abortion1 essays

abortion1 expositions Do you consider something with a thumping heart a living animal? An infants heart structures and starts pulsating in the fifth seven day stretch of pregnancy, along these lines, that would make premature birth murder. The infant that is becoming within you is relying upon you, so when you settle on the decision to end that life, you are settling on the decision to kill someone else. Somebody that puts stock in the star decision hypothesis would state that the choice is up to the lady, however the individual with the ace life hypothesis would state that it is murder regardless of what the circumstance. OK think of it as murder to kill a child the day after it is conceived? At that point for what reason would it not be murder to execute it before it is conceived? On the off chance that it is difficult to prematurely end an infant in the ninth month, at that point what makes it alright to do in the fifth or 6th month. (Carl Sagan Numerous premature births are played out every year in the United States. 75% of all premature births in the U.S. are performed on ladies more than 20 years old, yet the officials attempt to focus on the 186,000 teenagers that have a fetus removal every year. In 1990, there were about 400 premature birth bills were acquainted with 41 governing bodies. Up until now, upwards of 20 states have passed laws that requires an adolescent to have a guardians assent before having a fetus removal. This may help decrease the quantity of premature births every year, the individuals that passed these bills feel that perhaps the guardians will feel distinctively about the circumstance and have the option to work their kid out of it. 20% of teenagers that are explicitly dynamic don't utilize any type of anti-conception medication, these are the youngsters that wind up getting pregnant and getting a premature birth. On the off chance that these young ladies would utilize a prophylactic it could stop a ton of the premature births played out every year. Looking at the situation objectively, it is such a great amount of simpler to take a pill then it is to be pregnant and need to settle on the life of someone else. At the point when you feel that you are mindful enough to take an interest in sexual movement, you ought to likewise f ... <! Abortion1 articles Hardly any issues in history have isolated our kin as profoundly as the issue of premature birth. Master Choice promoters battle to keep laws that authorize fetus removal. They express a lady's entitlement to settle on that decision openly is principal. While, a similarly enthusiastic professional life development has announced that fetus removal is a definitive human rights issue. Each side is profoundly persuaded of the rightness and significance of its motivation. Voices are raised, regularly heatedly; discussions and shows proceed. Time and again ignored in the crossfire is the lady with the individual emergency of a startling pregnancy. Confronted with what is probably going to be one of the most troublesome choices of her life, she is regularly startled ignorant frequently without assets and alone. Relatives (on the off chance that they discover) may respond out of resentment or retreat behind I let you know so. A sweetheart, darling, or even a spouse my not feel arranged for parenthood. There might be no cash. Diaper changing may resemble a poor substitute for promising instruction or profession. Surrendering an infant for selection in the wake of experiencing work and conveyance may appear to be excruciatingly agonizing. So frequently premature birth is by all accounts the best way to end the emergency. Be that as it may, handy solutions only from time to time work out the manner in which they are planned. When a lady has a fetus removal its absolutely impossible to fix it. Premature births are conclusive and a huge number of lady who have had them always remember. The experience frequents them for a considerable length of time, possibly for lifetime. Blame isn't anything but difficult to live with. Not many ladies examining premature birth have been taught on fetal turn of events or the fetus removal methodology. Significantly less have been recounted the potential results of premature birth. What a lady with an unforeseen pregnancy doesn't require are allegations, addresses, or shortsighted counsel to settle on a brisk choice and continue ahead with life. She needs empathetic and functional assistance. She has a privilege to be taught without a political plan. ... <! Abortion1 papers Around 29 years back, Norma McCorvey, who at that point embraced the nom de plume Roe, turned into the lead offended party in a claim to challenge the severe enemy of fetus removal laws in Texas. The case was engaged the Supreme Court, which passed on its disputable decision on January 22, 1973. The choice sanctioned fetus removal in every one of the fifty states and started a sociopolitical banter that remaining parts charged right up 'til the present time. Nonetheless, McCorvey never had a fetus removal and in the end parted with the kid for selection. In 1995, she changed over to Christianity and turned into an intense foe of fetus removal. The lady who had battled for ladies to have the opportunity to choose how to manage their bodies came to consider star to be as executioners. Lets first investigate a portion of the conditions wherein individuals may choose to prematurely end a kid. I figure its a confusion to believe that individuals will just select fetus removal in instances of spontaneous parenthood. Todays innovation empowers us to see at a beginning time of the pregnancy if the infant is healthy. In the event that tests show that something isn't right and that the child will always be unable to endure or will just develop to be a specific age, guardians regularly have an extremely troublesome choice to make. In these cases, I imagine that guardians unquestionably reserve the option to decide on fetus removal. I think that its pitiful that, while those individuals experience a horrific experience, they are decided for their activities, frequently by individuals who clearly havent been in their circumstance and judge them as executioners who took an honest life. Its unquestionably more intricate than that. Undesirable pregnancies remain the fundamental motivation to decide on fetus removal. Here once more, the issue is intricate and there isnt an answer that is legitimate in each circumstance. On the off chance that the pregnancy is the consequence of assault or sexual maltreatment, there ought to be no conversation. The casualty has the privilege to decide for fetus removal ... <!

