Saturday, August 31, 2019

Saint Patrick

Saint Patrick was born in Kilpatrick, Scotland, in the year 387. His parents are Calphurnius and Conchessa. When Patrick was sixteen, he was carried off into captivity by Irish marauders and was sold as a slave to a chieftan named Milchu in Dalriada. In Dalriada, he tended his master’s flocks in the valley of the Braid and on the slopes of Slemish. When he was working the fields, he acquired a perfect knowledge of the Celtic tongue. His master was a druidical high priest, in which gave Patrick an opportunity to become familiar with all the details of Druidism from whose bondage he was destined to liberate the Irish race. Warned by an angel after six years, he fled from his cruel master and bent his steps toward the west. He traveled about 200 miles to Westport. He found a ship ready to sail and after some rebuffs was allowed on board. In a few days he arrived in Britain, but now his heart was set on devoting himself to the service of God in the sacred ministry. After wandering in dense forest for twenty-eight days they were found by others and eventually Patrick made it home to his family. He remained with them for a few years, and then decided to pursue the priesthood in answer to dreams he had about returning to Ireland. After a number of years, while he was on a short visit to the continent, probably Gaul, his name was proposed to lead a missionary expedition to Ireland. He set out around the year 432 as a bishop, and went to the headquarters of the Ulaid in Emain Macha, and there established his first church at what is now Armagh. From there he traveled predominantly in the north and west and made many converts, and trained many priests. After some time, his integrity was questioned, resulting in an inquiry at the hands of the British bishops, but he was subsequently vindicated. As the Ulaid were pushed out of more and more territory, Patrick moved with them to spend his last days in Down, from which he wrote his Confession. He died March 17, 461, in Downpatrick, Ireland. Kilpatrick still retains many memorials of Saint Patrick. His feast day, St. Patrick’s Day, is March 17, or the day he died.

Agriculture importance Essay

Those of us who preach the gospel of agriculture with evangelical zeal find the text compelling and convincing. We are regularly possessed by the spirit only to look around and see out colleagues, in other sectors, in country management, or even our senior management doubting, yawning or subtly edging towards the door. We face the implicit query, â€Å"If agriculture can do such great things, why have they not yet happened? †1 The past decade has been one of agro-pessimism. The promises that agricultural development seem to hold did not materialise. This pessimism seemed to coincide with pessimism about Sub-Saharan Africa. Especially for Sub-Saharan Africa the hope was that economic development would be brought about by agricultural development. After the success of the green revolution in Asia, the hope was that a similar agricultural miracle would transform African economies. But this hope never materialised, agricultural productivity did not increase much in SSA (figure 1), and worse, the negative effects of the green revolution in Asia became more apparent, such as pesticide overuse and subsequent pollution. Also in Asia the yield increases tapered off. The sceptics put forward several arguments why agriculture is no longer an engine of growth2. For instance, the liberalisation of the 1990s and greater openness to trade has lead to a reduction in the economic potential of the rural sector: cheap imported Chinese plastic buckets out compete the locally produced pottery. On the other hand, it does mean cheaper (imported) supplies. With rapid global technical change and increasingly integrated markets, prices fall faster than yields rise. So, rural incomes fall despite increased productivity if they are net producers3. The integration of rural with urban areas means that healthy young people move out of agriculture, head to town, leaving behind the old, the sick and the dependent. It is often also the men who move to urban areas, leaving women in charge of the farm. This has resulted in the increased sophistication of agricultural markets (and value chains) which excludes traditional smallholders, who are poorly equipped to meet the demanding product specifications and timeliness of delivery required by expanding supermarkets. The natural resource base on which agriculture depends is poor and deteriorating. Productivity growth is therefore increasingly more difficult to achieve. Finally, multiplier effects occur when a change in spending causes a disproportionate change in aggregate demand. Thus an increase in spending produces an increase in national income and consumption greater than the initial amount spent. But as GDP rises and the share of agriculture typically decreases, the question is how important these multiplier effects are, especially when significant levels of poverty remain in rural areas, which is the case in middleincome countries4. The disappointment with agriculture led many donor organisations to turn away from agriculture, looking instead to areas that would increase the well-being of poor people, such as health and education. Those organisations that still focused on agriculture, such as the CGIAR, were put under pressure to focus more on reducing poverty, besides increasing agricultural productivity. However, since the beginning of the new century, there seems to be a renewed interest in agriculture. A review of major policy documents5, including the well-publicised Sachs report and the Kofi Annan report, show that agriculture is back on the agenda again. The most influential report, however, has been the World Development Report 2008 of the World Bank6. This report argues that growth in the agricultural sector 1 contributes proportionally more to poverty reduction than growth in any other economic sector and that therefore alone, the focus should be on the agricultural sector when achieving to reach MDG 1. A reassessment of the role of agriculture in development seems to be required. This policy paper addresses several timely though complex questions: †¢ First, how can or does agriculture contribute to economic development, and in particular how does it relate to poverty? †¢ Second, the agricultural sector has changed considerably in the past decades: what are the main drivers of this change? †¢ Third, what is the relationship between economic or agricultural growth and pro-poor development? †¢ Fourth, how does agriculture relate to other sectors in the economy? †¢ Fifth, who is included and who is excluded in agricultural development, specifically focusing on small farms? †¢ And finally, if agricultural development is indeed important to economic development, then why, despite all the efforts and investments, has this not led to more successes? 2. Agriculture and economic growth This section presents a number of factual observations describing how the agricultural sector changed in terms of productivity, contribution to economic growth, and indicating the relevance of the agricultural sector for poverty alleviation in different regions. Background: some facts In the discussion of the role of agriculture in economic development, a leading question is how agriculture contributes to economic growth, and especially to pro-poor growth. There seems to be a paradox in the role of agriculture in economic development. The share of agriculture contributing to GDP is declining over the years (see figure 1). At the same time, the productivity of for instance cereal yields has been increasing (see figure 2). It seems that as agriculture becomes more successful, its importance declines in the overall economy. Of course, other sectors in the economy can be even more successful, such as the Asian Tigers.

Friday, August 30, 2019

Interview Reflection

Ernst & Young – LEAP Internship (Tax) On 1st March, I was really nervous for EY Tax interview. I had another Accounting quiz on the same day itself and I was not really prepared for the interview. And as if I was not nervous enough, I had to forget to bring my IC along! Thank goodness that the security at EY allowed me to enter. Then I went up to EY and saw another girl from NUS for the same tax interview as well. The personnel handed a short written test question to both of us to write in 15 minutes time.The NUS girl (I forgot her name) seems to be really prepared and told me about her friends' experiences and I remembered that she said her friend got a cow farm question for tax interview. I got nervous because truthfully, I wouldn't know how to answer that if it was posed to me. And I got more nervous when I thought it was going to be a group interview – seeing people competing with you for the same interview is just going to be so nerve-wrecking. Also read: Primary and Secondary Reflection ExamplesBut luckily, it was one-to-one and I got a very very nice lady as my interviewer. She's the tax partner at EY for corporate tax (I think) and the questions she asked were within what I expected – group conflict, teamwork, leadership, and time management. I answered to the best that I could and I really hope I can get in. Most importantly, I want to work under her (she said she will be leading the interns) because she just seemed to be a nice boss.KPMG – Audit And for the KPMG interview, though it was my second interview, I screwed it up. The same questions, but I just screwed it up badly because I was too relaxed I think. I didn't answer to my very best and I don't expect myself to get in. But one thing I learnt was – I scored very well for verbal test but below average for numerical test. Guess I am just bad at calculations.

Thursday, August 29, 2019

Literature Essay Example | Topics and Well Written Essays - 1500 words - 1

Literature - Essay Example â€Å"Barn Burning,† is also set in the Southern part of the United States, and tells the story of a little boy named Colonel Sartoris Snopes, or Sarty, whose father, Abner Snopes, bitter due to the class differences, is virulently acting out against the rich and influential even as he works for them. The story highlights the awkward relationship between the boy and his father, while also touching upon the young boy’s conscious and difficult decision to choose between familial loyalty and the truth. At the outset, both stories seem to have very different themes and plots. â€Å"A Rose for Emily† starts at the end of the story, and is a tale with gothic elements. â€Å"Barn Burning† on the other hand starts at the middle, and is essentially a tale regarding the triumph of what the protagonist perceives to be right over wrong. However, upon closer inspection, they do seem to have an identical theme – that of exploring a strange and strained relationsh ip of children with their respective fathers. It is suggested in â€Å"A Rose for Emily† that Miss Grierson’s father was a strict patriarch. ... However, after his death, she comes out of the hold that her father had on her. Although it is interesting to note that she does not want to come out of that hold herself. She is caught off guard when her father dies, and not knowing how to handle life now that her father is dead, is shown to have denied the death altogether. This, in essence, shows that she could not come to terms with living life independently. In â€Å"Barn Burning,† similarly, the relationship of Sarty with his father, Abner, is explored – although, here the analysis is much more in-depth than in â€Å"A Rose for Emily†. Abner Snopes is shown to be a man filled with vengeance and hatred for the rich. He holds them in contempt and carries out acts of, what he perceives to be, rightful retribution. Sarty Snopes observes all this and though he tries to side with his father, based on ideas of familial loyalty, it is shown that the father mistrusts him all the same. Abner is a very controlling man , who does not allow his family to challenge or even question his actions. His hold on his family is complete. However, despite that, Sarty, in the end, goes against his father when he goes to report the burning to the barn’s owner, De Spain. That is where these two stories seem to differ: Emily does not know what to do without her father’s hold on her. She cannot go against her father even after he has died, so much so that she refuses to acknowledge his death. Whereas in â€Å"Barn Burning,† Sarty willfully chooses to go against his father in reporting his actions to De Spain, thus, freeing himself of his hold. Both these stories are set in southern towns and explore certain â€Å"southern† values, so to speak. Miss Emily Grierson is caught between the changing times

Wednesday, August 28, 2019

Activities Essay Example | Topics and Well Written Essays - 500 words - 2

Activities - Essay Example However, lack of eye contact might show a real disinterest which would make the person presenting or discussing change strategies to keep their attention. A person needs to know the differences between all of these verbal and non-verbal cues to create a strategy for effective conversation or presentation. Emotional intelligence is important because it helps a person understand their own feelings and also the feelings of others. This helps the group member keep self-control and not act on their negative emotions which can be a turn off from others in the group. It also shows others in the group that you have empathy for their needs and gives you a strategy to talk on their level to gain more interest and willingness to follow. Emotions create social connection. When a person wants to be a team leader, they cannot be explosive when angry or overly excited if they want a positive follower response. In reflection, I learned a great deal about my personality. I often dismiss the words of others when I feel strongly about a certain issue or activity. This is because I have a great deal of trust in my own decision-making and I often do not like to work in groups because of this. However, I learned that active listening actually provides more diversity of solutions or quality discussion when the group leader gives people opportunities to speak their minds. This will be beneficial because people like to share in decision-making and be recognized for their own talents and knowledge. I will remember to be an active listener when in a leader role so that I gain more commitment and better social relationships with a mutual and shared focus. The most important lesson learned was about emotional intelligence. Many people have their own sets of values and principles that are unique from others. These attitudes impact behavior, discussion and the amount of conflict that can arise in the group or team. It is important to understand that people

Tuesday, August 27, 2019

Electronic communication Essay Example | Topics and Well Written Essays - 1000 words

