About Yourself Essay Example for Free

About Yourself Essay Q: Describe briefly your current job/most recent job responsibilities. State the knowledge and skills you have acquired from this experience A: My recent job assignment was in Testing domain of TAPAS Vodafone UK project. We have to test the codes of the development team to validate if the business and functional requirements are met. Our tasks inclued-; * Understand and analyse what are the expected outcomes from the interfaces of the Development team by going through the revelant documents and and with adequate discussion with the Dev team. * Based on the above, author the Test Cases and Test Scenarios for validating and testing the functional and business requirements of the project * On the technical front, we are expected to execute the shell scripts batches in Unix Environment to generate the data file which is to be checked from the back-end (Oracle 11g) With the help of SQL queries as well as from the front-end Oracle Retail Merchandising System (ORMS). * As our project mates were located in other parts of the Infosys Offices eg Bangalore, Hyderabad as well as onsite location London, we frequently (usually daily) needed to interact with peers and seniors to discuss the status and progress of the project along with the other issues faced by us, it helped me improve my verbal and no-verbal communication. * As part of testing, we have to raise the defects in an online Quality Control tool which was later assigned to the respective developer to fix the bug and many times we would find us in arguments and discussions with the respective devepoler, asserting and proving their points and stand which helped me in inculcating a healthy professional relation and to remain honest with my task and duty at the same time. * It also helped me in approaching and interacting with new people with the sound technical expertise and skills and put forward my ideas , opinions, doubts among my peers and seniors. Q: Describe briefly the most important situ ation in which you have demonstrated leadership skills during your professional career (not exceeding 250 words) See more:Â  The Story of an Hour Literary Analysis Essay Q: Describe briefly the most important situation in which you have demonstarted your ability to work in teams during your professional carees (not exceeding 250 words) A: Last month we, with the motive of improving the interaction among the floor-mates , we, a group of 12 persons of different projects and teams of the same floor planned,discussed and organised a event named L3 Trivia. We as volunteer and anchors, had the job of finding some unusual, interesting and little known facts about our floormates and frame these in a questionaire form to be found and answered by the randomly formed teams for which the team will be awarded marks. The teams had to work together and was asked to take signatures and click a pictures with the respective person to make it interesting and to ensure that everyone knows everyone else by his name and face. The other members of the organising team had to collect the crowd at one place and distribute the different coloured cards on the basis on which teams of 10-11 persons would be formed. As an anchor , we have to gather and handle the team with same coloured cards. We needed to coordinate the randomly formed teams, have a quick introduction with each-other and help them in picking a Team Lead. Apart from this, we had to hand them the Questionaire Sheet , explain them the rules of the games, clarify their doubts as well as encouraging them at the same time and evaluating their scores at the end. This event got amazing and overwhelming response from the floormates and everyone took out the time for this playful event. We, volunteers were not only appriciated by seniors and HR for our effotrs and hardship for managing,organising this event enjoyable and a hit but we also get to know new people and make friends and exhibit our managerial skills as well. Q: Why do you wish to go for a management career A: I always have an interminable dream to have my own business most preferably in online business where I can tap my technical skills of developing online applications. I believe that going for a Management Degree will be a wise idea for helping me in materialising my dream because it will not only help me understand the nitty-gritty of the business administration but will also provide me the the essential knowledge, idea, skills and techniques for management. The process of earning this degree will help me to think critically, deal with ambiguity and solve complex business scenarios through case study approach which requires us to evaluate business dilemmas and formulate the best plans of actions. Not only this, the environment there will motivate , develop and improve my soft courses in leadership, people skills and social interaction that can be a help in any walk of life. Before starting my own venture and entering into the business world , I would need a broad perspective of business world like how industry and business works and this degree will definitely give me an invaluable exposure to business concepts and development in functional areas. I think that this degree will help me in achieving an interesting and more responsible and influentional position. In addition, it will provide me the opportunity to meet new ,interesting, and important people and be challenged by peers and experts. That can help our career along. The MBA degree will prepare me to face the situations that can be faced in real life business scenarios, foster own personal growth, develop exciting career opportunities as well as networks. Q: What alternative careers are you considering and why? A: If I didn’t get the opportunity to persue MBA this year, I will continue my present job at Infosys as a engineer for few years to gather more sound technical knowledge and at the same time try to bring through capital for venturing my own start-up. Q: Describe your strengths/weaknesses as identified by you. A: My strengths can be listed as: * Disciplined and honest towards my duty * Ability to contribute positively as team player * Easily adopt to any environment * Self motivated and confidant My weaknesses can be listed as: * Inconsistent * Easily stressed * Have trouble in planning and prioritization Q: What is your most significant accomplishment so far A: I would recount one of my junior school incident in this case because I had a very positive influence of this incident in formative years at the school. Our school had an annual ceremony to elect the School Leader at both junior (1-6 class) and senior (7-10 class) sections. Teachers and sisters at our school used to assemble the entire junior/senior wing and the students were told to write the names of their candidates based on academics, sports, extra co-curricular activities etc. In a surprising outcome, out of 500 students from the entire junior wing, around 350 have voted in my favour. I was really thrilled to know this because I had never this idea or anticipation that my other classmates and juniors would know me, forget about being admired or revered!!! Although I have always been a good student and excelled in academics and few extra-co-curricular activities, I was also very garrulous, boisterous and a bit indiscplined, so being elected as a School Leader whose responsibility was to ensure discipline was difficult task. But I was really taken aback and amazed by this oucome and even I was not sure if I would be able to shoulder this responsibilty with honestly. This was the first time experience in my life that instilled me with a sense of responsibility.