Externalities of Education Essay Example | Topics and Well Written Essays - 500 words - 1

Externalities of Education - Essay Example Government funded Education and Decreasing Unemployment Levels: Rising degrees of state funded training decline joblessness levels so state funded instruction ends up being a positive externality. In created nations where advanced education is as a rule progressively open, the degree of joblessness further reductions. Also, in nations where specialized training turns out to be progressively open this rate goes further down. At the point when proficient and gifted learning gets open, it additionally expands the work versatility rate and work begins moving towards better occupation from conventional to progressively proficient. State funded Education Raises Living Standards: Public instruction is a constructive externality as it increases the living expectations of individuals. With the expansion in specialized and capable instruction at open level, individuals begin getting mindfulness about present day innovation and clear their ways towards better living. State funded instruction offers more possibilities towards headway and advancement particularly for normal man. Relatively, it is modest than private schooling so more individuals have chance to accomplish the advantages. State funded instruction is promptly accessible which likewise makes basic man to receive the full rewards from this arrangement of training. State funded Education and the Level of Awareness among People: as of now referenced, government funded instruction can be promptly accessible so with the assistance of this training framework an ever increasing number of individuals can get mindfulness about regular issues in regards to wellbeing and wellness, adjusted eating regimen, contamination and so on. Thus, again we can without much of a stretch say that government funded instruction is a positive externality in view of its social advantages. At the point when we dissect the presence of open K-12 educational systems versus Private K-12 Schooling framework, we can look at different focuses master and against the presence of these two. It is critical to comprehend that both the frameworks have their own points of interest just as disadvantages. The greater part of the

Artificial Intelligence What Really Makes us Human - Literature Essay Samples

â€Å"The question of whether a computer can think is no more interesting than the question of whether a submarine can swim.† This quote from Edsger W. Dijkstra is a fantastic illustration of the question that surrounds the world of artificial intelligence. These technologies have become so accessible in today’s society that we do not really think of, or consider, where we should draw the line of imposing human characteristics onto artificial beings. Now it is not to say that we only do this with technologies; in fact, the human race has the bad habit of trying to even impose our experiences on animals as well. Is it our fault that we question the relationship aspects that surround artificial intelligence? Better yet, at what point do we consider things human? Is it our abilities to form relationships through thought and passion, or the way we can hold conversation? At some point, humans have found the sweet spot where we can â€Å"recognize† and â€Å"determine† what is artificial, but chances are, we are wrong. In Ancillary Justice by Ann Leckie, relationships and artificial intellige nce are strong themes throughout. The main character, One Esk/Breq, raises a lot of questions about the capabilities that ancillaries, AIs, hold in the spaceworld society where the book takes place. The one event that sends the world of AI into mayhem is directly linked to the ability that One Esk has to pick favorite lieutenants. As the alternating chapters progress, the readers see the attachment that she has formed with Lieutenant Awn while stationed on the planet of Ors. When things on Ors go awry Anaander Mianaai, the leader of Radch, requests Awn to return to the Justice of Toren. Mianaai then orders another ancillary to kill Awn, and the ancillary complies. It is important to note that all of the ancillaries aboard the Justice of Toren share a common operating system, a unified label. The Justice of Toren was their identity, but the ancillaries themselves were still individuals with the capabilities of making intelligent decisions. That’s why when One Esk realizes that Awn has been killed she gets visibly upset. One Esk’s ability to form relationships and have care is most apparent at this point and we definitely see the definition of â€Å"human† begin to alter. If an ancillary can care, does that make them human? To understand analyzing another relationship dynamic is crucial. Breq’s encounter with Seivarden marks the beginning of another interesting bond. Seivarden is obviously not a favorite of Breq’s, but sh e is still compelled to bring him along and care for him. Breq even throws herself off of a bridge to save Seivarden at one point. Her internal dialogue provokes thought, â€Å"I didn’t know why I had jumped but at that moment it no longer mattered, at that moment there was nothing else† (Leckie 199). With Seivarden once holding the position of a lieutenant, that probably contributes to Breq’s inability to not monitor him. The relationship alters slowly as Seivarden eventually turns into Breq’s subservient figure. He follows her around and swears to never leave her. The dedication displayed towards Breq by Seivarden is something that we would define as a humanistic trait in all relationships. The bond between these two characters is reversed in comparison to the care and dedication that Breq showed to Awn. The aspects in both of these relationships are interesting to analyze and compare. Lieutenant Awn knew and recognized that One Esk was an ancillary. Ye t, she still displayed care for her. Although her affections were not explicit, Awn and One Esk both preferred each other over other lieutenants and ancillaries. Awn even states that One Esk’s â€Å"[] singing doesn’t disturb me []† (Leckie 181) and apologizes for One Esk thinking that it did. After Awn’s murder, One Esk began her search for vengeance. Desperate to kill Anaander Mianaai, she created her human guise. Was it through her ability to care for someone that made her disguise believable, or was it her competence that allowed her to hide her true identity? Either way, when Seivarden became involved, he immediately believed that One Esk was a human named Breq. Even further, do we consider Breq to be human? If we abandon the organic and biological definitions of human and look at all other aspects, Breq aligns. She has goals, ponders life, and realizes that death is a possibility during her mission. Breq is a conscious entity, just with altercations that change her human composition to technological. She appears to be human, can talk as if she is human, and interacts with others like she is human. An everyday citizen didn’t even recognize Breq’s true identity. How could we, as humans, say that we could easily distinguish Breq from any real, livin g being. Our misconstrued ways of defining humanity have closed the gap on what is real and not real. This concept has been around since we began imposing human characteristics onto non-human things, an idea also known as anthropomorphism. Somewhat similarly, in Mary Shelley’s Frankenstein, life is literally bestowed upon the dead. Victor Frankenstein is a scientist with a passion to reanimate, turning himself into a God figure almost. He completes just that with the creation of his monster, an atrocious looking being stitched together from random mismatching dead body parts. Even though the monster is a breathing, biological, and semi organic human being others have a hard time categorizing him as this. Right after creating the monster, Victor abandons him. He tells Victor that â€Å"God in pity made man beautiful and alluring, after his own image; but my form is a filthy type of your’s []† (Shelley 142). He never truly received the care, love, and understanding that he deserved. This leaves the monster seeking out vengeance of sorts, much like One Esk did with Lieutenant Awn. Each creation from these novels has been abandoned by someone that held importance in their life. The monster was left beh ind by his own creator, and One Esk left behind by her favorite lieutenant. The similarities between the characters and their relationships in both novels continue to stack up. The monster ends up altering himself and enhancing his humanistic qualities. He does this by moving into a shack behind a family that lives in a cottage. By analyzing the way the family interacts and behaves with one another, the monster starts to learn. He gains knowledge of language and speech by reading books such as Paradise Lost; due to this education, the monster eventually finds Victor. Victor learns all of this as the monster tells his story. Their relationship begins to alter at this point; due to the fact that Victor has gained a new respect for the monster. There is a new level of understanding and acceptance between the characters that had not been there before. The monster is now more â€Å"human† like to Victor, much like Breq’s view of Seivarden in Ancillary Justice. Breq and the monster both strove for more humanistic qualities to make themselves appear to be human. The question still remains though, do we define them as human? The monster is technically alive and biologically composed, but there is still the label of â€Å"monster† that he carries. He is not referred to as a compassionate being, similar to Breq’s situation. Both have feelings and create relationships, so why is it that we can’t allow them to be viewed as human? The stigma of artificial intelligence and the stigma of reanimation are very similar. It’s the negative cloud that surrounds both of these technologies that causes us to not label their by-products human, even if they appear to be so. Yet, we create these technologies ourselves. We always have to attain what’s bigger, what’s better. If it’s our looks that make us human, then why is Breq not considered to be one? If it’s emotion and feelings that make us human, then why are neither Breq or the monster considered to be one? What makes sense is that they both make us feel uncomfortable. Humans are creatures of habit. We like to have routines and to know that we are in full control of our own creations. The idea that something may be able to outsmart us and know our next move is terrifying. It’s one thing when a television set or gaming device follows our every move but when this intelligence takes on the shape of a human it automatically becomes even more unsettling. This theory is also known as the â€Å"uncanny valley†. Almost everything with â€Å"[] a highly human-like appearance can be subject to the uncanny valley effect, but the most common examples are androids,computer game characters and life-like dolls (Lay).† Because of our tendencies to anthropomorphize we have reached the point where our technologies cause us discomfort. The answer to the still prevalent question of when we begin to consider things human lies wi thin ourselves. The human race is responsible for the technologies that have surfaced in our society; in Ancillary Justice, the depiction of our relationship with artificial intelligence is accurate. We are the ones who impose authentic intelligence and emotions on technology because we have the inner desire to anthropomorphize. If the artificial intelligence is similar enough to us, then it should be as capable as we are. Due to this, we have stumbled upon a fear of being inferior or unsettled by these lifelike artificial intelligences. The reason we don’t consider these beings human is because we don’t want them to be human. As the superior and dominant species we want full control in society over everything that is below us. This includes artificial intelligence. No matter how close they are to us in emotions, appearances, and intelligence, we will never label them as human, but we should not blame the technology for this;we were the ones who desired it in the first place. Works Cite Lay, Stephanie. Uncanny Valley: Why We Find Human-like Robots and Dolls so Creepy. The Guardian. The Conversation, 13 Nov. 2015. Web. 18 Apr. 2016.Leckie, Ann. Ancillary Justice. New York: Orbit, 2013. Print.Shelley, Mary. Frankenstein. UK: Lackington, Hughes, Harding, Mavor, Jones, 1818. Print.

