Multimedia learning proposes Essay

Multimedia learning proposes ways of going beyond the pure verbal messages which have been used in lectures and printed lessons for hundreds of years. Multimedia learning as Thomas Edison predicted has proved to be an effective method of teaching, has revolutionized our educational system and has supplanted the use of textbooks. Multimedia presentations are known to help learners. The newly developed multimedia technologies which incorporate simultaneous presentations of narration, images and text make the possibilities for instruction vast. Yet how should educators use these technologies to ensure that there is optimal learning? The answer is that the multimedia messages should be designed in the best way using the eight principles for multimedia design as a guideline. Background to the multimedia principles: Mayer is known for his research in the field of cognitive theory. According to Mayer, a multimedia instructional message is a presentation which involves words (such as spoken or written text) and pictures (such as animation, video, illustrations, and photographs) in which the goal is to promote learning. Mayer links cognitive learning theory to multimedia design issues, validating three theory-based assumptions about how people learn from words and pictures: the (1) dual channel assumption which is based upon the theory that pictures are seen by eyes and are processed as pictorial representations in the visual-pictorial channel. Spoken words on the other hand enter through ears and are processed in the other channel of human cognition, the auditory-verbal channel. (2) Limited capacity assumption is demonstrated by auditory- verbal overload. Because each channel in the human cognitive system has a limited capacity for holding and manipulating knowledge, presenting too many visuals and a lot of sounds at the same time causes the auditory-visual channel to become overloaded. And the (3) Active processing assumption implies that optimal learning occurs when learners engage in active processing within the channels which include relevant words and pictures organized into coherent pictorial and verbal models and integrated with each other and other knowledge. The discovery of the eight principles of multimedia design was a result of Mayer’s research. Each principle was based on the cognitive theory and was supported by the finding of the research. The multimedia principles discussed with good and bad practice examples: These eight principles are explained as follows in more detail, along with their applications. Multimedia Principle: This principle states that carefully and selectively chosen words and pictures enhance a learner’s understanding of an explanation better than words alone. Mayer tells us that deeper understanding occurs because students mentally connect pictorial and verbal representations of the explanation. A study was conducted in which students viewed a narrated animation about pumps or brakes or simply listened to a narration; the students who viewed the narrated animation scored substantially higher. There are numerous examples of the multimedia principle. Desktop publishing programs and the illustrative capabilities of Microsoft Word and PowerPoint adding pictures to a multimedia presentation has become relatively easy. A good practice example would be to use an animation of how an earthquake occurs to support the textual and/or verbal description: â€Å"when the frictional stress of gliding plate boundaries goes beyond a certain value and causes a failure at a fault line, which results in a violent dislocation of the Earth’s crust. At this point, elastic strain energy is released causing elastic waves to be radiated, leading to an earthquake. † The goal of this principle is best achieved when graphics used are meaningful and illustrative in juxtaposition with text. Images which convey meaning, not simply multitudes of clip art images with no instructional purpose. It would be bad practice heaps of pictures which show destructions caused by earthquakes are used when explaining how earthquakes occur. It would actually be a hindrance in the process of learning as it would take focus off the topic and instead bring the costs of the earthquake into discussion. A good use of this principle would be when pictures and animations are used for presenting instructional content where there are used as lesson interfaces and not for any decorative purpose. Contiguity Principle: The contiguity principle examines how words and pictures should be coordinated in multimedia presentations. This principle states that there is more effective learning when the narration and animation are presented simultaneously rather than successively. Also, words and associative pictures should be close each other and presented at the same time so that when the narration or words describes a particular process or action, the animation or picture shows it at the same time. A good practice example of the contiguity principle would be showing a car assembly procedure where narration and video are presented simultaneously. Students would learn better when the two things are coordinated than otherwise. It would be bad practice if the entire textual description or narration of the car assembly procedure which has 23 stages is presented first, prior to the animation or when the animation is played prior to the verbal description. A good idea is to display the narration and animation in close time proximity so that when words describe the action, the visual depicts the same action at the same time. This will make it more likely for the learner to build mental connections linking the verbal and visual representations. Modality Principle: This principle states that students learn more deeply and effectively when words are presented as narration rather than on-screen text. Using animation and text is a method most people use when designing PowerPoint presentations. According to Mayer when both pictures and words are used are displayed in multimedia, only the visual channel is utilized and it easily becomes overloaded. A good idea therefore is to use both processing channels; the visual/pictorial channel and the auditory/verbal channel. When the narration presented is auditory, it is processed by the auditory channel allowing the visual channel the resources to process the graphical content without it becoming overloaded. A good practice example of this principle would be to present an animation of how a bicycle tire pump works together with the narration of the explanation. Presenting some information in visual mode and some in auditory mode will expand working memory capacity and reduce excessive cognitive load. It would not be a good idea to play the narration after or before the animation. Redundancy Principle: This principle states that students learn far better from multimedia presentations consisting of animation and narration than from animation, narration, and text. The redundancy principle rejects the idea of presenting duplicate instructions in different forms. Unless it is necessary, presenting the same information both in narration and on-screen text hinders the process of learning rather than facilitating it. Some people think presenting the same information in multiple forms is safe and at best advantageous. However we must understand the architecture of human cognition. When dealing with new and technical instruction, working memory is very limited and presenting the same information in narration and on-screen text will mean that not all information will be processed. A good practice of this principle would be when a lecturer uses presentations to deliver his lectures. He can narrate the instructions while his presentations present animation and pictures. It would not be good practice if the lecturer has text heavy-slides and yet continues to try to maintain the attention of the audience. This redundancy causes the learners or audience to become wrapped up in either the verbal presentation or the textual material and miss the other. Even worse the learner may decide to not pay attention at all when he is being bombarded with so much information. Coherence Principle: This principle states that students learn better from multimedia presentations when irrelevant material is excluded rather than integrated. Irrelevant words and pictures, interesting but irrelevant sounds and unnecessary words huts the student’s learning process. Learners throughout the multimedia presentation try to make sense of the material by building a coherent mental representation and any irrelevant information that comes out of nowhere is likely to disturb the process. A good practice example of this principle would be that when discussing the issue of widespread public display of affection and whether there should be laws imposed against it. It would be a good idea to stick to the topic and present points for or against the argument and the reach a conclusion. If however a person is tempted to spice up the presentation, it would be bad practice. Including dramatic stories of politicians engaged in the art of public affection and video clips where couples are seen showing affection in public would be highly entertaining but off topic and the audience might get upset if they do not make out anything from the four hour long presentation. It would also not be a good idea to include any other non instructional material such as unrelated clip arts, background music, sound clips or detailed textual descriptions. Personalization Principle: The personalization principle states that students learn better when words are presented in a conversational style than in a formal or expository style. Students or audience responds better when a more personalized tone is used in narration. A good example of this principle is when explaining how a human respiratory system works, there is a use of ‘your’ instead of ‘the’. For example instead of saying † During inhaling the diaphragm move down creating more space for the lungs† we say † When you inhale, your diaphragm moves down creating more space for your lungs†. Also when addressing community issues using multimedia presentations it is always a good idea to use ‘your community’ rather than ‘the community’. It will help the learners see that it is his community that has issue and not some other community and will provoke him to take action or become a responsible member of the community. Segmenting principle: This principle states that lessons should be divided into manageable segments. When an unfamiliar learner is introduced to a continuous presentation with a lot of inter related concepts which are complex it is easy for the cognitive system to become overloaded. A good practice of this principle would be when a lecture breaks down complex geometry problems into segments rather than present them as a single solution. This helps learners learn at their own pace. Pre-training principle: This principle suggests that people learn better from multimedia presentations when they are familiar with the names and idea of the core concepts. There is a better transfer of knowledge when the audience is trained on the components the presentation would use preceding a narrated animation. A good practice of this example is when explaining the phenomenon of global warming to children, it would work better when terminologies such as green house gases are explained and smaller concepts are built before proceeding to the presentation. This will help the children integrate their built in concepts into understanding the main problem of global warming. It is not good practice to start with the subject before providing the learners with an appropriate start up knowledge neither would it be a good idea to stop in the middle of the lecture to explain some terminology or a hidden concept. Conclusion: Multimedia enhances learning but for learning to be optimal, there should be effective use of animation, narration and on-screen test in multimedia presentations. Techniques to increase working memory by reducing cognitive load have been proposed by many theorists. These techniques improve instructional design, learning efficiency, and effectiveness. Richard E. Mayer and his Cognitive Theory of Multimedia Learning has highlighted well-established principles of multimedia learning which the research continues to support, including (a) the multimedia principle, (b) the contiguity principle, (d) the modality principle, (e) the redundancy principle, and (f) the coherence principle and (e) the personalization principle. These principles aid users to design effective multimedia presentations. References Clark, R. C. & Mayer, R. E. (2003). e- Learning and the science of instruction: Proven guidelines for consumers and designers of multimedia learning. San Francisco: Jossey-Bass/Pfeiffer.

