Plus, Nike business segments have a similar risk and thus a single cost is sufficient for this analysis. Joanna Cohen’s cost of debt was incorrect. An important fact is the WACC is used for discounting future cash flows, thus all components of the cost must reflect the firm’s concurrent or future abilities in raising capital. Cohen wrongly used the historical data in estimating the cost of debt. She divided interest expense by the average balance of debt to get 4.3% of before tax cost of debt. It doesn’t reflect Nike’s current or future cost of debt. The correct way to calculate the cost of debt is explained below. If the cost of debt is intended to be forward looking, it can be estimated by the yield to maturity of bond. The more appropriate cost of debt can be calculated with the data provided in Exhibit 4 of the case. Market data is correctly used rather than historical data. PV: 95.60 N= 40 Pmt: -3.375 FV: -100 The values above were put into Excel’s rate function. This came to a 7.16% annual cost of debt. The tax rate is 38%. The correct way to get the after tax cost of debt is to take 7.16% * (1-38%) = 4.44% The correctly calculated before tax cost of debt is 7.16%. This is significantly higher than Joanna’s incorrectly calculated cost of debt of 4.3%. Her incorrect calculation came from using historical rates rather than market rates. Next, the cost of equity is calculated. It is a good idea to use the 20 year T-Bond rate to represent the risk free rate. The cost of equity and the WACC are used to discount cash flows in the long run, thus rate of return of a T-Bond with 20 years maturity at 5.74% is the longest rate that is available. The geometric mean of market risk premium is 5.9%. This is more accurate than using arithmetic mean to represent market risk premium. By using arithmetic mean to represent true market risk premium, we have to have independently distributed market risk premium. It is often found that market risk premiums are negatively serial correlated. Market average Beta of .69 is used because it is a good indicator of the average Beta’s and their fluctuations throughout the years. Capital Asset Pricing Model (CAPM) |Cost of Equity(KE) | |KE = |Rf + ÃŽ ²(Rf – Rm) | |Rf = |5.74% | = |9.81% | |Beta |= 0.69 |Average Nike Beta | | Next, the weights of debt and equity need to be calculated. The market value of equity is $42.09 share price X 271.5 million shares = 11,427,000 Due to the lack of information of the market value of debt, book value of debt at 1296.6 million is used to calculate weights. Calculations for market and debt weights: 11,427,000 / (11,427,000 + 1297) = 89.8% Equity Weight 1 – 89.8% = 10.2% debt weight WACC Calculation 4.44% After Tax Cost of Debt X 10.2% Debt Weight + 9.81% Cost of Equity X 89.8% Equity Weight = 9.27% The CAPM method was used when calculating cost of equity for the WACC. Advantages and disadvantages of this method are explained below. Advantages: †¢ It only considers systematic risk, reflecting a reality in which most investors have diversified portfolios from which unsystematic risk has been essentially eliminated. †¢ It generates a theoretically-derived relationship between required return and systematic risk which has been subject to constant empirical research and testing. †¢ It is generally seen as a superior method of calculating the cost of equity than the dividend growth model (DGM) in that it explicitly takes into account a company’s level of systematic risk relative to the stock market as a whole. †¢ It is clearly better than WACC in providing discount rates for use in investment appraisal. Disadvantages: †¢ It is practically impossible to estimate betas for many projects. †¢ People sometimes focus on market risk rather than corporate risk, and this may be a mistake. The Dividend Discount Method is another method of calculating cost of equity. The assumption made with this model is that the company pays a substantial dividend, but Nike Inc. does not pay dividends. Therefore, we rejected this model since it does not reflect the true cost of capital. The method Compares dividends forecasted for the next period with the current share price for the firm and then adds the growth rate of the firm. Equation: Ke= D1/ P0 + g †¢ Variables: – G= the value line forecast of dividend growth, which equals 5.5% – PO= current share price, which is $42.09. – D1= DO (1+g), which equal .48 (1+.055) †¢ DO= from dividend history and forecast chart, which equals .48 Therefore, cost of equity = .564/42.09 + .055= 6.7% Advantages: †¢ Allow great flexibility when estimating future dividend streams †¢ Provide useful value approximations even when the inputs are simplified †¢ Can be reversed so the current stock price is used to impute market assumptions for growth and expected return †¢ Investors