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1The Study of Lifespan Development
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Learning Objectives
After completing this chapter, you should be able to:
• Define the lifespan perspective and summarize its primary
characteristics.
• Distinguish between developmental domains and provide
examples of overlapping characteristics.
• Describe nine stages of human development.
• Analyze key issues in the study of lifespan development.
• Identify the different contextual factors in lifespan
development.
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Prologue
Chapter Outline
Prologue
1.1 The Lifespan Perspective
Characteristics of the Lifespan Perspective
1.2 Topical Areas in Lifespan Development
Physical Development
Cognitive Development
Psychosocial Development
1.3 Stages of Development
1.4 Key Issues in the Study of Lifespan Development
Continuous Versus Discontinuous Development
Nature and Nurture
1.5 Contextual Factors in Lifespan Development
Sex and Gender
Peer Groups
Race, Ethnicity, and Culture
Socioeconomic Status
Summary & Resources
Prologue
Satchel Paige, a famous American baseball player, never
admitted to the day or year of his
birth. When reporters inquired about his age, Paige would often
turn the question around:
“How old would you be if you didn’t know how old you was?”
And because Paige displayed
atypical abilities for someone of the various chronological ages

that he did report, his actual
age was a frequent source of debate.
So how old would you be if you didn’t know the year of your
birth? How would you determine
if a person is an adult, entering middle age, or simply “old”?
Other than chronological mark-
ers, there are no definitive indicators of age. There are some 50-
year-olds who seem “young”
and some who seem “old.” There are some 80-year-olds who are
active, spry, and enjoying
life and others who are incapacitated, depressed, or show
characteristics of the stereotypical
curmudgeon. There are some 25-year-olds who have a career
and family and others who have
barely decided on a future course for their lives. Such
differences lead to a number of ques-
tions about human development:
• How old is somebody who is “old”?
• At what age should children begin formal school?
• When does puberty begin? Adolescence?
• Why are some people more independent than others, and how
does that characteris-
tic affect social, economic, and educational opportunities?
• Does having a family or a job demonstrate emotional
maturity?
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Section 1.1 The Lifespan Perspective
• Is retirement a distinct stage of life?
• If you could choose, how long would you want to live? Why?
This list identifies just a few of the questions that we might ask
when studying the course of
human development. If you think about it carefully, the answer
to each of these questions is,
“It depends.” For example, school readiness among children
varies tremendously, both physi-
cally and psychologically; similarly, some people in their 20s
act more like carefree teenagers
and others act the part of responsible adults.
There are many different ways to look at growth and
development. Satchel Paige had it right
when he implied that it is not enough to describe aging as a
simple series of chronological
numbers. Instead, aging is best viewed as a multifaceted
process. The goal of this text is to
examine the various processes and how we think they occur.
1.1 The Lifespan Perspective
Lifespan development, or what the American Psychological
Association (APA) refers to as
developmental psychology, is the study of human growth,
stability, and change. This field of
study is often divided into subcategories like “child
development,” “early adulthood,” and
“aging.” The traditional view of development emphasized the
patterns of growth during
childhood and adolescence, stability during early adulthood, and
decline in the later years.

However, contemporary developmentalists have largely rejected
this notion. Instead, devel-
opmentalists embrace the idea that development should be
studied as a function of growth,
stability, and change, not simply a matter of growth and decline.
This lifespan perspective
acknowledges that although development is often systematic
and predictable, there are dif-
ferent kinds of gains and losses for each individual at any
particular time. For instance, a
person who is not introduced to specialized physical skills
during childhood, like dribbling
a soccer ball or playing a musical instrument, is unlikely as an
adult to ever have elite skills
in those areas, even if the person was born with exceptional
potential. Rather than explor-
ing a “decline” in an ability that never existed,
developmentalists focus on how variations in
perception, experiences, and thoughts influence behavior.
Likewise, lifespan researchers also
explore factors that empower us to reach goals and to avoid
dysfunctional outcomes as we
age (Baltes, Lindenberger, & Staudinger, 1998).
Characteristics of the Lifespan Perspective
The study of development attempts to find explanations for both
the similarities and the dif-
ferences in feelings, thoughts, and behaviors that occur between
birth and the end of life,
“from the womb to the tomb.” Dramatic changes occur as
infants shift from being completely
dependent on others to being self-reliant adults. But adults may
then become less autono-
mous in old age as they revert to some form of dependence. The
study of the lifespan also
includes genetics and the prenatal (before birth) period, as these

factors have a strong influ-
ence on later development.
We will begin by laying some groundwork for how we view
lifespan development. There are
several theoretical propositions that form a basis for the
lifespan perspective, summarized
in Table 1.1 at the end of this section (Baltes, 1987). The course
of individual development is
directed by these guiding principles.
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Development Is a Lifelong
Process
It is unfitting to adopt the idea that
individuals reach some “peak” kind
of performance—say, during early
adulthood—and then simply decline.
People never stop developing, no mat-
ter how old they are. Whether we look
at how babies bond to their primary
caregivers, teenagers join cliques,
young adults find intimate partners,
or retirees consciously filter out less
desirable social activities, develop-
ment is viewed as a dynamic, lifelong

process.
Development Is Multidirectional
The same aspect of development can change in more than one
way. For example, one type
of intelligence, such as how fast an individual can complete a
puzzle that has multiple visual
elements, begins to decline sometime after the age of 30 (as
described in Chapter 9). But
another type of intelligence that relies on rote learning and
experience, such as completing
a crossword puzzle, increases after the age of 30. In this
comparison, overall intelligence is
multidirectional; there are both advances and declines
associated with aging.
Development Is a Balance Between Gains and Losses
Psychologists have expanded the lifespan model to include the
idea that developmental
change involves more than just progress and gains; in addition,
they determine that aging does
not mean declining. Instead, development is a balance between
gains and losses—changes
involve both benefits and costs. For example, a young couple
may have a child (gain) but lose
some of their independence (loss). (Conversely, a couple may
gain financially by choosing to
remain childless but potentially lose some social opportunities.)
Or grandparents, compared
to their abilities during early adulthood, may not be able to play
as actively with their grand-
children (loss), but they may have comparatively more time to
be with grandchildren (gain).
Development Is Plastic
Abilities are not wholly predetermined at birth. While

development is guided in part by biol-
ogy and genetics, the concept of plasticity reminds us that
possible outcomes are wide-ranging
and events do not shape every person the same way. Musical
talents, the regulation of emo-
tions, writing, socialization skills, athleticism, and other
abilities can be fostered and lead to
a wide range of outcomes, depending upon individual
opportunity, support, and motivation.
For example, we do not hear stories of “natural” athletes who
never played on an official court
or field, who never practice, yet still know how to play at a
professional level. But there are
many stories of professional athletes who gain success by
working harder than their peers.
iStock/Thinkstock
The study of lifespan development covers topics
from the prenatal period to death.
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Development Is Historically Embedded
People cannot be separated from their historical and cultural
contexts; this is a concept
referred to as historical embeddedness. Age-related

development is influenced by the kind
of sociocultural conditions that exist in a given historical period
and how these conditions
evolve over time. Because the cultural climate has changed
substantially, today’s young chil-
dren, recent high school graduates, middle-age mothers,
minorities, disabled, and others have
different developmental pathways than generations ago, even
though comparison groups
might be the same age.
Development Is Contextual
Development occurs within certain settings, or contexts. Three
contextual systems work
together to influence development: normative age-graded,
normative history-graded, and
nonnormative influences. Normative age-graded influences
include contextual changes
that are based on biological, psychological, social, or cultural
forces that are shared by most
people of the same age. For instance, age and cultural
expectations influence expectations of
kindergarten, the meaning of high school graduation, the social
excitement of turning 21, the
experience of menopause, and what it means to retire.
Sometimes there are distinct cultural influences that affect the
psychological development of
entire groups of individuals, or cohorts. These normative
history-graded influences may
provide an identity to an entire generation, like Baby Boomers
(those born between 1945
and the early 1960s), Generation X (those born after the Baby
Boomers in the early 1960s and
until the later 1970s), or the Millennial Generation (also called
Generation Y, born between

the late 1970s and 2000). Individuals raised during the Arab
Spring, a famine in Africa, or
under repressive governments also share particular cultural and
historical experiences. Some
cohorts are more or less likely than others to have access to
technology, or experience the
effects of malnutrition, war, disease, or economic downturn.
Every individual also has unique, unpredictable experiences that
affect personal develop-
ment. These are called nonnormative influences because they do
not fit any kind of standard
cohort or standard of development. Examples might include
moving in with grandparents
after a family home is destroyed, unexpectedly becoming a
teenage parent, having a spouse
die at an early age, or winning the lottery. These unique events
have the potential to influence
the trajectory of development.
Development Is Multidisciplinary
There are no universal models that can accurately forecast how
a person will grow. Academic
contributions come from disciplines other than psychology and
development, including
health care, public policy, community outreach, sociology,
anthropology, social work, educa-
tion, neuroscience, and economics, to name a few. In this way,
the study of the lifespan is
multidisciplinary.
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Table 1.1: Guiding principles in the study of lifespan
development
Concepts Principles
Development is lifelong process Every age period is important
in understanding the
nature of development. During all stages of the life-
span, both cumulative and novel events (biological and
experiential) contribute to developmental change.
Development is multidirectional No single direction of change
dominates. At any point
in time, some systems show increases and others show
decreases. Both growth and decline are dynamic and
continuous among multiple dimensions and vary by
categories of behavior.
Development is a balance between gain and loss Throughout the
lifespan, there is continuous interplay
between gain and loss. Development is accompanied
by both growth and decline in any particular stage.
Development is plastic There is considerable individual
capacity for change.
Depending on a person’s life conditions and experi-
ences, development is modified in response to environ-
mental conditions.
Development is historically embedded Lifespan development

