Selfridges to Launch Gender Neutral Retail Concept Article

Selfridges to Launch Gender Neutral Retail Concept - Article Example harnessing a trend, but rather tapping into a mind-set and acknowledging and responding to a cultural shift that is happening now’†.1 The fact that the director acknowledges that the project was developed in response to a cultural shift is an indication that it is short-lived. Actually, if we are to observe current global fashion trends, different societies have exhibited diverse preferences in dressing and in exemplifying preferences to adapt fashion trends. Some cultures, especially in developed countries, have long accepted gender neutral retail concept long before the Agender project. In other traditional and conservatist countries, the concept of fashion could still be asserted as maintaining gender-based clothing. Yet, contemporary generations have increasingly accepted openness to try innovative and creative fashion statements, including those that could be considered gender-neutral fashion concepts. From the slideshow that was viewed which presented four (4) different examples of gender-neutral fashion, one affirms that although the concept could revolutionize contemporary styles, more female are accepted to wear clothes with masculine underpinnings; as contrasted to males opting to wear clothes with female-typed styles. Aside from the latter being perceived to look awkward and fairly inappropriate, more males could agree that they would not be caught wearing clothes with feminine trimmings or style. Current societies still exhibit stereotyped beliefs regarding gender-related concepts, including fashion, toys, accessories, and preferences in entertainment, sports, or music endeavors. Overall, the Agender project could just be one of the many innovative and creative fashion showcases that are short-lived. One strongly believes that the fashion statements would not evolve to become the norm. Our contemporary generations, though more open and accepting of equality in various spheres, still strongly believe in gender differences, especially in clothing

Native Americans in the United States Essay Example for Free

Native Americans in the United States Essay Today, race is seen less as culture and history and more as your intelligence, wealth, morals, and how you should act. Unfortunately, racism, stereotypes, and prejudice have been around so long its become some what subconscious of us to pair actions and personalities with a skin color. In Princess Oreo Speaks Out by Dwan Carter, people around her are shocked by how she acts and even go as far as calling her â€Å"white† or â€Å"not black enough. † Carter states, â€Å"It seems that, for a lot of people around me, being black is an attitude. † In society today, people, especially young teens, are pressured to act a certain way based on how they look to feel accepted and ‘normal. ’ A personality that may be perfectly fine if you were one race is found weird and strange in another. In reality, though, race is only skin deep and the color of your skin can not affect how you choose to act. Indian mascot controversies have been going on for years and years. Teams with mascots and names many consider offensive towards Indians exist from high school teams all the way up to professional leagues. Some examples include the Illini Chiefs, Washington Redskins, and Cleveland Indians. Redskins team owner Dan Snyder says, â€Å"After 81 years, the team name Redskins continues to hold the memories and meaning of where we came from, who we are, and who we want to be in the years to come. † Even though the name has traditions, it nevertheless has a negative impact and should be retired. The term ‘Redskins is defined in dictionaries as an offensive racial slur. You shouldn’t be using a racial slur to sell a sports team to America and especially not for entertainment. The word is degrading and in a way dehumanizing because of the imagery that goes along with it. The name that claims to be honorable in fact actually leads to negative stereotypes of Native Americans. In arenas across the nation you will witness war chants, face paint, animal feathers, and savage like behavior in the stands. Theses images suggest that Native Americans act like they did 150 years ago. We are ignoring who Native people are today and we are treating them as objects of the past rather than people just like us. Racial integration in schools is very important for kids to be exposed to different races. In Why Are American Schools Still Segregated, studies are showing that schools seem to be falling back towards their segregated pasts. Racial integration in schools is not only important because of unfair educational opportunities and outcomes, but I believe it is also important for kids to be exposed to different races. The studies are showing that the minority races are slowly becoming the majority and that White population is getting smaller. This is even more reason for students to need to learn how to interact in a diverse environment. There are also advantages of having students work with others who are not of the same background. We live in a country founded on the principle of equality of all people regardless of race, but we still struggle to meet that ideal. Some people think we should be colorblind to peoples race, but on the other hand other people think you should pay attention to race because people of different races have encountered different things that need to be taken into account. Kids in highschool who are just starting to figure out who they are have lots of pressures to be someone that they might not necessarily be just because of how they happen to look. I think it’s important to know someone as an individual rather than a person of a specific race. It’s also important to recognize racism in life wherever you may encounter it like on tv, in books, and even things people say and then even start challenging it.

Challenges for Supply Chain Management

Challenges for Supply Chain Management introduction The biggest challenge facing the Vancouver manufacturing plant was that for the rest of Hewlett Packard, there was no problem; When it comes to real dollars, inventory costs do not enter into the P L statements, but losses hurt our revenues. Dont talk to us about inventory-service trade-offs. Period. Vancouver was held up as a model of efficiency (Kanban) and the DeskJet printer range was a runaway success. A culture of territorialism and poor communication exacerbated the lack of urgency. Damaging internal rivalry was rife as a result of disjointed an myopic decision-making in the absence of any truly global approach to the supply chain key performance indicators (KPIs); the bullwhip effect was writ large all over the firms supply chain. The problems brewing were real and mounting and we argue that the best solution would require a fundamental overhaul of HPs production and supply chain resulting in the need to establish a new manufacturing plant in Europe. The consumer electronics industry is the very embodiment of [key] aspects of supply chain management and related risks, (Sohdi, 2004), due to the short product lifecycles, tough competition, and global nature of the business. The DeskJet printer business presented a new challenge for HP as the firms expertise was in highly customized, low volume, and long lead-time manufacturing and supply chain. In DeskJet, high volume, short product lifecycles, and high obsolescence risk were the name of the game. Printers were in transition from an innovative product to a functional product but the supply chain did not reflect this. HP used OEMs to source components and then did their own assembly. HP made high margins on the cartridges, and the printer was the conduit. HPs success in Europe was beginning to rival the home market in sales, adding further complications due to the need to modify power sources and languages for local markets. In Europe, product option AB had the highest monthly mean demand, and demand was more dispersed over the options than in North America, where virtually the entire sales were in option A. Monthly standard deviation in demand for the popular options was quite high at +- 30%. Even more importantly, the company was holding large and expensive safety stock due to the long shipping lead times and the prohibitive cost of air freight. The success of HPs DeskJet printer range in spite of an un-optimized supply chain suggests that there were significant potential gains in profitability if the right solution were found. In addition, despite high inventory levels, stock-outs were still occurring, threatening the most precious asset of all in the highly competitive printer market: customer loyalty and sentiment. Questions of internal efficiency and customer fulfilment had to be evaluated against the backdrop of a rapidly growing printer market, which was exploding along with the proliferation of desktop PCs. Despite organizational inertia and competing priorities, a number of avenues were open to HP at the time, including inventory management-the benefits of postponing final assembly-product design, and the introduction of JITD. We examine each and delve deeper into the business and customer benefits of launching a production site in Europe to fully capitalize on the surge of the printer market. The market is evolving rapidly and needs a strategic realignment of its supply chain. Creating a European manufacturing facility, plus integrated financial performance and risk management (Hahn Kuhn, 2009) will also improve shareholder returns (by improving inventory management and hence cash flows) and will mitigate risk. Postponement strategy To be successful the DeskJet supply chain must match customer demand. It must be in the zone of strategic fit, with a better match in Europe between responsiveness and uncertainty. It must integrate sales, manufacturing, distribution, and operations. Postponement is a solution to support future DeskJet expansion in Europe and to meet European demand. A successful postponement strategy requires significant degrees of cohesion; departmental barriers will need to be brought down, processes restructured and products redesigned. However, the rewards of implementing a successful postponement strategy are great. HP is not without challenges to implement a successful postponement strategy. Significant organisational change and coordination would be required. As Pagh and Cooper state (1998), The notion of postponement is to maintain the product in a neutral and noncommittal status as long as possible in the manufacturing process. In order to support this, characteristics of the DeskJet that have to be localised should be added at the last moment. Standardising the DeskJet would make inventory management and forecasting easier. It is also a way to allow cost-effective end user customisation. By creating customisation, additional lines can be introduced and consumer needs are met more easily. Customisation will assist HP in differentiating itself and in capturing the market. Based on Cooper (1993), we propose the use of the deferred packaging postponement strategy. The DeskJet peripherals are not common to all markets whilst the formulation is common. Postponement requires tight integration of processes and the formation of a holistic view. In the case of DeskJet printing, redesigning the product to make it more modular will increase manufacturing costs, but would lower the total supply chain costs. A modular design will standardise the design and thus standardise procurement processes. Making the DeskJet design more modular will also limit the inclusion of components that differentiate the product until the latest possible moment. Other benefits of modularity are identified by Feitzinger and Hau (1997), including the ability to manufacture modules separately or in parallel, thereby reducing production time and assisting with problem diagnostics in identifying quality problems. When considering a supply chain strategy, all elements from the design, procurement, manufacture, sales and distribution must be considered in unison. For example, making the DeskJet power supplies universal voltage may be more expensive, but it would provide HP with a more flexible use of inventory and would reduce forecasting errors. Marketing must be involved in the design process to validate that product variety and customisation meet market requirements. Finance must be engaged to provide activity-based costing, (ABC) statistics to support scenario analysis. All stakeholders and their differing viewpoints must be considered in order to build a holistic model of the revised supply chain. Successful postponement requires that organisational boundaries are traversed. HP should work with resellers and distributors to provide some product localisation and customisation tasks. In many cases resellers will require significant support, training, and systems to carry out these tasks. The long term value outweighs the short