UV1385 Rev. Nov. 14, 2016 This technical note was .docxjessiehampson
UV1385
Rev. Nov. 14, 2016
This technical note was prepared by Professor Michael J. Schill. Special thanks go to Vladimir Kolcin for data-collection assistance and to Lee Ann
Long-Tyler and Ray Nedzel for technical assistance. Copyright 2015 by the University of Virginia Darden School Foundation, Charlottesville, VA.
All rights reserved. To order copies, send an e-mail to [email protected] No part of this publication may be reproduced, stored in a retrieval system,
used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School
Foundation.
Business Performance Evaluation:
Approaches for Thoughtful Forecasting
Every day, fortunes are won and lost on the backs of business performance assessments and forecasts.
Because of the uncertainty surrounding business performance, the manager should appreciate that forecasting
is not the same as fortune-telling; unanticipated events have a way of making certain that specific forecasts are
never exactly correct. This note purports, however, that thoughtful forecasts greatly aid managers in
understanding the implications of various outcomes (including the most probable outcome) and identify the
key bets associated with a forecast. Such forecasts provide the manager with an appreciation of the odds of
business success.
This note examines principles in the art and science of thoughtful financial forecasting for the business
manager. In particular, it reviews the importance of (1) understanding the financial relationships of a business
enterprise, (2) grounding business forecasts in the reality of the industry and macroenvironment, (3) modeling
a forecast that embeds the implications of business strategy, and (4) recognizing the potential for cognitive
bias in the forecasting process. The note closes with a detailed example of financial forecasting based on the
example of the Swiss food and nutrition company Nestle.
Understanding the Financial Relationships of the Business Enterprise
Financial statements provide information on the financial activities of an enterprise. Much like the
performance statistics from an athletic contest, financial statements provide an array of identifying data on
various historical strengths and weaknesses across a broad spectrum of business activities. The income
statement (also known as the profit-and-loss statement) measures flows of costs, revenue, and profits over a
defined period of time, such as a year. The balance sheet provides a snapshot of business investment and
financing at a particular point in time, such as the end of a year. Both statements combine to provide a rich
picture of a business’s financial performance. The analysis of financial statements is one important way of
understanding the mechanics of the systems that make up business operations.
Interpreting financial ratios
Financial ratios provide a usefu ...
Ratio AnalysisFinancial ratios can be used to examine various as.docxcatheryncouper
Ratio Analysis
Financial ratios can be used to examine various aspects of the financial position and performance of a business and are widely used for planning and control purposes.
They can be used to evaluate the financial health of a business and can be utilised by management in a wide variety of decisions involving such areas as profit planning, pricing, working-capital management, financial structure and dividend policy.
Ratio analysis provides a fairly simplistic method of examining the financial condition of a business.
A ratio expresses the relation of one figure appearing in the financial statements to some other figure appearing there.
Ratios enable comparison between businesses.
Differences may exist between businesses in the scale of operations making comparison via the profits generated unreliable.
Ratios can eliminate this uncertainty.
Other than comparison with other businesses, it is also a valuable tool in analysing the performance of one business over time.
However useful ratios are not without their problems.
Figures calculated through ratio analysis can highlight the financial strengths and weaknesses of a business but they cannot, by themselves, explain why certain strengths or weaknesses exist or why certain changes have occurred.
Only detailed investigation will reveal these underlying reasons. Ratios must, therefore, be seen as a ‘starting point’.
Financial ratio classification
The following ratios are considered the more important for decision-making purposes:
Ratios can be grouped into certain categories, each of which reflects a particular aspect of financial performance or position.
The following broad categories provide a useful basis for explaining the nature of the financial ratios to be dealt with.
Profitability.Businesses come into being with the primary purpose of creating wealth for the owners. Profitability ratios provide an insight to the degree of success in achieving this purpose. They express the profits made in relation to other key figures in the financial statements or to some business resource.
Efficiency.Ratios may be used to measure the efficiency with which certain resource have been utilised within the business. These ratios are also referred to as active ratios.
Liquidity.It is vital to the survival of a business that there be sufficient liquid resources available to meet maturing obligations. Certain ratios may be calculated that examines the relationship between liquid resources held and creditors due for payment in the near future.
Gearing.This is the relationship between the amount financed by the owners of the business and the amount contributed by outsiders, which has an important effect on the degree of risk associated with a business. Gearing is then something that managers must consider when making financing decisions.
Investment.Certain ratios are concerned with assessing the returns and performance of shares held in a particular business.
Profitabi ...
UV1385 Rev. Nov. 14, 2016 This technical note was .docxjessiehampson
UV1385
Rev. Nov. 14, 2016
This technical note was prepared by Professor Michael J. Schill. Special thanks go to Vladimir Kolcin for data-collection assistance and to Lee Ann
Long-Tyler and Ray Nedzel for technical assistance. Copyright 2015 by the University of Virginia Darden School Foundation, Charlottesville, VA.
All rights reserved. To order copies, send an e-mail to [email protected] No part of this publication may be reproduced, stored in a retrieval system,
used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School
Foundation.
Business Performance Evaluation:
Approaches for Thoughtful Forecasting
Every day, fortunes are won and lost on the backs of business performance assessments and forecasts.
Because of the uncertainty surrounding business performance, the manager should appreciate that forecasting
is not the same as fortune-telling; unanticipated events have a way of making certain that specific forecasts are
never exactly correct. This note purports, however, that thoughtful forecasts greatly aid managers in
understanding the implications of various outcomes (including the most probable outcome) and identify the
key bets associated with a forecast. Such forecasts provide the manager with an appreciation of the odds of
business success.
This note examines principles in the art and science of thoughtful financial forecasting for the business
manager. In particular, it reviews the importance of (1) understanding the financial relationships of a business
enterprise, (2) grounding business forecasts in the reality of the industry and macroenvironment, (3) modeling
a forecast that embeds the implications of business strategy, and (4) recognizing the potential for cognitive
bias in the forecasting process. The note closes with a detailed example of financial forecasting based on the
example of the Swiss food and nutrition company Nestle.
Understanding the Financial Relationships of the Business Enterprise
Financial statements provide information on the financial activities of an enterprise. Much like the
performance statistics from an athletic contest, financial statements provide an array of identifying data on
various historical strengths and weaknesses across a broad spectrum of business activities. The income
statement (also known as the profit-and-loss statement) measures flows of costs, revenue, and profits over a
defined period of time, such as a year. The balance sheet provides a snapshot of business investment and
financing at a particular point in time, such as the end of a year. Both statements combine to provide a rich
picture of a business’s financial performance. The analysis of financial statements is one important way of
understanding the mechanics of the systems that make up business operations.
Interpreting financial ratios
Financial ratios provide a usefu ...
Ratio AnalysisFinancial ratios can be used to examine various as.docxcatheryncouper
Ratio Analysis
Financial ratios can be used to examine various aspects of the financial position and performance of a business and are widely used for planning and control purposes.
They can be used to evaluate the financial health of a business and can be utilised by management in a wide variety of decisions involving such areas as profit planning, pricing, working-capital management, financial structure and dividend policy.
Ratio analysis provides a fairly simplistic method of examining the financial condition of a business.
A ratio expresses the relation of one figure appearing in the financial statements to some other figure appearing there.
Ratios enable comparison between businesses.
Differences may exist between businesses in the scale of operations making comparison via the profits generated unreliable.
Ratios can eliminate this uncertainty.
Other than comparison with other businesses, it is also a valuable tool in analysing the performance of one business over time.
However useful ratios are not without their problems.
Figures calculated through ratio analysis can highlight the financial strengths and weaknesses of a business but they cannot, by themselves, explain why certain strengths or weaknesses exist or why certain changes have occurred.
Only detailed investigation will reveal these underlying reasons. Ratios must, therefore, be seen as a ‘starting point’.
Financial ratio classification
The following ratios are considered the more important for decision-making purposes:
Ratios can be grouped into certain categories, each of which reflects a particular aspect of financial performance or position.
The following broad categories provide a useful basis for explaining the nature of the financial ratios to be dealt with.
Profitability.Businesses come into being with the primary purpose of creating wealth for the owners. Profitability ratios provide an insight to the degree of success in achieving this purpose. They express the profits made in relation to other key figures in the financial statements or to some business resource.
Efficiency.Ratios may be used to measure the efficiency with which certain resource have been utilised within the business. These ratios are also referred to as active ratios.
Liquidity.It is vital to the survival of a business that there be sufficient liquid resources available to meet maturing obligations. Certain ratios may be calculated that examines the relationship between liquid resources held and creditors due for payment in the near future.
Gearing.This is the relationship between the amount financed by the owners of the business and the amount contributed by outsiders, which has an important effect on the degree of risk associated with a business. Gearing is then something that managers must consider when making financing decisions.
Investment.Certain ratios are concerned with assessing the returns and performance of shares held in a particular business.
Profitabi ...
Financial ratios are indispensable to form a clear financial insight in the position of a company. They show the financial health and the potential of the company.
Budgeting is a process of expressing quantified resource requirements (amount of capital, amount of material, number of people) into time-phased goals and milestones.
Check out more @ www.eleaderstochange.com
Follow: #eleaders2change
Moneycation march 2015 newsletter; volume #3, issue #7A.W. Berry
Investment analysis is an art and a science. It is an art in the sense that agility and dynamic fluid thinking are useful when making decisions using empirically derived data. Fundamental analysis is one such method that is not pure science, but uses mathematical techniques to ascertain key financial information such as solvency, risk, liquidity, profit margin, expected rate of return and so on.
Finance is the language of business. You have to make the best decisions possible for yours or your client’s business. And, understanding financial analysis is the key to making this happen.
Financial plan and controll entrepreneurshipfatimanajam4
This file is uploaded to help the students learning finance easier. It will give a general understanding of planning and controlling of financial resources.
Mel feller looks at creating a more profitable businessMel Feller
Mel Feller Looks at Creating a More Profitable Business
Making a profit is the most important - some might say the only - objective of a business. Profit measures success. It can be defined simply: Revenues - Expenses = Profit. Therefore, to increase profits you must raise revenues, lower expenses, or both. To make improvements you must know what is really going on financially at all times. You have to watch every financial event without any kind of optimistic filter.
This article is a series of questions with comments to help you analyze your profits, their sufficiency and trend, the contribution of each of your product lines or services to them, and to help you determine if you have the kind of record system you need. The questions and comments are not meant to be definitive presentations on the subjects.
What are the four 4 major financial statements.pdfsarikabangimatam
Financial statements summarize a company's business activities, financial performance, financial position, and cash flows through a series of written reports. All reports should be structured to convey relevant data in an easily digestible manner. Specifically, a cliff note on the financial performance of the Business Accountants. These reports typically provide a snapshot of a specific period of time and typically represent activity over a specific month, year, or specific time period. These financial statements are critical to understanding your business and performance.
Ratios and Formulas in Customer Financial AnalysisFinancial stat.docxcatheryncouper
Ratios and Formulas in Customer Financial Analysis
Financial statement analysis is a judgmental process. One of the primary objectives is identification of major changes in trends, and relationships and the investigation of the reasons underlying those changes. The judgment process can be improved by experience and the use of analytical tools. Probably the most widely used financial analysis technique is ratio analysis, the analysis of relationships between two or more line items on the financial statement. Financial ratios are usually expressed in percentage or times. Generally, financial ratios are calculated for the purpose of evaluating aspects of a company's operations and fall into the following categories:
· Liquidity ratios measure a firm's ability to meet its current obligations.
· Profitability ratios measure management's ability to control expenses and to earn a return on the resources committed to the business.
· Leverage ratios measure the degree of protection of suppliers of long-term funds and can also aid in judging a firm's ability to raise additional debt and its capacity to pay its liabilities on time.
· Efficiency, activity or turnover ratios provide information about management's ability to control expenses and to earn a return on the resources committed to the business.
A ratio can be computed from any pair of numbers. Given the large quantity of variables included in financial statements, a very long list of meaningful ratios can be derived. A standard list of ratios or standard computation of them does not exist. The following ratio presentation includes ratios that are most often used when evaluating the credit worthiness of a customer. Ratio analysis becomes a very personal or company driven procedure. Analysts are drawn to and use the ones they are comfortable with and understand.
