Overview of the US subprime market Essay Example for Free

Outline of the US subprime advertise Essay With respect to the U. S. subprime showcase, the term itself alludes to the status of the borrower, elective terms for which are B-paper, close prime, or additional opportunity loaning, all allude to the act of offering advances to borrowers who have a flawed record as a consumer and subsequently don't meet all requirements for the common market rates. Subprime loaning and getting is unsafe as it is connected with states of high loan fees, dodgy record as a consumer and considerably less-than-impeccable budgetary circumstances. To access this extending market, moneylenders frequently accept dangers related with loaning to individuals with helpless FICO scores. They counterbalance their hazard by charging a higher loan fee, among different ways. Home loans, vehicle advances, Mastercards, all are instruments of subprime loaning. In Visas, for instance, a subprime client might be charged higher sums for late expenses, over breaking point charges, yearly charges, or in advance expenses for the card. In any case, it offers these borrowers who have a defective credit record the chance to access credit which probably won't have been conceivable something else. Subprime Credit Crunch and Mortgage Crisis: Since 2006, be that as it may, an extreme monetary emergency has created in the subprime credit showcase. It is particularly wild in the subprime contract advertise which has encountered an expanding pace of dispossessions. At the point when Interest rates increased, this prompted movable rate contracts getting progressively mainstream. Be that as it may, the lodging bubble didn't last and property estimations plunged, borrowers couldn't satisfy their budgetary duties and loan specialists couldn't recuperate their misfortunes. The outcome is today’s brutal credit crunch which has prompted enormous players in the subprime contract loaning industry to close down or petition for financial protection. Others have been blamed for empowering beguiling salary swelling on credit applications. Between December 2006 and March 2007, more than 30 subprime moneylenders shut activities. The rest have caused genuine misfortunes and are in a tough situation. Loaning gauges have gotten progressively tough and financial specialists at Goldman Sachs have anticipated this to cut yearly interest for new homes to go somewhere near one-fifth of last year’s deals. As per the September quarterly report (2007) of the Bank for International Settlements (BIS) in Basil, Switzerland, BIS cautioned of the 'dull shadow over worldwide money related markets brought about by the breakdown of the US subprime advertise. ' Examination: everything began as a little difficulty in December 2006 however has immediately advanced everywhere throughout the world, and by the mid year of 2007 had a significant negative effect on stock and security markets of the world. Financial specialists have endured overwhelming misfortunes in their portfolios and now face the extra danger of a potential worldwide downturn sooner rather than later. World monetary development is fundamentally attached to U. S. development, and as experts anticipate a downturn sooner rather than later, U. S. Subprime home loans can be seen as one of the fundamental impetuses of the current circumstance. A worldwide monetary disturbance has resulted, which has made its essence felt in all edges of the world, as various speculative stock investments, banks and financial exchanges in remote nations, for example, Australia, Thailand and Germany have even felt the brunt. This has brought about a reaction against some budgetary procedures utilized by speculators as nations were shocked by the effect of the issues of American mortgagors and property holders on their home markets. Assets and banks everywhere throughout the world were influenced in light of the fact that they had before purchased either bonds, or dangers identified with bonds, which had terrible home advances as insurance, and this whole group was known as a C. D. O. or on the other hand a collateralized obligation commitment. JPMorgan gauges indicated that worldwide C. D. O. s represented about $1. 5 trillion of obligation and organized money C. D. O. ’s, which alludes to bonds which have subprime contracts, marginally more secure home loans and business contracts as guarantee, represented about obligation of $500 billion to $600 billion. When these subprime contracts were hit gravely, it prompted a chain impact in a blemished framework, with appraisals which didn't give a precise expectation of hazard and defective suppositions about the effect on broadened portfolios with numerous layers of influence. A gradually expanding influence followed everywhere throughout the world as speculators began liberating themselves of any unsafe ventures and changing over their protections into money. As Pierre Cailleteau, Moody’s Investors Service boss market analyst in London stated, The mix of a subprime stun, â€Å"untested monetary development and influence has prompted a certainty emergency. Effect on Financial Markets: Financial markets have been seriously influenced, as budgetary foundations on Wall Street and all around the globe endeavor to adapt to the tragic situation in the U. S. subprime showcase. In June 2007, as indicated by a report by CNNMoney, resources worth $800 million were seized by Merrill Lynch from two flexible investments being overseen by Bear Stearns, one of the biggest monetary organizations of the world, that were managing protections, essentially securities upheld by subprime credits. These pained supports have practically useless at this point. Merrill Lynch itself revealed in October 2007 misfortunes of US$5. 2 billion, reexamined around the same time to $8. 4 million, because of the subprime fiasco which prompted compose downs on subprime contracts, collateralized bonds and utilized credits. Standard Poors called this misfortune surprising while experts concurred this was most likely the biggest misfortune ever to be looked by a Wall Street firm. Insolvencies and misfortunes are very common in the monetary world. In August 2007, the tenth biggest retail contract loan specialist in the U. S. , American Home Mortgage Investment Corporation petitioned for Chapter 11 insolvency. Around the same time, Mortgage Guaranty Insurance Corporation, the biggest supplier of private home loan protection in the nation reported that because of the billion-dollar misfortune it endured on its interest in Credit-Based Asset Servicing and Securitization, it would now desert the $4. billion arrangement which would result from its acquisition of the Radian Group, a credit upgrade organization. The effect was unquestionably had a worldwide reach. Around the same time one of the principle banks of Europe and France, BNP Paribas declared that it will no longer esteem three of its assets (Parvest Dynamic ABS, BNP Paribas ABS Euribor and BNP Paribas ABS Eonia) and that financial specialists were no longer permitted to pull back their assets. These assets include U. S. resource upheld protections which incorporate subprime contracts, misconducts on which have expanded while costs have fallen. It took this choice considering the incredibly irksome predicament of the U. S. subprime advertise as indicated by the bank, the total dissipation of liquidity in certain market sections of the U. S. securitization advertise has made it difficult to esteem certain advantages genuinely paying little mind to their quality or FICO score. The models don't end here. Worldwide Alpha fence stock investments, with a value of $8 billion and claimed by one of the universes biggest worldwide speculation banks, Goldman Sachs, fell by 26%. Citigroup endured titanic credit misfortunes of $700 million in July and August 2007, and keeping in mind that the misfortunes can not be contrasted with the banks benefits of more than $20 billion of every 2006, it will be hard for the bank to reestablish speculator certainty. Around the same time of August 2007, Sentinel Management Group auctions off its advantages and following three days of doing as such, petitioned for Chapter 11 insolvency. Stock records in U. S. , Europe and Asia kept on declining because of strife in credit and lodging markets. Around the same time as Sentinel, portions of Countrywide Financial, the biggest U. S. contract moneylender, plunged by 13% on the NYSE in the midst of fears that the tight liquidity conditions may prompt its chapter 11. This was the biggest one-day decrease in the countrys history since Black Monday, the securities exchange crash of 1987. Only a day sooner, the organization had announced that dispossessions and home loan defaults ha d never been this high since mid 2002. Resonations could be felt the extent that Australia: portions of Rams Home Loans Group fell by 41% on the Australian Stock Exchange, as it couldn't renegotiate its credits as purchasers would not like to purchase AUD$ 6. 7 billion of business paper, its fundamental wellspring of financing. Australian Hedge reserves, which were profoundly presented to U. S. subprime acknowledge, for example, Basis Capitals Basis Yield Alpha Fund sought financial protection security. This reserve sought financial protection in August 2007 while in May its benefits were esteemed at $1 billion. As per the IMF, The quick transmission of unsettling influences in a single piece of the money related framework to different parts, in some cases through misty and interweaved channels, has astounded both market members and the official division. Effect on Housing Market The Housing Market really wanted to be influenced by the subprime advertise crash: deals of recently claimed homes plunged to their most reduced in four years. Costs plunged and purchaser certainty declined, as the U. S. economy when all is said in done encountered a log jam. As per David Lereah, boss market analyst at the National Association of Realtors, acquisition of existing homes, which had been 6. 68 million in February 2007, declined to a yearly pace of 6. 12 million, which has been the biggest drop since January 1989. when contrasted with 2006, deals declined by 11. %. Ben S. Bernanke, Chairman of the Federal Reserve, just as other approach producers have secluded lodging as the division which would go about as an obstruction for the economy to accomplish moderate development. This decrease in deals has prompted the general assessment that the lodging downturn is digging in for the long haul. Subprime contract defaults give no indications of diminishing and proprietors don't wish to lessen costs, which will inevitably prompt progressively unsold properties in the market. The lodging bubble has unquestionably slammed as the gracefully of homes available to be purchased d

Late Antiquity, Catacomes Research Paper Example | Topics and Well Written Essays - 1000 words