Five Forces Model Of The Airline Industry Tourism Essay

Five Forces Model Of The Airline Industry Tourism Essay The bargaining power of buyers is another force that can affect the competitive position of a company (Porter, 1998, p.48). This refers to the amount of pressure customers can place on a business, thus, affecting its prices, volume and profit potential (Porter, 1998, p.45). The various airlines flying from the Gold Coast airport are competing for the same customer, which also results in strengthening the buyer power. Individuals wishing to travel to and from the Coolangatta airport are presented with various choices when selecting an airline but price is usually the most important factor, especially for students and families. Hence, the bargaining power of customers in the airline industry is very high since they are price sensitive and search for the best deals available. Virgin Blue attracts travellers that are price sensitive by offering them low fares and those that are convenience oriented by providing them with frequent flights. Qantas on the other hand has created a frequent f lyer program to create switching costs which may be a significant factor to a traveller when choosing which airline to fly with. In addition to buyers, suppliers can also exercise considerable pressure on a company by increasing prices or lowering the quality of products offered. The bargaining power of suppliers depends on supplier concentration, substitute supplies, switching costs, threat of forward integration and buyer information (http://www.unisanet.unisa.edu.au, 14 April 2008) Suppliers within the airline industry are concentrated since Boeing and Airbus are the main suppliers (http://www.unisanet.unisa.edu.au, 14 April 2008) As the supplier industry is dominated by Boeing and Airbus the concentration undermines the ability of airlines such as Virgin Blue to exercise control over suppliers and earn higher profits. Since Virgin Blue has a fleet of 53 Boeing 737 aircraft its supplier has a high bargaining power over Virgin Blue (http://www.virginblue.com.au/AboutUs/index.htm, April 12, 2008). However, other suppliers who work with the airline such as the providers of on board snacks do not have the same bargaining power as they are a larger industry which allows for Virgin Blue to have a choice over who they are purchasing from. Virgin Blue will purchase their on board snacks from the supplier which is the most economic so Virgin Blue can make a higher profit margin from the goods when they are sold. The availability and threat of substitutes is another factor that can affect competition within the airline industry. It refers to the likelihood that customers may switch to another product or service that performs similar functions (Stahl, M, Grigsby D 1997, pg 145). Substitutes for air travel include travelling by train, bus or car to the desired destination. The degree of this threat depends on various factors such as money, convenience, time and personal preference of travellers. The competition from substitutes is affected by the ease of with which buyers can change over to a substitute. A key consideration is usually the buyers switching costs, however due to their low fare non-stop flights, Virgin Blue, Jetstar and Tiger airways can lure both price sensitive and convenience oriented travellers away from these substitutes. Virgin Blue has actually joined forces with its substitutes, such as car rentals and hotel and tour packages as they believe that these complement the Airli ne Industry by helping its growth and popularity. No other travel industry has such incentives and these really help the airline industry to a large extent. The final force in Porterà ¢Ã¢â€š ¬Ã¢â€ž ¢s model is competitive rivalry that describes the intensity of competition between established firms in an industry (Stahl, M, Grigsby D 1997, pg 148). Industries that are very competitive generally earn low profits and returns since the cost of competition is high (Stahl, M, Grigsby D 1997, pg 148). The airline industry is usually characterized by the cut-throat competition that exists among the rival airlines due to its low cost nature. Since the carriers are involved in a constant struggle to take away the market share from each other, industry growth is average and as it is easy for buyers to switch between the airline companies, depending on price, the rivalry is increased. Rivalry is also high in the airline industry due to high fixed costs, as much of the cost of a flight is fixed, there is a great opportunity for airlines to sell unsold seats cheaply, which resolve in pricing wars between the airlines (Hubbard, 2004, pg 38). The airl ines are continually competing against each other in terms of prices, technology, in-flight entertainment, customer services and many more areas. The net result of this competition between companies is an overall slow market growth rate. In conclusion we can understand that the airline industry is very competitive and Michael Porters five-forces model can be used to explain why the potential for returns is so low in this industry. Firstly, the threat of new companies entering the industry is high and the entry barriers are low. Secondly, the bargaining power of customers is high since they are price sensitive and search for the best deals. The third force, bargaining position of suppliers, is strong since they are concentrated and this limits the control airlines have over suppliers to reduce prices and earn higher profits. The availability and threat of substitutes is another factor that can affect a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s competitive position. However, the degree of this threat depends on various factors such as time, money, convenience and personal preferences of travellers. The final force in Porters model is competitive rivalry between the companies within an industry. Cut-throat competition exists among the airlines and since there is a constant struggle for market share, the over all profit potential of this industry is low.