Electronic communication - Essay Example It is with no doubt that the technology has lowered the cost of operation and increased profit margins and business productivity, however, its rapid growth and extensive use has brought along potentially harmful threats to the technology itself and to its users. The paper examines the potential threats related to electronic communication and recommends possible responds to such threats. Introduction Electronic communication, a form of communication involving the transfer of images, signals, data and signs through electromagnetic energy, radio, wire or photo-optical system was discovered in 1998 and its popularity has grown drastically ever since. (Kranakis, 2008) The technology has significantly improved and enhanced the speed, reliability and accuracy in communication including globalization of various business and organizations utilizing the technology. A part from the vast and evident advantages of electronic communication, there are a number of threats associated with overrelianc e on the technology. The use of loop holes in the technology by cyber criminals posses as the most critical threat among others. Malicious actors such as hackers have the habit of utilizing easily accessible tools to compromise and intercept electronic communication thus putting the user and the target infrastructure at high risk. (Kranakis, 2008) The threats associated with electronic communication presents a potential danger to a business organization’s assets including the data of the organization and the users, user authentication information and the physical infrastructures like the network and the computer systems. The assaults and severity associated with such threats as spam, viruses and network attacks have risen to the extent that it threatens the viability of electronic communication. Apart from the leakage of confidential user data, such attacks and threats causes increased and unpredictable hardware and software costs, disruption to email delivery and depletion o f IT resources. The threats associated with electronic communication can be widely categorized in to two including the following. System and Application Threats There is a possibility that data and information sent through electronic communication can be intercepted, copied and modified by unauthorized persons through such attacks as man-in-the-middle attack. This compromises privacy and exposes the user to great danger in case sensitive information such as banking details are exploited. In case of a hospital, the modification of intercepted patient information can endanger the patient’s health or worse off, life. (Melliar-Smith & Chuang, 2012) Password theft and unauthorized computer and network access by hackers or other actors with malicious intentions also posses as a dangerous threat associated with electronic communication. Hackers use special software and Trojans to attack and compromise the security of a target thus gaining unrestricted access to sensitive data and in formation which can be used against the business organization. Such security breach can do massive damage to a company’s reputation besides its competitive advantage in case sensitive and confidential information is lost in the process. In addition, intellectual property may also be lost in case of a security breach involving

Monday, August 26, 2019

Arabic learning tools. Kingdom of Education web based platform Essay

Arabic learning tools. Kingdom of Education web based platform development. Project evaluation - Essay Example Keeping in mind the increasing importance of the Internet for education I have decided to develop a web site which allows beginners to learn basic Arabic language skills. The name of this web site is â€Å"Kingdom of Education† that is aimed at â€Å"providing an easy way to learn Arabic language and for everyone around the entire world†. Thus, keeping this objective in my mind I have started working on the development of a new technology based solution to offer a great deal of support for learning basic Arabic language skills. In view of the fact that the Internet has expanded so much, and presently there exist a wide variety of similar services and applications on the Web. In addition, a wide variety of technology based solutions are presently operational and offering superior services in all areas of life. In this scenario, the idea of web based learning portal is not a new one. However, I have tried to bring some innovation to this idea. In this regard I have develo ped an online system that offers very quick, simple and excellent approach to learn Arabic. This online learning system will be very effective and useful for people all through the world. This new technology based system will offer a capability to learn and speak the Arabic language quickly. This report presents a detailed analysis of my project. In this report, I will discuss some of the important aspects that are associated with my project. This report will analyze the basic idea and need behind the development of this web site, its objectives, development, research methodology and application aspects. This report will deeply assess the major contributions that this web based platform has made to the Arabic language learning. Research In order to better determine the requirements... After this research and analysis I have analyzed the Arabic learning tools and methods. Presently we have a wide variety of tools and methods around the world that are more complex, paper based and hard to reach. Hence, this manual nature and process of learning Arabic has become very difficult to manage in new technology based age where people have less time to learn and listen. In this situation there is a need for some innovative solutions. For this purpose I have researched the web and found a large number of websites which provide services and support for online Arabic learning. However, these websites have rigid material and traditional ways of learning. By seeing all these situations I have developed an idea which requires building up an online platform that offers an excellent support for learning and teaching Arabic online. For this purpose I have decided to build up an online web based portal that can be easily accessed and managed. These all aspects lead us to offer a grea t deal of support and capability to enhance the overall performance of the system development and application. For the implementation of this online Arabic learning system I have researched for the learning material. Here we need some innovation for new learning material. For this purpose, I have tried to develop more interactive and superior learning material. For this sake I have concentrated on the more interactive books and notes.

Sunday, August 25, 2019

Democratic and Prescriptive Instructional Strategies Research Paper

Democratic and Prescriptive Instructional Strategies - Research Paper Example According to the Alternative Educational Resource Organization, a democratic approach of education is one whereby students or learners have the autonomy in scheduling their daily actions and that there is no impartiality and undemocratic decision making among the students and teachers. (Bennett, 2001) A prescriptive approach is one whereby students are presented with the course outline of what they will learn and what they are expected to do. It involves student getting their learning results from what the teachers are saying and from the existing literature that is prescribed by the teacher or the instructor. In essence prescriptive approach is a strategy where the students rely heavily on what their teachers will say and the literature they are directed to use. The differences between the two approaches are the freedom given to the learners to make decisions. We find that in a prescriptive approach there is no excellent environment for learning because students are supposed to do what their tutors do without any alteration. Students are always forced to do activities that they are not comfortable with because there is no interaction between the teacher and the students hence the morale of the students is always low and tend to perform poorly in their course work. While in a democratic approach there is greater interaction among the students themselves and between the students and their teachers thus opening avenues of generating new knowledge and it is likely that students will be satisfied with the outcome. Another difference is that in democratic approach a lot of emphases is directed to the generation of new knowledge while in the prescriptive approach students are required to gain from the instructions of their teachers and from the ex isting literature or textbooks. An example of a democratic strategy is the use of debates and an example of a prescriptive approach is the use of lectures as ways of learning. (Fraser, 1996) This strategy involves dividing the students in class into a various grouping that will represent certain points of view on the identified issue which is always the most compromising subject. In the division of groups, they are those who support the argument, that is the proponents or those for, and those who oppose the issue referred to as those against or the critics. Students can involve themselves in the debates through character or even assuming different roles. An example of an issue to be subjected to debate may be, Does globalization leads to prosperity or impoverishment One group of the students will be expected to support the argument that globalization brings prosperity while the other group is expected to take a stance against globalization that it brings impoverishment. Debates can lead to a generation of new knowledge because by arguing it out a point, there is an opportunity of integrating ideas and hence conclusions arrived at being useful in the learning process.

Saturday, August 24, 2019

Gun Control Essay Example | Topics and Well Written Essays - 750 words - 1

Gun Control - Essay Example The opponents of gun control argue that guns are necessary for self-protection. Furthermore, they would ensure self defense when police fail to provide protection to general public. The proponents of this view believe that a burglar will always be armed and it gives him a higher advantage than the common man. If the general public also is given guns it may counter balance the situation. However, evidently gun is not devised to threaten or injure someone but to kill; hence the free use of guns must be banned on the following grounds. In the first place, nobody takes serious care of guns that it has become a common utensil like knife or pen. Guns are very often misused by everyone especially school children. When they get emotionally upset, instead of seeking some counseling measures, they pick parent’s gun and shoot at their peers and teachers. As reported in the New York Times, in the 90s, the number of children carrying guns to the school was more than one lakh in the US. It is also reported that â€Å"both gun carrying and gun violence are phenomena almost entirely confined to world outside schools† (Cleck, cited in Texas Plan for guns in school may not comply with state law, Aug 19, 2008). The statistics clearly shows the incidents like shooting in a college of Alabama killing one woman wounding three on April 7th 2011. The killing of 12 elementary school students by a gun man in Rio De Jeniro, Brazil on April 8th stands on the top of all such incidents (School shootings, May 2, 2011). The practice of allowing children to get access to and use guns is not digestible for common sense. The argument that guns are necessary for self protection in the US can be severed by pointing that guns can’t be carried to all the places. The exponents of such an argument must answer how they would secure their lives in such a place. But no law prevents a person from carrying his body to anywhere. So, those who are worried about their lives may master som e martial arts so that they can well protect themselves from a person coming to assault them. Some others argue that since criminals have guns, the public also must be given them to counter balance the situation. There are people who have the license to use guns. But still there are incidents like bank robbery and house breaking. If the license to use guns would well tackle the situation there would have been much decline in bank robbery, house breaking and so on. But unfortunately that does not happen. Recently, in Florida the auto dealership Nation’s Truck offered an imprudent promise of giving an AK-47 rifle for those who buy a truck. The idiotic offer of the company must be condemned on the ground that it is easy such a mass destructive weapons to reach the hands of the terrorists. This would add an extra asset to the stock piling of the evil doers as increase in the number of weapons also increase violence and the killing of innocent people. This shows the narrow concept of the companies to increase their profit without giving any consideration to social responsibility. Only licensed companies and government must be given the privilege to deal in arms and ammunition. Further, licenses given in case of inevitable circumstances must be limited to handguns and not to mass destructive weapons. In brief, I affirm that guns or any weapons are the means of destruction and killing, not of construction and creation. They are even

Friday, August 23, 2019

Wirless Essay Example | Topics and Well Written Essays - 500 words

Wirless - Essay Example As cell phones are easier than laptops to lug around, it becomes convenient for cell phone owners to check their emails from their cell phones. Text messages, video camera and other applications that cell phones offer today, I believe, are not as important as the previous needs. However, I consider text messages to be more significant than the video camera and other features. They are useful in passing information to others quickly, or to remind them about the schedule or location of a meeting, especially when one cannot make a call, due to any network or other issues. Cell phones will, soon, come equipped with more devices and applications making them more beneficial, and this might result in some health hazards to people. However, that is not a proven fact. While comparing AT&T, T-MOBILE, VERIZON and SPRINT some of the biggest cell phone service providing companies, it was discovered that all of them have some advantages and disadvantages. We found that SPRINT has the best coverage in the Chicago area, but SPRINT also is the most expensive as compared to other service providers. AT&T, which I use right now, is almost identical to VERIZON. These two companies have a very close competition. However, AT&T is winning right now because of the deal they have with Apple regarding their product, the iPhone. The iPhone is very popular with the customers, and because there are new people buying iPhone everyday, new customers are constantly coming to AT&T for cell phone services. However, the coverage both companies offer is not as excellent as SPRINT, although it is still good, moreover, the rates of both are quite high too. T-MOBILE has average coverage and their rates are not too high either; it does not cost a lot, but the coverage is not ver y excellent either. My recommendation is that the choice should be made depending on the desire of the consumer. The

The Importance of CSR at Nike Essay Example | Topics and Well Written Essays - 1750 words

The Importance of CSR at Nike - Essay Example In recent times, it has been observed that expectations from an increasingly informed society are gradually pushing business to prioritize CSR and embrace initiatives that seek to comply with the expectations (Hollender & Fenichell, 2014: p55). This paper seeks to study Nike’s activities as one of the leading sports equipment and wear manufacturer and distributor, aiming to discover whether Nike complies with CSR objectives. The company has faced negative publicity regarding its labour practices especially, which necessitates the objective investigation of its practices to determine whether Nike’s adverse publicity reflects general practice and philosophy at the company. This paper will seek to investigate Nike’s CSR policy, practices that are consistent with this policy, and challenges to their implementation of CSR. Nike’s labour practices in Asia during the 90s were the subject of heated criticism, which threatened their position as market leaders and necessitated a redefinition of their CSR policy. The company put up a multi-functional team at the executive level to drive CSR compliance as a result, allowing for the refining of their production processes to improve environmental sustainability and cut waste (Detienne & Lewis, 2009: p362). They also turned their attention to the workforce and designed a code of conduct for their suppliers so as to ensure their suppliers adhered to Nike’s values, especially in providing healthy working conditions for their workforce. Nike has embraced CSR and tries to impress the same on all their suppliers and retailer, as well. The company also insists that its employees’ internalize their code of ethics and practice it, while also making the same code a benchmark for its suppliers. Its efforts at waste reduction won them the Gigaton Awar d that is awarded to companies in recognition of their carbon emission reduction efforts.