International Portfolio Diversification: World Oil Economy

The prospect of innovating new technology is not only very economical but it also serves as an operational assistance to solve the forthcoming oil crises. With the help of this new technology, by 2015, we will be capable of earning about $10 billion annually. Under the current scenario, many people have predicted that the oil crises will prevail in the future. Daniel Yergin expressing his concern said that â€Å"people seem to have forgotten that oil prices like other commodities keep fluctuating and these can go up again†. Robert Dole pointed out, â€Å"in the future security of world's oil and gas supplies will be a vital interest of the US and other Powers†. (Romm and Curtis, 1996) The consequences of the rising trade deficit on the security of our oil resources have also been underlined by Alan Greenspan; the Chairman of the Federal Reserve bureau. Department of the Energy Information Administration (EIA) states that the daily consumption of oil by 2010 will rise to 20 million barrels. The International Energy Agency debating increase in population, urbanization and industrialization commented that the world's population specifically of Asia and Latin America will increase about 50% by 2020. (Romm and Curtis, 1996) It means more villagers will move to city resulting in increase in the consumption of energy and oil and the decrease in the cultivating area as oil the fundamental unit of urbanization. An analysis done by the national laboratories of the Energy Department shows that â€Å"the per capita energy consumption of china and India’s urban population can rise to 45% in the coming years†. Consequently, their daily consumption of oil will rise up to 119 million barrels. This is twice the global oil consumption today. (Romm and Curtis, 1996) Under the worldwide economic depression the global energy demand of oil is expected to rise high. According EIA, 80% of this demand will be fulfilled by the Persian Gulf. It means that within 10-15 years the export market share of Gulf countries will increase up to 67% of its current share. Moreover, EIA predicts with this increase in the demand of oil by 2010, the oil prices will rise up to $24 a barrel; causing a 75% increase in the export market. Besides, other countries have initiated a 15% and 10% increase in their oil production and in their proven reserves respectively. Unfortunately their reserves durability has fallen to 18-17 years. Unlike these countries OPEC’s attempt to raise its production and proven reserves to 20% and 75% will raise its productivity for ninety years. On the whole is seems that the economy and security of the United State is in the hand of OPEC countries, due to its increased dependence on oil. (Romm and Curtis, 1996) In the coming decade, the US is expected to import about 60% of its oil, of which one third will be imported from Persian Gulf this will raise its trade deficit in oil to $100 billion yearly. This is a great and persistent setback to its economy. In past decades the oil import has increased vulnerability to raised oil price increase. This is always fallowed by economic recession. Hence, by 2010 the oil revenue of the Persian Gulf nations is likely to increase to $250 billion from its current price of $90 billion annually. it means that the wealth of Persian Gulf will raise to $1. 5 billion in the next decade. This scenario is of great concern as it will bring heavy weaponry, influence and mischief in the troubled region of gulf. This may Increase military and technical expertise for Russia. (Romm and Curtis, 1996) Noticeably, in the future economic recession the competitors of US will be the Asian countries with their growing consumption of oil rather than the NATO countries. Whose measures to consume limited oil are of are helpful to US in the current a future scenarios. (Romm and Curtis, 1996) Presently, â€Å"International Departments of Energy (IDE)† are trying to explore and extract oil from countries other than Gulf e. . certain reserves of oil have been explored form Soviet Union. Hence, to facilitate these stances Department of Energy (DOE) is encouraging the privatization of many oil companies; particularly, those situated in Mexico and Latin America. In fact DOE is spending $10 million annually to develop advance oil field technologies. This will be helpful to reduce the cost of finding and extracting oil. EIA believes that US import of crude oil will reach to 10 million barrels within 15 years; even after maintaining a decline in the domestic oil usage. (Romm and Curtis, 1996) To reduce oil consumptions DOE has invested ten of million of dollars in automobile sector for The development of less fuel consuming cars and trucks with internal combustion engine, electricity run cars, boifuel consuming cars, super efficient hybrid vehicle, and devices with energy storage capacity like batteries etc. it is also investing to use the wastes of crops instead of natural gas. Most experts believe that the long term replacement of oil is only the fuel cells technology. Even if oil prices decreased, DOE’s attempt to produce alternatives will be helpful in many ways. These initiatives will create jobs and will save the money otherwise invested to import foreign oil. It will help in environment protection as on using these technologies less fuel will be consumed. (Joseph J. Romm and Charles B. Curtis, 1996) David and Crucini were conducted to analysis the variability among trade and Sudden movements of oil prices. For this reason we studied the correction terms of trade and other variable. Three oil producing countries – two industrial and on non industrial- were taken as sample. And a correlation was conducted among these industrial and non industrial oil producers. The results of the study explain the changes in oil production tends to affect the industrial productivity and ultimately to the trade. If production increases trade will also increase and with the decline of production trade will also decrease. (Backus, & Crucini, 2000) This also assists in finding the â€Å"correlation between the terms of trade and output generated†. The results show that there is a positive correlation between the trade terms and the increase in productivity. Increase in trade is directly proportional to the increase in productivity; if trade increase productivity will also increase. Besides, there is a negative correlation between the terms of trade and oil price hike. Trade decreases with the increase in oil prices and increase with the increase in oil prices. (Backus, & Crucini, 2000) The mechanism explained above also affects the trade and productivity of the items produced in the country. If there is an increase in the products domestically produces and traded, there prices will decrease. But if there is a decline in the production and trade of these products, an increase in their prices will be viewed. Therefore, If the oil supply is disrupted it will reduce the productivity and trade ability of an industrialized country. It is due to the fact that most of non oil producer industrialized countries import oil for use in their industries. So if there is a shortage of oil it will cause decrease in the products produced by the industry. In other words one can say that the oil prices are inversely related to the trade and productivity of a country. Therefore if there is an increase in the prices of oil it will badly affect the economy thus causing economic recession. (Backus & Crucini, 2000) The behavior of international oil prices in the postwar economy can be understood through the economic recession of 1970's and 1980's. When countries have to experience sudden increase and decrease in the oil prices. Moreover, between 1973-1986 oil prices underwent a noticeable changes in different directions: output vitality increased in UK, US Italy and France. However a noticeable decrease in the output was observed in Germany and Japan. Similarly an increase in the consumption of oil was perceived in Italy, Japan, United Kingdom and United States while declined in consumption of oil was by Germany and Japan.. Notwithstanding, this increase in the trade of five countries, the correlation of the exports was negative. The results showed that the trade prices are short lived and synchronized by the changes in the relative oil prices. (Backus & Crucini, 2000) the non-oil producer countries have large share of fuel in trade for example the Japan’s share in the fuel trade market was 22. 2%. However after first economic recession and oil price shock in the mid 1970's a change in fuel share was viewed: France, Germany, Italy and Japan all faced double deficit in their fuel trade. The cause of some of this reversal of trade deficit was the either collapse of oil prices in mid-1980's or energy conservation. However positive changes were viewed in the fuel share of Australia and Canada while US emerged as a net exporter of fuel through North Sea oil production. On the whole it was proved that oil prices have a cyclical influence upon the terms of trade. Backus & Crucini, 2000) Moreover term of trade of the smaller countries is more volatile as compared larger countries. Sudden increase in the prices of oil reduces the productivity and trade, simultaneously. On the whole this study suggests that there is an unstable relationship between relative price and quantities. Especially when increase in oil prices act differently over time. Hence the terms of, output, and the trade ba lance can be maintained and kept stagnant by controlling the source of oil price shocks. (Backus & Crucini, 2000) A crude oil reservoir contains crude oil extracted using primary, secondary, improved, enhanced, or tertiary method. Created liquids and those extracted from mined deposit are not crude oil. There is no doubt that crude oil reservoirs are in vast quantity yet the fact remains that they are finite. In fact most of these reservoirs are almost fully explored or are being explored. Petroleum production has been culminated with the increase in the demand. Currently demand for the crude oil in the developing countries like China, India, South America has risen up to 2%. (Wood et al, 2000) These countries face increase in the growth of crude oil demand due to increased consumer demand. Crude oil is mostly consumed for transportation and in internal combustion engines. Neither developing country other than China and India demanded high crude oil either due to political or economic reasons. However many economists and industry professionals predicted that over past two decades world crude oil production will increase with increasing frequency. And this increase will cause noticeable impacts on the world oil prices, lifestyle of people, US economy etc. Wood et al, 2000) In April 200, the United States Geological Survey (USGS) marketed the results of their most detailed and modern study. This 5year study was conducted by the geoscientists to compute and analyze the resources of crude oil and natural gas in the world. Basically this study was conducted by USGS â€Å"to provide impartial, scientifically based, societal relevant petroleum resource information essential to th e economic and strategic security of the United States. † The results of this study were used by EIA to analyze world oil supply in the long run. Hence, we can say that the EIA's analysis is based on historical and geographically derived facts rather than mere assumptions and estimations. (Wood et al, 2000) if the resource base is large it will reach peak of its production at a later stage as compared to a smaller one. Moreover, if following the USGS analysis crude oil continue to produce at 2% Growth rate than and if the production starts declining than till 2037 the production of the world’s crude oil will raise up to 53. 2 billion barrel annually. However, depending upon the demand it is also likely that by 2112 and 2021 the production of the crude oil may rise to 24. 6 and 48. 5 billion barrel (Wood, Long, Morehouse, 2000) the growing demand of the crude oil can only be reduced trough the invention of new technology e. g. hybrid powered automobiles and substitution of the source of energy e. g. Hydrogen- fed cell. The increase in unconventional sources of production (tar sands and very heavy oil) also depends upon the rate of technological advancement. This type of production is very economic and successfully working in Canada. However from this study we estimate that oil will peak in the middle of 21st century which means new energy doesn’t have the large time required to penetrate the market. Therefore these results does not justify both the supply and demand of the research (Woo et al, 2000) Since World War II about US recessions were fallowed by sudden increase in oil prices. Although, it doesn’t make any difference, in analyzing the outcome of oil price shock, economic decisions are more concerned with real oil prices rather than nominal oil prices. However most of the oil shocks are based upon the nominal prices as their magnitude is larger than the overall. Initially the nominal prices stay stagnant and change over time. The difference and nominal is that the former are the outcome of the change in internal economic inflation and have external statistical representation. There form many researchers use nominal oil prices as an explanatory variable to explain oil price economy. (Hamilton, 2005) In an economy dollar have a fairly small share i. e. in 2000 US consumed about 7. billion barrels of oil purchased at a price of $30 a barrel. This shows that dollar share is 2. 2% of the $9. 8 trillion GDP of US. However the nominal GDP of US has risen to 3. 8% in the past few years, after the production and supply disruptions caused by five oil price shocks and economic recessions. (Hamilton, 2005) The decrease in the quantity of oil supplied is actually synchronized by the sudden increase in the fuel prices. The oil shocks contributio n of economic downturns should be attributed with changes caused by other factors and capitalization rate. Theoretically, Increase oil prices will cause a decrease in capital and labor allocation. However, in reality an oil price cause increase in the output (allocating of labor and capital). (Hamilton, 2005) The economic regression of 1949-80 predicted a slow GDP growth of about 2. 9% annually after an oil price hike of 10%. However, 1949-2005 regression predicted only 0. 7% slow GDP growth. This is resulted through the use of less fuel efficient cars. Noticeably net oil prices have shown an increase in the crude oil prices to about 20%. In 2004 oil prices showed an 18% increase while world production showed an increase of 21%. Similarly 2005 viewed 0. 