Late Antiquity, Catacomes - Research Paper Example In each kind of religion, it is pervasive that individuals give a lot of consideration to the sepulchers of their own religion. A few history specialists have given inside and out consideration to the explanation for the attack and formation of this sort of strict workmanship. Their decisions show the development of this idea to have emitted as a path set out by the strict networks to rehearse their religion all the more without any problem. For example, Christianity was considered as an illicit religion during the second and third century (Ricciardi 991). Consequently, to rehearse their customs, they framed a unique spot to perform underground internments; as indicated by their convention. Afterward, when their religion got legitimate status during 313 AD, their internment parades consequently moved from the tombs into the open circle. Since sepulchers were another and a totally different idea from the normally existing entombment procedures of the current age, numerous students of history and archeologists have demonstrated significant levels enthusiasm for their experience and artifact. Jorg Scheid, one of the archeologists from the United States has placed a significant work in this field. Scheid pointed looking at the state of the dead bodies that were hundreds of years sooner covered underground (Yeomans 59). His point, nonetheless, couldn't be effectively conveyed forward, since his burrowing was significantly hampered because of the way that huge numbers of the potential signs and signs, that could have in any case have been useful to evaluate the bodies and use tombs for antiquated examination, were pulverized in past flames, flooding, earth tremors or other cataclysmic events (Delgado 321). However, he could pick up his significant discoveries and base his perceptions mostly on the remaining parts of the materials that were utilized for covering the dead bodies. A few archeologists equitably considered and attempted to watch the conditions and purpose s for the harm of the dead bodies and their annihilated shapes. They made sense of that the dead bodies in the tombs under the Capuchin Monastery zone were held under a temperature of 25 degree Celsius; alongside a seriously muggy condition that extended practically over 80 percent over the typical rate. This temperature the executives was demonstrated to be absolutely unsatisfactory and not perfect for keeping up or safeguarding dead bodies; which was the significant explanation of making tombs. The individuals of past hundreds of years accepted to keep up the dead assortments of their strict legends to be seen and admired by the coming ages. Be that as it may, the capacity conditions demonstrated insufficient for the manageability and durable support of the catacomb’s dead bodies. However, the archeologists have revealed that specific dead bodies are preferable saved over the others. They guarantee them to have predominant in the strict acts of their age, and consequently, were treated by the than individuals with deference after death and they were kept and saved with more consideration. These alleged tomb saints are generally found with huge measure of tissues despite everything existing inside their bodies; still un-disintegrated. Other than the brave characteristics or strict prevalence that was accepted by the archeologists to have been the significant explanation

An Analysis of the Term Actually Incurred in Section 11(a) of Income Tax Action :: Accounting Education Finances Taxes Essays

An Analysis of the Term Actually Incurred in Section 11(a) of Income Tax Action Act No. 58 of 1962 1.SYNOPSIS For the most part Accepted Accounting Practice incorporates explanation AC000: Framework for the readiness and introduction of fiscal reports. This sets out expansive what's more, complete principles administering the acknowledgment of liabilities and pay and consumption in fiscal reports. Explicitly the accompanying passages need to be thought of: Acknowledgment of liabilities: 91. A risk is perceived in a critical position sheet when it is plausible that a surge of assets exemplifying monetary advantages will result from the settlement of a current commitment and the sum at which the settlement will happen can be estimated dependably... Acknowledgment of costs: 94. Costs are perceived in the salary explanation when an abatement in future financial advantages identified with an abatement in a benefit or an expansion of an obligation has emerged that can be estimated dependably. This implies in actuality that acknowledgment of costs happens all the while with the acknowledgment of an expansion or then again an abatement in resources 95. Costs are perceived in the pay proclamation on the premise of an immediate relationship between the expenses brought about and the and the winning of explicit things of pay. This procedure, normally alluded to as the coordinating of expenses with incomes, includes the synchronous or consolidated acknowledgment of incomes and costs that result straightforwardly and together from a similar exchange or other occasions; The fisc takes little notification of these standards with regards to the acknowledgment of consumption for the motivations behind tax assessment. It is the piece of these standards that administer the general derivation arrangement that this report will analyze. Segment 11(a) of the South African Income Tax Act No. 58 of 1962 (as corrected) peruses as follows: 11. General conclusions permitted in the assurance of available salary.- To decide the available salary inferred by any individual from the carrying on of any exchange inside the Republic, there will be permitted as conclusions from the salary of such individual so inferred (a) consumption and misfortunes really brought about in the Republic in the creation of the salary, gave such consumption and misfortunes are not of a capital sort. The segment characterizes the conditions that must be met for consumption and misfortunes to be permitted as conclusions from salary. The use or misfortunes must have been: Actu ssme nt In the Republic of South Africa. In the creation of the pay. Such use or misfortunes must not be of a capital sort. The segment must be perused along with s23(g) 23. Derivations not permitted in the assurance of available pay.- No derivations will be made in regard of any funds, guaranteed as a conclusion from exchange, to the degree to which such monies

Business Plan Assignment Example | Topics and Well Written Essays - 4500 words

Field-tested strategy - Assignment Example We are a socially capable association with approaches identifying with wellbeing and security, preparing and nature along these lines giving confirmation to our clients that they are working with an expert organization, familiar with taking care of the business' changing necessities while keeping up the conventions of consumer loyalty and quality by offering top of the line administrations. WYR Ltd unshakably comprehends the difficulties confronting the house developers in the present market. This organization will build up a fortunate host of strategies and systems to oversee client necessities, sponsored up by vision and a monetarily adroit supervisory group. WYRL will be the piece of The Intelligent Membrane Trade Association (IMA) which is a top UK based association which records master contractual workers as its individuals. The posting measures of IMA are intense and just those contractual workers are recorded which have effectively shown greatest gauges. BehBehind the IMA is the quality of Icopal which is the biggest maker of material and building layers on the planet. Icopal has been producing plants in the UK, Finland, Norway, Sweden, Denmark, Germany, Poland, Czech Republic, Belgium, France and the USA. Items are conveyed by 7 workplaces across Europe, North America, the Middle East and Asia. Icopal is the biggest development film organization in the UK and Eire offering the greatest conceivable decision of particular items that include: Built up Flat Roofing, Pitched Roofing, Acoustic Flooring Systems, Structural Waterproofing, and Geomembranes. WYRL tries to be enlisted with Icopal so as to accomplish industry wide quality guidelines. WYR Ltd. will be steady in its responsibility to conveying top notch aptitude and client support to accomplish the Program necessities. This organization can likewise activate its talented workforce to support the necessities of any venture in any Wales and UK area. Item and Service Waterproof Your Roof Limited (WYRL) is an assistance arranged association offering administrations to wide scope of costumers having a place with both to our Industrial clients just as overall population. The fundamental administrations will incorporate water-verification material, water-spillage material just as establishment of airtight material. All the administrations might be benefited as a total bundle or can likewise be profited as independent administrations. So as to additionally build up ourselves in the business, we will endeavor to build up our novel selling recommendation of conveying excellent administrations at low expenses. For this reason, we won't charge our edges on the items bought from outsiders rather, our point will be to offer great administrations sponsored up by economical however profoundly compelling material which can guarantee high caliber yet strong roofline administrations. Every such help will be conveyed through profoundly prepared specialists who will convey every single such assistance inside dispensed timespan commonly concurred between our clients and us. WYRL will likewise be strategically pitching