Thursday, August 22, 2019

Physical Security Essay Example for Free

Physical Security Essay INTRODUCTION. Physical security starts with a rather simple basic premise; those who do not belong on your institution’s property should be excluded from your institution. This may happen in three often interrelated ways: when those who do not belong are identified, stopped and denied admission, when those who do not belong are denied admission by a physical device, such as a locked door. When those who do not belong are denied admission because they decide that your institution is too difficult to enter and thus they do note entry. This section will consider the various methods of excluding those who do not belong: access control, key control and locks, protective devices and alarms, windows and doors, fencing and gates, protective lighting, general deterrence. PHYSICAL SECURITY AND CRIME PREVENTION AND CONTROL Access Control Access control means that, when your facility is open, no visitor, delivery service person or unknown individual is able to enter your facility without being both observed directly or indirectly. Several techniques to accomplish that goal may include any or all of the following. Security Desk A security desk should be setup in them in lobby of each building which has an open-access or open-door policy. A sign-in and outlet supervised by an employee who validates identification prior to allowing visitors to proceed into the building, is highly advisable. Most supermarkets, five star hotels, foreign embassies, parliament buildings and major organizations have this measure in place in order to monitor the staff and clients as they come in and out to ascertain no harmful contrabands are sneaked in or pilferage of equipments and other relevant materials from the organization. When entering a building like IM where Standard Group have offices or Nation Centre where NTV is housed you have to produce your National ID, register your name, office and purpose of your visit then insured with a visitors pass in order to gain access to the premises. Monitored Entrances Ideally, an institution should have a single entrance only, monitored by staff personnel and equipped with an intercom system for communicating with anyone who comes to the door. Simply, an open door policy does not mean that every door need be left open and unlocked. You realize that hospitals, police headquarters, military barracks among others have personnel who are assigned on daily basis to check and verify individuals and motor vehicles that come in or leave the premises. Its purpose is to deter criminals and take note of every visitor for purposes of accountability when things go amiss. When entering the Times Tower where the Kenya Revenue Authority is housed, the security guards at the gate verifies visitors by their National Identity cards and or travelers passport and then a separate group of guards checks for any harmful materials by use of metal detectors. Visitors At no time should visitors be allowed to roam freely through your property unescorted or without being observed. That is especially true for individuals who expect to work on your most sensitive systems such as burglar alarms, fire alarms, communication systems or computers. Special diligence should be applied to those individuals when they visit your institution even if they are legitimate. For larger institutions, certain areas should be considered off-limits to all but authorized personnel. Allowing visitors free access to your facility does not mean that they should be allowed to go anywhere e.g. into restricted areas such as office spaces or that they should be given a sense that their actions are entirely unnoticed by the institution’s personnel. Some premises require having out of bound locations i.e. military barracks, production factories railway stations, air and seaports for purposes of security. Thus visitor should only be directed to designated zones only. Military barracks have their armories protected while airports have garages and main control rooms protected for security purposes. Employee Photo Identification Cards and Badges All employees should have and wear identification. Such badges make identification of non-employees immediate. Moreover, such cards will not only enable visitors to immediately identify those who work in an institution but will psychologically help employees understand that they are part of their agency’s security team. Photo identification should only be provided with accompanying education regarding their care, the procedure to be followed if they are lost, as well as the manner in which employees should approach unknown individuals. Creating ID badges requires thought. Cards should have clear pictures along with the employee’s name. The institution’s name should not necessarily be placed on the card. In any event, employees should be instructed that their card should be prominently worn while in the building and, for their own safety, kept from view when away from the building. In major hospitals like Nairobi hospital, Matter hospital among others every employee has a job ID which enables them access to all areas and distinguish them from patients, this reduces the chances of an admitted patient running away from the premise without paying the medical bill. Perimeter wall The perimeter wall, culverts and drainage units, lighting and other essential physical security areas. The drainage system and culverts can conceal entry and exit points for potential criminals. Culverts should be grilled to make it difficult for Criminals activities to occur. Parking lot Here the security personnel should be in a position to see how vehicles entering the premise or exiting are inspected. In some organizations parking badges are issued while in many more identification from drivers is not produced. In some organizations it is indicated cars parked at owner’s risk which injects confidence to car vandals and absorbs security responsibility. Parking should be offered to personnel with previous security background. The adjacent buildings and windows. The buildings and windows near a facility should not serve as a spring board for criminals to gain entry. The windows should be well and adequately secured to deny criminals an opportunity to access the facility under surveillance. Key Control and Locks Knowing who has which keys to which locks at all times is a vitally important issue. Failure to maintain such control may defeat the entire purpose of creating a security system. Institutions often simply assume that no one leaving their service either an employee or volunteer will subsequently break into their building or office. A sound key-control policy is essential to an effective security program. There should be a central key control location where masters are kept and access to which is strictly controlled. Registry. A central key control registry should be established for all key sand combinations. Employees and leadership should be required to sign for keys when they are received and the return of keys should be an important part of an exit process. Issuance. Supervisory approval should be required for the issuance of all keys and locks. Spare keys and locks should be kept in a centrally located cabinet, locked under the supervision of a designated employee. Master keys should be issued to a very restricted number of employees and these should be inventoried at least twice each year. Re-keying. When key control is lost, it may be worthwhile to have an institution’s locks Re-keyed or key should be surrendered incase employee is terminated or retired. Combination Locks and Codes. Where combination locks and coded locks are used, those combinations and codes should be changed at least every six months or when employees or leadership leave your premise. Combinations should also be kept under strict control of management. Computer systems and access. The computer system has become a concern in computer industry today. The security of electronic gadgets is pivotal in the growth of organizations, sabotage and shrinkage. The system should be protected from intruders or unauthorized access. The surveyor should include know who uses which computer, which services would be jeopardized by failure of a certain computer. Fires Are unpredictable hazards to organizations, homes and industries. The degree of vulnerability varies from one organization to another. The surveyor should check on the existing fire hazards, verify a match between hazards existing and fire suppression devices. Safes The area containing valuables is of paramount importance to a security survey. The protection of valuables should be consistent with security physical measures and criticality of a potential loss occurs. Safes and valuable storage areas should be fitted with adequate alarm systems. Surveillance Surveillance devices, CCTV’s and motion picture cameras are key to criminal activities detection, apprehension and deterrence. The surveyor should know their existence, location, protection and who monitors them. The security survey should capture the various departments in the organization, their operations and internal controls. Protective Lighting The value of adequate lighting as a deterrent to crime cannot be overemphasized. Adequate lighting is a cost-effective line of defense in preventing crime. Some Considerations on Lighting Lighting, both inside and outside, is most helpful and can be installed without becoming overly intrusive to neighbors. All entrances should be well lit. Fences should also be illuminated. For outside lighting, the rule of thumb is to create light equal to that of full daylight. The light should be directed downward away from the building or area to be protected and away from any security personnel you might have patrolling the facility. Where fencing is used, the lighting should be inside and above the fencing to illuminate as much of the fence as possible. Lighting should be placed to reduce contrast between shadows and illuminated areas. It should be uniform on walkways, entrances, exits, and especially in parking areas. Perimeter lights should be installed so the cones of illumination overlap, eliminating areas of total darkness if any one light malfunctions. Fixtures should be vandal-resistant. It is vital that repair of defects and replacement of worn-out bulbs be immediate. In addition, prevent trees or bushes from blocking lighting fixtures. You may wish to use timers and/or automatic photoelectric cells. Such devices provide protection against human error and ensure operation during inclement weather or when the building is unoccupied. A security professional should be contacted to help you with decisions on location and the best type of lighting for your individual institution. REFERENCE James K. Broder (200), Risk Analysis And The Security Survey 2rd Ed. Butterworth-Heinemann. USA. Lawrence J. Fennely (2003), Physical Security 3rd Edition. Elsevier Butterworth-Heinemann. Burlington, UK. Marc Weber Tobias (200), Locks Safes and Security, An International Police Reference 2nd Ed. Illinois USA.