2% increase in production and 21% increase in oil prices. These figures show that increased demand of oil contributed to the Increase of oil prices during the last years. (Hamilton, 2005) The recession from the oil prices increase suggests that there is some kind of relation between oil prices and productivity. The oil price shock is governed by factor share argument and affects the economy through the disruption caused by consumer and firm’s investment on other goods. Oil prices also affect the inflation rate governed by monetary policy on long term basis. (Hamilton, 2005) Today, we are so heavily dependent on oil that 90% of our transport, 95% of all good and food products requires oil. In short, today the world is consuming 80 million oil daily and 29 billion barrels of oil yearly. Unfortunately these figures of oil consumption are rapidly rising. According to the US government assumption by 2025 this demand of oil will increase to about 120 million barrel daily and 43 billion barrels yearly. (Leggett, 2006) America only consumes quarter of global current demand for oil. This is due to the decrease in domestic oil production and increase in demand during last 35 years. These figures show that America’s share of oil import will increase over time. Today, of the 20 million barrels consumed by America about 15 million are imported from the Middle East. The US can cut its import of 5 million barrel by increasing the fuel consumption capacity to miles per gallon of its automobile but instead it has allowed General Motors to build automobiles. Similarly, the US has increased the Share of Spots Utility vehicles to 24 % by 24%. (Jones et al, 2004) Consequently due to these lavish expenditure US vehicles fuel consumption ability reduce to 2. 44 mile per gallon in 2001 as compared to other countries whose cars have the capacity of moving 60 miles per gallon. (Jeremy Leggett, 2006)On the whole the fact remains that oil is finite thing. Different people have different views in this regard some think that only about 2 trillion barrels of oil is left to be used and discovered while other think that this amount is at most 1 trillion. The former suggests that oil production will expectedly end till 2030 which means there is enough time to go for alternatives. They also believe that 1. Saudi Arabia have achieved its peak of pumping and couldn’t serve as an alternative during recession 2. the giant oil field have all been exploited and none is left behind however in later case it seems the recession time will come soon and there is less time to innovate is a factor with help of which oil price shock can change macroeconomics. Reallocation of labor after the recession period is really helpful to reduce the effects of oil price shocks. Under a long lasting oil price rice reduces the energy usage, capital and labor supply which causes a reduction in the investment sector and capital stock market decline as well. Janis suggested that under increased oil prices wages are â€Å"potentially significant† even with low oil price and productivity. (Jones et al, 2004) Therefore, it seems that reallocation of capital and revision of investment plans is necessary to oil price shock effects on the macroeconomics. Oil price shock has a double effect on the destruction and creation of jobs in all sectors. In the case of positive oil price shocks sector responds ten times positively than in the negative shock situations. Increase in petroleum products cause an increase in the wages of skilled workers but 3%- 4% decrease in real wages of workers. In other wards one can say that oil price increases have a negative impact in the short run but in long run it has a positive. With the increase in oil prices unemployment also. (Jones et al, 2004) Interest rates have strongly asymmetric response towards positive and negative oil price shock in short run and a moderately asymmetric response to long run. It means that the oil price works primarily through GDP mechanism and affect the interest rates with its fluctuating prices. Hence, if the prices of petroleum increase the crude oil prices will also increases but if the prices petroleum decreases the price of the crude oil will also decrease. Jones, Leiby, and Paik suggested that â€Å"In case of crude oil relation with GDP asymmetry is the speed of response to the price in price GDP case asymmetry is the magnitude of the price hike†. Some experts say that the oil price of the 1970s was the real cause of the economic recession. Both energy prices other words it can also be said that the oil price shocks primarily through employment, GDP and interest rate. (Jones et al, 2004) There is a little doubt about the impact of the monetary policy’s response to the hike in the oil price. However, DOE did reached a conclusion that during 197-1990 episodes of recession that some of the GDP reduction was caused by a deficiency in the monetary policy and was outcome of oil price hike. This means that an alternative monetary policy could have averted recession of 1970s. One can say that during economic recessions oil prices indirectly act on the GDP through the monetary policy. The prices shock in the OPEC is actually the result of depressed growth but due to the increased demand of the oil. (Jones et al, 2004) After 1980s recession OPEC its ability to keep the prices of oil stable this type of change may be cause due to Oil prices never affected GDP. It was viewed to be so due to the lack of lengthy data to be studied. Since the World War II the pricing of world oil market was not as linear and simple as was observed. So when the flexibility in observing thing emerged the observers began to understand the price signal. (Jones et al, 2004) The changes in the stock market, which are caused by increase in economic activity is crucial for economic activity. Both present and future impacts of oil prices on the stock price are notice worthy and helpful to determine the future scenarios. The relationship between the stock market and the oil prices is reflected through the effects of stock market on cash flows. In other wards the cash flow of oil prices have a positive or negative impact on the stock market. 0% of the oil price shocks are responsible for the ups and downs in the business circle while only 16% is responsible for the fluctuations in the U. S. (Jones et al, 2004) The above discussion proves that during an economic recession GDP-oil relationship is mostly observed. This relationship can not be either avoided by the alternative monetary. Mover over after World War II the oil prices have been p roved to be non reliable and constantly fluctuating factors. Empirical research also shows that reallocation of 11% manufacturing labor occur after oil price hike. Hence, it seems that from a macroeconomic perspective all the price movements are different. It is necessary to develop policies helpful to deal with the oil price shocks. (Jones et al, 2004) To forecast oil supply a low cost approach can be helpful. It will help to determine the nature of the bias and recurring errors. This type of approach is necessary to explain the difficulties involved in making petroleum supply forecasting at a macroeconomic level. (Lynch, 2002) Forecasting of oil prices is in practice since late 1970s e. g. Lynch predicted that the by 2000 Gulf’s boom in oil production will decline to $13-18. per barrel. But this forecast was base upon the economic recession of 1970. Despite being shifting from the hands of one company to the other, oil prices have remained constant to $14 per barrel throughout its history. But this stability of the prices changed in 1970s, when it had to face price hikes due to disruptions caused by supply and demand. (Lynch, 2002) The OPEC decision to introduce a long term price raisin path supported the expectations of having a 2-4% price growth. This step was so mush supported that for many years’ people demanded these types of initiations. For a long time there is form cast that oil prices will remain flat. However, it seems that the price hike of 2000 will alter it. Since 1980s the researches related to oil production and supply has become pessimistic which a common approach before 1979; when most of the studies focused upon scarcity of recourse, and need for new discoveries outside the Middle East. The production of world crude oil has changed over time. In a study conducted for non-OPEC forecasts that that most of the errors and bias faces were same leading to the peak in production. Lynch, 2002) The development of a new technology for the extraction of oil does have many positive consequences, who really demand appreciation. Today with the help of technology many discovered but unutilized oil reserves have been drilled and are being marketed. For instance, oil reserves of North Sea were abandon due lack of heavy expenses in 1970s. Today these reserves have been discovered with the help of technology at a very low c ost. According to a study 1998 with the use of modern technology the oil reserves of US rose to about 24000 tones. This means that with the help of modern technology US underwent a remarkably 16% increase in its reserve. (Lynch, 2002) Notwithstanding this increase it is also true that these reserves are finite and will tend to decrease over time. Lynch conducted a study in this field and found that the production oil reserve will undergo a 10-20% decrease annually since its drilling and extracting starts. Even between Gulf countries the productivity level is different and depends upon the location. For instance, Drilling in Saudi Arabia will bring more revenues as compared to drilling in Oman. However, it is also a fact that most of the countries try to hide the actual situation and capacity of their oil reserves e. g. according to the report of Canadian oil experts the oil reserves of Canada remained same during 1999 and 2000. (Lynch, 2002) Many countries are reluctant to import oil in heavy quantity due to heavy tax rates. As most of the oil producing countries demand high taxes on the export of their products. In such cases producing countries raise the prices which then seriously affect the global economy. However, since the formation of OPEC oil prices are continuously regulated and controlled. (Lynch, 2002) The world oil production is regulated under Saudi Arabia and OPEC members since 1970s. After the oil shocks of 173 the new sources of oil supply have been discovered: Mexico, North Sea, China, Alaska, etc. Besides, Russia is the third largest producer and the second largest exporter of oil. Today, OPEC has a 40% share of the world oil supply which is sufficient to exert power in marinating and fluctuating world oil prices. The oil usage of US has been decreased since1980s economic recession. In 2000, after sudden 16% increase of oil prices US oil production declined to 12% As a result of these different trends in consumption. This means now the US more rely on imports than before. However, the US exports the domestically produced oil at the globally set prices. After the terrorist attacks in US oil prices were reduces bringing great setbacks to the world economy. This happened because of the ban imposed on air travel. (Perry, 2001) The Middle East does not seem to be affected by terrorists, yet its geographical locality and vulnerability to the terrorists can not be ignored. Currently both increase and decrease in the oil prices is viewed. (Perry, 2001) The recent oil forecasts claim that next economic recession will be caused by terrorist attacks and the prospect of authorizing limited airlines theses acts are likely to reduce the world oil demand which will ultimately lead to global recession. The OPEC could avoid this recession by introducing production and. Saudi Arabia has initiated by applying a production and price cut to its oil reserves: its oil price has reduced to $4 a barrel in October 2001 immediately after terrorist attack on the US. The oil prices decline of 1980s and 1990s will be very much helpful in the current situation: by assisting airline industry, slowing down the inflation rates, and will assist inpursuing expansionary monetary policy. (Perry, 2001) The two recessions fallowed by the world war were greatly associated with the disruptions in the oil: †¢ During the Arab-Israel war of 1974. Arab countries announces major cut in the production on oil and prohibited shipments to the supporters of Israel. The OPEC raised the crude oil price to $12 from $3. The 1975 economic recession faced both higher oil prices and depressed the oil demand. It was the time when OPEC had to cut production to maintain high oil prices. But this prospect negatively as with the fear of shortage of supplies certain precautions were adopted. (Perry, 2001) It was the time when US felt need and created the strategic petroleum reserve similar to those established in industrial countries. In addition, also applied buying constrain ts on consumer and imposed moderate price control measures on the domestic oil producers and refiners. (Perry, 2001) After the recessions of 1974-75 and the Iran-Iraq war of 1980 the high the OPEC prices shocked the world. OPEC raised its price to $30 a barrel exceeding to $35 a barrel. The imposition of greatly high taxes on petroleum products caused high inflation. Ultimately, it will increase the already rocketing food prices. This was the time when more intense monetary policy was in demand. During the 1979-1980 recession, the increase in production was needed to stabilize the market. Saudi Arabia was the first to raise it production up to 8. 6 million barrels a day in 1979 to 10. million barrel in 1980 and 1981. In 1983 and 1985 Saudi again acted and applied a production cut to 5. 0 million barrel and 3. 6 million barrel respectively. Though this worked but during the Arab war OPEC proves its ability to stabilize prizes by raising production to 5. 5 million per barrel, of which Saudi share was 3. 1 million. (Perry, 2001) Today, most of the economic forecasts suggest that the terrorist attacks if not controlled will lead to another economic recession. As terror is attacks will affect and reduce consumer and business spending. Today the major problem is not the rocketing oil prices but the security of oil reserves. Most of which are will the politically troubled and unstable region of the OAPEC and the OPEC. Today, the most important fear of all oil consuming country is to save the oil reserves from going in the hands of extremists. As bin Ladin has claimed to charge $144 a barrel after conquering the reserves of oil. (Perry, 2001) In the case of reducing the oil supply it will badly affect the economy of the US and the world. The good thing is that if new oil crises arise it will result in the demand for the reduction in foreign oil production. Notwithstanding, reality will never change that it is impossible to reduce dependence on foreign oil products. Today, the 40% of the US energy demand is fulfilled by the petroleum. The domestic oil reserves of the US have already diminished therefore it will definitely have to import foreign oil to fulfill its needs. Under the today’s scenario, the US consumption of oil will only partially change that also bringing a decline to its industrial economies. (Perry, 2001) The oil price crises emanates from the higher prices produced from the Middle East even if it is not involved in it. The individual nation producer cannot set their own prices they do have to fallow the prices set by the international market. Otherwise, the world will face great inefficiencies and it would become to fulfill the worldly oil need. Economy will be greatly exposed to the effects of the reduced oil. (Perry, 2001) Economizing oil prices are more helpful in the long run to changing capital stock and usage of less energy but in the short run there are scarcely efficient methods to reduce the effect of high prices it is for this reason that the demand of oil in the short run is more elastic. This means that 1% cut in the short run will cause 20% of the increase in prices. The magnitude of the impacts oil price rise in the short run depends upon the monetary policies and inflation. This shows that high prices will lead to high inflation and this will greatly affect the economy as the price of oil supply will be transferred to oil producers rather than oil suppliers. However, it is also clear that these years economy has seen less inflation as compared to the past. (Perry, 2001)