term investment. In all cases, postponement partnerships must be made on the basis of empirical evidence and having considered the interdependencies of the model. The decision to build European manufacturing capability and interfacing this capability with European distribution is crucial to support DeskJet sales in Europe. We support establishing a European plant as a strategy given European demand. However, in addition to the plant, distribution centres across Europe should be capable of managing product localisation and replenishment of all localisation materials. Opening a new facility in Europe Companies becoming global and enjoying growing revenue and expanding market shares across geographies face an important challenge: inertia. Being agile and being able to react quickly to changing conditions sometimes requires risky decision in volatile, uncertain environments, and sometimes mandates direct investment in foreign locales. The company must admit that what sustained past success will no longer work and must be adapted. This is the challenge Hewlett Packard faced when the Vancouver facility, which served the U.S. market, at the time HPs largest, could no longer meet the needs of growing overseas markets which were becoming progressively more important in terms of units sold. (Monthly mean of 23,108 units in Europe vs. 26, 611 units in North America). Hewlett realized that in terms of lead time, inventory optimization, transportation costs, and localization/customization, trying to serve European clients with its U.S. manufacturing facility was no longer viable despite var ious attempts at technology innovation and optimization, changes in product design, and shifts in its logistic processes; the problem could not be solved. (Transit time by sea takes up to five weeks.) As the European market matured, it needed one or more manufacturing locations geographically close to local suppliers and to end customers. However, selecting the correct locations in which to put one or many distribution centers and manufacturing facilities required performing scenario analysis (Sodhi, 2003) and considering several important criteria in a holistic framework for value-based performance and risk management in [robust] supply chains (Hahn Kuhn, 2009): Customer and supplier location, concentration and importance: the ideal location is a center of gravity based on weight clustering, transportation cost, the geographical location and relative importance of difference suppliers and customers. Order delivery time is a critical unifying dimension (Tempelmeier, 2001) when selecting a location that serves downstream needs. However, the center of gravity has to be modified by introducing additional constraints as listed below. In other words, optimization under many constraints must be performed. And this has to be done dynamically, including current data and future projections. Labor: The skills, training, and demographics of the workforce, unemployment trends, productivity, cost of labor, unionization, work regulation, work culture all vary widely across Europe and have to be considered. Cost and availability of land: The real estate environment of the area under consideration has to be analyzed: sites, building availability, construction cost, regulation, including environmental regulations, the availability and reliability of utilities, local construction companies, and maintenance providers. Corporate taxes and incentives: taxes are another layer of costs that have to be taken into account. Local authorities and governments may be competing to attract foreign direct investment and job-creating investments, offering tax and other financial incentives which can contribute to returns and lower risks. Logistical infrastructure: HP needs to evaluate connections to highways, rail transport, and the proximity to airports and seaports, all of which have to be reliable and cost effective. They also have to find credible logistic/transportation partners. Other criteria include the local climate and exposure to natural disasters. Finally, the company must provide expatriate personnel to manage the operation and its labor so quality of life issues must factor into the selection of the location. The process of selecting the optimal location is a multi-stage, top-down one, where initial screening produces a short list of countries or regions and then additional and more demanding criteria are added to narrow down the initial list through several iterations until one or two final locations are selected. The benefits of a manufacturing facility in Europe are significant and affect every step in the supply chain which now has a better strategic fit. Physical, financial, and information flows are better aligned. The market is as large as the U.S. but more diverse and will be better served. Raw materials procurement becomes more streamlined. Inventory days fall because one benefit of standardization (with local customization) is that inventory can be moved from one region to another so as to avoid piling up inventory in one region and stock-outs in another. The chain has moved to more of a push-pull system. Lead times are shorter. Finished product also does not pile up. The cost of manufacturing goes down and since printers were rapidly becoming a commodity product, economies of scale and cost savings are vital since customers choosing between two inkjet printers of equal speed and quality will make their decision based on cost and reliability. From a management perspective, handling th e supply chain becomes easier since it is optimized to regional needs but still integrated in a global framework that captures the benefits of HPs scale in buying power. The supply chain better serves customer needs and enables the company to grow more effectively in Europe and also is a model for other regions as they develop. The company can better manage its risks; it has reduced its exposure to inventory and transportation risk and improved its ability to manage supply chain supply and demand uncertainties in Europe. (Uncertainty metrics like margins, forecast error, stockout rates are all lower.) Finally, the improved supply chain should improve shareholder returns since operating margins, asset turns, and cash flow are positively affected. Other Improvement Opportunities As HPs management moves forward, it should take into account the following additional recommendations: A clear, overarching strategy for Europe needs to be defined and implemented across HPs corporate headquarters. Conflicting and competing corporate interests need to be reconciled with a clearly delineated command and communication structure. A clear company-wide and bottoms-up consensus should be reached about the framework necessary to achieve lasting success in Europe. HP needs to adopt improved corporate communication and defined spheres of responsibility and accountability across the organization. The case reveals that some of the companys most important technological advancements have been discovered by happenstance. Enhancing its technological advancement process with a more rigorous collaboration and innovation model would render technological and supply chain process improvements less susceptible to chance. For example, common global KPIs on inventory would be a good starting point. HP should remove organizational barriers to reduce lead time. (Billington Lee, 1992). The company should establish a dedicated European Localization Management Team to assess current local market trends as well as the viability of the suggestions above. The company should explore further trade opportunities within the European Union and in Eastern Europe, beyond just the tax and other cost-savings options. HP should exploit e-commerce, using the internet to take orders and organize distribution. The company should develop a supply chain risk-management framework to anticipate and mitigate any disruptions. A new or enhanced supply chain is an opportunity to integrate currency risks, cyber attacks, failed communication with suppliersterrorismnon-compliance. (Bosman, 2006). HP should modify its local marketing strategies based on national and cultural consumer demographics. The marketing and PR teams should also utilize available resources to identify such opportunities and participate within the European supply chain community. There are green opportunities within the supply chain that could be exploited. Technology Information processing: JITD New systems and better forecasting will make the problem visible but not solve it. The greatest gains are fundamental: Streamline design of the product to facilitate manufacture at the DCs and build capability at the DCs. However, there are still technical gains that can be made. Conclusion The HP case is an example of how effective supply chain management requires both a revised management paradigm (strategic change) and more sophisticated tools and techniques (optimization). The postponement strategy is a better strategic fit between the supply chain and HPs product life cycle across the key strategic and competitive variables: innovation, customer service, and cost leadership since printers are rapidly transitioning to maturity. Establishing a manufacturing plant in Europe, a major change in HPs printer supply chain, will improve the companys performance in four critical areas: costs, customer satisfaction, shareholder returns, and risk management. The companys physical flows, financial flows, and information flows will all be more aligned and efficient. After the initial capital cost of establishing the plant, the company should experience substantial cost savings from lower material costs, better predictability, improved supply assurances (no shortages), and lower inventory carrying costs. There is a tight linkage between sales, inventory, and product availability, (Raman et al, 2009), and so customer satisfaction, as measured by lower lead times, reduced variability in demand, fewer stock-outs, and enhanced ability to customize by region, should improve. The company will also position itself for future growth. HP should see the benefit of improved customer satisfaction in rising sales and market share in Europe. Shareholder value will be enhanced by the positive impact the supply chain changes will have on inventory and working capital and hence on operational value drivers like operating margins, asset utilization, and cash flow. Finally, the company will enjoy significant improvements in risk management. (Hahn Kuhn, 2009, referring to others). Certain risks, like being out of stock of a key component or product, will be entirely eliminated. Others can be mitigated through improved ability to contingency-plan and catch problems earlier. Th e company will be able to offload other risks or share them with suppliers and customers. And it will be able to consciously select risks, rather than passively absorbing them. Overall, the revised supply chain and the new manufacturing plant in Europe will be a catalyst for dramatic improvements in HPs operating and financial performance, not just on the Continent, but around the world. Bibliography Billington, Corey, Lee, Hau L. (1992, Spring). Managing Supply Chain Inventory: Pitfalls and Opportunities. Sloan Management Review, Volume 33, Number 3. Bosman, Ruud. (2006, April). The New Supply Chain Challenge: Risk Management in a Global Economy. FM Global. Cooper, James C. (1993). Logistics Strategies for Global Businesses. International Journal of Physical Distribution and Logistics Management, Vol. 23, No. 4, pp. 12-23. Feitzinger, Edward, Lee, Hau L. (1997, January-February). Mass Customization at Hewlett Packard: The Power of Postponement. Harvard Business Review, pp. 116-121. Hahn, Gerd Jurgen, Kuhn, Henirich. (2009, October 30). Value-Based Performance and Risk Management in Supply Chains: A Robust Optimization Approach. Working Paper. Department of Production and Operations Management-Catholic University of Eichstaett-Ingolstadt, Germany. Intermarine USA. (2009, December). Heavy-lift Air Transport Faces Capacity Loss, Competition. Intermarine Industry News. Lee, Hau L. (1995, Sept.-Oct.). The Evolution of Supply-Chain-Management Models and Practice at Hewlett Packard. Interfaces, Vol. 25, pp. 42-63. Raman, Ananth, DeHoratius, Nicole, Kanji, Zahra, (2009, June 12). Supply Chain Management at Hugo Boss (B)-the M Ratio. HBS Case No. 609-055, Harvard Business School Technology Operations Mgt. Unit, University of Portland and HBS. Sodhi, ManMohan S., (2003, Fall). How to Do Strategic Supply Chain Planning. Cass Business School Research Paper. Sloan Management Review. Vol. 45, No. 1, pp. 69-75. Sodhi, ManMohan S., Lee, Seongha. (2004, October 1). Global Supply-Chain Risks in the Consumer Electronics Industry. City University London, Sir John Cass Business School, Cass Business School Research Paper. Tempelmeier, Horst. (2001, December 31). Inventory Service-Levels in the Customer Supply Chain. OR Spektrum, Vol. 22 No. 3, pp. 361-380.