Factors behind Malysias economic boom

Factors behind Malysias economic boom Malaysia is a country endowed with rich resources, possesses well-developed infrastructure and is socio-politically stable. Malaysia has achieved fairly impressive economic success since 1970. Before 1969, Malaysia underwent poverty, unemployment and inter-ethnic economic imbalances caused by colonialism and then by the laissez-faire policies after Independence (Gomez Jomo 1999). From a poverty-stricken country that relies on agriculture and raw materials(rubber and tin exports) as nations economic source, Malaysia has now advance to an export-oriented industrialisation stimulated by technology intensive, knowledge based and capital intensive industries. Malaysia a multicultural country comprised of the 3 dominant ethnic group, Malay(50.4%), Chinese (23.7%) and Indian(7.1%) with an approximate population of 28 million, she is able to maintain economic advance within social unity (CIA World Factbook, 2010). Hence, in appreciative of Malaysias economic success in a sustained multicult ural unison, this essay will provide an overview on the government efforts in moving Malaysias dependence on low-income agricultural sector to export-oriented industrialisation (EOI) as well as attracting lucrative foreign direct investments (FDI). To address these, this essay will be divided into four sections. The first section will present a short account of indicators on Malaysias real GDP and poverty incidence. The second section, divided into subsections, will illustrates the major factors behind Malaysias economic boom in industrialisation and FDI since 1970, primarily through government intervention. The third section will attempt to evaluate Malaysias future economic challenges of how distributive policies may have hindered Malaysias future economic growth. The last section of the essay suggests recommendations on Malaysias approach in sustaining and improving economic growth. MALAYSIAS REAL GDP AND POVERTY INCIDENCE Graph 1 shows the real GDP growth and inflation in percentage of Malaysias economy. Based on the graph, the real growth rate averaged 7.8 per cent per annum during the 1970s but slowed to 6.9% during 1980 fell negative 1 percent in 1985, with better macroeconomic policies and market-based reforms, the Malaysian economy resumed rapid growth in 1987. Over the nine years to 1997, the average growth of GDP accelerates to over 8 per cent. Overall, Malaysias averaged 6.5 per cent of real GDP from 1971 to 2009 is a considerably impressive figure by developing country standards. The inflation rate although highest in 1974 at 17.4 per cent, the inflation has been kept relatively low after the first oil shock, averaging below 4 per cent from 1975 to 2009. Although unemployment rate was relatively higher for the first 2 decade during the implementation of NEP, it averages below 4 percent during the implementation of New Development Policy (NDP) and National Vision Policy (NVP). Graph 2 illustrates the incidence of poverty in Malaysia from 1970 to 1999. The total poverty of incidence shows a declining pattern up to 1997 but the rate moved up slightly in response to the Asian Financial Crisis. 85,900 households poverty in urban areas was reduced to 57,100 in 1993 whereas rural poverty reduced from 791,800 households to 268,200 in 1993. The large decrease in poverty incidence was a result from the growth in the economy, which created job opportunities in the non-traditional sectors (Zin ). FACTORS BEHIND MALAYSIAS ECONOMIC GROWTH Implementation of NEP (1971-1990) One of the major factors that boost Malaysias economic growth was the implementation of the New Economic Policy (NEP) from 1971-1990. According to Athukurola, at independence, native Malays accounted for 52% of the population and dominated politics but were relatively poor as involved mostly in low-productive agricultural activities(Barlow, 2001). However, the ethnic Chinese comprising 37% of the population enjoyed greater economic strength and dominated the most modern sector activities(Barlow, 2001). Of the 49 per cent of household in peninsular that received an income below the poverty line, 88 percent were found in the rural areas. Farmers made up 48 per cent and 30 per cent were farm or estate labourers. (Cho, 1990 p.68) Hence, the NEP prime objectives were to attain national harmony and inter-racial economic parity by eradicating poverty irrespective of race and to eliminate the association of race with economic role by reforming the society (Gomez Jomo, 1999, p. 24). For the former, the overall development plan was reformulated with emphasis on EOI, and development program on rural and urban areas (Menon 2008). The latters objective called for greater government intervention mainly on ethnic affirmative action, which includes accelerating expansion of the Malay middle class, accumulating Malay ownership of share capital in limited companies and producing Malay entrepreneurs (Gomez). In conjunction with the NEP, the main aim of the First Malaysia Plan (1996-70) was to promote agricultural and industrial activities so as to diversify the economy and create employment. Accordingly, the focus was on labour-intensive import and export substitution(). Hence, to achieve these goals, part of the NEP aimed at changing the employment patterns in the urban areas to reflect the racial composition of the country, and increasing Bumiputera equity in corporate ownerships from 2% in 1970 to 30% by 1990 (Menon). In order to achieve the restructuring objective, th e government established a large number of public enterprises such as Petronas(National Oil Corporation), Malaysian Airline System (MAS), and the Heavy Industries Corporation of Malaysia(HICOM) as well as trust agencies such as National Equity Corporation(PNB) and Amanah Saham Nasional (ASN) (Toh, 1989). Emphasis on EOI Industrialisation appears to be the key sector that led to economic growth in Malaysia. The export coefficient (total merchandise exports as a percentage of GDP) of around 50% in 1965 1880 increased modestly during the 1970s slowed in the first half of the 1980s and rose sharply from about 1987( Athukurola). The ratio was 96% in the mid-1990s. Malaysias export coefficient was the third largest in the developing world in the decade up to the late 1990s coming after the 170 percent of Singapore and 140 percent of Hong Kong. During the 1970s increasing commodities prices were a major determinant of high growth rates. (Africa). The fast-growing manufacturing industry