Qantas Essay

Qantas Airways is an Australian based airline and is a subset of the Qantas Group. It is a public-listed company in the ASX (Australian Securities Exchange). The purpose of this research is to provide information of the Qantas Group focusing on its profitability, efficiency and liquidity for the last 3 years. This research paper also examines the financial analysis and provides other relevant information to support in the evaluation of the company. 1 Company Profile 1.1 History Qantas is the world’s second oldest airline. It was founded in the Queensland outback in 1920 and has been in continuous operation since that date. Qantas is Australia’s largest domestic and international airline and is recognised as one of the world’s leading long distance carriers. The name comes from the initial letters of the words in the original registered title – Queensland and Northern Territory Aerial Services Limited. 1.2 Qantas Group Strategy Safety remains Qantas’ first operational priority and they are committed to maintaining the position as the leading Australian domestic carrier and one of the world’s premier sustainable long-haul airlines through the dual airline brands – Qantas and Jetstar. Qantas aim to maintain customer loyalty by delivering exceptional experiences through these dual brands, in conjunction with Qantas Frequent Flyer. The operating strategy is complimented with a prudent approach to capital management as they seek to deliver sustainable, long terms return to the shareholders. The Qantas Group strategic priorities are illustrated below. 4 1.3 Qantas Overview Qantas is Australia’s largest full service airline carrying 28 million passengers in 2011/2013 on 5,050 flights per week in Australia, New Zealand, Asia, North and South America, Africa and Europe. It is a founding member of the oneworld alliance. Qantas is a single integrated airlines providing airline transportation through its two Qantas brands – Qantas and QantasLink Main Markets Qantas’ main markets are domestic and international traffic to and from Australia. Qantas, a wholly-owned group of subsidiaries including QantasLink and Network Aviation, services 57 metropolitan and regional regular passenger transport destinations across Australia and Port Moresby in Papua New Guinea, as well as 19 dedicated fly-in-fly-out charter destinations. 2011/2012 Passenger Distribution Passenger Revenue Australia domestic 78% 51% International 22% 49% Customers Qantas carries business and leisure passengers Product Qantas offers passengers a premium network product on its extensive domestic and international network and through it oneworld membership, accessing 24 bilateral codeshare agreements (excluding Jetstar and Jetstar Asia with whom Qantas also has codeshare agreements), over 870 destination and 550 lounges. Passengers also have the opportunity to earn and redeem frequent flyer points across its global network. Qantas is focused on both business and leisure travellers by offering a one or two class product on domestic routes and a two, three or four class product for international services. 5 1.4 Jetstar Overview Jetstar commences operations in May 2004. It is the Qantas Group’s low fares airline and the largest low cost carrier in the Asia Pacific region. Jetstar comprises of Jetstar Domestic, Jetstar International and holdings in Singapore-based Jetstar Asia, Vietnam-based Jetstar Pacific and Jetstar Japan. In 2011/2012, its operations carried 18.7 million passengers to over  50 destinations in Australia, New Zealand, Asia and the Asia Pacific. Jetstar also recently announced its intention to invest in a new airline, Jetstar Hong Kong, with China Eastern Airlines in 2013. Main Markets Jetstar’s main markets are domestic and international traffic to and from Australia. Pan-Asian expansion has strengthened through Jetstar Asia, Jetstar Pacific and Jetstar Japan. New Zealand operations encompass both trans-Tasman and domestic New Zealand markets. 2011/2012 Passenger Distribution Passenger Revenue Australia domestic 57% 51% International 43% 49% Customers Jetstar focused on providing consistently low fares to predominantly leisure travellers. Product Jetstar offers domestic and international passengers a value based product with the flexibility to select additional operations in relation to seating, entertainment, catering, baggage and premium seating on long haul. Jetstar’s continual focus on leading online technology has enabled more innovative ways to book, check-in and board. 6 1.5 Fleet Qantas Group operates fleets comprises of Boeing 737-800, A330-200, A380-800 Boeing 787 Dreamliner, Bombardier Q400 and Boeing 717. Over the next 10 years, the Qantas Group has committed capital investment worth US$23 billion in more fuel efficient, next generation aircrafts such as A380-800, Boeing 787 Dreamliner and Airbus A320 neo. 1.6 Corporate and Social Responsibilities The Qantas Foundation was established as a charitable trust in 2008. It forms part of the Qantas Group’s commitment to operating in a sustainable and socially responsible manner. The Qantas Foundation focus on two key areas: ï‚ § Initiative that provide an immediate experience for those in need (Changing lives) ï‚ § Experiences and opportunities that empower the next generation of Australians to make a difference in community (Empowering change) To deliver this vision, the Qantas Group leverage off the diverse resources of the  Qantas Group – from their employees, diverse network of suppliers and partnerships, and the use of their own airline. Another initiative that the Qantas Group took on is aiming for a world class performance by protecting the environment for the generations. They aim to reduce their carbon footprint through several proven measures such as: ï‚ § Aircraft weight reduction initiatives ï‚ § Efficient ground power units in lieu of jet fuel driven auxiliary power units ï‚ § Using GPS-based navigation technology to improve operational efficiency ï‚ § Investing in a fuel efficient fleet such as Airbus A380 and Boeing 787 ï‚ § Facilitating a sustainable aviation fuel industry in Australia On ground, together with their partners, innovative projects and partnerships were set to achieve this goal. One example is the Clean Up Australia campaign; started since 1996, the Qantas Group have been a key corporate partner for the Clean Up Australia Foundation. Key Successes 1. Maintained a downward trend on electricity, water and waste-to-landfill consumption since 2006, despite operational growth. 2. Reduced environment impact between 2005 and 2011: Reduced electricity consumption by 8% Reduced water consumption by 19% Reduced waste-to-landfill by 21% 3. Maintained a downward trend on jet fuel emission intensity 7 2. Key Strategies The Qantas Group has a broad portfolio and a clearly defined strategy with the following core goals: ï‚ § Build on the Group’s domestic businesses through a clear focus on the customer ï‚ § Strengthened Jetstar’s presence across Asia to capture the full benefits of the region’s low-cost leisure travel boom. ï‚ § Continue to expand Qantas Frequent Flyer by adding new partners and increasing ways for members to earn and spend points. Some of the changes seen were introducing a new tablet-based in-flight entertainment system called Q Streaming that received outstanding feedback from passengers. New order for 10 Fokker 100 aircraft were placed to extend Qantas’ reach into Western Australia’s mining centres as part of the Group’s fly-in-fly-out strategy. Jetstar’s focus in the domestic market remained on building up  capacity on core leisure routes with modern fleet such as the A320 aircraft, adding almost 16,000 extra seats duri ng the year. Qantas Group also expanded alliance with American airlines, attracting consumers from the America regions. 8 2.1 SWOT Analysis on the Qantas Group STRENGTH Strong partnership with other alliance through its oneworld membership; accessing 24 bilateral codeshare agreements over 870 destination and 550 lounges. Passengers also have the opportunity to earn and redeem frequent flyer points across its global network which attracts consumer to choose the Qantas Airways over other airlines. Operate and fly in to many destinations such as Australia (Domestic), New Zealand, Asia, North and South America, Africa and Europe making Qantas Airways the ideal airline to consumers. WEAKNESS Qantas do not have many direct routes and depend heavily on its other airline partners. For example to get across to destinations such as Europe, the Middle East and North Africa, consumers have to transit at Dubai and change airlines to the Emirates to get to their final destination. This turns away consumers who prefer to fly in direct to the country. OPPORTUNITY Qantas’ subsidiary – Jetstar announced its intention to invest in a new airline; Jetstar Hong Kong, in partnership with China Eastern Airlines this year. This expands the flying business into the Chinese market. THREAT The global fuel price increase affects the airline industry. With higher fuel prices, the airline’s operating cost increases. To compensate, airline raise ticket prices to generate more revenue which in turn, turn away consumers and force them to look at other airline that provides competitive or even lower prices. Introduction of more low cost carriers from established airlines such as Scoot, a subsidiary airline of the Singapore Airline. 9 3. Ratios 3.1 Profitability Ratio (%) Profitability ratio is used to measure a company’s ability to generate revenue in relation to sales, assets and equity (i.e. often the sum of monies invested). It also shows how effective the company is being managed to stay profitable. Some commonly used profitability ratios include return on equity, return on investment, return on total assets, gross and net profit margins and return on capital employed. Profitability ratios provide investors guidance in their assessment of the company’s financial health and performance. For example, return on investment indicates whether the company is generating enough profits for its shareholders. Net profit margin declined by 0.52% in 2012 while an increase of 0.53% occurred in 2011 as seen in Table 1. It is slightly lower than the industry averages of 1.737% by 0.377%. The decline in net profit margin may be attributed to rising fuel costs, fall in freight, tours and travel revenue. In 2012, Qantas incurred restructuring costs of AUD376 million compared to nil in 2011, which is in relation to their initiative to reduce costs and improve business in the international segment. The other ratios such as Return on assets (ROA) and return on equity also declined to 2.12% and 3.38% respectively in 2012. Profitability Year/Ratio 2010 2011 2012 Industry averages Return on total assets (ROA) 1.76% 2.28% 2.12% 2.630% Return on equity 2.88% 4.26% 3.38% 5.290% Net profit margin 1.35% 1.88% 1.36% 1.737% 10 3.2 Efficiency Efficiency ratios are used to show how well a company uses its assets and liabilities efficiently to be able to earn significant amount of profits. Examples of efficiency ratios include asset turnover, inventory turnover, receivables turnover and payables turnover. Qantas may be considered as efficient in utilizing its resources to generate revenue, with asset turnover showing an increase to 252 days in 2012 compared to 245 days in 2011. Generally the higher a company’s asset turnover, it means the assets have been used more efficiently. From table 2, the number of days taken for creditors to be paid fell to 45.41 days in 2011, however a modest increase of 1.45 days was experienced in 2012. Compared to industry averages, Qantas took a longer time to pay their creditors. On the other hand, number of days debtors took to pay was shortened by 2.09 days in 2012 while there was an improvement of 1.62 days in 2011. However the receivables turnover is a little higher at 19.83 days co mpared to industry averages of 18.45 days. Inventory turnover shows the frequency a company’s inventory is sold and replaced over a period. A high turnover indicates strong sales while a low turnover may imply poor sales and hence excess inventory. Inventory turnover fell to 9.39 days in 2012 compared to 9.72 days in 2011. However the ratio is higher than industry average of 8.52 days. Table 2 Efficiency Year/days 2010 2011 2012 Industry averages Days payable 50.43 45.41 46.86 43.90 Days receivable 23.54 21.92 19.83 18.45 Days inventory 9.19 9.72 9.39 8.52 Asset turnover 234 245 252 284.70 11 3.3 Liquidity Liquidity ratio measures the company’s ability to pay its short term liabilities when due. It is calculated by dividing cash and other liquid assets by the short term borrowings and current liabilities. This will show the number of times the short term obligations are covered by the cash and liquid assets. The short term obligations are considered fully covered and the company is in good financial health if the value is greater than 1. The higher the liquidity ratio, the higher the capability the company possesses to meet its current liabilities. Examples of liquidity ratio include current ratio and quick ratio. Current ratio for Qantas was 0.90 in 2011 and 0.77 in 2012, near industry average of 0.81. In comparison to Virgin Australia Holdings Ltd whose current ratio is 0.65 in 2011 and 2012 (See table 4), Qantas appears more stable though the values of its current ratio are less than 1 for both years. Quick ratio also known as the acid-test ratio focuses on the most liquid as sets, leaving inventory out which may be hard to turn into cash in a timely manner. In the case of Qantas, the quick ratio was 0.71 in 2012, 0.14 drop from 0.85 in 2011, while industry average is 0.75. As compared to Virgin whose quick ratio was 0.61 in 2012, the company seems to be in a stronger position to meet its short term commitments. Table 3 Liquidity Year/Ratio 2010 2011 2012 Industry averages Current ratio 0.93 0.90 0.77 0.81 Quick ratio 0.88 0.85 0.71 0.75 12 Table 4 – Growth Profitability and Financial Ratios for Virgin Australia Holdings Limited Liquidity/Financial Health 2010-06 2011-06 2012-06 Current Ratio 0.76 0.65 0.65 Quick Ratio 0.75 0.62 0.61 Financial Leverage 4.15 4.15 4.3 Debt/Equity 2.3 3.21 3.96 Source: 2013 Morningstar, Inc. 13 3.4 Gearing Ratio Gearing ratio compares owners’ equity or capital to borrowings. Gearing is a measure of financial leverage showing the extent to which a company’s activities or operations are funded by owners’ funds against borrowed funds. A high gearing ratio indicates that a company is using debt to pay for its operations and may risk inability to meet repayments in an economic downturn. The situation could be made worse where rates move upwards suddenly. Lenders are generally concerned about excessively high gearing ratio that may put their loans at risk for non-repayment. Some examples of  gearing ratio are debt equity ratio and net interest cover. For Qantas, the gearing ratio increased to 111.21% in 2012 compared to 98.05% in 2011. This means the company used debt instead of equity to fund its continuing operations. However, this ratio is lower that industry average of 130.547%. Net interest cover ratio refers to the ease a company pays interest expenses on outstanding debt. The lower the ratio, the more the company is burdened by debt expense. The company’s ability to meet interest payments may be doubtful when the ratio is 1.5 or lower. In Qantas case, the net interest cover ratio dropped sharply to 1.54 in 2012 against 3.96 in 2011. This ratio of 1.54 is close to the threshold of 1.5 and is indicative that Qantas may face cash flow problems and inability to meet interest expenses should rates increase suddenly. Table 5 Gearing Year/days 2010 2011 2012 Industry averages Net Interest cover ratio 4.16 3.96 1.54 2.35 Gross Gearing (D/E) 95.600% 98.050% 111.210% 130.547% 14 3.5 Investment ratio A shareholder can analyse the financial information available to determine if the investment in a company is of value and quality. The price/earnings ratio is the best known investment valuation indicators and used widely by investment professionals and investors. Generally the stock with a high price earnings ratio indicates that investors expect higher earnings growth in the future. The price earnings ratio for Qantas was 12.23 in 2012, 15.90 in 2011 and 29.14 in 2010. A sharp decline of 13.24 was recorded in 2011 due to market confidence in this stock prior to 2011. However the industry average is 12.25 which may suggest that investors may be less likely to

