Jb Hi-Fi Financial Analysis Essay - 3058 Words

Financial Analysis The question asks us to compare and evaluate JB Hi-Fi’s calculated ratio report, with that of the retail industry ratio report (Potter, Libby, Libby, Short p. 1133). The retail ratio report is comprised of a basket of listed companies which operate under the retail banner, which makes it relevant to use as a comparison to JB Hi-Fi. 1. Liquidity ratios are a class of financial metrics that is used to determine a companys ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. Table 1: Current Ratio Current ratio: This ratio measures whether or not a firm has enough resources to†¦show more content†¦Table 5: Fixed Asset turnover Ratio The fixed-asset turnover: This ratio measures a companys ability to generate net sales from fixed-asset investments | 2010: 11.03 | 2011: 11.25 | Industry: 5.26 | Comparison: Here the industry average is 5.26 times, compared to JB Hi-Fi’s figures of 11.25 (2011) and 11.03 (2010) times. This indicates that JB Hi-Fi is able to generate greater sales from its fixed assets, when compared to the market average. Generally, firms with a higher fixed asset turnover are successful in getting the most out of their assets, and in turn are able to generate higher revenues. Here JB Hi-Fi outperforms its sector, and this indicates that it is in a strong position to generate sales from the assets it has available. Table 6: Total Asset Turnover Ratio Total asset turnover : This ratio measures the efficiency of a company’s use of its assets | 2010: 3.97 | 2011: 4 | Industry: 3.17 | Comparison: This ratio calculates the amount of sales generated for every dollar worth of assets. The retail average is 3.17 times whilst JB Hi-Fi is slightly higher at 4.00 (2011) and 3.97 (2010) times. This indicates that JB Hi-Fi may have lower profit margins, when compared to the rest of the industry. This may be explained by the fact that JB Hi-Fi is more cutthroat and competitive when it comes to pricing, trying to gain as many sales as possible. Table 7: Days Payables Ratio Days payables: This is a ratioShow MoreRelatedEssay about Jb Hi-Fi Financial Analysis2747 Words   |  11 PagesJB Hi Fi Ltd Company Analysis Report Executive Summary The impact of a company’s financial statement depends mainly on the company’s business strategy; both transactional and operational, its industry profile and the nature of its competitive environment. This report analyses 15 ratios of JB Hi-Fi’s financial performance and suggests a recommendation for investors. JB Hi-Fi Limited (JBH) is a specialty discount retailer of branded home entertainment products. The groupsRead MoreFinancial Performance Of Jb Hi Fi Limited1732 Words   |  7 PagesStatement of Purpose In this report, we are going to analyse the financial performance of JB Hi-Fi Limited (JBH), over the past three years (2012 to 2014), by calculating a series of ratios, using different historical data provided by audited financial reports. A period of three years has been selected for the financial analysis of the company as trend results generated over several periods are much more meaningful than that from a single year balance sheet and income statements. Moreover, afterRead MoreStudy Of Financial Statement Structure Of A Retail Company Jb Hi Fi1564 Words   |  7 Pagesassignment involves the study of financial statement structure of a retail company JB Hi-Fi which is listed on Australian Stock exchange. The report aims at understanding and stating the financial position and financial performance of the company and its utilization for the investors and internals in decision making process. The report is prepared on the basis of data extracted from the annual report for year 201 4 of the company. The report consists of financial statement analysis and a case study solutionRead MoreCorporate Reporting Under The Corporations Act 20011529 Words   |  7 Pagescompanies may be viewed as sneaky and troublesome. JB Hi-Fi has established an Audit and Risk Management Committee (ARM) as stated in their annual reports. This committee meets regularly and are independent of the company as they are non-executive directors. To further demonstrate JB Hi-Fi’s integrity, Deloitte Australia is used as an independent auditing company to additionally declare the annual financial reports as unbiased, factual and honest. As JB Hi-Fi is transparent in their corporate reportingRead MoreJb Hi Fi The Vision, Mission, Values And Challenges Facing The Organization1352 Words   |  6 Pagesthe organization JB Hi-Fi the vision, mission, values and challenges facing the organization, while identifying and analyzing the business. It will also feature a SWOT report followed by and over view of the organizations issues. Lastly the report will look into current and ongoing HR issues within the organization. Background JB Hi-Fi is an Australian retailer of consumer electronics it began in 1974, where Mr. John Barbuto (JB) established JB Hi-Fi in East Keilor, Victoria. His main focus was toRead MoreA Brief Note On Human Resource Management ( Hrm ) Essay1315 Words   |  6 Pages JB Hi Fi A company always requires a good management to succeed in the long run. Management is the process of reaching organizational goals by working with and through people and other organizational resources. It is a procedure or arrangement of proceeding and related exercises. It involves and concentrates on reaching organizational goals. It reaches these goals by working with and through people and other organizational resources. Some think little of the significance of administration inRead MoreJb Hifi and Harvey Norman Comparision3085 Words   |  13 Pagesreport is to compare the financial report of the two ASX listed companies they are Harvey Norman and JB Hi-Fi. It provides an analysis and evaluation of the current and previous profitability, liquidity and financial stability of both companies. Methods of analysis include financial ratio analysis for example profitability and performance ratio, liquidity ratio, financial and stability ratio by reviewing the financial report of two companies. It also review the industry analysis, highlighting the sizeRead MoreHarvey Norman and JB Hi-Fi financial compariosn2724 Words   |  11 Pagesï » ¿ Table of Contents Assignment Objective: The main aim of this assignment is to present an exploration of two major parts of financial statements i.e. Statement of Comprehensive income and statement of financial position. This is done by comparing elements of Balance Sheet and income statement of two separate companies and discussing similarities and difference of Presentation and Disclosures of these two separate organizations. Furthermore, discussing different methodsRead MoreJB HI FI Analysis3850 Words   |  16 Pagesï » ¿ JB Hi-Fi is a well-known and successful cooperation that majors in house hold appliances, technological goods and the stock shares, the JB Hi-Fi Cooperation was established in 1974 by Mr. John Barbuto (JB), trading from a single store in East Keilor, Victoria. Since then JB Hi-Fi was sold independently in 1983 from there on the business grew. In 1999 another nine stores were opened nationwide. Shortly thereafter In July 2000 JB Hi-Fi was purchased yet again by private equity bankers and seniorRead MoreJb-Hifi Analysis Report6189 Words   |  25 PagesExecutive Summary JB Hi-Fi is an entertainment and consumer electronics chain store, providing a range of branded home electronic products and music records. The electronic industry is experiencing growth over the last few years mainly due to the introduction of a handful of electronic gadget which captures the attention of consumer. However, this growth focused on a few products such as smart phones, tablet, and music player while the rest of the products are slowing in terms of growth. Despite

The House on Mango Street - Characterization Essay

Esperanza: the Person Behind the Print In The House on Mango Street, by Sandra Cisneros, a little girl from a Latino heritage is given birth to. Not literally, but in the sense of characterization. Esperanza is a fictional character made up by Cisneros to bring about sensitive, alert, and rich literature. She is the protagonist in the novel and is used to depict a female’s life growing up in the Latino section of Chicago. Cisneros creates the illusion that Esperanza is a real human being to communicate the struggles of growing up as a Latina immigrant in a modern world, by giving her a name, elaborating her thoughts and feelings, and illustrating her growth as a person through major events. To give a character life they first have to†¦show more content†¦It means sadness, it means waiting† (10). Not only is Esperanza’s name a way to trace her origin but it is also symbolic to the book as a whole. Her name illustrates how the Spanish inside her is sad and it is putting her in a position that is weighing her down and keeping her from becoming someone. The English counterpart is what is keeping her going and motivated to find a way to escape Mango Street and all it encompasses. Just like a genuine immigrants dream when they come to America, Esperanza’s name means â€Å"hope† and she uses this hope for a better life to â€Å"One day I will pack my bags of books and paper. One day I will say goodbye to Mango. I am too strong for her to keep me here forever. One day I will go away† (110). Cisneros uses the name of her character to give her a place in a Latino setting and start expounding on her thoughts and feelings that come with that life. Thoughts and feelings are human characteristics which distinct us from one another and cannot be duplicated or falsified. Cisneros bestows the feature of an internal view on Esperanza by having her speak of her thoughts and feelings in first person narrative throughout the novel. Cisneros starts acquainting this feature early in the story for such topics as laughter: â€Å"Nenny and I don’t look like sisters†¦not right away. Not the way you can tell with Rachel and Lucy who have the same fat popsicle lips like everybody else in their family. But me and Nenny, we are more alike than you wouldShow MoreRelatedThe House On Mango Street Analysis1020 Words   |  5 PagesIn Cisneros’s The House on Mango Street, Cisneros uses her Hispanic heritage to characterize the protagonist, Esperanza. In the novella, the obstacles caused by Esperanza’s background, such as racism and cultural standards set towards women, causes some self-doubt as she struggles to discover who she is and who she has the potential to become. Esperanza struggles with discovering how her Mexican culture impacts how she and others will view herself as an individual and how her culture impacts theRead MoreAnalysis Of CisnerosThe House On Mango Street742 Words   |  3 P agesfirst know your own.† (Laurrel K. Hamilton) Throughout the many vignettes, indirect characterization, vivid imagery and eloquent metaphors are utilized in many ways to create a connection between the characters and the reader. These characters explore sexuality, gender, culture, ethnicity and many more crucial things that are all a part of growing up and figuring out who you are. In Cisneros’ The House on Mango Street the identity of a character is made up of the environment they are a part of. GenderRead MoreSince Its Publication In 1984, The House On Mango Street1551 Words   |  7 PagesSince its publication in 1984, The House on Mango Street grows in popularity within inner-city grade schools to universities across the country -- it is a coming of age tale for a Mexican-American girl named Esperanza Cordero living in a fictional poor neighborhood in Chicago called Mango Street. Though it is called a novel, Cisneros creates The House on Mango Street with forty-four vignettes that thoughtfully depicts Chicano culture and what are the roles of women in this society; as EsperanzaRead MoreAnalysis Of Sandra Cisneros s The House On Mango Street 1506 Words   |  7 Pagesdid it affect them is also crucial. In Sandra Cisneros novel, entitled The House on Mango Street,the story depicts a Latina girl who transform throughout her time being on Mango Street. The girl named Esperanza is to faced obstacles of female oppression that she witnesses in the life of women on her stre et who they depends on men to bring them out of the street. In The House on Mango Street, Cisneros uses characterization to express the idea that Esperanza changes due to her surroundings and by doingRead MoreJack London Is King By Alexander Supertramp1593 Words   |  7 Pagesand even detracts from the significance of McCandless’s death. Alex lived a life free of the suffocations that society embodied, and it seems as his intentions would not let the facts rule over his death after a life lived free. From The House on Mango Street: â€Å"and the man says, ‘This, this is a music box . . . It’s like all of a sudden he let go a million moths all over the dusty furniture and swan-neck shadows and in our bones . . . This, the old man says shutting the lid, this ain’t for sale†Read MoreZara Business Case15365 Words   |  62 Pages as CEO Josà © Maria Castellano put it, was that â€Å"Galicia is in the corner of Europe from the perspective of transport costs, which are very important to us given our business model.