1. Liquidity Ratios
Working Capital
Working capital compares current assets to current liabilities, and serves as the liquid reserve available to satisfy contingencies and uncertainties. A high working capital balance is mandated if the entity is unable to borrow on short notice. The ratio indicates the short-term solvency of a business and in determining if a firm can pay its current liabilities when due.
Formula
Current Assets - Current Liabilities
Acid Test or Quick Ratio
A measurement of the liquidity position of the business. The quick ratio compares the cash plus cash equivalents and accounts receivable to the current liabilities. The primary difference between the current ratio and the quick ratio is the quick ratio does not include inventory and prepaid expenses in the calculation. Consequently, a business's quick ratio will be lower than its current ratio. It is a stringent test of liquidity.
Formula
Cash + Marketable Securities + Accounts Receivable
Current Liabilities
Current Ratio
provides an indication of the liquidity of the business by comparing the amount of current assets to current liabilities. A business's curren ...
Original article from the Flevy business blog can be found here:
http://flevy.com/blog/whats-the-impact-of-ratios-in-financial-analysis/
Financial statement analysis can be referred as a process of understanding the risk and profitability of a company by analyzing reported financial info, especially annual and quarterly reports. In other words, financial statement analysis is a study about accounting ratios among various items included in the balance sheet.
Advantages of Financial Statement Analysis
The different advantages of financial statement analysis are listed below:
The most important benefit if financial statement analysis is that it provides an idea to the investors about deciding on investing their funds in a particular company.
Another advantage of financial statement analysis is that regulatory authorities can ensure the company following the required accounting standards.
Financial statement analysis is helpful to the government agencies in analyzing the taxation owed to the firm.
Above all, the company is able to analyze its own performance over a specific time period.
From the above, it is obvious that only way for financial analysis is ratio analysis.
What is Ratio analysis?
What is the role/Importance of ratio analysis in financial analysis?
What are its advantages?
How it helps out in decision making?
How it helps the auditor in assessment of the risk of material misstatement?
These are some questions the answer of each must be known by every professional, business man and by user of financial statement. Some of you may already know about these. The answer of these questions must be part of professional’s life and business man must know to keep check on the management progress.
In simple words, we can say that ratio analysis is “quantitative analysis of information contained in a company’s financial statements.” In fact, it is critical quantitative analysis.
CASE STUDY 2.1 W. L. Gore and AssociatesHe was ready for anythi.docxdewhirstichabod
CASE STUDY 2.1: W. L. Gore and Associates
He was ready for anything—or so he thought. Dressed in his finest and armed with an MBA degree fresh off the press, Jack Dougherty walked in for his first day of work at Newark, Delaware–based W. L. Gore and Associates, the global fluoropolymer technology and manufacturing giant that is best known as the maker of Gore-Tex.
But it turned out he wasn’t ready for this: “Why don’t you look around and find something you’d like to do,” founder and CEO Bill Gore said to him after a quick introduction. Although many things have changed over the course of W. L. Gore and Associates’ 50+ years in business, the late Gore stuck to his principles regarding organizational structure (or lack thereof), a legacy he passed down to subsequent generations of management. Gore wasn’t fond of thick layers of formal management, which he believed smothered individual creativity. According to Gore, “A lattice (flat) organization is one that involves direct transactions, self-commitment, natural leadership, and lacks assigned or assumed authority.”
In the 1930s, Gore received a bachelor’s degree in chemical engineering and a master’s degree in physical chemistry. During his career, he worked on a team to develop applications for polytetraflurothylene (PTFE), commonly known as Teflon. Through this experience, Gore discovered a sense of excited commitment, personal fulfillment, and self-direction, which he yearned to share with others. Spending nights tinkering in his own workshop, he did what he had previously thought to be impossible: he created a PTFE-coated ribbon cable. It occurred to Gore that he might be able to start his own business producing his invention, so he left his stable career of 17 years, borrowed money, and drained his savings. Though his friends advised him against taking such a risk, W. L. Gore and Associates was born in January 1958. The basement of the Gore home was the company’s first facility.
Although no longer operating from a family basement (Gore boasts more than $3 billion in annual sales and 9,000 employees in more than 45 facilities worldwide), the sense of informality has stuck. “It absolutely is less efficient upfront,” said Terri Kelly, chief executive of W. L. Gore. (Her title is one of the few at the company.) “[But] once you have the organization behind it . . . the buy-in and the execution happens quickly,” she added.
Structure and Management of Unstructure and Unmanagement
Even as Gore started to grow, the company continued to resist titles and hierarchy. It had no mission statement, no ethics statement, and no conventional structures typical of companies of the same size. The only formal titles were “chief executive” and “secretary-treasurer”—those required by law for corporations. There were also no rules that business units within the company couldn’t create such structures, and so some of them did create their own mission statements and such. Many called Gore’s management style “unmanag.
Financial ratios are indispensable to form a clear financial insight in the position of a company. They show the financial health and the potential of the company.
Budgeting is a process of expressing quantified resource requirements (amount of capital, amount of material, number of people) into time-phased goals and milestones.
Check out more @ www.eleaderstochange.com
Follow: #eleaders2change
Moneycation march 2015 newsletter; volume #3, issue #7A.W. Berry
Investment analysis is an art and a science. It is an art in the sense that agility and dynamic fluid thinking are useful when making decisions using empirically derived data. Fundamental analysis is one such method that is not pure science, but uses mathematical techniques to ascertain key financial information such as solvency, risk, liquidity, profit margin, expected rate of return and so on.
Finance is the language of business. You have to make the best decisions possible for yours or your client’s business. And, understanding financial analysis is the key to making this happen.
Financial plan and controll entrepreneurshipfatimanajam4
This file is uploaded to help the students learning finance easier. It will give a general understanding of planning and controlling of financial resources.
Mel feller looks at creating a more profitable businessMel Feller
Mel Feller Looks at Creating a More Profitable Business
Making a profit is the most important - some might say the only - objective of a business. Profit measures success. It can be defined simply: Revenues - Expenses = Profit. Therefore, to increase profits you must raise revenues, lower expenses, or both. To make improvements you must know what is really going on financially at all times. You have to watch every financial event without any kind of optimistic filter.
This article is a series of questions with comments to help you analyze your profits, their sufficiency and trend, the contribution of each of your product lines or services to them, and to help you determine if you have the kind of record system you need. The questions and comments are not meant to be definitive presentations on the subjects.
What are the four 4 major financial statements.pdfsarikabangimatam
Financial statements summarize a company's business activities, financial performance, financial position, and cash flows through a series of written reports. All reports should be structured to convey relevant data in an easily digestible manner. Specifically, a cliff note on the financial performance of the Business Accountants. These reports typically provide a snapshot of a specific period of time and typically represent activity over a specific month, year, or specific time period. These financial statements are critical to understanding your business and performance.
Ratios and Formulas in Customer Financial AnalysisFinancial stat.docxcatheryncouper
Ratios and Formulas in Customer Financial Analysis
Financial statement analysis is a judgmental process. One of the primary objectives is identification of major changes in trends, and relationships and the investigation of the reasons underlying those changes. The judgment process can be improved by experience and the use of analytical tools. Probably the most widely used financial analysis technique is ratio analysis, the analysis of relationships between two or more line items on the financial statement. Financial ratios are usually expressed in percentage or times. Generally, financial ratios are calculated for the purpose of evaluating aspects of a company's operations and fall into the following categories:
· Liquidity ratios measure a firm's ability to meet its current obligations.
· Profitability ratios measure management's ability to control expenses and to earn a return on the resources committed to the business.
· Leverage ratios measure the degree of protection of suppliers of long-term funds and can also aid in judging a firm's ability to raise additional debt and its capacity to pay its liabilities on time.
· Efficiency, activity or turnover ratios provide information about management's ability to control expenses and to earn a return on the resources committed to the business.
A ratio can be computed from any pair of numbers. Given the large quantity of variables included in financial statements, a very long list of meaningful ratios can be derived. A standard list of ratios or standard computation of them does not exist. The following ratio presentation includes ratios that are most often used when evaluating the credit worthiness of a customer. Ratio analysis becomes a very personal or company driven procedure. Analysts are drawn to and use the ones they are comfortable with and understand.
1. Liquidity Ratios
Working Capital
Working capital compares current assets to current liabilities, and serves as the liquid reserve available to satisfy contingencies and uncertainties. A high working capital balance is mandated if the entity is unable to borrow on short notice. The ratio indicates the short-term solvency of a business and in determining if a firm can pay its current liabilities when due.
Formula
Current Assets - Current Liabilities
Acid Test or Quick Ratio
A measurement of the liquidity position of the business. The quick ratio compares the cash plus cash equivalents and accounts receivable to the current liabilities. The primary difference between the current ratio and the quick ratio is the quick ratio does not include inventory and prepaid expenses in the calculation. Consequently, a business's quick ratio will be lower than its current ratio. It is a stringent test of liquidity.
Formula
Cash + Marketable Securities + Accounts Receivable
Current Liabilities
Current Ratio
provides an indication of the liquidity of the business by comparing the amount of current assets to current liabilities. A business's curren ...
Original article from the Flevy business blog can be found here:
http://flevy.com/blog/whats-the-impact-of-ratios-in-financial-analysis/
Financial statement analysis can be referred as a process of understanding the risk and profitability of a company by analyzing reported financial info, especially annual and quarterly reports. In other words, financial statement analysis is a study about accounting ratios among various items included in the balance sheet.
Advantages of Financial Statement Analysis
The different advantages of financial statement analysis are listed below:
The most important benefit if financial statement analysis is that it provides an idea to the investors about deciding on investing their funds in a particular company.
Another advantage of financial statement analysis is that regulatory authorities can ensure the company following the required accounting standards.
Financial statement analysis is helpful to the government agencies in analyzing the taxation owed to the firm.
Above all, the company is able to analyze its own performance over a specific time period.
From the above, it is obvious that only way for financial analysis is ratio analysis.
What is Ratio analysis?
What is the role/Importance of ratio analysis in financial analysis?
What are its advantages?
How it helps out in decision making?
How it helps the auditor in assessment of the risk of material misstatement?
These are some questions the answer of each must be known by every professional, business man and by user of financial statement. Some of you may already know about these. The answer of these questions must be part of professional’s life and business man must know to keep check on the management progress.
In simple words, we can say that ratio analysis is “quantitative analysis of information contained in a company’s financial statements.” In fact, it is critical quantitative analysis.
Similar to CASE 5Business Performance Evaluation Approaches for Thoughtf.docx (20)
CASE STUDY 2.1 W. L. Gore and AssociatesHe was ready for anythi.docxdewhirstichabod
CASE STUDY 2.1: W. L. Gore and Associates
He was ready for anything—or so he thought. Dressed in his finest and armed with an MBA degree fresh off the press, Jack Dougherty walked in for his first day of work at Newark, Delaware–based W. L. Gore and Associates, the global fluoropolymer technology and manufacturing giant that is best known as the maker of Gore-Tex.
But it turned out he wasn’t ready for this: “Why don’t you look around and find something you’d like to do,” founder and CEO Bill Gore said to him after a quick introduction. Although many things have changed over the course of W. L. Gore and Associates’ 50+ years in business, the late Gore stuck to his principles regarding organizational structure (or lack thereof), a legacy he passed down to subsequent generations of management. Gore wasn’t fond of thick layers of formal management, which he believed smothered individual creativity. According to Gore, “A lattice (flat) organization is one that involves direct transactions, self-commitment, natural leadership, and lacks assigned or assumed authority.”
In the 1930s, Gore received a bachelor’s degree in chemical engineering and a master’s degree in physical chemistry. During his career, he worked on a team to develop applications for polytetraflurothylene (PTFE), commonly known as Teflon. Through this experience, Gore discovered a sense of excited commitment, personal fulfillment, and self-direction, which he yearned to share with others. Spending nights tinkering in his own workshop, he did what he had previously thought to be impossible: he created a PTFE-coated ribbon cable. It occurred to Gore that he might be able to start his own business producing his invention, so he left his stable career of 17 years, borrowed money, and drained his savings. Though his friends advised him against taking such a risk, W. L. Gore and Associates was born in January 1958. The basement of the Gore home was the company’s first facility.
