The Problem Of Drug Addiction - 1233 Words

This report will outline the problems of drug addiction that have arisen in the young teens and as well give possible solutions on how to overcome it. Drug addiction, increasing immensely in our society, is currently the biggest problem in young teens these days. Looking at the future of our country drowning in drugs is a big disappointment. To prevent drug addiction parents should guide their children into the right path, schools should promote healthy living, and the government should step forward to set up campaigns to educate parents about this topic. The riddance of drugs is a leading factor to abolish crimes in the community. After reading this report, you will have an understanding of how to reduce drugs from the city and the possible solutions to help over come this issue. ISSUE: Drug addiction has been increasing immensely among our society today and is spreading rapidly among young teens which is not only harming their health but is also ruining precious time of their life. ANALYSIS WITH POSSIBLE SOLUTIONS †¢ Parents should guide their children into the right path: A child is greatly impacted by it’s parents during their childhood. Children are like clay and parents can mould them in their initial stage of the life cycle how ever they want. Parents should have enough knowledge about ways children get attracted toward drugs, so that they can prevent addiction for the future. Often children with problematic backgrounds start consuming drugs because of theShow MoreRelatedDrug Addiction Problem1399 Words   |  6 PagesSolving the Problem of Drug Addiction 1.Drug abuse and addiction continues to be a global issue. According to the â€Å"United Nations Office on Drugs and Crime† (UNODC), about 5% of the global population used an illicit drug in 2010 alone, and about 27 million or 0.6 percent of the adult population of the world can be categorized as drug abusers. A7 2.This paper explores some of the measures that can be taken to resolve the drug addiction problem in the world. 3.Addressing various risk and protectiveRead MoreThe Problem Of Drug Addiction974 Words   |  4 Pagesan addiction, whether a person is addicted to alcohol, methamphetamines, marijuana or over the counter drugs, people often have different sides to this. Some may say that an addiction is a disease; others say that an addiction is just a poor choice of a person’s life. The National Institute on Drug Abuse states that â€Å"†¦drug addiction is a complex disease, and quitting takes more than good intentions or a strong will. In fact, because drugs change the brain in ways that foster compulsive drug abuseRead MoreThe Problem Of Drug Addiction952 Words   |  4 Pagesperson initially taking drugs can vary and while the action itself is voluntary: the eventual drug addiction is essentially involuntary. Drug addiction is a complex and chronic disease, a brain disease, which changes the way the brain functions. Drug addiction, much like chronic illnesses such as heart disea se and diabetes, disrupts healthy, normal functioning organs. This has harmful consequences that are both preventable and treatable (Branch, 2011, pp.263-265). Drug addiction is considered a brainRead MoreThe Problem Of Drug Addiction930 Words   |  4 Pagesconsumed alcohol, 15% have smoked cigarettes, and 16.5% have used marijuana. † A drug can be defined as a something which â€Å"alters your mind or body that is not food † which is something all of these substances have in common. There has been a massive increase in underage consumption of illegal substances in the last several decades. These substances which young people are using are known for being very addictive. Addiction is much more likely to occur when started at a young age and having more severeRead MoreThe Problems of Drug Addiction954 Words   |  4 PagesDrug addiction A reasonable number of people do not understand why other people get addicted to drugs. Some even associate drug abuse and addiction with lack of moral principles or willpower. People subscribing to this school of thought believe that drug addicts can stop using drugs by simply changing their behavior. They fail to realize that drug addiction is a complex disease whose eradication calls for many things other than changing habits. Drugs basically change the way a human brain worksRead MoreThe Problem Of Drug Addiction1796 Words   |  8 Pages Drug addiction has long been and still is a typical issue around the world. Jesmyn Ward writes about the effect of drug addiction in her community in DeLisle and the toll it took in her life and Rog’s life. There are different reason why people get addicted and various levels to which people become dependent on drugs, but the main thing I am going to be addressing is the multiple perspective on the causes for addiction. The ones I am going to explore are Low Income neighborhoods, social, financialRead MoreThe Problem Of Drug Addiction967 Words   |  4 PagesDrug addiction is an ever-growing problem faced in society and, although the government tries to take action to keep drugs off the streets, people of all social classes and backgrounds still fall victim to drug abuse. However, environmental situations can make an individual more susceptible: age, gender, location, genetics, family situations and the like can all be factors into an individuals’ drug habit. There are complications with picking the correct plan suited to a person. Each client is theirRead MoreThe Problem Of Drug Addiction1042 Words   |  5 PagesOPENING/ATTENTION: In reality, drug addiction is an unpredictable ailment, and stopping takes more than great goals or an in number will. Truth be told, because drugs change the mind in ways that cultivate compulsive drug misuse, stopping is troublesome, notwithstanding for the individuals why should prepared do as such The dependence on medications is a troublesome thing for any person to bargain with. Often, habit prompts the decay of a man s prosperity, budgetary security, and health. Drug addicts experienceRead MoreThe Problem Of Drug Addiction2110 Words   |  9 PagesMODEL(S) OF ADDICTION In going through the counseling process with Marge she was explained that there is the possibility that it could be a factor of genetics. When considering her background one has realized that she not only has an alcohol addiction, but it was the same for her father and her uncle, both of whom had lost their lives to the disease. In talking about the disease model with Marge she seemed to be more at ease with the situation and more willing to accept the fact that she does haveRead MoreThe Problem Of Drug Addiction Essay2435 Words   |  10 Pagesgoing to solve your problems? According to NIH, the death rate caused by usage of heroin has been increased by triple of its number in the past 10 years. The purpose is to treat people; especially teenagers understanding its negative consequences it has on them before they get addicted to it. When the addiction starts addicts have no idea that they would be so in to it that there is no possible way to stop. Addiction is a chronic, weakened disease characterized by compulsive drug-seeking and use despite

Monetary policy conduct under inflation targeting framework - Free Essay Example

Sample details Pages: 25 Words: 7432 Downloads: 2 Date added: 2017/06/26 Category Statistics Essay Did you like this example? CHARPTER ONE 1.0 INTRODUCTION The world is turning into a demon to its own people as many are living in deplorable situations that are hardly bearable. The price level have risen sharply in the recent past coupled with dwindling wage levels and declining growth rate, especially, in majority of African countries where poverty has embedded itself to an extent that people in these countries live below one dollar per day. However, majority of governments have embarked on instituting major reforms through introduction of avant-garde monetary policy schemes, which forge the way forward through which the monetary authority re-design its policy by focusing primarily on price stability as the primary objective. Don’t waste time! Our writers will create an original "Monetary policy conduct under inflation targeting framework" essay for you Create order In the last twenty years, majority of both developed and emerging economies respectively have embarked on IT framework as their best choice in conducting monetary policy, with none of inflation countries targeters abandoning the framework, save for Finland and Spain, that have already joined the European Monetary System (EMS) in late 90s. IT-framework; an approach to management of monetary policy was pioneered by the New Zealand Government in 1990 after it abandoned its pegged exchange rate five years later. By the year 2009, over twenty-five countries comprised of developed, emerging, and developing countries around the world had so far espoused the IT-Framework and have reported greater achievement of low inflation rate. Majority of these countries mainly from Latin America, East Asia and United Kingdom had experienced high bout of inflation and financial crises exacerbated by their former monetary policy regimes. These not only resulted to sacrificing output and employment but als o resulted to severe increase in international capital flow leading to a switch to floating exchange rate. 1.1 Historical Background In relation to many other African countries, the monetary policy and financial institutions of Kenya has developed rapidly within the last two decades and probably more advanced than other countries at a similar stage of underdevelopment. Kenya opened its own Central Bank in September 1966 with the hope that, it would at least generate secondary expansion by facilitating the creation of bank credit and accelerate the process of monetization of the economys subsistence sector, in spite, of its openness and sensitivity to fluctuations of primary commodities. The next decade following the establishment of her Central Bank witnessed interesting changes in Kenyas monetary and banking policies as the oil shock of 1973 created inflexibility in the foreign exchange reserves as they declined considerably. Hence, the magnitude and speed of reduction in credit expansion were not adequate to show the decline in foreign exchange reserves. In fact, the fear that tight monetary policy induced from outside could hamper the rate of development at home led to feeble corrective measures such as restraining inflation impact due to price boom of exports, which coincided with expansionary monetary policy under a low profile of interest rates. In the early 1980s and 1990s Kenya experienced high inflation resulting from a prolonged spell of drought and political instability that resulted from introduction of a multiparty system in the Kenyan political history in late 1980 and also general elections followed later in 1992. Besides, in 2002, the growth per capita was negative due to high corruption of the highly ranked government official and political interferences of major decision-making organs of government including the Central Bank of Kenya, as it could not carry out its mandate freely. In the year 2008, Kenya faced another dark moment in terms of its political stability as the whole country went into turmoil due to the highly disputed general elections of 2007. The once giant of East African countries went down into ashes and major sectors of the economy especially the financial sector got hurt the most. Since then, it has been very difficult for the resurgence of economic stability, political stability and financial i nstitution even after the power brokering that gave birth to a coalition government in that same year. However, in late 2010, the coalition government of Kenya gave hopes to recovery of major sectors of the economy when the New Constitution unanimously voted into existence in a referendum. This Constitution has brought about major reforms in the financial and political arenas more specifically in the Central Bank of Kenya as per se; hence, major changes are expected to be instituted by CBK for an effective and independent monetary policy conduct. 1.1.2 Road map of Kenya towards adoption of ITF 1.1.2a) Central Bank of Kenya main policy objective The amended Central Bank of Kenya Act of 1996, CAP 491(4) permitted the Banks operational autonomy in the conduct of monetary policy and mandated price stability as one of its primary objectives through formulation and implementation of such principal object of the bank, thus, promoting the long-term goal of economic growth. In fact, the Central Bank of Kenya does not announce an inflation target; instead, it uses money growth reserve as her main nominal anchor of which the repo rate forms its main operational target. It is in this perspective that the CBK monitor and control inflation rate through interest rate transmission channel as a way of conducting monetary policy. Apart from the main objective that is price stability, the Bank has a mandate to balance its inflation goals against other goals such as exchange rate stability and promotion of liquidity, solvency and steady-market back up while ensuring equilibrium in domestic and external payments. 