became known as the engine of growth to the country (rasiah rajah). Based on table above, manufacturing sector contributed constant growth rates to the GDP throughout the years and during the NEP period, the percentage rose from a mere 13.9 percent to a substantial share of 27 percent. The Second Malaysia Plan (1971-75) paid much attention to EOI, in addition to increased direct government participation in commercial and industrial activities which signalled a drastic departure from the earlier practice. Structural changes in the Malaysian economy are also reflected in the changing pattern of sectoral employment, with the contribution of agriculture to employment declining from 53.5 per cent in 1970 to 15.2 per cent in 1997 and that of manufacturing rising from 8.7 per cent to 27.5 per cent over the same period (Table 2). Under the Third Malaysia Plan (1976-80), resource-based industries were given a boost, thanks primarily to the discovery of oil and gas. Education and training in the field of industrial engineering were given much emphasis, to relieve shortage of skilled manpower.Among some of the efforts that drove EOI was the opening of Free Trade Zones and licensed manufacturing warehouses in 1972(Jomo,p. 119) The main task of the Fourth Malaysia Plan (1981-85) was to boost productivity, expand the industrial base and modernise the services sector. In addition, small-scale industries were promoted through the provision of training and financing facilities. The Malaysian government had a heavy hand in the launching of the ambitious heavy industrialisation programme in the early 1980s. The establishment of Heavy Industries Corporation of Malaysia (HICOM) was a strong manifestation of direct government involvement in the countrys industrial development. To both deepen the industrial structure and extend the into high value industries, formed HICOM, a series of heavy and chemical firms in sectors such as steel, cement, automobiles,chemicals, and paper and pulp(Ritchie p.749) Apparently, the policy decision in favour of heavy industrialisation was inspired by the Korean model of industrial development based on the practice of picking winners. In fact, the First Industrial Master Plan (1985-95) had Korean fingerprints all over. The Malaysian heavy industries have been in trouble, saddled with high production costs, heavy debts, market glut and excess capacity. They are simply uncompetitive. They could not have survived, had it not been for state patronage and strong protection. Contribution of FDI to Malaysias Economy Foreign direct investment(FDI) also contributed largely to Malaysias economy. A large number of empirical studies on the role of FDI in host countries suggest that FDI is an important source of capital, complements domestic private investment, is usually associated with new job opportunities and enhancement of technology transfer, and boosts overall economic growth in host countries(Karimi Yusop). To attract a larger inflow of FDI, the government introduced more liberal incentives including allowing a larger percentage of foreign equity ownership in enterprise under the Promotion of Investment Act (PIA), 1986. This effort resulted in a large inflow of FDI after 1987(the inflow of FDI grew at an annual average rate of 38.7 percent between 1986 and 1996). The major areas of investment by foreign companies are in sectors such as electronics and electrical products, chemicals and chemical products, basic metal products, non-metallic mineral products, food manufacturing, plastic products , and scientific and measuring equipment.(Ministry of Finance, 2001). Apart from these policy factors, it is generally believed that sound macroeconomic management, sustained economic growth, and the presence of a well functioning financial system have made Malaysia an attractive prospect for FDI. (Ministry of Finance, 2001). Foreign direct investment (FDI) has been seen as a key driver underlying the strong growth performance experienced by the Malaysian economy. Policy reforms, including the introduction of the Investment Incentives Act 1968, the establishment of FTZs in the early 1970s, and the provision of export incentives alongside the acceleration of open policy in the 1980s, led to a surge of FDI in the late 1980s. WHERE FROM HERE? In determining the future of Malaysia, the government has implemented the National Vision Policy (NVP) First we need to be independent. Local market too protected by the government. Proton. CamPro CONCLUSION To sum up, the economic growth was mainly a result of government outward-oriented policy stance government redistributive policies The profile of the Malaysian economy has changed radically since 1970. It is no longer dependent on a few primary commodities. Its production base has broadened, with manufacturing accounting for a growing share of national output and employment. The Malaysian economy has become more open and outward looking over the years.

Love Song of J Alfred Prufrock Essay -- T.S. Elliot

In the poem "The Love Song of J. Alfred Prufrock" by T.S. Elliot, Prufrock is a man that is pessimistic, has low self-esteem, and has much internal conflict. He believes that he isn't good enough for the women of his desire; this theme also becomes a motif.   Ã‚  Ã‚  Ã‚  Ã‚  The epigraph of the poem is an excerpt from Dante's Inferno, in which that the perfect audience could only be someone who would never be allowed into the real world where that person(s) might reveal Prufrock's idiosyncrasies. This of course is impossible so therefore he must settle on a personal reflection, thus creating an interior dialogue. This in effect sets a mood of isolation giving the reader some foreshadowing in to what the poem will be about.   Ã‚  Ã‚  Ã‚  Ã‚  The image of "a patient etherized upon a table" and "half-deserted streets" gives a more gloomy setting and adds to the isolation set forth by the epigraph. On lines 55-58, Prufrock compares himself to an insect being on display for all to poke and prod. This is how he will feel if he where to ever try and talk to one of the girls that he is so fascinated with. The yellow fog described on lines 15-25, refer to a giant cat spreading into every crevice and nook, spreading out enveloping everything in its path; the color yellow is used to show the fog is somehow tainted giving the feeling of being smothered.   Ã‚  Ã‚  Ã‚  Ã‚  The lines "In the room the women come and go talking of Michelangelo" are repeated because it is this person that Prufrock compares himself to. Michela...