Huffman Trucking Telephony Systems Analysis Essay -- Business Analysis

A Physical Location Background Huffman Trucking has offices paired with plants in four states: California, Missouri, New Jersey, and Ohio. Huffman has grown both organically and through acquisition. The tremendous growth experienced by the company has also shined the light on some growing pains. Each of the four locations have independently managed networks including telephony which has resulted in disconnected systems that require independent investment for upgrades, support, and maintenance and lacks the ability to leverage investments across the organization. The end result includes multiple proprietary telephony platforms and gateways that leave the organization unable to reduce overhead cost in this area. There is some good news found in some levels of common platforms among several locations. The focus of this paper will be to identify the common strengths regarding the types of systems, define the physical extent of the systems, and describe the services available. In addition opportunities to levera ge existing investments and reduce cost will be identified. B Network Commonality and Variance According to the network diagrams provided for each facility by Huffman there are some consistencies among the various facilities. The Missouri and Ohio office locations currently have an Avaya Digital Phone System installed that communicates through the use of a token-ring. Similarly the Missouri and Ohio plant locations have commonality by employing a token-ring to enable communication of several analog handset terminals to a mainframe. In the plant all of the phones also communicate through the token-ring without the benefit of any type of digital phone system. Other consistencies, albeit to a lesser extent, ca... ... manage all types of digital communication. Huffman would need to consider how much depreciation has occurred for each of the current hardware assets (ie. PBX's, handsets, etc) by location in order to identify a phased approach that would minimize disruption and maximize savings potential. For example, if a PBX at the Missouri office has recently been purchased and has several years before being fully depreciated then the company may want to consider prioritizing another facility first. Certain components such as scanners will still require a analog TDM gateway which means this will have to be considered in any proposed network design. II References VoIP. (n.d.). The American Heritage ® Science Dictionary. Retrieved May 28, 2007, from Dictionary.com website: http://dictionary.reference.com/browse/VoIP Huffman Trucking Telephony Systems Analysis Essay -- Business Analysis A Physical Location Background Huffman Trucking has offices paired with plants in four states: California, Missouri, New Jersey, and Ohio. Huffman has grown both organically and through acquisition. The tremendous growth experienced by the company has also shined the light on some growing pains. Each of the four locations have independently managed networks including telephony which has resulted in disconnected systems that require independent investment for upgrades, support, and maintenance and lacks the ability to leverage investments across the organization. The end result includes multiple proprietary telephony platforms and gateways that leave the organization unable to reduce overhead cost in this area. There is some good news found in some levels of common platforms among several locations. The focus of this paper will be to identify the common strengths regarding the types of systems, define the physical extent of the systems, and describe the services available. In addition opportunities to levera ge existing investments and reduce cost will be identified. B Network Commonality and Variance According to the network diagrams provided for each facility by Huffman there are some consistencies among the various facilities. The Missouri and Ohio office locations currently have an Avaya Digital Phone System installed that communicates through the use of a token-ring. Similarly the Missouri and Ohio plant locations have commonality by employing a token-ring to enable communication of several analog handset terminals to a mainframe. In the plant all of the phones also communicate through the token-ring without the benefit of any type of digital phone system. Other consistencies, albeit to a lesser extent, ca... ... manage all types of digital communication. Huffman would need to consider how much depreciation has occurred for each of the current hardware assets (ie. PBX's, handsets, etc) by location in order to identify a phased approach that would minimize disruption and maximize savings potential. For example, if a PBX at the Missouri office has recently been purchased and has several years before being fully depreciated then the company may want to consider prioritizing another facility first. Certain components such as scanners will still require a analog TDM gateway which means this will have to be considered in any proposed network design. II References VoIP. (n.d.). The American Heritage ® Science Dictionary. Retrieved May 28, 2007, from Dictionary.com website: http://dictionary.reference.com/browse/VoIP

Why Nations Go To War

WHY NATIONS GO TO WAR is a unique book and a product of reflection by author, Dr. John G. Stoessinger. First published in 1978, its Eleventh Edition with additions came out in 2010. It is built around ten case studies, culminating in the new wars that ushered in the twenty-first century: Iraq, Afghanistan, and the wars between Arabs and Israelis in Gaza and in Lebanon. In the book he analyses the most important military conflicts of the 20th century: First World War, operation Barbarossa, the Korean War, the Vietnam War, the war in Yugoslavia, the India-Pakistan conflict etc.The distinguishing feature of the book is the author's emphasis on the pivotal role of the personalities of leaders who take their nations, or their following, across the threshold into war. Thus this book transmits an understanding of warfare from World War I to the present century. Dr. Stoessinger believes that the war is neither impersonal, nor inevitable, arguing that the responsibility for a war doesn't lie solely with certain events, because everything is, in fact, about the decisions that people make.He argues that many conflicts could have been avoided without the use of force or without going to war. Dr. John G. Stoessinger attended college at Grinnell College in Iowa as an undergraduate and completed his Ph. D. in International Relations at Harvard. He has taught at several universities including Harvard, MIT, Columbia, Princeton, and the University of San Diego, where he is currently a Distinguished Professor of Global Diplomacy. In addition to his teaching career, Dr. Stoessinger has also led the International Seminar on International Relations at Harvard in 1969.He was also the keynote speaker at the World Congress of Junior Chamber International during their fiftieth anniversary event in Kobe, Japan. Dr. Stoessinger has written ten books on international relations and was awarded the Bancroft Prize for The Might of Nations: World Politics in Our Time. He has served as the book review editor of Foreign Affairs, acting director of the Political Affairs Division of the United Nations, and is a member of the Council of Foreign Relations. He has been included in Who’s Who in America and Who’s Who in the World. Dr.Stoessinger is notable for his individual analyses of war, contrasted with the systemic views more commonly studied by political scientists after the Second World War. Stoessinger was only a child when Adolf Hitler invaded his home of Austria in order to obtain Anschluss. As a Jewish family, they needed to escape from the Nazis. They received a visa to Shanghai, China from Chiune Sugihara, a Japanese diplomat who helped thousands of Jews escape from the Nazis. These were the beginnings that shaped Dr. Stoessinger's world view and interest in ‘WHY NATIONS GO TO WAR’.In the book’s introduction, Dr. Stoessinger tells how, when he was a student, he was always dissatisfied with the explanations found in history books rega rding wars: nationalism, militarism, alliance systems, economic factors and other â€Å"fundamental causes† that, according to him, couldn’t be directly linked to the precise moment of a war’s beginning. He argues that these â€Å"fundamental causes† of wars throughout history are those forces that people apparently don’t control, although it is people who lie at the base of a conflict.In analyzing the 10 conflicts presented in the book, Dr. Stoessinger searches for the â€Å"moment of truth†, the one in which the leaders take the fatal step towards the war, and he wonders in which precise moment the decision to go to war becomes irreversible, who takes responsibility for it and if the disasters could have been avoided. Dr. Stoessinger has set up his book to look at the events that led to specific wars of the twentieth century and then drawing parallels between the different wars that might not have been apparent or obvious at the times of t he various conflicts.The book closely examines each war or group of wars in individual chapters arranged in a near chronological order with a conclusion chapter that pulls from all of the conflicts previously presented. This approach is very well organized and helps the reader to follow the evolution of war styles. The book’s first chapter is dedicated to World War I and is expressively entitled The Iron Dice, referring to the famous words spoken on August 1st by German chancellor Theobald von Bethmann Hollweg: â€Å"If the iron dice must roll, may God help us†In general, because of the history taught in schools or because of popular history books, most people consider that the so-called fundamental causes of World War I are: the deteriorating balance of power in Europe and the new competitive alliances, the arms race, Germany’s militarism and her claims regarding a larger colonial empire etc. Loyal to his theory, Stoessinger ignores these causes and chooses to analyze the leader’s actions in the war’s eve. According to the author, all of the political leaders involved were aware of the war’s inevitability and, in spite of this, they couldn’t stop it.More than once, these leaders have denied their