Embracing classroom technology Research Paper Example | Topics and Well Written Essays - 1500 words

Embracing classroom technology - Research Paper Example To capture the attention of teachers on the importance of technology in the classroom, it is logic to outline the advantages of this venture. Firstly, technology helps to improve research. A tool for this activity is the computer. The research will help a student to come up with educational material from the internet. This also lessens the tutors’ duty to provide every bit of information to the students. A class exposed to lots information is in a more probable position to perform educationally than a class that does not include internet research. The student’s flourished performance increase the teacher’s morale to teach and embrace technology as the current trend in the learning system. A teacher may also benefit educational technology when dealing with testing and assessment. The modern school setting provides students with an institution website.   From these websites tutor post assignments at their most convenient time and means researching to Arthur this greatly simplifies the process of giving assignments to students. Additionally, the assessment of the assignments can be easily done online due to the advancements. With the simplified mode of assessment and testing, all teachers may find it interesting and suitable to embrace the technological advancements in an institution.   It is these great ideas and innovation steps that should be used to lure teachers to embrace technology. However, to motivate the tutors to incorporate the technology changes motivation plans should also be strategized.... Firstly, technology helps to improve research. A tool for this activity is the computer. Research will help a student to come up with educational material from the internet. This also lessens the tutors’ duty to provide every bit of information to the students. A class exposed to lots information is in a more probable position to perform educationally than a class that does not include internet research. The student’s flourished performance increase the teacher’s morale to teach and embrace technology as the current trend in the learning system (Reynolds, 2008). A teacher may also benefit educational technology when dealing with testing and assessment. The modern school setting provides students with an institution website. From these websites tutor post assignments at their most convenient time and means. According to Arthur (2009) this greatly simplifies the process of giving assignments to students. Additionally, the assessment of the assignments can be easily done online due to the advancements. With the simplified mode of assessment and testing, all teachers may find it interesting and suitable to embrace the technological advancements in an institution. It is these great ideas and innovation steps that should be used to lure teachers to embrace technology. The fact that the teachers are also in the receiving end of its advantages, makes it more appealing to tutors. However, to motivate the tutors to incorporate the technology changes motivation plans should also be strategized (Egbert, 2008). The motivation plan should also include performance predictions in case of using current technologies. If a teacher is convinced and assured of better performance after embracing technology, they are in high probable position to advocate for technological

The Origin Of Negro Slavery Essay Example | Topics and Well Written Essays - 750 words

The Origin Of Negro Slavery - Essay Example In this the east went to Portugal and the west to Spain. After this partition, England responded by Cabot's voyage to North America in 1497. Francis 1 of France celebrated this partition. Denmark and East Indies opposed the pope's decision. Even Sir William Cecil the Elizabethan statesman denied the pope's ruling. England, France, and even Holland began to challenge the Iberian Axis and claimed their place in the sun. Adam Smith says that the British colonial possessions were of two types. First the self sufficient and diversified economy of small farmers which included the Northern colonies of the American mainland and second type were that colony which could produce on large scale for an export market which included the tobacco colonies and sugar islands of the Caribbean. Caribbean colonies had no choice but to adopt slavery as it was coming on from the Georgian history. Adam Smith later propagates that slavery was also due to pride and love of power that the master had through slavery. It was also known that to hire free labor was more profitable as Slave labor was given reluctantly, it was unskillful, it lacked versatility. But slavery at that time was not chosen out of choice but there was no other choice besides it. Therefore Slavery was necessary, and to get slaves the Europeans turned first to the [Caribindian] aborigines and then to Africa. In Caribbean colonies where sugar and t... Though slavery was alien to scientific farming and crop rotation. Indentured servants were not forthcoming to the West Indies in sufficient quantities to replace those who had served their term. On the plantations, escape was easy for the white servant; less easy for the Negro who, if freed, tended, in self-defense, to stay in his locality where he was well known and less likely to be apprehended as a vagrant or a runaway slave. The servant expected land at the end of his contract; the Negro, in a strange environment, conspicuous by his color and features, and ignorant of the white man's language and ways, could be kept permanently divorced from the land. Racial differences made it easier to justify and rationalize Negro slavery, to exact the mechanical obedience of a plough-ox or a cart-horse, to demand that resignation and that complete moral and intellectual subjection which alone make slave labor possible. Finally, and this was the decisive factor, the Negro slave was cheaper. Kidnapping in Africa was less difficult then England, therefore when slaves stopped coming themselves they were kidnapped. Captains and ships had the experience of the one trade to guide them in the other. Bristol, the center of the servant trade, became one of the centers of the slave trade. Capital accumulated from the one financed the other. White servitude was the historic base upon which Negro slavery was constructed. This is how the Negro slavery started. It was not due to racial factors but the cheapness of labor. Negro slavery, thus, had nothing to do with climate. Its origin can be expressed in three words: in the Caribbean, Sugar; on the mainland, Tobacco and Cotton. A change in the economic structure produced a corresponding change in the labor supply. The fundamental