Definition and Examples of Resumptive Modifiers

Legal Frameworks Regulate The Domestic And International...

Various legal frameworks regulate both the domestic and international businesses. As such, the laws and regulations within the United States are somewhat dissimilar to those in the global trade arena. It is worth pointing out that contextual factors among other issues are some of the reasons why trades conducted within the United States markets would be different from the international ones. For a company like Medeco that wishes to consider expansion into the global arena, it would be essential to understanding that the legal regulations it will encounter in its endeavor to operate overseas may be different and challenging. Within the United States, the company would have to comply with the Uniform Commercial Code (UCC). This regulatory framework stipulates and directs how businesses within US are carried out. However, on the international venture, Medeco will need to subscribe to Convention and Contracts for International Sales of Goods (CISG). This is a trade agreement that tow par ties from different states enter into as they seek to engage in the sales of goods and services at the international level. For a company in the caliber of Medeco, signing this contract with countries like Germany, France, and China is necessary since it operates from the United States, an agreement between the nation (US) and the respective countries is key in enhancing business operations. It is imperative to note that the CISG is not absolute. Although it is an important contract that bringsShow MoreRelatedLegal Memorandum911 Words   |  4 PagesThis document presents a framework for developing a legal memorandum concerned with the themes that need to be considered in the company’s decision to expand to Mexico. There are several legal and ethical areas pertinent to doing business internationally in Mexico. They derive from aspects of both the American and Mexican legal environments as outlined herein. I. Domestic Law A. The FCPA 1. The Foreign Corrupt Practices Act (FCPA) governs the conduct of business operations and activities by AmericanRead MoreFinancial Crisis And The Global Financial System858 Words   |  4 PagesFinancial crises have plagued the international financial system for many decades. Indeed, they are becoming quite common lately. This quasi-permanent and problematic aspect of the global financial system can be highlighted by the problems regarding the sovereign debts of Asia, Africa, Central Europe, Latin America and the Middle East in the 80s, the 1987 stock market crash, the European foreign exchange crisis in 92-93, the bond market shock in 94, the financial problems that affected Asia, BrazilRead MoreWhat Can Post Democracy Tell Us About Mncs And Extraterritorial Violations Of Human Rights?1195 Words   |  5 Pagesout as political power shifts to the corporate sphere. Crouch’s explanatory framework considers a range of political institutions in detail, but this article focuses on just one: the transnational corporation (TNC). I specifically consider the problem of extraterritorial human rights violations committed by TNCs, and draw on Crouch’s framework to illustrate why the issue has proved to be so difficult for states to regulate. I begin by examining the problem of corporate regulation more generally, andRead MoreBitcoin And Digital Forms Of Currency919 Words   |  4 Pagesinterference with Bitcoin businesses. Most consumer have no understanding of why. This general writing requirement attempts to explain the background of Bitcoin and decentralized currency; it further defines why Bitcoin is in popular use; and finally the paper calls for United States government to take an active role in the international regulation of this growing financial scheme. Furthermore, I will address if there is any existing law that can be drawn to parallel the legal regulations that willRead MoreIKEA Environmental Factors1202 Words   |  5 Pagescatalog. There are many environmental factors that affect IKEA’s global and domestic marketing decisions. An analysis of those factors, the influence of the global economic interdependency and the effect of trade practices and agreements, the demographic and physical infrastructure, the cultural differences, social responsibility and ethics versus legal obligations, the effect of political systems and the influence of international relations and the Foreign Corrupt Practices Act of 1977, and finally theRead MoreThe Foreign Direct Investment Is An International Movement Of Capital1452 Words   |  6 PagesFirst of all, the foreign direct investment is an international movement of capital made by a company or by other entity to establish a subsidiary or to affiliate abroad, by acquiring an interest in a foreign company, by merging with a company foreign, or by establishing a joint venture in another country (O Neill, 2004). The FDI will allow Wal-Mart to expand their operations into the Moroccan market, to increase its productivity, and to increase its turnover. By merging with Marjane CorporationRead MoreThe Environment of Modern Business1797 Words   |  8 Pagesneeds some form of government to regulate its business affairs. As a function of any organised society, the governments play a key role in the modern business environment. But the form of government differs from nation to nation. Whatever the form or structure, all governments have activities and objectives in common, namely political, economic, legal, technological, and social environment of business. We can use these PEST(LE) factors, mainly in political, economic, legal, technological factors to examineRead MoreBarriers to Foreign Investment in the Chinese Internet Industry1675 Words   |  7 Pagesstrict legal co ntrols on information and distribution and poor enforcement of intellectual property laws. This article explains the barriers facing high-tech companies in China. [pic] Introduction | | China has the largest population and one of the fastest-growing economies in the world. If only one percent of its population participates in the New Economy, China will provide a market of more than 13 million potential customers for Internet businesses aroundRead MoreFactors Affecting International Business Practices2147 Words   |  9 PagesInternational Business: International business basically involves all business transactions like the transfer of goods, services, capital, technology and managerial knowledge throughout the world. Similar to other businesses or trade, international business also incorporates the export and import of business items. There are various options for conducting business include starting a joint venture with an existing firm in the host nation, exporting goods and services, offering managerial servicesRead MoreInternational And National Law On Forest Trade And Management4008 Words   |  17 PagesInternational and national law on Forest Trade and management Introduction Forest goods and services are valuable recourses and providing huge benefits to humankinds and all live on earth. Forest can bring about high level of commercial, material, and immaterial benefits. Many countries get benefits from trading in forest goods and services and consider forestry to substantial source of income. On the other side, trade in forest goods and services can contribute to environmental problem and environmental

Financial Analysis Tesco PLC