How My Personal Values Influence My Way of Teaching

Relating theory to instructional method †how my own qualities impact my method of educating Within any youth training (ECE) setting the teaching method of the instructors will have extraordinary effect on the projects and ways of thinking which the youngsters inside that setting will be affected by. Instructors have a duty to manufacture and keep up legitimate, open, proportional associations with youngsters, families and the network (Gailer, 2010).This isn't just a necessary piece of the youth educational plan Te Whariki which has connections as one of its four establishment standards (Ministry of Education [MoE], 1996) yet in addition part of the showing norms and morals. As an educator I relish in the opportunity to construct associations with various kids, all extraordinary in their way of life, qualities, thoughts and method of being. The significance I place on connections agrees with both Vygotsky’s and Bronfenbrenner’s sociocultural speculations. Vygotsky s tressed the significance of the individuals encompassing a youngster, seeing them critical for supporting and improving the child’s development.Bronfenbrenner broadened this into a model of relevant variables, utilizing thoughts regarding five sorts of settings encompassing the individual kid including their smaller scale and meso-frameworks where the cooperations of their everyday real factors happen (Drewery and Bird, 2004). These speculations have been indispensable in the advancement of New Zealand’s youth educational program, Te Whariki, thus my understandings of these and with my own way of thinking I plan to have what it takes to have the option to manufacture aware equal associations with all students. Building these connections anyway isn't as simple as individuals outside of the calling frequently assume.Appendix 2 shows Suzie Gailer’s (2010) article on being proficient, the article talks about how proficient respectability of training is dependent on instructors having a specific arrangement of qualities, regard, legitimacy, strengthening and straightforwardness. The picture of the youngster is socially developed and connected to our time and spot ever, the picture I have as an educator today of kids is altogether different to that of which I was seen as a kid. My picture of the kid has changed as I have increased both down to earth and hypothetical instructing experience.In my first practicums I didn't really have the foggiest idea what's in store about structure starting associations with youngsters yet as I have picked up information I currently realize that kids can be trusted to manufacture these connections in time allotments which are directly for them. Te Whariki (MoE, 1996) presents the picture of youngsters as able students and communicators and I currently maintain this picture in my showing practice and as a parent (Appendices 3, 4 and 5), alongside the estimations of regard which I have explained through the accompa nying of Magda Gerber’s work.From my own moderately constrained down to earth understanding and hypothetical information I can identify with the thought of Edwards and Nuttall (2005) where â€Å"the instructional method, or ‘the demonstration of teaching’, isn't just interceded by educators’ understandings about the kids, learning, and the educational plan; their understandings about the social settings wherein they work, their own encounters past the work environment and their commitment with the centre’s more extensive network all have a job in deciding the educator’s actions† (p. 36).My own hidden convictions, qualities and methods of reasoning all effect on my showing style and, albeit frequently unwittingly, in transit I identify with people. Duty to intelligent practice, the individual way of thinking I have enunciated and the longing for proficient advancement will help me in maintaining a teaching method which is responsive in time just as to people. This teaching method with its distinguished parts of appraisal, arranging, execution and assessment is affected by my qualities and encounters and I endeavor to clarify and consider these in this essay.The fundamental evaluation process I use is ‘Learning Stories’, a methodology created by Dr. Margaret Carr. Learning stories show a depiction of a learning experience which has been imparted to the kid or kids included and are a record of the premiums and qualities of the youngster. Research shows that learning is increasingly compelling when it is gotten from premiums, empowering inspiration and the feeling of certainty that originates from working inside one’s own strengths.The learning story structure depends on the conviction that growing great learning attitudes is the most significant aptitude in youth and this fits well with my estimations of regard and having the Te Whariki picture of the youngster, a sure, equipped student and commu nicator. The establishments of learning stories are the attitudes found in Te Whariki and in my own learning stories these are featured, demonstrating individual instructors, guardians and whanau how I work to help children’s learning in all parts of the program and educational plan (Appendices 4, 6 and 7).Upholding this picture of youngsters practically speaking is anyway met with difficulties. Woodrow (1999) depicts how there are coming about developments of youth dependent on how people experienced adolescence, on social antiques and on proficient information, Ellen Pifer (2000) additionally portrays these clashing pictures in her book Demon or Doll (Appendix 8) which has really opened my brain to methods of seeing people. Other encouraging experts may hold various pictures of kids, for example, the kid as guiltless or as an undeveloped organism grown-up and this will affect in transit they act around and towards children.Having a dedication towards intelligent practice an d consistently assessing my own teaching method will permit me to manage these difficulties, giving me the aptitudes to clarify my perspective and comprehend that of others with the goal that the most ideal result is accomplished. To embrace such appraisal it is essential to fabricate a relationship with the youngsters and these proportional connections are another key piece of my philosophy.This esteem has changed with my experience and hypothetical information, in my underlying practicum I was uncertain about how to approach building connections that are both aware and corresponding (Appendices 9 and 10) yet my trust in this has, and will proceed, to develop (Appendix 11). I accept that building an equal relationship implies offering parts of my life to youngsters and not anticipating that them should uncover themselves without the kindness being returned. I have a gigantic energy towards creatures and I have imparted this to the youngsters on my last two practicums by bringing my guinea pigs (Appendix 12).The kids feel parts of strengthening and trust as I permit them to be personally associated with a significant piece of my own life. Building such connections preceding endeavor evaluation features the winding idea of instructing and the parts of instructional methods. Taking the guinea pigs to the inside required arranging and cautious execution, incorporating conversation with staff and families to guarantee social needs were met. A few societies don't concur with the keeping of creatures as pets and so as to maintain the aware picture of the kid and associations with the family and network I expected to acknowledge and regard this belief.The focus strategies and enactment likewise assume a job in arranging and usage, wellbeing and cleanliness guidelines should have been considered for this action and for other people, a wide range of arrangements will become an integral factor. For additional appraisal and arranging the contribution of associates and wh anau in the learning stories and other documentation would assume an indispensable job in the continuation of the premium however shockingly the short idea of the practicum didn't take into consideration this.Cultural needs and matches weight intensely in the arranging and execution phases of my teaching method. This is connected to all the qualities in my way of thinking; connections, regard and value. These qualities imply that I have faith in focussing on aptitudes and abilities instead of on inadequacies to make learning situations, for instance regarding that crying is a substantial endeavor at correspondence and can be a certified learning experience (Appendix 11). Nyland (2004) depicts how the cooperation rights and settings of infants’ information can be ignored in childcare settings.On-line conversations with individual understudies in regards to this perusing offer help to the possibility that insolent conditions antagonistically influence the personality and invest ment of youngsters. What occurs in a domain when a personality is missing out and out and kids are confronted with pictures of white working class physically fit citizenry? What message is that providing for these kids and their families? You don’t have a place? You are not a genuine individual from our general public? We don’t esteem you? The situations we plan for the youngsters say a lot about how we see society and the individuals we regard and worth (Ellis, R. , Fuamatu, P. Perry Smith, A. M. Moodle; September 2011). During arranging I in this manner need to ponder assets which mirror the way of life inside the setting and the network. This can be accomplished through correspondence with different teachers in the setting, guardians, and different individuals from the network, for example, kaumatua or the neighborhood minister. Anticipating social events is additionally imperative to me as I feel they interface the ECE setting with the more extensive network and so cial qualities. This incorporates occasions, for example, Mother’s and Father’s day (Appendix 13) just as social events, for example, the Lantern Festival, Diwali and Pasifika events.Although during such arranging I am aware of the objectives and learning results which Te Whariki and the training guidelines present I additionally continually help myself to remember the all encompassing nature in which the learning will happen. Lawrence (2004) depicts the move in intuition and program arranging in ECE settings in the course of the last two deca

Book Riots Deals of the Day for April 21st, 2019

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Religion and Temperance in The Faerie Queene Book Two - Literature Essay Samples