† 6 ZARA: Fast Fashion 703-497 Some of the same characterizations applied at a national level, to Inditex’s home base of Spain compared, for example, to Italy. Spanish consumers demanded low prices but were not considered as discriminating or fashion-conscious as Italian buyers—although Spain had advanced rapidlyRead MoreInstructive Text Types11631 Words   |  47 Pagesfunction One of the six functions is always the dominant function in a text and usually related to the type of text. 1.2 Beaugrand’s and Dressler’s typology Beaugrande and Dressler’s typology (1981) is less developed in its linguistic characterization but provides some useful hints in terms of its organisation of knowledge across types. Figure1 presents the defining features of the three basic text types. Figure 1 | DESCRIPTIVE | NARRATIVE | ARGUMENTATIVE | Knowledge | objects, situationsRead MoreRastafarian79520 Words   |  319 Pagesof the movement, (2) the gradual rapprochement between the movement and the wider society, and (3) the impact of Rastafari on the evolution of Jamaicas indigenous popular culture. The internal development includes the emergence of a network of â€Å"houses† and â€Å"mansions† as the collective units of the movement,10 of a world view or ideology encoded in a variety of symbols, and of collective ritual activities, which initiate and conï ¬ rm individuals in the principles of Rastafari. With regard to the

Group Case Study ADB Knowledge Audit

Question: Discuss about theGroup Case Study for ADB Knowledge Audit. Answer: Introduction In the present era, in which there are changes in organizational dynamics at a rapid rate the need for knowledge management becomes much important (Lauer and Tanniru, 2001). In order to manage the business organizations that are working in complex environmental settings the process of managing knowledge is essential (Schwikkard and du Toit, 2004).The case is related to knowledge management strategy adopted by Asian Development Bank. Evaluation Strategy In order to achieve this goal the company developed a strategic outline in order to make the system of management, culture, process of business, solutions for IT, community of practice and relations with outside organizations by development of networks in 2007. In this the process of carrying out knowledge audit was also outlined. As an initial point to start, the bank decided to carry out an online survey that will measure the perceptions of employees and in turn it will serve as the foundation to measuring the success of system. The major objective of adopting this knowledge strategy was to change the focus to sense and respond rather than make and sell so that shareholders can have maximum value. In order to have a holistic knowledge management the organization should have integration of external environment, context of organization, knowledge and relationships between the people of organization and the interaction of organization with other organizations. The departments for eval uation include ADB management,board of directors, operations department, DMC, internal evaluation committee and IED that are jointly responsible to evaluate the system (ADB, 2007). Approaches In order to properly implement knowledge management, organization, leadership, technology, and learning are integrated. The leadership plays an important role in driving value for managing knowledge; they work from identifying the need of managing knowledge, establishing goals, planning process and implementing it. Organization acts as a supporting mechanism in the knowledge management procedure by gap, opportunities and risk identification, developing the model and keeping the audience engaged. Technology facilitates the collection of knowledge as well as connecting the sources of knowledge, in this regard it helps using the resources in innovatve ways, it allows better access to knowledge and makes the organization able to report and monitor information in a better way. In learning process teams are developed virtually so that information sharing can be managed, communities of practice are made and incentives and rewards are given to people who play good role in sharing knowledge ( ADB, 2007). Technology and Techniques In ADB their objective is to use knowledge management in order to enhance performance in development of strategy, improving techniques of management, better collaboration, learning and sharing of knowledge along with capturing and sharing knowledge. In order to attain this goal, the tools such as knowledge audit, assistance from peers, exit interviews, knowledge mapping etc are employed in order to attain these objectives. In this process the technology was also kept in consideration, as modern technological advances such as use of data warehousing, various software to manage data, Email, multimedia, groupwares, intranet, systems to support decisions, search engines, systems of neural networks and lessons learned, communication and video conferencing were adopted. It has been found that the process of managing knowledge is facilitated by adopting modern tools and technologies (Miller, 2009). ADB employed the method of knowledge audit to be carried out in five months, the steps incorporated, included preparation of knowledge, analysis of audit, review and planning for business. In order to carry out the knowledge audit questionnaires were administrated that contained five aspects i.e. development strategy, management techniques, sharing of knowledge and learning, collaboration and storing and capturing of knowledge. In this process the perceptions of all departments were considered in order to evaluate the performance of knowledge management system in ADB. It was found that as per the perception of employees in IED, development of strategy, collaboration and capturing and sharing of knowledge is being done effectively, they thought sharing and storage of knowledge is not good. They also said that management should adopt better techniques. Apart from the evaluations of IED, it was found by other departments only strategy is being developed in good way while rest of things need improvement such as collaboration, learning and sharing of knowledge, capturing and storing of knowledge. The participants that belonged to the international committee for evaluation had a different view point. They were only asked about three aspects i.e. collaboration, storing and capturing, learning and sharing knowledge. They gave positive opinion reading all those aspects. It is stated that the process of managing knowledge is never effective if it is not linked to the external environment, relationships with agencies that act as evaluators and context of company. In case of ADB although they had developed a good knowledge management system but the audit results revealed that there are various issues in this process. Moreover, the opinion of IED, IEC and ADB departments were different that show that the system is not developed in a coherent manner. In addition to this the process of designing the audit included the need analysis of knowledge, analysis of inventory of knowledge, analysis of flow of knowledge and mapping. Most of the focus of the knowledge management process resides on explicit knowledge and they did not have much focus on the tacit knowledge that is more important aspect of any organization. In addition to this the relationship among departments, the context of company, linkage to the outside environment was taken into account. This is a good point because when the link with external environment is not established the proper need identification cannot be done. Theorganization needs to deploy thatknowledge that helps it to improve the business performance and make it aware of the trends(Bontis, Fearon and Hishon, 2003). When the company will have knowledge of trends then it will able respond to the needs of stakeholders accordingly.Furthermore, itis important that all departments must coordinate with each other so that they have a coherent process of knowledge management. But, in this case it is examined that IEC, IED and ADB had different perceptions regarding the knowledge management system. This shows the overall lacking in the understanding of goal of knowledge management system. It also shows that the system is not sufficient to address all the needs of knowledge management as the areas of improvement were identified by ADB and IEC. Although, IED stated that knowledge management process was working well on all dimensions but they were not asked about the development strategy and techniques of management. One of which was rated as inadequate by ADB. In addition to these the areas deemed to be working satisfactorily by IED were considered as areas of improvement like ADB reported issues in sharing and reporting of knowledge along with storing and capturing knowledge. Solution and Evaluation This made ADB realize that their system needs improvement, so they paid attention toward making knowledge audit process more efficient. They proposed that evaluations should be taken from perspective of more clients. Theysuggested that the success rates of projects should also be included. They developed new tools such as learning curves, system for evaluation of information that is an online system containing recommendations, lessons and responses of management. The company has also enhanced the focus on making group communication better and they renewed ECGnet. The method of evacuation was changed and made more frequent, they created online evaluation community for practice, incorporatedcharts forevaluation, harmonized the indicators of performance. The reporting was made more visual by using presentations and photographic formats. A deliberate effort is being made to enhance the value from evaluating operations. They are using matrices for managing knowledge in this case in additi on to incorporating feedback of clients. Overall, good approach is adopted by ADB in order to meet up the deficiencies in its knowledge management system. They have enhanced condition and communication, enhanced the frequency of evaluation and took feedbackfrom more people that will make their evaluation better and able them to adapt the knowledgemanagement system as per needs of internal and external environment, these practices are found to be useful in managing knowledge (McInerney and Koenig, 2011). But they could also adopt the method of carrying out interviews in the process of knowledge audit that is deemed to be one of effective method in identifying the needs of knowledge (Perez-Soltero at el. 2006). The main aim of carrying out audit of knowledge is to examine where the organization stands in terms of knowledge and where knowledge is located. So, in this case we suggest that they should involve the senior management and support of leadership as well as they are in a better situation to identify the needs of knowledge in collaboration with employees of organization(Kumar,2011). This will make sure that process is carried out under the guidance of senior management and no important knowledge source or skill is left out. As suggested by Miller (2009) they can also involve people from expert knowledge audit firm to carry out the process in better way. The audit team should have involved people from all departmentsspecially those who have goods knowledge about vision of company so that knowledge management can be matched with it. In addition to this, in order to better develop the tacit knowledge informal social networking should be encouraged(Debenham and Clark, 2003). Improvements It is suggested that the ADB should have developed knowledge team that includes the people form senior management, finance department, marketing and HR department. In addition to this, the people should be from information technology department and there should be a special head for knowledge management. Furthermore they can also hire an expert form professional knowledge audit firm(Harding, 2010). They had adopted a good process of aligning the knowledge management process with vision of bank but there were some