Although no longer operating from a family basement (Gore boasts more than $3 billion in annual sales and 9,000 employees in more than 45 facilities worldwide), the sense of informality has stuck. “It absolutely is less efficient upfront,” said Terri Kelly, chief executive of W. L. Gore. (Her title is one of the few at the company.) “[But] once you have the organization behind it . . . the buy-in and the execution happens quickly,” she added.
Structure and Management of Unstructure and Unmanagement
Even as Gore started to grow, the company continued to resist titles and hierarchy. It had no mission statement, no ethics statement, and no conventional structures typical of companies of the same size. The only formal titles were “chief executive” and “secretary-treasurer”—those required by law for corporations. There were also no rules that business units within the company couldn’t create such structures, and so some of them did create their own mission statements and such. Many called Gore’s management style “unmanag.
Case study 1Client ProfileMrs. Harriet is a 68-year-old .docxdewhirstichabod
Case study 1
Client Profile
Mrs. Harriet is a 68-year-old woman who is alert and oriented. Allergies are Erythromycin. She presents to the emergency department with complaints of chest tightness, shortness of breath, cough, and congestion. She states, "I have been having these symptoms for three days now. I have been taking Maximum Strength Robitussin for my cough but it has not helped very much. When I woke up this morning. I felt very weak so I came in to be checked out." Her vital signs are blood pressure 110/70, pulse 94, respiratory rate of 28, and temperature of 102.7 F. Her oxygen saturation on room air is 92%. She is placed on 2 liters (L) of oxygen by nasal cannula. The HCP prescribes a 12-lead electrocardiogram (ECG, EKG) and chest X-ray (CXR). Laboratory tests prescribed include complete blood count (CBC), basic metabolic panel (BMP), brain natriuretic peptide (B-type natriuretic peptide assay or BNP), total creatine kinase (CK, CPK), creatine kinase-MB (CPK-MB), and troponin. The HCP will also assess blood cultures x 2, AGs on room air, sputum culture and sensitivity (C &S), and asks that the client have a Mantoux (tuberculin, purified protein derivative, or PPD) test.
Case Study
Mrs. Harriet's ECG shows normal sinus rhythm (NSR) with a heart rate of 98 beats per minute. The CXR reveals a right lower lobe(RLL) infiltrate. Laboratory tests include the following results: white blood cell cot (WBC) 12,2000 cells/mm3, 72& seg neutrophils with a left shift of 11% bands, and a BNP of 50.9 pg/mL. ABGs on room air is pH 7.44, partial pressure of carbon dioxide (PaCO2) 39 mmHg, bicarbonate (HCO3) 26.9 mEq/L, partial pressures of oxygen (PaO2) 58 mmHg, and oxygen saturation (SaO2) of 92%. Results of the sputum culture show Streptococcus pneumoniae. The CPK, CPK-MB, and troponin are all within normal limits. Mrs. Harriet is five feet three inches tall and weighs 224 pounds (101.8 kg). On assessment, the nurse hears expiratory wheezes and rhonchi bilaterally with diminished lung sounds in the right base. Her thoracic (chest) expansion is equal but slightly decreased on inspiration. Accessory muscle retraction is not noted, and she does exhibit central cyanosis. The capillary refill of the client's nail beds is four seconds.
Mrs. Harrier is admitted with acute bronchitis and pneumonia. The HCP prescribes oxygen via nasal cannula to keep the client's saturations greater or equal to 95%, Ceftriaxone sodium, Erythromycin, Albuterol, Acetaminophen every four to six hours as needed, bed rest, an 1800 calorie diet, increased oral (PO) fluid intake to 2 to 4 liters per day, coughing and deep breathing exercises and use of the incentive spirometer (IS).
1. Discuss additional assessment data that would help gain a more thorough understanding or Mrs. Harriet's symptoms?
2. Discuss the causes, pathophysiology, and symptoms of acute bronchitis?
3. Discuss the pathophysiology and causes of pneumonia in general?
4. Compare the defining characteri.
Case Study 11.1 Why the Circus No Longer Comes to TownFor 146 y.docxdewhirstichabod
Case Study 11.1: Why the Circus No Longer Comes to Town
For 146 years, the Ringling Brothers and Barnum & Bailey Circus traveled the United States by train, putting on shows featuring acrobats, trapeze artists, clowns, and exotic animals. In 2017, the circus held its last performances after a significant decline in attendance and revenue due to changing public tastes. Shorter attention spans also contributed to its demise. The final blow to the circus came from its decision to eliminate elephant acts. According to a press release from Feld Entertainment, the company that owned the circus, this move led to a “greater than could have been anticipated” decline in ticket sales.1
For decades the American Humane Society, PETA (People for the Ethical Treatment of Animals), and other animal rights groups tried to ban elephant acts in Ringling Brothers performances. Protesters regularly picketed the circus, and for 14 years animal rights groups fought Ringling Brothers in court. Activists claimed that elephant acts were cruel and pointed out that these highly intelligent animals were chained up much of their lives. In 2011, Feld Entertainment was fined $270,000 for violations of the Animal Welfare Act. However, Feld Entertainment successfully fended off the lawsuits, winning a $24 million judgment against the animal rights groups in 2014. Nonetheless, Ringling Brothers agreed to retire all traveling elephants to its Center for Elephant Conservation in Florida that same year. (During this same period, Los Angeles, Oakland, and Asheville, North Carolina, restricted animal acts.)
Animal rights groups cheered the closing of the circus. According to PETA’s president, “PETA heralds the end of what has been the saddest show on earth for wild animals, and asks all other animal circuses to follow suit, as this is a sign of changing times.”2 The CEO of the United States Humane Society said, “I applaud their decision to move away from an institution grounded on inherently inhumane wild animal acts.”3 CEO Kenneth Feld acknowledged that the negative publicity generated by the lawsuits took its toll: “We prevailed in court 100% [but] obviously, in the court of public opinion we didn’t win.”4
Ringling Brothers/Feld Entertainment isn’t the only company that has had to deal with changing societal attitudes toward animals. For decades killer whales were the major attraction at SeaWorld parks in San Diego, Orlando, and San Antonio. However, the death of trainer Dawn Brancheau, who was dragged into the water and drowned by Sea World’s largest breeding male, Tilikum (“Tilly”), galvanized opposition to captive orca programs. The film Blackfish documented the death of Brancheau and whale mistreatment. Matt Damon, Harry Styles, Willie Nelson, and other celebrities joined the protest. Animal activists noted that orcas (which are really large dolphins) never kill humans in the wild. In captivity, young killer whales are separated from their families and are forced to live thei.
Case Study 10.3 Regulating Love at the OfficeThe office has bec.docxdewhirstichabod
Case Study 10.3: Regulating Love at the Office
The office has become a hotbed of romance. In one survey, 60% of employees surveyed reported that they had participated in an office romance during their careers and 64% said they would do so again. And the percentage of workplace romances is likely to climb as younger workers (ages 25 to 34) put in more hours at work. As one human resource writer notes:
Traditional places like church, family events, and leisure time don’t present the same pool of candidates as they did in earlier times. The workplace provides a preselected pool of people who share at least one important area of common ground. People who work together also tend to live within a reasonable dating distance, and they see each other on a daily basis.1
Office romances can pose a number of problems, including a loss of productivity, public displays of affection, gossip, damage to the professional image of the organization, charges of favoritism, and affairs in cases where romantic partners already have spouses or significant others. Serious issues arise when superiors and subordinates date and then break up. The subordinate (often a young female assistant) may claim that she was sexually harassed because she was pressured into having sex to keep her job or that her supervisor (often an older male executive) retaliated when the relationship ended.
The nation was reminded of the dangers of superior–subordinate relationships when former late-night talk show host David Letterman admitted that he’d had a series of sexual relationships with female writers and staffers at his production company. Letterman went public with his affairs after a CBS producer who dated his long-term girlfriend, Stephanie Birkett, tried to extort money from the entertainer in return for keeping silent about his sexual activities. While Letterman’s relationships were consensual, it appeared as if the women he dated received special benefits. For example, Birkitt was featured in broadcast segments even though she did not seem to be particularly talented.
Human resource departments are taking note of the dangers of office romances. The number of companies developing written policies to address office romances rose from 20% to 42% over an eight-year period, according to the Society of Human Resource Management. And the policies grew stricter. Almost all the firms surveyed by SHRM forbid romantic relationships between superiors and subordinates; one-third forbid relationships between those reporting to the same supervisor or with a client or customer; 10% don’t allow romances between their employees and employees of competitors. Punishments range from minimal (relationship counseling and department transfers) to severe (suspension and termination). Executives at the American Red Cross, the World Bank, Walmart, Boeing, and the Harvard Business Review lost their jobs for having relationships with subordinates.
Not everyone is convinced that restrictions on dating are just.
Case Study 1 Is Business Ready for Wearable ComputersWearable .docxdewhirstichabod
Case Study 1: Is Business Ready for Wearable Computers?
Wearable computing is starting to take off. Smartwatches, smart glasses, smart ID badges, and activity trackers promise to change how we go about each day and the way we do our jobs. According to Gartner Inc., sales of wearables will increase from 275 million units in 2016 to 477 million units by 2020. Although smartwatches such as the Apple Watch and fitness trackers have been successful consumer products, business uses for wearables appear to be advancing more rapidly. A report from research firm Tractica projects that worldwide sales for enterprise wearables will increase exponentially to 66.4 million units by 2021.
Doctors and nurses are using smart eyewear for hands-free access to patients’ medical records. Oil rig workers sport smart helmets to connect with land-based experts, who can view their work remotely and communicate instructions. Warehouse managers are able to capture real-time performance data using a smartwatch to better manage distribution and fulfillment operations. Wearable computing devices improve productivity by delivering information to workers without requiring them to interrupt their tasks, which in turn empowers employees to make more-informed decisions more quickly.
Wearable devices are helping businesses learn more about employees and the everyday workplace than ever before. New insights and information can be uncovered as IoT sensor data is correlated to actual human behavior. Information on task duration and the proximity of one device or employee to another, when combined with demographic data, can shed light on previously unidentified workflow inefficiencies. Technologically sophisticated firms will understand things they never could before about workers and customers; what they do every day, how healthy they are, where they go, and even how well they feel. This obviously has implications for protecting individual privacy, raising potential employee (and customer) fears that businesses are collecting sensitive data about them. Businesses will need to tread carefully.
Global logistics company DHL worked with Ricoh, the imaging and electronics company, and Ubimax, a wearable computing services and solutions company, to implement “vision picking” in its warehouse operations. Location graphics are displayed on smart glasses guiding staffers through the warehouse to both speed the process of finding items and reduce errors. The company says the technology delivered a 25 percent increase in efficiency. Vision picking gives workers locational information about the items they need to retrieve and allows them to automatically scan retrieved items. Future enhancements will enable the system to plot optimal routes through the warehouse, provide pictures of items to be retrieved (a key aid in case an item has been misplaced on the warehouse shelves), and instruct workers on loading carts and pallets more efficiently.
Google has developed Glass Enterprise Edition smar.
Case Study 1 Headaches Neurological system and continue practicing .docxdewhirstichabod
Case Study 1 Headaches: Neurological system and continue practicing documentation of a focused/episodic SOAP note for Assignment
A 20-year-old male complains of experiencing intermittent headaches. The headaches diffuse all over the head, but the greatest intensity and pressure occurs above the eyes and spreads through the nose, cheekbones, and jaw.
Episodic/Focused SOAP Note Template
Patient Information:
Initials, Age, Sex, Race
S.
CC
(chief complaint) a BRIEF statement identifying why the patient is here - in the patient’s own words - for instance, "headache", NOT "bad headache for 3 days”.
HPI
: This is the symptom analysis section of your note. Thorough documentation in this section is essential for patient care, coding, and billing analysis. Paint a picture of what is wrong with the patient. Use LOCATES Mnemonic to complete your HPI. You need to start EVERY HPI with age, race, and gender (e.g., 34-year-old AA male). You must include the seven attributes of each principal symptom in paragraph form, not a list. If the CC was “headache”, the LOCATES for the HPI might look like the following example:
Location: head
Onset: 3 days ago
Character: pounding, pressure around the eyes and temples
Associated signs and symptoms: nausea, vomiting, photophobia, phonophobia
Timing: after being on the computer all day at work
Exacerbating/ relieving factors: light bothers eyes, Aleve makes it tolerable but not completely better
Severity: 7/10 pain scale
Current Medications
: include dosage, frequency, length of time used and reason for use; also include OTC or homeopathic products.