can vary substantially depend-
ing on historical and cultural conditions. The path of
development is markedly influenced by sociocultural
conditions that exist in a given historical period and
how they evolve over time.
Development is contextual Development can be understood as
the outcome of the
interactions between biological systems and individual
and historical events. People are exposed to both group
and individual events in a dynamic world. Some influ-
ences are shared with others of the same age; some
influences are specific to a generation; other influences
are uniquely individual.
Development is multidisciplinary Multiple disciplines inform
the study of development,
including psychology, sociology, biology, anthropology,
neuroscience, economics, political science, and others.
Source: Adapted from Baltes, P. B. (1987). Theoretical
propositions of life-span developmental psychology: On the
dynamics
between growth and decline. Developmental Psychology, 23(5),
611–626. doi:10.1037/0012-1649.23.5.611 . 1987 by the
American Psychological Association. Adapted with permission.
Activity
To demonstrate the multidisciplinary study of lifespan
development, go through the college
catalog and identify subject areas outside of psychology that are
important to the study of
lifespan development. Then, identify one lifespan topic within
that discipline.
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Section 1.2 Topical Areas in Lifespan Development
1.2 Topical Areas in Lifespan Development
To make sense of the multidisciplinary nature of lifespan
development, it is important to
organize the different kinds of change into broad categories, or
domains. In this section, we
explore the areas of physical, cognitive, and psychosocial
development, which make up the
three overlapping domains of development. Development is also
commonly organized by
age-related classifications called periods (or stages) of
development, which we will discuss
in section 1.3. Though development rarely occurs in perfectly
isolated categories, classifying
development into domains and periods makes the study of the
lifespan more convenient and
orderly for researchers, teachers, and students.
Physical Development
Physical development is the most
noticeable kind of change. It includes
the biologically driven transitions in
height, weight, muscles, sexual devel-
opment, and perceptual abilities, such
as vision, hearing, and motor skills.
There is also physical development
that is less visible, like changes in

brain mass that are associated with
faster (and then slower) speed in pro-
cessing information. Bone growth and
deterioration, the strengthening and
weakening of heart tissues and other
organs, susceptibility to disease, and
hormonal changes are all part of the
physical domain of development. Even
if such changes are not visible, they
can be behaviorally remarkable. For
instance, hormones are involved in
basic reproduction, first leading to fer-
tility and then later preventing it; age-related diseases of the
brain can cause rapid declines
in physical and intellectual abilities. We understand physical
development by studying such
topics as differences exhibited by preterm infants and active
versus sedentary adults.
More than the other domains, physical development depends on
maturation, or the biologi-
cal unfolding of growth over time. Each individual has a
schedule built into his or her genes
that controls both the timing and degree of physical growth and
decline. Under ordinary con-
ditions, a person cannot be prevented from experiencing a range
of predetermined physical
changes. Although maturation plays an essential role,
environmental forces and individual
choices, like nutrition and exercise, also mediate physical
development.
Stockbyte/Thinkstock
Physical traits like height are easy to notice, but also
changing as a body develops are the brain, bone

mass, and organ tissues.
Section Review
Provide examples that demonstrate each of the guiding
principles of lifespan development.
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Section 1.2 Topical Areas in Lifespan Development
Cognitive Development
A second domain of development consists of mental activities—
what we call cognition. The
study of cognition includes how people think, make decisions,
use language, solve problems,
and pay attention to the stimuli they encounter within the
environment. Cognitive develop-
ment is therefore a broad domain that refers to overall
development of the mind. Cognitive
processes are intimately connected to the use of language and to
gains and losses of intelli-
gence and memory. For example, compared to teenagers, older
adults have a greater store of
information and therefore generally make better judgments
about people, the community,
and the world. However, on average, older adults take longer to
learn novel information, such
as how to use a new technology, and are more likely to forget
newly learned names (Glisky,

2007; Whiting, Chenery, & Copland, 2011). As age-related
diseases affect the brain, a deterio-
rating memory may even compromise self-care functions, like
grooming and toileting
activities.
Like the way in which age affects memory, it is apparent that
the cognitive and physical domains often overlap. Not only do
physical changes lead to cognitive consequences (e.g., reexam-
ining capabilities as the body is declining), but the reverse is
true as well. For example, what depressed individuals think
about themselves and their condition often influences the
degree of malaise. Or consider variability in attention-
deficit/hyperactivity disorder (ADHD),
which is partially explained by expectations in cognitive tasks
and how an observer defines
appropriate behavior. Relatedly, physical exertion is associated
with prevention of depression,
and physical play is often a successful part of treatment for the
cognitive problems associated
with ADHD (Abdollahian, Mokhber, Balaghi, & Moharrari,
2013; Blumenthal, Smith, & Hoff-
man, 2012). Moreover, research tells us that more (physical)
movement in general improves
long-term cognitive function throughout the lifespan (Kirk-
Sanchez & McGough, 2014; Mam-
men & Faulkner, 2013; Timmons et al., 2012).
Like physical development, there is evidence that maturation
plays a significant role in cogni-
tion. For instance, all infants babble (the precursor to using
recognizable words) at about 3
or 4 months of age, no matter what language or culture children
are exposed to. Even deaf
babies babble, so it appears that babbling is programmed into us

as a necessary physical and
cognitive preparation for speech. Psychosocial development,
which we will discuss next, is
influenced by maturation as well.
Psychosocial Development
Beginning with a newborn baby’s temperament, or the early
observable parts of personality,
we know that at least part of personality and emotional
development is inborn. (Tempera-
ment is a concept that will be discussed more in Chapter 11.)
Temperament includes how
infants and toddlers respond to new people (getting excited
versus withdrawing) and the
amount of patience exhibited before getting frustrated. Like
later personality, temperament
characteristics are somewhat consistent during childhood, and
appear to be at least partly
inherited (Caspi, Roberts, & Shiner, 2005). Temperament and
later personality are also linked
Critical Thinking
How might culture affect a person’s
cognitive development?
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Section 1.3 Stages of Development

1.3 Stages of Development
Typically, professionals in the field of development limit their
specializations to the study of
growth, stability, and change that occur in one of the three
domains. There is often further
specialization within a limited age range or stage (see Figure
1.1). For instance, a psychologist
might study the cognitive changes that occur during adolescence
or the changes in personality
evident during late adulthood. But it is difficult to point to any
one aspect of a person’s physi-
cal, cognitive, or psychosocial development and say that we
know exactly why it unfolded in
a particular way. Development is best viewed as a fluid process,
not one of absolutes. Even
the transitions between different stages are sometimes blurry.
For instance, we know what
(physical) puberty and (psychosocial) adolescence look like, but
it is difficult to identify the
exact time either one begins or ends. Other periods in life are
even more difficult to identify.
Is middle age defined best by a number (i.e., chronological
age), by types of relationships, or
by financial security?
to the acquisition of social skills and attitudes, as these factors
are a reflection of how people
act. For example, being “kind” (a personality trait) is usually a
better social strategy than
being “mean.” The degrees to which young children are content,
display negative emotions
(like anger and fear), and focus their attention are all parts of
personality that persist into
adolescence and adulthood (Congdon et al., 2012; Garstein,
Slobodskaya, & Kinsht, 2003).

A natural leader may become impatient when others do not plan
well; a natural introvert is
likely to become frustrated or anxious when there are
inescapable social demands. Therefore,
differences in an individual’s traits and exposure to external
demands will lead to changes in
personality development that will affect outcomes, including
career paths, choices for roman-
tic partners, and living arrangements in old age.
Together, these kinds of personality, emotional, and social
factors make up the domain of
psychosocial development. This concentration includes the way
society and culture shape
people and, in turn, the way people shape society and culture. It
is difficult to separate the
parts of personality and self-image that are strictly individual
“choice” from those that are
the result of social or cultural expectations. As people develop,
their individual experiences
and thoughts incrementally modify their psychosocial
characteristics. As people change,
society changes as well.
Section Review
Provide examples of processes that are representative of the
three domains of development.
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10 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 35 40
45 50 55 60 65 70 70+
Years
Periods in Child Development
Infancy
Early childhood
Middle childhood
Adolescence
Prenatal
Early adulthood
Late
adulthood
Middle adulthood
Emerging
adulthood
We therefore cannot always neatly define a group of individuals
by physical, mental, or psy-
chosocial characteristics. Additionally, any one period of
development is usually dependent
on culture and society. For example, in the agrarian society of
the United States that predated

the Industrial Revolution, life often fell into three stages:
infancy, childhood, and adulthood.
Children played; adults worked and raised families. Today,
many young adults who are attend-
ing school or settling into their careers delay the move to
become independent. This cultural
change has prompted some to embrace the idea of a new stage
called emerging adulthood
that is sandwiched between adolescence and early adulthood
(Arnett, 2000).
Therefore, stages of development should not be thought of as
having absolute beginnings and
endings; they should be thought of as dynamic ideas rather than
limited constructs. Table
1.2 presents the most commonly recognized divisions of
development among academicians.
Notice that other than the prenatal period, the stages overlap,
following the lifespan view that
these are not universally defined ages, but more generally
accepted group patterns. Recall
also that there are intersecting physical, cognitive, and
psychosocial processes. The stages
are organized around chronological age, which, as noted in the
prologue, is only one way to
view development and sometimes lacks meaning. Other forms of
classification correspond to
physical maturation, cognitive change, and psychosocial
experience.
Figure 1.1: Stages of development
Periods of development should not be thought of as having
absolute beginnings and endings. With the
exception of the prenatal period, the periods should be
conceptualized as approximate age ranges.