The Faerie Queene Book Two, by Edmund Spenser, is a book entirely devoted to the concept of temperance and moderation. Espoused as a cardinal virtue in Platos Republic, and referred to similarly in several other influential works from across many cultures, temperance encompasses myriad traits or characteristics. It is perhaps best described as refraining from excess; resisting temptations and impulses which otherwise might overcome ones control completely. That temperance is the main concern of Book Two is made clear by Spenser in the title of the work, being called The Legend of Sir Guyon OR Of Temperaunce. However, rather than simply being a story about a temperate knight, the nature of temperance itself is actually the subject of Book Two; specifically, whether or not it is possible to be continuously temperate. Book Two highlights the flaws in the concept of temperance, and this has wider ramifications when considering the social context, specifically regarding the Reformation an d the perceived pitfalls of Catholicism over Protestantism (temperance arguably being considered unimportant in Protestantism, as Protestants believe in predestination). This essay will show, therefore, how Book Two of The Faerie Queene can be considered a religious commentary as well as an examination of the idea of temperance. An important point to note, before looking at any particular stanza in detail, is that a word which continually recurs throughout Canto XII is â€Å"wanton†, and this word perfectly encapsulates the dichotomy of the Bower of Bliss and the nature of sin. It is a word which can mean many things, and indeed its meaning throughout this Canto changes depending on the context in which it is used. First, it is used in the line â€Å"nature had for wantonesse ensude† (2.12.59.3) , which depicts it as a negative thing, or at the very least something excessive. However, when referring to the images of the boys on the fountain, the word used in the line â€Å"their wanton toyes† (2.12.60.8) implies playfulness. In stanza 61, when describing the flowers in the fountain, the word is again used negatively: â€Å"Their fleecy flowres seemd for wantones to weep† (2.12.61.9). Finally, in stanza 63, the word is used in perhaps its most multi-layered context yet: the maide ns in the fountain are said to â€Å"wrestle wantonly† (2.12.63.8). This could simply mean that their wrestling was carefree; however, the recurrence of the word (which occurs thirteen times in this Canto) as well as Guyons response to their wrestling, intermingles the ideas of excessiveness, playfulness, and sexual hedonism. The rather disparate meanings of the word â€Å"wanton† imbue this Canto with an ambivalence regarding what, exactly, qualifies as sin, and highlights that evil doesnt always look evil – something Guyon fails to notice, it seems, until the end of the book and his meeting with Acrasia. Though this is a running theme throughout the book, it is arguably most evident during Canto Twelve, in which Guyon finally reaches the Bower. In stanza 58 of Canto XII, the Bower is described for the first time: it is termed a â€Å"Paradise† (2.12.58.1), even to the â€Å"sober eye† (2.12.58.2) of Guyon. It is not even, in fact, described in particularly lascivious or maleficent terms; instead, it seems to be a place of beauty, in which nature seems to be the defining characteristic. Spenser mentions the â€Å"painted flowers† (2.12.58.5), â€Å"the hilles for breathing space† (2.12.58.6), and â€Å"the Christall running by† (2.12.58.7) imagery which is unequivocally positive. Additionally, the pleasures spoken about in this stanza seem to be universal, as â€Å"none does others happinesse enuye† (2.12.58.4). The Bower does genuinely appear to be a paradise, and the final line of the stanza directly addresses this, saying â€Å"The art, w hich all that wrought, appeared in no place† (2.12.58.9). The dichotomy between what the Bower appears to be, and what it is according to Guyons view, is here laid out for the reader – he seems to expect brazen and wanton sin, and the obvious presence of magic or some supernatural source, but instead is presented with a glorious representation of nature. The comparison of the Bower (known to be a sinful place) with the majesty of nature, reproduced in all its glory, makes a statement about the connection between nature and sin, and arguably implies that what is considered sinful is also natural (created or predestined directly by God), a prominent Protestant argument – and a powerful argument against temperance as a permanent characteristic. Stanza 59 goes on to address this dichotomy, speaking of how skillfully the Bower seems to emulate nature, and how â€Å"the art† and nature seem harmoniously intermingled, as in the lines â€Å"So striving each thother to undermine/Each did the others work more beautifly† (2.12.59.5-6). It is as if the Bower itself somehow exceeds nature – the line â€Å"that nature had for wantonesse ensude† (2.12.59.3) shows this. Interestingly, this is the first point at which negative vocabulary creeps into the articulation; in particular, the aforementioned lines, and the line â€Å"Art, and that Art at nature did repine [chafe]† (2.12.59.4). This idea of the jarring comparison between nature and the Bowers magical representation of nature is not sustained, however, and indeed the stanza is prefaced with the words â€Å"One would have thought† (2.12.59.1), so the Bower is not being directly described in negative terms. Still, the reason for the inclusio n of such ideas remains ambiguous; it could be simply to provide a sense of juxtaposition, or it could be making a point about the reader, telling them essentially that true beauty, and that which is derived from evil sources, are indistinguishable. This arguably makes the point that the pleasures offered in the Bower, while encouraging sin, are not in themselves sinful, as they are described as so aesthetically pleasing and even the narrator seems unaware of any way in which the Bower can be perceived as evil. The pleasing imagery is renewed throughout the remainder this stanza, with the ultimate impression of the Bower being that of â€Å"sweete diversity† (2.12.59.8). That phrase itself, however, can be taken several different ways, two of which make important allegorical points. Firstly, that temperance itself is by comparison â€Å"unsweete†, as it is a mode of being which decries diversity, and instead encourages simply the metaphorical staying of ones hand, rath er than action, either good or bad. Secondly, and perhaps more crucially, this phrase implies that there is some symbiosis between nature and sin. This ties in with the Protestant idea that sin is ingrained in humans, and that they are foredestined to do so. Taken this way, this stanza hints at Guyons forthcoming lapse in control as a result, arguably, of what happens in the following stanzas. The next stanza introduces perhaps the most important physical object of this Canto: the fountain. This item is significant both for its upcoming role in Guyons strongest temptation yet, but also because it relates back to a story told by the Palmer in Canto II – of a nymph fleeing the unwanted advances of Faunus by becoming a fountain, the water of which could never be sullied. Indeed, in that Canto, the Palmer says â€Å"secret vertues are infusd/In every fountaine† (2.2.5.6-7), and the fountain in Canto XII seems to reinforce that fact. It is described as breathtakingly beautiful, made of â€Å"richest substance, that on earth might bee† (2.12.60.2), as well as â€Å"pure† (2.12.60.3) an interesting word choice given the environment. While the majority of the words used so far to describe the Bower, with the possible exception of â€Å"Paradise†, have been words which relate to aestheticism, the word â€Å"pure† has different connotations , specifically holy ones. There is an inherent connection between Cantos II and XII here, in that divinity and lust are inexorably linked through the fountain – a connection which makes a wider allegorical point. The Palmers story in Canto II shows that lust is inescapable unless one becomes something else entirely, which is exactly what happens to Guyon at the end of this Canto. This again acknowledges the Protestant idea that sin itself is inescapable. A linked and salient point is that fountains are, as the Palmer says, connected with secret magic – an interesting oversight, then, when in stanza 58 there is the statement about â€Å"The art appear[ing] in no place† (2.12.58.9). While this may be a reference to Acrasia specifically not being anywhere in sight, another interpretation is that Guyon himself doesnt regard the fountain as magical. This is the first step towards his ultimate downfall, and again makes an important point – even when one is spec ifically warned about sin, one cannot expect to recognize it every time it appears, which goes some way towards refuting the idea of temperance as a permanent trait. How, this section implies, can one be temperate even when one is incapable of recognizing sin when one sees it. In stanza 62, the positive imagery is continued, with the â€Å"infinit streams† (2.12.62.1) of the Jasper-paved fountain being described as â€Å"sweet and faire to see† (2.12.62.2). Despite these statements, the fountain is perhaps the most potent representation of wanton excess (and, indeed magic) in the garden. While the streams of all fountains seem to be infinite, Spenser describes the basin into which they fall to as being increasingly filled, saying that the water â€Å"shortly grew /That like a lake it seemed to be† (2.12.62.4-5). This is a clear sign that the fountain is magical – if the streams were infinite, and the amount of water in the basin grew as it was watched yet the depth never exceeded three cubits, then clearly the fountain is magical as such a thing is impossible. Also, in stanza 63, it is made clear that this fountain is surrounded by laurel trees, which â€Å"defend† (2.12.63.2) it from the sunlight – a potent word c hoice, as sunlight is inherently connected with the idea of heavens power. This word choice is followed by the sunlight itself becoming personified; it â€Å"[beats] on the billowes† (2.12.63.3), implying the idea of a battle between light and dark. Very like, in fact, the one which is about to occur within Guyon himself (or, arguably, between Guyons inner self and the Palmer), when he sees the wrestling women in the fountain. The description of these women, between stanzas 64 and 67, has a rather different hue from what has come so far. Spensers word choice in these stanzas is much more ambiguous. The women are not simply naked; their bodies are occasionally hidden by the water â€Å"as through a vele† (2.12.64.6), and then suddenly exposed to all present and â€Å"thamorous sweet spoiles† (2.12.64.9) revealed to Guyons â€Å"greedy eyes† (2.12.64.9). In other words, they are set up to be as tempting as possible, their â€Å"dainty partes† (2.12.63.9) being hidden, and then shown, over and over again. The word â€Å"amorous† here is ambiguous and carries implications of bitterness, as does the phrase â€Å"sweet spoiles† â€Å"spoils† of course meaning both â€Å"prizes† and â€Å"becoming rotten†. Stanza 65 mentions â€Å"that fair Starre† (2.12.65.1) not only a reference to Venus mentioned again in a following line as the â€Å"Cy prian goddess† (2.12.65.3) the Roman goddess of beauty, but also to evil, as Venus was also called â€Å"Lucifer† (â€Å"light-bringer†). Stanza 67 also makes a reference to Venus, as one of the women stands up and lets down her long hair, covering her body, so â€Å"that faire spectacle from [Guyon] was reft† (2.12.67.6). This echoes the painting The Birth of Venus by Botticelli in which Venuss private parts are also hidden from the viewer by her long, flowing hair. These references comprise perhaps the clearest connection between beauty and evil so far, and yet, despite this potent symbolism, this is the point at which Guyon is drawn in, â€Å"his stubborne brest gan secret pleasaunce to embrace† (2.12.65.9). Without the intervention of the Palmer (the true representation of temperance in the book), this is the point at which Guyon would have lost his battle with temptation, as he has been shown throughout the book to have a weakness for beauty. In fact, Guyons resistance to temptation seems to hinge on this very idea; he has very little trouble resisting the filthy, grubby Mammon and his piles of money in a gloomy glade, but when presented with things of genuine beauty – Philotime, the fountain, the wrestling maidens – his resolve wavers. Even his ultimate transgression – the â€Å"pitilesse† (2.12.83.2) destruction of the Bower – is in part a response to beauty of Acrasia and her subversion of the handsomeness and power of Verdant. Guyon seems to subconsciously resist the idea of beauty hypothetically being evil throughout the book, and when he is finally confronted by (and subdues) the agent of the Bower – the beautiful seductress Acrasia – his lust for beauty turns to rage. Having taken the moderate path throughout the book, and indeed even doing so in capturing Acrasia rather than killing her, Guyons resolve breaks and he utterly destroys the Bower of Bliss in a manner incongruous with the idea of temperance. The reasons for this, in terms of Guyons motivations and characteristics, are actually made clear by Guyon himself in Canto I; he says to Palmer that â€Å"raging passion/robs reason of her dew regalitie† (2.1.57.4-5) . Throughout the book, Guyon is able to resist all temptations but shows a weakness for lust. In Canto VII, the only offer made by Mammon which is not dismissed based on temperance is his daughters hand in marriage; the language used by Guyon in rejecting the offer is much less harsh, and is based on his self-perceived unworthiness and previous betrothal. This character flaw ultimately ends up inspiring Guyons acts of violence in Canto XII, and shows that, with or without temperance (temperance being, as has been stated, embod ied by the Palmer), Guyon was destined to sin. This can, therefore, be considered the dominant argument of Book 2 in general – that humankind is fundamentally flawed, and therefore cannot be expected to avoid sin through temperance.