Allergies:
include medication, food, and environmental allergies separately (a description of what the allergy is ie angioedema, anaphylaxis, etc. This will help determine a true reaction vs intolerance).
PMHx
: include immunization status (note date of
last tetanus
for all adults), past major illnesses and surgeries. Depending on the CC, more info is sometimes needed
Soc Hx
: include occupation and major hobbies, family status, tobacco & alcohol use (previous and current use), any other pertinent data. Always add some health promo question here - such as whether they use seat belts all the time or whether they have working smoke detectors in the house, living environment, text/cell phone use while driving, and support system.
Fam Hx
: illnesses with possible genetic predisposition, contagious or chronic illnesses. The reason for the death of any deceased first degree relatives should be included. Include parents, grandparents, siblings, and children. Include grandchildren if pertinent.
ROS
: cover all body systems that may help you include or rule out a differential diagnosis You should list each system as follows:
General:
Head
:
EENT
: etc. You should list these in bullet format and document the systems in order from head to toe.
Example of Complete ROS:
GENERAL: No weight loss, fever, chills, weakness or fatigue.
HEENT: Eyes: No visu.
CASE STUDY 1 HeadachesA 20-year-old male complains of exper.docxdewhirstichabod
CASE STUDY 1: Headaches
A 20-year-old male complains of experiencing intermittent headaches. The headaches diffuse all over the head, but the greatest intensity and pressure occurs above the eyes and spreads through the nose, cheekbones, and jaw.
Evaluate abnormal neurological symptoms
Apply concepts, theories, and principles relating to health assessment techniques and diagnoses for cognition and the neurologic system
Assess health conditions based on a head-to-toe physical examination
USE THE ATTACHED EPISODIC SOAP NOTE
.
Case Study - Stambovsky v. Ackley and Ellis Realty Supreme C.docxdewhirstichabod
Case Study -
Stambovsky v. Ackley and Ellis Realty
Supreme Court, Appellate Division, State of New York 169 A.D.2d 254 (1991)
he assignment should consist of a Word Document, 2 pages in length double spaced, 12-point font, 1-inch margins not including the title page and reference page. (Short papers will lose significant points!!). All cases will automatically be submitted to Turnitin. Your paper should follow the case format (below) and include a summary of the relevant facts, the law, judicial opinion, etc.
Research the case using the case citation in the Library under databases (select - HeinOnline), FindLaw.com, and other legal sources. Research the parties and circumstances of the case itself.
Utilize the case format found in the Case Analysis Module.
Submit your assignment as a Microsoft Word document.
.
CASE STUDY - THE SOCIAL NETWORKThe growing use of social network.docxdewhirstichabod
CASE STUDY - THE SOCIAL NETWORK
The growing use of social network sites (such as Facebook) and online communities (such as
for instance the Apple Computer community, the community of Harley-Davidson riders,
and the community of Starbucks customers) provides exciting opportunities for
organizations. Online brand communities allow organizations to engage and interact with
customers, obtain market information, sell and advertise products, rapidly disseminate
information, develop long-term relationships with the community, and eventually to
influence consumers’ preferences and behavior (Dholakia and Bagozzi, 2001, Dholakia,
Bagozzi, and Pearo, 2004, Franke and Shah, 2003, Muniz and Schau, 2005, Tedjamulia, Olsen,
Dean, and Albrecht, 2005). “Brand community” is a term that is used to describe likeminded
consumers who identify with a particular brand and share significant traits, such as
for instance “a shared consciousness, rituals, traditions, and a sense of moral responsibility”
(Muniz and O’Guinn, 2001, p. 412). Online brand communities are based on their core value
- the brand- and grow by building relationships with and among members interested in the
brand (Jang et al. 2008).
There are several possible categorizations of online brand communities, but they are
generally grouped into two categories based on who initiates and manages the community;
(1) company-initiated communities, built by the company that owns the brand and (2) userinitiated
communities, voluntarily built by their members (that is, the consumer) (e.g.,
Armstrong and Hagel 1996; Kozinets 1999). These two types of brand communities provide
different opportunities for marketers. For instance, a brand community on a company
website is one of the key determinants of attracting consumers to and retaining customers
on the website (Nysveen and Pedersen, 2004). Consumer-initiated online brand
communities may provide consumers with useful information about other consumers’
experiences with the product or service and the strengths and weaknesses of products or
services (Jang et al. 2008).
The success of online brand communities is heavily dependent on consumer participation in
the online brand community. To determine why consumers participate in online brand
communities business student Jesse Eisenberg has developed a model based on extant
service marketing literature. The main idea in this literature is that perceived value and
satisfaction are antecedents of the intention to use a product or service (Anderson, Fornell,
and Lehmann 1994; Bolton and Drew 1991; Grönroos 1990; Hocutt 1998; Kang, Lee, and Choi
2007; Ravald and Grönroos 1996). Jesse wants to apply this idea to consumer participation in
online brand communities. According to Jesse, “members will probably be satisfied with an
online brand community and have the intention to participate in the community when they
derive value from the community. Therefore it is important to know which values.
Case Study #1 Probation or PrisonWrite a 12 to one page (.docxdewhirstichabod
Case Study #1: Probation or Prison?
Write a 1/2 to one page (150–275 words) response in which you answer the three questions that follow the case study below:
You could have been in the same situation yourself. Instead, it is Mary Lee Smith, one of your probationers, who is about to stand before the judge in a probation revocation hearing.
When you and your husband split 10 years ago, you had two children and eventually had to declare bankruptcy and accept food stamps to be able to pay the rent. After seven years working as a secretary at the nearby state juvenile corrections center, receiving constant encouragement from Mrs. Jones, the superintendent, and taking advantage of a criminal justice scholarship program, you finished a degree in administration of justice and qualified for an entry-level position with the community resources division of the state department of corrections. You advanced as the system grew, and now, three years later, you are a probation supervisor in Judge Longworth's court.
In a way, Mary Lee is as much a victim as she is an offender. Married at seventeen, she quit high school and moved west with her husband who was in the army. By the time she was twenty, she had two children and was divorced. With babysitters to pay and skills that would command no more than minimum wage, Mary Lee turned to such income supplements as shoplifting, bad check writing, and occasionally prostitution. Her check-passing skills developed rapidly, and it was not long before she had amassed a series of convictions, not to mention several lesser offenses for petty larceny that were disposed of by the prosecutor's declaration of
nolle prosequi
. To date, Mary Lee has not served a day in prison. Judge Longworth has used admonition, restitution, suspended sentence, and probation to rehabilitate Mary Lee. However, Mary Lee's criminal conduct has persisted, as has her inability to stretch her food stamps, welfare payments, and part-time minimum-wage employment into a satisfactory existence for herself and her children. To complicate the matter, the welfare safety net that had helped keep Mary Lee and her children afloat would cease to exist for her within 24 months.
Judge Longworth has called you into his chambers before the hearing. He read your violation report with interest. You pointed out Mary Lee's family obligations and the imminent possibility that the children would have to be placed in foster homes if she were confined. You also pointed out that she has been faithful in making restitution and that she maintains a steady church relationship and a good home environment for her children. Although your report is fair and accurate, you realize that the judge has sensed your misgivings and uncertainty concerning Mary Lee.
Judge Longworth looks up from your report and comes directly to the point. "Do you really believe this woman deserves to go back into the community? You certainly seem to have found some redeeming features in her cond.
Case Studies of Data Warehousing FailuresFour studies of data .docxdewhirstichabod
Case Studies of Data Warehousing Failures
Four studies of data warehousing failures are presented. They were written based on interviews with people who were associated with the projects. The extent of the failure varies with the organization, but in all cases, the project was at least a disappointment.
Read the cases and prepare a report that provides a substantive discussion on each of the following:
1. What’s the scope of what can be considered a data warehousing failure?
2. What do you find most interesting in the failure stories?
3. Do they provide any insights about how a failure might be avoided?
Your discussion should be at least 2 pages in length with 1.5” spacing & 1” margins.
Case Study 1: Auto Guys
Auto Guys initiated a data warehousing project four years ago but it never achieved full usage. After initial support for the project eroded, management revisited their motives for the warehouse and decided to restart the project with a few changes. One reason for the restructuring, according to the project manager, was the complexity of the model initially employed by Auto Guys.
At first, the planner for the data warehouse wanted to use a dimensional model for tabular information. But political pressure forced the system’s early use. Consequently, mainframe data was largely replicated and these tables did not work well with the managed query environment tools that were acquired. The number of tables and joins, and subsequent catalog growth, prevented Auto Guys from using data as it was intended in a concise and coherent business format.
The project manager also indicated that the larger the data warehouse, the greater the need for high-level management support – something Auto Guys lacked on their first attempt at setting up the warehouse. Another problem mentioned by the project manager was that the technology Auto Guys chose for the project was relatively new at the time, so it was not accepted and did not garner the confidence that a project using proven technology would have received. This is a risk inherent in any “cutting edge” technology adoption. The initial abandonment of the project was undoubtedly hastened by both corporate discomfort with this new technology and the lack of top management support.
A short time after dropping the project, top management felt pressure to reestablish it. Because Auto Guys initially planned an enterprise-wide warehouse, they had considerable computer capacity. It was put to use on a much smaller project that focused exclusively on a single subject area. Other subject areas were due to be added once the initial subject area project was completed. Auto Guys expects to grow the warehouse to two terebytes within a year or two and eventually expand to their projected enterprise-wide data warehouse. The biggest difference between pre- and post-resurrection will be that the project will evolve incrementally.
Given his experience with the warehouse, the project manager made the following summary .
Case Studies GuidelinesWhat is a Case StudyCase studies.docxdewhirstichabod
Case Studies Guidelines
What is a Case Study:
Case studies are stories. They are formatted in such a way that at a glance one could easily determine the “issue” about to be discussed. We look to clearly address the who, what, where, when, why and how to ensure that we have covered the story in its entirety. If you miss one of these factors, you leave the reader guessing and questioning your report. In public policy & administration our case studies/stories are required to be fact based. Make sure your research is based on credible information. Verify, verify, verify. Make a mistake and/or be challenged on one of your “facts”, could create a host of issues. If you are found to be incorrect, the entire report is incorrect and your credibility is suspect. Cite your research appropriately.
We call it an issue rather than a “problem” because a problem presents a negative image/connotation. Issues are not necessarily negative and provides the policy analyst with an opportunity to evaluate each issue based on its own merits without taking a position of negative or positive.
What Does a Case Study Look Like:
A case study should set up similar to story-telling.
Do not write this as you would a thesis.
You don’t want to put in a lot of “fluff & stuff”. Think of the reader as a high level administrator whose in-box is full of documents that require review. To catch this administrator’s attention, consider what he/she would be concerned with. The “issue” clearly delineated, then the people involved “stakeholders”, the positions (where one stands depends upon where one sits), of these people/perspectives” of the stakeholders and then a fact based well thought out “recommendation”. Use the first paragraph or two to set the tone for the issue under consideration. Once you have the reader’s attention then you are prepared to move onto your 4-step policy analyses.
Why a 4-Step Policy Analysis:
We use the four-step policy analysis because of its simplicity and its thoroughness. There are plenty of other models, some with seven-steps and others with ten-steps. It is not the number of steps that makes a case study. It is the report itself that stands on merit.
Do not change the language of the 4-steps or add other language, as new headings could change the report and its intent. It is vital that you understand this foundation as it will be used throughout your baccalaureate curriculum. Learning to use this in both your professional and personal lives will help you with your decision making in a variety of ways.
How Do I Begin:
Case studies are complex and may contain a myriad of issues, stakeholders, etc. It is your job to select one issue and then to stay on course as you work through your critical thinking and 4-step policy analysis. Do not say there are “many” issues as this may confuse the reader of leave him/her questioning why you chose one issue over another. Chose one….
How Should the Final Case Study Paper Set Up:
Use APA format when c.