Question: Discuss about the Report for financial analysis Tesco PLC? Answer: Introduction Tesco was founded by Jack Cohen in 1919 when he started selling daily commodities at a small stall in London. On the first day of business, Mr. Cohen made a profit of on 1 pound from sale of just 4 pounds. Company started to expand to sell more products in the 60s in even bigger stores. Company started selling its products online when it launched its website in 2000 that is Tesco.com. Additionally the company also expanded its product range by including items such as cosmetics, clothes and electronics. In 2009, company also entered into banking business. Financial Anlysis Return On equity Return on equity calculates the profit earned by the company with relation to investment made in the company. The ratio would assess that how efficiently the management of the company is utilizing its assets to earn profits and companys ability to properly allocate the assets to the specific projects. The company earned a Return on equity of 8.05% which grew by 50% to 12.19%. This would suggest that company is not utilizing its assets efficiently to earn profits by allocating assets to the projects which are profitable(Damodaran, n.d.). Additionally the assets may be more costly as there is an increase in expenses. This increase would be due to increased sales of the company or may be due to the falling prices of oil which would have reduced the transportation costs. Reduced transportation costs would have resulted in increased profit as compared the equity of the company. Return on capital employed Return on capital employed calculates the profit earned by the company with relation to the total assets of the company. The ratio would assess that how efficiently the management of the company is utilizing its assets to earn profits and companys ability to properly allocate the assets to the specific projects. The company earned a Return on capital employed of 6.9% which grew by 28% to 8.84%. This would suggest that company is not utilizing its assets efficiently to earn profits by allocating assets to the projects which are profitable(Kantila, 2011). Additionally the assets may be more costly as there is an increase in expenses.This increase would be due to increased sales of the company or may be due to the falling prices of oil which would have reduced the transportation costs. Reduced transportation costs would have resulted in increased profit as compared the equity of the company. Sales revenue to capital employed Sales revenue to capital employed calculates the sales revenue earned by the company with relation to the total assets of the company. The ratio would assess that how efficiently the management of the company is utilizing its assets to earn Sales revenue and companys ability to properly allocate the assets to the specific projects. The company earned Sales revenue to capital employed of 2.04% which grew by 4% to 2.14%. This would suggest that company is not utilizing its assets efficiently to earn sales by allocating assets to the projects which are profitable. Additionally the assets may be more costly as there is an increase in expenses. Companys increased sales revenue as compared to its capital due to increased marketing of the company. Additionally, companys sale also increased due to opening of new stores in the areas that had huge demand for consumer goods. Sales revenue per employee Sales revenue per employee calculates the sales revenue earned by the company with relation to the total employees of the company. The ratio would assess that how efficiently the management of the company is utilizing its human resources to earn Sales revenue and companys ability to properly allocate the HR to the specific projects. The company earned sales revenue per employee of 0.155% which grew by 3% to 0.16%. This would suggest that company is utilizing its assets efficiently to earn profits by allocating HR to the projects which are profitable. Companys increased sales revenue as compared to its capital due to increased marketing of the company. Additionally, companys sale also increased due to opening of new stores in the areas that had huge demand for consumer goods. Quick ratio Quick ratio assesses the companys position with respect to its liquid assets and short term liabilities. It assesses companys ability to pay its short term obligations with its liquid assets. Liquid assets are cash or those that can easily and immediately be converted to cash. In 2013 company had a quick ratio of 94% which decreased by 47% to 44%. This would suggest that that company does not have sufficient liquid assets to immediately meet its current financial obligation. Company currently has reasonably low quick ratio suggesting weak short term financial position. Companys low quick ratio would be mainly due to the fact that companys majority of the current assets are companys inventory. Since inventory is not considered as a liquid asset it wasnt taken into account in the calculation lowering the current assets and thus it resulted in low quick ratio. Current ratio Current ratio assesses the companys position with respect to its current assets and short term liabilities. It assesses companys ability to pay its short term obligations with its current assets. In 2013 company had a current ratio of 68% which decreased by 11% to 61%. This would suggest that that company has sufficient current assets to meets its current financial obligation. Company currently has reasonably low current ratio suggesting unhealthy short term financial position(Gryglewicz, n.d.). Such low current ratio would be due to the fact company might be selling its goods on high credit which would result in less available cash. Gearing ratio The gearing ratio assesses the financial leverage of the company to determine the financial risk that is being faced by the company. In 2013 company had a gearing ratio of 87% which increased by 9% to 96%.Such trend indicates that company is majorly funded through debt finances and faces huge financial risk due to such funding measures(Feld, Heckemeyer and Overesch, 2013). One of the reasons for increased gearing would be the expansion policy of the company. Company is rapidly growing by opening new stores in more demanding locations. These expansions required funding, which was then obtained through issuing new loan. Such actions increased companys debt and thus increased companys gearing. Interest cover Interest cover assesses the companys ability pay off its interest obligations when required by comparing its interest costs or expenses with the companys profit before tax and interests. It assesses how secure the company is financially. Company achieved an interest cover ratio of 3.76 times in 2013 which grew by 30% to 4.66 times in 2014. This trend would suggest that company earns more than required profits and such profits are enough to cover for companys financial obligations. Dividend Payout ratio Dividend payout ratio assesses the companys policy regarding dividend to be paid to its shareholders. However ideal payout ratio depends upon the expectations of the shareholders of the company. Some share holders might be expecting regular dividends to meet their regular expenditures. Where as some share holders expect the company to retain its earnings and expand to achieve capital gains for the value of shares. Company had a payout ratio of 85.42 in 2013 which fell by 24% in 2014 to 62.29%. The decrease in the payout ratio would be due to the expansion of the company and these retained earnings would have been utilized to fund the expansion. Price to earnings ratio Price to earnings ratio assesses companys perception in the market as compared to earnings by comparing companys market price of its share with the earning per share. Company had P/E ratio of 186 times which fell to 28 times in 2014. This was due to increase in the eps as expected by the market. Conclusion In accordance with the above financial ratios, it can be said that Tesco does not have adequate funds to meet the short term debt obligations since the quick ratio and current ratio indicates this fact as the current assets are lower than the current liabilities. The companys capital structure is dependent more on debt and less on equity funds due to which there could be numerous issues for Tesco which can definitely produce a more drastic impact on its operations and even on profits as well. However, Tesco has the ability to cover the interest expenses on the debt it owes and that is quite clear from the interest coverage ratio. References Damodaran, A. (n.d.). Return on Capital (ROC), Return on Invested Capital (ROIC) and Return on Equity (ROE): Measurement and Implications.SSRN Electronic Journal. Feld, L., Heckemeyer, J. and Overesch, M. (2013). Capital structure choice and company taxation: A meta-study.Journal of Banking Finance, 37(8), pp.2850-2866. Gryglewicz, S. (n.d.). Corporate Liquidity and Solvency.SSRN Electronic Journal. Kantila, D. (2011). A Survey of Pharmaceutical Companies with Respect to Return on Net Capital Employed.IJAR, 2(3), pp.12-13.