1.1.2b) Central Bank of Kenya attributes that favor ITF adoption The Bank like any other bank of its caliber is mandated by the legislation to carry out its objectives in a more coherent and consistent manner without any external interference, thereby commanding greater central bank independence. The Old Constitution of the Republic Kenya of (1963) and Newly Promulgated Constitution of the Republic Kenya of (2010) have further strengthened the Banks Act, thereby, empowering the bank to carry its main objective without political interferences and curbing time-inconsistency trap. The appointment and removal of the CEO of the Bank (governor) and his/her deputy rest with the president discretion for a period of four years term in office unless stated otherwise. In connection to the governor term of office termination, the president has a directive to appoint a tribunal comprised consisting of a chairperson and two members who hold offices in High Court or Court of Appeal. This tribunal enquires on matters related to termination of such appointments and make recommendation to the president. Nevertheless, these might undermine the Banks credibility in upholding autonomy in case the termination of the governor might be unlawfully since the appointing authority might compromise the tribunal to favor his/her decision. In conformity with the Act CAP (491), the MPC is hereby required to forward a report at least every six month to the Minister detailing all dealings the bank is undertaking hence the Minister shall table the MPC report before the Parliament for further amendment and deliberations. The Bank is exempted from any taxation whatsoever in respect to losses or profits. The Banks books of records and financial statements subjected for auditing by the Controller and Auditor General only if the Minister of Finance deems it appropriate for such auditing. Both Governor and Deputy Governor are indebted to adhere to the bank in totality and prohibited from engaging in any other paid businesses, professional activities or employment while still in office. These is in agreement with majority of literature such as (Klomp and Haan 2008) who based their idea on Cukierman Index which states the following inherent features for a central bank to be termed as more independent: (i) if the governor appointing authority rest with BOG rather than the president, is not prone to relieve of his/her duty, and has a longer tenure in office. (ii), if the government has no tendency to interfere with banks conduct of business, for example, in policy formulation and implementation; if there is a greater independence be it of legal instruments or goal instruments; and also if the government has no capacity to borrow from the bank. (iii) last but not least, if the bank main objective is price stability. 1.1.2c) Economic Independence of CBK Kenya has also experienced tremendous financial innovations intensifying greater implications to monetary policy transmission mechanism. The Bank is empowered to act as a fiscal agent of the government or any public entity. Similarly, the advance made by bank to the government is supposed to be secured with securities issued by government, of which are supposed to mature before twelve months, bears interest at market rate, and are advanced for a short-term period to the government. In compliance with the statute, the CBK has an authority to grant loans and advances not exceeding three years in fixed period to government as a Deposit Protection Fund Board (DPFB), while the bank has mandate to lend or give credit to public entity, although, it is limited in extending such credits. The main interest is built on the various chief features associated with the introduction of inflation targeting framework by most of the Central Banks of both developed economies and transitional economies around the world; borrowing heavily from various aspects of literature that have analyzed greatly the development of this framework in order to determine the viability of the framework in low income countries such as Kenya. indeed, little has been done in A model specific to the needs of Kenya will be developed while building a general structure within the framework of an ITF so as to distinguish between group characteristics of the inflation-targeting and non-targeting central banks since its inception, and the relationship between various variables mentioned in the hypothesis. In addition, the paper depicts lessons learned by countries that have already adopted the strict ITF since 1990s. What become apparent evident in process of this review, however, is that several contributory problems must first be solved before forming an informed judgment on the likelihood of low-income countries embracing the framework. The first of these problems is whether there are impetus and aspect linked with decisions to move from a specific monetary practice to another. Second problem revolves around the feasibility of other policy designs of monetary policy such as exchange rate regime and central bank independence Third problem will address chief pitfalls that could prevent low-income countries from embracing this policy design. The study hypotheses investigates the relationship between conditions that lead to adoption of inflation targeting framework in developed economies and examine if these pre conditions have a replicate effect in low income countries. The other parts of the paper shall be structured as follows: In section II, assess modification of monetary policy conduct under ITF by various developing countries central banks, the cons and pros of shifting to such strategy. In section III evaluate the exchange rate transition and its role to inflation targeting framework more specifically the following interrelated issues will be taken into considerations: the role of nominal exchange rate it plays as a nominal anchor, the costs associated with the real exchange rate overvaluation; and the approach for exiting the pegged exchange rate. Section IV reviews the role of the central bank independence since it forms the core tenet of conjecture that is built around the inflation targeting framework.Likewise, other contributory factors to embracing the framework will be captured in this Section. The paper concludes with the policy recommendation and the way forward. 1.3 General Salient features, Implementation and Experience A better strategy for monetary policy is built on the following inherent characteristics as summarized by Svensson Lars 1997; Friedman, 1990; McCallum, 1990 that is, it is supposedly to be highly correlated with the goal and has a tendency to be controlled by central bank with much ease than the goal itself. Similarly, the public and the central bank should be able to comply to it with much ease than the goal. In addition, transparency is of greater importance in terms of the efficiency and effectiveness of the bank communicating to the public its objective and procedure of conducting its monetary stance. Literature from (Bernanke and Mishkin 1997), Bernanke et al. (1999) and (Svensson Lars 1997) has vehemently mentioned various elements that form this framework which includes. First, price stability is formally chosen as the main intent of monetary policy, which indicates the monetary stance and the central banks principle of appraising its performance. Second, the central bank issues a declaration, which categorically states the numerical target for inflation within a specific, horizon-thus the bank has the latent to lessen the possibilities of falling into time inconsistency trap in carrying out its primary goal. Third, either the government can opt to choose the target, independently or collectively with the central bank, which is associated with appropriate changes in the central banks law thus enhancing instrument independence of the institution in achieving its target. Fourth, the ITF promotes high transparency in the conduct of monetary policy thus enabling flow of information from the central bank to the public and government. Svensson Lars (1997) stated that, when the authority anticipate the policy target deviation, the strategy should be attuned in such a way it is neither contractionary nor is it expansionary in accordance with keeping the policy on target. On this background, the IT-framework work best in forecasting future inflation, that is, the relevant information for forecasting monetary policy is of greater importance in predicting future inflation. Indeed, this transparency of inflation targeting forms a better juncture in terms of motivating and focusing the activities insi de the central bank. More so, there is high tendency of central bank accountability, which is often outlined in case of breach of inflation target, meaning it helps in clarifying what the central bank is capable and incapable for it to be accountable. Although, inflation targeting has proved to be the best modern strategy it does not lack some criticism or problems that characterizes it in terms of implementation and monitoring. For instance Svensson Lars (1997) has described some of the inherent problems that makes this strategy ineffective, which includes: central banks inability to restrain inflation due to the fact that, previous decisions and contracts play a vital role in determining current inflation. In other words, the authority can only have power over the future inflation. In addition, monitoring and evaluation of monetary policy by public faces a greater set back due to the inadequate control of inflation. CHARPTER TWO 32.0 Literature Review A large body of literature has been developed to analyze the effectiveness of an explicit numerical anchor since such framework was adopted in early 1990s. There exists a large number of literatures on major development of Inflation Targeting Framework since its inception in developed countries and emerging economies. However, there is little development in low-income countries in regards to adoption and implementation of this framework varies greatly in most of these countries because of lack of a well-developed financial market, inadequate fiscal position, political interferences and also lack of market integration in majority of them thus posing a bigger challenge to welcoming this framework as a way of monetary policy conduct. Therefore, the section borrows heavily from past studies that have since been done in order to demarcate the gaps that have made the framework ineffective. 3.1 Transition to Inflation Targeting Framework: Central Bank of Kenya In the past decades, the monetary policy encountered by most of the emerging markets economies has been depressing, these resulted to extreme periods of monetary instability, vacillating from high inflation, to colossal capital flight, and thereby led to downfall of many financial systems. However, the forecast for successful monetary policy in the majority of countries in transition have so far been augmented. This has been typified by considerable decline of inflation rate in Latin America region as an example of an emerging region, which dramatically fell from an average of above 400% in 1989 to less than 10% (Mishkin Savastano, 2001) According to Morande and Schmidt-Hebbel (997), this objective of inflation control has been interpreted by public as formal targets or hard targets. Thus enables the central bank to be more accountable by explicitly announcing a multi-year target for inflation. Downs and Vaez-Zadeh (1990) declared that during the transition it is not possible to forecast market behavior..[s]ince the old money-model is bound to be obsolete and perhaps of little use (318). Indeed, the old fashioned regime of money-growth targeting framework has proved inefficient in the recent past, although the Central Bank of Kenya has been able to maintain inflation rate as low as possible. Above all, the de-regulation of economic activities in the early 1990s marked a major landmark in the conduct of monetary policy in Kenya in terms of objectives, instruments and institutional framework. Mwega 1990(a) developed a model that sought to explain the changes in the CPI Growth e.g. real income (T) changes, changes in money supply (M2), changes in import prices and changes in previous years inflation rates (Pt-1) were the expansionary variables. In these results, he found money supply to be a significant determinant of inflation. Similar study was done by Ndungu (1993) where he did a comprehensive study on the dynamics of the inflationary process in Kenya for the period 1970-1991. He used a monetarist model, named the error correction form of model and empirically showed monetary growth, interest rates changes, real income growth and excess money printing which were significant determinants of inflation in Kenya assuming a closed economy. When he included the external economy, he found the exchange rate had a significant effect on the domestic price level. The results of his study indicated inappropriate government policies (monetary and fiscal) resulted lack of control of inflation especially in 1980-1990 where inflation level escalated. Mishkin and Schmidt-Hebbel (2007) in there panel data analysis comprising of both inflation-targeting industrial countries and non-inflation targeting industrial countries, argued that ITF has helped these countries in achieving stable inflation rate in the long-run where they are attributable in oil-prices and exchange rate shocks, and that are associated with strengthening of monetary policy independence and enhanced policy efficiency. Taguchi and Kato (2010) assessed the performance of the IT in East Asian economies where they adopted a co-integration approach between money and inflation. The estimation results were that, the ITF in the sample of few selected economies, except for Philippines, proved to work well as an anchor for controlling inflation through speeding up price adjustments (stabilizing inflationary expectations) against money supply in the context of floating exchange rate. Similarly, they argued that, well-functioning inflation targeting framework was consistent with enhanced monetary autonomy under the post-crisis floating exchange rate. Aizenman and Hutchison (2008) used a simple empirical model where they estimated panel data for 17 emerging markets for both inflation-targeters and non-inflation targeters and concluded that there was a stable inflation response running from inflation to policy interest rates for inflation-targeters in emerging markets who have anchored their inflation than in non-inflation targeters whose central banks respond less in such markets. Similarly, they argued that the response to real exchange rate was much stronger in non-IT countries, however, suggesting that policymakers are more constrained in the IT regime where they attempt to target both inflation and real exchange rate and these objectives are not always consistent. 