responsibility, placing it in the hands of God or destiny. But it wasn’t God who could control the evolution of events and stop the war, was he? Dr. Stoessinger’s main theory is that the events weren’t, in fact, incontrollable and that it was the people who made the crucial decisions. And these people weren’t some evil leaders with a thirst for blood and destruction (how the Kaiser is so often portrayed), but worried people stuck inside their own illusions.Stoessinger believes that the crucial events that pushed the European countries to war were the following 1) The pledge that Germany made to Austria-Hungary regarding her policy towards Serbia 2) The ultimatum Vienna gave to Serbia and its rejection by the Serbs 3) The German efforts to mediate the conflict and tame Austria 4) At last, the declaration of war made by Germany against Russia and the invasion of Luxembourg and Belgium. In the first section of his novel, The Iron Dice: The causes of WW1, Stoessinger offer an alternative explanation of the causes of World War I, one that includes human reactions and feelings.He says: â€Å"The notion that WW1 is beyond men's control is wrong: Mortals made these decisions. They made them in fear and in trembling but they made them nonetheless. In most cases, the decision makers were not evil people bent on destruction but were frightened and entrapped by self-delusion. They based their policies on fears, not facts, and were singularly devoid of empathy. Misperception, rather than conscious evil design, appears to have been the leading villain in the drama. † Although Dr. Stoessinger's essay is well thought out and well written, It is hard to agree to the thesis compl etely.It seems that all the European countries had good reasons for wanting a war as well. â€Å"Serbia was right in wanting to expand, Austria in wanting to survive. Germany was right in fearing isolation, Great Britain in fearing German power. † All these countries needed to wage war since the balance of power was no longer balanced. All of these countries had good motives for a war, therefore, it is illogical to place the blame just upon the leaders of those countries, rather than analyzing the circumstances that made the countries want to wage war.As much as we would all like things to be simple, they are not. Finding a couple of unfortunate leaders in power guilty seems to be the easiest solution. However, the truth is just not that simple. The truth is that everyone was to blame, the circumstances that created the need for war, the short war illusion that everyone entertained, and the governments who felt the need for a war. The responsibility of preventing World War On e rests not solely upon the shoulders of a few selected individuals. However that is the theory maintained by Dr. Stoessinger throughout the book.The distinguishing feature of the text throughout the book remains the author's emphasis on the pivotal role of the personalities of leaders who take their nations or their following across the threshold into war. Most statesmen who made the crucial decisions behaved like fatalists. The terrible denouement was foreseen, but couldn't been prevented. Historians have been affected by this fatalistic attitude (events passing beyond men's control). Stoessingers view is that this is wrong mortals made decisions basing their policies on fear, not facts. Stoessinger views the World War I as preventable.The perception of statesmen and generals were absolutely crucial. Following dimensions of this phenomenon: 1. A LEADERS PERCEPTION OF HIMSELF 2. HIS PERCEPTION OF HIS ADVERSARY'S CHARACTER 3. HIS PERCEPTION OF HIS ADVERSARY'S INTENTIONS 4. HIS PERCE PTIONS OF HIS ADVERSARY'S POWER AND CAPABILITIES 5. HIS CAPACITY FOR EMPATHY WITH HIS ADVERSARY Most leaders saw themselves as stronger than they really were and their adversaries as weaker than they really were. These misperceptions led directly to distorted perceptions of adversarial intentions which then precipitated quickly into all out war.If the leaders of the various nations involved would have viewed reality rather than their own distorted misperceptions, it may have been possible to avoid conflict on such a massive scale or even avoid war altogether. This seems to be a recurring theme throughout the book. One of the important theories attributed to Stoessinger is the theory of perceptions. Stoessinger believes that, in the eve of major conflicts, many of the political leaders involved have misjudged the situation and have thus led their countries to war.These false perceptions manifest on 4 levels: firstly, a false perception regarding the leader’s own person, of the ir role in the world and of their loyalty towards the possible outcome of the conflict. The second level regards the opponent and often includes demonizing his image and the inability to objectively understand a situation. On the third level, we are dealing with the misperception of the opponent’s intentions and, on the fourth level, with misjudging the opponent’s abilities.Stoessinger has emphasized the importance of the political leaders’ personalities and the fundamental part they play in the evolution of international relations. The second chapter discusses Hitler and his invasion of Russia in 1941. Again, misperceptions played a key role in the events that unfolded. This time, more emphasis was put on the character of the aggressor and his adversary. Hitler essentially had a one track mind. He decided to attack and eliminate the Russian people and paid no attention to the lessons learned by Napoleon when he had attempted to conquer Russia.Hitler was convinc ed that it would be a quick and easy victory. Stalin, on the other hand, believed that since they had previously been allies, Hitler would not invade Russia. Stalin continuously ignored intelligence that came from British and American sources, including eighty-four warnings in the year preceding the attack, because he was suspicious of Anglo-American motives. He preferred to place his trust in Hitler, a fellow dictator. In the end, Hitler invaded Russia and had misjudged the Russian people.They were fighting for their very existence which is probably the most powerful motivation ever. He had failed to plan for the Russian winter because he thought it would be a quick and easy victory, and ended up losing many men to cold and starvation, much as Napoleon had previously. Stalin had placed his trust in the wrong entity and was greatly disillusioned and was unprepared for the attack when it came. Again, the misperceptions of the leaders involved ended in a great loss of life. The third chapter deals with the Korean War and misperceptions of a different sort.In the later stages of the war, after the North Koreans were driven back to the 38th parallel, General Douglas MacArthur went beyond the original scope of the police action by driving toward Chinese border along the Yalu River. This move provoked China and brought them into the conflict. MacArthur did not believe that the Chinese army would be strong and thought he could achieve an easy victory. He ignored intelligence that told him the size of the Chinese army and chose to believe that it was smaller than it really was.His hubris added two years to the war and cost 34,000 additional American lives. Had he chosen to listen to reality instead of his own misperceptions, many lives could have been saved. The Vietnam War was full of misperceptions as well. One of the biggest misperceptions would be the type of war being fought. The United States was fighting against communism, while the Vietnamese were fighting aga inst imperialism and colonialism and to protect their way of life. Had the United States never entered Vietnam, communism would have taken over earlier, and with fewer human lives wasted.In 1978, the Vietnamese communists invaded Cambodia to put a stop to the communist regime of Pol Pot and the killing fields. Had the United States been open-minded enough to see that there were distinctions between types of communists, perhaps we would never have participated in the conflict. Dr. Stoessinger continues through several other wars including: Milosevic’s ethnic cleansing in Yugoslavia, the battles between India and Pakistan, the Arab-Israeli conflicts, Saddam Hussein’s wars in Iran and Kuwait and the current American wars in Iraq and Afghanistan after the tragedy of 9/11.Dr. Stoessinger summarizes the book in the final chapter. Here he reiterates his thoughts that the â€Å"case material reveals that perhaps the most important single precipitating factor in the outbreak o f war is misperception. † He also restates the dimensions of misperception and gives each one special attention. In regards to the idea that there is a misperception in a leader’s self-view, Stoessinger notes that there is â€Å"remarkable consistency in the self-images of most national leaders on the brink of war.Each confidently expects victory after a brief and triumphant campaign. † He also states that â€Å"leaders on all sides typically harbor self-delusions on the eve of war. † Stoessinger also discusses the idea that a leader’s misperception of his adversary’s power is perhaps â€Å"the quintessential cause of war. It is vital to remember, however that it is not the actual distribution of power that precipitates a war; it is the way in which a leader thinks that power is distributed.†Dr. Stoessinger uses many primary sources for his information including newspapers, documents, reports, and first-hand accounts. He also uses many secondary sources including books by other authors well-versed in the conflicts being discussed. It is very apparent that a lot of thought and research has gone into the creation of this book. The index is very complete and the bibliographies at the end of each chapter make it easy to find more information on the conflict at hand.I believe that this book has a lot of historical worth since it pulls from so many valid sources. It presents straightforward and factual information with knowledgeable interpretations of the information. I believe that Dr. Stoessinger has successfully accomplished what he has set out to do. I would recommend the book to others if they are looking for interpretations of war and how they begin. The book was interesting, though it could be a little dry at times to someone who is not well-versed in modern and contemporary history.