Wednesday, August 21, 2019

The Vision Mission And Values Of Good Leadership Business Essay

The Vision Mission And Values Of Good Leadership Business Essay Leadership is the exercise of power; it can be defined as the act of making something happen that would not otherwise occur (Warner Burke, 2002) This is easy to write the definition of leadership but its quite hard to practice in real life. The behaviour does matter first in leadership and the skills are second. There is hell of difference between manager and a leader. The manager more likely depends on management skills, planning, organizational and communication skills but the leader does have the skills of a manager as well as some more qualities. Some people born with qualities of a good leaders and some people develop such qualities in their to be a good leader. There are many qualities which a leader must have like confidence, charisma and the qualities continue to grow in a leader with experience. There are different styles of leadership. Some leaders have no style, which is right for some situation and wrong for some situations as well. Managers, Stake holders, staff, all people have different style of leadership according to different situation. For leadership to work well, people (employees and interested outsiders) must be able to connect their expectations, aims and activities to a basic purpose or philosophy of the organization. This foundational philosophy should provide vital reference points for employees decisions and actions Vision: Defines the desired or intended future state of a specific organization or enterprise in terms of its fundamental objective and/or strategic direction. Vision is a long-term objective. Mission: Defines the fundamental purpose of an organization or an enterprise, describing why it exists. Mission is a short-term objective. Values: Beliefs that are shared among the stakeholders of an organization. Values drive an organizations culture and priorities. And every body like executives, managers, staff, customers, suppliers, stakeholders, etc, need solid philosophical principles in term of mission vision and values on which to base their expectations, decisions and actions. Evens ,(1963)similarity hypothesis The more the similar parties the parties in dyad are ,the more likely a favourable outcome It means if every individual and and teams know their duties and if they match their goals with strategic direction of the organization than they would have the same thinking and they will work together on the same path which is the strategic direction of the organization to get better outcome . Strategic direction of organization is very important on march 6,1990 west Germany Daimler Benz and Japan Mitsubishi group revealed that they had secret meeting in Singapore .to work on a intensive cooperate among their different projects and lines of business .because germens cooperate structure does not mash or fit with Mitsubishi group of management approach . For this the organizational direction is being used was GSA(global strategic alliance ) which create new horizons in fact by this creates new products and ease the problem of worldwide excess productivity capacity became the essential part of every organizations structure and brought different national origins together. Leadership approaches and styles: Great Man Theories: This theory indicates about the leadership that great leader is born, not made. This kind of theory represents the heroic personalities who were got the qualities of leadership when they were born. Great Man theories assumes that leadership is integral These theories often represent great leaders as heroic, fabulous, and destined to rise to leadership when needed. The term Great Man was used because, at the time, leadership was thought of primarily as a male quality, especially in terms of military leadership. Trait Theories: Similar in some ways to Great Man theories, trait theory focuses on the people receive assured qualities and characters that make them better matched to leadership. Trait theories repeatedly classify specific personality or communicative features shared by leaders. But this theory raises the question as if certain traits are key features of leadership, how do we clarify people who hold those qualities but are not leaders? This question is one of the problems in using trait theories to illuminate leadership. Contingency Theories: This kind of leadership style emphasis on specific variables which are directly related to environment to have control on style of leadership which is best suited for the situation. According to this theory, the leadership style must be different in different situation. The leader can change their behaviours in different kind of situations. Contingency theory says that the success of a leader depends on the number of variables the leader use in different circumstances and the abilities of the admirers. Situational Theories: This kind of theory illustrates that leader choose the best action must be taken by the leader based upon the situational variable. Decision making in different type of situation does matter in this theory. Behavioral Theories: Behavioural thory believes that the great leaders can be made rather they born with qualities. This leadership theory focuses on the action of leaders rather the mental level, personality and internal qualities. Behavioural theory says people can learn to become great leader through getting knowledge, experience and observations. Participative Theories: The participative leadership theory illustrates that the leaders must take his/her followers into account. In this theory the followers take participate in decision making and the members feel more relevant and committed as well. The leader allows the members to participate in decision making process. Management Theories: Management theories (also known as Transactional theories) emphasis on the role of administration, association, and group performance. These theories base leadership on a structure of incentive and penalty. Managerial theories are frequently used in industry; when workforces are fruitful, they are satisfied; when they fail, they are reproached or penalized. Relationship Theories: Relationship theories (also known as Transformational theories) focus upon the networks formed between leaders and admirers. These leaders stimulate and inspire people by helping group members see the prominence and higher good of the job. Transformational leaders are absorbed on the presentation of group members, but also want each person to achieve his or her impending. These leaders frequently have high principled and moral standards. Leadership could be described in different levels in organization as Direct leadership Which is part to element leadership or direct line is in the organization were staff see their leader all the time . Organizational leadership They are the leaders on hundreds or some time on thousands of the staff but this is indirect leadership to help him there must be the staff at direct level to help the leader for decision making. Strategic leadership Strategic leaders are generally responsible for large organizations and may influence several thousand to hundreds of thousands of people. They establish  organizational structure, allocate resources, and communicate strategic vision. Strategic leaders work in an uncertain environment on highly complex problems that affect and are affected by events and organizations outside their own. Strategic leaders apply many of the same leadership skills and actions they mastered as direct and organizational leaders; however, strategic leadership requires others that are more complex and indirectly applied. Strategic leaders, like direct and organizational leaders, process information quickly, assess alternatives based on incomplete data, make decisions, and generate support. However, strategic leaders decisions affect more people, commit more resources, and have wider-ranging consequences in both space and time than do decisions of organizational and direct leaders. Perhaps of paramount importance-because they exert influence primarily through subordinates-strategic leaders must develop strong skills in picking and developing good second-tier leaders strategic_clip_image001.gif (586ÃÆ'-416) http://www.leadafrika.com/Templates/strategic_clip_image001.gif Strategic leadership skills and characteristics: There are many leadership skills and characteristics a person should posses to become a quality manager and to succeed in the globalized world of business.These leaders have certain characteristics such as the leader should be employers brand Should posses emotional intelligence,creativity, innovativeness, and flexibility, posses certain leadership characteristics as high ethical standards, energy, prioritization skills, commitment, dedication, goal orientation, empathetic, and extroverted. Leaders adapt leadership styles accordingly in order to better create and develop new ideas or reform existing ones. Some leaders may choose a certain leadership style based on the culture of their organization. A manager should provide leadership and direction to management levels according to the organizations goals, mission, and vision. Conclusion: Leadership is about the influencing and motivating peoples these days and leader are not born and leader can be developing through organisation structure and development training as well. Among the two leadership styles discussed, there are some that have a better fit in different organizational models. In the non-profit sector, using a servant leadership style would be effective the majority of the time, yet the other two models can be used for specific purposes. The leadership styles are noted in all organizations. However, there is a primary style shared in the organizational culture. There are many other styles not examined in this analysis, which opens the opportunity for further research in this area. Further research can be conducted using other leadership models and other industries. Supplementary research can also be done within each industry subdividing it further. The decision of which style to use in each industry would depend on the leader, follower(s), and tasks. A lead er should learn and practice those skills needed to be a successful leader. In conclusion, individual leaders who have the skills and qualities necessary to succeed are better equipped to execute the styles of leadership discussed. To become a successful leader one should utilize the best suiting style to everyone in every situation. The style of leadership used varies by organization and leader. While organizations may have a primary style of leadership, this is not the inclusive selection or style. The leadership technique and characteristic of the leader varies as the various experiences change. The leader must know to adapt and adjust their leadership style according to the current events of the organization. As the organization evolves through its growth stages, it calls for the use of different leadership styles.

Tuesday, August 20, 2019

Innocent until Proven Guilty Police Body Cameras

Innocent until Proven Guilty Police Body Cameras All police officers should wear body cameras because it helps to protect the public, it helps with the police officers safety, the back and forth accusing of racial profiling, and also the neighborhood safety. Body cameras can serve as a reliable eyewitness. Without the body cameras, it would be the victims word against the police officers. According to The Daily Beast, These are the Victims of the Dallas Police Massacre Brent Thompson was an officer who died during the Dallas Police Massacre. Before joining the Department in 2009, Thompson trained police in Iraq and Afghanistan while working for a private military contractor. it also states how great of a police officer Thompson was andIn May, Thompson shared a meme that she read, when I die my friends better do this at my funeral written on top of a scene from the show Eastbound Down if worn cameras during the deadliest day for U.S law enforcement since 9/11 maybe the world would know who killed the wonderful officer Thompson. The use of body cameras can protect police officers from being falsely accused of unnecessary actions or brutality against suspected criminals. According to Considering Police body cameras, Marcus Jeter was arrested by New Jersey Police officers during the summer of 2012 and subsequently, charged with eluding the police, resisting arrest, and aggravated assault on a police officer. Parts of this encounter, were caught on tape by the dashboard camera in the officers cruiser. Jeter maintains from the beginning that the officers has used excessive force while arresting him and that he had not acted violently. The Bloomfield Police Department conducted an internal investigation and found the officers did nothing wrong. Jeters arrest, his attorney uncovered evidence that a second police cruiser had been on the scene that night. This shows how police officers are also getting the protection they deserve while using body cameras, without this evidence from the video cameras it would of been the officers word against Jeters. Police officers are more likely to be protected from criminals trying to attack them because evidence is available to contact them. The number of deaths from last year has been outrageous. Many people are concerned about not only the safety of citizens but also the use of guns. Some people feel as if the deaths of most citizens has been because of the use of racial profiling. Veronica Majerol from New York Times Upfront states in the case of Michael Brown, an unarmed black teenager. Some witnesses confirmed Officer Darren Wilsons account that hed shot Michael Brown in self-defense. Others said Brown didnt pose a threat and that the shooting amounted to murder. A jury decided not to charge Wilson with a crime, but what really happened that night? If the encounter had been captured on video, some would have argued wed know After Wilsons innocence and the death of Brown thousands of people looked at this case as the use of racial profiling killing innocent people because of the color of their skin. As stated above people would know more about the case of Browns and hes death if use of body cameras were worn during t his incident. Furthermore, body cameras is also a great way to create safer communities. David French response to Trayvon Martin case An armed neighborhood-watch volunteer, George Zimmerman, shot and killed an unarmed teen, Trayvon Martin. Zimmerman claimed Martin had attacked him without any justifiable provocation. With that being said if Zimmerman was wearing a body cameras during his claim attack by the teenage boy February 26, 2016 this would of shown rather or not Martin did actually attack him. So many thing is going in the world today rather its public safety, the officers safety, the racial profiling, or even neighborhood safety. Cops will be more protected if wearing a video camera, just like the police ovth says you are innocent until proven guilty and the video cameras shows just that, and also more of a suspect and a victim. References 13-Year-Old With a BB Gun Is Shot and Killed by Police in Columbus, Ohio. Daily Intelligencer, 15 Sept. 2016. General OneFile, go.galegroup.com/ps/i.do?p=GPSsw=wu=j020902v=2.1id=GALE%7CA463581242it=rasid=cda072b43290f61613c17c1b2ebfa48b. Accessed 9 Feb. 2017. Body of evidence grows, but questions remain about police body cameras. American City County, 28 Sept. 2016. General OneFile, go.galegroup.com/ps/i.do?p=GPSsw=wu=j020902v=2.1id=GALE%7CA465071065it=rasid=950657093dd447a10f9907a85c057467. Accessed 9 Feb. 2017. Considering police body cameras. Harvard Law Review, Apr. 2015, p. 1794+. General OneFile, go.galegroup.com/ps/i.do?p=GPSsw=wu=j020902v=2.1id=GALE%7CA412800618it=rasid=5a50cce41c3ebfd18f649a9ba6938064. Accessed 9 Feb. 2017. Majerol, Veronica. Should police wear body cameras? While video can tell us a lot about encounters between the police and the public, body cams also raise concerns about privacy. New York Times Upfront, 7 Sept. 2015, p. 6+. General OneFile, go.galegroup.com/ps/i.do?p=GPSsw=wu=j020902v=2.1id=GALE%7CA436695119it=rasid=524ebcba9260ccc1380ec5d4a7ecd396. Accessed 9 Feb. 2017.

Monday, August 19, 2019

Poetic Techniques of Wilfred Owen Essay -- essays research papers

Wilfred Owen can be considered as one of the finest war poets of all times. His war poems, a collection of works composed between January 1917, when he was first sent to the Western Front, and November 1918, when he was killed in action, use a variety of poetic techniques to allow the reader to empathise with his world, situation, emotions and thoughts. The sonnet form, para-rhymes, ironic titles, voice, and various imagery used by Owen grasp the prominent central idea of the complete futility of war as well as explore underlying themes such as the massive waste of young lives, the horrors of war, the hopelessness of war and the loss of religion. These can be seen in the three poems, ‘Anthem for Doomed Youth’, ‘Dulce Et Decorum Est’ and ‘The Last Laugh’, in which this essay will look into. The sonnet form is commonly adopted by Owen to tersely present his numerous ideas and to evoke contemplation. The elegy, ‘Anthem for Doomed Youth’, is written as a basic Shakespearean sonnet to mourn for the enormous loss of young soldiers from two distinct angles, the improper burials they obtained and the remembrance they deserve. The first two stanzas of ‘Dulce Et Decorum Est’ also adopt the sonnet form to explore two varying aspects of torment within war, the terrible conditions faced by all the men on a day-to-day basis and the sickening suffering of one particular youth. Owen uses this possible intertwining of contrasting thoughts within sonnets to emphasise that in every generation, there will always be different views with regard to the war. However, it is of key significance that the millions who died and suffered in this futility will be forever remembered. Their inconceivable experiences and horrifying statistics must be taken into... ... shells â€Å"wailing† their â€Å"shrill, demented† mourning. The last sounds these soldiers are forced to listen to are their killers’ ridiculing at their naà ¯ve decision to fight. Weapons in Owen’s poems are personified to mock the war and reinforce its futility. The poetic techniques used in Wilfred Owen’s war poetry sweep the reader from the surface of knowing to the essence of truly appreciating his ideas. Through sonnets, Para rhymes, ironic titles, voices and strong imagery, not only is the reader able to comprehend to the futility and the horrors of the Great War, but also they can almost physically and mentally empathise with those who fought. Through the three poems examined, it is evident that Owen goes to great effort to describe the conditions and thoughts of the First World War, thus his works are considered an invaluable asset to the modern literature.