2.2 An overview of the exchange rate transition and its role in ITF The Central Bank of Kenya policy objectives have been to protract an exchange rate that will ensure international competiveness while maintaining domestic rate of inflation at low levels through conduct of strict monetary stance. Calvo and Reinhard (2002) argued that Majority of emerging markets are facing problem in performing inflation targeting due to various issues of how to manage the exchange rate under the condition that their external debt is primarily denominated in U.S. dollars. Therefore, the idea of this framework is believed to work best under floating exchange rate regime.Hence, inflation targeting framework as a monetary policy strategy becomes unrealizable in majority of this countries due to too much concern towards exchange rate volatility. In recent times, countries with fixed exchange rate have a tendency to fix their domestic currency value to countries whose main objective is to anchor their inflation in readiness to keep inflation rate in check. Most of the countries that have adopted a crawling target or peg their currency tend to devalue at a firm rate in order to keep their inflation rate low vis a vis their counterpart anchoring countries. These periods marked a milestone that foresaw an accelerated money supply growth and high inflation, but at the same time there was a move to speed up economic reforms and accelerate the pace of liberalization. An exchange rate regime makes central bank quite accountable because it has clear-cut goals [b]ut can actually weaken accountability of the Central Banks in emerging- markets countries, by eliminating important signal that can help keep monetary policy from becoming too expansionary (Blejer, creb, 1999, p. 41).Also, for the same reasons described in (Mishkin, 1999a) exchange rate targeting can promote financial fragility and lead to foreign exchange crises that can also lead to full-fledged financial crises with disastrous consequences for the economy(Cited by Blejer creb, p.50) .Hence, a continuous adherence of exchange rate regime is probable to have far-reaching impact of economic sluggishness and exacerbate redundancy in the economy, which is exactly what Kenya has exper ienced in the past. Therefore, the Central Bank should move more assertively by provision of an extra credibility, where policy easing is desired to prevent output reductions, without igniting fears of renewed inflation. Mishkin Savastano ( 2001) acknowledged that [t]here are three broad monetary policy strategies that can produce an explicit nominor anchor that credibly constrains the discretion of the central bank over the medium : hard exchange-rate pegs, monetary targeting, and inflation targeting. In spite of this, majority of industiralized economies, notably the United States, have used a more or less the same strategy of anchoring inflation. However, it does not explicitly anchor inflation but it implicitly anchor its inflation. a monetary policy with an implicit but not an explicit nominal anchor sought of monetary policy strategy to achieve macro-economic goals. Whereas, the three monetary policy strategies have enabled emerging economies to set up institutions and mechanisms that have effectively and efficiently constrained the discretion of their monetary authorities; their suitability to conditions in different markets differs according to each strategy that is adopted by each country. Reinhart and Rogoff (2004) declared that, Developing countries central banks tend to pursue exchange rate targets that considerably are more deterministic than their official pronouncements.[while] a managed floater might be operating a fixed exchange rate or a crawling peg for extended periods. Likewise, Kenya has undergone myriad exchange rate regimes in the past mostly driven by various economic cycles, and chiefly the balance of payments deficit. For instance, up to 1974, the exchange rate was pegged to the dollar, but later the devaluation of the currency resulted to a change of the peg to the SDR.1 from 1974-1984 period. This regime lasted until 1990 when a dual exchange rate system was adopted that lasted till October 1993 when, after a series of devaluations, the official exchange rate was abolished. (Mwega and Ndungu, 2001) acknowledged that Kenya adopted a unified and flexible exchange rate in the early 1990s, as part of a market-based reform program designed to improve the investment environment and spur economic growth(Cited by Ndungu, 2008). In addition, the (Kenyan Economic Survey, 1995) revealed that the nominal exchange rate suddenly depreciated by about 32%, moving to Ksh38 to the U.S dollar from Ksh 44 to the dollar, and inflation declined from 46% in 1993 to 28.8% in 1994 (as cited in Ndungu, 2000) as a result of shilling appreciating against dollar in 1995. 2.3 Central Bank Independence The literature on ITF in emerging market economies suggests that this monetary policy strategy should be adopted only if some institutional preconditions are met. One of them is Central Bank Independence. Many scholars have given much attention to the central bank autonomy and the role it plays in adopting ITF. Indeed, where central bank is autonomous from government interference it is likely to insulate itself from political pressures to finance government fiscal deficits, which can result to over-expansionary monetary policies that would lead to inflation above target. Cukierman, Webb and Neyapti (1992) constructed Central Bank Index that was designed in two folds that is, legal independence and turnover rate of governors, where both revolved around central bank charters and legislation and the relationship it has over the overall performance of the economy. This paper provides an overview of the mushrooming literature on authority autonomy and precision relating it to the mechanis ms through which central banks have in the past adopted greater openness, thereby, focusing more on the role they play in adoption and effective implementation of inflation targeting framework. (Klomp and De Haan, 2010) used a random coefficient model and they estimated a sample of more than 100 countries to re-examine the relationship between CBI (measured by both governors TOR and central bank legal indicator) and inflation. They found Central Bank Index to be negatively insignificant with the level of inflation rate of country specific. Most literatures in developing countries have focused on de facto independence as a proxy of CBI that is governors turnover rate. Studies of Cukierman, Webb and Neyapti (1992) stated that the average and variance of inflation has a negative correlation to governors turnover rate in most of the developing. This is due to the fact that, majority of studies has expressed doubts over the reliability of most of indicators used to construct Central Bank Independence indices. Indeed, there exist a greater divergence when it comes to categorization of indicators used to measure CBI incase of high income countries, emerging countries and low income countries. Cukierman,1994 and Eijffinger and De Haan (1996) have categorically contended that, the CBI indices in majority of high income countries are arises from central banks laws interpretation and are of great concern to legal independence indicator, whereas, in developing countries de facto independence indicators form the main measure of central bank independence. Axel Dreher, Jan-Egbert Sturm, Jakob de Haan (2010) used a data set comprising of eighty-eight countries term of office of central banks governors since 1975-2005. They used logit model to test the likelihood central bank governor term of tenure geting terminated before their legal term in office expires. According to their results, the probability of a TOR as a measure of CBI tend to soar under certain condtions which includes: unstable political system, undue elapse of governor term of service in office and during elections period in self-governing countries. Accordingly, they indicated in their hypothesis that there was a higher chance of the governors getting replaced if there was huge drop out of veto players from the government. Alex, Webb and Bilin (1992)) developed legal independence where they mentioned some of the intrinsic features such as the degree of independence that the authority should bestow to the Bank, and lone dependence on legal component of independence. Beside s, the legal independence is significant in ascertaining inflation rate in developed economies. Whereas, turnover rate of governors forms a better turning point of inflation determination in developing countries. Likewise they argued that, in cases where governor legal term of office is shorter than that of government CBI is likely to be compromised by the government, thereby, resulting to increased TOR. More over, the governor is likely to be susceptible from government influence thereby derailing long-term objective of policy formation and implementation under the pretext of political pressure especially during election periods. (Kuttner Kenneth, Posen Adam 2010), took the same direction and indicated that undue appointment of governor in office result to construed information to the bank in terms of carrying out its primary objective of price stability. For instance, unjustifiable appointment of governor under low inflation periods may reinforce the exchange rate, while the opposite is always true. Since governors appointment seem to contain valuable information regarding the exchange rate and inflation rate. Gutierrez (2003) indicated that CBI has positieve impact in reducing the chances of governments incurring budget deficits through quasi-fiscal activities. Since such activities can be understood on their inflationary impacts. Posen and Kuttner (2010) estimated the effect of legal appointment of governor to office exchange rates and bond yield and argued that the main test was to verify the scope to which markets observe that the next governor will bring a swing in policy, whereby he/she is expected to determine the bearing of such swing. This is in conformity with the fact that, the news conveyed may favour either one side due to markets reaction after such appointment. 2.4 Financial Institutions Another important prerequisite for successful ITF stressed by the literature is a healthy financial and banking system. Several reasons can be advanced to explain the great importance of well-functioning financial system under inflation targeting framework. First, a sound financial system is essential to guarantee an efficient transmission of monetary policy through the interest rate channel which forms the major channel through which the CBK carries out its main objective of price stability, and more specifically forms an enabling environment of smooth exchange and provision of credit. Second, according to Mishkin (2004), a weak banking sector is potentially problematic to achieve inflation target, because the central bank would be hesitant to raise short-term interest rates for fear that this will impact the profitability of banks and lead to a collapse of the financial system. Third, countries characterized by weak financial institutions are more vulnerable to a sudden stop of cap ital outflows, causing a sharp depreciation of the exchange rate which leads to upward pressures on the inflation rate (Mishkin, 2004). Fourth, a consequence of lack of large domestic capital markets is an important accumulation of foreign currency external liabilities by firms, households and the government, while their assets are denominated in domestic currency. This liability dollarization makes the financial system more vulnerable to a depreciation of the domestic currency9 by reducing the net worth of borrowers through a balance sheets effect Finally, as outlined in (Woo 2003), a well-developed domestic capital market enables the public treasury to diversify its sources of funds (e.g. by issuing bonds), and then reduces incentive to finance public deficits through inflation. Moreover, (Cukierman 1992) argues that the degree of financial depth is positively correlated with the level of CBI, in the sense that broad financial markets are more likely to grant their central bank more independence in order to avoid potential disruptions in the process of financial intermediation. Lucotte, (2010 argues that for any monetary policy strategy, a sound financial system in essential to guarantee efficient transmission of monetary policy through interest rate channel, but also through credit channel. (Mishkin, 2004) declared that unhealthy financial system can result to problems in case of embracing the scheme since CB tend to raise interest in the short term for fear of collapse of financial systems. He also argues that exchange rate sharply depreciate due to huge capital outflow thus exacerbating upward pressure on the inflation rate. 2.5 Political institutions Eijffinger and De Haan, ((1996) noted that, a positive relationship between party political instability and CBI has been reinforced by current politicians in office who anticipate a greater downfall in terms of losing their position in an election, thus, they tend to delegate authority to central bank in order to constrain the future government, that is restrict the range of policy actions available. Similarly, according to findings of (Cukierman, 1992) Influence of Political Stability countries experiencing political stability leads to a more independent central bank. The results showed that political parties instabilities have a positive relation with CBI, whereas a high level political party instability has a negative relationship with CBI. The political arena is of greater importance in arriving to the conclusion as to why most countries experiencing high bout of inflation tend to be characterized by high level of political instability. The main contribution is to examine whether the political institutions have embarked on strengthening and supporting the democratic space in terms of political participation, democracy, accountability and openness in government. 