Dividend Policy & Capital Structure

â€Å"Comparative Analysis of Dividend Policy & Capital Structure† Prepared For: Lutfur Rahman Senior Lecturer, Department of Business Administration, East West University. Course Code: FIN-435 Course Title: Managerial Finance Prepared By: Md. Habibur Rahman Utpal Kumar Ghosh ID: 2006-2-10-175 ID: 2006-2-10-179 Date of Submission: August 11, 2009 East West University 43, Mohakhali C/A, Dhaka-1212 Introduction ? ? Origin of the Report: Mr. Lutfur Rahman, Senior Lecturer, East West University, has assigned this report to us, as this report is a requirement of the course â€Å"Managerial Finance†. Objectives of the Report: The broad objective of the report is to build a strong familiarity about the Dividend policy & Capital Structure to measure the performance of the company. By preparing this report we are trying to acquaintance of the overall dividend policy & capital Structuring. Moreover the superficial objective of the report is to acquire knowledge about the insights of interpreting the ratios. Preparing this report such kind of topic is extremely beneficial for us as the students of finance. Scope of the Report: This report is based on the dividend policy & capital Structuring. Through this report we are try to focus on the area related to the financial performance of the companies. We particularly focus on dividend policy & capital Structuring and related ratios; as those are the major indicator of the performance assessment of a firm. Methodology: For execution of the report we use MS office software. Topic of the report is not permitting us to input data from primary sources. As the report must be factual, the data source of this report is basically secondary sources. We gathered our relevant data from the different periodicals published by the two cement companies. We also collect our relevant information from different books as well. We also collected some data from the internet to broaden our scope of analysis. Dhaka Stock Exchange websites, Meghna Cements mills website, Confidence Cement Ltd, websites are few of them. Limitations: †¢ Inadequate knowledge in studying reports. †¢ Lack of in-depth understanding of certain terms and concepts prevented us from going into details. †¢ Lacks of research. †¢ Unavailability of updated data. †¢ Time limitation is also been there. †¢ Lack of information and coordination. Confidentiality of data was another imperative barrier that was faced during the conduct of this study. †¢ Power Crisis. ? ? ? 2|Page Dividend Policy ? Dividend: Dividends are payments made by a corporation to its shareholders. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend. For a joint stock company, a dividend is allocated fast as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding. For the joint stock company, paying dividends is not an expense; rather, it is the division of an asset among shareholders. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from a regular one. Cooperatives, on the other hand, allocate dividends according to members' activity, so their dividends are often considered to e a pre-tax expense. Dividends are usually settled on a cash basis, as a payment from the company to the shareholder. They can take other forms, such as store credits (common among retail consumers' cooperatives) and shares in the company (either newly-created shares or existing shares bought in the market. ) Further, many public companies offer dividend reinvestment plans, which automatically use the c ash dividend to purchase additional shares for the shareholder. ? Forms of Payments: ? Cash dividends (most common) are those paid out in the form of a check. Such dividends are a form of investment income and are usually taxable to the recipient in the year they are paid. This is the most common method of sharing corporate profits with the shareholders of the company. For each share owned, a declared amount of money is distributed. Thus, if a person owns 100 shares and the cash dividend is $0. 50 per share, the person will be issued a check for 50 dollars. ? Stock dividends are those paid out in form of additional stock shares of the issuing corporation, or other corporation (such as its subsidiary corporation). They are usually issued in proportion to shares owned (for example, for every 100 shares of stock owned, 5% stock dividend will yield 5 extra shares). If this payment involves the issue of new shares, this is very similar to a stock split in that it increases the total number of shares while lowering the price of each share and does not change the market capitalization or the total value of the shares held. ? Property dividends are those paid out in the form of assets from the issuing corporation or another corporation, such as a subsidiary corporation. They are relatively rare and most frequently are securities of other companies owned by the issuer, however they can take other forms, such as products and services. ? Other dividends can be used in structured finance. Financial assets with a known market value can be distributed as dividends; warrants are sometimes distributed in this way. For large companies with subsidiaries, dividends can take the form of shares in a subsidiary company. A common technique for â€Å"spinning off† a company from its parent is to distribute shares in the new company to the old company's shareholders. The new shares can then be traded independently. |Page ? Types of Dividend Policies: ? Constant-Payout-Ratio Dividend Policy: A dividend policy based on the payment of a certain percentage of earnings to owners in each dividend period. ? Regular Dividend Policy: A dividend policy based on the payment of a fixed-dollar dividend in each period. Often firm that use this policy increase the regular d ividend once a proven increase in earning has occurred. ? Low-Regular-and-Extra Dividend Policy: A dividend based on paying a low regular dividend, supplemented by an additional dividend when earnings are higher than normal in a given period. Argument for Dividend Relevance : Gittman (10th edition) divided stock into two types, such as common stock and preferred stock. He also showed that dividends are the outcome of investment. So, common stocks are an ownership claim against primarily real or productive asset (Higgins, 1995), but he also said that if the company prospers, stockholders are the chief beneficiaries, if it falters, they arc the chief losers. Smith (1988) presented that stocks arc one of the most popular forms of investment. People buy stocks for various reasons: Some are interested in the long-term growth of their investment by buying low priced stock of a new company in the hope of substantially growth of share price over the next few years. Another reason he suggested that in a well established firm stockholders expect the stock growth will be stable over the long run. (Smith. 1988). Stockholders expect dividend but it is not promised (Gitman, 10th edition). Common stocks are hold by true owners of the business. Sometimes they are known as residual owners’ as they receive whatever left after winding up of the company (Gitman, 10th edition; Higgins 1995). Another type of stock is known as publicly owned stock. Common stock owned by a broad group of unrelated investors or institutional investors is called as publicly owned stock. However, all common stock of a firm owned by a small group of investors is denoted as closely owned stock. When all the stock is owned by a single person is known as privately owned stock. Due to the limit of number of share, stock can be classified in to four types. Such as authorize share, outstanding share, treasury stock and issued stock (Gitman, 10th edition). Authorized shares represent the maximum number of shares a firm allows to issue. Outstanding shares are hold by public. Treasury stock is repurchased by firm itself and it is no longer considered as outstanding share. Issued shared are the shares that have been put into circulation. Recently stock repurchase option is very popuLar as it is able to increase stock value by decreasing outstanding stock number (Port. 1976). Port also suggested that firms should avoid issuing stock to pay dividend as they slow down company growth. According to Short and Wclsch (1990), Johns (1998) and Port (1976), a dividend is a usually distributed in cash form to stock holders of a corporation approved by the board of director. It may also include stock dividend or other forms of payment. A stock dividend represents a distribution of additional shares to common stockholders (Higgins, 1995). On the other hand. Ross et al. (2005) divided earnings into two parts; either it is retained or paid as dividend. Whereas Wild et al. (2001), Johns (1998) and Kieso et al. (2004) argued that retained earnings are the primary source of dividend distribution to the stockholder. Dividends are only cash