The Impact of the A380 Project on the Financial Performance free essay sample

Abstract Airbus has been making headlines in the past few months for all the wrong reasons. This iconic European corporation has undergone a turbulent period due to the problems surrounding the Airbus A380 project. A new flagship product that should have curved out an unassailable advantage for Airbus over Boeing went completely wrong. The Airbus A380 aircraft was a ground breaking concept that was meant to push EADS into a unique market segment. Instead, it threatened the very existence of the company and served as a catalyst for major surgery and a complete reorganization of the corporation starting from the top management down to the production floors. Numerous studies have been undertaken that have documented details of the Airbus A380 project and what, how and why it all went wrong. The company and other stakeholders have been undertaking drastic steps to try and put the company back on track and ensure the survival of the commercial aircraft business unit. We will write a custom essay sample on The Impact of the A380 Project on the Financial Performance or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page In this study we look at how the problems surrounding the Airbus A380 project have affected the financial health of EADS. The background to the problems and the financial performance of Airbus is studied and presented. A brief discussion of how the data we collected and used for the study and the data that we could not get access to is also presented early in the paper. From the data and analysis, a comparison of the two dominant players in the commercial aircraft manufacturing industry, Airbus and Boeing, is also undertaken. A brief highlight of the financial impact of a project in the computer/consumer electronics industry is also presented. Finally from these data and prior studies on this subject, we have tried to highlight the impact of the project on the short and long term financial direction of EADS. Table of Contents List of Tables6 6 List of Figures7 1 Introduction8 2 Theoretical Framework14 3 Data Collection25 4 EADS Background and Analysis27 5 Boeing Background and Financial Data50 6 Comparative Analysis of EADS and Boeing 59 7 Other Factors that Affected the Financial Health of EADS69 8 Long-Term Prospects72 9 Comparison to a Project in a different Industry78 10 Conclusions79 81 11 Future Work82 12 Reference List83 List of Tables Table 4. 1 Business Segment Data of EADS 36 Table 4. 2 Consolidated Cash Flow Statements of EADS. 36-37 Table 4. 3 Consolidated Income Statement of EADS.. 40 Table 4. 4 Consolidated Balance Sheet of EADS 40-41 Table 5. 1: Consolidated Statements for Boeing 55-57 Table 5. 2: Income Statements for Boeing. 57-58 Table 5. 3: Consolidated Cash Flow Statements of Boeing 58-59 Table 8. 1: The Order Book for A380 Aircraft 76-77 List of Figures Figure 4. 1: EADS stock ownership. 29 Figure 4. 2: EADS management structure.. 31 Figure 4. 3: Airbus management structure 32 Figure 4. 4: EADS divisions and revenue. 34 Figure 4. 5: EADS share price (25 Nov 05 to 25 Jun 07)†¦. 49 Figure 5. 1: Boeing distribution of stock. 51 Figure 5. 2: Boeing divisions, revenue and activities.. 52 Figure 5. 4: The management structure of Boeing.. 54 Figure 6. 1: Working Capital Boeing Vs EADS 61 Figure 6. 2: Revenue Boeing Vs EADS 64 Figure 6. 3: Airplane Delivery Boeing Vs EADS. 65 1 Introduction The commercial aircraft industry requires huge capital investments in manufacturing and research and development. This is a very competitive sector where industry consolidation has resulted in the emergence of two major players from either side of the Atlantic, EADS in Europe and Boeing in the United States of America. The two form a duopoly with market leadership in the sector largely rotating between these two corporate giants depending on the market dynamics. Commercial airlines and other air transport operators form the bulk of the customers. Governments are also important customers. The government involvement in the sector extends to investing, supporting (Aboulafia, Richard, 2000; O’Neal, Michael, 1990) and regulating. Any problems in the industry have implications that go well beyond the confines of the affected companies. Governments therefore subsidize and invest in aircraft manufacturing and research and development. This also serves to protect the highly skilled jobs in this sector and ensures that the respective countries remain technologically competitive (Wall, R. Sparaco, P, 2007). Big companies play an important role in the economics of the countries they operate in. They influence the conditions in the industries and directly impact employment rate in the countries where the manufacturing takes place. EADS and Boeing are the leading competitors in the aircraft manufacturing industry and demonstrate the high level of political interest in this sector and the way governments try to influence the business decisions made by such corporations (Wall, Robert Jens, Flottau 2007; Barrie, Douglas 2007). 1. 1 Problem Definition Airbus is a subsidiary of EADS that has been a global leader in the manufacture of commercial aircraft. The launch of the A380 aircraft project was expected to become a huge success and elevate EADS to a new level of market domination. But following production delays and the cancellation of some orders for the A380 aircraft by some customers, the company found itself in a difficult position. The failure of a challenging project such as the A380 project can have far reaching financial consequences that could lead to bankruptcy. It could also serve to expose weaknesses and inefficiencies in the structure of an organization that could be a major hindrance to the success of a company. The popular media and professional journals have been full of news and articles concerning the problems with the A380 aircraft and Airbus in particular. The list of problems include workforce discontent, possible reduction in production activities, delivery delays, customer dissatisfaction and a lack of new orders, to mention only a few. The complex set of problems extends to the influence EADS has that can cause significant economic problems in the concerned countries. Numerous studies and articles have been written about EADS and the A380 project that catalogue the various organisational, technical and financial problems associated with the manufacture of the A380 super-jumbo aircraft. A systematic evaluation of the financial consequences of the project has not been carried out. 1. 2 Purpose The purpose of this research work is to evaluate the impact of the A380 project on the financial health of EADS. The following questions will be addressed: In the short run, what effect has the A380 project had on the financial performance of EADS? In the same period, what was the financial performance of Boeing, the direct competitor of EADS? Should EADS continue supporting the A380 project with additional financing? What long term financial impact will the A380 project have on the future of EADS? Finally, in order to fulfil the purpose we will also briefly discuss other factors that influenced the financial health of EADS, in addition to the A380 project 1. 