deficiencies in the system that could be managed if an effective team is developed (Burnett, Williams and Illingworth, 2013). This kind of cross functional team will allow equal focus on tacit and explicit knowledge; it will eliminate bias and make ADB able to deal with the complexities of knowledge management process(Kidd, 2004). They should include 8Cs of knowledge audit including connectivity, culture, community, content, cooperation, capacity, capital and commerce (Berge ron, 2003). Analytical Model On the basis of above discussion and evaluation the new model to show the proposed knowledge system and audit is shown below Conclusion In this report the knowledge management process and knowledge audit of ADB is examined. It is found that the company is taking into account the environmental factors and needs of company while managing knowledge and they aim to maximize the value of services. The knowledge audit process revealed some of the weaknesses in the area of development of strategy, collaboration, learning, storing, capturing and sharing of knowledge. In response to this an improved system is devised that incorporated more frequent audit and involvement of more stake holders who collaborate more frequently. It is suggested that the ADB knowledge team should be cross functional in nature and equal importance should be given to tacit knowledge. They should include 8Cs of knowledge audit including connectivity, culture, community, content, cooperation, capacity, capital and commerce and contact external experts for further improvement. References ADB. (2007). Learning Lessons in ADB. Manila. [Online] Available at: www.adb.org/documents/reports/learning-lessonsadb/strategic-framework-2007-2009.asp [Accessed 23 September 2016] Bergeron, B. (2003). Essentials of Knowledge Management, New Jersey: John Wiley Sons Inc. Burnett, S., Williams, D. and Illingworth, L. (2013). Reconsidering the Knowledge Audit Process: Methodological Revisions in Practice. Know. Process Mgmt., 20(3), pp.141-153. Debenham, J. and Clark, J. (2003). The knowledge audit. North Ryde, N.S.W.: CSIRO Division of Information Technology. Harding, N. (2010). Understanding the structure of audit workpaper error knowledge and its relationship with workpaper review performance. Accounting Finance, 50(3), pp.663-683. Kidd, J. (2004). Leading with Knowledge: Knowledge Management Practices in Global Infotech Companies. Knowledge Management Research Practice, 2(2), pp.133-134. Kumar, A. (2011). Knowledge Audit: Its Learning Lessons. SSRN Electronic Journal. Lauer, T. and Tanniru, M. (2001). Knowledge Management Audit - a methodology and case study. AJIS, 9(1). McInerney, C. and Koenig, M. (2011). Knowledge Management (KM) Processes in Organizations: Theoretical Foundations and Practice. Synthesis Lectures on Information Concepts, Retrieval, and Services, 3(1), pp.1-96. Miller, A. (2009). A Review of Knowledge Management in Practice: Connections and Context. Journal of Web Librarianship, 3(3), pp.294-294. Perez-Soltero, B. Valenzuela, et al. 2006. Knowledge Audit Methodology With Emphasis on Core Processes. European and Mediterranean Conference on Information Systems (EMCIS), Costa Blanca, Alicante, Spain, July 6-7, 2006. Schwikkard, D. and du Toit, A. (2004). Analysing knowledge requirements: a case study. AP, 56(2), pp.104-111. Bontis, N., Fearon, M. and Hishon, M. (2003). The eà ¢Ã¢â€š ¬Ã‚ flow audit: an evaluation of knowledge flow within and outside a highà ¢Ã¢â€š ¬Ã‚ tech firm. J of Knowledge Management, 7(1), pp.6-19.

Peer Buddy Programs for Students with Disabilities

Introduction The author decided to focus on the peer buddy program as it relates to children with disabilities in schools. In the essay, the author will provide recommendations with regard to how the peer buddy program can be successfully implemented in schools in the future. The purpose is to see to it that children with disabilities enjoy inclusivity in the learning processes.Advertising We will write a custom essay sample on Peer Buddy Programs for Students with Disabilities – Essay specifically for you for only $16.05 $11/page Learn More As such, the recommendations are meant to ensure that children with disabilities are not discriminated against in the school system. In addition, the author will introduce social scripting as a support system for the peer buddy program. The aim is to enhance the success of the peer buddy program in the schools. To compile the current essay, the author relied on secondary sources of information. The information from these secondary sources is used to support the arguments made by the author. The author finds the topic quite relevant, especially in the future of inclusive education in both public and private schools. For this reason, the author will recommend ways through which the program can be improved. In addition, the author will analyze how social scripting will help in the implementation of the peer buddy program in the future. Recommendations Overview According to Charman (1997, p. 3), the peer buddy program is an approach adopted to educate students with disabilities. The approach allows such children to spend time with those students who are not disabled. The peer buddy program addresses the various impediments to inclusion. In most cases, such impediments are present in secondary schools (Delano Snell, 2006, p. 29). For instance, the program is important when it comes to class scheduling. In such cases, peers are introduced to help students with disabilities maneuver from one c lass to the other with ease. Accordingly, the author has proposed several recommendations towards an effective implementation of a peer buddy program in schools. The recommendations are important for the future of inclusive education. The recommendations made by the author rely on the arguments made by Bellini, Peters, Benner Hopf (2007). According to Bellini et al. (2007), inclusivity is important as it enhances the quality of future education for both disabled and non-disabled students. Social Script Training should be Part of the Peer Buddy Program To effectively implement a peer buddy program in any school, teachers should pay special attention to students with autism. To this end, teachers can make use of social script training. Social script training is one of the possible strategies of effectively implementing a peer buddy program in schools. Social script training is important as it ensures that students with autism, as well as students with other forms of disabilities, are effectively catered for.Advertising Looking for essay on education? Let's see if we can help you! Get your first paper with 15% OFF Learn More According to Goldstein Cisar (1992, p. 270), script training involves a situation where a specific play sequence is constructed with the help of play theme-related materials for students. Goldstein Cisar (1992) concluded that script training increased the number of activities that the students were involved in. The results are a clear indication that, coupled with the overall special education program, script writing is the future of a better peer buddy program. Engage in Motivational Activities that Help Improve Comprehension Goldstein Cisar (1992, p. 273) are of the opinion that adults should be made part of the peer buddy program. The two scholars opine that, owing to the maturity of parents, such issues as encouragement and support will be effectively addressed in implementing the program. According to the author of the current paper, participation of parents will motivate the disabled students, as well as potential volunteers, involved in the implementation of this program. Such activities as arts and craft, which have a mentoring aspect to them, will motivate participants in the peer buddy program. In addition, such activities will improve the students’ comprehension abilities. Continuous Awareness on the Need for Interactions Nietzel (2008) describes a situation where few non-disabled students are willing to participate in the program. In most cases, such a trend is caused by stigma associated with the interaction between students with disabilities and those without. For an effective peer buddy program, Stahmer Schreibman (1992) propose creating awareness with regard to the essence of inclusivity in the education system. Such awareness will address the problem of dwindling numbers of volunteers. There is need for a continuous awareness program in schools. Select a Set Number of Non-Disab led Volunteers per Class The author of this paper recommends that in future, school authorities should introduce a policy that helps in the selection of a pre-determined number of volunteers. The selection will involve both teachers and students. Such a measure will go a long way in addressing the problem of inadequate participants (read volunteers) for the peer buddy program. Moreover, the author finds such a measure quite beneficial to the reduction of stigma associated with participating in the peer buddy program.Advertising We will write a custom essay sample on Peer Buddy Programs for Students with Disabilities – Essay specifically for you for only $16.05 $11/page Learn More Conclusion In the current paper, the author made an attempt to highlight the various attributes of peer buddy program as far as its place in the education system is concerned. The author highlighted what the entire concept is all about. In addition, the author introduced script training as a tool that will help boost the effectiveness of the peer buddy program. The author made further recommendations regarding the overall implementation of a peer buddy program. The recommendations took into consideration the future of the education system and the place for disabled students. The author advises school authorities to abandon the traditional programs that promote segregation of students with disabilities. Inclusivity, as recommended by the author of this paper, will ensure that the peer buddy program is the future of quality education for students with disabilities. References Bellini, S., Peters, J. K., Benner, L., Hopf, A. (2007). A meta-analysis of school-based social skills interventions for children with autism spectrum disorders. Remedial and Special Education, 28, 153-162. Charman, T. (1997). The relationship between joint attention and pretend play in autism. Development and Psychopathology, 9, 1–16. Delano, M., Snell, M. E. (2006). T he effects of social stories on the social engagement of children with autism. Journal of Positive Behavior Interventions, 8, 29-42. Goldstein, H., Cisar, C. L. (1992). Promoting interaction during social play: Teaching scripts to typical pre-schoolers and classmates with disabilities. Journal of Applied Behavior Analysis, 25, 265-280.Advertising Looking for essay on education? Let's see if we can help you! Get your first paper with 15% OFF Learn More Nietzel, J. (2008). Steps for implementation: PMII for early childhood. Chapel Hill, NC: The National Professional Development Center on ASD, Frank Porter Graham Child Development Institute, The University of North Carolina. Stahmer, A. C., Schreibman, L. (1992). Teaching children with autism appropriate play in unsupervised environments using a self-management treatment package. Journal of Applied Behavior Analysis, 25, 447–459. This essay on Peer Buddy Programs for Students with Disabilities was written and submitted by user Aiden Conner to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

DIvidend Policies and Financing Essay Example