payments regularly made by corporations to their stockholders (Johns, 1998). He also specified that they are decided upon the declaration by the board of the directors and can range from zero to virtually any amount the corporation can afford to pay. 4|Page Jones (2005) said that dividends are the only cash payment a stockholder receives directly from firm and these are the foundation of valuation for common stocks. Stock price response to an unexpected dividend change announcement is related to the dividend preferences of the marginal investor in that firm where other things remaining same (Denis et al. , 1994). In addition, a company. Which changes dividend policy, is expected to xperience upward or downward trends in share returns (Gunasekarage et al. , 2006). They also said that for the initiating firms, the share prices continued to rise even after the initial public offering (IPOs). Higgins (1995) said that if the company will have less money to invest or it will have to raise more money from external sources to make the same investments stockholders cl aim on future cash flow, which reduces share price appreciation. Moreover, during dividend announcement period stock price also fluctuate due to announcement of dividend. Mulugetta et al. 2002) examined the impact of Standard and Poor are ranking changes on stock prices. In addition, Affleck-Graves & Mendenhall (1992) found that stock price reacts after 8 days on average up to 54 days of such earning announcement. With this believe, Hampton (1996) said that value of stock increase by more dividend and share remain undervalued by lower dividend policy. In addition, he also showed that there are two schools of thought regarding with the effect of dividend on stick price, one is dividends do not affect market price and the another one is dividend policies have profound effects on a firm’s position in the stock market. Benartzi et al. (1997), Ofer and Siegel’s (1987) and Bae (1996) found a positive correlation between share price and dividend. Furthermore. Campbell and Shi ller (1988) found a relationship between stock prices, earnings and expected dividends and he drives a conclusion that earnings and dividends is powerful in predicting stock returns over several years. Wilkic analyzed a 76 months share price index and dividend announced. He found a correlation coefficient. Which was under 0. 7 for the period 76 months and he also get that the maximum value of the regression coefficient being reached after 79 months. Moreover. ShilLer (1984. 1989) recommended investors in his study to buy the stocks when price is low relative to dividends and to sell stocks when it is high payoffs. On the other hand to their opinion, Jensen and Johnson (1995) suggested that, dividend cut results reduction in share price. More interesting matter is that if capital markets are perfect, dividends have no influence on the share price (MilLer and Modgliani, 1961). MiLler and ModgLiani (1961) also states that if the market is imperfect, dividend may affect stock price. ? Current Practices of Dividend Policy in Bangladesh: As Bangladesh is a developing country, the corporate culture is growing very slightly in our country. Dividend policy is a major financing decision that involves with the payment to shareholders in return of their investments. Every firm operating in a given industry follows some sort of dividend payment pattern or dividend policy and obviously it is a financial indicator of the firm. Thus, demand of the firm’s share should to some extent. Dependant on the firm’s dividend payment pattern. Many investors like to watch the dividend yield, which is calculated as the annual dividend income per share divided by the current share price. The dividend yield measures the amount of income received in proportion to the share price. If a company has a low dividend yield compared to other companies in its sector, it can mean two things: (1) the share price is high because the market reckons the company has impressive prospects and isn’t overly worried about the company’s dividend payments, or (2) the company is in trouble and cannot afford to pay reasonable dividends. At the same time, however, a high dividend yield can signal a sick company with a depressed share price. Dividend yield is of little importance for growth companies because, retained earnings will be reinvested in expansion opportunities, giving shareholders profits in the form of capital gains. 5|Page MEGHNA CEMENT limited (MCML) ? OVERVIEW OF THE COMPANY The Meghna Cement Mills Limited (MCML) was the first undertaking Bashundhara Group in the manufacturing sector. This enterprise produces world-class cement and, as a testimony to this, stands the fact that the concern has been awarded the ISO-9001 certification for sustained quality control effort. The Company markets its cement under the registered trademark of King brand†. ? Basic Information: Market Category: A 400. 0 225. 0 100 2250040 Foreign 0 Public 10 Listing Year:1995 Authorized Capital in BDT (mn) Outstanding Capital in BDT (mn) Face Value Total no. of Securities Share Percentage Sponsor/Director 58 Govt. 0 Institute 32 Graph 1: The Market price of share of MCML in 2008-2009 (Highest Value: 678. 25, Lowest Value: 336. 25) 6|Page ? Dividend Policy Followed By Meghna Cement Ltd: EPS Dividend Payout Cash Ratio 24. 15 279 216% 25. 00 22. 80 348 164 25. 00 7. 37 246 75 25. 00 5. 93 277 54 25. 00 5. 35 352 46 30. 00 65. 6 1502 75 130 13. 12 300. 75 26 Table 1: Financial Data of MCML from 2004-2008 P/E ratio Share Price(MKT. ) Dividend Bonus Share 0 0 0 0 0 0 0 Total 25. 00 25. 00 25. 00 25. 00 30. 00 130 26 Year 2004 2005 2006 2007 2008 Total Average 11. 57 15. 25 33. 38 46. 71 65. 86 172. 77 34. 554 Interpretation: According to the above information it is visible that the company is following regular dividend policy (according to definition as given above). From 2004-2007 though the profit has increased subsequently but it was not sufficient for payment of dividend at a rate of the preceding years to all share holders of the company. For upholding the benefit and interest of general public the sponsors shareholders/Directors have decided to give up their dividend during those years under review of maintaining 31 consistent dividend policy for the 30 general public shareholders. So the 29 board of directors of the company 28 pleased to recommend cash dividend 27 26 @ 25% on par value of shares for the 25 public share holders taking into 24 consideration the profit and liquidity 23 position of the company during that 22 period under reviewed. 004 2005 2006 2007 2008 But In 2008, the EPS increased by almost Total Dividend 25 25 25 25 30 Paid 50% from previous year. So the directors ? Dividend decided to increase the dividend percentage to 30% instead of 25%. The company paid 25tk per share as dividend from 2004-2007 but in 2008 as the income increased by almost 50% than the previous year it paid a dividend of 30tk for the earnings of 2008. Total Dividend Paid Share Price(MKT. ) 400 350 Share Price (MKT. ) 300 250 20 0 The dividend policy that followed by the company has an impact on its share price. 150 As the graph shows the share price has 100 an increasing trend. As the company 50 declared 25% dividend per share from 0 2004-2005 this was more than its EPS so 2004 2005 2006 2007 2008 the share price increased and reached to Share Price(MKT. ) 279 348 246 277 352 350tk. But in 2006- 2007 the dividend was lower than its EPS so the share price declined and again increased in 2008 with an increase in dividend. 7|Page Confidence Cement Limited (CCL) ? OVERVIEW OF THE COMPANIES Confidence Cement Limited is the first private sector cement manufacturing company in Bangladesh established in early 90's with having 4,80,000 M/T annual production capacity at Chittagong, 16 K. M away from Chittagong port, besides Dhaka Chittagong highway. CCL is the first ISO-9002 certified cement manufacturing in Bangladesh. It has a unique management system in quality Assurance, Marketing, Sales, and Procurements. It manufactures ordinary Portland cement. Our company aims to be the number one cement manufacturing company in Bangladesh, through continuous development and by producing high & consistent quality cement to meet all customers requirement at all time. To achieve these objectives CCL uses modern machineries, calibrated testing equipment's, computerized packing & raw materials mixing devices in its production process. Additionally the company frequently arranges internal & external training program for the staff of all level to develop the potentiality and skill of its human resources. CCL is always keen to keep the customers satisfied by proving the best possible service. ? Basic Information: Market Category: A 500. 0 209. 0 100 2090000 Govt. 0 Institute 25. 37 Foreign 0 Public 49. 17 Sponsor/Director 25. 