Case Project 8-2 Detecting Unauthorized ApplicationsIn conducti.docxdewhirstichabod
Case Project 8-2: Detecting Unauthorized Applications
In conducting a review of the Oss running on the Alexander Rocco network, you detect a program that appears to be unauthorized. No one in the department knows how this program got on the Linux computer. The department manager thinks the program was installed before his start date three years ago. When you review the program’s source code, you discover that it contains a buffer overflow vulnerability. Based on this information, write a report to the IT manager stating what course of action should be taken and listing recommendations for management.
Your essay should be a minimum of 350 words and include the steps you took to discover file.
Use reference:
Simpson, M. T., Backman, K., & Corley, J. (2011).
Hands-on ethical hacking and network defense
. Cengage Learning.
Add any other recent references
.
Case Number 7Student’s NameInstitution Affiliation.docxdewhirstichabod
Case Number 7
Student’s Name
Institution Affiliation
Case Number 7. The case of physician do not heal thyself
Questions
1. Have you recently engaged in risky behaviors such as binge eating, unsafe sex, gambling, drug and substance abuse, or risky driving?
1. How would you describe your relationships with people such as your spouse, friends, neighbors, colleagues, and strangers while considering aspects of anger, irritability, and violence?
1. Do you have a recurring problem of variant moods that result to interpersonal stress, feeling of emptiness, and other challenges that are stress-related and they push you towards suicidal thoughts?
People to speak to
It is crucial to identify the right people to provide essential details for the assessment of the patient. Some of the most important people include the spouses, siblings, family friends, personal friends, and neighbors. Furthermore, the patient’s colleagues can provide important information regarding the behaviors of the patient and help in identifying issues that the patient could be hiding. Speaking to the people to whom the patient exercises authority is important in attaining the true image of the person.
Physical exam and diagnostic test
The disorder is mental, but it can be assessed through physical exams that indicate how the brain is working in relation to actions ( Stahl 2013). Fixing a puzzle would be an effective way of testing the patient and how stable they can be. The other approach is engaging the patient in a physical exercise and observing their participation. Physical exams provide a diagnostic insight to test how the patient relates with others.
Diagnoses
Personality Disorder
Mood Disorder
Depression with psychotic features
Pharmacological agents
Application of antidepressants
Use of antipsychotics
Administering mood-stabilizing drugs
Contradictions or Alterations
It is a complex situation to treat a complex and long-term unstable disorder of mood because the patients experience different emotions even during therapy (Yasuda & Huang 2008). It becomes difficult to separate mood disorder from personality disorder especially for difficult patient like in this case. Furthermore, there are no specific drugs that can be used for treatment without additional therapy since this patient is able to adjust or play with their own treatment as a physician. The mental condition observed in the patient requires a careful approach due to the delicate situations involving suicidal thoughts and aggression.
Lessons Learned
In the case study “The case of physician do not heal thyself,” the lessons include the importance of conducting a complete assessment of the patient and including other people who interact with the patient. It would be more effective to treat such conditions if the patients had stable emotions, but strategic approaches can help to streamline the treatment process ( Stahl 2014b).
References
Stahl, S. M. (2013). Stahl’s essential psychopharmacol.
Case number #10 OVERVIEWAbstract In this case, a local chapt.docxdewhirstichabod
Case number #10
OVERVIEW
Abstract In this case, a local chapter of a national nonprofit organization continuously struggles with funding and must, therefore, be proactive in seeking out additional revenue sources. The local coordinator encounters a situation involving a potential donor that forces her to weigh the pros and cons of breaking the rules and the best way to communicate her concerns to her superiors and the donor. A chance meeting on a flight leads to a potential conflict-of-interest situation for the local coordinator.
Main Topics Decision making, Ethics
Secondary Topic Communication, Intergovernmental affairs*
Teaching Purpose To discuss the complexities involved in balancing personal and organizational responsibilities within the framework of a nonprofit organization.
The Organization ReadNow is a nonprofit program that promotes early literacy by giving new books to children and advice to parents about the importance of reading aloud in pediatric exam rooms across the nation.
* Main Characters: • Michael Vaughn, Executive Vice President of Johnson Hospital • Dr. Lea Nelson, Head of National ReadNow • Patricia Clay, Local ReadNow Coordinator • Molly Carter, Tillingast Foundation employee • Dr. Katie Nelson, ReadNow Local Director
BACKGROUND
In 1962, a group of doctors at a hospital in Phoenix, Arizona, were brain-storming ways to increase early childhood literacy and parent– parent– child interactions among their patients. One doctor had the idea of distributing children's books to their patients during checkups, accompanied by advice to the parents about the importance of reading aloud to their children. From this modest beginning, ReadNow developed into a national, nonprofit organization that distributes books and early literacy guidance to more than 2.5 million children and their families. ReadNow has offices all over the United States and is currently supported in part through a grant from the U.S. Department of Education. ReadNow opened a branch in Crown City, Michigan, in August with a partnership between the National ReadNow and the Johnson Children's Medical Center. One of the founders, Dr. Mark Jeffries, still active within ReadNow, approached Dr. Katie Nelson, a pediatrician at Johnson Hospital with the opportunity to bring ReadNow to Crown City. Dr. Nelson soon had more than thirty pediatric clinics participating in the program and hired a coordinator, Patricia Clay, to manage the day-to-day operations of the Crown City chapter.
As a result of its affiliation with the Johnson Children's Medical Center, ReadNow was fortunate to have its rent, computers, telephones, and office supplies provided by the hospital. Johnson Children's Medical Center agreed to support the office environment of ReadNow, as well as to guarantee the coordinator a stipend of $ 50,000 each year. However, part of Patricia Clay's duties included raising funds to purchase books to distribute in clinics across the metropolitan area and t.
Case GE’s Two-Decade Transformation Jack Welch’s Leadership.docxdewhirstichabod
Case: GE’s Two-Decade Transformation: Jack Welch’s Leadership
Thoroughly: -Identifies core problem of the case with applicable rationale and evidence. -Discusses the severity of the core problem. Provides supporting rationale. -Discusses implications of the core problem. How and to what extent may the core problem affect the stakeholders/those being led? Provides supporting rationale.
.
CASE BRIEF 7.2 Tiffany and Company v. Andrew 2012 W.docxdewhirstichabod
CASE BRIEF 7.2
Tiffany and Company v. Andrew
2012 WL 5451259 (S.D.N.Y.)
FACTS: Tiffany (plaintiffs) allege that Andrew and others (defendants) sold counterfeit Tiffany
products through several websites hosted in the United States. Andrew accepted payment in U.S.
dollars, used PayPal, Inc. to process customers' credit card transactions, then transferred the sales
proceeds to accounts held by the Bank of China (“BOC”), Industrial and Commercial Bank of
China (“ICBC”), and China Merchants Bank (“CMB”) (“Banks”).
Andrew defaulted on the suit, and Tiffany sought discovery from the Banks by serving subpoenas
seeking the identities of the holders of the accounts into which the proceeds of the counterfeit sales
were transferred and the subsequent disposition of those proceeds. The Banks involved all
maintained branch offices in the Southern District of New York, and the subpoenas were served
on those branch offices.
The Banks responded to the subpoenas by explaining that the information sought was all
maintained in China and that the New York branches of the Banks lacked the ability to access the
requested information. China's internal laws prohibited the disclosure of the information except
under certain conditions. The Banks proposed that the plaintiffs pursue the requested discovery
pursuant to the Hague Convention.
The court concluded that Tiffany should pursue discovery through the Hague Convention. Tiffany
submitted its Hague Convention application to China's Central Authority in November 2010, and
on August 7, 2011, the Ministry of Justice of the People's Republic of China (“MOJ”) responded
by producing some of the documents requested. For each of the Banks, the MOJ produced account
opening documents (including the government identification card of the account holder), written
confirmation of certain transfers into the accounts and a list of transfers out of the accounts. With
respect to CMB, the records indicate that all funds in the account were withdrawn through cash
transactions at either an ATM or through a teller. BOC and CMB each produced documents
concerning a single account; ICBC produced documents for three accounts.
In its cover letter, the MOJ noted that it was not producing all documents requested. Specifically,
the letter stated, “Concerning your request for taking of evidence for the Tiffany case, the Chinese
competent authority holds that some evidence required lacks direct and close connections with the
litigation. As the Chinese government has declared at its accession to the Hague Evidence
Convention that for the request issued for the purpose of the pre-trial discovery of documents only
the request for obtaining discovery of the documents clearly enumerated in the Letters of Request
and of direct and close connection with the subject matter of the litigation will be executed, the
Chinese competent authority has partly executed the requests which it d.
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
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The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
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Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
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CASE 5Business Performance Evaluation Approaches for Thoughtf.docx
1. CASE 5
Business Performance Evaluation: Approaches for Thoughtful
Forecasting
Every day, fortunes are won and lost on the backs of business
performance assessments and forecasts. Because of the
uncertainty surrounding business performance, the man-ager
should appreciate that forecasting is not the same as fortune-
telling; unanticipated events have a way of making certain that
specific forecasts are never exactly correct. This note purports,
however, that thoughtful forecasts greatly aid managers in
under-standing the implications of various outcomes (including
the most probable outcome) and identify the key bets associated
with a forecast. Such forecasts provide the manager with an
appreciation of the odds of business success. This note
examines principles in the art and science of thoughtful
financial fore-casting for the business manager. In particular, it
reviews the importance of (1) under-standing the financial
relationships of a business enterprise, (2) grounding business
forecasts in the reality of the industry and macroenvironment,
(3) modeling a forecast that embeds the implications of business
strategy, and (4) recognizing the potential for cognitive bias in
the forecasting process. The note closes with a detailed example
of financial forecasting based on the example of the Swiss food
and nutrition com-pany Nestle.
Understanding the Financial Relationships of the Business
Enterprise
Financial statements provide information on the financial
activities of an enterprise. Much like the performance statistics
from an athletic contest, financial statements provide an array
of identifying data on various historical strengths and
3. performance. It is worth noting that there is wide variation in
the definition of financial ratios. A mea-sure such as return on
assets is computed many different ways in the business world.
Although the precise definitions may vary, there is greater
consensus on the interpreta-tion and implication of each ratio.
This note presents one such definition and reviews the
interpretation. Growth rates: Growth rates capture the year-on-
year percentage change in a particu-lar line item. For example,
if total revenue for a business increases from $1.8 million to
$2.0 million, the total revenue growth for the business is said to
be 11.1% [(2.0 − 1.8)/1.8]. Total revenue growth can be further
decomposed into two other growth measures: unit growth (the
growth in revenue due to an increase in units sold) and price
growth (the growth in revenue due to an increase in the price of
each unit). In the above example, if unit growth for the business
is 5.0%, the remaining 6.1% of total growth can be attributed to
increases in prices or price growth. Margins: Margin ratios
capture the percentage of revenue that flows into profit or,
alternatively, the percentage of revenue not consumed by
business costs. Business profits can be defined in many ways.
Gross profit reports the gains to revenue after subtracting the
direct expenses. Operating profit reports the gains to revenue
after subtracting all associated operating expenses. Operating
profit is also commonly re-ferred to as earnings before interest
and taxes (EBIT). Net profit reports the gains to revenue after
subtracting all associated expenses, including financing
expenses and taxes. Each of these measures of profits have an
associated margin. For example, if operating profit is $0.2
million and total revenue is $2.0 milli
Case 5 Business Performance Evaluation: Approaches for
Thoughtful Forecasting 91 margin is 10% (0.2/2.0). Thus, for
each revenue dollar, an operating profit of $0.10 is generated
and $0.90 is consumed by operating expenses. The margin
provides the analyst with a sense of the cost structure of the
business. Common definitions of mar-gin include the following:
4. Gross margin = Gross profit/Total revenue where gross profit
equals total revenue less the cost of goods sold. Operating
margin = Operating profit/Total revenue where operating profit
equals total revenue less all operating expenses (EBIT). NOPAT
margin = Net operating profit after tax (NOPAT)/Total revenue
where NOPAT equals EBIT multiplied by (1 − t), where t is the
prevailing marginal income tax rate. NOPAT measures the
operating profits on an after-tax basis without accounting for
tax effects associated with business financing. Net profit margin
= Net income/Total revenue where net income or net profit
equals total revenue less all expenses for the period. A business
that has a high gross margin and low operating margin has a
cost structure that maintains high indirect operating expenses
such as the costs associated advertising or with property, plant,
or equipment (PPE). Turnover: Turnover ratios measure the
productivity, or efficiency, of business assets. The turnover
ratio is constructed by dividing a measure of volume from the
in-come statement (i.e., total revenue) by a related measure of
investment from the balance sheet (i.e., total assets). Turnover
provides a measure of how much business flow is generated per
unit of investment. Productive or efficient assets produce high
levels of asset turnover. For example, if total revenue is $2.0
million and total assets are $2.5 million, the asset-turnover
measure is 0.8 times (2.0/2.5). Thus, each dollar of total asset
investment is producing $0.80 in revenue or, alternatively, total
assets are turning over 0.8 times a year through the operations
of the business. Common mea-sures of turnover include the
following: Accounts receivable turnover = Total
revenue/Accounts receivable Accounts receivable turnover
measures how quickly sales on credit are collected. Busi-nesses
that take a long time to collect their bills have low receivable
turnover because of their large receivable levels. Inventory
turnover = Cost of goods sold/Inventory Inventory turnover
measures how inventory is working in the business, and whether
the business is generating its revenue on large levels or small
levels of inventory. For inven-tory turnover (as well as payable
5. turnover) it is customary to use cost of sales as the volume
measure because inventory and purchases are on the books at
cost rather than at the expected selling price. PPE turnover =
Total revenue/Net PPE
Part TwoFinancial Analysis and Forecasting
PPE turnover measures the operating efficiency of the fixed
assets of the business. Businesses with high PPE turnover are
able to generate large amounts of revenue on relatively small
amounts of PPE, suggesting high productivity or asset
efficiency.