10 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 35 40
45 50 55 60 65 70 70+
Years
Periods in Child Development
Infancy
Early childhood
Middle childhood
Adolescence
Prenatal
Early adulthood
Late
adulthood
Middle adulthood
Emerging
adulthood
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Table 1.2: Stages of lifespan development and their associated
characteristics
Stage of life and age range Characteristics
The prenatal
period
Conception to
birth
The only period with definitive physical beginning and ending
points; the other age ranges originate from social constructs and
have become useful groupings. The prenatal period lasts from
the
time of conception until birth, whether the infant is born at full
term
or not.
Infancy Birth to age 2 The second year of infancy is often
referred to as toddlerhood.
During infancy, there is tremendous growth in all
developmental
domains. Physically, children begin to move on their own
(“toddle”).
Cognitively, children begin to talk, and there is tremendous
growth in
language comprehension. Psychosocially, children begin to
engage in
independent activities and self-soothing behaviors, and they
begin to
form meaningful relationships.

Early
childhood
About age 2 to
5 or 6
Commonly referred to as the “preschool” years in mainstream
literature and conversation. Body proportions change and
children
use more coordinated movements, partly because of rapid
changes
in neuron (brain) growth. Cognitively, children show great
progress
in the use of words and phrases to form sentences. They also
become
a bit more discerning of friendships as they spend generous
amounts
of time playing if given opportunities to do so. Understanding
what
different playmates can offer leads to advances in psychosocial
development.
Middle
childhood
About age 6
to 11
Generally encompasses the elementary school years. Physical
and
cognitive differences among children become more noticeable.
Children are often acutely aware of the exceptional handball
players,
mathematicians, and readers. Formal education allows children
to
master basic language and computational skills. From a

psychosocial
perspective, social comparisons begin to affect how we feel
about
ourselves. Games and play become more rule oriented as
morality
becomes more sophisticated.
Adolescence About age 11
to 18
Coincides with the dramatic physical changes that mark puberty
and is thought of as a transition to adulthood. Depending on
how the
changes are measured, on average puberty begins at about age
10 for
girls and at about age 12 for boys. It marks the change into an
adult
body and includes sexual maturation. Significant changes in
cogni-
tion, due at least partly to physical maturation of the brain,
begin
to surface. Thought processes become more abstract as
teenagers
think about the future in a way that younger children cannot.
From
a psychosocial standpoint, adolescence lasts until around the
end
of high school. Self-identity becomes prominent as adolescents
look
toward the future and establish goals. Adolescents look to
friends
for emotional support rather than strictly shared activities; they
also begin romantic relationships. Personal and cultural context
often affects much of the transition to adulthood. For instance,
when
adults say that a child has “grown up fast” because of

circumstances
such as war or the death of a parent, the comment usually
alludes to
the psychosocial domain.
(continued)
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Stage of life and age range Characteristics
Emerging
adulthood
About age 19
to mid-20s
Because the transition time between adolescence and adulthood
has
lengthened in recent years, this classification is a newer
addition
to conceptualizations of lifespan stages. The characteristic time
of
exploration is most common in Westernized young adults,
especially
those in the United States who have options due to economic
oppor-

tunity. It is a time of feeling “in-between” adolescence and
adulthood,
as emerging adults explore future goals related to school,
career,
and family without committing to one path. After graduating
from
college, emerging adults may take a “gap year” without specific
goals,
travel before entering graduate school or the workforce, or
remain
dependent on parents for an extended period of time.
Early
adulthood
Early 20s to
mid-40s
Physical capabilities peak during this time, but those abilities
are not
always particularly noticeable. Metabolism slows at the same
time
that opportunities for activity typically decline in Western
countries,
resulting in weight gain. Individuals leave home to get a job,
get mar-
ried, go to college, or join the military as career development,
work,
and identity become interconnected. Intimate, long-term
relation-
ships are established. Showing new kinds of thinking and
learning,
individuals in this stage have not yet reached their peak
cognitive
capabilities.

Middle
adulthood
Mid-40s to
mid-60s
Physical changes that began in the late 20s/early 30s become
notice-
able. Disease becomes more prevalent; reaction time slows;
eyesight
diminishes. Later, height begins to slowly decline and
menopause
occurs among women. Couples remain sexually active;
frequency
of intercourse sometimes increases when menopause signals that
childbearing years have ended. Abilities in knowledge
acquisition
and problem solving peak and most other cognitive abilities
continue
to improve. There are some delays in memory retrieval, but
slower
declines are associated with increased physical fitness. Children
leaving home leads to expanded opportunities; there is high
relative
marital satisfaction. Earning power is often at its peak.
Retirement
planning becomes paramount. There is a focus on appraisal of
worth
and legacy for next generation.
Late adulthood Mid-60s and
beyond
When classifying differences among certain cohorts, this period
is
sometimes sub-divided into the young old, old-old, and the very

old.
Senses and height continue their gradual decline, which become
more noticeable. Bone diseases, cancer, and cardiovascular
diseases
become prevalent. There is considerable variation in cognitive
development. Some people have little degradation, while others
suffer from severe dementia, including Alzheimer’s disease.
Short-
term memory is not as efficient; long-term memory remains
largely
intact. For most, learning remains a vital part of development.
Social
networks are more selective. There is movement into activities
with
more competence and away from those where skills are
diminishing
(like playing golf instead of basketball). Retirement often
affects self-
worth and identity. “Life review” is a distinguishing feature,
which
can lead to despair or a great sense of fulfillment. Role reversal
often
occurs, as adults become dependent on their children.
Table 1.2: Stages of lifespan development and their associated
characteristics (continued)
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13

Regardless of the generalizations identified in Table 1.2,
individual and cultural variations are
the norm. The typical age and course of marriage, work, and
retirement (if they even exist!)
varies considerably throughout the world, even among Western
cultures. Because of these
individual and group differences, we use caution in generalizing
development to describe pat-
terns or traits that occur in “all older people” or “all young
adults.” Because there is so much
variation among how individuals display developmental
changes, there are also areas of study
that are met with frequent debate. We touch upon these issues in
the next section.
Section Review
Describe characteristics that are associated with each stage of
lifespan development.
Psychology in Action: Defining and Studying Biomarkers
New research highlights the difficulty in studying the lifespan
using only chronology to orga-
nize changes. In addition to individual behavior, health status,
including biological aging, can
vary widely at any particular age. While educators often turn to
online longevity calculators
to demonstrate how biological and environmental factors
influence life expectancy, none has
been clinically standardized. To fill the gap, a team of
researchers recently followed 954 men
and women from age 26 to age 38, looking for systematic
biological changes that are indicative
of aging (Belsky et al., 2015). In order to quantify biological

aging, they developed a scientific
measure for longevity that identified 18 risk factors. The factors
were validated as “biomark-
ers” for longevity and included measures such as waist-to-hip
ratio, cholesterol levels, and
immune system and organ functions.
After 12 years of studying how the biomarkers changed over
time, the researchers were able
to determine who aged faster or slower than normal, what they
termed the “pace” of aging.
Most people aged one year for each chronological year, but
some aged as many as three bio-
logical years and others made no increase in biological years at
all. They determined that indi-
viduals indeed age at a different pace, beginning at least as
early as 26. In addition, lifestyle
variables that are typically associated with behavioral changes
are also associated with the
biomarkers. In other words, even before they reached middle
adulthood, those in the study
who were assigned “older” ages due to the study’s biomarkers
were also found to be less phys-
ically active, had relatively greater cognitive decline, reported
worse health, and were judged
to “look” older by an unrelated experimental group.
Similarly, investigators were also able to detect the pace at
which the sample was aging. Rela-
tively young adults who were physically weak, showed
cognitive decline, worse health, and
looked older, were also aging more rapidly, according to the
biomarkers. The authors conclude
that when we study how to extend the lifespan, we are too
focused on the elderly. They sug-
gest that much can be accomplished by also studying those who

have not yet experienced age-
related diseases. We continue to expand the field of lifespan
psychology by studying develop-
ment from multiple perspectives.
mos82599_01_c01_001-026.indd 13 2/11/16 8:10 AM
14
Infancy
Adulthood
Infancy
a) Continuous Development b) Discontinuous Development
Adulthood
Section 1.4 Key Issues in the Study of Lifespan Development
1.4 Key Issues in the Study of Lifespan Development
The field of lifespan development includes issues that also help
to guide and organize
research. These issues direct theories and are encountered
repeatedly throughout the text.
They include discussions about how specific kinds of growth
occur (continuous and discon-
tinuous development), the relative importance of biology and
genetics versus environmental
influences (the issue of nature and nurture), and the value of

studying development as a uni-
versal idea versus one that is culturally specific.
Continuous Versus Discontinuous Development
Debates among developmentalists generally focus on how
change occurs. For example, some
postulate that growth occurs in relatively distinct stages, as
when a child suddenly begins to
walk; others support a view that development is due to gradual
changes. Instead of an abrupt
event, walking is viewed as a result of small, incremental
changes: learning to walk includes
standing, cruising (walking while holding on to tables or other
objects), muscle maturation,
and brain development, among other processes. Children do not
suddenly walk; they gradu-
ally build up to it.
Regardless of where growth originates, when it is viewed as an
incremental, gradual process,
it is called continuous development. Development is viewed as a
continuous process that
evolves from simple thoughts, emotions, and behaviors to ones
that are more complex (Figure
1.2a). Changes are small and cumulative, like those that occur
in numeracy and many kinds of
athletic pursuits. Instead of abrupt change, the mind and body
gradually incorporate new
information and add to the old store.
Figure 1.2: Continuous and discontinuous development
Discontinuous development produces an abrupt, qualitative
change, whereas continuous
development produces a smooth, gradual, quantitative change.