Project Management And Construction Of The Project

All the financing, sourcing, bidding management and construction of the project are decided by MOR internally7. Eventually, the power centralized into three people – former Minister of Railways Liu Zhijun, former railway ministry chief engineer Zhang Shuguang and former China Railway Communication Group Corp. Chairman Ma Cheng. Liu Zhijun, who had the main leadership responsibility for the accident and acted as the executive sponsor, was sacked and detained in Feb, 2011, before it happened, being accused of corruption6, while Ma Cheng died of a heart attack in the following weeks of the accident. They were all accused of abuse of power and accepting bribes which somehow reduced the budget for the contractual supplier. As a result, corner cut on materials during the construction is common and poses a tremendous risk on riding the train. Cause of failure 3 – transparency and oversight: Transparency is always crucial in project management. However, it has been a problem in Chinese society for thousand years. For example, after the accident, the relevant authorities tried to bury the fallen carriages without thorough life inspection (one little girl was found alive after the carriage was half-buried) and cover up the fact from being exposed to the public8. Even though it is not clear what happened during the project, it is believed that serious transparency problems underlie the deadly accident. Who made the decision to award contracts? How decisions were made forShow MoreRelatedProject Management Of Construction Projects Essay3459 Words   |  14 PagesINTRODUCTION Construction projects can be extremely complex and fraught with uncertainty. Risk and uncertainty can potentially have damaging consequences for the construction projects. 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Thoreaus Transcendentalism - Free Essay Example

Sample details Pages: 4 Words: 1181 Downloads: 7 Date added: 2019/07/08 Category Philosophy Essay Level High school Topics: Transcendentalism Essay Did you like this example? In the early 19th century, a philosophy known as transcendentalism emerged in America. Members of the transcendentalist movement believed that the thoughts of individuals were bastardized due to societal issues such as politics and religion. Although transcendentalists held numerous beliefs, the three essential values of transcendentalism are idealism, individualism, and the divinity of nature. Don’t waste time! Our writers will create an original "Thoreaus Transcendentalism" essay for you Create order Transcendentalists believed that individuals should be independent, and not influenced by the rules of society. Along with individualism, members of this movement used creative writing in order to describe the significance of nature, and demonstrate their love and respect for the natural world. In order to live a successful life free from the judgement of society, transcendentalists believed that it was crucial to connect and understand nature. One of the most influential writers of this period, Henry David Thoreau, was very passionate about nature. Thoreau is most well-known for his book Walden, which describes the importance of living a simple life and being able to provide for yourself while preserving a connection to nature. The transcendentalist themes reflected in the piece were inspired by the time Thoreau lived away from society in a cabin he built himself on Walden Pond. After Thoreaus death, another piece titled Walking was published. In this piece, Thoreau writes on the subject of nature, and dismisses the ideas of society that hinder both individual thought and the experiences provided by nature. Both of these pieces reinforce Thoreaus message that there is value in self-reliance and discovery as well as a connection between man and nature. Throughout both texts, Thoreau explains that nature represents the natural aspect to man that has been subdued by society. Unlike most people, Thoreau believes it is more important to be independent in both social and economic situations than to rely on society to make those decisions. Thoreau finds contentedness in solitude, and refuses to interact with society, unless it is on his own terms. Thoreau also expresses that he does not understand how people can be content in life without a strong connection to nature. A passage from Walking describes Thoreaus opinions on normal members of society, I think that I cannot preserve my health and spirits, unless I spend four hours a day at least†and it is commonly more than that†sauntering through the woods and over the hills and fields, absolutely free from all worldly engagements You may safely say, A penny for your thoughts, or a thousand pounds. When sometimes I am reminded that the mechanics and shopkeepers stay in their sho ps not only all the forenoon, but all the afternoon too, sitting with crossed legs, so many of them†as if the legs were made to sit upon, and not to stand or walk upon†I think that they deserve some credit for not having all committed suicide long ago. Thoreau believes that people are distracted by society, and no longer take the time to enjoy the beauty of nature, and this is incomprehensible to him. In Walden, Thoreau reinforces this idea when he states, Simplicity, simplicity, simplicity! I say, let your affairs be as two or three, and not a hundred or a thousand; instead of a million count half a dozen, and keep your accounts on your thumbnail In both texts, we see that Thoreau expresses his distaste for society. Instead of a mentality exhausted by societal issues, Thoreau encourages readers to think deeply about themselves and their personal connection to nature. In Walking Thoreau says, In my afternoon walk I would fain forget all my morning occupations and my obligations to society. But it sometimes happens that I cannot easily shake off the villageWhat business have I in the woods, if I am thinking of something other than the woods? Thoreau believes that the only way to fix the issues faced by members of society is to keep the interactions with others to a minimum and to take the time to enjoy the splendor of the natural world. Thoreau begins Walking with a quote that that captures the theme of the piece; his admiration of the natural world, I wish to speak a word for Nature, for absolute freedom and wildness, as contrasted with a freedom and culture merely civil†to regard man as an inhabitant, or a part and parcel of Nature, rather than a member of society. Throughout the essay, he describes the wildness present in both man and nature, and uses the activity of walking to explain the human attempt to understand nature. Thoreau believed that man was a part of nature and completely separate from society, and elaborates on this concept in Walden. In order to understand nature himself, Thoreau took a trip to Walden Pond. At the pond, Thoreau lived a simple life and supported himself. He knew that society would be skeptical of his endeavor, but wished to gain valuable knowledge about himself by surrounding himself with the natural world. Unlike other members of society who focused on materialistic things, Thoreau was content with simplicity, and focused his attention on nature. Not only did Thoreau build the cabin he inhabited himself, but he lived off the land eating foods that nature provided, and found entertainment and intellectual simulation in the animals and plants surrounding him. He proved that it was possible to live successfully among nature, and that people who escaped the grasp of society would be more satisfied and aware if they accepted themselves as a part of nature. Thoreau explains that after spending time in nature, he no longer felt that human connection was significant; In the midst of a gentle rain while t hese thoughts prevailed, I was suddenly sensible of such sweet and beneficent society in Nature, in the very pattering of the drops, and in every sound and sight around my house, an infinite and unaccountable friendliness all at once like an atmosphere sustaining me, as made the fancied advantage of human neighborhood insignificant. While Walking and Walden share many of the same themes, the way in which Thoreau presented the ideas was very different. In Walking, concepts are presented more dramatically than they are in Walden. Although he presented his ideas differently in each of the texts, the relationship between the texts explained Thoreaus reasoning for appealing to humans. In fact, an article published by Slate Magazine, claims that Walking is Waldens counterpart. Wen Stephenson said, If you understand Walking, you can almost skip Walden. (Im not really recommending that†in fact, please dont.) What I mean is this: Its clear that Walking, and the actual walking that inspired it, leads to Walden. Within a year of delivering the Walking lecture for the first time, in the spring of 1851, Thoreau was back at his draft of the big book, revising and expanding with renewed creative energy. You could almost say Thoreau walked to Walden. The natural correlation between the two pieces allowed for Thoreau to co nvey to people that in order to live a successful and happy life, they should not depend on society to guide their actions, and that humans were not superior, but equal to nature.