The Features of Durkheims Social Realism Essay -- Sociology Analysis

Durkheim is a highly influential name to remember when thinking of sociology. Durkheim’s mission was to develop sociology so it could be defined and to develop a method on how sociology should be used. Durkheim’s main concern in his career was primarily associated with how societies might preserve their integrity and rationality within modernised society, when things such as shared religious views and ethnic backgrounds are seen as things of the past. In relation to Durkheim’s social realism his concern was with the growing individualism in society. Durkheim argues that we are in an era which is imperfectly moving towards a morality based on individualism as â€Å"Durkheim regarded individualism as a collective representation, a force that would impress itself on human minds regardless of their subjective opinions, as well as the manifestation of the egotistical will†. (Mestrovic 1988: 8). Ultimately Durkheim was a strong believer that it is society that defines the individual rather than the individual shaping society. For this reason we can clearly see why Durkheim was highly concerned with growing individualism in society, within a society which he believes shapes an individual therefore individuals are highly dependent on society. This can be seen in Durkheim’s theory of the division of labour. Durkheim argues that in a primitive society which is a society which is seen as having more morals and was a much better society to live in this is because society is seen as having deteriorated as civilisation has developed and become modernised. The division of labour within a primitive society therefore is to create or maintain a mechanical social solidarity in which there is a common consensus which allows social order to be maintai... ...dividuals living within society. Works Cited Calhoun, C. Et al. (2007) Classical Sociological Theory (2nd edn). Blackwell. Craib, l. (1997) Classical Sociologucal Theory. London:Oxford Univeristy Press Hughes, J. & Martin, P. & Sharrock, W. (1997) Understanding Classical Sociology: Marx, Weber and Durkheim. London: Sage Durkheim, E. (1976) The elementary forms of the religious life. Biddles Ltd Durkheim, E. (1984) The division of labour in society. Great Britain: Macmillan Durkheim, E. (1982) Rules of sociological method. United States of America: Macmillan Bellah, R. & Durkheim, E. (1973) On Morality and Society: selected readings. London: Chicago Press Mestrovic, S. (1988) Emile Durkheim and the reformation of sociology. London: Rowman & Littlefield Publishers Weber, M. (1978) Sections in translation.Cambridge: Cambridge university press

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CASE: American Barrick Resources Corporation : Managing Gold Price Risk 1. In the absence of a hedging program using financial instruments, how sensitive would Barrick stock be to gold price changes? For every 1% change in gold prices, how might its stock be affected? How could the firm manage its gold price exposure without the use of financial contracts? Particulars for yr 1992($ million)| | Pretax earnings (Exhibit 2)| 223| Reductions in earning of gold sold at spot (1280mn oz x (422-345) (Exhibit 12)| (99)| Proforma Pretax Earnings| 124| Taxes @ 21% (Exhibit 2) | (26)| After Tax Earnings| 98| Thus in absence of risk management program the American Barrick stock would be more sensitive to gold price changes. This could also be observed from Exhibit 4 where the return on Barrick’s stock is continuously increasing as compared to other unstable major stocks in gold mining sector. Elasticity of Earnings & Profit for 1% change in Gold Price 1% change in gold price ($345)| $3. 45| Number of ounces| $1,280m| Additional pre-tax profits| $4. 4m| Additional after-tax profits| $4. 4 x (1-. 1) = $3. 5mn| Additional profits as % of earnings| 3. 5/98 = 3. 5% (approx)| Cash Flow = Earnings + Noncash charges| 98mn + 69mn = $167mn| Additional profits as % of cash flow| 3. 5/167 = 2. 1%| Thus with 1% change in gold price the earnings of Barrick would change by 3. 5%. The firm can manage its gold price exposure in following three ways: 1. Diversifying its business 2. Hedging against the gold price risk 3. Insuring against the gol d price risk Hedging involves entering into financial contracts and so does insuring against the gold price risk. Thus without being involved in any financial contracts Barrick can reduce its gold price exposure only by diversifying its business. 2. What is the stated intent of ABX’s hedging program? What should be the goal of a gold mine’s price risk management program? Stated intent American Barrick Resources Corporation is one the most financially successful gold-mining concerns in the world. The main stated intent of ABX’s hedging program was to profit handsomely even during a downtime, when gold prices are falling. The hedging position had allowed ABX to sell its commodity output at prices well above market rates. The main motive of the hedging program was to profit and gain an advantage over its competitors by hedging, at a time when the prices of gold were low and also interest rates were falling. Thus, the main intent of the hedging program was to position the organization as a low- cost commodity producer, willing to sacrifice potential profits from gold price peaks in order to level out potential losses in the future. Goal of a gold mine’s price risk management program The primary goal of a gold mine’s risk management program is to hedge the risk of falling gold prices and low interest rates, to ensure the minimum sale price of gold even when prices are declining. One of the main goal is to achieve financial stability. The risk management programs motive is to hedge risk in order to plan the future cash flows with certainty. Also, at a time, when an organization has immense production initially itself, the risk management program enables the firm to earn a predictable, rising earnings profile in the future inspite of rising production. Thus , the intent of the risk management program is to hedge the risk in such a manner, that its production decisions are not affected by the market price of gold. 3. What would convince you that a price risk management program created value for its shareholders ex ante? The American Barrick Resources Corporation, had since its inception a strategy of efficient risk management system to protect or hedge itself from the fluctuations in the Gold prices. The various risk management system coupled with favourable circumstances and opportunities of price locking, rendered an overall strong balance sheet for American Barrick. They were able to attract investors who shied away from gold mine investments due to price risk, due to the efficiency in hedging mechanism. In 1992, American Barrick produced and sold over 1. 