Infancy
Adulthood
Infancy
a) Continuous Development b) Discontinuous Development
Adulthood
mos82599_01_c01_001-026.indd 14 2/11/16 8:10 AM
15
Some kinds of development will not occur until the time is
right: walking, certain kinds of
thinking processes, the start of puberty, and the end of
childbearing (menopause), for exam-
ple. We have specific psychosocial markers as well: beginning
formalized school, high school
or college graduation, marriage, having children, beginning a
career, and retirement. Each of
these events can imprint on development and change.
Furthermore, the distinct qualitative
events are processes that are described as discontinuous
development, because they lack
a smooth progression (Figure 1.2b). Discontinuous change
implies that there is a connec-
tion between biology and an organism’s consequent behaviors

and skills. Changes occur only
when the body or mind has matured in some specific way. That
is, genetic programming dic-
tates when humans are ready to babble, walk, think abstractly,
understand geometry, show
empathy, or form intimate relationships.
Consider video gaming as a possible metaphor for development.
Some video games require
a specific amount of time and experience at one level in order to
advance to a more com-
plex level (discontinuous), but other video games gradually
speed up as players become
more proficient (continuous). Psychologists today generally
agree that human development
includes both continuous and discontinuous changes. Sometimes
the same type of develop-
ment may even include both. For example, children start reading
only when they have begun
to understand sound–symbol relationships, which is a
discontinuous development. But once
that happens, there is a constant upward movement in reading
and comprehension skills—
a continuous trend. We can also compare the discussion on
continuous and discontinuous
development to the growth of a tree. At first glance, it looks as
if a tree has continuous growth.
But on further inspection, it is apparent that there is a seedling
phase, a fruit or seed phase,
and perhaps a dormancy phase. Importantly, conceptualizing
how development occurs often
differentiates a researcher’s field of study. For instance, while
some researchers might study
the continuous patterns of mental health among long-term
couples, others might study the
potential abrupt, discontinuous changes that might occur after

the death of a spouse.
Nature and Nurture
The interacting forces of biology (including heredity) and the
environment is the subject in
lifespan development that probably receives the most deliberate
and intense examination.
Instead of viewing these processes as opposing forces, there is
now a more concerted effort
to understand how nature and nurture interact. Certainly there
are distinctions in thought
and kinds of relationships that can occur only through
maturation and the passage of time.
And environmental forces are essential to growth in this area.
But a person must be exposed
to certain social structures and coached in some kinds of
relationships in order to achieve
potential. Small bits of change are dependent on people’s
interactions with their surround-
ings, including even the unique and changing prenatal
environment.
Behavioral genetics is a relatively new field that studies the role
of genetics in species-
specific behavior. It has gained more widespread attention with
the completed mapping of
the human genome in 2003. The anticipation of its completion
led to a great deal of excite-
ment about the possibility of discovering individual genes that
control behavior. Instead,
breakthroughs in gene mapping have determined that separating
genetic and environmental
influences may not be the right approach. Finding an individual
gene that affects a specific
behavior (like the ability to pay attention) has remained elusive.
Though single genes have

been identified in some conditions, like Huntington’s disease, it
appears that other disorders,
like schizophrenia, have a more complex, polygenetic (“many
genes”) inheritance (Crow,
mos82599_01_c01_001-026.indd 15 2/11/16 8:10 AM
16
2007; Réthelyi, Benkovits, & Bitter, 2013; Walker, 2007). The
influence of environmental fac-
tors on gene expression, along with the complex analysis of
these relationships, is something
scientists are working to understand.
The Interactionist Perspective
Therefore, rather than drawing conclusions based on nature or
nurture, investigating the
roots of the interaction between genes and the environment is
more consistent with contem-
porary perspectives. Scientists no longer believe that either
experiences or biology are singu-
larly responsible for a person’s destiny. For instance, biological
aging is the strongest variable
involved in the prediction of Alzheimer’s disease and other
forms of dementia, but there is
also evidence that diet, physical and cognitive exercises, and
other environmental factors are
influential. Physical activity plays an especially important

protective role against dementia
(Grande et al., 2014; Kirk-Sanchez & McGough, 2014).
One of the clearest examples of how
nature and nurture interact comes from
a study in which researchers bred strains
of rats to show specific traits. One group
was bred with a high level of aggression
and the other with a low level of aggres-
sion. In separate colonies, they behaved
according to their biological predis-
positions. But when they were raised
together, all the rats showed similar lev-
els of aggression (Hood, 2005). Studies
like this suggest that environment has the
potential to override genetic predisposi-
tion. Alternatively, nature often trumps
nurture, as in the case of people born with
physical limitations. Regardless, the inter-
actionist perspective has slowly replaced
the theory that we can trace observable
traits and behaviors to specific genes.
The Epigenetic View
In line with the interactionist perspective, there has been a
renewed emphasis on epigenetics,
the study of the bidirectional influences of genes and
environmental forces. Rather than
depending strictly on maturational schedules, gene expression
may be the result of non-
genetic circumstances, like the fetal environment, where people
grow up (e.g., temperature,
availability of clean water and nutrition), or how encounters
with different people are
resolved. Importantly, epigenetic influences are bidirectional.
That is, environmental events

affect gene expression, and certain environmental experiences
will lead to developmental
changes only if the right combination of genes exists. For
instance, a number of genes appear
to have a cumulative effect on the expression of anti-social or
delinquent behavior. One par-
ticular set of genes appears to moderate the negative effects of
childhood maltreatment; they
decrease the chances of an abused child later becoming a
delinquent. However, the genes
appear to have a protective effect only in the presence of
maltreatment. Among children who
Science Picture Co/Superstock
Contemporary perspectives favor studying how
genes and the environment interact with each other
to express certain traits.
mos82599_01_c01_001-026.indd 16 2/11/16 8:11 AM
17
Section 1.5 Contextual Factors in Lifespan Development
1.5 Contextual Factors in Lifespan Development
Related to the debate over how nature and nurture interact is the
growing discussion about
whether development should be viewed as mostly universal or
more dependent on individual
circumstances (Shweder et al., 2006). In the modern view,

developmental sequences vary as
a consequence of individual and environmental contexts,
especially unique cultural and gen-
erational experiences. For instance, acting more “man-like” or
“woman-like” is viewed differ-
ently depending on whether a person is male or female.
Worldwide there is broad contextual
diversity. Small differences in infant care and parenting have
been found to prescribe widely
different developmental pathways (Keller, 2013). The Arab
Spring and other social changes
may have opened physical, psychosocial, or learning
opportunities that did not exist in pre-
vious years. The expression of one’s sexuality has become less
stressful in many U.S. cities,
Europe, and elsewhere, but remains difficult in other contexts.
Because of its size and unique diversity, the United States
provides dynamic examples of the
importance of contextual factors. There are cultural and
generational differences in how chil-
dren should behave and be disciplined, attitudes about
education, the importance of mar-
riage and children, the meaning of work, and caring for elderly
family members. Contextual
issues are often noticed during adolescence, when psychosocial
development may be affected
by choices in music and friendships, which in turn may affect
academics, cognitive develop-
ment, and risk-taking behaviors. The way in which these
seemingly small issues are viewed
both individually and culturally may in fact lead teenagers to
entirely different adult lives.
Peer groups, ethnicity and culture, and financial and educational
status also affect a person’s
developmental trajectory. Rather than approaching development

as a universal theme, the
extent to which behavior is viewed in contexts is an important
area of study.
Sex and Gender
In psychology, sex and gender are separate concepts. Sex refers
to a person’s biology: whether
someone is born male or female. It is rare (but still possible)
that someone cannot be defini-
tively identified as either male or female at birth; this occurs in
about 1 out of 5,500 births
are not maltreated, the set of genes do not have a behavioral
expression (Caspi et al., 2002).
Similar epigenetic processes are thought to occur in the onset of
diabetes. Because of genetic
inheritance, it appears that some people are at higher risk for
the expression of “diabetes”
genes; certain behaviors (e.g., overeating and obesity) may turn
disease genes either on or off,
but genes alone do not appear to cause either obesity or
diabetes. In the absence of the envi-
ronmental catalyst, the disease does not occur (Gottlieb, 2007;
Stankov, Benc, & Draskovic,
2013).
Section Review
Explain how the key issues in development affect how those in
the field view growth, stability,
and change.
mos82599_01_c01_001-026.indd 17 2/11/16 8:11 AM

18
(Sax, 2002). On the other hand, gender is more of a social
construct or a custom that pertains
to a specific group. It refers to how a person behaves or
identifies him- or herself, partly
in comparison to societal norms. Some people act more “male-
like” while others act more
“female-like.” In contrast to sex, which is usually either one or
the other, there is a broad con-
tinuum of gender-typed behavior.
Sex
It should not be surprising that simply being male or female has
a profound effect on devel-
opment. For instance, there are differences in the symptoms and
course of osteoarthritis, an
inflammation of the joints that affects nearly everyone by age
70 or so. Although it affects men
and women equally before age 55, it is more common in women
after age 55. The effect on
mobility affects physical and social opportunities, which may in
turn affect cognitive develop-
ment (van Dijk, Veenhof, Lankhorst, van den Ende, & Dekker,
2011).
Biological sex has an effect on a variety of other diseases too.
Certain cancer rates and heart
disease are affected by estrogen, a hormone that is found in
much larger concentrations in
women than in men (Fuhrman et al., 2012). Although behavioral
differences may be a con-

tributing factor, being male is a higher risk factor for lung and
colorectal cancer (CDC, 2014d,
2014f ). Furthermore, compared to women, men are more likely
to drive recklessly and com-
mit suicide; women are more likely to be overweight (but
equally likely to be obese) and
more likely to attempt suicide (CDC, 2014d; Flegal, Carroll,
Kit, & Ogden, 2012; Taubman &
Findler, 2003). However, determining which of these
differences are due to nature and which
to nurture is analogous to asking whether each were the result
of sex or gender. For example,
is more reckless driving associated with the greater activity
level inherent in males, or is it a
learned behavior associated with “masculinity”?
Gender
Because gender is a function of social and cultural factors, it is
related to the extent to which
people embrace roles. Even young infants look to adults to
provide signals about how to behave
in ambiguous situations. In addition to using explicit language,
adults use smiles, frowns, and
other nonverbal gestures to provide powerful feedback on how
to behave (Stenberg, 2009). As
young children discover the meaning of sex differences, they
begin to process the expectations
and requirements related to their gender. These expectations
include how to dress, what toys
to play with, which games and activities to engage in, and
methods of interacting with others.
Throughout later childhood and adulthood, societal
expectations are learned and integrated into personality
along with moral and ethical codes, sexual behavior, and
sexual identity. Notably, gender contributes to choices in