DIvidend Policies and Financing Essay Dividend policy refers to the decision made by the company whether to retain the profits within the company, or they pay out the profits to the owners of the organization in the form of dividends (Garrison 2008). Once the company decides on whether to pay dividends, they may establish a somewhat permanent dividend policy, which may in turn impact on investors and perceptions of the company in the financial markets (Garrison 2008). What they decide depends on the situation of the company now and in the future. It also depends on the preferences of investors and potential investors (Garrison 2008).When deciding on the dividend policy, several factors such as legal constraints, contractual constraints, internal constraints, growth prospect, owners considerations and market considerations have to be taken into account. Considerations taken into account can be incorporated in several dividend theories such as the residual theory of dividends, the clientele theory, the signalling dividend theory, the bird-in-the-hand theory and Modigliani and miller dividend theory.Manufacturing overseas can reduce costs due to its cheap labour costs but there are other considerations that have to be taken into account. There are pros and cons for manufacturing at overseas.Companys capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities (http://en.wikipedia.org/wiki/Capital_structure). Debt financing and equity financing has their own advantages and disadvantages but certain factors have to be considered when choosing between these two financing strategies.2.0 Factors Affecting the Dividend PolicyWhen deciding on the dividend policy, several factors need to be taken into account. The factors needed to taken into account are as follows (sources taken fromhttp://freemba.in/articlesread.php?artcode=488substcode=30stcode=10):Stability of EarningsThe nature of business has an important bearing on the dividend pol icy. Industrial units having stability of earnings may formulate a more consistent dividend policy than those having an uneven flow of incomes because they can predict easily their savings and earnings. Usually, enterprises dealing in necessities suffer less from oscillating earnings than those dealing in luxuries or fancy goods.Age of CorporationAge of the corporation counts much in deciding the dividend policy. A newly established company may require much of its earnings for expansion and plant improvement and may adopt a rigid dividend policy while, on the other hand, an older company can formulate a clear cut and more consistent policy regarding dividend.Liquidity of FundsAvailability of cash and sound financial position is also an important factor in dividend decisions. A dividend represents a cash outflow, the greater the funds and the liquidity of the firm the better the ability to pay dividend. The liquidity of a firm depends very much on the investment and financial decisio ns of the firm which in turn determines the rate of expansion and the manner of financing. If cash position is weak, stock dividend will be distributed and if cash position is good, company can distribute the cash dividend.Extent of Share DistributionNature of ownership also affects the dividend decisions. A closely held company is likely to get the assent of the shareholders for the suspension of dividend or for following a conservative dividend policy. On the other hand, a company having a good number of shareholders widely distributed and forming low or medium income group would face a great difficulty in securing such assent because they will emphasize to distribute higher dividend.Needs for Additional CapitalCompanies retain a part of their profits for strengthening their financial position. The income may be conserved for meeting the increased requirements of working capital or of future expansion. Small companies usually find difficulties in raising finance for their needs of increased working capital for expansion programs. They having no other alternative, use their ploughed back profits. Thus, such Companies distribute dividend at low rates and retain a big part of profits.Trades CycleBusiness cycles also exercise influence upon dividend Policy. Dividend policy is adjusted according to the business oscillations. During the boom, prudent management creates food reserves for contingencies which follow the inflationary period. Higher rates of dividend can be used as a tool for marketing the securities in an otherwise depressed market. The financial solvency can be proved and maintained by the companies in dull years if the adequate reserves have been built up.Government PoliciesThe earnings capacity of the enterprise is widely affected by the change in fiscal, industrial, labor, control and other government policies. Sometimes government restricts the distribution of dividend beyond a certain percentage in a particular industry or in all spheres of busi ness activity as was done in emergency. The dividend policy has to be modified or formulated accordingly in those enterprises.Need for FundsDividends paid to stockholders use funds that the firm could otherwise invest. Therefore, a company running short of cash or with ample capital investment opportunities may decide to pay little of no dividends. Alternatively, there may be an abundance of cash or a dearth of good capital budgeting projects available. This could lead to very large dividend payments.Management Expectations and Dividend PolicyIf a firms managers perceive the future as relatively bright, on the one hand, they may begin paying large dividends in anticipation of being able to keep them up during the good times ahead. On the other hand, if managers believe that bad times are coming, they may decide to build up the firms reserves for safety instead of paying dividends.Stockholders PreferencesReinvesting earning internally, instead of paying dividends, would lead to highe r stock prices and a greater percentage of the total return common stockholders receive coming from capital gains. Capital gains are profits earned by an investor when the price of a capital asset, such as common stock, increases.Common stockholders may prefer to receive their return from the company in the form of capital gains and some may prefer to receive their return from the company in the form of dividends. Capital gains are not taxed at all unless they are realized. That is, unless the stock is sold. The board of directors should consider stockholder preferences when establishing the firms dividend policy.Restriction on Dividend PaymentsA firm may have dividend payment restrictions in its existing bond indentures or loan agreements. For example, a companys loan contract with a bank may specify that the companys current ratio cannot drop below 2.0 during the life of the loan. Because payment of a cash dividend draws down the companys cash account, the current ratio may fall b elow the minimum level required. In such a case, the size of a dividend may have to be cut or omitted. In addition, many states prohibit dividend payments if they would create negative retained earnings on the balance sheet. This restriction is a prohibition against raiding the initial capital. Figure 1 summarizes the factors that influence the dividend decision.Figure 1: This figure identifies key elements that make a dividend payment more or less likely.2.1 Leading Dividend TheoriesThe factors that affect the dividend policy can be incorporated in several dividend theories. Dividend theories can be divided into dividend relevance theory and dividend irrelevance theory. Dividend relevance theory refers to the value of a firm is affected by its dividend policy while dividend irrelevance theory refers to a firms dividend policy has no effect on either its value or its cost of capital (http://www.studyfinance.com/lessons/dividends/index.mv?page=01).2.1.1 Dividend Relevance TheoriesAcc ording to Gallagher Andrew (2007) dividend relevance theories are as follows:The Clientele Dividend TheoryThe clientele dividend theory is based on the view tat investors are attracted to a particular company in part because of its dividend policy. For example, young investors just starting out may want their portfolios to grow in value from capital gains rather than from dividends, so they seek out companies that retain earnings instead of paying dividends. Stock prices tend to increase as earnings are retained and the resulting capital gain is not taxed until the stock is sold.Older investors, in contrast, may want to live off the income their portfolios provide. They would ten to seek out companies that pay high dividends rather than reinvesting for growth. According to the clientele dividend theory, each company therefore has its own clientele of investors who hold the stock in part because of its dividend policy.If the clientele theory is valid, then it doesnt much matter what a companys dividend policy is as long as it has one and sticks to it. If the policy is changed, the clientele that liked the old policy will probably sell their stock. A new clientele will buy the stock based on the firms new policy. When a dividend policy change is contemplated, managers must ask whether the effect of the new clienteles buying will outweigh the effects of the old clienteles selling. The new clientele cannot be sure that the most recent dividend policy implemented will be repeated in the future.The Signaling Dividend TheoryThe signaling dividend theory is based on the premise that the management of a company knows more about the future financial prospects of the firm than do the stockholders. According to this theory, if a company declares a dividend larger than that anticipated by the market, this will be interpreted as a signal that the future financial prospects of the firm are brighter than expected. Investors presume that management would not have raised the d ividend if it did not think that this higher dividend could be maintained. As a result of this inferred signal of good times ahead, investors buy more stock, causing a jump in the stock price.Conversely, if a company cuts it dividend, the market takes this as a signal that management expects poor earnings and does not believe that the current dividend can be maintained. In other words, a dividend cut signals bad times ahead for the business. The market price of the stock drops when the firm announces a lower dividend because investors sell their stock in anticipation of future financial trouble for the firm. If a firms managers believe in the signaling theory, they will always be wary of the message their dividend decision may send to investors. Even if the firm has some attractive investment opportunities that could be financed with retained earnings, management may seek alternative financing to avoid cutting the dividend that may send an unfavorable signal to the market.The Bird-i n-the-Hand TheoryThe bird-in-the-hand theory claims that stockholders prefer to receive dividends instead of having earnings reinvested in the firm on their behalf. Although stockholders should expect to receive benefits in the form of higher future stock prices when earnings are retained and reinvested in their company, there is uncertainty about whether the benefits will actually be realized. However, if the stockholders were to receive the earnings now, in the form of dividends, they could invest them now in whatever they desired. In other words, a bird in the hand is worth two in the bush.If the bird-in-the-hand theory is correct then the stocks of companies that pay relatively high dividends will be more popular and therefore will have relatively higher stock prices than stocks of companies that reinvest their earnings.2.1.2 Dividend Irrelevance TheoriesDividend irrelevance theories are as follows (Gallagher ; Andrew 2007):The Residual Theory of DividendsThe residual theory of dividend is widely known. The theory hypothesize the amount of dividends should not be the focus of the company. Instead, the primary issue should be to determine the amount of earning the firm should retain within the firm for investment. The amount of earnings retained, according to this view, depends on the number and size of acceptable capital budgeting projects and the amount of earnings available to finance the equity portion of the funds needed to pay for these projects. Any earnings left after these projects have been funded are paid out in dividends because dividends arise from residual or leftover earnings, the theory is called the residual theory.The residual theory focuses on the optimal use of earnings generated from the perspective of the firm itself. This may appeal to some, but ignores stockholders preferences about the regularity of and the amount of dividend payments. If a firm follows the residual theory, when earnings are large and the acceptable capital budgetin g projects small and few, dividends will be large. Conversely, when earnings are small and many large acceptable projects are waiting to be financed, there may be no dividends if the residual theory is applied. The dividend payments will be erratic and the amounts will be unpredictable.Modigliani and Millers Dividend TheoryFranco Modigliani and Merton miller (commonly referred as M;M) theorized in 1961 that dividend policy is irrelevant. Given some simplifying assumptions, M;M showed how the value of a company is determined by the income produced from its assets, not by its dividend policy. According to the M;M dividend theory, the way a firms income is distributed (in the form of future capital gains or current dividends) doesnt affect the overall value of the firm. Stockholders are indifferent as to whether they receive their return on their investment in the firms stock from capital gains or dividends so dividends dont matter.2.2 Advantages