3 Research Methodology The first stage of this research will involve reviewing the information that is available about the aircraft manufacturing industry with a focus on information about EADS and Airbus. Our focus will be on financial information. As a public company, EADS is obliged to publish financial data about the corporate structure and financial information containing revenues, profits and sales orders per EADS division such as Airbus. The A380 has been a major project at EADS for the past few years that has taken substantial preparations and investments amounting to significant annual expenditures (Thomas, J. , 2001; Gummesson, E, 2006). The main thrust of our research will be quantitative for aspects where we shall obtain the financial data needed to do the analysis. We shall also employ a qualitative approach to evaluate the leadership and organizational structure at EADS. To evaluate the financial impact of the A380 project on EADS, our primary focus will be on financial and ratio analysis of the company. We will examine the financial statements from EADS. This quantitative analysis will include the period from 2004 to 2005 that preceded the initial announcements delivery delay of the A380 as well as the period following the announcements, from 2006 to the first quarter of 2007. To analyze the changes in profits, revenues and cash flows, we will perform a comparative analysis of the years from 2004 to 2006 and evaluate the first quarter of 2007 in comparison to the first quarter of 2006. We will explore what influence the Airbus A380 project has had on the financial health of EADS. In order to get a clearer picture of the financial health of EADS, we will compare the financial performances of EADS and its main competitor, Boeing. The financial statements of Boeing Company are also generally available as it is a public corporation. Boeing has a similar structure, is engaged in the same activities and is comparable in size with EADS. Boeing also operates in the aircraft manufacturing industry, with its commercial aircraft unit also being the major part of the company’s activities. Therefore, the cross-company financial analysis between EADS and Boeing will provide some useful insights into the scale of the finanicial problems. Some A380 aircraft customers have already cancelled their orders and moved to Boeing instead. Since these two companies form a duopoly, most customers that leave EADS for Boeing increase the market share for Boeing. The foreign currency exchange rates between the US dollar and the euro have had an impact on the competitiveness of EADS. The manufacturing plants of EADS are located in Europe. The basic bills are paid in Euros (salaries, taxes etc), while customers outside Europe settle their contractual obligations in US dollars. The lead time between contractual agreements and actual aircraft deliveries, coupled with fluctuating US dollar versus euro exchange rate influence the financial performance of EADS. Depending on the direction the change takes, it can add to the losses from the A380 project, especially with the lead time from the date of agreement to the date of delivery being stretched by the delays The US dollar to euro relationship is therefore an area of interest, we will therefore analyze trends in exchange rates and evaluate its impact on EADS. We will also evaluate trends in stock prices of EADS and compare them to ones of Boeing. This will allow us to see how the market value of the company was affected by the A380 crisis and delivery delays. The market values of stocks are important indicators of financial stability and are of special interest to investors. Trends in the stock price will also show the possible direction of the company. A review of the financial position of EADS, that will include cash flows, revenues in total, total revenues and profits, revenues and profits by divisions in the period starting from 2005 to 2007 (both within the company and in comparison with Boeing), together with review of stock prices and exchange rates in 2005-2007, will help paint the picture of the A380 project impact on the short run financial performance of EADS. Evaluation of trends in profits and cash flows of EADS and review of order and delivery book of Airbus, the major source of revenues and cash flows for EADS will reveal the possible future direction of the company. Upon reviewing the trends in financial position of EADS (through ratio analysis) and examining the order or delivery book of Airbus, taking into account that this type of business involves cash transfers and recognition of revenues upon fulfilment of contracts, we will be able to determine how much of a burden the A380 project is for EADS and if the company can carry on without significant financial reorganization. Finally, we will briefly examine other factors which could additionally influence financial health of EADS. The corporate structure and leadership issues have important bearing on the operations of a company and could also influence financial state of a company. Our evaluation will be based on information from the companies on the existing organizational structures and scientific articles where available. Among others, the following issues will be examined: the composition of the Boards such as the number of independent directors and how focused the Boards are on business activities and how independent they are when making decisions. This will give us some insight into the efficiency of EADS as an organization, which has an indirect influence on profitability as well. The dynamics of exchange rates influence financial health of EADS as the company is based in Europe but sells big part of its products overseas. We will use data on exchange rates obtained from business media sources for this analysis. 1. 4 Possible Limitations We will be unable to accurately estimate certain values without sufficient data. This is a complex case, with several interrelated issues. We will use the available data. The available data will be sufficient to make qualitative conclusions as is usual in case studies. For example, without knowing the values of discounts offered to some customers, the values of penalties incurred, the impact of some customers exercising the option to buy alternative aircraft from Airbus, we may be unable to make exact quantitative conclusions on losses and net cash outflows from the project. We cannot definitely determine sources and values of external (from other projects) financing for the A380 project. We would liked to look at the A380 project appraisal (preferably with more comprehensive appraisal method, like NPV), but it will not be possible to do this as we will lack exact data necessary for this type of evaluation. The A380 project is an evolving story that has new developments all the time. The data from primary data that we sourced from some company’s websites may be skewed in favour of the respective companies as there is tendency for companies to put emphasis on positive information. 2 Theoretical Framework 2. 1 Introduction According to Brealey et al, 2006, managers are agents of the owners of the company, the shareholders. The manager’s main goal is to increase the value of the shareholders’ wealth. The board of directors are part of the corporate governance system and are meant to oversee the performance of the managers and strategic direction of the company. The board ensures that the managers are adequately compensated for the day to day running of the corporation and have the mandate to replace the managers if they do not deliver shareholder value or , among other reasons do not conduct the operations ethically or legally. There are several methods to evaluate potential success of a project in a company. This is an important step. In a large company and/or if a significant investment opportunity is considered, investment appraisal methods, such as NPV (Net Present Value) are applied. To analyse the impact of the A380 project on EADS, our approach was to look at the problem from three angles: the financial angle, the organisation structure (leadership and governance) and to compare EADS to a similar organisation. The theoretical foundations that we base our analysis on are described in the following sections of this chapter. 2. 2 Assessment of the Financial Health 2. 2. 