Personal Health Assessment Essay Example | Topics and Well Written Essays - 2000 words

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Business Organization And Policy Essay Example | Topics and Well Written Essays - 2250 words

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How do we explain the stance of the Fatimid Empire towards the Essay - 1

How do we explain the stance of the Fatimid Empire towards the Crusades - Essay Example Jerusalem, which was a Christian group, wanted to end the ruling of the region by the Muslims who had controlled the region for numerous periods. The war against the crusades, which was known as the Jihad, lacked organization and diplomacy because of social, religious, and political differences among the Fatimid Muslims (Hillenbrand, 1999). At times, the Fatimids supported the crusades while at other times they opposed the Christian movement. This essay will analyze the different stances taken by the Fatimid Empire towards the crusades. An analysis of the religious origin and differences among the Fatimids is essential because it will help in understanding the stance of the group towards the crusades. Muslims lived as one religious group when they were ruled by Prophet Mohammed before his death in 632 AD (Carl, 1977). However, when the prophet died, his followers split into two groups on the basis of misunderstandings concerning his successor. The groups were the Shia who believed th at the prophet’s successor was Ali, and the Sunni who claimed that the spiritualist had not named anyone to succeed him as the leader. The Shia established the Fatimid Empire by holding onto their belief that Ali was their leader after Mohammed and following the teachings and the rulings of their new spiritualist. The Shia gained fame in the muslim lands of the Middle East when the Ismaili Shiites in the region supported their religious and political beliefs (Brett, 2007). The group built their empire in Tunisia where they had acquired full support then extended to the entire region (Poole, 1968). The rise of the Shia in the Muslim region and the support that they gained from the Ismaili Shiites split their ideologies and those of the Sunni further. The Seljuks who supported the Sunni became open enemies of the Fatimids (Andrea, 2003). The enmity of the groups developed from being only religious into political and social such that they exclaimed their opposition in public. Wh ile the enmity of the Fatimid and Seljuks rose, the Fatimid Empire extended its ruling to Egypt from Tunisia. The group founded an empire in Cairo, in Egpyt, a location that made it possible for them to rule in the whole of the Middle Easter region including Syria, Palestine, Baghdad, Arabia, and the highlands of the Mediterranean (Adib-Moghaddam, 2008). The first crusade took place in Egypt in 1096 when Pope Urban 11 urged Christians to conquer Muslims in the region. The Pope urged Christians to abandon their homes and help in the fight against Muslims so that they could recover Jerusalem from this religion. Christians wanted to recover Jerusalem from the Muslims because it is their Promised Land in the bible (Carl, 1977). The land of Jerusalem was fertile and it produced plenty of food that fed the inhabitants of the town while people from other regions of Europe died from hunger and poverty. Having persuaded the Europeans, the first crusade was made of soldiers from France, Italy , Normandy, and Flanders (Poole, 1968). The first crusade was so organized that the Fatimids were incapable of defending themselves from the brutality and massacres of the European soldiers. The Muslims were incapable of defending themselves partly because they lacked organization like the soldiers of the first crusade, and also because they misunderstood the aim of the arrival of Christians in their land. The misunderstanding of the Christians’

Zara case Essay Example | Topics and Well Written Essays - 250 words

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Quantitative Methods for Computing Assignment Example | Topics and Well Written Essays - 1500 words

Quantitative Methods for Computing - Assignment Example This paper involves discussion and analysis of a questionnaire carried out in united kingdom on their view on adoption of near mobile technology by the banks and other financial institutions (NFC forum 2011). Some of the companies which are carrying out experiments on the use of near field technology into the mainstream use are: NOKIA, SAMSUNG and GOOGLE. However adoption of this technology has come with several issues in terms of drawbacks, though this technology come several too which will be described in this paper. This paper will discuss the pros and drawbacks of this technology in UK and help banks which are attempting to add value to their core business function through the adoption of this technology. Based on several interviews, this paper provides some recommendations for managers wishing to take full advantage of the business benefits of NFC technology (rose 2012). This technology is ISO-based and tends to build on radio-frequency identification (RFID) communication protoc ol and also incorporates standards used in other contactless card technology (NFC forum 2011). Contactless payments involves the use of devices that make use radio-frequency identification so as to make secure payments, these include: debit and credit cards, smart cards and key fobs. The RFID chip and antennae enables users to wave the card or fob across the reader when making payments. The use of NFC technology in United Kingdom was started in the year 1997 by Mobil gas stations but financial institutions like banks adopted the technology in 2008 which involves the use of master card. These banks are; Citibank, American Express bank, Barclays bank, HSBC and the royal bank of Scotland group. Barclaycard was the first institution in UK to offer contactless cards in 2008. The use of NFC technology in United Kingdom was initiated by the orange mobile phone firm when it partnered with Barclaycard in 2010. Mobile phone with contactless technology was initiated in United Kingdom in 2011; these phones had master card paypass and visa Paywave, these services were assigned to the embedded secure element and SIM card. The number of these secure phones is increasing in united kingdom though initially they were available in small scale(carton et al. 2012). The Near field communication technology has been incorporated in contactless card standard hence making it possible to use devices which are NFC-enabled instead of credit and debit cards thereby reducing the weight to customers, For instance, there has been a prooval of a number of NFC – enabled smartphones to be used with Paywave, NFC-enabled makes it possible for users to make payments by using their phone devices in the place of credit or debit cards (visa 2012). Procedure A questionnaire containing several questions which focused on the financial industry in UK was designed. These questions were meant to review on the views of bankers and other financial institution managers on the adoption of NFC technology in banking focusing mainly on the limitations and advantages of NFC technology. The research was about contactless technology in UK though a lot of emphasis was put on NFC technology. Thirty people were given the questionnaires and were given a period of two days to fill them. The study ensured none of the questioned could interact with the other since it was carried in different part of United Kingdom. The questions asked are