28 Million Ounces of gold at a price of $422 instead of $345 market rate, as a result of the risk management program. Such benefits would lead to higher revenues, and thus higher profits and in turn render higher value for the shareholders. The organisation guidelines clearly specifed that the risk managemnt system should be such that they are fully protected against price declines for 3yrs and 20-25% for a decade. Thus such a mechanism helped create value for the shareholders as the profits of a Gold mine are dependent on fluctuation in gold prices and the difference between revenue and costs. Thus locking future prices, provided financial stability, enabling the organisation to avoids dips, and plan cash flows in a confident way, and in combination with the rising production, offered investors and shareholders a predictable , rising earnings profile in the future 1. How would you characterize the evolution of Barrick’s price risk management activities? Are they consistent with the stated policy goals? As a producer of commodity products, gold mining firms had virtually no marketing or distribution costs. There was always a ready market for their products, at market prices, once extracted from the earth & refined. Therefore a gold mine’s profits were a function of the quantity of its production & the difference between the prices at which it sold its output & its costs. To minimize the price risk, hedging is necessary. Being conservative in nature, company has maintained lower leverage. As per stated policy goals of company, Gold Hedging program gives American Barrick extraordinary financial stability. It protects shareholder’s wealth from the dip in gold prices. American Barrick’s hedging program evolved over history and used a wide range of tools to manage gold price risk. With gold financing, forward sales, options strategies & spot deferred contracts, company shed some of its price risk while maintaining flexibility to profit from rising gold prices. a. Gold Financing: In early days, Company’s gold price management activities were incorporated in financing for its mines. Company made its growth organically as well as inorganically. Almost every year, company madeacquisition of 1 gold mine company. For financing such acquisition, company used following tools Gold Trust: Paying specific percentage of gold production as return to investors Bullion Loan: Bank gives loan in gold form, company need to pay interest in gold terms only. Collateral is reserves company owns Limitations: Limited scope. b. Forward Sales: Production at Gold mine is highly inelastic in nature. ie Its not easy for the company to change the production in tune with the highly fluctuating demand, market prices. To avoid price risk, American Barricks used Forward Sales as tool by which company can lock in prices for future dates. Forward Sales are usually for relatively short delivery periods of under a few years. Normally forward sellers receive a premium (approx. 5%)above the current gold prices ensuring a guaranteed return of 5% for forward sellers. Limitations: Forward sale mitigates downside risk but also its ability to benefit if price rose. c. Options & Warrants: Hedging using Forward sales eliminated downside risk for the American Barricks but also its ability to benefit if price rose. To resolve this issue, from 1987 company started using Options and warrants. This allows company to hedge from downside risk and retain some benefits of rising prices. Board of American Barricks were ready to use options but in costless manner. Collars strategy: Simultaneously buying Put Option & writing Call Options on gold. Premiums and maturity of both call and put option is maintained same. This strategy ensured a price range for the gold in future giving opportunity to the company to get benefits from rising gold prices as well as downside protection if price dips. Limitation: Market for such options were liquid only for contracts with maturities under 2 years. This horizon was far shorter than 20 years of expected production currently in reserve. d. Spot Deferred Contracts: This tool gives additional feature to standard forward sale. In forward sale, the delivery date is fixed. In SDC there are multiple delivery dates. Seller chooses at which date he will pay gold. Forward price is decided at each roll over date depending upon current market price plus prevailing contango premium. ( SDC will be explained in detail in Q6. ) So during 10 years, American Barricks moved solely from getting gold financing, lock in future prices to getting strategic benefit due to inherent strengths of American Barricks over competitors using tools like Spot Deferred Contracts. 5. How should a gold mine which wants to moderate its gold price risk compare hedging strategies (using futures, forwards, gold loans, or spot deferred contracts) with insurance strategies (using options)? On what basis should these decisions be made? Once a firm has decided on either a hedging or an insurance strategy, how should it choose from among specific alternatives? One can characterize risk management strategies as either linear, hedging strategies (which eliminate all exposure to price fluctuations) or nonlinear, insurance strategies (which protect firms against falling gold prices only. ) Choices among instruments are determined by their relative costs (including transaction costs), interim liquidity requirements, accounting and tax implications, and the ability to customize the contract terms. For example, gold mining firms tend to use forward sales instead of futures contracts, at least in part to avoid the cash margin calls which futures transactions might entail. As another example, mining firms' preferences for spot deferred contracts over them functionally equivalent strategy of rolling forward contracts seems to be related to their relatively attractive accounting treatment. Distinguishing linear and nonlinear strategies becomes more difficult with dynamic trading. Suppose we observe a firm only selling gold forward. By a static measure, we would conclude that it was hedging. However, as is well known, through dynamic replication, a trader can create a put option by adjusting the amount of gold sold forward. Specifically, as the gold price falls, a dynamic replication strategy would have the firm short-sell more gold. Thus, distinguishing hedging from insurance strategies requires an analysis of the changes in a firm's equivalent short position (or delta-percentage) relative to changes in the price of gold. The sensitivity of cash flows and investment costs relative to changes in the underlying macro-variable are equal. If the sensitivities are equal, linear or hedging strategies will be optimal, otherwise firms would prefer to use non linear or option strategies. It is not apparent how to measure the degree to which mines face quantity risk. Firms facing borrowing constraints and that facing higher price risk might be more active users of options. Borrowing constraints might be more severe among firms with high operating costs, small market values, or small reserves; bankers might be reluctant to lend to high-cost producers that may be forced to shut-in production and to smaller firms with less collateral. It is reasonable to suspect that price risk might be more pronounced among mines with higher production costs. Firms with higher cash costs and those with smaller market values and reserves might be more likely to use options or price-contingent nonlinear strategies. 6. What is a â€Å"spot deferred contract? † Why has ABX chosen to rely on spot deferred contracts relative to other gold derivatives? Spot deferred Contract (SDC) is used by gold producers to hedge gold price exposure. It is a type of forward contract which has multiple delivery dates with the final one being 5 or 10 years after the initiation of the contract. The seller of SDC has the right to choose on which of the rollover date he will deliver the gold and can defer the delivery date till the end of the contract. Therefore spot deferred contract gives the right to the seller to choose the delivery date but has to deliver the quantity of gold specified in the contract. American Barrick entered into SDC with 1-year delivery or rollover dates where prices were set only for the first rollover date. On the rollover date, American Barrick could deliver the contract if forward prices were higher than spot prices or could roll the contract for the next period and sell the gold in the spot market. American Barrick chose to rely more on spot deferred contracts relative to other gold derivatives because of the following reasons: 1) Initially American Barrick entered into contracts for delivery within 3 to 4 years. Later on its bargaining power increased because of its large reserve base and strong financial position which made them negotiate agreements giving them 10 years within which to make delivery. 2) SDC was a way to profit from increase in price of gold yet set a minimum price on its sales of gold.