education, family responsibilities, and employment. For
example, perceived gender roles account for the fact that
there are more male dentists in the United States than
there are female, and more female dental assistants than
there are male (BLS, 2014a). But in the United States, the
trends in education, employment, and family responsi-
bilities have changed considerably over the last several
decades, demonstrating the cultural component of gender.
Critical Thinking
Imagine a woman in a lesbian relation-
ship who transitions to a man and is now
known as Chaz. Chaz wants to remain
with the woman in his previous relation-
ship. How would you now identify Chaz’s
sexual orientation (is he gay or straight?),
sex, and gender?
mos82599_01_c01_001-026.indd 18 2/11/16 8:11 AM
19
The media play a strong role in the construction of gender roles.
Both children’s television
programming and shows that are geared toward adults provide
constant models of scien-
tists, investigators, and especially mothers and fathers.
Television and other media exert their

influence by reinforcing traditional roles and by providing role
models for alternative behav-
iors. But media portrayals have also changed considerably over
the last 50 years since the
Father Knows Best mentality of the 1950s and 60s. In the
appropriately titled sitcom Modern
Family, there are some characters who fit the mold of a
traditional family, with a husband,
wife, and three children. However, fathers are shown taking on
parenting roles that were once
the exclusive domain of women. There is also a blended family
and a married gay couple who
have adopted a child together.
Peer Groups
Social groups not only teach individu-
als about expected gender roles and
appropriate behavior, they also pro-
vide a sense of belongingness, which
helps build a sense of identity. In one
example, older adolescents who were
identified as nonconforming with
indistinct social roles were later found
to have higher rates of depression
and lower ratings of life satisfaction
(Toomey, Ryan, Diaz, Card, & Russell,
2010). On the other hand, learning
social competence in peer groups leads
to a strong sense of identity and has a
positive effect on well-being (Larson,
Whitton, Hauser, & Allen, 2007; Zhou
& Fang, 2015).
Peers and social status during child-
hood can predict a number of behav-
iors in adulthood. The influence of peers on antisocial behavior

during young adulthood can
be traced back as early as fourth grade (Nelson & Dishion,
2004). Gender roles and peers
strongly influence drinking behavior among college students
(e.g., Barnett et al., 2014; Bot,
Engels, & Knibbe, 2005). Of course, peer groups influence
initial sexual attitudes, but they
can also reverse mindsets, even when they are entrenched
(Kaponda et al., 2011). One way or
another, peer groups influence the way that people see
themselves, from childhood onward.
Race, Ethnicity, and Culture
Traditionally, differences between race and ethnicity have been
considered analogous to sex
and gender, and nature and nurture. Race usually refers to
observable characteristics that
societies have traditionally used to distinguish one group from
another, like skin color and
hair texture. However, it is easily argued that the concept of
race is not a natural scientific
division. That is, there are no distinct group differences in
genetic makeup among humans
because we all belong to the same taxonomic subspecies (homo
sapiens sapiens). Accordingly,
iStock/Thinkstock
Peer groups can have a profound impact on
individuals’ senses of belonging and how they see
themselves.
mos82599_01_c01_001-026.indd 19 2/11/16 8:11 AM

20
absolute definitions of race vary widely in scientific literature
(Ferguson, Kerr, & Rynn, 2011;
Lieberman et al., 2004).
It is perhaps more useful to look at race as a part of ethnicity. A
person’s ethnicity includes
characteristics that are immersed in culture, including
differences in nationality, language,
religion, values, and beliefs. As a function of historical and
personal circumstances, including
observable characteristics like skin color, ethnicity contributes
to individual and group identity.
Ethnicity and culture can have a profound effect on
development. Culture contributes to sta-
tus, both individually and collectively, which in turn affects
health, as well as educational and
social opportunities. These differences may be inadvertently
institutionalized or the result of
historical legacy, as in the United States. Other times there are
direct efforts to create differ-
ences, as in countries that impose legal restrictions on literacy
and other opportunities for
women. Culture shapes a person’s view of the world, impacts
goals in adulthood, and pre-
scribes how people are regarded in old age. Simply identifying
with one group or another can
have a powerful psychological influence on development.

Culture and ethnicity are at times used to explain group
differences in development, but there
are often confounding variables. For example, evidence
indicates there is a higher prevalence
of dementia among blacks than whites, including regional
(subcultural) differences, as if
dementia is caused by something specifically found in the local
community (Gillum & Obis-
esan, 2011). On further investigation, it appears that the
variance in dementia between racial
groups is more likely due to the timing of diagnoses, quality of
patient care, and prior medical
history (Husaini et al., 2003; Sengupta, Decker, Harris-Kojetin,
& Jones, 2012). That is, differ-
ences identified in dementia by race may be due to the way
blacks and whites are diagnosed
and treated rather than biology. It is difficult to know the
precise mechanisms that lead to
disparities in health outcomes for different cultural and
economic groups.
Socioeconomic Status
Dementia is one example of how factors related to economics
and acquired knowledge can
affect development. Together, income, education, occupation,
and the social and financial
opportunities that they represent contribute to socioeconomic
status (SES). In research,
families are usually categorized into high-, middle-, and low-
SES groups. Consider the poten-
tial implications of nature, nurture, and context on issues like
education and health care. It
is well known that individuals from low-SES families have
poorer health and do poorer in
school when compared to children from high-SES families. This
relationship contributes to

a lifelong disadvantage in career opportunity. But, of course,
not all low-SES children fare
poorly later, which presents at least two important questions:
(1) What factors contribute to
the poor outcomes among low-SES children, and (2) What
factors contribute to the success
that so many low-SES children do experience?
Among social variables, SES often has a stronger predictive
value than race or ethnicity. For
instance, poorly educated, impoverished (low-SES) groups wait
longer than others before
seeking medical treatment, regardless of race. People with
comparatively more education
and income are more likely to have both the means and the
knowledge to seek early treat-
ment. SES affects choices in grade schools and colleges, access
to professional connections,
and knowledge about healthy personal habits. The rate of
smoking, for instance, decreases
consistently as a function of educational level (see Table 1.3).
mos82599_01_c01_001-026.indd 20 2/11/16 8:11 AM
21
Table 1.3: Cigarette smoking by level of education
Percentage of current cigarette smokers aged ≥25 years by
education level.

Education level* 2013
Men (% of 15,440) Women (% of 19,117) Total (% of 34,557)
0–12 years (no diploma) 30.6 18.0 24.2
High school diploma 26.7 17.6 22.0
Some college, no diploma 22.4 19.5 20.9
Associate degree 17.8 17.7 17.8
Undergraduate degree 10.4 7.9 9.1
Graduate degree 5.7 5.5 5.6
* Among persons aged ≥25 years.
Source: Adapted from Auld, a. F., Agolory, S. G., Shiraishi, R.
W., Wabwire-Mangen, F., Kwesigabo, G., . . . Ellerbrock, T. V.
(2014).
Current cigarette smoking among adults—United States, 2005–
2013. Morbidity and Mortality Weekly Report, 63(47), 1108–
1112.
The SES of a person or family often dictates what opportunities
are available, as the social
environment often places barriers—or offers advantages—to
optimal development. SES is
related to whether a person has a more or less physically taxing
job. Some families need to
depend on a public computer and public transportation while
others have more convenient
and less time-consuming access to resources. Lower income
neighborhoods usually have

fewer grocery stores that carry fresh produce; wealthier
neighborhoods usually have safer
recreational facilities. An environment that has richer material
and educational assets usually
results in children who are advantaged physically (e.g., better
nutrition, more varied recre-
ation, better access to quality healthcare), cognitively (e.g.,
better technology and educational
opportunities) and psychosocially (e.g., a safer environment and
access to friends), leading to
better outcomes throughout the lifespan. Understanding these
issues can lead to public policy
changes and contribute to intervention strategies.
Research consistently shows that blacks, Hispanics, and those in
lower economic classes have
more chronic diseases, poorer health, and a lower life
expectancy than those who are in mid-
dle and upper income brackets. However, if blacks and
Hispanics are divided by their income
brackets, the racial differences mostly disappear. Although it
appears that simply being
minority can be a form of social disadvantage, income level has
remained the most important
factor associated with optimal development, not race (Barr,
2014; Guralnik, Land, Blazer, Fil-
lenbaum, & Branch 1993). Stated another way, within-group
differences among races and
ethnicities in the United States are much larger than between-
group differences. Wealthy
people have similar health advantages and outcomes regardless
of race or ethnicity.
Section Review
Find specific examples of contextual factors that have had an
influence on your own

development.
mos82599_01_c01_001-026.indd 21 2/11/16 8:11 AM
22
Summary & Resources
Summary & Resources
Chapter Summary
Contemporary psychologists rely on seven guiding principles, as
described by Paul Baltes.
Development is organized into overlapping domains and broadly
defined stages, and there
are key issues that often determine a person’s research focus.
The issues of nature and nur-
ture, for example, provide an especially rich source of
discussion in the field.
There are several contextual factors that will remain a common
theme throughout this text.
Factors like gender and socioeconomic status can often be used
to predict developmental
trajectories. Developmentalists work to understand how these
variables affect development
so that we can devise intervention strategies that will improve
developmental outcomes.
Moving forward, organizing development in these ways allows
us to differentiate psycholog-
ical theories of development and provides the foundation for