Asset turnover = Total revenue/Total assets
Total capital turnover = Total revenue/Total capital
Total capital is the amount of capital that investors have put
into the business and is defined as total debt plus total equity.
Since investors require a return on the total capital they have
invested, total capital turnover provides a good measure of the
productivity of that investment. Accounts payable turnover =
Cost of goods sold/Accounts payable Accounts payable turnover
measures how quickly purchases on credit are paid. Businesses
that are able to take a long time to pay their bills have low
payable turnover because of their large payables levels. An
alternative and equally informative measure of asset
productivity is a “days” measure, which is computed as the
investment amount divided by the volume amount multiplied by
365 days. This measure captures the average number of days in
a year that an investment item is held by the business. For
example, if total revenue is $2.0 million and accounts
receivable is $0.22 million, the accounts receivable days
measure is calcu-lated as 40.2 days (0.22/2.0 × 365). The days
measure can be interpreted as that the average receivable is held
by the business for 40.2 days before being collected. The lower
6. the days measure, the more efficient is the investment item. If
the accounts receiv-able balance equals the total revenue for the
year, the accounts receivable days measure is equal to 365 days
as the business has 365 days of receivables on their books. This
means it takes the business 365 days, on average, to collect
their accounts receivable. While the days measure does not
actually provide any information that is not already contained in
the respective turnover ratio (as it is simply the inverse of the
turnover measure multiplied by 365 days), many managers find
the days measure to be more in-tuitive than the turnover
measure. Common days measures include the following:
Accounts receivable days = Accounts receivable/Total revenue
× 365 days Inventory days = Inventory/Cost of goods sold × 365
days Accounts payable days = Accounts payable/Cost of goods
sold × 365 days Return on investment: Return on investment
captures the profit generated per dollar of investment. For
example, if operating profit is $0.2 million and total assets are
$2.5 million, pretax return on assets is calculated as operating
profit divided by total assets (0.2/2.5), or 8%. Thus, the total
dollars invested in business assets are generating pretax
operating-profit returns of 8%. Common measures of return on
investment in-clude the following: Return on equity (ROE) =
Net income/Shareholders’ equity where shareholders’ equity is
the amount of money that shareholders have put into the
business. Since net income is the money that is available to be
distributed back to equity
Case 5 Business Performance Evaluation: Approaches for
Thoughtful Forecasting 93 investors, ROE provides a measure
of the return the business is generating for the equity investors.
Return on assets (ROA) = NOPAT/Total assets where NOPAT
equals EBIT × (1 − t), EBIT is the earnings before interest and
taxes, and t is the prevailing marginal income tax rate. Like
many of these ratios, there are many other common definitions.
One common alternative definition of ROA is the following:
Return on assets (ROA) = Net income/Total assets and, lastly,
7. Return on capital (ROC) = NOPAT/Total capital Since NOPAT
is the money that can be distributed back to both debt and
equity inves-tors and total capital measures the amount of
capital invested by both debt and equity investors, ROC
provides a measure of the return the business is generating for
all investors (both debt and equity). It is important to observe
that return on investment can be decomposed into a margin
effect and a turnover effect. That relationship means that the
same level of business profitability can be attained by a
business with high margins and low turnover, such as
Nordstrom, as by a business with low margins and high
turnover, such as Wal-Mart. This decomposition can be shown
algebraically for the ROC: ROC = NOPAT margin × Total
capital turnover NOPAT NOPAT = Total capital Total revenue
× Total revenue Total capital Notice that the equality holds
because the quantity for total revenue cancels out across the two
right-hand ratios. ROE can be decomposed into three
components: ROC = Net profit margin × Total capital turnover
× Total capital leverage Net income Net income = Shareholders’
equity Total revenue × Total revenue Total capital Total capital
× Shareholders’ equity This decomposition shows that changes
in ROE can be achieved in three ways: changes in net profit
margin, changes in total capital productivity, and changes in
total capital leverage. This last measure is not an operating
mechanism but rather a financing mech-anism. Businesses
financed with less equity and more debt generate higher ROE
but also have higher financial risk. Using Financial Ratios in
Financial Models Financial ratios provide the foundation for
forecasting financial statements because fi-nancial ratios
capture relationships across financial statement line items that
tend to be preserved over time. For example, one could forecast
the dollar amount of gross profit for next year through an
explicit independent forecast. However, a better approach is to
forecast two ratios: a revenue growth rate and a gross margin.
Using these two ratios in Part Two Financial Analysis and
Forecasting combination one can apply the growth rate to the
8. current year’s revenue, and then use the gross margin rate to
yield an implicit dollar forecast for gross profit. As an example,
if we estimate revenue growth at 5% and operating margin at
24%, we can apply those ratios to last year’s total revenue of
$2.0 million to derive an implicit gross profit fore-cast of $0.5
million [2.0 × (1 + 0.05) × 0.24]. Given some familiarity with
the financial ratios of a business, the ratios are generally easier
to forecast with accuracy than are the expected dollar values.
The approach to forecasting is thus to model future financial
statements based on assumptions about future financial ratios.
Financial models based on financial ratios can be helpful in
identifying the impact of particular assumptions on the forecast.
For example, models can easily allow one to see the financial
impact on dollar profits of a difference of one percentage point
in op-erating margin. To facilitate such a scenario analysis,
financial models are commonly built in electronic spreadsheet
packages such as Microsoft Excel. Good financial fore-cast
models make the forecast assumptions highly transparent. To
achieve transparency, assumption cells for the forecast should
be prominently displayed in the spreadsheet (e.g., total revenue
growth rate assumption cell, operating margin assumption cell),
and then those cells should be referenced in the generation of
the forecast. In this way, it becomes easy not only to vary the
assumptions for different forecast scenarios, but also to
scrutinize the forecast assumptions. Grounding Business
Forecasts in the Reality of the Industry and Macroenvironment
Good financial forecasts recognize the impact of the business
environment on the per-formance of the business. Financial
forecasting should be grounded in an appreciation for industry-
and economy-wide pressures. Because business performance
tends to be correlated across the economy, information
regarding macroeconomic business trends should be
incorporated into a business’s financial forecast. If, for
example, price in-creases for a business are highly correlated
with economy-wide inflation trends, the financial forecast
should incorporate price growth assumptions that capture the
9. avail-able information on expected inflation. If the economy is
in a recession, then the fore-cast should be consistent with that
economic reality. Thoughtful forecasts should also recognize
the industry reality. Business prospects are dependent on the
structure of the industry in which the business operates. Some
in-dustries tend to be more profitable than others.
Microeconomic theory provides some explanations for the
variation in industry profitability. Profitability within an
industry is likely to be greater if (1) barriers to entry discourage
industry entrants, (2) ease of indus-try exit facilitates
redeployment of assets for unprofitable players, (3) industry
partici-pants exert bargaining power over buyers and suppliers,
or (4) industry consolidation reduces price competition.2 Table
5.1 shows the five most and the five least profitable industries
in the United States based on median pretax ROAs for all public
firms from
Case 5 Business Performance Evaluation: Approaches for
Thoughtful Forecasting 97 financial forecast. The forecast
should recognize, however, that business strategy does not play
out in isolation. Competitors do not stand still. A good forecast
recognizes that business strategy also begets competitive
response. All modeling of the effects of busi-ness strategy
should be tempered with an appreciation for the effects of
aggressive competition. One helpful way of tempering the
modeling of business strategy’s effects is to complement the
traditional bottom-up approach to financial forecasting with a
top-down approach. The top-down approach starts with a
forecast of industry sales and then works back to the particular
business of interest. The forecaster models firm sales by
modeling market share within the industry. Such a forecast
makes more explicit the challenge that sales growth must come
from either overall industry growth or market share gain. A
10. forecast that explicitly demands a market share gain of, say,
20% to 24%, is easier to scrutinize from a competitive
perspective than a forecast that simply projects sales growth
without any context (e.g., at an 8% rate). Another helpful
forecasting technique is to articulate business perspectives into
a coherent qualitative view on business performance. This
performance view encourages the forecaster to ground the
forecast in a qualitative vision of how the future will play out.
In blending qualitative and quantitative analyses into a coherent
story, the fore-caster develops a richer understanding of the
relationships between the financial fore-cast and the qualitative
trends and developments in the enterprise and its industry.
Forecasters can better understand their models by identifying
the forecast’s value drivers, which are those assumptions that
strongly affect the overall outcome. For example, in some
businesses the operating margin assumption may have a
dramatic impact on overall business profitability, whereas the
assumption for inventory turnover may make little difference.
For other businesses, the inventory turnover may have a
tremendous impact and thus becomes a value driver. In varying
the assumptions, the forecaster can better appreciate which
assumptions matter and thus channel resources to improve the
forecast’s precision by shoring up a particular assumption or
altering the business strategy to improve the performance of a
particular line item. Lastly, good forecasters understand that it
is more useful to think of forecasts as ranges of possible
outcomes rather than as precise predictions. A common term in
fore-casting is the “base-case forecast.” A base-case forecast
represents the best guess out-come or the expected value of the
forecast’s line items. In generating forecasts, it is also
important to have an unbiased appreciation for the range of
possible outcomes, which is commonly done by estimating a
high-side and a low-side scenario. In this way, the forecaster
can bound the forecast with a relevant range of outcomes and
can best appreciate the key bets of the financial forecast.
11. Recognizing the Potential for Cognitive Bias in the Forecasting
Process
A substantial amount of research suggests that human decision
making can be system-atically biased. Bias in financial
forecasts creates systematic problems in managing and investing
in the business. Two elements of cognitive bias that play a role
in financial forecasting are optimism bias and overconfidence
bias. This note defines optimism bias
Case 5 Business Performance Evaluation: Approaches for
Thoughtful Forecasting 99 One approach to forecasting the
financial statements for 2014 is to forecast each line item from
the income statement and balance sheet independently. Such an
ap-proach, however, ignores the important relationships among
the different line items (e.g., costs and revenues tend to grow
together). To gain an appreciation for those relationships, we
calculate a variety of ratios (Exhibit 5.1). In calculating the
ratios, we notice some interesting patterns. First, sales growth
declined sharply in 2013, from 7.4% to 2.7%. The sales decline
was also accompanied by much smaller decline in profitability
margins; operating margin declined from 14.9% to 14.1%.
Meanwhile, the asset ratios showed modest improvement; total
asset turnover improved only slightly, from 0.7× to 0.8×. Asset
efficiency improved across the various classes of assets (e.g.,
accounts receivable days improved in 2013, from 53.0 days to
48.2 days; PPE turnover also improved, from 2.8× to 3.0×).