and Disadvantages of Overseas Manufactu ringManufacturing at overseas certainly saves cost of production in some degree due to cheap labor and material cost but it has its advantages and disadvantages for overseas manufacturing.2.2.1 Advantages of Overseas ManufacturingEase and Speed of Distribution: Manufacturing in overseas shortening the distance between the original location of manufacturer and its distribution market (if the manufacturer has its markets around the region of the considered location). For example, when Nike manufacturer from United States manufactures in Malaysia, they have greater ease and speed of transportation for goods and people to other Asian markets. Besides that, transportation and shipping cost may be reduced due to a shorter distance for shipping and distribution.Cost Savings: In less-developed countries, labor cost is cheaper than developing and developed countries. It is estimated that a company that manufactures in less-developed country can cut costs by between 30% and 80% depending on h ow labor intensive the product is. Besides that, material cost is also cheaper compared to developed countries too.Gain in Efficiencies and Economies of Scale: Besides that, in the long run, manufacturing overseas can gain efficiencies and economies of scale which will assist in reducing unit cost as output increases. Moreover, the initial investment of capital may be spread over an increasing number of units of output and therefore the marginal cost of producing a good or services decreases as production increases.Low Capital Costs: Low capital cost is one of the advantages that encourages manufacturing overseas. The cost of capital in developing or developed countries is higher than the cost of capital in less-developed countries.Incentives for Manufacturing: Some of the less developed countries encourage overseas manufacturers to invest or manufacture in their country. In order to attract manufacturers, these less-developed countries do offer incentives for the manufacturers. For example, Penang has offered incentive to Motorola from USA in order to attract them to manufacture at Penang.2.2.2 Disadvantages of Overseas ManufacturingQuality of Production Suffers: Cheap labor is an advantage for cost savings. Inversely, it reduces the quality of the products as cheap labors usually produce less quality productions. Therefore, the products will suffer in quality as most of the cheap labors are unskilled or semi-skilled. Indirectly, the manufacturer may lose its customers due to the production of less quality products.Time Consuming: When an organization wants to manufacture in overseas, the organization has to analyze and comprehend the considered location and also the facilities available around the setting up area. The analysis and comprehension takes considerable time to complete in order to have a perfect set up in overseas. Therefore it spends considerable time and energy to understand the considered location (Sweeney N.D.).Complexity: To operate oversea i s not as easy as locally. Most of the manufacturers have adapted to their own manufacturing culture and therefore adapting to another manufacturing environment would be difficult for them to familiarize with it. First of all, language may be a barrier, for example, it is difficult to communicate with the South Americans labors if we are not familiar with Latin (Sweeney N.D.). Besides that, finance, tax, and labor laws will be different and must be understood (Sweeney N.D.). Sweeney (N.D.) stated that, understanding national cultures and subcultures are important for any activity as manufacturers have to deal with government and private sector people and especially selling into the market.Brand Risks: Nowadays, consumers are perceived where the product is made from. The production location is a factor that will affect the brand image and reputation. For example, consumers would prefer a product made in USA rather than made in China. If the manufacturer produces in Bangladesh it may m ore or less affect their images as some of the consumers believe that products from developed countries are much better than less-developed countries and therefore the image and reputation of the brand may suffer.Availability of Expertise: The availability of expertise is one of the factors that should be considered when organization seeks to manufacture overseas. Less developed countries may not provide the expertise in the fields required.Long Start Up Time: It is not easy for manufacturer to start up their manufacturing process. To manufacture in a smooth way requires time. It usually requires a considerable of long time start up and familiarize.3.0 Debt ; Equity Financing3.1 Equity FinancingEquity financing is a method to acquire capital that involves selling a partial interest in the company to investors (Brian 1990). In return of the money paid, shareholders receive ownership interests in the corporation (Brian 1990).3.1.1 Pros and Cons of Equity Financing3.1.2 Pros of Equity FinancingThe advantages of equity finance are:Commitment of Funds: The funding is committed to the business and intended projects. Investors only realize their investment if the business is doing well (eg. through flotation or a sale to new investors).Vested Interest: Investors have the same interest that is to keep the business going on well and generate maximum profits which leads to an increase in the value of the business.Follow-up Funding: When business grows, investors are often prepared to provide follow-up funding.(Source of reference:http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES;itemId=1073789573)Wider Pool of Finance: When company is listed in stock exchanged, the company has the access to wider pool of finance.Quality Products: The owners will pay proper attention for improving the quality of products. The reason is the appropriate of quality product goes to them.No Interest Cost: No payment of interest for the funds provided by the shareholders. The c ost of production remains low as there is no burden of interest.Earning Remains with the Firm: When funds provided by shareholders for improvement in the business are making profits, the earnings are remained with the owners. Earnings are not shared by the creditors.To Tide over Emergencies: Firm is in a better position to tide over recession period and other emergencies due to no burden of rate of interest.Ability to borrow: Borrowing ability is improved if the equity capital is financed well.(Source of Reference: http://www.blurtit.com/q303144.html)Sources of Skills and Experiences: Good investors can bring resources for the business. They can help one to get skilled people, right contacts to build the business. They might also help out with their own experience in the formation of the strategy or with decision making.No Obligation for Repayment: No obligation for the repayment of the finances in the initial phase of the business when the cash flow is quite slow. Whereas, in bank loans there are severe obligations and penalties in case a business fails to generate monthly interests and make the monthly payments to the bank.(Sources of Reference:http://www.freewarefiles.com/techfi/Advantages_of_Equity_Financing.html)Pledge No Assets: Corporation does not have to pledge their assets as collateral to obtain equity investments.Availability of Cash: Business will have more cash available due to no debt payments have to be made.(Source of reference:http://forums.forbes.com/forbes/board/message?board.id=entreforum;message.id=399)3.1.3 Cons of Equity FinancingThe disadvantages of equity finance are:Costly and Time Consuming: Raising equity finance is costly and time-consuming. Business may suffer as times are devoted to the deal. Potential investors will seek background information on owner and his business and they will closely scrutinize past results and forecasts and will delve the management team.Interference in Management: The equity investors can interfere in the management of the company and in addition they also have the voting rights which could influent the making of major decisions.Extra Effort to Provide Information: Founder will have to invest management time to provide regular information for the investor to monitor the situation of the business.Share Dilution: Founders share in the business will be diluted which means lessen in strength. Besides that, businesss profits will be shared by other equity investors.Legal and Regulatory Compliance: There can be legal and regulatory issues to comply with when raising finance (eg. when promoting investments).(Source of Reference;http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES;itemId=1073789573)Limitation of Control: Founders must give up some control of the business. If investors have different perceptions and ideas about the companys strategic direction or day-to-day operations, they can pose problems for the entrepreneur.(Source of Reference: http://www.answers.com/eq uity+Financing?cat=biz-fin)No Tax Deduction: Dividend payments are not tax deductible.(Source of Reference:http://forums.forbes.com/forbes/board/message?board.id=entreforummessage.id=399)3.2 Debt FinancingAccording to (http://www.answers.com/debt+financing?cat=biz-fin) debt financing is a strategy that involves borrowing money from a lender or investor which the full amount will be repaid in the future usually with interest within a certain period. It asserted that it does not include any provision for ownership of the company. Debt financing has a prior claim on the company irrespective of the profits earned despite the company goes into liquidation (Joseph 2008).3.2.1 Pros and Cons of Debt Financing3.2.2 Pros of Debt FinancingMaintain ownership: The debt holder cannot interfere in the management of the company and they do not have the voting rights. Therefore, business can be run without outside interferenceTax deductions: Principal and interest payments on a business loan are cla ssified as business expenses and thus tax deductible. It also lowers the actual cost of the loan to the company.Lower interest rate: There is a lower interest rate of debt financing when interest rate is lower than tax rate (where the business can take a loan and have a deduction on tax rather than high interest rate).(Source of Reference: http://entrepreneurs.about.com/od/financing/a/debtfinancing.htm)No Complex Procedures Required: Debt financing is easier to obtain than equity financing. Raising debt capital is less complicated because the company is not required to comply with state and federal securities laws and regulations.No Profits Sharing: Profits of company are not shared with the lenders who require capital appreciation and dividends on their investments.Forecasting: Interest and principal payments are typically a know amount that can be forecast.(Source of Reference: http://www.job-employment-guide.com/business-financing.html)No Extra Rewards: Debt holders are entitled only to repayment of the agreed-upon principal of the loan plus interest and have no direct claim on future profits of the business if the company has made extra profits.Saving Management Time: Company does not have to send periodic mailings to large numbers of investors, hold periodic meetings with shareholders and seek the vote of shareholders before taking certain actions.(Source of Reference: http://smallbusiness.findlaw.com/banking_financing/be1_5debtvsequity.html) David H. Schwartz3.2.3 Cons of Debt FinancingRepayment: Sole obligation to the lender is to make payments on time. If the business fails, the company still has to make payments. If business goes into bankruptcy, lenders will have claim to repayment before any equity investors.Impacts Credit Rating: It seems to be attractive to keep bringing on debt when company needs money, a practice known as levering up, but each loan will be noted on your credit rating. The more borrowings, the higher the risk to the lender and th e higher interest rate the company will have to pay.Cash and Collateral: The company is usually required to pledge assets of the company to the lender as collateral, and owners of the company are in some cases required to personally guarantee repayment of the loan.(Source of Reference:http://entrepreneurs.about.com/od/financing/a/debtfinancing.htm)Difficulty in Business Growth: Interest is a fixed cost which raises the companys break-even point. High interest costs during difficult financial periods can increase the risk of insolvency. Companies that have large amounts of debt as compared to equity often find it difficult to grow because of the high cost of servicing the debt.Restrictions on Activities: Debt instruments often contain restrictions on the companys activities, preventing management from pursuing alternative financing options and non-core business opportunities which results in losing of other investment opportunities.