are able to suit their model to their expectations rather than force assumptions into the model †¢ Specifying the underlying assumptions allows for sensitivity testing and analyzing market reactions to ever changing circumstances Disadvantages †¢ Subjective inputs can result in wrongly specified models and bad results †¢ Over-reliance on a valuation that is really just an estimate †¢ Sensitivity is high to small changes in input assumptions †¢ Flow-through of minor formula or data entry errors when using spreadsheets The Cost of Equity Method is the other method for forecasting cost of equity. The final model used to compute the cost of capital was the earning capitalization model. The problem with this model is that it does not take into consideration the company’s growth. Therefore we chose to reject this calculation. The earnings capitalization model calculations were found this way: †¢ Stands for earnings capitalization model †¢ This model compares forecasted earnings for the next period over the current share price. †¢ Equation: – Ke: E1/ P0 †¢ Variables: – E1= (1+g) * (E0/ # of shares outstanding) †¢ G= retention ratio * return on equity †¢ Retention ratio= retained earnings/ net income †¢ 3194.3/ 589.7= 5.42 †¢ Return on equity= net income/ total shareholders’ equity †¢ 589.7/ 3494.5= 16.88% †¢ G= 5.42* 16.88%= .914 †¢ EO= Net Income, which equals 589.7 †¢ Share Outstanding= 271.5 – E1= ((1+.914) * 589.7)/ 271.5= 4.1572 – PO= Nike current share price, which is 42.09 †¢ Therefore, cost of equity= – 4.1572/ 42.09 = 9.88% Advantage Strong representation of earnings Disadvantages Brealey & Myers argue in Principles of Corporate Finance that this model is not good to use for growing firms but is appropriate for no-growth firms. Hence it is not appropriate for Nike Inc. since this company is still growing. Analysis and Recommendation Kimi ford used a WACC discount rate of 8.4% to find a share price of $63.50. Nike is currently trading at $42.09. This makes the share price undervalued by $21.41. However, her discount rate does not reflect true market value due to the mistakes in her methods we discussed earlier. The discount rate we came up with from using the CAPM was 9.27%. This higher WACC results in a lower share price of around $55.60. Share price has decreased once Joanna’s calculation methods have been corrected, but Nike is still overvalued so we still recommend buying the stock. Share price is now undervalued by $12.97. SWOT Analysis Strengths: †¢ Globally recognized #1 sports brand †¢ Strong marketing, research and development, and innovation †¢ Worldwide logo recognition, brand loyalty, and slogan â€Å"Just do it.† Weaknesses: †¢ Most profits are solely from footwear †¢ Revenue has plateaued, expenses have increased †¢ Supply chain issues affecting financial health too †¢ Price sensitive retail industry Opportunities: †¢ There are plans in place to address top line growth and operating performance †¢ Plans to create more athletic footwear †¢ Also plans to push apparel line †¢ High revenue growth (8-10%) and earning (15%) targets Threats: †¢ Uncertainties in international trade †¢ The market is cut throat †¢ Growing competition from other companies can lead to decreased market share DuPont Analysis †¢ Net Income: 589,700,000 †¢ Sales:9,488,800 †¢ Total Assets:5,819,600 †¢ Common Equity – Common Stock, Par: 2,800,000 – Capital in excess of stated value: 459,400,000 – Retained Earnings: 3,194,300,000 – Total: 3,656,500,000 †¢ NI/Sales: 589,700,000/9,488,800,000 = 6.2% †¢ Sales/TA: 9,488,800,000/5,819,600,000 = 1.63 †¢ TA/CE: 9,488,800,000/3,656,500,000 = 2.60 †¢ Profit Margin * TA Turnover * Equity Multiplier †¢ 6.2% * 1.63 * 2.60 = 26.27% ROE. This Return on Equity is high, further stating the fact that Nike stock is good to buy. Nike has strong financial health and its stock is a sound investment. It would make a valuable addition to any mutual fund. The End Thank You

Board Game and Total Cycle Time

X-Opoly Inc. X-Opoly, Inc. , was founded by two first-year college students to produce a knockoff real estate board game similar to Monopoly. Initially, the company’s purpose was to produce a board game based on popular local landmarks in their small college town, as a way to help pay for their college expenses. However, due to big success and since they enjoyed running their own business, the founders decided to pursue the business full-time after graduation.X-Opoly has growth over the last couple of years attributed to its designing and producing custom real estate trading games for universities, municipalities, chambers of commerce, and lately even some businesses. The company fills orders from a couple of hundred to several thousand and projects that its sales will grow 25 percent annually for the next five years. X-Opoly’s