2.6 Fiscal Positions CHARPTER THREE 3.0 Methodology This paper will focus more specifically on various institutional arrangements focusing primarily on the central bank autonomy, financial institutions, fiscal position, political institutions and also macro-economic variables. In order to underscore the effect of ITF, it is also important to note that, most of the emerging economies that have already anchored their monetary strategy using this framework have a very short experience with regard to its implementation; therefore, the analysis will focus on those countries with more than two years of operation by the end of 2009. Similarly, since the data used in these paper is largely secondary data it varies greatly due to various factors associated to country specific, for example, political upheavals that may have derailed data collection; re-organization of governments from former regimes these is mainly related to former soviet union countries which disintegrated in 1990s. 3.1 Data coverage and sources The Panel dataset covers thirty-nine developed economies, emerging markets and developing economies comprising of those markets that have targeted their monetary policy and those that are yet to target for the period ranging from 1980-2009. This is because it is easier to establish the effectiveness of the framework since the first country anchored its monetary policy in late 1980s. See appendix for further variable specific description 3.2 Variable Specification 3.2.1 Exogenous variable This paper is built on a half year rule in deciding the actual date that the inflation targeting countries adopted the framework. Therefore, the first six months of the year will be taken as the actual year of adoption and the second six months of the year will be captured in the year that follows and will be recognized as the year of inflation targeting adoption. 3.2.2 Endogenous Variables I. Institutional Indicators Institutional indicators have been highly used by various scholars and countries targeting inflation in determining the preference or probability of shifting their former monetary stance to inflation targeting framework. The variables of importance will be categorized into four broad indicators each proxied with variable of interest to be analyzed at a later stage. Central Bank Independence Index proxied by both legal independence index and governors turnover rate forms the first institutional indicator of interest. This paper is built on the indices of Cukierman et al (1992); Crowe, C. and Ellen E. Meade (2007); Kuttner and Posen (2001); Grilli, et al (GMT)(1992) it will take a diferent appraoch. I use their more or less methodology of arriving at the legal independence index by constructing a dummy variable of CBI guided by the following six broad questions: first, what is the authority primary objective of monetary policy conduct? Second, who is responsible in the appointment procedures of the chief executive of the authority? Third, The Turnover rate of the Governors forms an inverse relationship of central bank autonomy where it is assumed that a high turnover rate is good indicator of fragile central bank sovereignty. Therefore, Cukierman et al (1992) derivation of the TOR will form the focal point of this paper and the expected sign is negatively related to the likelihood of adopting ITF. Political stability variable forms a larger part in determining the probability of countries anchoring their inflation rate, in particular, the developing countries where democracy is highly undermined by few political elite. Beck et al (2001) constructed a dataset called Polity IV project to measure institutional political stability using databases of DPI. However, the Polity IV project is further reconstructed to Polity2 Index. Similarly, the focus is democratic score and autocratic score used to derive this index by deducting both score.Hence for the sake of this paper, a democratic score dummy will be indicated by 1 if a country is more democratic or zero otherwise. The same applies to autocratic score dummy where it will take a value of 1 if a country is very autocratic or zero otherwise. The exchange rate regime forms the third institutional indicator variable. Many proponent of international finance have classified exchange rate regime into both de jure exchange rate(according to law), which basically captures central banks official commitment to policy, however, it lack proper mechanism for actual policy control. The other classification of exchange rate regime is the de facto exchange rate (by existence) and it monitors the exchange rate movement, however, it lacks the intended compositional characteristics. The IMFs AnnualReport on Exchange Arrangement and Exchange Restrictions classified the exchange rate regime into nine categories and further re-classified the same into three folds namely: 1)floating exchange rate comprised of free floating, managed floating. 2) An intermediate floating comprising of basket pegging, crawling pegging and band arrangement 3) fixed exchange rate comprised of hard pegging and currency board. For the purpose of this paper, I will employ the de jure exchange rate classification where I will construct a dummy variable, which will take the value of 1 if a country is under floating exchange rate or zero otherwise. Since the interest is built on the impact of the exchange rate regime towards country specific shifting to another monetary policy strategy. The sign of coefficient is expected to be positive, that is, the more flexible exchange rates the higher the chances of a country to adopt the framework. II. Macro-economic Structure variables The Financial Development variable forms the first macro-economic structural indicator of in interest. Therefore, it is of great importance to countries forging the way forward in case of adopting this strategy since it gives authority credibility to meet their intended objectives. Although, there are many indicators that have been used to test financial depth of various countries private credit ratio to GDP will form my indicator. I expect a positive coefficient that categorically states that, strong financial depth provides high probability of countries adopting this framework. Second, trade openness which is the ratio of exports plus imports of goods and services to nominal GDP is used as an alternative to evaluate the extent of exposure to external shocks. This is because it has a direct relationship with the exchange rate regime hence a fixed exchange rate makes a country to be vulnerable to external shocks due to pressure of sustaining such regime. This variable has a positive relationship with the likelihood of adopting inflation targeting. Third, Financial openness proxied by the ratio of external government debt to nominal GDP measures the financial openness of a country. Countries characterized with greater financial openness compel authority responsible of conducting monetary policy to inauspicious environment in the conduct of their business. Therefore, financial openness has an inverse relationship with the discretion of adopting inflation targeting framework. The fourth measure of macroeconomic structure is fiscal balancewhich is typified by two aspects, that is,government balance to GDP ratio and current account to nominal GDP ratios. The presumption is that, those countries that are highly characterized by government fiscal imbalances are conceived to command low levels of reliability. The variables in consideration are supposed to be positively related with ITF. III. Control variables: Third macroeconomic variable to be included in the model will be the log of GDP per capita (ln_GDP), which measures the variation in the level of economic development involving countries. Has a positive sign of coefficient to inflation targeting. Fourth Variable is the nominalized inflation rate (INF_N) hence the sign is expected to be negative. A normalized inflation is important in case of controlling weight of hyperinflation and it should be lagged two periods to avoid a potential simultaneity between inflation targeting and inflation level. Empirical methodology This paper aim at protracting logit model estimation in order to arrive at the choices facing various countries in particular developing countries in adopting inflation targeting. Moreover, the will 3.1.1 Panel data logit regression model Due to the nature of the exogenous variable (I.e. binary exogenous variable) given as ITit where it takes a value of 1 if a country specific is inflation targeting and 0 otherwise. Subscripts i=1N is the cross section dimension; t=1T both representing country specific and years respectively. it is the constant term. The white noise term is specified as it=it+it where it designate unnoticed country-specific effects, whereas it is the random error. it ~ IN(0, 2) is an assumption of random effects logit model specification. IT it-2= it + INSTit + INF (-2)it+ Xit + it it ~ IN(0, 2) The independent variables include institutional framework denoted as (INSTit) and comprises of various institutional variables comprised of: first, Central Bank Independence indices measured in this analysis by the turnover rate of central bank governors and legal independence of central banks. 3.1.2 The Inflation approach These section is built on both panel and cross-sectional approach, where the exogenous variable is nominal inflation rate variable. The independent variables arises from control variables comprised of trade openness, Log of GDP per Capita, dummy Exchange rate regime, proxy of current account to GDP ratio, and Polity2 index as a proxy of political instability. Under this section the variables under consideration will be grouped in three periods 1980-89, 1990-99 and 2000-2009, each is made up of at least ten years. I also include a dummy Inflation Targeting Framework (ITFt-2) in lag of two years in order to capture the marginal effect of the framework towards inflation rate for inflation targeting countries or zero otherwise. See Appendix VI, Table6 for further variable specific explanations 3.3 Data The sample of IT countries is composed of Australia, Brazil, Colombia, Canada, Czech Republic, Chile, Guatemala, Ghana, Hungary, Israel, Mexico, Peru, Philippines, Poland, S. Africa, S. Korea, Thailand, Finland, Norway, Spain, Sweden, New Zealand, Iceland, and United Kingdom. Whereas, Non-IT countries includes: Bulgaria, Belgium, Egypt, Nigeria, Kenya, Dominic Republic, Ireland, Argentina, Morocco, Cape Verde, Equatorial Guinea, Honduras, Luxembourg, Netherlands ,and Greece. Difference in majority of literature on the actual dates and number of countries that have so far adopted ITF (eg Kuttner and Posen 2001) Peru IT regime to January 1993 vis a vis (Mish kin and Schmidt-Hebbel 2001) and Bank of Peru date it to January 1994 and January 2002). This paper will stress the (Levya 2008) countries IT classification by the end of 2005 exclusive of Ghana which adopted ITF in 2007 and Turkey (2006). 3.4 Estimating Results 4.0 Conclusion The main analysis of this study will exhaust major avenues that have led many countries shifting their former monetary strategy to inflation targeting framework paying attention to emerging markets and developing countries. Factors such as institutional arrangement and macroeconomic variables that have been considered in this paper have a high likelihood of countrys decision to embrace the ITF. The findings of my analysis using probit regression model have indicated that CBI has a positive relationship of a country specific adopting the framework this clearly states the need of major central bank to be fully independent before they embrace the framework. Similarly, market capitalization is one of the indicators of financial development of a country hence it is clear that, countries need to have strong financial institutions before switching to this framework. The Log of Real GDP per capita is significantly associated with the choice of inflation targeting hence a good precedent of im proving overall economic performance; it is also consistent with the fact that the rationale behind adopting ITF is to improve economic performance. The regressions results also indicate that majority of countries with floating exchange rate stand a high probability of embracing ITF. (Hu, 2003), found the negative effect of inflation over the chances of adopting the ITF be unforeseen, which is consistent with this analysis. In fear of losing public credibility, the central bank is more likely to adopt inflation targeting when inflation rates are low, which makes the targeted inflation rate easier to achieve. This is because most central banks are unwillingly to adopt inflation targeting during high bout of inflation that might undermine their credibility. Strong financial development variables are found to play a key role in determining the likelihood of developing countries adopting ITF under various regression specifications. 4.1 Policy Recommendation Inflation targeting offers a coherent framework for the conduct of monetary policy, not only for industrialized and established emerging market economies but also, with some modification, for pre-emerging market economies such as Kenya with the dominant view that the basic architecture of the formal inflation-target framework is sound and is likely to remain in place in the future. The instruments independence, in which the central bank controls monetary policy instruments, should be insulated from short-run political pressures that may lead it to time-inconsistency trap thus producing bad long-run outcomes. In addition, the central banks long-run preferences should coincide with societys preferences that suggest a goal dependent central bank, and a transparency of policy associated with inflation-targeting that is intended to central bank highly accountable to the public.