46 Listing Year:1995 Authorized Capital in BDT (mn) Outstanding Capital in BDT (mn) Face Value Total no. of Securities Share Percentage Graph 2: The Market price of share of MCML in 2008-2009 (Highest Value: 627. 25, Lowest Value: 268. 5) 8|Page ? Dividend Policy Followed By Confidence Cement Ltd: Earnings per share -12. 65 10. 95 21. 65 27. 73 -14. 98 Diluted Earnings per share n/a n/a n/a n/a -13. 62 Net Asset Value Per Share 319. 83 326. 28 332. 93 345. 66 330. 67 Diluted Net Asset Value Per Share n/a n/a n/a n/a 300. 62 Net Profit After Tax (mn) -24. 04 20. 81 41. 13 52. 8 -28. 46 Year End P/E -9. 50 10. 78 6. 40 13. 30 n/a % Dividend % Dividend Payout Ratio 46% 69% 54% Year 2004 2005 2006 2007 2008 5. 00 5. 00 15. 00 15. 00 10%B Interpretation From the above information it is visible that the company follows the regular dividend policy. That is the policy of the company is to pay a perticular dividend amount and if there’s higher earning for perticular year and if earning pe r share increases they also increase their Dividend amount. In 2004, due to tough competition the company couyld not earn desiered profit. This year EPS is tk(12. 65). However considering the 16 interest of shareholders the board of 14 directors decleared 5% dividend from 12 dividend equalization fund. In 2006 and 10 2007 , as the EPS increases than the 8 previous year so the board of director 6 decided to pay dividend of 15% per 4 share. But in 2008 the company 2 decleared a 10% bonous dividend which indicates the company has used 0 2004 2005 2006 2007 their earnings for farther investment so the company didn’t give any cash % Dividend 5 5 15 15 dividend. Dividend From the graph it is easily indentifiable that the share price had strong relationship with dividend. In 2004 the company decleared a dividend of 5% per share when it had a EPS of (12. 65) the increased. In 2006-2007 for an increased dividend of 15% the share price also maxmized and again declined in 2008 due to 10% Bonous dividend decleared by the company. Share Price (MKT) 400 350 300 250 200 150 100 50 0 Share Price (MKT) 2004 289 2005 250 2006 225 2007 368. 8 2008 318 9|Page Capital Structure Capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or ‘structure' of its liabilities. For example, a firm that sells $20 billion in equity and $80 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in this example, is referred to as the firm's leverage. In reality, capital structure may be highly complex and include tens of sources. Gearing Ratio is the proportion of the capital employed of the firm which come from outside of the business finance, e. g. by taking a long term loan etc. The Modigliani-Miller theorem, proposed by Franco Modigliani and Merton Miller, forms the basis for modern thinking on capital structure, though it is generally viewed as a purely theoretical result since it assumes away many important factors in the capital structure decision. The theorem states that, in a perfect market, how a firm is financed is irrelevant to its value. This result provides the base with which to examine real world reasons why capital structure is relevant, that is, a company's value is affected by the capital structure it employs. These other reasons include bankruptcy costs, agency costs, taxes, information asymmetry, to name some. This analysis can then be extended to look at whether there is in fact an optimal capital structure: the one which maximizes the value of the firm. 10 | P a g e Capital Structure Meghna Cement Mills LTD. Items Total Current Asset Fixed Asset Total Asset Current Liability Long term Debt Total Debt/ Total Liability Total Equity Share Outstanding Net Income Earnings Before interest and tax Retained Earnings Interest Charges/ Financial Expenses Market Price Per Share Debt to Total Assets Long term Debt ratio = Debt to Equity = Year 2004 1,003,252,653 1,422,581,752 2,500,368,171 952,991,742 923,377,280 1,885,115,488 615,252,683 2,250,040 26,021,799 195,208,573 390,248,683 162,297,008 279 Financial Information Year Year 2005 2006 979,316,891 1,427,560,032 2,406,876,923 970,701,416 812,529,812 1,783,231,228 623,645,695 2,250,040 34,311,762 176,319,775 398,641,695 67,785,759 3 48 2004 75. % 2005 74. 1% 1,189,929,096 1,397,087,008 2,587,016,104 1,197,987,718 718,168,213 1,916,155,931 670,860,173 2,250,040 75,106,875 201,332,892 445,856,173 118,067,797 246 2006 74. 1% Year 2007 1,064,749,181 1,378,737,392 2,443,486,573 1,128,318,964 787,868,674 1,916,187,638 527,298,935 2,250,040 105,096,707 236,610,206 88,286,676 120,127,996 277 2007 78. 4% Year 2008 1,588,397,601 1,307,816,629 2,896,214,230 1,443,833,003 833,152,269 2,277,035,172 619,228,958 2,250,040 148,181,023 278,378,580 57,399,542 99,849,906 352 2008 78. 6% Long Term Debt Solvency 6. 9% 33. 8% 27. 8% 32. 2% 28. 8% 3. 06 2. 86 2. 86 3. 63 3. 68 Times Interest Earned = 1. 20 2. 60 1. 71 1. 97 2. 79 Interpretation: According to the above information we can say that the company has a higher debt in its capital structure. As its Debt/Asset ratio shows from 2004-2008 it has been maintaining almost same amount of debt which is 75% of total assets in its capital structure. It indicates the company is a hi ghly leveraged firm and more risky in terms of debt. According to Long term debt ratio the company maintained a long term debt of around 33% from 2004 – 2008, which also indicates that the company had higher short term debt than it’s long term debt. Time interest earn ratio indicates that the company has enough liquid asset to payback its interest expenses. However Debt/Equity ratio shows the company had a capital structure containing higher debt than its equity. The total debt amount fluctuates throughout this given 5 years but it remains almost three times than its total equity. 11 | P a g e Capital Structure: Confidence Cement Mills LTD. Financial Information Items Year 2004 Year 2005 482627000 570818000 1053645000 429290000 4421000 52985936 433711722 619933000 1900000 20814000 176,319,775 208362754 21573000 250 Year 2006 424937956 580334331 1005272287 362205475 10501799 61807398 372707274 661065000 1900000 41132000 201,332,892 220862754 17559894 225 Year 2007 535307861 564884690 1100192551 413902667 1040702 97073198 414943369 685249000 1900000 52684000 236,610,206 240862754 19968848 368. 8 Year 2008 564074297 590057449 1154131746 525841496 0 58606753 525841496 628290000 1900000 -28459000 278,378,580 221862754 26294826 318 Total Current Asset Fixed Asset Total Asset Current Liability Long term Debt Account Payable/ Trade Creditors Total Debt/ Total Liability Total Equity Share Outstanding Net Income Earnings Before interest and tax Retained Earnings Interest Charges/ Financial Expenses Market Price Per Share 357315000 579526135 936841360 329088697 83293 39197784 329171990 607669370 1900000 -24039000 195,208,573 207412754 25264715 289 12 | P a g e Long Term Debt Solvency Debt to Total Assets = 2004 35. 1% 2005 41. 2% 006 37. 1% 2007 37. 7% 2008 45. 6% Long term Debt ratio = Debt to Equity = 0. 00% 0. 4% 1. 0% .01% 0. 00% 0. 05 0. 02 .02 .01 .01 Times Interest Earned = -1. 951485 -0. 035183 2. 54968 2. 9453453 -2. 0823 Interpretation: According to the above information we can say that the company has a lower debt in its capital structure. As its Debt/Asset ratio shows from 2004-2008 it has been maintaining increasing amount of debt in its capital structure which was 35. 1% in 2004 & reached to45. 5% in 2008. It indicates the company is a moderately levered firm and risky in terms of debt. According to Long term debt ratio the company maintained nonexistence long term debt only 2% in 2006, which also indicates that the company had higher short term debt than it’s long term debt. Time interest earn ratio indicates that the company has did not had enough earning to payback of its interest other than the year of 2006 &2007. However Debt/Equity ratio shows the company had a capital structure containing lower debt than its equity. The total debt amount remained almost constant throughout this given 5 years which is very negligible than its total equity. 13 | P a g e Comparative Analysis 14 | P a g e Divedend Policy Comparative Financial Data Analysis The financial data we gathered to find out the relationship between various variables with price of two different cement companies arc given. We attempted to explore some conclusion on the behavioral pattern of changing the share market price due to dividend, dividend policies followed. The data are extracted from annual reports of two selected companies that are The Meghna Cement Mills Limited (MCML) and Confidence Cement Limited . The annual data of these companies has been taken from the annual reports and other annual publications of Dhaka Stock Exchange. Confidence Cement Ltd Net Net Year % Asset Profit End Dividend Value After P/E Per Tax Share (mn) Meghna Cement Ltd Net Year % Profit End Dividend After P/E Tax (mn) Industry Average Net Year % Profit End Dividend After P/E Tax (mn) Year Earning per share % Dividend Payout Ratio Earning per share Net Asset Value Per Share Dividend Payout Ratio Earning per share Net Asset Value Per Share % Dividend Payout Ratio 2004 2005 2006 2007 2008 -12. 