1 Financial Statements – Ratio Analysis Potential investors, as well as other interested parties, always analyze past/present financial performance of a company before making investment. This is necessary to evaluate possibility of future returns. Trends in profits and cash flows of past few years not only show how effective was a company in the post, but can also indicate future direction of a company. Probably the best way to evaluate possible return from investment is by analyzing data available from financial statements of a company (40). The major financial statements are: Statement of Balance Sheet, Statement of Cash Flows and Income Statement. Income Statement is intended to disclose revenues and expenses, as well as profits of a particular period. It should be noted, that profits are often different from cash flows, as items like depreciation of fixed assets are not taken into account in net cash flow calculations, but they do influence profits. Statement of Balance Sheet shows the financial position of a company at a particular point in time. Namely, it shows the values of assets (both current and non-current), liabilities (both current and non-current) and equity. Following balance of Balance Sheet components is always maintained, if the statement is correctly prepared: Assets-Liabilities=Equity Statement of Cash flows discloses the way all cash resources have been used throughout a particular period of time. Cash Flow Statement consists of three basic parts: Cash Flows from Operating Activities, Cash Flows from Investment Activities and Cash Flows from Financing Activities. Income Statement, Statement of Balance Sheet and Cash Flow Statement can be analyzed to find out how effective the performance of a company in the past was and to forecast, what can be expected in the future. It should be pointed out, that basic financial statements of listed (parent) companies are readily available to general public (through company web sites, etc), while financial statements of subsidies (â€Å"daughter† companies), like Airbus, usually are not readily available. A. Millichamp, 1997, suggests three methods for assessing financial performance. Each figure (or number) in the financial statement should be compared with: 1) The corresponding figure of previous statements 2) The corresponding forecasted (budgeted) figure 3) The corresponding figure of another company in the similar business While comparison of subsequent statements of a company is important (to see improvements/backward steps etc), it is sometimes even more important and interesting to see how well a company is performing in comparison with direct competitor (e. g. in our case Boeing vs. EADS). The first method of assessment shows trends within a company, while cross-company evaluation shows if those steps are more effective than the ones taken by a competitor. Third method of an evaluation (i. e. comparison with budgeted values), while definitely being important, usually cannot be performed by an outsider, as budgets (i. e. internal data) are rarely disclosed by companies. While comparison of absolute values of financial statements is often performed, comparison through financial ratios is frequently more relevant. Many financial values are inter-related. Besides, some trends are better seen through relative analysis of values, for instance, when two companies construct their financial statements in different currencies. Boeing does this in US dollars while EADS uses the euro. According to Williams et al, 2005, (p606): â€Å"Ratio is a simple mathematical expression of the relationship, of one item to another. Every percentage may be viewed ad a ratio-that is, one number expressed as a percentage of another†. 2. 2. 1. 1 Ratio Analysis Assessment of three basic types of activities can be conducted to evaluate overall financial performance of a company (35). Changes since previous period show short term improvements/steps backward, while overall trends in years can also indicate what can be expected in the future. These three activities are: Liquidity, Profitability and Gearing/Leverage. It should be noted, though, that this is not a strict classification and some ratios may â€Å"belong† to more than one performance appraisal subgroups. For better representation of subsequent statements, they are usually placed next to each other and percentages of each corresponding values are also given. 2. 2. 1. 2 Liquidity Measures Liquidity of a company refers to its ability to manage short term obligations. Short term obligations are those ones, which should be repaid within a year. In other words, it is an ability to repay current liabilities with available current assets. Current assets are assets readily convertible into cash. While current liability is an obligation which should be settled within a year. The basic term often used in relation to Liquidity is Working Capital. Simply, it is an excess of current assets over current liabilities. Basic ratios used to assess liquidity of a company are: 1) Current Ratio=Current Assets/Current Liabilities It is a measure of how well are current liabilities covered by current assets. To some extent, the more it is (hopefully over 1. 5), the better it is for a company, but too high Current Ratio may imply that current assets are not entirely utilized. 2) Quick Ratio=(Current Assets-Inventories)/Current Liabilities It is a similar measure to Current Ratio, but with the exclusion of inventories-the least liquid current assets. Sometimes it is a more relevant measure. Again, a value of Quick Ration in excess of 1 is usually expected, but it varies from industry to industry. 3) Working Capital Cycle is considered to be an important illustrative measure of Liquidity. It is calculated in days/months. By Working Capital Cycle we measure the period from the date purchase of raw materials to the date of cash collection from products manufactured from those materials. Working Capital Cycle equals: Period to collect cash from customers+ period to turn over inventories- period to settle trade liabilities Days to collect cash from customers= (Average Receivables/Sales Revenues) x 365 Days to turn over inventories = (Average Value of Inventories/Cost of Sales) x 365 Days to settle trade obligations = (Average Payables/Cost of Sales) x 365 If average values are not available, year end values can also be used. Generally, the shorter is the Working Capital Cycle, the better it is for a company, as it is an indicator of effective performance. 2. 2. 1. 3 Profitability Measures Profitability ratios can help us evaluate trends in profitability and help us find out if a company earns sufficient profits in comparison with available resources. One thing should be noted here. If a company has a very high profitability but low cash balance, it can lead to a collapse-company can run out of cash. It is called Overtrading. On the other hand, excessive cash balance with corresponding low profitability is an indicator of Overcapitalization-sign of inefficient use of available resources (assets do not generate sufficient profits). Trends in Profitability can be measured both in absolute terms and with the use of ratios. Following measures are used: 1) Gross Profit Percentage: Gross Profit/Sales Revenue It is an indicator of what is percentage of Gross Profit from Sales Revenue Earnings per Share: Earnings for Ordinary Shareholders/Number of Outstanding Shares is an indicator of earnings for one share. Two important measure of profitability are also used to evaluate the efficiency in use of assets and equity to generate profits. Return on Equity = Net Profits/Value of Equity Return on Assets = Operating Profit / Value of Total Assets Maintenance of high levels of profitability is the primary objective of a company. It is a sign of relatively safe continuity. But as it was stated above, high levels of profitability should not be confronted with low Liquidity. 2. 2. 1. 4 Measures of Gearing and Leverage By Gearing we mean the ability of a company to meet long term debt obligations. Debt composition of Balance Sheet is an important indicator of Gearing. Higher share of long term debt in comparison with to equity is an indicator of higher Gearing. While, generally, long term debt is considered to be the least expensive source of finance (less expensive than common stock issue), too much reliance on debts puts accompany into danger, as interest on debt should be repaid (unlike dividends) regardless of profitability level. Good indicator of Gearing is the Debt Ratio: Debt Ratio= Total Liabilities/Total Assets Another indicator of Gearing is Interest Cover: Interest Cover= Profit before Interest and Tax/Interest Expense The higher it is, the easier it is for a company to settle its long term debt interest. This ratio is also related to Liquidity of a company. All above mentioned ratios are calculated from Statements of Balance Sheet and Statements of Income. Additionally, examination of Cash Flow Statements can reveal how cash is used in a company, which items of the statement are seem to generate more/less cash than was expected and by how much has cash decreased/increased in the considered period. 