Nathaniel Hawthorne s Young Goodman Brown - 1083 Words

The Puritan religion played a big role in the formation of early America, therefore significantly changing a lot of the authors who wrote throughout this time period, including Nathaniel Hawthorne. One of Hawthorne’s most known stories is â€Å"Young Goodman Brown† – a story wherein Hawthorne mixes faith and history to demonstrate humanity’s struggle with sin. â€Å"Young Goodman Brown† could possibly be regarded as a Spiritual story of symbols and inevitably as a disapproval of Puritan Calvinism. This is apparent once someone considers the tale through a mixture of symbolism and an intellect of the Puritan beliefs. Hawthorne incorporates symbols and allegories all through the story â€Å"Young Goodman Brown† to exemplify the Puritan Calvinistic outlook throughout the span of the 17th century, in which sin and wickedness is all around. He portrays faithfulness as a belief and as an a individual, the forests are represented as spirited evil collapsing inward all around, with branches turning to snakes, clouds of despair, torched branches, and also a satanic spiritual union mocking biblical matters. Understanding these symbols is incredibly vital since Hawthorne hopes the reader will ponder on the various notions in holy principles which are explained as complete fact, when in all actuality the principles are the analysis of the person teaching about the religion. â€Å"Young Goodman Brown† is set in 17th century New England, and focuses on the Calvinist idea that everyone lives within a world ofShow MoreRelatedNathaniel Hawthorne s Young Goodman Brown1543 Words   |  7 PagesIn Nathaniel Hawthorne s short story of Young Goodman Brown, the author uses symbolism and allegories in order to showcase the Puritan faith as well as man s conflict between good and evil. This analysis will break down the techniques that the author uses to critique the puritan society and to show the difference between how people appear to be in society and the true colors that they are hidden inside of them. There has been a lot of great authors in our time, but none more interesting thanRead MoreNathaniel Hawthorne s Young Goodman Brown1065 Words   |  5 PagesWhen it comes to the topic of Nathaniel Hawthorne’s Young Goodman Brown, most of us will readily agree that duplicity is a major theme in the piece, or the idea of different versions of reality. Where this agreement usually ends, however, is on the question of whether Hawthorne is implying that man is inherently evil. Whereas some are convinced that Young Goodman Brown was good until tainted by the Devil, others maintain that he was evil from the beginning and was completely aware of the evil heRead MoreNathaniel Hawthorne s Young Goodman Brown905 Words   |  4 PagesThough Nathaniel Hawthorne is an author of many great works, his short story â€Å"Young Goodman Brown† still stays relevant because it has themes and subjects that are relatable in today s world. In the story â€Å"Young Goodman Brown,† Good man Brown leaves his wife Faith, to go into the woods near Salem to have a meeting with the devil. Appearance vs. reality is shown in â€Å"Young Goodman Brown† through the plot, the character of Goody Cloyse, and the symbol of the maple staff. The characterRead MoreNathaniel Hawthorne s Young Goodman Brown1312 Words   |  6 PagesWithin Nathaniel Hawthorne s short story Young Goodman Brown (p.317), Young Goodman Brown travels through a dark and mysterious forest late at night. Ignoring the pleas of his pure wife Faith, he ventures deep into the woods with many dangers around him, only to emerge in the morning a changed man with bewildered views on his own Puritan life and the Puritan community around him. At the cause for this change in mindset, the dream of an old man symbolizing the devil appears, showing him the communityRead MoreNathaniel Hawthorne s Young Goodman Brown Essay1274 Words   |  6 PagesIn Nathaniel Hawthorne’s â€Å"Young Goodman Brown,† the devil says, â€Å"Evil is the nature of mankind† (â€Å"Young† 627). Since Adam and Eve ate the forbidden fruit and attempted to hide conceal their sin from God, humans have tried to hide their sin from others. Although ever yone sin is human nature, everyone has a different reaction to sin. While some acknowledge sin, others ignore it. In Hawthorne’s other short story, â€Å"The Minister’s Black Veil,† Father Hooper wears a black veil to represent the sin heRead MoreNathaniel Hawthorne s Young Goodman Brown Essay1449 Words   |  6 Pages â€Å"Young Goodman Brown† is a short story that is filled with symbols and mystery. Nathaniel Hawthorne provides plenty forms of symbolism for readers to digest. Hawthorne displays strong faith as the greatest virtue for a man or woman, and when the faith is compromised, one can be filled with skepticism and uncertainty towards the rest of the world. The story begins as a conventional allegory, creating the expectation that the characters will be able to consistently display the abstractions they symbolizeRead MoreNathaniel Hawthorne s Young Goodman Brown1695 Words   |  7 Pagesstory, Young Goodman Brown, by Nathaniel Hawthorne is set in Puritan New England. Hawthorne uses symbolism, description, scenery, and Goodman’s journey to illustrate and symbolize the battle of good versus evil. In the first scene, we see how Young Goodman Brown leaves his wife, Faith, to start on his â€Å"evil† journey through the woods. Though Faith asks him to stay with her, he chooses to continue on even though he knows the evilness lies ahead. As the story continues, we see how Hawthorne uses FaithRead MoreNathaniel Hawthorne s Young Goodman Brown1492 Words   |  6 PagesIn Nathaniel Hawthorne’s short story of Young Goodman Brown, the author uses symbolism and allegories in order to showcase the Puritan faith as well as man’s conflict between good and evil. This analysis will breakdown the techniques that the author uses to critique the puritan society, and to show the difference between how people appear to be in society and the true colors that they are hidden inside of them. There has been a lot of great authors in our time, but none more interesting than NathanielRead MoreNathaniel Hawthorne s Young Goodman Brown2532 Words   |  11 PagesNathaniel Hawthorne’s short story, â€Å"Young Goodman Brown,† demonstrates how Goodman Brown leaves his wife, Faith, to do an errand within the woods with a man that is believed to be the devil. During the time period in which this took place, the 1620’s, many of the people from the village were practicing Puritanism. Puritanism is an intense practice of religion retrieved from Protestants, only removing its Catholic influence. When Goodman Brown entered the woods to meet the devil, he soon turned intoRead MoreNathaniel Hawthorne s Young Goodman Brown894 Words   |  4 Pagesread. In â€Å"Young Goodman Brown†, I found several romanticism characteristics to be in this story. One being, the emphasis on feelings and emotions. Nathaniel Hawthorne writes, â€Å"The cry of grief, rage, and terror was yet piercing through the night, when the unhappy husband held his breath for a response.† The cry of anguish and pain are very applicable to the protagonist idea in this story. Brown also expresses feeling when he doesn t want to leave his wife Faith, but he feels that it s his role to

William Shakespeares Presentation of Hamlet Through...