(Source of Reference:http://smallbusiness.findlaw.co m/banking_financing/be1_5debtvsequity.html)3.3 Consideration Factors for Sources of FinanceEquity financing and debt financing is the option for a company that needs financing. Each company is unique and they have their own financing requirements and therefore, it is inappropriate to determine any one of the financing methods is the best option for companies. There are certain factors that a company needs to consider before choosing the right financing method:The size of the company: Larger companies may obtain financing by equity financing due to the needs of wider pool of finance for company growth (Joseph 2008). However for smaller companies, debt financing is much easier to obtain because its not easy to reach the status of public limited company and the issuance cost of equity finance is unaffordable by smaller companies (Joseph 2008).The ability to generate cash flow: This relies upon the operations of the company (Joseph 2008). If the company is able to generate enough cash f low, the company may seek debt financing because debt financing requires cash make frequent repayment of interest and principal (Joseph 2008).Any Restrictive Covenants: If the company is restricted by the lender from subsequent borrowings, equity financing is more appropriate due to the bindings against the company.The Cost of Financing: The cost of financing for debt financing is cheaper than equity financing due to the debt financer is exposed to lesser risk and he is entitled for prior claim in the companys profits and interest payable are tax deductible (which means actual cost of debt is lesser) (Joseph 2008).The Duration of Borrowing: The longer the duration, the interest rate charged on the borrower will be higher (Joseph 2008).The Current Gearing Level: If a company has a high gearing level, it is the best to go for equity financing whilst if a company has a low gearing level, they can go for debt financing (Joseph 2008).4.0 ConclusionNot every dividend policy suits a compan y. When deciding on how much dividend should be distributed to their investors, factors such as legal constraints, contractual constraints and etcetera have to considered to obtain the most suitable and appropriate dividend policy for better financing.Factors that affect dividend policy can be incorporated in several dividend theories such as residual dividends theory, clientele theory, signalling dividend theory, bird-in-the-hand theory and Modigliani Miller dividend theory. These theories can be classified into dividend relevance theory where its dividend policy will affect on companys value and cost of capital and dividend irrelevance theory where its dividend will not affect on companys value and cost of capital.Overseas manufacturing gains advantages such as cost savings and economies of scale. Inversely, it also has other effects such as no expertise available and also time consuming for starting a new factory.Companys capital structure can be financed through debt financing and equity financing. These are the strategies that a company can get its fund. However, these two strategies have their own advantages and disadvantages. When implementing any of those strategies, factors such as size of the company, ability to generate cash flow, current gearing level and other factors have to be considered in order to have the most suitable strategy to finance the organization. DIvidend Policies and Financing Essay Example DIvidend Policies and Financing Essay Dividend policy refers to the decision made by the company whether to retain the profits within the company, or they pay out the profits to the owners of the organization in the form of dividends (Garrison 2008). Once the company decides on whether to pay dividends, they may establish a somewhat permanent dividend policy, which may in turn impact on investors and perceptions of the company in the financial markets (Garrison 2008). What they decide depends on the situation of the company now and in the future. It also depends on the preferences of investors and potential investors (Garrison 2008).When deciding on the dividend policy, several factors such as legal constraints, contractual constraints, internal constraints, growth prospect, owners considerations and market considerations have to be taken into account. Considerations taken into account can be incorporated in several dividend theories such as the residual theory of dividends, the clientele theory, the signalling dividend theory, the bird-in-the-hand theory and Modigliani and miller dividend theory.Manufacturing overseas can reduce costs due to its cheap labour costs but there are other considerations that have to be taken into account. There are pros and cons for manufacturing at overseas.Companys capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities (http://en.wikipedia.org/wiki/Capital_structure). Debt financing and equity financing has their own advantages and disadvantages but certain factors have to be considered when choosing between these two financing strategies.2.0 Factors Affecting the Dividend PolicyWhen deciding on the dividend policy, several factors need to be taken into account. The factors needed to taken into account are as follows (sources taken fromhttp://freemba.in/articlesread.php?artcode=488substcode=30stcode=10):Stability of EarningsThe nature of business has an important bearing on the dividend pol icy. Industrial units having stability of earnings may formulate a more consistent dividend policy than those having an uneven flow of incomes because they can predict easily their savings and earnings. Usually, enterprises dealing in necessities suffer less from oscillating earnings than those dealing in luxuries or fancy goods.Age of CorporationAge of the corporation counts much in deciding the dividend policy. A newly established company may require much of its earnings for expansion and plant improvement and may adopt a rigid dividend policy while, on the other hand, an older company can formulate a clear cut and more consistent policy regarding dividend.Liquidity of FundsAvailability of cash and sound financial position is also an important factor in dividend decisions. A dividend represents a cash outflow, the greater the funds and the liquidity of the firm the better the ability to pay dividend. The liquidity of a firm depends very much on the investment and financial decisio ns of the firm which in turn determines the rate of expansion and the manner of financing. If cash position is weak, stock dividend will be distributed and if cash position is good, company can distribute the cash dividend.Extent of Share DistributionNature of ownership also affects the dividend decisions. A closely held company is likely to get the assent of the shareholders for the suspension of dividend or for following a conservative dividend policy. On the other hand, a company having a good number of shareholders widely distributed and forming low or medium income group would face a great difficulty in securing such assent because they will emphasize to distribute higher dividend.Needs for Additional CapitalCompanies retain a part of their profits for strengthening their financial position. The income may be conserved for meeting the increased requirements of working capital or of future expansion. Small companies usually find difficulties in raising finance for their needs of increased working capital for expansion programs. They having no other alternative, use their ploughed back profits. Thus, such Companies distribute dividend at low rates and retain a big part of profits.Trades CycleBusiness cycles also exercise influence upon dividend Policy. Dividend policy is adjusted according to the business oscillations. During the boom, prudent management creates food reserves for contingencies which follow the inflationary period. Higher rates of dividend can be used as a tool for marketing the securities in an otherwise depressed market. The financial solvency can be proved and maintained by the companies in dull years if the adequate reserves have been built up.Government PoliciesThe earnings capacity of the enterprise is widely affected by the change in fiscal, industrial, labor, control and other government policies. Sometimes government restricts the distribution of dividend beyond a certain percentage in a particular industry or in all spheres of busi ness activity as was done in emergency. The dividend policy has to be modified or formulated accordingly in those enterprises.Need for FundsDividends paid to stockholders use funds that the firm could otherwise invest. Therefore, a company running short of cash or with ample capital investment opportunities may decide to pay little of no dividends. Alternatively, there may be an abundance of cash or a dearth of good capital budgeting projects available. This could lead to very large dividend payments.Management Expectations and Dividend PolicyIf a firms managers perceive the future as relatively bright, on the one hand, they may begin paying large dividends in anticipation of being able to keep them up during the good times ahead. On the other hand, if managers believe that bad times are coming, they may decide to build up the firms reserves for safety instead of paying dividends.Stockholders PreferencesReinvesting earning internally, instead of paying dividends, would lead to highe r stock prices and a greater percentage of the total return common stockholders receive coming from capital gains. Capital gains are profits earned by an investor when the price of a capital asset, such as common stock, increases.Common stockholders may prefer to receive their return from the company in the form of capital gains and some may prefer to receive their return from the company in the form of dividends. Capital gains are not taxed at all unless they are realized. That is, unless the stock is sold. The board of directors should consider stockholder preferences when establishing the firms dividend policy.Restriction on Dividend PaymentsA firm may have dividend payment restrictions in its existing bond indentures or loan agreements. For example, a companys loan contract with a bank may specify that the companys current ratio cannot drop below 2.0 during the life of the loan. Because payment of a cash dividend draws down the companys cash account, the current ratio may fall b elow the minimum level required. In such a case, the size of a dividend may have to be cut or omitted. In addition, many states prohibit dividend payments if they would create negative retained earnings on the balance sheet. This restriction is a prohibition against raiding the initial capital. Figure 1 summarizes the factors that influence the dividend decision.Figure 1: This figure identifies key elements that make a dividend payment more or less likely.2.1 Leading Dividend TheoriesThe factors that affect the dividend policy can be incorporated in several dividend theories. Dividend theories can be divided into dividend relevance theory and dividend irrelevance theory. Dividend relevance theory refers to the value of a firm is affected by its dividend policy while dividend irrelevance theory refers to a firms dividend policy has no effect on either its value or its cost of capital (http://www.studyfinance.com/lessons/dividends/index.mv?page=01).2.1.1 Dividend Relevance TheoriesAcc ording to Gallagher Andrew (2007) dividend relevance theories are as follows:The Clientele Dividend TheoryThe clientele dividend theory is based on the view tat investors are attracted to a particular company in part because of its dividend policy. For example, young investors just starting out may want their portfolios to grow in value from capital gains rather than from dividends, so they seek out companies that retain earnings instead of paying dividends. Stock prices tend to increase as earnings are retained and the resulting capital gain is not taxed until the stock is sold.Older investors, in contrast, may want to live off the income their portfolios provide. They would ten to seek out companies that pay high dividends rather than reinvesting for growth. According to the clientele dividend theory, each company therefore has its own clientele of investors who hold the stock in part because of its dividend policy.If the clientele theory is valid, then it doesnt much matter what a companys dividend policy is as long as it has one and sticks to it. If the policy