Dressen Case Study Essay

#1)I believe one major factor was how appealing Dressen had become during 1995, as opposed to previous years. It appeared that new management had turned the company around. Management stated Dressen was looking good for future growth during the end of 1995. I think management felt it was the opportune time to sell. They wanted to sell Dressen while they were making money and being successful, as opposed to hemorrhaging money from Westinghouse. Dressen was Westinghouse’s star performer in the Q3 of 1995. Sales increased 10% over the year-prior quarter. EBIT reached 12% of sales as well. Their growth strategy as well as technology and work processes lead management to believe that there was even greater growth potential. Dressen was now headed in the right direction. Management was trying to strike while the iron was hot. Another factor was the cash acquisition of CBS in August 1995 for $5.4 billion. The large purchase price had strained an already weakened balance sheet. There was also a $2 billion bridge loan that was due in February 1996. Businesses are meant to earn economic profit and mitigate the cost associated with them. Without effective and timely cost strategy, a business cannot climb the stairs of economic prosperity. Organizations have to be aware of how much cost they are incurring over a certain period of time, as most of the time, high operational costs can devastate the entire financial structure of an entity. Apart from the cost, it is also important for a company to be consistent in their earnings momentum because it is something that shareholders, as well as analysts, are looking for in a company. There are certain ratios that can be taken into account to analyze why Westinghouse would want to sell Dressen. Mentioned below are some calculations that justify why Westinghouse was intending to sell Dressen at the end of the fiscal year 1995: 1991 1992 1993 1994 1995 Net Sales 671 577 508 563 621 % Change -14.01 -11.96 10.83 10.30 Gross Profit 200 151 122 153 203 Gross profit margin 29.81 26.17 24.02 27.18 32.69 Net Income -40 -60 29 Net Profit Margin -7.87 -10.66 4.67 Dressen recorded a net profit of $29 in 1995, as compared to the net loss of $60 a year before, but the net profit margin of the company in 1995 was only 4.67%, which is still very low. The Gross Profit Margin in the same year was 10.30%, which shows that around 90% of the sales come under the net Cost of Goods Sold. This is a very high figure that businesses cannot sustain for a long period of time. Total assets of Dressen also showed a net decrease from fiscal year 1994 to 1995: Year 1994 1995 Assets $ in Million 705 657 Proportion -6.809 A decrease in the operational assets would not be acceptable for the company as a whole. Therefore, Westinghouse was willing to sell Dressen because the company was not doing well in its jurisdiction. #2)There are a number of valuation tools which could be used for the purpose of analyzing the effectiveness of a company as a whole. Warburg is considering paying $585 million for Dressen and we must analyze if this is a fair price for Warburg to pay. Price to Earnings is a ratio that is usually applied by investors on the entire investment in order to anticipate the expected dividend.  Specifically, it refers to the ratio evaluation of an entity’s price of shares in relation to earnings for each share. Price to Earnings ratio is generally symbolized as an earning multiplier or investment multiplier. However, there are some probability flaws in the P/E ratio, but it is still the most widely accepted technique to measure potential speculations. Market price to earnings is one of the most vital tools used to analyze the stance of investors while investing in the company. Five-year period analysis has been taken into consideration for Dressen: Question-2 1991 1992 1993 1994 1995 Share Price Average 32 32 15 15 15 Earnings Per Share 0 0.00 -0.87 -1.31 0.60 Market Value to Earnings 0 0 -17.175 -11.45 24.88 The computation of Dressen’s Market Price to Earnings is showing that the  company did a good job in the fiscal year 1995, as its Price to Earning (P/E) or Market Value to Earning (MV/E) ratio had increased tremendously to a level of $24.88. The higher the P/E, then the higher the net worth of the company. Enterprise Value to Sales is a valuation method that is applied to assess the ratio of enterprise value to its market share price. The Enterprise Value to Price ratio allows investors to make a decision on whether the market share of the company is expensive or cheap. The ratio has also considerable influence on the company’s sales as it is utilized by many market analysts to avoid any manipulation over the turnover of an entity. The Enterprise Value to Sales analysis is mentioned below: 1994 1995 Market Capitalization $ in Million 458 481 Total Debt in $ million 247 176 Total Worth in $ Million 705 657 Less: Cash in $ Million 5 2 Net Worth in $ Million 700 655 Annual Sales in $ Million 563 621 EV/Sales 124.33 105.48 The Enterprise Value to Sales is high in both years 1994 and 1995. This shows me that the net worth of the company is high. EBIAT is a financial appraisal technique which is used to figure out the operating performance of a company. It refers to how much resources have been utilized to generate revenue within a given span of time. The financial evaluators are most likely to consider this ratio as an indicator of a company’s performance within a defined accounting cycle. This will allow them to set a point of time within the operating cycle that they can focus on. EV/EBIAT 1994 1995 Market Capitalization $ in Million 458 481 Total Debt in $ million 247 176 Total Worth in $ Million 705 657 Less: Cash in $ Million 5 2 Net Worth in $ Million 700 655 EBIAT in $ Million -2.5 10.4 EV/EBIAT (28,000) 6,298 The company recorded a net loss in the year 1994 of $-28,000, but it is a positive figure of $6,298 in the year 1995. My calculation for the Dividend