scientific endeavor, two topics
which will be the focus of the next chapter.
Summary of Key Concepts
The Lifespan Perspective
• Lifespan development, or developmental psychology, is the
scientific study of
changes in behavior, thoughts, and emotions from birth through
the end of life—
from “the womb to the tomb.”
• Contemporary psychologists rely on seven guiding principles
as described by Paul
Baltes: development is lifelong, multidirectional, a balance
between gain and loss,
plastic, historically embedded, contextual, and
multidisciplinary.
Topical Areas of Lifespan Development
• Though there is considerable overlap, the study of
development is usually organized
into physical, cognitive, and psychosocial domains.
• Physical development refers to body changes and is the most
noticeable develop-
mental domain. It includes genetically prescribed changes in
height, weight, muscles,
and sexual development. We also study changes in brain size
and mass; perceptual
abilities, such as vision and hearing; and motor skills. Physical
development depends
largely on maturation: the biological unfolding of growth.
• Cognitive development is a broad domain that refers to

development of the mind,
including the gains and losses of intelligence and memory. We
want to understand
how people think, make decisions, use language, solve
problems, and pay attention
to the stimuli they encounter within the environment.
• Psychosocial development consists of personality, emotional,
and social factors.
This domain includes a focus on the way society and culture
shape people and the
reverse.
Stages of Development
• Chronological age ranges should be thought of as a guide to
development, not abso-
lute markers.
• The nine periods of the lifespan referred to in this text are
standardized for
convenience. The most commonly recognized stages are the
prenatal period,
infancy (including toddlerhood), early childhood (preschool),
middle childhood,
mos82599_01_c01_001-026.indd 22 2/11/16 8:11 AM
23
Summary & Resources

adolescence, emerging adulthood, early adulthood, middle
adulthood, and later
adulthood.
• Only the prenatal period, which is determined by biology, is
fixed. Other develop-
mental periods are often socially defined and overlap.
• Emerging adulthood is not universally recognized and is a
newer concept that
applies mostly to wealthier individuals in industrialized
countries.
• Later adulthood is sometimes divided into the young old, old-
old, and very old.
Key Issues in the Study of Lifespan Development
• Most psychologists today believe that human development
includes both continu-
ous and discontinuous changes. Continuous development is
defined as cumulative,
incremental growth; discontinuous development is more stage-
like.
• The study of nature and nurture generally focuses on their
complementary, relative
influences. Scientists understand that maturational and
environmental influences
are both involved in development and cannot be easily studied
in isolation.
• Epigenetics focuses on how gene expression changes as a
function of environment
circumstances.

Contextual Factors in Lifespan Development
• Development is seen as a fluid, individual process that varies
according to context,
especially unique cultural and generational experiences. These
factors include sex,
gender, peer groups, race, ethnicity, culture, and socioeconomic
status.
• Sex refers to a person’s biological makeup, whereas gender
refers to behaviors that
correspond with social expectations. Though there is often
considerable overlap, the
two factors have a strong individual influence on development.
• Peer groups can have a strong influence on a person’s
developmental trajectory.
They teach us about expected gender roles and behavior,
provide a sense of belong-
ingness, and help build a sense of identity.
• A person’s ethnicity includes characteristics that are immersed
in culture, including
differences in nationality, language, religion, values, and
beliefs. Race and ethnicity
are embedded in historical and personal circumstances, and as
such contribute to
individual and group identity.
• Socioeconomic status and the social and financial
opportunities they represent have
a stronger predictive role than race or ethnicity on health and
development.
Critical Thinking and Discussion Questions

1. Baby boomers and other groups are identified in this chapter
as normative history-
graded influences. Recently, observations and research have led
social psychologist
Jean Twenge to characterize much of the millennial generation
as “Generation Me”
and “The Entitlement Generation.” Based on what you have
learned and can discover
through research, how do Twenge’s conceptualizations compare
to other history-
graded influences mentioned in the text?
2. Table 1.3 in this chapter shows that the prevalence of
smoking is associated with
level of education. Among adults with a GED, however, the
prevalence of smokers is
41% (CDC, 2014e). As a preview to the research methods
presented in Chapter 2,
discuss some reasons why this figure seems out of place.
mos82599_01_c01_001-026.indd 23 2/11/16 8:11 AM
24
Summary & Resources
3. Identify areas of development where the three domains
strongly overlap. Identify
one area in each domain where there appears to be minimal
overlap.

4. Which of the guiding propositions of lifespan development do
you think best
explains your personal developmental experience? In what ways
does this same
approach also fail to explain your experience?
5. Provide one physical, one cognitive, and one psychosocial
example of how both
nature and nurture have contributed to your own development.
6. Explain how contextual factors have impacted your
development.
Additional Resources
Web Resources
• American Psychological Association (APA)
http://www.apa.org/
• APA Division 7, Developmental Psychology
http://www.apadivisions.org/division-7/index.aspx
• Dan Buettner’s Blue Zone, longevity research
https://www.bluezones.com/about-blue-zones/
• Time magazine’s “Generation Me and the Millennials” by Joel
Stein
http://time.com/247/millennials-the-me-me-me-generation/
Further Research
• Arnett, J. J. (2000). Emerging adulthood: A theory of
development from the late teens
through the twenties. American Psychologist, 55(5), 469–480.
Retrieved from http://

jeffreyarnett.com
• Belsky, D. W., Caspi, A., Jouts, R., Cohen, H. J., Corcoran, D.
L., Danese, A., . . . Moffitt,
T. E. (2015). Quantification of biological aging in young adults.
Proceedings of the
National Academy of Sciences of the United States of America.
Advance online publica-
tion. doi: 10.1073/pnas.1506264112 Retrieved from
http://www.pnas.org/content
/112/30/E4104.full
Key Terms
behavioral genetics The field of study that
examines the role of genetics in species-
specific behavior.
cognition Mental actions or processes,
including thought, memory, and language.
cognitive development The domain
of development that includes the study
of changes in thinking, language, and
intelligence.
continuous development The perspective
that views development as a smooth, incre-
mental process.
discontinuous development Distinct,
stage-like developmental events that lack a
smooth progression.
domains of development Three over-
lapping categories of developmental

changes, including physical, cognitive, and
psychosocial.
epigenetics The study of gene expres-
sion that arises due to contact with the
environment.
ethnicity A person’s characteristics that are
immersed in culture, nationality, language,
religion, values, and beliefs.
mos82599_01_c01_001-026.indd 24 2/11/16 8:11 AM
http://www.apa.org/
http://www.apadivisions.org/division-7/index.aspx
https://www.bluezones.com/about-blue-zones/
http://time.com/247/millennials-the-me-me-me-generation/
http://jeffreyarnett.com
http://jeffreyarnett.com
http://www.pnas.org/content/112/30/E4104.full
http://www.pnas.org/content/112/30/E4104.full
25
Summary & Resources
gender Refers to how a person behaves
according to norms for maleness/masculin-
ity and femaleness/femininity.
historical embeddedness Proposition that
says that age-related development is influ-

enced by sociocultural conditions existing
in a given historical period and how these
conditions evolve over time.
lifespan development The study of human
growth, stability, and change from concep-
tion until death.
maturation The biological unfolding of
growth over time.
multidisciplinary Tying together ideas
from psychology, biology, sociology, anthro-
pology, and other sciences.
nature and nurture The study of the rela-
tive strength of both biological and environ-
mental influences on development.
nonnormative influences Sources of
developmental change that are unique to an
individual.
normative age-graded influences Sources
of developmental change based on biologi-
cal, psychological, social, or cultural forces
that are shared by most people of the same
age.
normative history-graded influences
Sources of developmental change that are
associated with an entire group.
physical development The biologically
driven changes evident with changes in
height, weight, muscles, sexual development,

brain mass, perceptual abilities (such as
vision and hearing), and motor skills.
psychosocial development Changes that
occur in identity development, personality,
emotions, and socialization. Includes the
way society and culture shape people and
the way people shape society and culture.
race Usually refers to observable charac-
teristics that have traditionally been used to
distinguish one group from another, like skin
color and hair texture.
sex Refers to a person being born with
specific chromosomes, genitalia, and other
physical characteristics that are categorized
as male or female.
socioeconomic status (SES) The status
and opportunities that are associated with
income, education, and occupation.
mos82599_01_c01_001-026.indd 25 2/11/16 8:11 AM
mos82599_01_c01_001-026.indd 26 2/11/16 8:11 AM

SEC 10k assignment 1
Genevieve Strobel
Why I Chose Starbucks
To begin with, I chose Starbucks because I am a customer of
theirs. I am impressed with their products and service. I have
always received excellent service from every barista. I would
not mind being a barista there myself. I have heard that
Starbucks is a wonderful company to work for from several of
their employees. I used to go to a weekly meet up at a
Starbucks, the meet up was for mothers and babies. The staff
was always very friendly and accommodating to us. I enjoy
Starbucks coffee, cups and mugs. I purchase Starbucks coffee to
use in my home as well. Also in my home we use Starbucks
mugs and to go thermal containers on almost a daily basis. My
mother and I would go to our local Starbucks for a coffee and a
cake, this was a special treat for me. When I was deployed we
used to receive care packages of Starbucks coffee, that we
would brew ourselves. This helped power me through long work
hours and sometimes over night shifts. It was also a reminder
that people back home care. I can also remember the moment I
got off the plane, from my deployment and into the airport
terminal and the next turn was a man playing somewhere over
the rainbow, and there was Starbucks in all its glory. I was
greeted so friendly and got myself a refreshing drink. It was a
welcome home present and literally my first taste of America
again. Having this luxury coffee holds a fold place in my heart
with many warm memories. I have a drink I order for every
season. I enjoy the products and I enjoy the excellent customer
service. I also know that Starbucks invests in their employees,
by paying for their first four-year degree. To me this speaks