Sunday, August 18, 2019

Thinking About Stupidity In Our Scholars :: essays research papers

The stupidity in our scholars, like stupidity and arrogance everywhere, follows a model. The model presented here was developed by Anticommerical University Professor William Mason. It applies in general to stupidity at any level of intensity. It has 5 stages.1. Mimetic ArroganceOne party identifies themselves as an authority on a subject and other parties imitate that arrogance. Examples of things scholars and professors are arrogant about: science, literature, art, sociology, psychology, philosophy. Whatever the culture tells us is a difficult subject, that's what scholars decide is worth being arrogant about.2. Mimetic Use of the Word MimeticNow the parties begin competing for the object of arrogance: jargon. Whatever big, fancy words emerge, others copy them. Since they all use the same words in different ways, any hope of finding concrete definitions of them vanishes. To win, you only need to get more exclusivity of words such as 'exclusivity.' If the word becomes ubiquitous, then you make up even more complex words that have simple meanings, such as 'ubiquitous.' If this doesn't work, then you must resort to using neojargon or pseudojargon or neopseudojargon or neopseudoneojargon. Examples of these forms of jargon are the prefixes 'neo' and 'pseudo.'3. GraikosGraikos is a Greek word that means "Greek." It's the root of much stupidity found in scholarly discursions. In the rivalry for respect, if one side finds an inferior usage of jargon, they are caught in the temptation of Graikos and feel compelled to retaliate by literally speaking a whole new language. Thus begins a "jargon" war, fought on the battlefield of the dictionary. Graikos is what makes it so hard to read their professional journals, so hard to feel like you have any grasp whatsoever on vocabulary. It's so easy to feel intellectually inferior to such unjustified usage of language. The gap between scholar and layman escalates.4. IntimidationEventually one side crosses some arbitrary threshold of concern where the supervising authorities feel compelled to intervene. It's essentially random which side is considered the "supervising authority" since they both consider the other as worthless scum, but often it's the faction with more college degrees, which uses more venomous attacks to maintain parity. Whichever side is considered the "supervising authority" becomes the intimidator of the layman and the others who kept their ego below threshold are victims, doomed to low self-esteem and feelings of worthlessness.5. Authorized, Sanctioned and Sacred StupidityTo appease the scholars, the authorities determine guilt and visit sanctions and punishment on the intimidated.

Saturday, August 17, 2019

Drugs and Medicine Options Report Essay

Medicine and drugs have been used throughout history in order to improve upon the well being of the world’s population. Both are used most commonly as a way to improve health by altering the physiological state, sensory sensations, and emotions which in some cases could all be the result of the placebo effect. Nonetheless, these drugs and medicines offer a unique advantage to our societies because of the ways that they can offer so much support to our bodies. An important thing to remember about these drugs and medicines is how unique each particular one is to a specific function of the body, meaning the chemistry behind it is also very unique for the many different functions. What makes medicines and drugs so unique in our particular society is their use as pain relievers, deficiency supplements, as well as their use to balance systems and organs in the body. However, in order for any of these uses to actually take effect it requires for that medicine or drug to somehow be ingested into the bloodstream so that it can travel to its necessary location in the body. One of the most common ways that this is done is through oral ingestion with tablets, syrups, or drops. These oral methods are much slower than the rest because of how much slower the rate of absorption into the bloodstream from the stomach is. A more common way as far as more extreme medicines go is something like an IV, where a needle is stuck directly into a vein so that the medicine is immediately worked into the bloodstream. However, the oral methods will most likely remain the most common because of how comfortably and easily they can be ingested by people. Prior to ever considering working a medicine or drug into the bloodstream, a long and extensive set of procedures must be carried out. This first begins with the isolation of the new product from other variables that could alter the testing. This new drug is then prescribed to laboratory testing where its effects can be observed and measured. If these established effects from the experimentation prove to be significant, a market is observed as a possible window for the drug to be sold in. Once the window has been considered, more of the final tests begin on actual humans where a placebo effect has been considered as well. After these final tests have been finished, the medicine must be approved by the Food and Drug Administration as either an over the counter drug or one that requires a prescription. Antacids are bases that neutralize the excess acidity and thus relieve the pain associated with heartburn and peptic ulcers (Brown). The most commonly used bases for the reduction of excess acidity in the stomach are those that are weak since strong bases would offer a support that would be much too corrosive to the body tissue. The most effective of these commonly used bases is aluminum hydroxide because of the fact that it can completely neutralize three moles of hydrochloric acid for every one mole of aluminum hydroxide that is used. Another common metal oxide that is used is magnesium oxide because of how quickly it reacts and thus offers relief, however since it reacts so quickly the relief does not last for as long as it does with the other bases. The metal carbonates used as bases offer an alternative to the metal oxides but they also react to create carbon dioxide which results in antifoaming agents being required as well to make sure that the users are not throwing up. As discussed above, there are specific types of drugs that can be known to help with pain relief; these drugs are known as analgesics. There are really two different type of analgesics, strong ones that are more commonly known as narcotics, and milder analgesics that are typically the over the counter pain relievers. The stronger analgesics work by binding with the actual pain receptors in the brain to block the transmission of the pain signals between brain cells (Jordan). These stronger analgesics are also able to trick the body’s brain cells by producing analgesia to produce a false sense of well being. The most common of the stronger analgesics are ones such as heroin, codeine, and morphine. In contrast to the stronger analgesics, the mild ones actually work by attacking the source of pain at that same location by helping to slow down with the production of prostaglandins, which are the actual chemicals that cause pain. The other way that these milder analgesics more commonly reduce pain is my reducing the inflammation by constricting the blood vessels near the pain source. The more frequently used of these milder analgesics are ones such as aspirin and ibuprofen that are typically in every household. Depressants are drugs prescribed by a doctor that affect the central nervous system by changing the concentration of neurotransmitters causing a decrease in brain activity and breathing rate (Jordan). There are three main types of depressants being barbiturates, benzodiazepines, and alcohol. Alcohol is probably the most well known of all three because of the large dependencies on it in our society today. While under the influence of alcohol, a person’s judgment and decision making becomes severely impaired which is what can so commonly lead to so many incidents involving alcohol. Aside from being temporarily impaired from alcohol, it can also lead to permanent brain damage as well as a high level of dependency on the alcohol which can completely alter one’s behavior. Stimulants are the type of medicine or drug that seems to have the complete opposite effect of the depressants. The most common of these stimulants are drugs such as amphetamine, adrenaline, nicotine, and caffeine. Adrenaline and amphetamine have many similarities as far as how they actually stimulate the body but they are different in the sense that adrenaline can be naturally produced by the body where as amphetamines are solely synthetically produced. Nicotine being another stimulant is best known for its role in the addiction of smokers to their cigarettes. Nicotine can be very harmful to the body however as it can lead to cancer and it is very difficult to stop using after it has first been used. Looking back on the drugs and medicine in our culture today it can easily be seen that they do have a very positive role in our society but because of the power that they possess they can also be dangerous when not used properly. It is sometimes heard on the news of people dying from drug overdoses that involve heroin or codeine but the only reason that these occurrences are even a problem at all is because of the personal abuse from those using those drugs. When used properly and only when suggested to by a doctor, the drugs and medicine that are in our culture today provide a huge advantage for us as we try to improve upon how well we live our lives today. The important thing to remember here is that it is nearly always necessary to regulate the changes in medicine and drugs in our society despite how well we may seem to have it under control.