Process X-Opoly’s clients request either a new game board that has not been produced or repeat orders for a game that was previously prod uced.Once the request for a new game is received from a client, a meeting is arranged with a graphic designer from X-Opoly’s art department and the actual game board is designed. The approved designs are transferred electronically to the printing department where they are loaded onto personal computers and printed on special decals. The printing department is also responsible for printing the property cards, game cards, and money. The money is then moved to the cutting department, where it is cut into individual bills. Similarly, property cards and game cards are produced with the exception of using material resembling poster board.In addition to cutting the money, game cards, and property cards, the cutting department also cuts the cardboard that serves as the substrate for the actual game board. After being cut, game boards, money, and cards are stored in totes in a work-in-process area and delivered to the appropriate station on the assembly line as needed. X-Opoly Operati ons Efficiency Measuring X-Opoly’s performance is the key to improving its service to customers. The company currently operates 19 stations with a total cycle time of 6 min 45 sec per job.In my opinion, X-Opoly should consider combining assemblies within stations to reduce the number of stations. This process would allow some components to be partially assembled for the next station. This reduces the number of jobs involved in making multi-level products and keeps inventory to a minimum. Adopting a lean approach starts with a simple question: â€Å"What's essential? † Whether X-Opoly is simply trying to survive or conducting an assessment of their productivity, it is imperative to determine that every activity they engage in is essential in the value chain to providing a competitive product.This involves analyzing each phase of the product lifecycle from innovation, to design and development, to testing and, eventually, manufacturing and removing the waste from those p rocesses. For example, the company’s production line maximum capacity/day is would increase by reducing the waste and redundancy in design and development which would increase the company’s efficiency. To further improve X-Opoly’s efficiency, I would recommend developing a more formal manufacturing system (Flow Manufacturing). Flow manufacturing is a time-based process that pulls material through a production system without any interruption. (SAE. rg) This can be achieved by striking the proper balance between new technology and the proper amount of skilled labour. Flow manufacturing would reduce total cycle time, lessen inventory and increase X-Opoly’s productivity. The increase productivity would assist the company in meeting and possibly exceeding future demands. Finally, I believe X-Opoly would benefit from eliminating is non value added time to improve its efficiency. References Jacobs, F. , and Chase, R. , (2011). Operations and Supply Chain Managem ent (13th ed. ). McGraw-Hill, New York, NY SAE. org (2011). Thinking of Lean Manufacturing Systems. Retrieved October 2011

Bad Bugs †Article Summay

Bad Bugs – Article Summay Free Online Research Papers In reading the article â€Å"Bad Bugs† I learned that bacteria can become immune to antibiotics. Antibiotic-immune bacteria have lived long before we did and they want to keep living, so they have gotten smarter. When an antibiotic drug is introduced to the body, bacteria begin to evolve and form a resistance to it Most of the cases of antimicrobial resistance occur in hospitals. Seventy percent of bacteria that cause infections in hospitals are resistant to at least one antibiotic. In the past couple of years drug-resistant diseases have been increasingly showing up in communities to people that haven’t gone to a hospital. This is because when a person takes an antibiotic it kills the sensitive germs, but some resistant bacteria stays to grow and reproduce. If a patient takes antibiotics incorrectly the bacteria have a greater chance to develop a resistance. In reading the article â€Å"Antibacterial Debate† I learned that when you use soap with triclosan, the triscolan stays on your skin after you wash and provides an additional layer of hygienic protection. The soaps that contain triclosan are bactericidal because they can kill bacteria and they are also bacteriostatic because they can inhibit the growth or reproduction of bacteria. Plain soap is only bactericidal not bacteriostatic. Since not all bacteria disappear with alkaline hand wash. Ciba Irgasm is a big advantage because it works very well even at low concentrations and it can prevent strong growth of bacteria on skin for up to twelve hours. I think the findings