2. 2. 2 Limitations of Financial Evaluations using Ratios Financial analysis through ratios is an important and useful method to evaluate financial performance of a particular company. But this type of evaluation has its limitations. One can never make convinced conclusions purely based on ratio analysis. One of the reasons can be so called â€Å"window dressing†, i. e. a case when a company intensively â€Å"improves† performance by the end of accounting period to make year end financial statements look â€Å"attractive†. This can lead to incorrect assessment of a company. Besides, measures used in financial analysis are relative measures, which indicate to relative changes and therefore do not always allow us to make absolute judgments on companies (Millichamp A, 1997; Williams R. et al, 2005). Nevertheless, comprehensive (including cross-company) evaluation of company performance through financial ratios can disclose not only past problems of a company but even allow us make forecasts on future financial health of the company. This evaluation is well supplemented by other non-ratio financial indicators, like stock price trends and (where relevant) trends in currency exchange rates. 2. 2. 3 Stock Prices The wealth of shareholders in a company is generated from: 1) Dividends received; 2) Market values of shares Return from investment to shareholders can be generated from both received dividends and from capital gain due to increase in value of shares. Very important measures a company value is market value of all its outstanding shares. In order to increase the value of a company, management should achieve high profits so that it could distribute higher dividends and insure high values of shares (to allow higher capital gains). When market value of shares is low, the possibility of takeover from an outsider company is more likely. What is also significant, value of shares and trends of share prices are very important indicators of a company financial health for a potential investor. It is taken into account together with financial statements of a company (Millichamp A. 1997, Brealey R. et al, 2006). 2. 3 Additional Factors that can affect the Financial Health In this section we look at other factors that can have a bearing on the finances of EADS as factors like corporate structure, leadership and foreign exchange rates can have an influence on the financial stability of a company or indirect impact on projects within a company. The indirect influence of factors like corporate structure and leadership is reflected in the ability to avoid or reduce the negative impacts caused by a project while fluctuations of exchange rates can magnify losses or profits from projects when exchange rates are either favorable or unfavorable. However, the primary purpose of this thesis is to look at the impact of the A380 project. 2. 3. 1 Leadership The corporate culture, leadership and governance of a corporation influences the way the success of a company. Dubrin A. , (2007) has further catalogued the types of leadership characteristics that are needed for organisational success. These are especially relevant in organisations of the scale and complexity of EADS or Boeing that depend on the creativity and the innovation of the workforce. Dubrin also describes leadership traits needed to effectively manage international or geographically dispersed companies that are also culturally diverse are also. Other characteristics that have relevance to our subject matter relating to Airbus and EADS include teamwork, leadership development, succession and transformational leadership skills are required to lead an organisation through a crisis. This list is not exhaustive, it only seeks to provide a brief background to some of the leadership failures that could have led to the problems at Airbus, impacted on organisational efficiency and subsequently translated into financial woes for the company. 2. 3. 2 Corporate and Governance Structure Organizational structure can play a vital role in the performance of a company. The way the board of directors coordinate performance of top management and the manner it communicates with groups of shareholders is often as important as contemporary financial health of a company. The central role in organizational structure belongs to board of directors which usually consists of 8-15 members in a large corporation. The board should be independent to ensure independent and objective reporting and decision-making of the board (15). According to Walter J. Salmon: â€Å"Inside directors are often too committed to tradition and their new ideas. Outside directors, without independent sources of information are usually only capable of anaemic discussion and dissent. The result: consumers, competition, technology, and the economy may all change, but the company fails to keep up† (15, p4). According to Walter J. Salmon, a board of 8-15 members is optimum, with at least 2/3 of it being outside directors. An empowered board (15) has the ability and independence to monitor activities of management and to influence top management to revise their activities if their performance does not correspond to the strategic direction of a company determined earlier. The board should monitor the performance of the CEO and interfere if the company moves in the wrong direction to improve things before further damage occurs. The following steps are essential for Board empowerment (15): Directors receive independent and competent information on the performance of a company in the most easy-to-understand format The board consists of independent, competent members. It is an integrated board. Members of the board freely and frequently communicate with each other The board members also monitor the performance of the board itself. They set objectives for themselves and try to achieve them. 2. 3. 3 Governed Corporation vs. Managed Corporation According to John Pound, there are two types of organizational structures: a governed corporation and a managed corporation. The board of directors has a passive role in a managed corporation. Its main tasks are monitoring and selection and appointment of top management. The managers retain all leadership and decision-making rights (15). It is not considered to be the best governance model nowadays. Today many problems of large organization do not stem from power imbalances, but rather from poor decision-making. The governed corporation model proposed by John Pound is designed to remove the imbalances of the managed corporation model. It is centred on the decision making process in the company. The board of directors, top management and shareholders are more integrated and share responsibilities in decision making and formulation of the strategic direction of a company. Managerial duties are retained by CEO’s, but the board is not a passive onlooker. 2. 3. 4 The Impact of Foreign Exchange Rates Exchange rate of a currency is a rate at which one country’s currency can be traded in exchange to another country’s currency. Basically, exchange rate is determined by supply and demand of currencies at exchange markets. Following factors influence exchange rates: Government policy to influence exchange rates (limitation of maximum exchange value etc) Interest rates in the countries of those currencies The rates of inflation in those countries Trends in exchange rates (Euro to Dollar) can become a source of troubles for both importers and exporters of products, because â€Å"actual† amount received by them can fluctuate as exchange rates vary (35). There are some measures to be taken in order to avoid or reduce negative influence of exchange rates: 1) Contrac