Overall in 2013 Nestle’s declines in sales growth and margins
were counteracted with improvements in asset efficiency such
that return on assets improved from 6.9% to 7.1%. Because
return on assets com-prises both a margin effect and an asset-
productivity effect, we can attribute the 2013 improvement in
return on assets to a denominator effect—Nestle’s asset
efficiency improvement. The historical ratio analysis gives us
12. some sense of the trends in busi-ness performance. A common
way to begin a financial forecast is to extrapolate current ratios
into the future. For example, a simple starting point would be to
assume that the 2013 financial ratios hold in 2014. If we make
that simplifying assumption, we generate the financial forecast
presented in Exhibit 5.2. We recognize this forecast as naïve,
but it provides a straw-man forecast through which the
relationships captured in the financial ratios can be scrutinized.
In generating the forecast, all the line-item figures are built on
the ratios used in the forecast. The financial line-item forecasts
are com-puted as referenced to the right of each figure based on
the ratios below. Such a forecast is known as a financial model.
The design of the model is thoughtful. By linking the dollar
figures with the financial ratios, the model preserves the
existing relationships across line items and can be easily
adjusted to accommodate different ratio assumptions. Based on
the naïve model, we can now augment the model with
qualitative and quantitative research on the company, its
industry, and the overall economy. In early 2014, Nestle was
engaged in important efforts to expand the company product
line in foods with all-natural ingredients as well the company
presence in the Pacific Asian region. These initiatives required
investment in new facilities. It was hoped that the initiatives
would make up for ongoing declines in some of Nestle’s
important prod-uct offerings, particularly prepared dishes.
Nestle was made up of seven major busi-ness units: powdered
and liquid beverages (22% of total sales), water (8%), milk
products and ice cream (18%), nutrition and health science
(14%), prepared dishes and cooking aids (15%), confectionary
(11%), and pet care (12%). The food process-ing industry had
recently seen a substantial decline in demand for its products in
the developing world. Important macroeconomic factors had led
to sizable declines in demand from this part of the world. The
softening of growth had led to increased competitive pressures
within the industry that included such food giants as Mondelez,
Tyson, and Unilever.
13. Part Two Financial Analysis and Forecasting Based on this
simple business and industry assessment, we take the view that
Nestle will maintain its position in a deteriorating industry. We
can adjust the naïve 2014 forecast based on that assessment
(Exhibit 5.3). We suspect that the softening of demand in
developing markets and the prepared dishes line will lead to
zero sales growth for Nestle in 2014. We also expect the
increased competition within the industry will increase amount
spent on operating expenses to an operating expense-to-sales
ratio of 35%. Those assumptions give us an operating margin
estimate of 12.9%. We expect the increased competition to
reduce Nestle’s ability to work its inventory such that inventory
turnover returns to the average between 2012 and 2013 of 5.53.
We project PPE turnover to decline to 2.8× with the increased
investment in new facilities that are not yet operational. Those
assumptions lead to an implied financial forecast. The result-ing
projected after-tax ROA is 6.3%. The forecast is thoughtful. It
captures a coherent view of Nestle based on the company’s
historical financial relationships, a grounding in the
macroeconomic and industry reality, and the incorporation of
Nestle’s specific busi-ness strategy. We recognize that we
cannot anticipate all the events of 2014. Our forecast will
inevitably be wrong. Nevertheless, we suspect that, by being
thoughtful in our analysis, our forecast will provide a
reasonable, unbiased expectation of future performance. Exhibit
5.4 gives the actual 2014 results for Nestle. The big surprise
was that the effect of competition was worse than anticipated.
Nestle’s realized sales growth was actually negative, and its
operating margin dropped from 14.9% and 14.1% in 2012 and
2013, respectively, to 11.9% in 2014. Our asset assumptions
were fairly close to the outcome, although the inventory
turnover and PPE turnover were a little worse than we had
expected. Overall, the ROA for Nestle dropped from 7.1% in
2013 to 5.3% in 2014. Although we did not complete a high-
side and a low-side scenario in this simple example, we can
14. hope that, had we done so, we could have appropriately assessed
the sources and level of uncertainty of our forecast. Appendix
To test for forecasting bias among business school forecasters,
an experiment was per-formed in 2005 with the 300 first-year
MBA students at the Darden School of Business at the
University of Virginia. Each student was randomly assigned to
both a U.S. public company and a year between 1980 and
2000.3 Some students were assigned the same company, but no
students were assigned the same company and the same year.
The students were asked to forecast sales growth and operating
margin for their assigned company for the subsequent three
years. The students based their forecasts on the 3More
precisely, the population of sample firms was all U.S. firms
followed by Compustat and the Value Line Investment Survey.
To ensure meaningful industry forecast data, we required that
each firm belong to a meaningful industry, which is to say that
multiform, industrial services, and diversified industries were
not considered). We also required that Value Line report
operating profit for each firm. To maintain consistency in the
representation of firms over time, the sample began with a
random identification of 25 firms per year. The forecast data
were based on Value Line forecasts during the summer of the
first year of the forecast. All historical financial data were from
Compustat.
CASE In the Bruner text, carefully read Case 10: Best
Practices” in Estimating the Cost of Capital: An Update on
pages 145 to 171.
15. Part Three
Estimating the Cost of Capital
Over the years, theoretical developments in finance converged
into compelling recom-mendations about the cost of capital to a
corporation. By the early 1990s, a consensus had emerged
prompting descriptions such as “traditional . . . textbook . . .
appropriate,” “theoretically correct,” “a useful rule of thumb”
and a “good vehicle.” In prior work with Bob Bruner, we
reached out to highly regarded firms and financial advisors to
see how they dealt with the many issues of implementation.1
Fifteen years have passed since our first study. We revisit the
issues and see what now constitutes best practice and what has
changed in both academic recommendations and in practice. We
present evidence on how some of the most financially
sophisticated compa-nies and financial advisors estimate capital
costs. This evidence is valuable in several respects. First, it
identifies the most important ambiguities in the application of
cost of capital theory, setting the stage for productive debate
and research on their resolu-tion. Second, it helps interested
companies to benchmark their cost of capital estima-tion
practices against best-practice peers. Third, the evidence sheds
light on the accuracy with which capital costs can be reasonably
estimated, enabling executives to use the estimates more wisely
in their decision-making. Fourth, it enables teachers to answer
the inevitable question, “But how do companies really estimate
their cost of capital?” The paper is part of a lengthy tradition of
surveys of industry practice. For in-stance, Burns and Walker
(2009) examine a large set of surveys conducted over the last
quarter century into how U.S. companies make capital
budgeting decisions. They find that estimating the weighted
average cost of capital is the primary approach to select-ing
hurdle rates. More recently, Jacobs and Shivdasani (2012)
report on a large-scale survey of how financial practitioners
implement cost of capital estimation. Our approach differs from
most papers in several important respects. Typically studies are
based on written, closed-end surveys sent electronically to a
16. large sample of firms, often covering a wide array of topics, and
commonly using multiple choice or fill-in-the-blank ques-tions.
Such an approach typically yields low response rates and
provides limited op-portunity to explore subtleties of the topic.
For instance, Jacobs and Shivdasani (2012) provide useful
insights based on the Association for Finance Professionals
(AFP) cost of capital survey. While the survey had 309
respondents, AFP (2011, page 18) reports this was a response
rate of about 7% based on its membership companies. In
contrast, we report the result of personal telephone interviews
with practitioners from a care-fully chosen group of leading
corporations and financial advisors. Another important
difference is that many existing papers focus on how well
accepted modern financial techniques are among practitioners,
while we are interested in those areas of cost of capital
estimation where finance theory is silent or ambiguous and
practitioners are left to their own devices. The following section
gives a brief overview of the weighted-average cost of capi-tal.
The research approach and sample selection are discussed in
Section II. Section III reports the general survey results. Key
points of disparity are reviewed in Section IV.
Section V discusses further survey results on risk adjustment to
a baseline cost of capi-tal, and Section VI highlights some
institutional and market forces affecting cost of capital
estimation. Section VII offers conclusions and implications for
the financial practitioner.
I. The Weighted-Average Cost of Capital
A key insight from finance theory is that any use of capital
imposes an opportunity cost on investors; namely, funds are
diverted from earning a return on the next best equal-risk
investment. Since investors have access to a host of financial
market opportunities, corporate uses of capital must be
benchmarked against these capital market alternatives. The cost
of capital provides this benchmark. Unless a firm can earn in
excess of its cost of capital on an average-risk investment, it
17. will not create economic profit or value for investors. A
standard means of expressing a company’s cost of capital is the
weighted-average of the cost of individual sources of capital
employed. In symbols, a company’s weighted-average cost of
capital (or WACC) is:
WACC = (Wdebt(1 − t)Kdebt) + (WequityKequity),
where:
K = component cost of capital.
W = weight of each component as percent of total capital.
t = marginal corporate tax rate.
For simplicity, this formula includes only two sources of
capital; it can be easily ex-panded to include other sources as
well. Finance theory offers several important observations when
estimating a company’s WACC. First, the capital costs
appearing in the equation should be current costs reflect-ing
current financial market conditions, not historical, sunk costs.
In essence, the costs should equal the investors’ anticipated
internal rate of return on future cash flows as-sociated with
each form of capital. Second, the weights appearing in the
equation should be market weights, not historical weights based
on often arbitrary, out-of-date book values. Third, the cost of
debt should be after corporate tax, reflecting the benefits of the
tax deductibility of interest. Despite the guidance provided by
finance theory, use of the weighted-average expression to
estimate a company’s cost of capital still confronts the
practitioner with a number of difficult choices.2 As our survey
results demonstrate, the most nettlesome component of WACC
estimation is the cost of equity capital; for unlike readily avail-
Part Three Estimating the Cost of Capital able yields in bond
markets, no observable counterpart exists for equities. This
forces practitioners to rely on more abstract and indirect
methods to estimate the cost of equity capital. II. Sample
Selection This paper describes the results of conversations with
leading practitioners. Believ-ing that the complexity of the
18. subject does not lend itself to a written questionnaire, we
wanted to solicit an explanation of each firm’s approach told in
the practitioner’s own words. Though our telephone interviews
were guided by a series of questions, the conversations were
sufficiently open-ended to reveal many subtle differences in
practice. Since our focus is on the gaps between theory and
application rather than on aver-age or typical practice, we
aimed to sample practitioners who were leaders in the field. We
began by searching for a sample of corporations (rather than
investors or financial advisors) in the belief that they had ample
motivation to compute WACC carefully and to resolve many of
the estimation issues themselves. Several publications offer lists
of firms that are well-regarded in finance; of these, we chose
Fortune’s 2012 listing of Most Admired Companies.3 Working
with the Hay Group, Fortune creates what it terms “the
definitive report card on corporate reputations.” Hay provided
us with a listing of companies ranked by the criterion “wise use
of assets” within industry. To create our sample we only used
companies ranked first or second in their industry. We could not
obtain raw scores that would allow comparisons across
industries. The 2012 Fortune rankings are based on a survey of
698 companies, each of which is among the largest in its
industry. For each of 58 industry lists, Hay asks executives,
directors, and analysts to rate companies in their own industry
on a set of criteria. Start-ing with the top two ranked firms in
each industry, we eliminated companies headquar-tered outside
North America (eight excluded).4 We also eliminated the one
firm classified as a regulated utility (on the grounds that
regulatory mandates create unique issues for capital budgeting
and cost of capital estimation) and the seven firms in finan-cial
services (inclusive of insurance, banking, securities and real
estate). Forty-seven companies satisfied our screens. Of these,
19 firms agreed to be interviewed and are included in the
sample given in Table I. Despite multiple concerted attempts we
made to contact appropriate personnel at each company, our
response rate is lower than Bruner, Eades, Harris, and Higgins
19. (1998) but still much higher than typical cost of capital surveys.
We suspect that increases in the number of surveys and in the
demands on executives’ time influence response rates now
versus the late 1990s.