65 10. 95 21. 65 27. 73 -14. 98 319. 83 326. 28 332. 93 345. 66 330. 67 24. 04 20. 81 41. 13 52. 68 28. 46 -9. 5 10. 78 6. 4 13. 3 n/a 10%B 5 5 15 15 46% 69% 54% 11. 57 15. 25 33. 38 46. 71 65. 86 273. 44 26. 02 277. 17 34. 31 298. 15 320. 42 275. 20 75. 11 105. 10 148. 18 24 . 21 25. 00 20. 61 25. 00 216% -0. 54 164 13. 1 75 27. 515 54 37. 22 46 25. 44 301. 72 315. 55 333. 04 302. 93 27. 56 58. 12 78. 89 59. 86 15. 69 7. 02 9. 61 5. 35 15 20 20 30 105 72 54 46 296. 63 0. 99 7. 5 15 216 7. 64 5. 92 5. 35 25. 00 25. 00 30. 00 15 | P a g e Interpretation: Earnings Per Share: The industry average of EPS is tk. (. 54), 13. 1, 27. 51, 37. 22, and 25. 44 for the year 2004, 2005,2006,2007,2008 consecutively. In 2004 EPS of Meghna Cement Ltd was 11. 57 & after that EPS has increased and reached up to 65. 86 in 2008, So that, the graph shows that the EPS of Meghna Cement is well above of the industry average EPS. In 2004 EPS of Confidence Cement Ltd was (12. 65) & after that EPS has increased and reached up to 27. 63 in 2007. After that EPS has decreased again and reached to (14. 8)So that, the graph shows that the EPS of Confidence Cement is well below of the industry average EPS. Comperative EPS 70 60 50 40 30 20 10 0 -10 -20 2004 2005 2006 2007 2008 Confidence -12. 65 10. 95 21. 65 27. 73 -14. 98 Cement Ltd Meghna 11. 57 15. 25 33. 38 46. 71 65. 86 Cement Ltd Industry Average -0. 54 13. 1 27. 515 37. 22 25. 44 So, according to our Comparative EPS analysis, we can easily say that Meghna Cement Ltd. is in the best position where Confidence Cement Ltd is the worst position. Price Earnings Ratio: The industry average of P/E ratio is tk. 7. 5, 15. 69, 7. 02, 9. 61, and 5. 5 for the year 2004, 2005,2006,2007,2008 consecutively. In 2004 P/E ratio of Meghna Cement Ltd was 24. 21 & after that P/E has decreased gradually and reached to 5. 35 in 2008, so according to Industry average, the graph shows that the P/E ratio of Meghna Cement is well above up to 2006 of the industry average P/E, then in 2007 it’s ratio falls below the industry average and in 2008 equal to industry average due nonexistence of P/E ratio of Confidence Cement in 2008. Comparative P/E Ratio 30 25 20 15 10 5 0 -5 -10 -15 Confidence Cement Ltd 2004 -9. 5 2005 10. 78 2006 6. 4 7. 64 2007 13. 5. 92 2008 Meghna 24. 21 20. 61 Cement Ltd 5. 35 In 2004 P/E ratio of Confidence Cement Ltd was Industry 7. 35 15. 69 7. 02 9. 61 5. 35 Average (9. 5), after that EPS has increased to 10. 78 in 2005, then again decrease in 2006 and in 2007 it has increased to 13. 3. In 2008 there is no existence of P/E due to no cash dividend declared by the company. So, according to Industry average, the graph shows that the P/E ratio of Confidence Cement is well below up to 2006 of the industry average P/E, then in 2007 its ratio rise above the industry average and in 2008 no P/E as discussed earlier. So, according to our Comparative P/E ratio analysis, we can easily say that Meghna Cement Ltd. is in the best position where Confidence Cement Ltd is the worst position. 16 | P a g e Comparative Dividend Dividend Per Share: The industry average of DPS is tk. 15, 15, 20, 20, and 30 for the year 2004, 2005,2006,2007,2008 consecutively. From 2004 to 2007 DPS of Meghna Cement Ltd was 25 & after that DPS has increased to 30 in 2008 due to extra earning as discussed before. So according to Industry average, the graph shows that the DPS of Meghna Cement is well above up to 2007 of the industry average DPS. In 2008 DPS is equal to industry average due nonexistence of Dividend of Confidence Cement in 2008. 35 30 25 20 15 10 5 0 Confidence Cement Ltd Meghna Cement Ltd Industry Average 2004 5 25 15 2005 5 25 15 2006 15 25 20 2007 15 25 20 2008 30 30 From 2004 to 2005 DPS of Confidence Cement Ltd was 5 & from 2006-2007 DPS has increased to 15 in 2008 due to extra earning as discussed before. So according to Industry average, the graph shows that the DPS of Confidence Cement is well below up to 2007 of the industry average DPS. In 2008 there in no DPS of Confidence Ltd. due nonexistence of Dividend. So, according to our Comparative DPS analysis, we can easily say that Meghna Cement Ltd. is in the best position where Confidence Cement Ltd is the worst position. Dividend Payout Ratio: The industry average of Payout ratio is 216, 105, 72, 54, and 46 for the year 2004, 2005,2006,2007,2008 consecutively. In 2004 Payout ratio of Meghna Cement Ltd was 216 which is equal to the industry average payout ratio because of non existence of payout ratio of Confidence Cement Ltd. in 2004. After that payout ratio has decreased gradually and reached to 46 in 2008, so according to Industry average, the graph shows that the payout ratio of Meghna Cement is equal to the industry average payout ratio in 2004, then it’s ratio rise above the industry average up to 2006 and in the last two years equal to industry average. Compative Payout Ratio Compative Payout Ratio 250 250 200 200 150 150 100 100 50 50 00 Confidence Confidence Cement Ltd Cement Ltd Meghna Meghna 216 216% Cement Ltd Cement Ltd Industry Industry 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 46 46 164 164 69 69 75 75 54 54 54 54 46 46 46 46 16 216 105 105 72 72 54 54 Average Average In 2004 there was no Payout ratio of Confidence Cement Ltd as mentioned earlier. After that payout ratio has increased in 2006 and then again decreased in 2007. In 2008 there is no payout ratio because there is no cash dividend. So according to Industry average, the graph shows that the payout ratio of Confidence Cement i s well below compare to the industry average payout ratio in 2005 & 2006, and then its ratio is equal to the industry average in 2007. In 2008 there is no payout ratio as discussed before. So, according to our Comparative DPS analysis, we can easily say that Meghna Cement Ltd. is in the best position where Confidence Cement Ltd is the worst position. 17 | P a g e Capital Structure Interpretation: Debt/Asset Ratio: The industry average of Debt/Asset Ratio for the year 2008 is 62. 1%. Debt/Asset Ratio of Meghna Cement Ltd is 78. 6% and Confidence Cement Ltd. is 45. 6%. So, according to industry average Confidence Cement is in the best position while Meghna Cement Ltd is in the worst position. Long Term Debt Ratio: The industry average of Long Term Debt Ratio for the year 2008 is 14. %. Long Term Debt Ratio of Meghna Cement Ltd is 28. 8%, and Confidence Cement Ltd. Is 0%. So, according to industry average Confidence Cement is in the best position and Meghna Cement Ltd is in the worst position. Debt Management Ratio 4 3 2 1 0 -1 -2 -3 Debt to Total Assets Confidence Cement Mills LTD 2008 Industry Average 0. 456 Long term Debt ratio 0 0. 288 0. 144 Debt to Equity 0. 01 3. 6 8 1. 845 Times Interest Earned -2. 0823 2. 79 0. 35385 Meghna Cement Mills LTD 0. 786 0. 621 Debt to Equity Ratio: The industry average of Debt/equity Ratio for the year 2008 is 184. 5%. Debt/equity Ratio of Meghna Cement Ltd is 368%, and Confidence Cement Ltd. is 1%. So, according to industry average Confidence Cement is in the best position Meghna Cement Ltd is in the worst position. Time Interest Earned: The industry average of Time Interest Earned for the year 2008 is 0. 5385. Time interest earned for Meghna Cement Ltd is 2. 79; Confidence Cement Ltd. is -2. 0823. So, according to industry average Meghna Cement is in the best position and Confidence Cement Ltd is in the worst position. Return on Assets: The industry average of Return on Assets for the year 2008 is 2%. Return on Assets of Meghna Cement Ltd is 5. 1%, and Confidence Cement Ltd. Is (2. 5%). So, according to industry average Meghna Cement is in the best position Confidence Cement Ltd is in the worst position. Return on Equity: The industry average of Return on equity for the year 2008 is 0. 26%. Return on Equity of Meghna Cement Ltd and Confidence Cement Ltd. Is (4. 5%). So, according to industry average Meghna Cement is in the best position Confidence Cement Ltd is in the worst position. Profitability Ratio 30. 00% 25. 00% 20. 00% 15. 00% 10. 00% 5. 0% 0. 00% -5. 00% -10. 00% Meghna Cement Confidence Cement industry Average Return on Asset 5. 10% -2. 50% 2% Return on Equity 23. 90% -4. 50% 26% 18 | P a g e References ? Intermediate Accounting ( 11th Edition),Donald E. Kieso ? The Analysis and Use of Financial Statements(3rd Edition),Gerald I. White ? Scott Besely & Eugene F. Brigham, â€Å"Essentials of Managerial Finance†, Thirteenth Edition, ? ? ? ? Thomson South-Western, Ohi o, 2006 www. bashundharagroup. com/mcml/ www. confidencegroupbd. com/cement/ www. dsebd. org www. wikipedia. com 19 | P a g e