Evaluate the Possible Ways to Market a New Business Essay

For my business studies coursework, my new business will be a Junior Tennis Academy for talented tennis players aged 3-18. Its name will be named after where it is based, at St Georges College, Weybridge. Therefore its name will be The Weybridge Tennis Academy. It will provide top coaching for young talent, as well as providing state of the art facilities which include four indoor tennis courts, three artificial clay, eight acrylic and three grass courts, as well as a gym where the players can train to help get fitter and stronger to help give them that physical edge over their competitors. We offer these services because tournaments are played on many different surfaces and we need to train our players to the highest possible standard. We also offer a re-stringing service at extremely competitive prices as well as official Weybridge Tennis Academy merchandise supplied by a top sports company, which is available for purchase at a discounted price. These facilities will help the business because ‘Tennis Parents’ will see that our company has better facilities for their child than another tennis academy down the road. Tennis is a very expensive sport, so therefore our business is not only aimed at the players playing, but also the parents paying. Tennis parents are notoriously pushy people and they are usually quite well off, so therefore the more facilities we can offer, the more likely they will come to us. Usually, when money isn’t a factor, people go for the best product, and by offering so many facilities, we have that competitive advantage over our competitors. With our location being in Weybridge, we automatically have good transport links, such as the M25 and Addlestone and Weybridge train stations. This will target all people living in and around London. London is the biggest city in Britain, so therefore we have many more potential customers compared to a tennis academy in for example Northumberland . My business’ aim is to fill a gap in the market. It will meet a demand for a Tennis academy open to all standards, rather than one where you have to be invited to join. For example the National Tennis Centre at Roehampton, a 32 million pound facility is only open to players who have been invited. The Weybridge Tennis Academy is open to young players of all standards but with the same facilities as the National Tennis Centre. Therefore many more players will pass through the doors of my academy because it is open to a wider range of players. This will then lead to my business making a profit because there is not any other competition in the local area. During this coursework I will need to investigate the potential market and location to enable me to situate my business in the best possible location to help make as much profit as possible. I will also have to research the local competition to identify my main competitors and the buying habits of the local consumers to see what they look for most when investing in a product. The importance of Marketing Marketing is selling ‘the right product, at the right place, at the right time and at the right place.’ The marketing mix, sometimes known as the four P’s is used to describe the key elements that a consumer wants and needs when buying a new product. I will need to find out what a consumer looks for, and make sure I find the right elements to help make my business successful. My business has to offer the customer a better thing than the local competition otherwise my business will fail. This means that my business will have to offer the customer something that no other tennis academy offers in the local area. This is because obviously if every academy offered the same thing as my business my business would have no competitive edge which will lead to failure. The Weybridge Tennis Academy needs to offer the customer what they want and need. This will then identify the first stage of the marketing mix which is product. The second stage of the, marketing mix is place. Place means how the customers are going to access my academy. There are many factors affecting this decision. It has to be in a place where customers can easily get to, as well as somewhere where there are many potential customers. My business will be situated in St Georges College, Weybridge (hence the name of the business). By being in Weybridge, there are many convenient transport links, such as the M25 or Weybridge or Addlestone train station. Addlestone train station is in fact situated less than a mile away from the centre, which means that there are many good transport links. This will then draw customers in from all around London and the South East. The third section of the Marketing Mix is Price. The Price is how much the product is being sold for. The price is very important to any business because it is normally one of the first things to be looked at when a consumer is considering buying a product. The customer has to think that the business is good value for money, and by comparing the prices of local competition, I will come up with an appropriate pricing method for my business. It is important that I take into account how much the business has cost to build because obviously if the expenditure is higher than the income, I will have made a loss rather than a profit There are many pricing strategies available to me, for instance cost plus pricing, which means setting a price by adding a fixed amount or percentage to the cost of making the product. This means that however much I spend on my Tennis Academy; I will add a percentage of money to this amount and charge the customers that amount. By doing this, I will always make a profit because I will be getting my money back on the expenditure, plus an added amount. The second pricing strategy I could use is to set a price based on competitors pricing. This means that I would look at the price of my competitors’ product and I would make that cheaper or better value to help make customers buy into my product. The fourth and final section of the Marketing Mix is the promotion. Promotion means how your product is shown to the customer, obviously if the customer does not know the business is there they cannot buy it. One example of this is advertising. There are many ways of promoting a business; it could be through a newspaper, television, internet and radio. These are examples of advertising through the media. Another way of promoting your business is through merchandising. This is a crucial way that I plan to promote my business through players buying official Weybridge Tennis Academy Merchandise, wearing it to tournaments and promoting the company through people seeing the companies name or logo on a back of a player’s shirt. Most players at my academy will be competing against players from other academies. This is a way of promoting because other players will see the company’s logo and the tennis parents may well look into the possibility of sending their child to my acade my. However ways such as sales promotion, which could include special offers, price discounts or free gifts, would not be appropriate because my business is looking for long term customer rather than short term customers. To get the best results I will conduct numerous experiments and research which will help me to find what the customers want and need. I will conduct questionnaires, surveys and interviews with other people finding out what they look for in investing in a tennis academy. I will also research statistics such as the number of competing juniors in the south east and also the amount of tennis academies in that area. This will then help me gain a competitive advantage over my competitors. Market Research Market Research is used by a business to try and find out what people want and also what competitors and doing and planning. Market Research helps find out who the customers are, whether they will like the product, how the business can be promoted, how much the customers willing to pay, what type of customer will be interested, how the profile of the customers can be built, whether the business is in the right location and how the products will be distributed. There are two main ways of conducting research. Field/Primary research is used to find out new information, and Desk/Secondary research is useful for looking at an entire market, and analysing trends for future reference. I will use both to research how my business can best achieve its goals and how it can beat competitors to getting customers. Field/Primary research is the process of manually entering the population and asking first hand questions. The advantage of using this method is that it is specific to my business, meaning that it is up to date and relevant. This means that I can ask any questions on any subject, and receive answers that are highly relevant and suitable for my research. There are many techniques which can be used, such as surveys, questionnaires and interviews. I believe that by conducting the research in the area where my business will be situated, I will achieve the most relevant and suitable results. However, to ensure that the data is accurate you need to use large field samples which can be expensive and very time consuming. Desk research is useful for looking at an entire market, whilst analysing past trends for future reference. For example I would have to look at the trends of tennis academies across Britain. Desk research has already been researched and accessed by other companies, so it therefore already exists and therefore it takes no time to conduct or find the data you want. The data can be accessed through the internet, newspapers, government records and market research. Desk research is good because it is easy to obtain and it is cheap. The disadvantage is that it is not specific or relevant to your business. It can also be biased or out of date which severely affects the reliability. I will try and collect Qualitative data so I can then see exactly what people want, as well as their thoughts and feelings. This will then help me know what customers want which will help me gain an edge over the competitors. I will do this by interviewing a select amount of people and finding out what they look for in a tennis academy. The questions asked will be based on how much people will pay, how the location will affect their decision and once again what they look for when investing in a tennis academy. After I have found out the information, I will access it and make it relevant to my business. By knowing what customers look for in a company, I will know what to include when I am trying to promote my business. For instance if a lot of people want indoor courts to make sure that it can never be cancelled or so that there child can play all year round, I will make sure that the fact that my academy has indoor courts is highly publicised. Also, by knowing what customers want, I will have an advantage over my competitors. Evaluation Number of Competing Juniors: Berkshire-149 Essex-343 Hampshire-274 Kent-338 Middlesex-450 Surrey-536 Total number of competing juniors in the south east-2090 Information obtained from www.lta.org.uk Juniors includes all players born in 1990 Tennis academies in the south east: Clive Asprey Tennis Academy-Aldershot Sutton Junior Tennis Centre The National Tennis Centre-Roehampton Win Tennis-Bisham Abbey Esporta-Croydon Westway-London These are all TENNIS ACADEMIES this does not include any ‘LAWN TENNIS CLUBS’. Lawn tennis clubs are open to any people and are therefore not relevant to my business. These academies are my main competitors because it is invitational only. There are roughly 2000 competing juniors in the South East and there are six tennis academies (not including my academy) in this area. Therefore on average there are around 300 children to every academy. Obviously this would not be the case in reality but it gives a good idea of the Academy/Player Ratio. INFORMATION OBTAINED BY WWW.YELL.COM 1st Interview 1) What are the 3 main things that you look for in a tennis academy? The three main things I look for are the ability for the academy to get my child to its full potential, therefore I know that I am paying for excellence and I know my money’s being put to good use. The ability to play all year round is very important because I therefore know that sessions can never be cancelled due to weather and my child can therefore train all year round. Lastly the coaches have to be highly qualified and I would like to know a bit about them so I know that they can emphasize with players when they are going through tough times. 2) How would the location affect your decision of where to send your child? There would have to be good roads such as motorways because obviously I don’t want to be travelling all the time. Also if my child is of an age that he could travel on his own, I would like there to be easy to access buses and trains for him/her to use. 3) How important is the cost of the tennis academy? I wouldn’t mind paying a lot of money as long as the results were shown. Also if I had a younger child, I would want to pay less at first until I see that he/she was improving and that he was committed. As he/she improves I would be more inclined to pay more. 2nd Interview 1) What are the three main things you look for in a tennis academy? I would firstly look at the academy’s credentials, for instance its results of members, and the proof of its results. It would also have to be good value for money, so therefore I would need to be seeing an improvement in my child’s progress. Also the location is important because I don’t wish to be travelling all the time. 2) Why is the location an important factor in choosing where to send your child? I have got a busy life and I don’t wish to be travelling all across the countryside after I’ve had a long day at work. It has to be easy to attend so therefore good transport links are vital. 3) How important is the cost of the tennis academy? Obviously there is the factor of whether it can be afforded but the price is not important. I would have to see that my money is being put to good use so therefore the investment has to match the progress. 3rd Interview 1) What are the three main things you look for in a tennis academy? I look at the facilities of the academy, for instance whether it has indoor courts. I would also like to know the standard of the players that attend the academy and the background of the coaches. The attitude and the atmosphere of the academy are crucial because I have to know where I am sending my child. 2) Is the location an important factor in choosing where to send your child? Obviously I don’t want to be travelling too much and it has to be reasonably local otherwise we’ll spend more time travelling than actually playing. Also I don’t want to be paying a fortune for the transport fees, for instance petrol or train/bus fares on top of the price of attending the academy. 3) Is the cost important? The cost is obviously very important otherwise our whole life would be being run by tennis. I would prefer to pay less at the start and once I have seen an improvement or a commitment start to increase the price. Evaluation of Questionnaires: I have found out that what most people want is value for money. This means that however much they put in, they want out. This therefore means that the more they pay, the bigger the improvement in their child’s ability they would expect to see. Therefore I think I will give special offers to new customers, such as they get the first term half price so that they know that it is what their child wants to do and also if they do not see an improvement they have the opportunity to pull out. This was suggested to the people that I interviewed and it seemed a popular idea. Secondly, they found the factor of indoor courts crucial as that meant they could play all year round. As my academy would have this facility, this is a good thing, however many other academies have indoor courts and this therefore does not separate us from our competitors. Many people thought that the location was an important factor. Many parents have busy lives and they do not wish to be travelling all over the place. My academy is situated in a place with good public transport links, there are two train stations within two miles of the academy, and it is situated two miles from the M25. This was once again explained to the interviewees and they seemed to be in favour of the placement of my academy. Many people didn’t mind about the cost of the academy, as long as they saw the results. This was touched upon earlier and I will use a penetration pricing method, which means that I will make the price quite low at the start to try and draw customers in and then increase it as they see an improvement. This was a major aspect that the people that I interviewed would look for in tennis academy and this will help me gain that competitive advantage. Overall the research I conducted was extremely useful as it told me what customers wanted and needed, as well as giving me statistics that would help me gain a bit more knowledge in this type of business. I found out the amount of competing juniors in the south east, as well as the number of academies. It also told me how customers felt, for instance about the price and location of the academy. The information I have found out will help me in making the decisions about the academy, such as the pricing, structure and promotion of the business. Conclusion/Judgement Overall I believe that my tennis academy will work. There are six full time academies in the South East, not including my one, and there are over two thousand regularly competing juniors in the same area. This means that the ratio of Academies/Players is 6:300. Obviously in reality some academies have more players than others because of reputation, facilities, transport and cost. My academy has state of the art facilities, as explained earlier. It is also situated in a place where there are good channels of distribution and good transport links. This means that customers will be attracted because it is easy to get to. The cost will be determined by a ‘Penetration’ Pricing Method. This means that my prices will be low for new customers, so that parents then know that their child is improving, or enjoying the experience. Most parents interviewed wanted their money to be payed back through improvement of their child’s development. Therefore if I charge low prices at the start, for instance half price for your first term, and the child makes a big improvement, the parent is more likely to want to pay more from then on. If the child does not improve, the parent will then be giving the option of continuing with the programme. This will then help company/customer relations. This will then help my academies reputation, which will then attract more customers. As my academies reputation builds, more profit will come in and we can start charging higher prices. To help promote my academy, I will seek sponsorship from sports companies such as ‘NIKE’, ‘Adidas’, ‘Wilson’, ‘Babolat’, ‘Prince’, ‘Head’, ‘Dunlop’, ‘TTK’ and ‘Lacoste’. I will also sell official Academy merchandise such as training kit, match play kit, and tracksuits which will be worn to tournaments by players and other players will see them. This is a way of free advertising as the children/parents would be paying for the kit and wearing it around showing it off to other players and parents. I will also look to gain funding from the ‘Lawn Tennis Association’ who gives funding to academies that have regularly competing juniors. These are called ‘Satellite Clubs’ and they are given funding which helps pay for the costs of balls, rackets and other training equipment. As my academy builds in reputation, I will look to gain more funding which wi ll help me make more profit. Overall there is a lot of potential in this product. I believe that people will be attracted to my product because of the facilities, meaning the product itself; the price, meaning that I will make it cheaper at the start to draw customers in; the promotion, for instance the official merchandise that will be seen in tournaments; and finally the place; meaning the channels of distribution. This will attract customers because of where it situated, meaning that it is easy to get to. However my tennis academy does have a lot of competition, which means that I will have to use the knowledge that I found out through the market research to help gain the competitive advantage over my rivals.