William Shakespeares Presentation of Hamlet Through Soliloquies Shakespeare presents Hamlet in the first Act as distraught and angry in a state of utter depression caused by his father’s death and as we learn during the first soliloquy, by his mother’s ‘frailty’ in remarrying so soon after the King’s death. Shakespeare reveals Hamlet’s torment and the origins and causes of a lot of his feelings that contribute to his behaviour throughout the play, in the first of Hamlet’s soliloquies in Act One, Scene Two. It is in this soliloquy that we learn of the hatred Hamlet feels for his mothers ‘incestuous’ marriage to his uncle Claudius, and ultimately the hatred he feels for himself. Not only do†¦show more content†¦Hamlet cannot see any solution to end his ‘too solid flesh’ other than suicide; it is the only way in which he feels he will be free. However, ‘the Everlasting’ does not allow anyone to act in this way. It is God who rules the universe and Hamlet feels he has no decision but to obey. To commit suicide would be the greatest sin Hamlet could commit which will not provide Hamlet with the purity and the state of mind he struggles for. The overwhelming disgust that Hamlet feels for the sin he believes his mother has committed is further enforced by Shakespeare’s use of form and language. The dramatic pauses throughout the soliloquy, such as ‘But tow months dead: nay, not so much, not two:’ reveal Hamlet’s distressed mood in which he thinks aloud through a stream of consciousness, almost as if he were in a dream. The poetry Shakespeare uses portrays the torture of Hamlets thoughts; the heavy syllables all the way through the soliloquy convey Hamlet’s utter state of depression. ‘O God; God, / How weary, stale, flat and unprofitable / Seem to me all the uses of the world!’ This dreamlike state Hamlet seems to be in is yet hardly a dream at all –Show MoreRelatedEssay about Greek Tragedy Exemplified in Shakespeares Hamlet1191 Words   |  5 PagesGreek Tragedy Exemplified in Shakespeares Hamlet For several thousands of years, drama has existed among mankind. The ancient Greeks are accredited with the creation of drama, which began as simple religious rituals and eventually evolved into the more complex forms of tragedies and comedies. The first rules of drama, not surprisingly, were also written by a Greek--the famous philosopher and intellectual, Aristotle. Aristotle took note of the what qualities created a successful dramatic pieceRead MoreWilliam Shakespeare s Hamlet - The Contemplation Of Suicide And Murder1941 Words   |  8 Pagesdeath. In William Shakespeare’s Hamlet, the protagonist: Hamlet, contrasts the ideas of life and death to understand whether life is worth living with all the pain one must endure. Hamlet battles an internal struggle throughout the play to decide if suicide is the correct method to alleviate his hardship and dismay, or if he should face the daunting task of avenging his father’s death. The struggle Hamlet is faced with leads h im to debate suicide in his â€Å"To be, or not to be† soliloquy. The contemplationRead More Shakespeares Hamlet - Gertrude Essay examples2462 Words   |  10 PagesRegarding Hamlet’s Gertrude  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚        Ã‚  Ã‚  Ã‚   Angela Pitt in â€Å"Women in Shakespeare’s Tragedies† comments that Shakespeare’s Gertrude in Hamlet is, first and foremost, a mother:    Gertrude evinces no such need to justify her actions and thereby does not betray any sense of guilt. She is concerned with her present good fortune, and neither lingers over the death of her first husband nor analyses her motives in taking another. . . .She seems a kindly, slow-witted, rather self-indulgentRead More Shakespeares Hamlet Essay: Observations on Gertrude2572 Words   |  11 PagesAnd What of Gertrude in Hamlet?      Ã‚  Ã‚   To what extent does evil reign in the heart of Queen Gertrude in Shakespeare’s Hamlet? This essay will delve into her character, and into the deposit of literary criticism regarding her, in order to analyze her character in depth.    Philip Edwards’ â€Å"The Ghost: Messenger from a Higher Court of Values?† expresses the necessity of the Ghost leaving the guilt of Gertrude to the afterlife:    The final injunction, ‘Leave her to heaven’, mustRead More Custom Essays: Imagination versus Realism in Hamlet2213 Words   |  9 PagesImagination versus Realism in Hamlet      Ã‚  Ã‚   Is the Shakespearean tragic drama Hamlet basically an imaginative work or basically a realistic work? This essay seeks to answer this question and related questions, with the help of literary critics.    Harold Goddard’s essay, â€Å"Hamlet: His Own Falstaff,† highlights the battle between poetry and realism (history) in the play:    Hamlet, the conclusion is, is a failure because the materials Shakespeare inherited were too tough and intractableRead MoreEssay on Passionate Gertrude in Shakespeares Hamlet2793 Words   |  12 PagesPassionate Gertrude in Hamlet  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚        Ã‚  Ã‚   Like so many of the characters in Shakespeare’s tragedy Hamlet, Gertrude appears to be dominated by passion. This essay will explore this and other aspects of her interesting character.    Lilly B. Campbell comments in â€Å"Grief That Leads to Tragedy† on Queen Gertrude’s sinful state:    Shakespeare’s picture of the Queen is explained to us by Hamlet’s speech to her in her closet. There we see again the picture of sin as evil willed by aRead More Gertrude of Shakespeare’s Hamlet Essay3047 Words   |  13 PagesThe Gertrude of Shakespeare’s Hamlet      Ã‚  Ã‚   Is Gertrude, in the Shakespearean drama Hamlet, a bore? A killer’s accomplice? The perfect queen? A dummy? This paper will answer many questions concerning Claudius’ partner on the Danish throne.    In her essay, â€Å"Acts III and IV: Problems of Text and Staging,† Ruth Nevo explains how the hero’s negative outlook toward Gertrude influences his attitude toward Ophelia:    Whereas it is precisely his total inability to know her [Ophelia]Read MoreImpossibility of Certainty in Hamlet1296 Words   |  6 PagesThe Impossibility of Certainty in Hamlet â€Å"Doubt is that state of mind where the questioner faces no single answer nor the lack of one, but rather a choice between a pair of alternatives.† – Harry Levin in The Question of Hamlet It is appropriate that William Shakespeare’s Hamlet is regarded as the Bard’s greatest dramatic enigma, for misunderstanding is the unavoidable condition of Hamlet’s quest for certainties. Not only is Hamlet bewildered by puzzling visions and by commands seeminglyRead MoreResponse to Shakespeares Presentation of the Responsibilities and Obligations Placed on Sons by Fathers in Hamlet1394 Words   |  6 PagesResponse to Shakespeares Presentation of the Responsibilities and Obligations Placed on Sons by Fathers in Hamlet Hamlet, by William Shakespeare, is a play based on the theme of revenge (otherwise known as a revenge tragedy). However there are other themes to this play that may not be as obvious as the main. Love, hate, madness are all other themes to this play, along with the theme of responsibility to sons and fathers. This theme is sustained throughout the whole playRead More Shakespeares Hamlet - Regarding Gertrude Essay1965 Words   |  8 PagesRegarding Hamlet’s Gertrude  Ã‚        Ã‚  Ã‚   In William Shakespeare’s most famous tragedy Hamlet, the audience meets a queen who is a former and present queen. She was unhappy before – how does she feel now? Is she evil, guilty, motherly, lascivious? The multiple aspects of her personality deserve our attention.    Angela Pitt in â€Å"Women in Shakespeare’s Tragedies† comments that Shakespeare’s Gertrude in Hamlet is, first and foremost, a mother:    Gertrude evinces no such need to justify

Rugby Football Union Free Essays

Rugby What is it all About? â€Å"In 1823, William Webb Ellis first picked up the ball in his arms and ran with it. And for the next 156 years forwards have been trying to work out why. † – Sir Tasker Watkins (1979) The History of Rugby, many believe that Rugby was born in 1823 when William Webb Ellis whilst spending his time at Rugby school, took the ball in his arms during a game of football and ran with it. We will write a custom essay sample on Rugby Football Union or any similar topic only for you Order Now This then became the distinctive future of the Rugby game. Although this is not fact as there is little in the way of evidence to substantiate this view, it is more by popular belief. The true year Rugby Football Union was founded was in the year 1871, in the month of December 1870 two men published a letter in The Times suggesting that anyone who plays the Rugby Game should meet and form a code of practice. On 26 January 1871 a meeting was held in Pall Mall, London with representatives from 21 clubs of the game. As a result of this meeting the Rugby Football Union was officially founded. Three lawyers who were former students of Rugby school drew up the first laws of the game which were approved in June 1871. The first ever International game was when England faced Scotland in Edinburgh on March 1871, the England team wore white with a red rose and Scotland wearing brown with a thistle. The game was played over two halves, 50 minutes each way. Scotland won by scoring a goal, a goal then was a try followed by a successful conversion kick. The name and game of rugby has evolved dramatically over the years. In 1886 found the formation of the International Rugby Football Board, this was formed by Scotland, Ireland and Wales as England refused to join after a try against Scotland was disallowed by the Referee. England finally agreed to join in 1890, since then the International Rugby Football Board changed its name in 1997 are now known as the International Rugby Board. The game is always started with the toss of a coin to deicide what team will kick off first. Play then starts with a drop kick, with the players chasing the ball into the opposition’s territory, and the other side trying to retrieve the ball and then taking the ball forward. If the player with the ball is tackled to the ground the team will then form a ruck to protect the ball and organize to set up play, throwing or passing the ball is always made to the player behind the ball, forward passing is not allowed. The ball can only move forward in three ways, by kicking, a player running with it and the ball moving within a scrum or ruck. Blocking is not allowed and only the player with the ball may be tackled if the ball is knocked forward by a player with his arms a knock on is committed and play is restarted with a scrum. Protective equipment is optional and strictly regulated. The most common items are mouth guards, which are worn by most players. Other protective items permitted include thin head gear no thicker than 10mm, non-rigid shoulder pads and also shin pads. Some players will wear bandage or tape to protect injuries. Over the years more and more countries have got involved in the game of rugby. 1910 was the start of the Five Nations Championship between England, France Ireland, Scotland and Wales. 1987 saw the start of the Rugby World Cup this championship was won by New Zealand who defeated France 29-9 at Eden Park, Auckland. 1996 the Tri Nations Series began between Australia, New Zealand and South Africa. 2000 the Five Nations became the Six Nations Championships with Italy joining in the competition. Even the points system has dramatically changed in 1890 a try was 1 point and a conversion 2 points now its 5 points for a try and 2 points for a conversion. My conclusion to rugby is that the history and tradition will grow stronger and stronger over the years, from famous victories to famous trophies for instance the Six Nations Championship Trophy as plenty of tradition and history, the current trophy was presented to the championship winners France in 1993, the sterling silver trophy, designed by James Brent-Ward and made by a team of eight silversmiths is valued at ? 5,000, although this trophy was originally silver inside over the years of celebratory champagne fillings the trophy became corroded and is now plated with 22 carat gold for protection. The trophy has 15 side panels representing the 15 members of the team and three handles to represent the three officials, this tradition will never die. â€Å"In our country, true teams rarely exist . . . social barriers and persona l ambitions have reduced athletes to dissolute cliques or individuals thrown together for mutual profit . . . Yet these rugby players. ith their muddied, cracked bodies, are struggling to hold onto a sense of humanity that we in America have lost and are unlikely to regain. The game may only be to move a ball forward on a dirt field, but the task can be accomplished with an unshackled joy and its memories will be a permanent delight. The women and men who play on that rugby field are more alive than too many of us will ever be. The foolish emptiness we think we perceive in their existence is only our own. † – Victor Cahn (The New York Times in June 1973) How to cite Rugby Football Union, Papers