Analyzing Psychological Disorders Essay Example for Free

Analyzing Psychological Disorders Essay Schizophrenia is a mental illness that is chronic and severe. It can be a disabling illness that affects men and women with the same ratio or frequency. This term is from a Greek word that means having a â€Å"split mind†. Though this usage in medical terms is not accurate. The Western perception of this illness is their belief that the term is equal to a disorder of split personality. They have been found to be very distinct mental disorders. People afflicted with schizophrenia do not manifest split personalities. Schizophrenia is an illness hat affects the mind and is characterized by the disability of perceptions and manifestations of reality. Schizophrenia has five classifications. The first is the paranoid type where hallucinations and delusions are present but there is absence of disorganized behavior, thought disorder and active flattening. The disorganized type of schizophrenia occurs when active flattening and thought disorder are both present. Catatonic schizophrenia occurs when there is evidence of psychomotor disturbances. There is the presence of psychotic symptoms in the undifferentiated type but there is also absence of criteria for the other types of schizophrenia. The residual type is wherein all the symptoms of the mental disorder is present at low level of intensity. Signs and symptoms for people with schizophrenia suffer from delusions and false faith in their personal convictions despite the presentation of evidence disproving the matter. This symptom is not explained by a persons cultural background and orientation. Those afflicted also suffer from hallucinatory perceptions that can manifest when there is a lack of external diversion. The most common type of hallucination is the hearing of voices and other sounds. There is also the manifestation of disorganized attitude, behavior and thoughts. Speech is also incoherent and disorganized. The person suffering from this type of mental disorder display catatonic behavior wherein the persons body may become rigid and unresponsive. The causes of schizophrenia are unknown. There are a lot of factors that are said to be involved with the formation of this illness. There is an interaction between genetics, biology, psychology and the environment that leads to the mental disorder. Medical science does not have a full understanding of all the causes and other concerns related to the mental disorder. Recent research and medical studies is slowly but surely shows improvement and progress that would help define the causes of schizophrenia and their explanation. An increase in the dopaminergic activity that is inside the mesolimbic pathway of the brain is a constant and significant finding (Bentall 2005). Data gathered from a PET study shows suggestions that the lesser frequency the frontal lobes are activated during a task that involves a working memory there is a greater increase in the abnormality of dopamine activity in the striatum that is though to be related to deficits in neurocognition in schizophrenia. While the credibility of the diagnosis has introduced many difficulties in the measurement of the relative effect of genes and the factor of environment, more and more evidence have suggested that environmental and genetic factors can combine and create a reaction that would lead to the mental disorder of schizophrenia. Suggestions have also been made regarding the diagnosis of schizophrenia had an important genetic composition but that is influenced by the stressors or factors relating to the environment. The concept of a vulnerability that can be inherited from by some people can be destroyed by psychological, biological and environmental stressors. This is known as the stress-diathesis model. The idea that psychological, biological and social factors is more significant is called the biopsychosocial model in analyzing the causes of schizophrenia (Goldner, Hsu 2002). The approximate degree and frequency of hereditary causes in schizophrenia has a tendency to vary because of the difficulty in the separation of the effects of the environment and genetics. Twin studies have both suggested that there is a high rate of cases involving schizophrenia caused by genetic factors. It is possible that schizophrenia is a mental condition that is complicated in hereditary nature with many genes likely interacting to increase the risk of schizophrenia or the separate parts that can also occur that will lead to its diagnosis. Studies in genetics have implied that genes that increase the risk for the development of schizophrenia are not specific and may also increase the risk of development of other psychotic disorders. A breakthrough in recent research also suggested that very rare copies or omissions of small DNA sequences within the genes that are known as copy number variants were also related to the increased rate of risk for the development of schizophrenia (Noll 2006). It has also been thought that factors that cause schizophrenia can combine in the early development of the human brain during pregnancy. This would later increase the risk of developing schizophrenia. One finding that raised a great amount of curiosity is that people who were diagnosed with the mental illness is said to have been more possibly born in spring or winter in those living in the northern hemisphere of the planet. There is current evidence that exposure to infections during the prenatal stage can increase the risk of the development of schizophrenia in the age of maturity. This finding provides additional proof that linked the utero-developmental pathology with the risk of developing the mental disorder. Social conditions also help the increased risk of schizophrenia. People who are living in a highly urbanized environment have been found out to be exposed to great risk of being afflicted with the mental disorder. Poverty, poor living conditions and social status has also been found to contribute to the risk factor. Migration of people that is related to social problems like racial discrimination, unemployment and people coming from broken families also become factors of developing schizophrenia. There has been an implication made regarding the risk factor of childhood abuse and trauma that can cause schizophrenia later on in life. Lack of support and family dysfunctions also increase the risk but not directly connected to parenting. Substance use have also been found to increase the risk of schizophrenia but the relationship of this link is found to be complex. There has been some difficulty in distinguishing a clear relationship of substance use and the mental disorder. There is also solid evidence that the usage of certain illegal substances can start the onset or relapse of the mental illness in some people. These people who were diagnosed with schizophrenia use these substances to overcome negative emotions that comes with the intake of anti-psychotic medication and the mental condition itself. Negative feelings of paranoia and anhedonia were considered to be primary characteristics. The ingestion of amphetamines can trigger the brain to release dopamine that would increase dopamine activity. It is this excessive increase in activity that it is known to be partially responsible for the manifestation of psychotic symptoms of the mental disorder. This is partially supported by the idea that amphetamines can worsen the symptoms present in schizophrenia. This type of mental disorder can be triggered by heavy usage of stimulants and hallucinogens. One study has suggested the that the use of cannabis contributes to the occurrence of psychosis though some researchers suspect that the use of this substance was only a small part of the many factors of schizophrenia (Green 2002). There is also a number of psychological reasons that have been implicated in the development and sustainability of schizophrenia. A number of cognitive biases have been named in those that have been diagnosed and those that are at risk especially when there is the application of stress or in a state of confusion overly increased attention to potential threats, arriving at conclusions and impaired reasoning. There is also the manifestation of difficulty in differentiating from inner speech mechanism to one coming from an external entity and difficulty in retaining concentration. Case Studies: Anxiety Tom is an engineer, he is happily married, and he is the father of three bright, healthy children. By all appearances, his life is stable and satisfying. Tom, however, suffers from continual worry that he has a difficult time turning off. His anxiety may center on anything from his perceived health problems (he has recently been to his doctor for a physical, but no health issues were discovered) to money and job responsibilities. At times his anxiety peaks to the point that it interferes with his ability to function on the job. Physical symptoms include muscle tension, headaches, and hot flashes that often accompany Tom’s anxiety. Tom often feels nauseated, and he becomes easily fatigued. When he feels anxious, Tom has difficulty concentrating, he becomes irritable, and he has difficulty falling asleep at night. All of these symptoms have been present for the last 6 months. Tom has tried to talk himself out of his anxiety, but this has not worked for him. Toms wife is supportive, but she does not know what to do for her husband (Hauser, 2005). Neural circuitry involving the amygdala and hippocampus is thought to underlie anxiety. When confronted with unpleasant and potentially harmful stimuli such as foul odors or tastes, PET-scans show increased bloodflow in the amygdala. Possible mechanism is malfunction in the parabrachial nucleus, a structure in the brain, that among other functions, coordinates signals from the amygdala with input concerning balance. The amygdala is involved in the emotion of fear. Biochemical factors come into play. Low levels of GABA, a neurotransmitter that reduces overactivity in the central nervous system, contributes to anxiety. A number of anxiolytics achieve their effect by modulating the GABA receptors.

The pioneer experiences Essay Example for Free

The pioneer experiences Essay The western migration of the mid-nineteenth century was a time of uncertainty for America.   It was also a time of excitement because of the new adventures that awaited Americans.   Although western migration was difficult, many chose to undertake it because they wanted a new life, riches, and a chance to own their own land.   There was also a religious aspect, as some people moved to be missionaries to the Native Americans and to form new churches and religions. The pioneer experiences of men and women differed in several ways.    This is evidenced by the writings of Lydia Allen Rudd and Elizabeth Dixon Smith Geer.   Elizabeth talked about constant rain and carrying two children through the mud and water.   She also talked about looking for shelter for her sick husband and watching him deteriorate.   She also writes about how the children had great responsibilities such as driving cattle and oxen. Elizabeth talks incessantly of the impossibility of cooking or staying warm and dry.   Much of this has to do with when she and her family chose to travel.   She also writes that with her husband ill, â€Å"the whole care of everything falls upon [her] shoulders (Geer 1847).† This contrasts sharply with Lydia Allen Rudd.   Though in her account there is rain, she remains upbeat, sharing the soaring vistas and her experiences with the Native Americans.   All is not grand, however.   She speaks of seeing the graves of men and women having died of measles and cholera.   Her diary tells of reaching Salem, Oregon, and also Burlington.   There, they are successful in finding both employment and housing for the winter (1852). Men, on the other hand, saw much more violence in their lives.   In looking at Edward Gould Buffum’s account of life in the gold mines, he tells of the â€Å"trial† of five men who were consequently lashed, and three of those men who were tried for attempted murder and robbery.   A jury found the men guilty. Buffum notes that â€Å"the charges against them were well substantiated, but amounted to nothing more than an attempt at robbery and murder; no overt act being even alleged (1850).†Ã‚   The sentence was death by hanging, and they were hanged that very day.   Such was frontier justice.   Buffum even protested against the mens’ death sentence, but stopped when the mob threatened to hang him. Government played a huge role in encouraging and supporting westward migration.   This was accomplished by the Homestead Act of 1862.   It took affect on the first of January of 1863.   It gave anyone twenty one or older who is a citizen or intended to become a citizen, and â€Å"who had never borne arms against the United States Government or given aid and comfort to its enemies† entitlement to land at $1.25 per acre, so long as the claim did not exceed a hundred sixty acres. The only thing the person had to do was swear out an affidavit that they were the head of household, or is twenty one, or given service in the US armed forces, never borne arms against the US and never given aid or comfort to its enemies.   The person also had to hold the land for five years. The idea of Manifest Destiny fit in well with the actual experiences of the pioneers.   Though the road was tough, the rewards were great, as many people made their fortunes in the west.   Manifest Destiny, or the idea that America had a God-given right to all of North America did fit in well with the actual experiences of the pioneers.   It did not, however, respect the culture of the Native Americans.   Native Americans were forced to move from ancestral lands, and some began to assimilate.   This was largely due to the amount of missionaries that moved from the east to Oregon. Their goal was to â€Å"civilize† the â€Å"savage† Native Americans.There was, however, a place where the Americans and the Native Americans came together without argument.   That place was called Middle Ground.   It was a place where Native Americans and Americans came together for trade.   Manifest Destiny also affected communications.   Mail traveled over a route known as the Butterfield Trail. This trail between Saint Louis and SanFrancisco took two weeks for mail to travel it.   This helped to foster the development of the Pony Express.   It ran for eighteen months and used relays of young riders to move mail slightly faster than traditional mail.   Many went to Oregon and California to seek their fortunes and establish new lives. Sometimes, this involved religious differences.   The Mormons for example, moved because they were not accepted in either New York or Illinois.   In the two female accounts that were discussed, the women moved with their families to seek a new life in Oregon.   In the account of Edward Gould Buffum, he had spent six months in the California gold mines. Even Horace Greely got into the idea of Manifest Destiny, advocating for a transcontinental railroad as a way to facilitate communication and transportation to the new territories.   He also talks about the need for education and â€Å"virtuous women (Greely, 1860).†    Additionally, he discusses the need for the families of the men in California to have their families.   He feels settlement would again be facilitated by a transcontinental railroad.   Families would move with their men, and more families would be willing to move out west on the comfort of the trains, rather than take the wagon trains through the uncertain weather.   The growth of towns showed that people were taking the idea of Manifest Destiny seriously.   The mass migration of immigrants to California numbered 80,000, and the city of San Francisco grew from 848 to an astonishing 60,000. The pioneer experiences and Manifest Destiny walked hand in hand through history.   Manifest Destiny’s goal of taking over the continent combined with the curiosity of the American Pioneer.   Their experiences helped forever shape the new America.   The United States Government helped by passing the Homestead Act, which encouraged people to settle in the new territories.   Though their experiences were different, collectively, men and women helped shape a new America full of new challenges and new rewards. Bibliography 37th Congress, Homestead Act of 1862. 1862.http://wpscms.pearson.cmg.com/long_longman_mhlus_0/0,11867,3125072- content,00.html (accessed March 8, 2009). Bauer, William J.. Dismantling Indian Country in the Nineteenth Century. History: Reviews of New Books 36, no. 2 (2008): 49-52. Buffum, Edward. Six Months in the Gold Mines. 1850.http://wpscms.pearson.cmg.com/long_longman_mhlus_0/0,11867,3124634- content,00.html (accessed March 8, 2009). Geer, Elizabeth. Journal. 1847. 1848.http://wpscms.pearson.cmg.com/long_longman_mhlus_0/0,11867,3124638- content,00.html (accessed March 8, 2009). Graulich, Melody. Review of West of Emerson: The Design of Manifest Destiny. Amercan   Literature 76, no. 3 (2004): 617-619. Greely, Horace. An Overland Journey. 1860.http://wpscms.pearson.cmg.com/long_longman_mhlus_0/0,11867,3124701- content,00.html (accessed March 8, 2009). OSullivan, John. The Great Nation of Futurity. http://wpscms.pearsoncmg.com/long_longman_mhlus_0/0,11867,3124755- content,00.html (accessed March 8, 2009). Rudd, Lydia. Diary of Westward Travel 1852. 1852.http://wpscms.pearson.cmg.com/long_longman_mhlus_0/0,11867,3124798- content,00.html (accessed March 8, 2009).