The Juxtaposition Of Private Witt And First Sgt. Welsch

The juxtaposition of Private Witt and First Sgt. Welsch in The Thin Red Line by Terrence Malick is used to illustrate the two ways that a man can view the world, in the most basic sense. John Cottingham also discusses these two ways in his book Philosophy of Religion. Cottingham describes the two ways as the atheist, who cannot see past the â€Å"disorganized concatenation of contingent episodes† in his experiences, and fails to find transcendent meaning in his experience of nature (Cottingham 61). This describes Welsch’s worldview. He has experienced war and from that experience he has concluded that there is no vertical plane that can draw him up. There is only the darkness here and now, all we can do is try to survive as long as we can. However, there is another way of seeing things, the way of the theist, or Private Witt. According to Cottingham, the theist not only can, but must have a sense of joy, reverence, and thankfulness for the experiences we have, because t he theist can see the beauty, or as Witt would say, the glory, that shines through all things. The theist has a transfigured experience of reality. A theist encounters God in a profound way through his experience of nature, art, literature, and the like. The two views are strikingly different, and Mallick uses Witt and Welsch’s interactions, as well as nearly every other moment in the film, to illustrate the two manner of seeing the world. In their first interaction, Welsch spells out his beliefs about self

The Rights Of The United States - 2558 Words

During class, a topic was brought up that was very interesting and needed to be further investigated and researched. The topic is the rights of artists in the United States and what laws have been passed to deal with them, lawsuits that have occurred, and what the artists themselves think about the different rights. There has been a battle over copyright, moral rights, and resale rights of artists in the United States. Copyrights are basic rights that are given by acts that have been passed and they protect any creative works. Moral rights are trickier and are not as clearly defined. Resale rights are interesting to discuss because some artists have differing opinions, with each other and with the government officials. The rights of†¦show more content†¦Some artists also have the rights of attribution and integrity, meaning they can claim authorship and prevent the use of their name for works that are not theirs. There are different time constraints for a work to be copyrigh t-protected in the United States according to the Artists Rights Society. They also explained that any changes in copyright terms have occurred over the years, but now there is a total of 95 years of copyright protection of works published before January 1, 1978, and a term of the lifetime of the artist plus 70 years for works published after January 1, 1978. The term of copyright protection is different from country to country and depends on what the individual nations decide to do. On the â€Å"Copyright Basics† page of Artists Rights Society, they state that in 1994, the European Union, as a whole, established a term of the lifetime of the artist plus 70 years. Understanding the background information about copyright in the United States is helpful when discussing the specific issues right for artists. The moral rights of artists are somewhat difficult to explain because they are similar to copyrights. As specified by the College Art Association, â€Å"Copyright is seen a s a property right, one that creates economic incentives for authors to create works by giving them exclusive rights to control their work†¦By exploiting these rights, copyright owners can, if they are fortunate, earn an income.† Because a copyright is on the property, it ensures that the