volumes about the company. They want their employees to grow
and better themselves, even if it means they move on from the
company. This is an excellent example of leadership. To sum
up, I chose Starbucks because I truly enjoy their products as
well as their service, they are a company that has a sentimental
value to my life, and I believe they are a great example of
leadership in the corporate world.
Company Profile
Starbucks Corporation is the roaster, marketer and retailer of
specialty coffee in the world. The industry classification for the
company is restaurants, specialty eateries, . The primary
products by Starbucks Corp are specialty coffee. They sell a
variety of coffee and tea products. Starbucks sells goods and
services under brands including Teavana, Tazo and Seattle’s
Best Coffee. (Starbucks Corp. 2017) Its stores offer coffee and
tea beverages, packaged roasted whole bean and ground coffees,
single-serve and ready-to-drink coffee and tea products, juices,
and bottled water; an assortment of fresh food and snack
offerings; and various food products, such as pastries, breakfast
sandwiches, and lunch items, as well as beverage-making
equipment and accessories. In addition to the company also
licenses its trademarks through licensed stores, and grocery and
national foodservice accounts. It offers its products under the
Starbucks, Teavana, Tazo, Seattle’s Best Coffee, Evolution
Fresh, La Boulange, Ethos, Frappuccino, Starbucks Doubleshot,
Starbucks Refreshers, and Starbucks VIA brand names.
According to Starbucks.com, the company has more than 30
blends of premium coffee. They have hand crafted beverages
ranging from fresh brewed coffee, either hot or iced, to their
Frappuccino® coffee and non-coffee blended beverages,
Starbucks Refreshers® beverages, smoothies and teas. They
offer merchandise such as coffee and tea-brewing equipment,
Verismo® System by Starbucks, mugs and accessories,
packaged goods, books and gifts. In addition to their beverages

hey also sell fresh food. This includes baked pastries,
sandwiches, salads, oatmeal, yogurt parfaits and fruit cups.
Lastly, Starbucks also has ready to go drinks, these ae sold in
their stores and grocery stores. The list of these ready to drink
beverages includes Starbucks® bottled Frappuccino® coffee
drinks, Starbucks Discoveries® chilled cup coffees, Starbucks
Discoveries Iced Café Favorites®, Starbucks Iced Coffee,
Starbucks Doubleshot® espresso drinks, Starbucks Doubleshot®
Energy Coffee drinks; Starbucks Refreshers® beverages,
Evolution Fresh™ bottled juices, Tazo® bottled iced and juiced
teas.
According to Starbucks.com, company operates globally, the
company has more than 24,000 stores in 70 countries, believing
that their great coffee and genuine service transcends language.
The company operates in four segments: Americas; China/Asia
Pacific; Europe, Middle East, and Africa. Starbucks CEO,
president and director is Mr. Kevin R. Johnson. (SBUX Profile,
2017) Starbucks is currently number 131 in the current
Fortune 500 List.
Starbucks Corporation’s current stock price is $54.88 per share,
as of close 4:00pm on 27 October, 2017. The stock price per
share was previously slightly higher at $54.91 before the slight
drop before close. Earlier this summer the stock price was even
up to $63.88 per share. (SBUX, 2017)
Recent Events
Starbucks closes online store.
Very recently, just over a month ago actually, Starbucks closed
their online store. They did this to focus on more in person
experience. This is a bold move considering the day and age we
live in, where most other companies are moving towards an
online based ecommerce. Previously before the store closed
online you could purchase, mugs, tumblers, espresso machines
and other accessories online. Starbucks stated that customers
could still purchase these items, just in person at their local

stores now. They also went on to claim that they guarantee the
availability of these products in stores. The company
spokeswoman, Maggie Jantzen, said that this decision was a
part of simplifying Starbucks sales channels. “We’re continuing
to invest in amplifying Starbucks as a must-visit destination and
are looking across our portfolio to make disciplined, thoughtful
decisions,” Ms. Jantzen said. According to Starbucks chief
executive, Kevin Johnson, Starbucks’ most recent call about a
“seismic shift” in retailing. To survive, he said, merchants need
to create unique and immersive in-store experiences. Howard
Schultz, the chairman of Starbucks, said “Your product and
services, for the most part, cannot be available online and
cannot be available on Amazon.” Included in this, Starbucks
made their syrups unavailable for purchase. There were not sold
in stores, but customers could previously purchase them online.
Now to get your favorite specialty drink, customers have to go
to the store themselves. Other items such as coffee can still be
purchased from grocery stores. (Cowley, 2017)
Starbucks doubles down in China.
In a time when many America businesses are moving away
from China, Starbucks has been opening more than 500 stores
there a year. In Shanghai alone, there are already 600 stores.
Starbucks chairman, Howard Schultz says, when people ask me
how much can you really grow in China, I don’t really know
what the answer is, but I do believe it’s going to be larger than
the U.S.” Starbucks has a 20-year history doing business in
China. The company invests in China, pays higher wages, and
offers ownership benefit to Chinese workers. (Sorkin, 2017)
"Continued focus on execution against our strategic priorities
enabled us to gain share and positions us well for the future,"
says Mr. Kevin Johnson, CEO. One of the strategic priorities is
the closure of all of its 379 Teavana retail stores, which the
company said have been consistently underperforming. Earlier
this year, Starbucks announced a $1.3 billion buyout of joint
venture partners' 50 percent ownership stake of Chinas

Shanghai Starbucks Coffee Corp. The buyout, the largest
acquisition in company history, gives Starbucks 100 percent
ownership of 1,300 Starbucks stores throughout China.
(Duggan, 2017)
Starbucks has unequal family leave. Investors press for change
on unequal family leave.
Currently at Starbucks, maternity leave all depends on
whether the employee is a barista or a boss. There are different
rules for corporate office employees and those who work in the
stores. The first article on the issue gives real world insight, by
telling the story of one of the baristas who is soon to have a
baby. The barista herself, will get 6 weeks of partial leave at
partial pay after her child is born. However, employees at
Starbucks Seattle headquarters, which happens to have only
been an hour from the baristas residence, along with other
corporate offices receive 16 weeks of fully paid leave after
delivering their children. Fathers and adoptive parents receive
12 weeks. This policy went into effect the beginning of this
month, 1 October. The problem is that the new policy did not
increase the length of leave for in store employees, not for those
giving birth, adopting or fathers alike. Starbucks baristas and
store managers felt they were being treated differently.
Starbucks has argued that their parental leave policy is
“exceptional within the retail industry”. While this is true
compared to others brands, employees want the gab in leave
closed. At Starbucks their employees are considered their
“partners”. As Howard Schultz said “Not every decision in
business is an economic one, We’re also in business to create
value for our people. And I want to share with you, after 25
years of being a public company, I think what we’re most proud
of is the unbelievable commitment and conviction that we’ve
had to our partners and their families.” The rest of their partners
and families want to see this in action and receive the same
amount of parental leave and pay while on leave. (Redden,
2017)

The next article related to this policy covers investors pressing
the company for change on the policy. Shareholders in a
meeting in Marched, called for the company to change. It seems
to be the first of its kind, where shareholders call for a company
to rethink its policy on paid family leave. In this article it also
adds that fathers whose partners give birth get no leave at all.
(Redden, 2017)
The Securities and Exchange Commission (SEC)
When the stock market crashed in 1929, the public’s
confidence in the U.S. markets did too. Congress then held
hearings to identify the problems and solutions. This prompted
the formation of SEC. In the peak year of the depression
congress to pass the Securities Act of 1933. That law, along
with the Securities Exchange Act of 1934, which created the
SEC, was designed to restore investor confidence in our capital
markets by providing investors and the markets with more
reliable information and clear rules of honest dealing. The SEC
primary role is the disclosure of important market-related
information, maintaining fair dealing, and protecting against
fraud. (SEC, 2013) (The Role of SEC, 2017) SEC regulates the
stock market and influences GAAP. (General Accepted
Accounting Principles) A 10K report is an annual report that
gives a comprehensive summary of a company’s financial
performance. Any company with more than $10 million in assets
and a class equality security that is held by more than 2000
owners must file annual and other periodic reports, regardless
of whether the securities are publicly or privately traded.
References
Cowley, Stacey. “Starbucks Closes Online Store to Focus on In-
Person Experience.” The New York Times, The New York
Times , 1 Oct. 2017,
www.nytimes.com/2017/10/01/business/starbucks-online

store.html?rref=collection%2Ftimestopic%2FStarbucks%2
0Corporation.
Duggan, Wayne. “Starbucks Dumps Teavana, Doubles Down in
Chin.” U.S. News , U.S. News , 28 July 2017,
money.usnews.com/investing/stock-market-news/articles/2017-
07 28/starbucks-corporation-sbux-dumps-teavana-doubles-
down-in-china.
“International Stores.” Starbucks Coffee Company, 29 Oct.
2017, www.starbucks.com/business/international-stores.
Redden, Molly. “At Starbucks, Your Maternity Leave Depends
on Whether You're a Barista or a Boss.” The Guardian,
Guardian News and Media, 30 Aug. 2017,
www.theguardian.com/us news/2017/aug/30/starbucks-
coffee-paid-parental-leave.
Redden, Molly. “Starbucks Investors Press Coffee Chain for
Change on Unequal Family Leave.” The Guardian, Guardian
News and Media, 2 Oct. 2017,
www.theguardian.com/business/2017/oct/02/starbucks-
investors-coffee-family-parental
birth-leave.
“SBUX Profile | Starbucks Corporation Stock.” Yahoo! Finance,
Yahoo!, 29 Oct. 2017,
finance.yahoo.com/quote/sbux/profile?ltr=1.
“SBUX : Summary for Starbucks Corporation.” Yahoo! Finance,
Yahoo!, 29 Oct. 2017, finance.yahoo.com/quote/SBUX/.
Sorkin, Andrew Ross. “While Other U.S. Companies Flee
China, Starbucks Doubles Down.”The New York Times, The
New York Times, 31 July 2017,
www.nytimes.com/2017/07/31/business/dealbook/sorkin-