is changed, the clientele that liked the old policy will probably sell their stock. A new clientele will buy the stock based on the firms new policy. When a dividend policy change is contemplated, managers must ask whether the effect of the new clienteles buying will outweigh the effects of the old clienteles selling. The new clientele cannot be sure that the most recent dividend policy implemented will be repeated in the future.The Signaling Dividend TheoryThe signaling dividend theory is based on the premise that the management of a company knows more about the future financial prospects of the firm than do the stockholders. According to this theory, if a company declares a dividend larger than that anticipated by the market, this will be interpreted as a signal that the future financial prospects of the firm are brighter than expected. Investors presume that management would not have raised the d ividend if it did not think that this higher dividend could be maintained. As a result of this inferred signal of good times ahead, investors buy more stock, causing a jump in the stock price.Conversely, if a company cuts it dividend, the market takes this as a signal that management expects poor earnings and does not believe that the current dividend can be maintained. In other words, a dividend cut signals bad times ahead for the business. The market price of the stock drops when the firm announces a lower dividend because investors sell their stock in anticipation of future financial trouble for the firm. If a firms managers believe in the signaling theory, they will always be wary of the message their dividend decision may send to investors. Even if the firm has some attractive investment opportunities that could be financed with retained earnings, management may seek alternative financing to avoid cutting the dividend that may send an unfavorable signal to the market.The Bird-i n-the-Hand TheoryThe bird-in-the-hand theory claims that stockholders prefer to receive dividends instead of having earnings reinvested in the firm on their behalf. Although stockholders should expect to receive benefits in the form of higher future stock prices when earnings are retained and reinvested in their company, there is uncertainty about whether the benefits will actually be realized. However, if the stockholders were to receive the earnings now, in the form of dividends, they could invest them now in whatever they desired. In other words, a bird in the hand is worth two in the bush.If the bird-in-the-hand theory is correct then the stocks of companies that pay relatively high dividends will be more popular and therefore will have relatively higher stock prices than stocks of companies that reinvest their earnings.2.1.2 Dividend Irrelevance TheoriesDividend irrelevance theories are as follows (Gallagher ; Andrew 2007):The Residual Theory of DividendsThe residual theory of dividend is widely known. The theory hypothesize the amount of dividends should not be the focus of the company. Instead, the primary issue should be to determine the amount of earning the firm should retain within the firm for investment. The amount of earnings retained, according to this view, depends on the number and size of acceptable capital budgeting projects and the amount of earnings available to finance the equity portion of the funds needed to pay for these projects. Any earnings left after these projects have been funded are paid out in dividends because dividends arise from residual or leftover earnings, the theory is called the residual theory.The residual theory focuses on the optimal use of earnings generated from the perspective of the firm itself. This may appeal to some, but ignores stockholders preferences about the regularity of and the amount of dividend payments. If a firm follows the residual theory, when earnings are large and the acceptable capital budgetin g projects small and few, dividends will be large. Conversely, when earnings are small and many large acceptable projects are waiting to be financed, there may be no dividends if the residual theory is applied. The dividend payments will be erratic and the amounts will be unpredictable.Modigliani and Millers Dividend TheoryFranco Modigliani and Merton miller (commonly referred as M;M) theorized in 1961 that dividend policy is irrelevant. Given some simplifying assumptions, M;M showed how the value of a company is determined by the income produced from its assets, not by its dividend policy. According to the M;M dividend theory, the way a firms income is distributed (in the form of future capital gains or current dividends) doesnt affect the overall value of the firm. Stockholders are indifferent as to whether they receive their return on their investment in the firms stock from capital gains or dividends so dividends dont matter.2.2 Advantages and Disadvantages of Overseas Manufactu ringManufacturing at overseas certainly saves cost of production in some degree due to cheap labor and material cost but it has its advantages and disadvantages for overseas manufacturing.2.2.1 Advantages of Overseas ManufacturingEase and Speed of Distribution: Manufacturing in overseas shortening the distance between the original location of manufacturer and its distribution market (if the manufacturer has its markets around the region of the considered location). For example, when Nike manufacturer from United States manufactures in Malaysia, they have greater ease and speed of transportation for goods and people to other Asian markets. Besides that, transportation and shipping cost may be reduced due to a shorter distance for shipping and distribution.Cost Savings: In less-developed countries, labor cost is cheaper than developing and developed countries. It is estimated that a company that manufactures in less-developed country can cut costs by between 30% and 80% depending on h ow labor intensive the product is. Besides that, material cost is also cheaper compared to developed countries too.Gain in Efficiencies and Economies of Scale: Besides that, in the long run, manufacturing overseas can gain efficiencies and economies of scale which will assist in reducing unit cost as output increases. Moreover, the initial investment of capital may be spread over an increasing number of units of output and therefore the marginal cost of producing a good or services decreases as production increases.Low Capital Costs: Low capital cost is one of the advantages that encourages manufacturing overseas. The cost of capital in developing or developed countries is higher than the cost of capital in less-developed countries.Incentives for Manufacturing: Some of the less developed countries encourage overseas manufacturers to invest or manufacture in their country. In order to attract manufacturers, these less-developed countries do offer incentives for the manufacturers. For example, Penang has offered incentive to Motorola from USA in order to attract them to manufacture at Penang.2.2.2 Disadvantages of Overseas ManufacturingQuality of Production Suffers: Cheap labor is an advantage for cost savings. Inversely, it reduces the quality of the products as cheap labors usually produce less quality productions. Therefore, the products will suffer in quality as most of the cheap labors are unskilled or semi-skilled. Indirectly, the manufacturer may lose its customers due to the production of less quality products.Time Consuming: When an organization wants to manufacture in overseas, the organization has to analyze and comprehend the considered location and also the facilities available around the setting up area. The analysis and comprehension takes considerable time to complete in order to have a perfect set up in overseas. Therefore it spends considerable time and energy to understand the considered location (Sweeney N.D.).Complexity: To operate oversea i s not as easy as locally. Most of the manufacturers have adapted to their own manufacturing culture and therefore adapting to another manufacturing environment would be difficult for them to familiarize with it. First of all, language may be a barrier, for example, it is difficult to communicate with the South Americans labors if we are not familiar with Latin (Sweeney N.D.). Besides that, finance, tax, and labor laws will be different and must be understood (Sweeney N.D.). Sweeney (N.D.) stated that, understanding national cultures and subcultures are important for any activity as manufacturers have to deal with government and private sector people and especially selling into the market.Brand Risks: Nowadays, consumers are perceived where the product is made from. The production location is a factor that will affect the brand image and reputation. For example, consumers would prefer a product made in USA rather than made in China. If the manufacturer produces in Bangladesh it may m ore or less affect their images as some of the consumers believe that products from developed countries are much better than less-developed countries and therefore the image and reputation of the brand may suffer.Availability of Expertise: The availability of expertise is one of the factors that should be considered when organization seeks to manufacture overseas. Less developed countries may not provide the expertise in the fields required.Long Start Up Time: It is not easy for manufacturer to start up their manufacturing process. To manufacture in a smooth way requires time. It usually requires a considerable of long time start up and familiarize.3.0 Debt ; Equity Financing3.1 Equity FinancingEquity financing is a method to acquire capital that involves selling a partial interest in the company to investors (Brian 1990). In return of the money paid, shareholders receive ownership interests in the corporation (Brian 1990).3.1.1 Pros and Cons of Equity Financing3.1.2 Pros of Equity FinancingThe advantages of equity finance are:Commitment of Funds: The funding is committed to the business and intended projects. Investors only realize their investment if the business is doing well (eg. through flotation or a sale to new investors).Vested Interest: Investors have the same interest that is to keep the business going on well and generate maximum profits which leads to an increase in the value of the business.Follow-up Funding: When business grows, investors are often prepared to provide follow-up funding.(Source of reference:http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES;itemId=1073789573)Wider Pool of Finance: When company is listed in stock exchanged, the company has the access to wider pool of finance.Quality Products: The owners will pay proper attention for improving the quality of products. The reason is the appropriate of quality product goes to them.No Interest Cost: No payment of interest for the funds provided by the shareholders. The c ost of production remains low as there is no burden of interest.Earning Remains with the Firm: When funds provided by shareholders for improvement in the business are making profits, the earnings are remained with the owners. Earnings are not shared by the creditors.To Tide over Emergencies: Firm is in a better position to tide over recession period and other emergencies due to no burden of rate of interest.Ability to borrow: Borrowing ability is improved if the equity capital is financed well.(Source of Reference: http://www.blurtit.com/q303144.html)Sources of Skills and Experiences: Good investors can bring resources for the business. They can help one to get skilled people, right contacts to build the business. They might also help out with their own experience in the formation of the strategy or with decision making.No Obligation for Repayment: No obligation for the repayment of the finances in the initial phase of the business when the cash flow is quite slow. Whereas, in bank loans there are severe obligations and penalties in case a business fails to generate monthly interests and make the monthly payments to the bank.(Sources of Reference:http://www.freewarefiles.com/techfi/Advantages_of_Equity_Financing.html)Pledge No Assets: Corporation does not have to pledge their assets as collateral to obtain equity investments.Availability of Cash: Business will have more cash available due to no debt payments have to be made.