Effects of Changes to International Accounting Standards

Effects of Changes to International Accounting Standards CONTENTS PAGE (Jump to) (1)(a) REQUIRED CHANGES UNDER INTERNATIONAL  ACCOUNTING STANDARDS (1)(b) MERITS AND DEMERITS OF EXTINCTION OF  EXTRAORDINARY ITEMS (1)(c) RECOGNISED GAINS AND LOSSES AND HISTORICAL  COSTS (1)(d) CLASSIFICATION OF PREFERENCE SHARES  AND DIVIDENDS (2)(a) OBJECTIVES OF IAS 7 AND DISTINCTION  BETWEEN IAS 7 FRS (2)(b) PREPARATION OF A CASH FLOW STATEMENT UNDER  A DIRECT METHOD UNDER IAS7 FRS (2)(c) ASSESSMENT OF THE COMPANY’S LIQUIDITY IN  ACCORDANCE WITH THE INFORMATION ON THE CASH FLOW BIBLIOGRAPHY This report relates to the recent changes in the International Accounting Standards. Furthermore, it underlines the primary principles that Sky Corporation must comply with. (1)(a) REQUIRED CHANGES UNDER INTERNATIONAL ACCOUNTING STANDARDS After the introduction of the International Accountant Standards, all public limited companies must comply with these provisions. Sky Corporation must adhere to the IAS 1, effective on all financial statements dating on and from 1st January 2005. In effect the Sky plc will have to prepare its financial statements on a going concern basis unless there is an intension to liquidate the entity, accrual basis of accounting must be used in the preparation of financial statements except for cash flow statements, presentation and classification of items must be obtained from one period to the next, material class of similar items must be presented separately and dissimilar items must be included separately unless they are immaterial, items (individually or collectively) that are likely to influence the economic decision of the user must not be omitted or misstated, assets, liabilities, income and expenses must not be offset unless approved by an IFRS, financial statements must be presented a t least annually, all amounts relating to comparative information must be disclosed in financial statements. Furthermore, Sky must adhere to the disclosure requirements on the face of or in the notes to the balance sheet BS, income statement and statement of changes in equity. Current and non-current assets and liabilities must be present as separate classification on the face of the BS. Additionally, financial statements must include specified disclosure in relation to information, judgements, estimations, uncertainties and accounting policies. At present, Sky’s accountant made a statement indicating that the financial statements in the forthcoming November 2005 accounts will comply with the principles of IAS. In addition, the company’s financial statements included audited reconciliation of the 2005 Income Statement, Balance Sheet and Cash Flow to UK GAAP from IFRS detailing the impact of the Company’s new accounting policies, and unaudited quarterly 2005 Income Statements to provide comparatives for 2006. (1)(b) MERITS AND DEMERITS OF EXTINCTION OF EXTRAORDINARY ITEMS ISA 1 regarding the presentation of financial statements was issued in December 2003 and is applicable for annual periods beginning on or after 1 January 2005. International Accounting Standard (IAS 1) prescribes the grounds for presentation of general-purpose financial statements, to ensure comparability both with entity’s financial statements of previous periods and with financial statements of other entities. ISA 1 does not serve any application to interim financial statements prepared in accordance with the ISA 34. Under the SSAP 6 extraordinary items are material items which are transaction that fall outside the ordinary activities of the company and thus not expected to recur frequently or regularly. By excluding extraordinary items from the PL, this will reflect on the EPS. Exclusion of extraordinary items will benefit the current operating performance. As far as Sky Communications Plc is, concern there appears to be no extraordinary items in their PL account. Additionally, EPS will be greater than expected if extraordinary items were included since the EPS is used by investors to calculate PE ratio. The exclusion of extraordinary items could also lead to an increase in corporation tax. (1)(c) RECOGNISED GAINS AND LOSSES AND HISTORICAL COSTS Under the FRED 22 (revision of FRS3)which aim to reflect the international shift, makes provisions for reporting comprehensive income such as reporting all recognised gains and losses in a sole statement instead of splitting these gains and losses between the performance statement and the STRGL. There is a need for the display of recognised gains and losses as they are part of the company’s operating activities and some are financial in nature. There is a list of recognised gains and losses that should appear in the treasury section of the performance statement. According to Sky’s accounts for 2004 and 2005, there were no recognised gains or losses in either year other than those included within the profit and loss account. Primarily, statement of total recognised gains and losses are financial statements that enable users to consider all recognised gains and losses of a reporting company in assessing the company’s overall performance. Notes of historical costs are necessary as it identifies the resources acquired by the company at their original price. In effect, this identifies how the items are actually measured over a period. Additionally, it assists with the understanding of capital maintenance adjustments. Firstly, assets are recorded at the value of the consideration given to acquire them at the time of acquisition. Liabilities are recorded at the amount of proceeds received in exchange for the obligation. The purpose for this is to measure the process of determining the monetary amounts in which the element of the financial statements are to be recognised and carried in the balance sheet and in the income statement. (1)(d) CLASSIFICATION OF PREFERENCE SHARES AND DIVIDENDS According to the IAS 1 preference shares are reclassified to borrowings and the preference dividends are reclassified to finance costs. However, when preference shares are non-redeemable, the appropriate classification is determined by the rights attached to the preference shares. Classification is dependent upon an assessment of the substance of the contractual arrangements, equity instrument and the definition of financial liability. Furthermore, the classification of preference shares as an equity instrument or a financial liability is unaffected by a history of making distributions and an intention to make distribution in the future. Under IAS 10, a company must not recognise a liability for dividends in respect of dividends declared after the balance sheet date as it is not a current liability at the balance sheets date under IAS 37. In the event that a company purchases its preference shares for cancellation for more than their carrying amount (premium) then this should be treated as preferred dividend in the calculation of EPS. (2)(a) OBJECTIVES OF IAS 7 AND DISTINCTION BETWEEN IAS 7 FRS1 The structure of the IAS 7 had an influence on the revision of FRS 1. The objective of IAS 7 is that a cash flow statement of a company must correspond to the requirements and identifications under IAS1. In addition, the cash flow must identify movement in cash and cash equivalents during the financial period (cash equivalents are short term and highly liquid investments). Furthermore, there must be a provision identifying and classifying the changes in cash and cash equivalents to operating, investing and financing activities. In a number of cases, there are conflicting factors between the framework of the Financial Reporting Standards and the International Accounting Standards. In the event of conflict, the framework of the International Accounting Standards prevails over the Financial Reporting Standards. IAS 7 requires companies to present cash flow statements as part of a company’s financial statement. International Accounting Standards (IAS 7) is a mechanism that provide additional information on the company’s business activities, assess the present liquidity of the business activities, demonstrate substantial cash flow sources, assist with the estimation of future cash flows and finally will identify cash flow accumulated from trading activities rather than sources of finance. (2)(b) PREPARATION OF A CASH FLOW STATEMENT UNDER A DIRECT METHOD UNDER IAS7 FRS1 The following is a cash flow for Sky plc prepared in accordance with the direct method IAS 7: Notes for Guidance (1) Net profit before tax is taken from the extract of the income statement. (2) Depreciation is shown as a note to the income statement. (3) Loss on sale of the non-current asset; proceeds minus (cost less depreciation to date) see note A1 below. (4) Interest expense is shown on income statement. Changes in Working Capital Structure: Inventory, receivables and payables are differences in opening and closing balances shown on the balance sheet. Disposal Account ( £000’s) Non-Current Assets Notes: (A2, A3 and A4) The interest paid is the net interest cost shown on the income statement and is the 10% charge on loan notes shown on the balance sheet for June 2000. The dividend and tax paid in the year are those shown on the 1999 balance sheet extract under the heading Current Liabilities. (A5) Purchase of Non-Current Assets (A6 A7) Proceeds from the issue of shares and loan notes are the increases shown on the difference between the two balance sheet figures for 2004 and 2005. (A8) This is the net effect from operating activities  £7,975, net cash used in investing activities (8,525) and the net cash flow from financing activities 1,550. (A9) This is the bank figure under current assets 2004 balance sheet. (A10) Bank balance on 2005 balance sheet. (2)(c) ASSESSMENT OF THE COMPANY’S LIQUIDITY IN ACCORDANCE WITH THE INFORMATION ON THE CASH FLOW. Having examined the accounts and financial statements of Sky plc, there is clear evidence reflecting on the company’s liquidity level. Firstly, the measurement of the liquidity ratio revealed that the company was in healthy liquid position. Current Ratio= Current Assets / Current Liabilities Current Ratio of Sky = current assets  £1,830m/ current liabilities  £1,481m= 1.24 times The current ratio measures a company’s ability to meets its financial obligations as they fall due. A normal current ratio is two. Sky’s current ratio is relatively stable considering the type of industry of Sky plc. Acid Ratio= Current Assets- stock/current liabilities Acid Ratio of Sky= Current Assets  £1,830m- Stock  £627m/ Current liabilities  £1,482m=0.81 times The acid ratio clearly indicate that Sky has a high levels of stack and this also demonstrates that the current ratio overstated Sky’s ability to meet its financial obligations because of the inclusion of the stock in the numerator. The information provided in the cash flow, demonstrated clear evidence of liquidity in the flowing of cash. For example, there was a dramatic net increase in cash and cash equivalents of  £1,000m over a year. Furthermore, this indicate that the company’s economic activities are performing well in comparison to the previous year. However, amount  £8525m was invested in investing activities, this figure being greater than the company’s net cash flow from operating activities amounting to  £7975m. Nevertheless, the short fall in the financing of investing activity was meet by new issue of shares  £50m and issue of bank loans  £1500m. Inevitably, the bank loan increases company’s debt and the gearing level of the company. Nevertheless, over a year company’s bank balance increased from  £1250 to  £2250m. In conclusion, the accounts of Sky plc indicate substantial development but there are great expenditure resulting from investment in activities. However, there is not a real concern over the liquidity of the company nor any chances of bankruptcy. BIBLIOGRAPHY Cox .D. 1999 â€Å"Business Accounts† 2nd Edt Osborn Business Naylor.J. 1999 â€Å"Management† Financial Times Prentice Hall Pendlebury. M Groves .R . 2000 â€Å" Company Accounts, Analysis, Interpretation and Understanding† 5th Edt Thompson Russell. D et al 2002 â€Å"Cost Accounting an Essential Guide† Financial Times Prentice Hall. Watson . D Head. A. 2001 â€Å"Corporate Finance Principles and Practice† 2nd Edt Financial Times Prentice Hall.