Financial Statement Analysis McDonalds

Question: Describe about the Financial Statement Analysis of McDonalds? Answer: Evaluation of corporate finance Introduction McDonalds is one of the largest food chain in worldwide. McDonalds is serving more than 72 million customers every day. Company has branches in more than 120 nations. McDonalds operated in franchisee form of business. In 2013, company able to garnered more than 28 billion as per its annual report. Company is known as the world second largest employer company just behind the Wal-Mart. Some of the major products and services sold by the company is burgers, fries and soft drinks (Carlson Fisher Giammarino, 2008). Company is been opened by Richard and Maurice McDonalds brothers in 1940. McDonalds is only company which branches more than 120 nations where more than 6o billion employers works. Company is known for the strong capital structure and strong market hold in the capital market. McDonalds is one of blue chip Company which is holds strong market in the market. Liquidity Ratios Working capital ratio = current asset current liabilities Ratios of McDonalds 2013 2012 Working capital ratio Current asset- current liabilities 5050.1-3170 =1880 4992.1-3403.1 =1589 Working capital ratio of McDonalds shows that, company is performing exceptionally well as the company has higher working capital ratio. Company working capital cycle is been very much able to generate cash from their operation adequately (Woelfel, 2009). This is because company has been able to reduce its working capital cycle by giving the discount to its franchisee client which helps the company to generate the large income. Although company working capital cycle is very much strong but the actual cash inflow and outflow cannot only be only be assumed with the current formula. Working capital cycle can be strong but the trade payables and trade receivables of the company is very much poor in compare to previous year (www.aboutmcdonalds.com, 2015). IN FY 12 the company has working capital worth of 1589 million but in the FY 2104 it is higher. This is because of the implementations of E-procurement and JIT implementation within the supply chain of the McDonalds. Current ratio Ratios of McDonalds 2013 2012 Liquidity ratio Current asset/current liability 5050.1/3170 =1.5 4992.1/3403.1 =1.46 Current ratio of the company shows that, company actual current ratio performance. Current ratio of the company suggests that, it has strong positions than previous year. But the production of the company is higher than before as because of the JIT which has been installed din the year 2009. Initially company was using the assembly line production in its operations which why the current ratio in 1990-2006 was below 0.55 (News.mcdonalds.com, 2015). Quick ratio: Ratios of McDonalds 2013 2012 Quick ratio Current asset- inventory/ current liability 5050.1-123.7/ 3170 =1.55 4992.1- 121.7/3403.1 =1.43 Quick ratio generally shows how well company will be able to meet its short term obligations. This ratio is also known as the acid test ratio. The quick ratio depicts actual current asset inventory of McDonalds and figures out whether company has sufficient cash to meet its short term obligations or not as because the inventory are generally is closing stock (Woelfel, 2009). Quick ratio of the McDonald In FY 12 is 1.43 in compare to the FY 13 the ratio is higher. This is because the reason in FY 12 company has higher amount of inventory that helps the company to gain right kind of exposure (Graham et al. 2014). In recent times company has able to maintain the balanced score card which help the company to assess the actual performance of technology and manpower. However, the result is been favourable (News.mcdonalds.com, 2015). Financial leverage ratio Ratios of McDonalds 2013 2012 Debt to equity ratio Debt/equity 14129.8/ 16009.7 =0.88 13632.5/15,293.9 =0.89 Debt equity ratios of the company suggest that, company has majorly dependent on the debt than equity. As the company has acquire more than 52% of shares with itself in order to maintain the decision making. Therefore it can be said that, company is basically a capital intensive rather than labour intensive (www.aboutmcdonalds.com, 2015) . Most of all debt equity ratio of the company shows that company has increased its long term debt by 14129 in FY 2013 as in compare to FY 12 it was 13632.5. This shows that, company is higher dependent on the debt than equity. Although it is very much risky form of decision making because the company has to pay the high interest rates irrespective of the company performance (Sondi White, 2014). Ratios of McDonalds 2013 2012 Debt ratio Total liabilities/total asset 17446.6/36626.3 0.47 20092.9/35386.5 =0.56 The total debt equity ratio of the company suggests that company is mostly dependent upon the debt ratio. The debt ratio of McDonalds is very much shows that the total debt in FY 13 is higher than FY 12. This is because company has long term liabilities worth of 14129 and accrued interest worth of 221.6 million. This has increased the debt ratio of McDonalds which is very much riskier for the company in future (News.mcdonalds.com, 2015). Although McDonalds has strongly built their goodwill based on its innovations and creativity while manufacturing its products. but since the 21st century , company is facing tough competition from the rivals companies whose growth are being impeccable. The restaurants game has been changed so far as because of the fast-food companies are coming up with new ideas and variety in their platter to attract the customer base (Costales, 2010). However, the rise in the debt ratio is because of the company has spend more than 5.7 million in FY 213 , for coming up with customized burger pilot programme more than 2000 US restaurants chain. This programme has cost the company dearly as company and most probably benefit for the business will be given in near future (News.mcdonalds.com, 2015). Ratios of McDonalds 2013 2012 Equity ratio Total equity /total asset 16009.7/36626.3 =0.43 15293.6/ 35386.5 =0.43 The total equity ratio of the company is very much consistent because of the as per the above given informations. Most of all in FY 13 Company is not been able to keep up their total asset higher in compare to FY 12 which was 1380 million (Stickney Weil, 2009). Since the company has closed number of their sick units and higher debt ratio has lowered down the equity ratio of the company. There has unanimous decision made by the board of the director and CEO of the company which is to reduce in the expansion of restaurants. Company has been facing tough to manage its 3rd quarter results which is declining in compare to the competitors like Big Mac and KFC (Arthur, Cheng Czernkowski, 2010). Apart from that, using higher debt ratio with 70% and equity of 30% is been one of the major reason for the failure to attract the investor to invest for long time in company as per the FT (Financial Times). Asset management ratio Ratios of McDonalds 2013 2012 Inventory turnover ratio COGS/Inventory 365/turnover 19341.4/123.7 =156.35 365/156.35 2.33 27567/121.7 226.5 1.61 Inventory turnover ratio of the company suggests that, McDonalds is having higher sales in compare to FY 13. As the company has come up with new and better ideas to formulate the recipe and keep attracting the customer. Although the new recipe like McEgg, Mcveggies and McCheese are been popular but company fails decrease its inventory turnover ratio. As the standard format the lower the inventory turn ratio is the better chances of the increase in sales. The inventory of the company in FY 213 was 2 days which initially in FY 12 was 1 and half day. This has shows that , McDonalds has not been able to generate the higher sales with their innovations in recipe. This is because of the recipe like McPo and McBE which are pork and beef which are not usually sold in the Asian market (Berger, Ofek Swary, 2012). McDonalds has been very much able to generate the higher sales in UK and IS market as price of the Mc is been one of the major issues which is been increasing (News.mcdonalds.com, 2015). Another major reason for reduction in the inventory turnover of the McDonalds is their logistics which was initially poor and problems of leakages are higher. Therefore, in FY 13 December, company has come up with new ideas of selling of grilled chicken to reduce the ingredients. It is one of the major part of cost reduction programme by the company which will available for more than 14300 stores in US by end of the next week as per the NEW York Ap. The FY 13 sales of the company is being higher in compare to the previous week which is why the inventory turnover days are higher (Berry, 2009). Ratios of McDonalds 2013 2012 Accounts receivable ratio (Net sales/ average accounts receivable)/365 18874.2/ 659.9 28.60 12 days 18602.5/687.65 27 13. days An account receivable days of the company is higher because of their gap in the accounts payables. Since, the company has higher accounts receivable ration in FY 13 with 13 days because of the franchisee payment or royalty credit note is been increasing (Brigham Houston, 2009). There has been large gap in the accounts receivable and accounts payables ratio. The creditors specifically franchisee holder are disappointed from their payments (www.aboutmcdonalds.com, 2015). The rise in the accounts payables which is 1086 in FY 13, this is because sales of the most of the franchisee business in EU and Asian market has dipped down because of the competitors like Chinese food , pizza and other burger companies (Campbell Shiller, 2013). Accounts receivable of the company is going to improve by FY 15 because of the