china
starbucks.html?rref=collection%2Ftimestopic%2FStarbuck
s+Corporation.
“Starbucks Corp.” SBUX: Starbucks Corp Company Profile,
Morning Star , 27 Oct. 2017,
financials.morningstar.com/company-
profile/c.action?t=SBUX.
“Starbucks Company Profile.” Starbucks Coffee Company, 29
Oct. 2017, www.starbucks.com/about-us/company-
information/starbucks-company-profile.
“The Role of the SEC.” Investor.gov, 29 Oct. 2017,
www.investor.gov/introduction investing/basics/role-sec.
“What We Do.” SEC Emblem, 10 June 2013,
www.sec.gov/Article/whatwedo.html.
All accounting instructions
Week 2/SEC 10K Assignment The Balance Sheet and Credit
Risk Analysis
Credit risk encompasses a company’s ability to meet its
obligations as they arise as well as a long-run ability to pay its
debt. A company may be profitable but yet face bankruptcy if it
is unable to pay its liabilities on time. Companies with large
amounts of debt have greater credit risk because of an increased
vulnerability to increases in interest rates and declines in
profitability.
In this assignment, you will answer questions about your
company’s classified balance sheet and conduct a ratio analysis
to evaluate the company’s liquidity and solvency. A financial

ratio expresses the relationship of one amount to another and
enables analysts to quickly assess a company’s financial
strength, profitability, or other aspects of its financial activities.
Requirements
In the first section, define liabilities and describe how liabilities
are classified as current and long-term (give examples). Also
define liquidity and solvency as it relates to the company’s
debt-paying ability. What does your company call its ‘Balance
Sheet’?
In the second section, define working capital, the current ratio,
and the debt ratio, three frequently used ratios to assess credit
risk (described in LEO’s online text or any principles of
accounting text). Identify which are a measure of liquidity and
which are a measure of solvency. Indicate how the ratio is
interpreted. Is an increasing or decreasing ratio a favorable
trend? Conduct online research to provide a ratio level (or
range) that is considered acceptable for the current and debt
ratio (technically, working capital is not a ratio so an average
isn’t meaningful). If you can find information on acceptable
ranges for the current ratio and debt ratio for your company’s
industry, include that in your discussion. Numbers and ratios
are more meaningful when considered relative to a benchmark.
Benchmarks can be the company’s past performance, a similar
company’s performance, an industry average, or a rule-of-
thumb. For instance, for decades, a current ratio of 2 to 1 was
considered satisfactory.
In the third section, prepare a table giving the dollar amount of
current and long-term liabilities for the most recent year and the
previous year. Either in the same table or a new table report the
results of a ratio analysis. Calculate working capital, current
ratio, and the debt ratio for the current year and the past year
(show your calculations). Indicate whether the ratios are
improving or deteriorating. If you find a relevant benchmark
(industry average or rule-of-thumb), comment on your
company’s performance relative to the benchmark.
Finally, in the fourth section briefly summarize results of any or

all of the following: 1) an internet search for articles on recent
events that may affect your company’s debt paying ability, 2) an
internet search for financial analysts’ assessment of the
company’s credit risk and or 3) management’s view of the
company’s current debt-paying ability as found in the
Management Discussion and Analysis (MD&A) section of the
annual report. Either in this section or a conclusion paragraph,
briefly summarize the results of your credit analysis by
commenting on your company’s weakening or stronger financial
position (i.e. liquidity and solvency).
Technical requirements same as for the first paper. Business
report, single-spaced, use headings, should be over one page;
limit to two pages, cite references and provide reference list.
Make a table in Word (or Excel and copy into Word) as
mentioned in the third section and provide appropriate and
column and row labels.
SEC 10K Week 3 – The Income Statement and Profitability
The notes to the financial statements are integral part of the
company’s financial report. Read the Notes to the Financial
Statements (FS) for your SEC 10-K company. These "notes" are
displayed after the financial statements.
1.
2. 3.
4. 5.
Note 1 includes accounting information. What is the fiscal year
for your SEC 10-K Company? This may be June 30 each year,
or it may be the Sunday closest to the last day of January, or
some other description. Inventory: How is Inventory described
for your SEC 10-K company? LIFO, FIFO, and/or average cost?
Relate your answer to topics in our course. Income Statement:
Is it a single-step or multi-step income statement? A multi-step
statement (also called a classified income statement) reports
levels of income (gross profit, operating income, net income).
Define gross profit, operating income, and net income. Why are
the levels of income important to financial statement users? A
single- step statement reports revenues minus expenses and

doesn’t highlight gross profit. Gross profit must be calculated
by the user. Summarize management’s discussion of the
company’s performance in the MD&A section of the annual
report. Calculate the Gross Profit and Gross Profit Percentage
(Gross Profit/Sales) for this year and last year, creating a small
table, such as the following:
This Year
Last Year
Net Sales
$1,200
$1,400
Cost of Goods Sold
800
1,200
Gross Profit
400
200
Gross Profit Percentage
33%
14%
In the above example above, sales decreased, gross profit
increased, and the gross profit percentage increased. Therefore,
sales are more profitable. The company made 33 cents of gross

profit on every dollar of sales this year, but only 14 cents of
gross profit on every dollar of sales last year. Sales decreased,
but sales are actually generating more profit overall, both as an
absolute dollar value and as a percentage.
Be sure to use good form - $ signs for the first number in a
column and use commas to separate thousands. You may drop
off zeros similar to the way your company does in its financial
statements but be sure to indicate that the numbers are in
thousands (three zeros omitted) or millions (six zeros omitted).
SEC10K Project Week 4 – Liquidity II
This week’s SEC 10K project will look more in-depth at
liquidity. In a previous assignment, you calculated the current
ratio. A similar ratio, but more stringent measure of a
company’s ability to pay currently maturing debt or generate
cash for operations, is the quick ratio (also called the acid-test
ratio):
Quick Ratio = Quick Assets Current Liabilities
Quick assets include cash, short-term investments in marketable
securities, and net accounts receivable. Notice that the quick
ratio excludes inventory and prepaid expenses in the numerator.
Quick assets are those that will generate cash for the company
more quickly. Inventory is two-steps away from being cash;
first it must be sold and then the accounts receivable must be
collected. Prepaid expenses do not generate cash since the
account represents cash paid in advance for rent, insurance, etc.
If quick assets exceed current liabilities, the quick ratio
indicates the number of times the company can pay its currently
maturing debt. A quick ratio of 1.5 means that the company can
cover its current liabilities one and a half times or pay all of its
current liabilities and still have quick assets remain. If quick
assets are less than current liabilities, the company can only
cover a portion of its current liabilities. For example, a quick
ratio of 0.88 means the company can pay 88% of its liabilities.
One explanation for an increasing current ratio (normally a
favorable trend) and a decreasing quick ratio (unfavorable
trend) is that inventories are growing which could be a signal

that the company is having trouble selling its inventory. If the
company is having trouble collecting accounts receivables both
the current ratio and the quick ratio will be higher since both
include receivables in the numerator, but the company may not
be in a good position to pay current liabilities. This suggests
that interpreting the results of ratios requires judgment. Also, it
illustrates that looking at one ratio in isolation is rarely useful.
Turnover ratios also provide information on liquidity. The faster
a company can ‘turn over’ its accounts receivable (i.e. the
number of times it collect accounts receivable in a year) and
inventory (i.e. sell inventory) the better its liquidity.
Accounts Receivable Turnover = Net Credit Sales (if credit
sales not available, use net sales) Average Accounts Receivable,
net
Average accounts receivable = Beginning Accounts Receivable*
+ Ending Accounts Receivable 2
*This year’s beginning balance of accounts receivable is last
year’s ending balance.
Inventory Turnover = Cost of Goods Sold Average Inventory
Average Inventory = (Beginning Inventory + Ending Inventory)
÷ 2
SEC10K Project Week 4 – Liquidity page 2
For both ratios, an increasing turnover is favorable.
Dividing the turnover ratios into 365, gives an indication of the
number of days the receivables are outstanding and the average
age of inventory:
Age of receivables = 365/Accounts Receivable turnover
Average age of inventory = 365/Inventory Turnover
Lower is better for both of these ratios. The longer receivables
are outstanding the higher the likelihood of uncollectability.
The longer inventory remains unsold the greater its
susceptibility for spoilage or obsolescence.
Keep in mind, the results of these ratios are industry specific.
For instance, auto manufacturers will turn over their inventory
slower than a grocery store. Compare a company’s ratio to its

previous year’s ratios or to an industry average rather than
comparing to a company’s ratios from another industry (this
applies to any ratio, not just for liquidity).
A signal that a company is having liquidity problems is
receivables and inventory growing faster than sales. To
calculate the percentage increase or decrease in a financial
statement number
% change = This year’s number – 1 x 100 Last year’s number
For example, last year’s net sales = $125,000 and this year’s net
sales = $130,000:
%changeinsales=$130,000 -1 x100 =(1.04–
1)x100=0.04x100=4%increase $125,000
If last year’s net sales = $125,000 and this year’s net sales =
$120,000 (sales decreased):
% change in sales = $120,000 -1 x 100 = (0.96 – 1) x 100 =
(0.04) x 100 = 4% decrease $125,000
Do this for net sales, accounts receivable, and inventory to
determine if accounts receivables and inventories are growing
faster than sales.
SEC10K Project Week 4 – Liquidity page 3
Required:
a. Calculate the current ratio, quick ratio, accounts receivable
and inventory turnover ratios, the age of receivables and
inventory for this year and last year. Make a table for the
results and indicate whether the changes are favorable or
unfavorable. Since your current SEC 10K report may not have
the beginning balances for inventory or accounts receivable to
calculate averages for the previous year, you may substitute the
ending balance for the average for the previous year only.
b. Calculate the percentage change in sales, accounts receivable,
and inventory from the previous to the current year. Are sales
increasing faster than accounts receivable and inventory? Or are
accounts receivable and inventory growing faster than sales?
Make a table for the results (either the same table as above or in
a separate table).

11The Study of Lifespan DevelopmentHero Images Inc.He.docx

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