Discount Model is as follows: P = Dividend / WACC – g WACC = 12% G = Growth rate = 4% = 1.2 / 12 – 8 1.2/ 0.08 P = $15 The average Share Price in the year 1995 was also $15. Taking all of this analysis into consideration, I believe that $585 million is a fair price to pay for Dessen. The net worth of Dressen in terms of financial value and share valuation are strong. I believe that Warburg is underpaying for Dressen. I believe Warburg got Dressen for a good price. I feel that Warburg should have paid more for Dressen, so with a purchase price of $585 million I believe Warburg got a great value. #3)Financial Forecasting is an important metric to use because it can estimate the future financial outcomes of a company. Analysts have to forecast the cash flows and debt obligations to analyze the financial competitiveness of a company as a whole. Two different ratios could be used to analyze Dressen’s ability to generate sufficient cash flows to service its debt. The two ratios I used for Dressen are the Cash Flow to Sales Ratio and Debt to Equity. The Cash Flow to Sales ratio is an important ratio which analyzes what percentage of the company’s sales are on credit, and how much of the sales are on cash. The computed ratio for the next five years is below: Operating Cash Flow to Sales 1996 1997 1998 1999 2000 Forecasted Operational Cash Flow 77 83 99 101 95 Forecasted Sales in Million $ 658 698 740 784 804 Operating Cash Flow to Sales 11.70 11.89 13.38 12.88 11.82 Average 12.33 The forecasted figure of the cash flow to sales is showing that the company is not efficient in getting their cash sooner as related to sales. The amount of operating cash flow to sales ranges from 11.70% to 13.38%, with an average of 12.33%. This shows that over 80% of Dressen’s sales are on  credit, which is not a good sign from the viewpoint of the company. The risk in generating sufficient cash flow will remain with the company for the next five years (1996-2000) as well, because the cash generating cycle of the company is too low and it has to be increased accordingly. The Debt to Equity ratio of Dressen for the next five years is below: Debt to Equity 1996 1997 1998 1999 2000 Total Debt in $ Million 530 501 455 409 357 Equity in $ Million 178 208 247 294 345 Debt to Equity 2.98 2.41 1.84 1.39 1.03 Average 1.93 The Debt to Equity ratio for Dressen (Forecasted) is showing that the level  of debt is twice that of the equity. This is against the restrictive covenants. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings because of the additional interest expense. Average Debt to Equity of the company is showing that the proportion of debt is nearly 68%, while the proportion of equity is 32%. This is very near to the restrictive covenants, in which debt should not be higher than 70%. There is a risk that this ratio will increase in the upcoming years. #4)For the Debt Rating analysis I decided to examine the Debt to total Capital and the liabilities to total assets. I wanted to figure out these ratings for 1994 and 1995, before the buyout. Question-4 Debt Rating 1994 1995 Average Subordinate Debt in $ Million 165 Capital 458 481 Percentage of Debt/Capital 36.03 34.30 35.16 Total Liabilities in $ Million 247 176 Total Assets in $ Million 705 657 Proportion 35.04 26.79 30.91 The Total Debt to Capital of Dressen on average is 35.16%. This would represent a rating category of â€Å"A.† Along the same lines, liabilities to assets have a figure of 30.91%. The bond rating in this particular scenario is also â€Å"A.† The coverage ratio is a measure of a company’s ability to meet its financial obligations. The higher the coverage ratio, the better the ability of the company to fulfill its obligations to its lenders. Analysts and investors perform coverage ratios to determine the change in a company’s financial position. The findings of the coverage ratio I performed on Dressen are below: 1994 1995 EBIT -2.5 10.4 Interest Expense 3 1 Coverage Ratio -0.83 10.40 This analysis shows that Dressen generates enough cash flow to pay its interest, specifically in the year 1995. Taking all of this information into account, I would assign an â€Å"A† rating to Dressen. #5)In order to analyze the level of business risk for the buyout, I decided to use the current ratio and the gearing ratio. The current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations. The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. This is an important ratio for Warburg because they need to make sure they can meet their short-term obligations after the buyout. Current Assets in Million $ 183 Current Liabilities in Million $ 95 Current Ratio 1.926 Dressen has a current ratio of 1.926. The current ratio can give a sense of the efficiency of a company’s operating cycle and its ability to turn its product into cash. This ratio shows that Dressen is doing a good job as far as meeting its short-term financial obligations and promises. The gearing ratio is a financial ratio that compares some form of owner’s equity to borrowed funds. It is a measure of financial leverage that demonstrates the degree to which a firm’s activities are funded by owner’s funds versus creditor’s funds. A company with high gearing (high leverage) is more vulnerable to downturns in the business cycle because the company must continue to service its debt regardless of how bad sales are. If a company has more equity, then there would be more of a cushion, which would show financial strength. Debt 420 Equity 160 Assets 705 EBIT 10.4 Interest 1 Debt to Equity 2.625 EBIT/Interest 10.4 Equity/Assets 22.70 From this analysis, it can be determined that the Debt to Equity of the company is still high at 2.62%. Total Equity to Assets is relatively small at only 22.70%. This shows that most of the assets in Dressen have been bought using debt. From this analysis, it is found that the company is not risky when it comes to short-term financial obligations, but it will be in a dangerous situation in the long-term.