in these articles are valid regarding antibacterial resistance and there is scientific evidence to back it up. In the past three years,16 states have passed legislation to require public reporting of hospital infection data, and fourteen of those will publish numbers for each hospital in the state. In November, Pennsylvania released the nation’s first report on infection rates on a hospital-by-hospital basis, and Florida and Missouri have since produced similar reports. Right now ,infection-disclosure bills are being considered in 14 states. Humans are being helped by antibiotics because it is a cure for a lot of diseases. Antibiotics kill bacteria in your body and help you become immune to the bacteria. The soaps help because they prevent bacteria and germs from spreading from your hands to other places.Humans are being harmed by antibiotics because if they take them when theyre not supposed to or if they take too much of them, the bacteria will only get stronger and will be more likely to develop a resistance.In the future I think the problem is going to be worse because physicians are prescribing antibiotics more freely so people are taking them when they dont have to and as a result, the bacteria develops a resistance. My opinion about these articles is that they are informative articles. I don’t think they shouldve stopped selling bacteriostatic soap because its so much better than regular soap and the reason people didn’t buy it is because they didn’t know how good it is. I didn’t even know about it and if I did, then I would buy it. I agree with the authors because it will eventually become a serious problem. It already is a problem and no one is really doing anything to fix it. This article will effect what consumers will buy because it didn’t really show that bacteriostatic soap is a lot better , so consumers will keep buying regular soap. This new finding would affect society because if they would know about all this,theyll stop overdosing and taking drugs when not prescribed. When there are more antiobiotics they want to sell them faster and it causes people to take too much.I think the best way to educate society about bad bugs and antibacterial resistance is to put up posters in pharmacies and to show it on television,on the news and on commercials.It should say on the boxes that antiobotics come in,not take too much and not to take them if not prescribed. It should also say on soap bottles a lttle bit about triclosan. Research Papers on "Bad Bugs" - Article SummayGenetic EngineeringMarketing of Lifeboy Soap A Unilever ProductArguments for Physician-Assisted Suicide (PAS)The Effects of Illegal ImmigrationPersonal Experience with Teen PregnancyBook Review on The Autobiography of Malcolm XThe Relationship Between Delinquency and Drug UseCapital PunishmentMoral and Ethical Issues in Hiring New EmployeesThe Fifth Horseman

God essays

God essays Looking back over the twentieth century, there have been many influence people. There is only one person though, who has touch hundreds of millions of peoples that was life changing, and made those people make the most important decision of their life that would last for eternity. One man and only one man fit this prestigious profile. That man would be Billy Graham himself. He is an evangelist who speaks the word of God into the hearts of people. He said to them, go into all the world and preach the good news to all the creation (Mark 16:15). On November 7,1918 in Park Road, North Carolina, William and Morrow Graham gave birth to a baby boy named William Franklin Graham (Graham 3). William, also known as Billy for short, grew up on a huge farm. Being a child in the roaring twenties was rough. His father lost his savings, all of $4,000 in the stock market crash in 1929 (Graham 4). Being the eldest of the family, with a younger brother Melvin, and younger sister Jean, he took the role of the eldest sibling, protective and only wanting the best for his younger brother and sister. Billy had a mishap when he was a young that almost prevented him from becoming the great man he is. On accident when Billy got sick his mother went to give him some medicine and by mistake gave him a spoonful of iodine (Graham 8). If it werent for his aunt, who insisted that he drank some cream to counteract the dosage, Billy Graham would not have been here to make the huge impact on the twentieth century that he did. As Billy grew up he p layed baseball and acquired many different jobs. Besides working on the farm with his dad, and doing his chores, Billy was a milk deliveryman in the summer, and a bus boy (Graham 15). After high school Billy and a friend of his decided to go door to door and sell brushes (Graham 35). During this period, Billy realized how well he could talk to people and get their attention. H...