Friday, August 16, 2019

Walmart Analysis

Company Information Sam Walton opened their first Walter store since July 2, 1962. â€Å"People think we got big by putting big stores In small towns. Really, we got big by replacing Inventory with information. † They opened their first store In Rogers, Arkansas. By 1967 they owned 24 stores and bringing In $12. 7 million In sales. By 1970 Walter went national. They also became a publicly trading company. In sass's the first Cam's Club opened and the first Walter Superstructure opened as well. It combines a supermarket and general merchandise all in one place.In sass's, Walter was named America's Top Retailer. They also opened their first Cam's Club in Mexico City in 1991. Sam Walton passed away in 1992 at age 74. By that time, Walter employed 371,000 associates In 1,928 stores and clubs. In 1993, they hit their first $1 million mark in sales. Between 1994 and 1998, Walter opened stores in China, United Kingdom, and bought Wolcott 122 stores in Canada. (www. Walter. Com) By 20 14, Walter employs 2. 2 associates at more than 1 1 ,OHO stores worldwide. At this time it serves over 200 million customers.Walter's earnings per share Increased 10. 6 % to $5. 02. They had an Dalton of $22 billion In net sales, and they are now a $466 billion company. They SOOT Strengths Wide range of products International operations Cost leadership strategy Weaknesses Labor related lawsuits High employee turnover Negative publicity Opportunities Trends towards healthy eating Retail market growth Online shopping growth Threats Resistance from communities Rising prices Gap Analysis Walter has had to face several labor related lawsuits every year. They cost the company millions of dollars.The company is criticized for poor work conditions, low ages, unpaid overtime work and female discrimination. It also suffers from high employee turnover. It Increases the company's cost because they have to do a lot of training of new employees. I think the reason for the high turnover is because they have low skilled and poorly paid Jobs. These two gaps are best filled by training needs. I think management needs a better training assessment for their employees. Walter does have a lot of stores order to keep employees, I think they need a better training program.