Part Three Estimating the Cost of Capital pressures regarding
cost of capital. When an advisor is representing the sell side of
an M&A deal, the client wants a high valuation but the reverse
may be true when an advisor is acting on the buy side. In
addition, banks may be engaged by either side of the deal to
provide a Fairness Opinion about the transaction. We wondered
whether the pressures of these various roles might result in
financial advisors using assumptions and methodologies that
result in different cost of capital estimates than those made by
operating companies. This proved not to be the case. ∙
Textbooks and Trade books. In parallel with our prior study, we
focus on a handful of widely-used books. From a leading
textbook publisher we obtained names of the four best-selling,
graduate-level textbooks in corporate finance in 2011. In
addition, we consulted two popular trade books that discuss
estimation of the cost of capital in detail. III. Survey Findings
Table II summarizes responses to our questions and shows that
the estimation ap-proaches are broadly similar across the three
samples in several dimensions: ∙ Discounted Cash Flow (DCF)
is the dominant investment evaluation technique. ∙ WACC is the
dominant discount rate used in DCF analyses. ∙ Weights are
based on market not book value mixes of debt and equity.6 ∙
The after-tax cost of debt is predominantly based on marginal
pretax costs, and marginal tax rates.7 ∙ The Capital Asset
Pricing Model (CAPM) is the dominant model for estimating the
cost of equity. Despite shortcomings of the CAPM, our
companies and finan-cial advisors adopt this approach. In fact,
across both companies and financial advisors, only one
respondent did not use the CAPM.8 These practices parallel
many of the findings from our earlier survey. First, the “best
practice” firms show considerable alignment on many elements
20. of practice. Sec-ond, they base their practice on financial
economic models rather than on rules of thumb or arbitrary
decision rules. Third, the financial frameworks offered by
leading texts and trade books are fundamentally unchanged from
our earlier survey.
Part Three Estimating the Cost of Capital On the other hand,
disagreements exist within and among groups on matters of
application, especially when it comes to using the CAPM to
estimate the cost of equity. The CAPM states that the required
return (K) on any asset can be expressed as: K = Rf + β(Rm −
Rf), where: Rf = interest rate available on a risk-free asset. Rm
= return required to attract investors to hold the broad market
portfolio of risky assets. β = the relative risk of the particular
asset. According to CAPM then, the cost of equity, Kequity, for
a company depends on three components: returns on riskfree
assets (Rf), the stock’s equity “beta” which mea-sures risk of
the company’s stock relative to other risky assets (β = 1.0 is
average risk), and the market risk premium (Rm − Rf) necessary
to entice investors to hold risky assets generally versus risk-free
instruments. In theory, each of these components must be a
forward-looking estimate. Our survey results show substantial
disagreements, espe-cially in terms of estimating the market
risk premium. A. The Risk-Free Rate of Return As originally
derived, the CAPM is a single period model, so the question of
which in-terest rate best represents the risk-free rate never
arises. In a multi period world typi-cally characterized by
upward-sloping yield curves, the practitioner must choose. The
difference between realized returns on short-term U.S.
Treasury-bills and long-term T-bonds has averaged about 150
21. basis points over the longrun; so choice of a risk-free rate can
have a material effect on the cost of equity and WACC.9
Treasury bill yields are more consistent with the CAPM as
originally derived and reflect risk-free returns in the sense that
T-bill investors avoid material loss in value from interest rate
movements. However, long-term bond yields more closely
reflect the default-free holding period returns available on long-
lived investments and thus more closely mirror the types of
investments made by companies. Our survey results reveal a
strong preference on the part of practitioners for long-term bond
yields. As shown in Table II (Question 9), all the corporations
and financial advisors use Treasury bond yields for maturities
of 10 years or greater, with the 10-year rate being the most
popular choice. Many corporations said they matched the term
of the risk-free rate to the tenor of the investment. In contrast, a
third of the sample books sug-gested subtracting a term
premium from long-term rates to approximate a shorter term
yield. Half of the books recommended long-term rates but were
not precise on the choice of maturity.
Case 10 “Best Practices” in Estimating the Cost of Capital: An
Update 157 Because the yield curve is ordinarily relatively flat
beyond ten years, the choice of which particular long-term yield
to use often is not a critical one. However, at the time of our
survey, Treasury markets did not display these “normal”
conditions in the wake of the financial crisis and expansionary
monetary policy. In the year we conducted our survey (2012),
the spread between 10-and 30-year Treasury yields averaged
112 basis points.10 While the text and trade books do not
directly address the question of how to deal with such markets,
it is clear that some practitioners are looking for ways to “nor-
malize” what they see as unusual circumstances in the
government bond markets. For instance, 21% of the
corporations and 36% of the financial advisors resort to some
his-torical average of interest rates rather than the spot rate in
the markets. Such an averag-ing practice is at odds with finance
22. theory in which investors see the current market rate as the
relevant opportunity. We return to this issue later in the paper.
B. Beta Estimates Finance theory calls for a forward-looking
beta, one reflecting investors’ uncertainty about the future cash
flows to equity. Because forward-looking betas are
unobservable, practitioners are forced to rely on proxies of
various kinds. Often this involves using beta estimates derived
from historical data. The usual methodology is to estimate beta
as the slope coefficient of the market model of returns: Rit = αi
+ βi(Rmt), where: Rit = return on stock I in time period (e.g.,
day, week, month) t. Rmt = return on the market portfolio in
period t. αi = regression constant for stock i. βi = beta for stock
i. In addition to relying on historical data, use of this equation
to estimate beta re-quires a number of practical compromises,
each of which can materially affect the re-sults. For instance,
increasing the number of time periods used in the estimation
may improve the statistical reliability of the estimate but risks
including stale, irrelevant in-formation. Similarly, shortening
the observation period from monthly to weekly, or even daily,
increases the size of the sample but may yield observations that
are not normally distributed and may introduce unwanted
random noise. A third compromise involves choice of the
market index. Theory dictates that Rm is the return on the
“market portfolio,” an unobservable portfolio consisting of all
risky assets, including human
23. Case 10 “Best Practices” in Estimating the Cost of Capital: An
Update 165 We probed the extent to which respondents alter
discount rates to reflect risk dif-ferences in questions about
variations in project risk, strategic investments, terminal values,
multidivisional companies, and synergies (Table II, Questions
13 and 17–20). Responses indicate that the great preponderance
of financial advisors and text authors strongly favor varying the
discount rate to capture differences in risk (Table II, Ques-tions
13, 19, and 20). Corporations, on the other hand, are more
evenly split, with a sizeable minority electing not to adjust
discount rates for risk differences among indi-vidual projects
(Table II, Questions 13 and 17). Comparing these results with
our earlier study, it is worth noting that while only about half of
corporate respondents adjust dis-count rates for risk, this figure
is more than double the percentage reported in 1998. Despite
continuing hesitance, companies are apparently becoming more
comfortable with explicit risk adjustments to discount rates. A
closer look at specific responses suggests that respondents’
enthusiasm for risk-adjusting discount rates depends on the
quality of the data available. Text authors live in a largely data-
free world and thus have no qualms recommending risk
adjustments whenever appropriate. Financial advisors are a bit
more constrained. They regularly confront real-world data, but
their mission is often to value companies or divisions where
extensive market information is available about rates and prices.
Correspond-ingly, virtually all advisors questioned value multi
division businesses by parts when the divisions differed
materially in size and risk, and over 90% are prepared to use
sepa-rate division WACCs to reflect risk differences. Similarly,
82% of advisors value merger synergies and strategic
opportunities separately from operating cash flows, and 73% are
prepared to use different discount rates when necessary on the
various cash flows. There is a long history of empirical research
on how shareholder returns vary across firm size, leading some
academics to suggest that a small cap premium should be added
24. to the calculated cost of capital for such firms.17 Our study
focuses on large public com-panies, so it is not surprising that
firm responses do not reveal any such small cap adjust-ments.
In contrast, financial advisors work with a wide spectrum of
companies and are thus more likely to be sensitive to the
issue—as indeed they are. Among financial advi-sors
interviewed, 91% said they would at times increase the discount
rate when evaluat-ing small companies. Of those who did make
size adjustments, half mentioned using Ibbotson (2012) data
which show differences in past returns among firms of different
size. The adjustment process varied among advisors, as the
following illustrative quotes suggest. “Adjustments are
discretionary, but we tend to adjust for extreme size.” “We have
used a small cap premium, but we don’t have a set policy to
make adjustments. It is fairly subjective.” “We apply a small
cap premium only for microcap companies.” “We use a small
cap premium for $300 million and below.” In important ways
corporate executives face a more complex task than financial
advisors or academics. They must routinely evaluate
investments in internal opportuni-ties, and new products and
technologies, for which objective, third party information is
Part Three Estimating the Cost of Capital the influence of a
wide array of stakeholders. For instance, a number of companies
voiced that any change in estimation methods would raise red
flags with auditors look-ing for process consistency in key
items such as impairment estimates. Some advisors mentioned
similar concerns, citing their work in venues where consistency
and prece-dent were major considerations (e.g., fairness
opinions, legal settings). Moreover, some companies noted that
they “outsourced” substantial parts of their estimation to
advisors or data providers. These items serve as a reminder that
the art of cost of capital estima-tion and its use are part of a
larger process of management—not simply an application of
finance theory. The financial upheaval in 2008–2009 provided a
25. natural test of respondents’ com-mitment to existing cost of
capital estimation methodologies and applications. When
confronted with a major external shock, did companies make
wholesale changes or did they keep to existing practices? When
we asked companies and advisors if financial market conditions
in 2008–2009 caused them to change the way they estimate and
use the cost of capital (Table II, Question 15), over three-fifths
replied “No.” In the main, then, there was not a wholesale
change in methods. That said, a number of respondents noted
discomfort with cost of capital estimation in recent years. Some
singled out high volatility in markets. Others pointed to the low
interest rate environment resulting from Federal Reserve
policies to stimulate the U.S. economy. Combining low interest
rates and typical historical risk premiums created capital cost
estimates that some practitio-ners viewed as “too low.” One
company was so distrustful of market signals that it placed an
arbitrary eight percent floor under any cost of capital estimate,
noting that “since 2008, as rates have decreased so drastically,
we don’t feel that [the estimate] represents a long-term cost of
capital. Now we don’t report anything below 8% as a minimum
[cost of capital].” Among the minority who did revise their
estimation procedures to cope with these market forces, one
change was to put more reliance on historical numbers when
estimating interest rates as indicated in Table XI. This is in
sharp contrast to both finance theory and what we found in our
prior study. Such rejection of spot rates in favor of historical
averages or arbitrary numbers is inconsistent with the academic
view that historical data do not accurately reflect current
attitudes in competitive markets. The academic challenge today
is to better articulate the extent to which the superiority of spot
rates still applies when markets are highly volatile and when
gov-ernments are aggressively attempting to lower rates through
such initiatives as quan-titative easing. Another change in
estimation methods since our earlier study is reflected in the
fact that more companies are using forward-looking risk
premiums as we reported earlier and illustrated in Table VII.
26. Since the forward-looking premiums cited by our respon-dents
were higher than historical risk premiums, they mitigated or
offset to some degree the impact of low interest rates on
estimated capital costs.
PART l
FOR THIS ASSIGNMENT PLEASE USE THE CMPAGNY
“SHERWIN-WILLIAMS”
In the Bruner text, carefully read Case 5: Business Performance
Evaluation: Approaches for Thoughtful Forecasting on pages 89
to 102. This “case” is actually a note that “examines principles
in the art and science of thoughtful financial forecasting for the
business manager.”
The first part of the note discusses “Interpreting Financial
Ratios.” For this assignment, search online for the 2018 annual
report of a publicly traded company (you can choose any
company you would like to know more about and/or that you
think the class would like to know about). Use the financial
statement data to in the annual report to fill in the following
chart (you must compute these ratios for the noted years – round
all values to one decimal place):
Ratio
2016
2017
2018
27. Total revenue growth rate
Gross profit margin
Net profit margin
Accounts receivable days
Inventory days
Accounts payable days
Asset turnover
Total capital turnover
ROA
28. ROE
ROC
Copy and paste your completed chart into the Word document.
Discuss any ratios that show significant change over the period.
Do the changes indicate potential strength or weakness?
Next, what is your expected growth rate in sales and what is
your expectation for the net profit margin for your chosen
company for next year? What is your justification for those
expectations?
This assignment should be at least 600 words.
PART ll
In the Bruner text, carefully read Case 10: Best Practices” in
Estimating the Cost of Capital: An Update on pages 145 to 171.
For this assignment, estimate the weighted average cost of
capital for the company that you discussed in the previous
assignment You must explain each part of your estimate and
identify the source of any data that you use in creating your
estimate in proper APA format.
This Assignment should be at least 600 words.