company is offering the large amount of discount to existing franchisee holder of early payments. Ratios of McDonalds 2013 2012 Total asset turnover Sales/total asset 28105.7/ 36626.3 0.76 27567/ 35386.5 0.77 The total asset of the turnover of the company represents the efficiency of the ratio that help to analyse the company capability to generate the sales from its existing total asset. The asset turnover ratio of the McDonalds is 0.76 in FY 13 in compare to the FY 12 which is showing higher. This is because McDonalds has closed more than 68 restaurants of their chain in US because of lower productivity and sales (Hashemi, 2013). In France, more than 2100 employees of restaurant went for strike and lock out because of the hiring and firing process of the McDonalds. The existing manpower of the company are highly skilled by closing the sick unit there will be rise in the unemployment in US. Most of all company is been using its existing asset to change it sales because company already has invested more than 221 million in centralizing its operation by E-procurement and E-logistics (www.aboutmcdonalds.com, 2015). Profitability ratio Ratios of McDonalds 2013 2012 GP margin Gross profit/ Net sales 8764.3/5585.9 1.56 8604.6/5464.8 1.57 The Gross profit margin of the country is higher in FY 12 with 1.57 in compare to FY 13 which was 1.56. The gross profit of the company suggest that, company has higher cost of the goods sol which is why company operating profit for FY 12 was lower by 379 million. In FY 13 the operating cost of the company is 19341.4 (Hashemi, 2013). because of the good and per price is 6361.3 and employee payroll is increased by 4824 million as per its annual report. The gross profit margin has been reduced in FY 13 because of the rise in the raw materials like bread, meat, paper, soft drinks and payroll. The major increase in the ware material has been one of the major reasons for decrease in the GP margin (Brigham Houston, 2009). Ratios of McDonalds 2013 2012 ROA Net income /total asset 5585.9/36626.3 0.15 5464.8/ 35386.5 0.15 ROA (return on asset) of the company shows that company performance is very much same in FY 12 and FY 13. One of the major reason for the failure of the growth of ROA in FY 13 is lower because of the franchisee sales of the company is not been able to generate large income because of the total asset of the company is lower in FY 134 (Campbell Shiller, 2013). As the company has sold most of its sick units in Orlando, Mississippi and Seattle to reduce the cost of goods sold of the company. In FY 12 company has decent RPA as the company has invested most in digital marketing which is apps and ICT to connect with their global customers. By giving them discounts coupon and the various other offers to attract the customer worldwide (www.aboutmcdonalds.com, 2015). Market value ratio Ratios of McDonalds 2013 2012 EPS Net income/Number of shares outstanding 5585.9/998.4 5.6 5464.8/1010.1 5.4 EPS of the company is very much stable as because investor has strong faith in the company future growth which is why company has able to generate the higher profit. While assessing the EPS of the company , net income and number of share outstanding is taken in considerations. date close volume open high low 1/13/2014 94.83 5753201 95.83 95.83 94.59 1/10/2014 95.8 5512233 95.83 96.22 95.64 1/8/2014 95.41 7653903 95.55 95.71 95 1/7/2014 96.38 4881787 96.38 97.08 96.13 2/14/2012 99.55 3520703 99.51 99.64 98.95 2/13/2012 99.65 2965636 99.72 99.9198 99.28 2/10/2012 99.47 3871018 99.52 99.66 98.94 2/9/2012 99.99 3599302 100.06 100.46 99.7 1/31/2012 99.05 6563026 99.04 99.26 98.25 1/30/2012 98.69 6075981 98.04 98.81 97.7 12/27/2011 100.55 3032607 100.17 100.82 100 4/6/2010 67.81 3318247 67.77 67.96 67.65 4/5/2010 68.03 4875149 67.76 68.2 67.76 4/1/2010 67.58 5473763 67.06 67.71 67.06 EPS of the McDonalds shows that there has severe growth in the recent times but company fails to improve its current EPS because of the rise in competition in market . As the company growth has been decreased by 4.7% every year because of the rise in competition in the market has been one of the major reasons (Hashemi, 2013). Although the price of the share is been increased but the growth is too much fluctuated as per the FY 12, FY 13 and FY 14. Ratios of McDonalds 2013 2012 PE ratio Price per share/ EPS 5.59/ 5.6 =0.09 5.41/5.4 0.10 PE ratio of the company is showing slow growth in the PE ratio. Price earnings ratio depicts how much an investor is willing to pay for purchasing the shares of the company. Since then, growth of PE ratio is very much lower in FY 13 and is poor because of the slower growth of the company. Apart from that, too much of complaints and too much legal notice on the company has hamper its goodwill which is why company has poor PE ratio (Arthur, Cheng Czernkowski, 2010). Too much of fluctuation in share price shows that company needs to improve its existing strategy like higher debt and reduce the amount if COGS would attract the new customer base towards the company in FY 13. Ratios of McDonalds 2013 2012 Dividend payout ratio dividend per share/EPS 3.12/5.6 0.55 2.87/5.4 0.53 Dividend payout ratio of the company is very much higher in FY 13 in compare to FY 12. With rise in the DP ratio, company will be able to generate the large customer base. The dividend payout ratio of the company is poor and is not been able to generate higher growth which is because of rise in the DP to the investors (Arthur, Cheng Czernkowski, 2010). As the rise in the DP Shows Company has to pay higher amount of DP which is why company profit of share is bee decreased by 3.5%. Rise in the DP has attracted the fundamental investor to invest in the company but it has also affected the company net come severly in FY 13 and FY 13. ROCE Ratios of McDonalds 2013 2012 ROCE EBIT /capital employed 8204.5/33456.3 0.24 8604.6/ 31983.4 0.26 ROCE of the company is very much higher in FY 13 with 0.24. One of the major reason for the failure of the ROCE is in FY 13 because of the company has investment in various types of programmes like Digital marketing and flagship model of operation has been yet to give the profit. the flagship and model and 24 storey inventory system is been one of the major investment area dine by the company to increase its profit in the long run (Sondi White, 2014). However, In FY 12 company has able to generate decent amount of the ROCE because of the innovations in recipes and the various types of offers which is old school but were very much effective. ROE Ratios of McDonalds 2013 2012 ROE Net income /average share holder equity 5585.9/ 8004.8 0.69 5464.8/ 7646.8 0.71 ROE of the McDonalds is very much higher and able to generate large customer base in FY 12 because of the strategy like offering a equity as divined rather than cash dividend. ROE (Return on equity) of the company is very subtle in 212 with such strategy. However, one of the major long term effect of the equity as dividend is show in the FY 2013. This equity dividend has decrease the price of shares in the market simultaneously because of the too much shares and too few buyers. One of the major problems for the McDonalds for right now is that the company is sales are falling all of the three major areas EU because of the rise in the inflations, Asia because of the hala meat and other scandals and In US because of the severe competition (Costales, 2010). From the above , analysis, liquidity ratio of the McDonalds is very much shows that , company has ideal liquidity position with 1.5. Apart from that company has taken any kind of short term loan to manage and control its short term obligations. This shows that, company is able to accounts receivables and accounts payables is balanced. Whereas when it comes to profitability ration , company is growth rate is decreasing which is because of increases rate of raw materials and huge competition of rivals like subway and KFC. Lastly, fixed asset turnover of McDonalds is 1.19 which shows that, company has enough ability to generate the high net sales from the existing fixed resources. Apart from company has opened new restaurants and has enough manpower to manage its food chain. PE ratio of the company is showing 17.7p this is because company is not able to perform well because of the higher rivals firms like Subway and KFC are slowly coming with the innovative ideas to attract the customers. Findings and recommendations From the above , it has been found that, the McDonalds is very much in trouble because of rising the long term loan and increasing the competition in market. Apart from that, if conversion cycle shows larger result then it will not be a healthier cycle for McDonalds and on the other side if the conversion cycle shows smaller result then the company will receive payment in quick time. Moreover, cash conversion cycle will help McDonalds in measuring how efficiently and quickly they can pull out cash from operation. Further, conversion cycle will let McDonalds know when they can be able to pay to their suppliers. Thus, the study has help in better understanding the gap between account receivables and account payable. Reduce the working capital cycle phases: the working cpital cycle of the company shows that, company is not able to perform well in terms of its balancing the accounts receivable and accounts payables. Use of Equity financing: Company is using less of equity and more of debt which is increasing the risk of liquidity in future. Apart from that, company should look to use the equity financing is much safer in terms of the high interest rate payments. Reference List Books Woelfel, C. (2009) Financial statement analysis. 4th ed. Harlow: Financial Times Prentice Hall. Graham, B. et al. 2014) Graham and Dodd's security analysis. 5th ed. Oxford: Butterworth-Heinemann. Sondi, A. White, G. (2014) The Analysis And Use Of Financial Statements, 3rd ed. London: Thomson. Costales, S. B. (2010) The guide to understanding financial statements. 4th ed. London: Palgrave Macmillan. Stickney, C. Weil, R. (2009) Financial accounting: an introduction to concepts, methods, and uses. 5th ed. London: Routledge. Journals Arthur, N., Cheng, M. Czernkowski, R. (2010) "Cash flow disaggregation and the prediction of future earnings". Accounting Finance, 50, pp. 130. Berger, P., Ofek, E. Swary, I. (2012) "Investor valuation of the abandonment option", Journal of Financial Economics, 42, pp. 257287 Berry, A., (2009). Financial Accounting: an introduction. 4th ed. California: Random House. Brigham, E., Houston, J., (2009) Fundamentals of Financial Management. 5th ed. London: McGraw-Hill Campbell, J. Shiller, R. (2013) The dividend-price ratio and expectations of future dividends and discount factors. Review of Financial Studies 1, 195228. Hashemi, S. A. (2013) Analyze the relationship between operating cash flows and accruals, operating cash flow forecasting model, according and Auditing Review, 38, 1-24. Websites www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Investors/McDs2013AnnualReport.pdf,. (2015). McDonald Annual report 2013. Retrieved 2 April 2015, from https://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Investors/McDs2013AnnualReport.pdf News.mcdonalds.com,. (2015). McDonalds - McDonalds Official Global Corporate Website. Retrieved 2 April 2015, from https://news.mcdonalds.com/Corporate/Press-Releases/Financial-Release?xmlreleaseid=123057.