Assessment of Financial Health Free Essays

string(65) " to less creditworthy individuals or inattention to collections\." Reocities Home Neighborhoods Making Of Cases in Finance – Final Project Report Friendly Cards, Inc. (1988) Gary Cao Noah N Flom Robert Harris Srini Pidikiti May 1997 TABLE of CONTENTS 1 Assessment of Financial Health Pro Forma Financial Statements 1. 1 Review of History and Statement of Financial Health 1. We will write a custom essay sample on Assessment of Financial Health or any similar topic only for you Order Now 1. 1 Industry 1. 1. 2 Friendly Cards History 1. 1. 3 Friendly Financials 1. 2 Review and Evaluation of Pro Forma Statements 1. 3 Financial Policy / Covenants 2 Beaumont’s Decisions 2. 1 Envelope Machine Proposal 2. 1. 1 Evaluation 2. 1. 2 Financial Effect of Investment 2. 1. Recommendation 2. 2 Evaluation of West Coast (new equity offer) 2. 2. 1 Advantages 2. 2. 2 Disadvantages 2. 3 Valuation of Creative Designs, Inc. 2. 3. 1 Capital Structure Argument 2. 3. 2 Weighted Average Cost of Capital Assumptions (WACC) 2. 3. 3 Cash Flows, Terminal Value, Equity Value Valuations 2. 4 Pooling Implictions (Friendly + CD) 2. 5 Friendly Cards Stock Valuation 3 Overall Assessment 4 Goals for the Financial Structure of Friendly Cards, Inc. ——————————————————————————- PART 1. Assessment of Financial Health Pro F ormas 1. Review of History and Statement of Financial Health Wendy Beaumont, president of Friendly Cards, Inc. , has rapidly expanded her greeting card business through internal growth and acquisitions. Ms. Beaumont realizes that money is currently tight, however, she is adamant about future growth and has sought our opinion as to determine her best course of action. In presenting a decision we will first conduct an analysis of the industry, then give a short history of Friendly Cards, Inc. (Friendly), and then examine Friendly’s financial statements to determine the financial health of the company. Industry Information The greeting card industry is dominated by three large companies, (Hallmark, American Greetings, Gibson), which are referred to as ‘The Big Three’. ‘The Big Three’ dominate market share, and the remaining competitors are predominantly small private and family owned firms. The greeting card industry is characterized high fixed costs due to: large inventory costs, large investment costs in the establishment of efficient distribution lines, and the need for a highly diversified product lines. Market leaders enjoy great economies of scale which tends to hinder new ntrants into the market. As a result, the card industry is capital intensive and very competitive. The number of firms competing in the industry has decreased by an annualized rate of 15% over the last three decades. Exiting firms were typically smaller in size, the majority of which had less than 50 employees. Additionally, the competitive nature of the market results in a high d egree of price sensitivity which culminates in smaller margins on sales. Sales tend to be very seasonal in nature with peaks during major holidays. There is trending toward a larger variety of card offerings (increasing inventories), shorter carrying/selling periods, increased diversification of product lines, and an increase in sales of everyday cards as compared to holiday cards. Friendly Cards, Inc. Beaumont Greeting Card Co. was founded by Wendy Beaumont in 1978, in New York City. She later acquired Lithograph Publishing Co. and took these companies public a year later for $3 a share under the name Friendly Cards, Inc. Friendly has rapidly expanded by acquiring Glitter Greetings of Lansing, Michigan (for cash and equity), whose primary market was selling cards to supermarkets. Soon thereafter, it acquired Edwards Co. of Long Beach, New York (for cash), whose primary market was selling juvenile valentines through chain, drug, variety, and discount stores, as well as, to wholesalers and supermarkets. These acquisitions greatly enhanced Friendly’s distribution line expanding it to a regional power. Later Friendly acquired a California firm (Friendly Artists) which extended the distribution line to a national basis. Friendly Artists’ primary market was prepackaged cards direct to the warehouse. Twenty-five percent of Friendly’s sales are prepackaged boxes, which have a higher margin than regular cards due to lower return rates and lower handling costs. Currently, Friendly appears to be a niche player in the prepackaged box cards market and has avoided entry into the premium card market, thus, avoiding direct competition with the ‘Big Three. ‘ Friendly’s sales are more concentrated than the industry with the majority of sales occurring near Christmas at 30% (vs. Industry 32%), and Valentines Day at 25% (vs. Industry 7%). Thus, over 55% of sales occur within a 3 month period. Plants at Friendly are being used at capacity thus, growth would necessitate further additions or acquiring contract services. Friendly’s distribution line is effective for a smaller firm due to its structure. Of twenty salesmen, one-third work on commission thus lowering Friendly’s costs. However, one problem with using salesmen on commission and having such a small sales force is the tendency to sell to rack jobbers and wholesale distributors. This decreases the potential margin on cards by two-thirds. Friendly’s Financials Sales have increased by over 50% between 1985 to 1987. Cost of goods sold has decreased as a percentage of sales in each of those years thus, producing an increasing margin ( 29. 36% in 1985 to 35. 15% in 1987). The rapid growth by acquisition and the national distribution channels that were accomplished by it, have affected the number slightly. In 1986 selling and delivery expenses increased by 1. 45% and this leveled out in 1987. GA expenses also spiked in ’86, reflecting the recent purchase of another company, and then settled back in 1987. However, while sales may have grown rapidly they have not matched the increase in asset growth, which nearly doubled in 1986. Growth in this company is being funded by improving margins and by increasing leverage, as indicated by the Dupont Data. Although the acquisitions were acquired by both cash and equity, the majority were debt financed, which explains why the ROE figures have increased so dramatically (almost 16%) in the last three years. The activity ratios indicate that the receivable to payable were in arrears by 36 days in 1985 increasing to 52 days in 1987. This is probably a result of increased sales to less creditworthy individuals or inattention to collections. You read "Assessment of Financial Health" in category "Papers" Inventory turnover umbers are shrinking due to the continually larger inventories being carried. Net fixed asset turnover has decreased by 2. 3% between 1985 and 1987. This can be explained by higher growth in assets than in sales. The liquidity ratios indicate that the asset to liability ratio for this company is trending down. The current ratio indicates that the company i s becoming slightly more insolvent with a current ratio of 1. 18 during ’87. However, by looking at the Quick ratio and discounting for the affect of inventory in the asset number, the company is dramatically less liquid at 0. 67 in 1987. This indicates that the company is very highly leveraged and is using its large inventory levels in order to support its substantial borrowing needs. Friendly’s actual growth rate exceeded the sustainable growth rate in 1986 and was equivalent in 1987. This difference in 1986 produced a need for added debt to finance growth. However excess funds were not needed to fund additional growth in 1987 since the actual rate of growth did not exceed the sustainable rate of growth. This can also be seen in the total debt to equity ratio which increased from 3 in 1985 to 5. 21 in 1986 and reduced to 4. 1 in 1987. The leverage ratios indicate that the bank loans to debt are fairly well matched, with loans being less than receivables, however, increasing in percentage. Interest bearing debt jumped dramatically in 1986 as a result of debt funded acquisitions but continues to level off along with total debt to equity figures in 1987. Finally, debt to assets has increased dramatically in the last three years, increasing by 7. 5% to 82. 5% in 1987. Thus Friendly Cards seems to be very highly leveraged, even more so than other firms in the industry although the trend is to increase debt. This highly leveraged position coupled with the high fixed costs and low margins characteristic of the industry, exposes Friendly as extremely susceptible to fluctuations in the market. Therefore, further debt growth may not be advisable–especially since it is currently violating its existing debt covenants. However, Continued growth, however, is needed as to allow the company to further take advantage of its existing distribution lines and realize further economies of scale. 1. 2 Review and Evaluation of Pro Forma Statements The parameters that Ms. Beaumont has set for the pro formas seem reasonalbe for the most part. There are, however, some questionable numbers. For instance, all the forecasts are based on continued sales growth at 20% per year. When compared to astronomical growth rates of 58% in 1986 and 27% in 1987, these estimates appear almost conservative. The majority of the growth in the past, however, were associated with major acquisitions which served to inflate the sales numbers. The historical reluctance to use equity to grow would serve to limit growth if continued into the future. Furthermore, it may be difficult to continue to grow at such a high rates in an increasingly competitive market. Holding costs of goods runs at 65% of sales and may also present a problem depending on whether the company can continue to manage its costs as it continues to grow. It could be argued that the reason CGS has dropped recently is due to the acquisition of Friendly Artists and the increasing reliance on a sales mix made up of low cost prepackaged boxes of cards. A shift in the mix away from these items could increase costs. Also, further acquisitions will serve to push up delivery and selling costs. For our purposes, however, holding them flat seems reasonable. The tax rate seems low at 38% but, depending on the new volume of sales and the maximum tax rate for a corporation, this rate could be even higher. And while the rest of the numbers seem to follow their previous assumptions, the inventory turnover, debt to asset, and interest rate assumptions could be assumed differently. As a result of increased competition in the industry, increasing variations of cards as well as shorter holding duration, it is very unlikely that inventory turnover would improve to 1. 1, and it may very well drop well below this number, possibly to 1. 75. Since growth is likely to continue into the future, an increased amount of inventory will be needed for new market areas. Debt to assets needs to decrease, but this will be difficult to do without funding growth by equity rather than debt. The large sales growth assumptions are directly related to acquisitions, thus increasing assets. If this is done through equity, this number is very realistic. Finally, there may be a problem with the assumption that interest rates on LTD will be 11%. The Monetary Policy Report to Congress indicates that rates should tend to decrease in the future so this rate may be attainable even to such a highly leveraged firm as Friendly. Without more information this estimate seems fine. 1. 3 Financial Policy / Covenants Friendly’s apparent financial policy is rapid growth by debt. This debt-financed growth may be due to a ownership issues that could affects Ms. Beaumont’s control over her company. The financials indicate that growth is also taking place at the expense of margins, as indicated by the Dupont data. The company believes in the economies of scale of the industry and appears to be establishing a national distribution network. While costly in the short run, this strategy may enable a viable and profitable position in the industry. The elements of Friendly’s financial policy appear to be the following. Friendly’s capital structure mix is governed by a debt orientation. Its debt/assets ratio is currently at 82. 5% which places is significantly below the AAA rate. AAA bonds are listed at 9. 7% while Friendly can only borrow at 11. 5%. While equity has been used in recent acquisitions there is a strong preference by management to use debt funding. Without question, Friendly is at an integral juncture. Existing lines of credit are maxed out and the bank is imposing new covenants on future loans: bank loans ; 85% of AR and liabilities not to exceed three times the BV of the company. Friendly currently has a $6. 25 million line of credit. Under the current structure Friendly will be in violation in 1987 with bank loans at 87% of AR and debt to equity is at 3. 13 times. Significantly, bank and trade credit for Friendly is expected to reach over $9 million in Dec. ’87. Long term and short term debt are both fueling growth. The basis is assumed to be the prime rate (which is 8. 5%) plus 2. 5% points. This is assumed to be a fixed rate established at the time of borrowing. The company’s currency is the U. S. dollar and the company does not have any exotica policy to mention. Control of the company rests solely with Ms. Beaumont as she is both the president and the leading shareholder, possessing 55% of the stock. An additional 20% of the stock is owned by employees and officers of the company. Finally, earnings are retained for future growth and meeting current obligations. There are no dividend payments and the stock has depreciated in value from a high of $15 a share. PART 2. Decisions faced by Ms. Beaumont 2. 1 Envelope Machine Investment Evaluation of the Envelope Machine We do not agree that the investment in the envelope machine will result in a return of 31%. The reason for this is that the working capital needed to fund the machine would be funded by additional debt by the company. The interest on the debt needs to be considered before evaluating the total return on the investment. Under this scenario, and considering that Friendly Cards’ interest on debt is 11% the interest expense is $22,000 per year before taxes. Our Estimated Annual savings from Operation of Envelope Machine, Years 1 through 8 ( Dollar figures in thousands) is as follows: Savings: Outlays for envelopes purchased in 1987 $1,500 Incremental expenses from manufacturing envelopes: Materials$ 902 Warehouse 94 Labor 91 Depreciation 62 Total Expenses $1,149 Increase in Profit before Taxes (decrease in COGS) 351 Interest Expense on Working Capital 22 Actual Increase in Profit before Taxes 339 Increase in Income Taxes @. 