(Source of reference:http://forums.forbes.com/forbes/board/message?board.id=entreforum;message.id=399)3.1.3 Cons of Equity FinancingThe disadvantages of equity finance are:Costly and Time Consuming: Raising equity finance is costly and time-consuming. Business may suffer as times are devoted to the deal. Potential investors will seek background information on owner and his business and they will closely scrutinize past results and forecasts and will delve the management team.Interference in Management: The equity investors can interfere in the management of the company and in addition they also have the voting rights which could influent the making of major decisions.Extra Effort to Provide Information: Founder will have to invest management time to provide regular information for the investor to monitor the situation of the business.Share Dilution: Founders share in the business will be diluted which means lessen in strength. Besides that, businesss profits will be shared by other equity investors.Legal and Regulatory Compliance: There can be legal and regulatory issues to comply with when raising finance (eg. when promoting investments).(Source of Reference;http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES;itemId=1073789573)Limitation of Control: Founders must give up some control of the business. If investors have different perceptions and ideas about the companys strategic direction or day-to-day operations, they can pose problems for the entrepreneur.(Source of Reference: http://www.answers.com/eq uity+Financing?cat=biz-fin)No Tax Deduction: Dividend payments are not tax deductible.(Source of Reference:http://forums.forbes.com/forbes/board/message?board.id=entreforummessage.id=399)3.2 Debt FinancingAccording to (http://www.answers.com/debt+financing?cat=biz-fin) debt financing is a strategy that involves borrowing money from a lender or investor which the full amount will be repaid in the future usually with interest within a certain period. It asserted that it does not include any provision for ownership of the company. Debt financing has a prior claim on the company irrespective of the profits earned despite the company goes into liquidation (Joseph 2008).3.2.1 Pros and Cons of Debt Financing3.2.2 Pros of Debt FinancingMaintain ownership: The debt holder cannot interfere in the management of the company and they do not have the voting rights. Therefore, business can be run without outside interferenceTax deductions: Principal and interest payments on a business loan are cla ssified as business expenses and thus tax deductible. It also lowers the actual cost of the loan to the company.Lower interest rate: There is a lower interest rate of debt financing when interest rate is lower than tax rate (where the business can take a loan and have a deduction on tax rather than high interest rate).(Source of Reference: http://entrepreneurs.about.com/od/financing/a/debtfinancing.htm)No Complex Procedures Required: Debt financing is easier to obtain than equity financing. Raising debt capital is less complicated because the company is not required to comply with state and federal securities laws and regulations.No Profits Sharing: Profits of company are not shared with the lenders who require capital appreciation and dividends on their investments.Forecasting: Interest and principal payments are typically a know amount that can be forecast.(Source of Reference: http://www.job-employment-guide.com/business-financing.html)No Extra Rewards: Debt holders are entitled only to repayment of the agreed-upon principal of the loan plus interest and have no direct claim on future profits of the business if the company has made extra profits.Saving Management Time: Company does not have to send periodic mailings to large numbers of investors, hold periodic meetings with shareholders and seek the vote of shareholders before taking certain actions.(Source of Reference: http://smallbusiness.findlaw.com/banking_financing/be1_5debtvsequity.html) David H. Schwartz3.2.3 Cons of Debt FinancingRepayment: Sole obligation to the lender is to make payments on time. If the business fails, the company still has to make payments. If business goes into bankruptcy, lenders will have claim to repayment before any equity investors.Impacts Credit Rating: It seems to be attractive to keep bringing on debt when company needs money, a practice known as levering up, but each loan will be noted on your credit rating. The more borrowings, the higher the risk to the lender and th e higher interest rate the company will have to pay.Cash and Collateral: The company is usually required to pledge assets of the company to the lender as collateral, and owners of the company are in some cases required to personally guarantee repayment of the loan.(Source of Reference:http://entrepreneurs.about.com/od/financing/a/debtfinancing.htm)Difficulty in Business Growth: Interest is a fixed cost which raises the companys break-even point. High interest costs during difficult financial periods can increase the risk of insolvency. Companies that have large amounts of debt as compared to equity often find it difficult to grow because of the high cost of servicing the debt.Restrictions on Activities: Debt instruments often contain restrictions on the companys activities, preventing management from pursuing alternative financing options and non-core business opportunities which results in losing of other investment opportunities.(Source of Reference:http://smallbusiness.findlaw.co m/banking_financing/be1_5debtvsequity.html)3.3 Consideration Factors for Sources of FinanceEquity financing and debt financing is the option for a company that needs financing. Each company is unique and they have their own financing requirements and therefore, it is inappropriate to determine any one of the financing methods is the best option for companies. There are certain factors that a company needs to consider before choosing the right financing method:The size of the company: Larger companies may obtain financing by equity financing due to the needs of wider pool of finance for company growth (Joseph 2008). However for smaller companies, debt financing is much easier to obtain because its not easy to reach the status of public limited company and the issuance cost of equity finance is unaffordable by smaller companies (Joseph 2008).The ability to generate cash flow: This relies upon the operations of the company (Joseph 2008). If the company is able to generate enough cash f low, the company may seek debt financing because debt financing requires cash make frequent repayment of interest and principal (Joseph 2008).Any Restrictive Covenants: If the company is restricted by the lender from subsequent borrowings, equity financing is more appropriate due to the bindings against the company.The Cost of Financing: The cost of financing for debt financing is cheaper than equity financing due to the debt financer is exposed to lesser risk and he is entitled for prior claim in the companys profits and interest payable are tax deductible (which means actual cost of debt is lesser) (Joseph 2008).The Duration of Borrowing: The longer the duration, the interest rate charged on the borrower will be higher (Joseph 2008).The Current Gearing Level: If a company has a high gearing level, it is the best to go for equity financing whilst if a company has a low gearing level, they can go for debt financing (Joseph 2008).4.0 ConclusionNot every dividend policy suits a compan y. When deciding on how much dividend should be distributed to their investors, factors such as legal constraints, contractual constraints and etcetera have to considered to obtain the most suitable and appropriate dividend policy for better financing.Factors that affect dividend policy can be incorporated in several dividend theories such as residual dividends theory, clientele theory, signalling dividend theory, bird-in-the-hand theory and Modigliani Miller dividend theory. These theories can be classified into dividend relevance theory where its dividend policy will affect on companys value and cost of capital and dividend irrelevance theory where its dividend will not affect on companys value and cost of capital.Overseas manufacturing gains advantages such as cost savings and economies of scale. Inversely, it also has other effects such as no expertise available and also time consuming for starting a new factory.Companys capital structure can be financed through debt financing and equity financing. These are the strategies that a company can get its fund. However, these two strategies have their own advantages and disadvantages. When implementing any of those strategies, factors such as size of the company, ability to generate cash flow, current gearing level and other factors have to be considered in order to have the most suitable strategy to finance the organization.

The Winning Formula for Writing Success

The Winning Formula for Writing Success The Winning Formula for Writing Success The Winning Formula for Writing Success By Mark Nichol When I wrote the heading for today’s post, I thought to myself, â€Å"I should be making infomercials and workshop presentations, offering my ‘secret’ for a thousand dollars.† A thousand dollars a head for even a few dozen participants? That’s what I call successful writing: With one phrase and a few platitudes, I could take a couple of years off from work. Nah. I’ll give it to you free of charge: Quality requires quantity. Yes? And? That’s it. Quality requires quantity. Oh, all right. I’ll expound. That’s a layered statement, one that’s as deep as you want to dive. But on its most basic level, it means that an output of high quality must be preceded by an input of high quantity. In other words, a return of quality takes an investment of quantity. The new publishing model is that, thanks to the Internet, everyone’s a writer. That’s the good news. But it’s also the bad news, because it means that because many writers in this suddenly expanded universe are not highly qualified, the universe is degraded. There have always been less-than-stellar writers, but it was more difficult for them to publish their work and sustain success. Now, however, nonprofessional writers can be forgiven for believing that because it’s easy to type, it’s easy to write. And the remaining exemplars of great writing are lost in the leveling of the signal-to-noise ratio if they are sought out at all anymore. The brave new world of formal publishing is also degraded, in this case by a business model that no longer values quality because remember, quality requires quantity (and quantity, of course, requires financial investment). So now, I can find six typographical errors stuffed into a twenty-word caption in the website for a major metropolitan newspaper (since corrected because, hey, it’s the instant Internet, and we can always fix it later!), and I can find my enjoyment of a newly published book compromised by shoddy editing (improvement of which must wait for the second edition, if there is one, and if there is the wherewithal to improve it but that’s too late for me). That’s why I may come across as a dinosaur about these things, because I believe that if something is worth doing, it is worth doing well. And because I believe that, that’s why I’m proud to remain part of the old-school old guard, editing book manuscripts for publishers willing to spend time, effort, and especially money to ensure that their products reflect their high standards. Quality requires quantity. Oh, quality is sometimes accidentally produced with a minimum of quantity, but standards cannot rely on serendipity. The work ethic is called that for a reason: Good isn’t easy. It takes effort. Quality requires quantity. There’s at least one other layer to the formula. Last week, I wrote a post about another formula, what I call a writing-competence matrix. Rather than explain it here, I invite you to read the post, if you haven’t already, or to review it, if you have. Go ahead. I’ll wait. What does it take to score high on this matrix? Don’t expect to ever hit â€Å"Expert† on all three counts; many successful writers may excel in only one category. But to rate highly in even one area takes time. Remember the 10,000-Hour Rule? (That’s all right. I’ll still be here when you get back.) If you want to be a great writer, be content at first with endeavoring to be a good writer. Great can wait. But to become a good writer, you must invest quantity in your quest for quality quantity of time and effort. And you must be willing to labor not only longitudinally, putting in years of skill development, but also latitudinally, massaging, refining, and polishing each piece of writing along the way. Remember this truism: If it’s easy, you’re probably not doing it right. Quality requires quantity. Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Writing Basics category, check our popular posts, or choose a related post below:75 Synonyms for â€Å"Angry†Do you "orient" yourself, or "orientate" yourself?Is "Number" Singular or Plural?