38 125 Increase in profit after taxes $ 204 The projected Cash flows for the investment in the machine are: (attachments). Based upon the cash flows projected in the above Table the internal Rate of Return on the investment is 26%. Based upon Friendly Cards Cost of Equity which is 20% (Appendix WACC) buying the machine with all equity at 20% or debt at 11% is recommended Financial Effects of Investment The Financial effects of buying the envelope machine are can be examined in detail in Appendix Machine. The activity ratios for Friendly if the investment in the machine is made are: (attachments). The investment in the machine has the following effects: * Decreases Cost of Goods Sold by about 1. 5 % which in turn increases the Gross Margins * Decreases Inventory Turnover from 1. 91 to 1. 86 * Increases Funds needed in 1988 by $418,000, in 1989 by $323,000 and in 1990 by $112,000. * Earnings per share increase to $2. 89 in 1990 from $2. 53 in 1990 without investment * By making the investment in the machine Friendly would not be able to meet both of the covenants required by the bank The ratio of the bank loans to receivables exceeds . 85 in all three periods. * Ratio of Friendly’s total liabilities to the book value of the company’s net worth exceed 3 in 1988 and 1989 which do not meet the covenant but in 1990 the ratio drops down to 2. 94 where it meets the covenants. 2. 2 Evaluation of West Coast Offer (New Equity) We agree with Ms. McConville’s conclusion that Friendly should accept the offer from the West Coast Group at the terms stated if that was the only option available to Friendly Cards. The advantages of this proposal would be: Agency costs will be only 5% compared to the actual costs if an investment bank was used to sell securities of the company in a public offering. * The infusion of equity would enable Friendly to meet all the covenants required by the banks (Appendix WC) enabling Friendly to continue its rapid growth without any financial restrictions from the bank. * The equity infusion would enable Friendly to invest in the envelope making machine and reduce its cost structure and still meet all covenants required by the bank. * The uncertainty about how many securities will be sold if a public stock offering is held is eliminated. Continuing rapid growth would enable Friendly to retain most of the sales representatives who might shift to a competing firm if growth is slowed to enable Friendly to meet its financial covenant s * The price that Friendly is getting is more than reasonable based upon the present value of the discounted cash flows as shown in (Appendix Valuation) Disadvantages of accepting the proposal would be: * Loss of control. Ms. Beaumont’s who presently owns 55% of the outstanding shares would own 40. 37% of the company after the equity infusion. Even though along with the employees of the company she would own 60% of the company she would not be able to make unilateral decisions. * The West Coast Investors who would own 26% of the company would have a significant say in how the company should be run which may affect the current management structure and aversely effect their ability to mange the company as they wish. * Reduction of EPS. Earnings per share would be reduced to $2. 29 per share from the projected $2. 89 per share in 1990 with the purchase of the machine and without equity infusion due to the dilution effect of the new shares. This earnings dilution would probably result in a lower share price. (Approximately $18. 32 instead of $23. 12 considering a price multiple of 8). 2. 3. Valuation of Creative Designs, Inc. Capital Structure Argument Ms. Beaumont had been considering a possible acquisition of Creative Designs, Inc. (CD), a small mid-western manufacturer of studio cards. She had examined the details of CD’s operations for four months, and believed that under her management, CD could immediately reduce cost of goods sold by 5%, and reduce other expenses by 10%. If Friendly acquires CD in early 1988, assumptions are made that CD’s sales would stay flat during 1988 but would grow at 6% per year thereafter. Based on the following table from case facts, there is a wide range of Debt-to-Equity Ratios for the four companies within the same industry. American Greetings'(AG) D/E ratio increased from 0. 35 in 1985 to 0. 63 in 1987. The reason for this upward trend was that American Greetings had diversified its business segments; from solely relying on greeting card sales AG expanded into gift wrap and stationary goods, such as playing cards, gift-books, and college study guides. Such diversification efforts demanded higher debt levels. In addition, AG was a large company with annual sales of $1,174 million in 1987, up 16% from 1985. Gibson Greeting’s (GG)D/E ratio decreased from 0. 71 in 1985 to 0. 49 in 1987. The reason for this downward trend was that Gibson was a relatively small company, with annual sales of $359 million in 1987, an 8. 8% increase from 1985. GG’s growth rate was significantly lower than American Greetings. The total debt-to-equity ratio of Creative Designs would decrease over the next several years. Since CD’s sales in 1987 was $5 million, it was much smaller than the above two companies. Based on the pro forma financial statements for the period of 1988 to 1990, we see growing sales and EBIT. As a small-size manufacturer, the best capital structure would be: financing its operations mainly by internal growth and a significant reduction in the company’s debt levels. Ms. Beaumont wanted to acquire CD for the following reasons: * In the highly competitive market with high cost in distribution and low margin, Friendly had to grow in order to survive, and CD was a good target; Since CD’s shareholders agreed to the acquisition by stock-exchange, â€Å"pooling of interests† accounting method would be used, and the consolidated financial statements more attractive than without CD, and Friendly need not record goodwill (if any) and avoid amortization of goodwill; * Since CD had a relatively low debt level and a very low â€Å"bank loan to receivable ratioâ⠂¬ , while Friendly had difficulty meeting its bank borrowing restrictions, acquiring CD would make possible for Friendly to meet the covenants; Friendly can easily integrate CD to its high growth strategy, and expand Friendly’s market presence in the mid-western region. Weighted Average Cost of Capital Assumptions (WACC) Based on the case facts that the premium for equity risk was 6% on long-term governmental bond rate of 8. 37%, we may calculate the unleveraged beta for American Greetings and Gibson Greeting, and use a derived estimate as a proxy for CD’s unleveraged beta. 1987 Financial Data for Two Large Publicly Traded Companies To be conservative, we assume the unleveraged beta for CD is 0. 77. Since the cost of debt was 11% and the tax rate was 38%, we calculated CD’s cost of equity is 13. 97% in 1988, and the weighted average cost of capital (WACC) is 11. 07%. Over the next five years, CD’s WACC would increase to 11. 92% in 1992 due to the decreasing D/E ratio and therefore the tax shield effect. Cash Flows, Terminal Value, Equity Value Valuations In addition to the above information on WACC and sales growth rate, we have made the following assumptions: * Sales will stay flat in 1988, but will grow at 6% per year after 1989. * Cost of goods sold will stay at 55. 2% of sales level. * Depreciation, â€Å"Selling, delivery, and warehousing expenses†, and â€Å"general and administrative expenses† will grow proportionately to sales growth. * Increased Retained Earnings will be used to reduce long-term debt. * Prepaid expenses will increase by a small amount each year. * Interest expenses will decrease over the period since the debt level will decre ase. * No dividend will be paid after 1988. Based on the above assumptions, we found that the total present value for CD was $4. 349 million. Adjusting for the interest-bearing loans totaling $1. million, the net worth of CD would be $3. 049 million, $1. 168 million higher than the calculated value of the stock exchange ($1. 881 million). This indicates that acquiring CD is a good transaction for Friendly. 2. 4 Pooling Implications (Friendly + CD) By using the â€Å"pooling of interests† accounting method, we constructed the Friendly and CD consolidated financial statements. (see Appendix Valuation – Friendly + CD) The impact on 1988 pro forma financial statements is as follows: * New bank loans needed decreased from $1. 585 million to $1. 357 million; * EPS increased from $1. 7 to $1. 73; * Net profit margin increased from 4. 96% to 5. 49%; * Assets turnover increased from 1. 01 to 1. 03; * ROA increased from 5. 01% to 5. 49%; * ROE decreased from 25. 23% to 20. 5%; * Days in Receivable reduced from 157 to 149; * Bank loan to receivable ratio decreased from 0. 9 to 0. 74; * Interest bearing debt to equity ratio decreased from 2. 62 to 1. 92; * Total debt to equity ratio decreased from 4. 04 to 2. 62. The overall impact of acquiring CD to CF is positive. The result of pooling is in line with Friendly Cards’ financial strategy. In the long run, acquisition of CD would become an integral part of Friendly Cards’ strategic plan for the next few years to achieve a higher growth rate and increased market share. In the short run, acquisition of CD would meet Friendly Cards’ immediate financial needs enabling the company to meet the bank’s covenants, specifically, to reduce the â€Å"bank loan to receivable† ratio to an estimated 0. 9 in 1988 to 0. 85 or lower, and to decrease â€Å"total liabilities to equity ratio† from an estimate 4. 04 in 1988 to 3 or lower. The result of pooling shows that these two requirements are met. 2. 5 Friendly Cards Stock Valuation Assumptions: Capital structure Based upon the pro forma financial statements and the bank covenants’ requirements, we assume the capital structure to be 75% debt and 25% equity. Any other capital structures with the reduction of debt would make it more difficult to get additional capital through equity. We need the debt financing to be able to meet Ms. Beaumont’s growth requirment. Discount rates We assume the cost of debt to be 11%. This is based upon the following facts: In early 1988, interest rates were declining, the 10-year Treasury Notes rate declined from 9. 52% in October 1987 to 8. 9% in January 1988; even though the short-term Prime Rate increased to 9. 07% by October 1987, it had decreased to 8. 5% by January 1988; furthermore, the Federal Reserves Monetary Policy Report(Jan. 1988) stated that â€Å"high rates of capacity utilization and low unemployment suggest the needs in maintaining progress toward price stability†, indicating that interest rates would stabilize at the present level. Also the need to reduce the trade deficit, business and labor would continue to exercise restraint in price and wage behavior, indicating the Fed would hold interest rate at the present level, or even reduce them. We assume the interest rates would hold stable at the present level of 8. 5% and that the lending institution will continue its premium of 2. 5% over prime. We assume all the funding for the debt to be short term as most of the debt would be used to fund the current assets (receivable and inventories). This would be a proper matching of funds. Based on the valuation of Friendly Cards, we found that * FCFE Method (Free Cash Flows for Equity): the valuation was -$ . 95 per share ; * Free Cash Flow for Capital: the valuation was -$5. 5 per share ; * Book Value Method: using 11/2 times Book Value the valuation was $7. 40 ; * P/E ratio (multiple) method: using the industry average P/E ratio of 7, the valuation was $9. 50 per share. (Please refer to appendix Valuation – Friendly Cards, Inc. ) The only way the company’s stock price was worth $8 to $9. 50 per share was that West Coast Investors and Creative Designs valued the company using a Price to Earnings multiple method. * *Note** We attempted to back out a discounted cash flow model that would justify an $8 or $9. 50 share price. By altering certain assumptions, most specifically the sales growth rate we can achieve positive valuations of the stock price. Slower growth in sales PART 3 Overall Assessment Our recommendation to Ms. Beaumont is to (1) First, acquire CD with a stock exchange of 198,000 shares at $9. 5/share, (2) With the additional leverage obtained by the CD acquisition, purchase the envelope machine. As evidenced by the above matrix and graphs, even though Friendly Cards would achieve a higher EPS by not acquiring CD but buying the machine, it would not meet the bank covenants. Advantages of our recommendation: * Meet all of the bank’s covenants; * Meet Ms. Beaumont’s growth needs; * Meet Ms. Beaumont’s requirement on D/E ratio of 2 by 1990; * Maintain a relatively high level of control for Ms. Beaumont over the company; * Position the company for future growth by providing a more favorable D/E ratio. Disadvantages of our recommendation: * EPS dilution by acquiring CD from $4. 64 per share in 1992 as compared to $4. 15 with the CD acquisition; * Reduce Ms. Beaumont’s control from currently 55% to 41. 5% with CD acquisition. PART 4 Goals for the Financial Structure of Friendly Cards, Inc. 4. 1 Friendly Cards capital structure consideration Our recommendation is that Ms. Beaumont to move Friendly Cards’ capital structure closer to 60% debt and 40% equity (a D/E ratio of 1. 5). Our reasoning for such a recommendation is as follows: Flexibility: For future growth and possible acquisitions, Funds for acquiring more assets (another envelope machine! ) to reduce costs. Risk: Ability to deal with possible adversity into the future (i. e. , low sales) Lower risk level than current D/E ratio Income: Future growth in earnings due to ability to acquire market share through acquisitions. Further exploit the economies of scale to reduce CGS, Handling and Distribution Costs Control: Maintain controlling interests in the company Timing: Having a higher D/E Friendly can issue equity at more favorable terms at a later date when EPS is higher, the market environment is â€Å"friendlier†, and the company will be in a better financial position. Our recommended target capital structure for Friendly Cards, Inc. of 60/40 D/E is realistically attainable within 3-4 years (mid 1991). Friendly Cards Case Attachments How to cite Assessment of Financial Health, Papers