Thursday, August 15, 2019

The Usefulness of Accounting Estimates for Predicting Cash Flows

The Usefulness of Accounting Estimates for Predicting Cash Flows and Earnings Baruch Lev* New York University Siyi Li University of Illinois Theodore Sougiannis University of Illinois and ALBA January, 2009 * Contact information: Baruch Lev ([email  protected] nyu. edu), Stern School of Business, New York University, New York, NY 10012.The authors are indebted to the editor and reviewers of the Review of Accounting Studies for suggestions and guidance, and to Louis Chan, Ilia Dichev, John Hand, James Ohlson, Shiva Rajgopal, and Stephen Ryan for helpful comments, as well as to participants of seminars at Athens University of Economics and Business, London Business School, Penn State University, Purdue University, University of Illinois at Urbana-Champaign, University of Texas at Dallas, Washington University in St.Louis, the joint Columbia–NYU Seminar, the 16th Financial Economics and Accounting Conference, the 2006 AAA FARS Midyear Meeting, and the 2008 AAA Annual Meeting. 1 ABSTRACT Estimates and projections are embedded in most financial statement items. These estimates potentially improve the relevance of financial information by providing managers the means to convey to investors forward-looking, inside information (e. g. , on future collections from customers via the bad debt provision).On the other hand, the quality of financial information is compromised by: (i) the increasing difficulty of making reliable forecasts in a fastchanging, often turbulent economy, and (ii) the frequent managerial misuse of estimates to manipulate financial data. Given the ever-increasing prevalence of estimates in accounting data, whether these opposing forces result in an improvement in the quality of financial information or not is among the most fundamental issues in accounting. We examine in this study he contribution of accounting estimates embedded in accruals to the quality of financial information, as reflected by their usefulness in the prediction of enterpr ise cash flows and earnings. Our extensive out-of-sample tests, reflecting both the statistical and economic significance of estimates, indicate that accounting estimates beyond those in working capital items do not improve the prediction of cash flows. Estimates do, however, improve the prediction of next year’s earnings, though not of subsequent years’ earnings. Our economic significance tests corroborate that accounting estimates do not improve cash flow or earnings prediction.We conclude that the usefulness of accounting estimates to investors is limited, and provide suggestions for improving their usefulness. 2 The Usefulness of Accounting Estimates For Predicting Cash Flows and Earnings 1. Introduction Financial statement information, be it balance sheet items such as net property, plant and equipment, goodwill and other intangibles, accounts receivable and inventories, or key income statement figures, such as revenues, pension expense, in-process R&D, or the rec ently expensed employee stock options, is largely based on managerial estimates and projections.The economic condition of the enterprise and the consequences of its operations as portrayed by quarterly and annual financial reports are therefore an intricate and ever changing web of facts and conjectures, where the dividing line between the two is largely unknown to information users. With the current move of accounting standard-setters in the U. S. and abroad toward increased fair-value measurement of assets and liabilities, the role of estimates and projections in financial reports will further increase.We ask in this study: what is the effect of the multitude of managerial estimates embedded in accounting data on the usefulness of financial information? straightforward. The answer is far from On the one hand, estimates/projections are potentially useful to investors because they are the primary means for managers to convey credibly forward-looking proprietary information to invest ors1. Thus, for example, the bad debt provision, if estimated properly, informs investors on expected future cash flows from customers, restructuring charges predict future employee severance payments and plant closing costs, and the capitalized portion of We say â€Å"credibly† primarily because post Sarbanes-Oxley the firm’s CEO and CFO have to certify that â€Å"†¦information contained in the periodic report fairly represents, in all material respects, the financial condition and results of operations of the issuer†¦Ã¢â‚¬  3 software development costs (SFAS 86) informs investors about development projects that passed successfully technological feasibility tests and are accordingly expected to enhance future revenues and earnings. 2 This potential contribution of managerial estimates to investors’ ssessment of future enterprise cash flows underlies the oft-quoted statement by the Financial Accounting Standard Board (FASB) in its Conceptual Framewor k about the superiority of accruals earnings—mostly based on estimates—over the largely fact-based cash flows in predicting future enterprise cash flows: Information about enterprise earnings based on accruals accounting generally provides a better indication of an enterprise’s present and continuing ability to generate favorable cash flows than information limited to the financial aspects of cash receipts and payments (FASB, 1978, p. IX).On the other hand, the contribution of estimates to the usefulness of financial information is counteracted by two major factors: (i) Objective difficulties. In the current volatile and largely unpredictable business environment, due to fast-changing market conditions (deregulation, privatization, emerging economies) and rapid technological changes, it is increasingly difficult for managers to make reliable projections of business events. Consider, for example, the estimated future return on pension assets—a key componen t of the pension expense: This estimate is essentially a prediction of the long-term performance of capital markets.Are managers better predictors of market performance than investors? 3 Or, reflect on the generally large impairment charges of fixed assets and acquired intangibles (including goodwill) mandated by SFAS 121 and SFAS 142: The determination of these 2 Indeed, Aboody and Lev (1998) document a positive association between capitalized software development costs and future earnings. 3 Consider, for example, the 2001 pension footnotes of three financial institutions, Merrill Lynch, Bank of NewYork, and Charles Schwab, which report the following estimates of the expected returns on pension assets: 6. 60%, 10. 50%, and 9. 00%, respectively (Zion, 2002). The wide range of estimates (6. 6%-10. 5%) of the long term performance of capital markets reflects the inherently large uncertainty (unreliability) of the pension expense estimate. 4 charges requires managers to estimate futur e cash flows from tangible and intangible assets. In today’s highly competitive and contested markets the reliability of asset cash flows forecasted over several years is obviously questionable.Accordingly, the accounting estimates and projections underlying financial information introduce a considerable and unknown degree of noise, and perhaps bias to financial information, clearly detracting from their usefulness. 4 (ii) Manipulation. Add to the above objective difficulties in generating reliable estimates the expected and frequently documented susceptibility of accounting estimates to managerial manipulation, and the consequent adverse impact of estimates on the usefulness of financial information becomes apparent.Given that it is very difficult to â€Å"settle up† with manipulators of estimates—even if an estimate turns out ex post to be far off the mark, it is virtually impossible to prove that ex ante the estimate was intentionally manipulated—there are no effective disincentives for managers to manipulate accounting estimates. Indeed, many of the Securities and Exchange Commission (SEC) enforcement cases alleging financial reporting manipulation concern misuse of estimates underlying accruals (e. g. Dechow et al. , 1996). Thus, the impact of estimates underlying accounting measurement and reporting procedures on the usefulness of financial information is an open question, to be examined in this study. The relevance of this examination cannot be overstated. Accounting estimates and projections underlie much of Generally Accepted Accounting Principles (GAAP) and consume 4 A case in point (Wall Street Journal, August 4, 2004, p. c1): â€Å"Investors in Travelers have needed more than that ed umbrella protection from what has been raining on them since the company was spun out from Citigroup in early 2002. Late last month, St. Paul Travelers Cos. , †¦ announced what Morgan Stanley termed a ‘blockbuster reserve chargeà ¢â‚¬â„¢ of $1. 625 billion. The charge was about twice as large as analysts have been expecting. The insurer contends that the charge stems largely from the need to reconcile differing accounting treatments at the two companies [Travelers and its acquisition—St. Paul Cos. ]. It was just a â€Å"reserve valuation adjustment,† the company said†¦.Sadly there seems to be little reason why Travelers’ executives didn’t anticipate problems with St. Paul’s insurance methodologies†¦ Mr. Benet [Travelers’ CFO] said:†¦we recognized early on that there was a difference in some of the methodologies [to estimate reserves] that would have to be addressed. † (emphasis ours). Thus, different accounting methodologies used to estimate the same reserves, all approved by auditors, yield a difference of $1. 625 billion. 5 most of standard-setters’ time and efforts.Just consider the major issues addressed by the FASB in recent yearsâ₠¬â€financial instruments, employee stock options, fixed assets and goodwill impairment, and the valuation of acquired intangibles, to name a few—all require major estimates and forecasts in the process of accounting measurement and reporting. If these and other accounting estimates do not contribute significantly to the usefulness of financial information, the efforts of accounting regulators, and even more importantly, the resources society devotes to the generation of estimates in the process of financial statement preparation and their auditing, are misdirected.Worse yet, if financial information users are led by the estimates-based accounting information to misallocate resources, an additional dead-weight cost is imposed on society. We define and test the usefulness of estimates embedded in accrual earnings in terms of their ability to predict enterprise performance. 5 This predictive use of financial information is central to security analysis and valuation and is also a fundamental premise of the FASB’s Conceptual Framework as indicated by the quote above. Future enterprise performance is mainly reflected by cash flows and earnings.Future cash flows are at the core of asset and liabilities accounting valuation rules. Thus, for example, asset impairment (SFAS 144) is determined by expected cash flows, and the useful lives of acquired intangibles (SFAS 142) are a function of future cash flows. More fundamentally, asset or enterprise cash flows are postulated by economic theory as the major determinants of their value. Given a certain ambiguity about the specific definition of cash flows used by investors, we perform our tests with two widelyused and frequently prescribed cash flow constructs: cash from operations (CFO) and free cash flows (FCF).Much of prior related research focused on CFO. Free cash flows are central to 5 There are, of course, other uses of financial data, such as in contracting arrangements, which are not aimed at predicti ng future enterprise performance. 6 many practitioners’ valuation models (e. g. Brealey and Myers, 2003), and play an important role in research too (e. g. , FCF is a primary variable in the valuation constructs of Feltham and Ohlson, 1995). Cash flow prediction is thus a predominant element of accounting measurements and practitioners’ valuation processes.Despite the prominence of cash flows in economic asset valuation models, there is no denying that many investors and analysts are using financial data to predict earnings. The underlying heuristics are somewhat obscured; perhaps investors predict earnings first, and derive future cash flow estimates from the predicted earnings. In any case, earnings prediction is prevalent in practice, and we therefore also examine the usefulness of accounting estimates for the prediction of earnings, both operating and net income.The focus of this study is on accounting estimates, but many of the estimates underlying financial infor mation are not disclosed in the financial reports. 6 We, therefore, focus in this study on accruals, most of which are based on estimates. In particular, we distinguish between accruals which are largely unaffected by estimates (changes in working capital items, excluding inventory), and accruals which are primarily based on estimates (most non-working capital accruals). This enables us to draw sharper inferences on the effect of estimates on the usefulness of financial information.We also analyze a smaller sample of firms with data on specific estimates which we split into recurring and non-recurring to separate noise (the non-recurring estimates) from information (the recurring estimates). Our empirical analysis is based on a sample of all non-financial Compustat firms with the required data—ranging from roughly 1,500 to 3,200 companies per year—and spanning the 6 For example, General Electric reports in its revenue recognition footnote that various components of rev enues derived from long-term projects are based on the estimated profitability of these projects.GE, however, does not break down total revenues into estimates and â€Å"facts. † 7 period 1988-2005. Our tests are conducted in three stages: (1) In-sample, industry-by-industry, predictions of future enterprise cash flows and earnings, based on: (a) current cash flows only (the benchmark), (b) earnings, and (c) the set of cash flows, the change in working capital (excluding inventory), and various components of accruals based on estimates. Here we follow the regression procedures of Barth, Cram, and Nelson (2001) and find, on more recent data, results which are generally consistent with Barth et al.This is our departure point. (2) Out-of sample firm specific predictions of future cash flows and earnings using the industry specific parameter estimates of the in-sample regressions. The focus of this analysis is on the improvement in the quality of predictions brought about by the addition of estimates (accruals) to the predictors. We thus predict cash flow from operations, free cash flows, net income before extraordinary items, and operating income over various horizons: one year ahead, second year ahead, aggregate two years ahead, and aggregate three years ahead.Our results show that accounting estimates do not improve the prediction of future cash flows (both operating and free cash flows), compared with predictions based on current CFO and the change in working capital excluding inventory. However, accruals do improve next year’s prediction of net and operating income. Notably, cash flow predictions based on current earnings only are significantly inferior to those generated by current CFO, contrary to Kim and Kross (2005). In our small sample analysis, neither recurring nor nonrecurring estimates improved significantly the predictions of either cash flows or earnings.The bottom line—accounting estimates beyond those in working capital items (except inventory) do not improve the prediction of cash flows. 8 (3) Finally, we examine the economic significance of estimates. These tests complement stage two, which is based on the statistical significance of differences in the quality of alternative predictors. Since it is difficult to gauge economic significance from statistical significance, we perform various portfolio tests, where portfolios are constructed from predicted cash flows and earnings based on various predictors, some of which are based on estimates.The abnormal returns on these portfolios, generated by alternative predictors, are our gauge of economic significance. The focus here is on comparing the returns on portfolios constructed from predictions based on current cash flows only (the benchmark), with returns on portfolios constructed from predictions based on current earnings or current cash flows plus changes in working capital and estimates. The results from these tests generally corroborate the out-of-sa mple prediction tests.In practically all our portfolio tests the model that uses current operating cash flows only to predict firm performance generates higher abnormal returns than models which add estimates to the prediction process used for the portfolio formation, though most of these returns are insignificant. Furthermore, the portfolios constructed from predictions based on current cash flows only yield abnormal returns with generally lower standard deviation than the alternative portfolios which include earnings or estimates among the predictors. We caution against sweeping conclusions.We examine the usefulness of accounting estimates in terms of predictive ability with respect to future firm performance. Accounting information is used for other purposes too (contracting, national accounting), for which estimates may be useful. Furthermore, our prediction tests are based on fairly simple models. Users may be using different, more sophisticated models where estimates could pro ve to be useful. 9 Nevertheless, we believe that our findings draw attention to the significant vulnerability of financial information from the multitude of underlying estimates and projections, and to the urgent need for improving the eliability of estimates, on which we comment in the concluding section. The order of discussion is as follows: Section 2 relates our findings to available research, and Section 3 outlines our research design. Section 4 describes our sample, and Section 5 reports our prediction tests. Section 6 informs on a battery of robustness checks, and Section 7 focuses on a subsample with an extended set of accounting estimates. Section 8 reports our portfolio (economic significance) tests, while Section 9 concludes the study. 2.Relation to Available Research Our study interfaces with several active research areas, and below we comment on the relation between our work and various representative studies. We are not familiar with empirical studies which assess the impact of accounting estimates on the informativeness of financial information, but there is a substantial number of studies that examine the contribution of accruals to the prediction of future cash flows and other variables. These studies can be roughly classified into regression-based (in-sample) analyses, and out-of-sample prediction tests.An example of the former is the comprehensive work by Barth, Cram and Nelson (2001), who regress CFO on lagged values of CFO and components of accruals (primarily the changes in accounts receivable, inventories, and accounts payable, as well as depreciation & amortization and other accruals). The authors report (p. 27) that â€Å"each accrual component reflects different information relating to future cash flows†¦[and] is significant with the predicted sign in predicting future cash flows, incremental to current cash flows. Note that 10 predictive ability is assessed in this and similar studies by the significance of the estimated accrua ls’ coefficients and by the improvement inR 2. 7 An interesting extension of the regression strand is provided by Subramanyam and Venkatachalam (2007) who examine the relative explanatory power of earnings and cash flows with respect to an ex post measure of the intrinsic value of equity which uses Ohlson’s (1995) equity valuation framework, based on realized values of earnings and book values.The authors argue that such measurement of equity values avoids the necessity to assume capital market efficiency, as in Dechow’s (1994) study relating accruals to contemporaneous stock returns. Dechow documents a significant association between accruals and stock returns, but the implications of such association for market efficiency are challenged by Sloan’s (1996) findings of strong return reversals (market inefficiency) following extreme accruals.Subramanyam and Venkatachalam (2007) conclude that operating cash flows are more strongly associated with future cash flows than earnings, and that current earnings are more strongly associated with future earnings than cash flows. Regressing the ex-post equity measure on earnings and cash flows indicates that earnings exhibit a higher explanatory power than cash flows. By and large, the in-sample regression studies suggest that accruals are associated with subsequent cash flows and contemporaneous equity values, a finding we largely update and corroborate in the initial stage of our analysis (Section 5. ). However, as is argued in Section 5. 1, in-sample regressions are not prediction tests, and may even provide misleading inferences concerning prediction power. We move, therefore, to out-of-sample tests. An early and innovative out-of-sample prediction test is Finger (1994), who concludes from a sample of 50 companies with long historical data that cash flow is marginally superior to 7 Bowen et al. (1986) and Greenberg et al. (1986) perform similar regression-based, in-sample predictions. 11 ear nings for short-term predictions and performs similar to earnings in long-term cash flow predictions.However, time-series and cross-sectional out-of-sample short-term prediction tests by Lorek and Willinger (1996) and Kim and Kross (2005), respectively, show that current earnings predict more accurately future cash flows than current cash flows do. Thus, a mixed picture emerges from the out-of-sample tests, calling for further research. Note also that most previous studies, in- and out-of-sample, focus on the prediction of cash from operations, despite the fact that free cash flows (a measure included in our tests) is frequently used by analysts and investors.Barth, Beaver, Hand and Landsman (2005) provide an interesting perspective on the usefulness of accruals. Using the valuation framework of Feltham and Ohlson (1995, 1996), they examine the ability to predict equity value of various disaggregations of earnings: aggregate earnings, cash flows and total accruals, as well as cash f lows and four major components of accruals. The prediction methodology is out-of-sample in a particular sense: cross-sectional valuation models are run for each year (equity values regressed on contemporaneous earnings disaggregations), excluding each time a particular sample firm.The equity value of that firm is then predicted from the estimated coefficients of the models. Barth et al. (2005, p. 5) â€Å"†¦find evidence of some reduction in mean prediction errors from disaggregating earnings into cash flows and total accruals, and some additional reduction from disaggregating total accruals into its four major components†¦median prediction errors generally support disaggregation of earnings only into cash flows and total accruals. Overall, these findings vary considerably by industry, and appear to indicate a more consistent success for the cash flows and total accruals model than for the cash flows and disaggregated accruals model. 8 8 Studies such as Bathke et al. (198 9) and Lorek et al. (1993) also perform out-of-sample prediction tests. 12 The substantial body of research on the accruals anomaly initiated by Sloan (1996) is tangentially related to our study.This research establishes that accruals are often misinterpreted by investors: large (small) accruals firms are contemporaneously overvalued (undervalued) in capital markets, and these misvaluations are largely reversed within a couple of years. Notably, much of the accruals anomaly resides in small, thinly traded firms, which are unattractive to most institutional investors (Lev and Nissim, 2006), a fact that contributes significantly to the persistence of this anomaly. It is important to note that our focus in this study is different from the ccruals anomaly research: we do not examine investors’ perceptions of accruals, and the consequences of such perceptions. Rather, we focus on the contribution of accruals and by implication of the embedded estimates to the primary role of finan cial information—assisting users in predicting future enterprise performance. The short-term market inefficiencies highlighted by the accruals anomaly are, of course, worth noting, but they do not inform much on the presumed role of accruals—to improve the prediction of enterprise performance.Stated differently, while extreme accruals are often mispriced contemporaneously by investors, a misperception corrected fairly shortly thereafter, accounting accruals in general, prevalent in every financial report, may still enhance the multi-year prediction of firm performance. It is this fundamental role of accruals and their underlying estimates that is the main theme of our study. The lack of convergence of the extant accruals’ usefulness research makes it very difficult to draw firm conclusions.Some studies are in-sample, while others are out-of-sample; some researchers relate accruals to contemporaneous returns or equity values whereas others to future values. Some predict cash flows while others predict equity values based on models using forecasted or realized residual earnings. Our main contribution to extant research is the focus on the estimates embedded in accruals and the provision of certain closure to the usefulness of 13 accruals issue. We distinguish between accruals which are largely based on facts and those primarily reflecting estimates, to focus on the usefulness of accounting estimates.Our main tests are out-of-sample predictions, replicating what most investors actually do—predict, with no ex post information (as implicitly assumed by in-sample studies), various versions of future earnings and cash flows. The comprehensiveness of our predicted performance measures (two versions of earnings and two of cash flows), and the number of future periods examined (years t+1, t+2, and aggregate next two years and next three years) enables us, we believe, to draw general conclusions about the contribution of estimates to firm perf ormance rediction. Furthermore, our study is the first, we believe, to examine both the statistical and economic performance of accruals-based prediction models. Inferences from statistical significance are sometimes difficult to draw and generalize. Consider, for example, the Barth, Beaver, Hand and Landsman (2005, p. 5) conclusion: â€Å"we find evidence of some reduction in mean prediction errors from disaggregating earnings†¦Ã¢â‚¬  (emphasis ours). While definitely interesting, this conclusion leaves open the important question of: how material is â€Å"some reduction†?Is it, for example, sufficiently large to support the current move of the FASB and IASB toward increased reliance on estimates in financial reports (fair value, stock option expensing, etc. )? Statistical significance coupled with economic significance, as provided below, allows for a more comprehensive evaluation of the evidence. 9 The focus on accounting estimates, the out-ofsample methodology, and the examination of both statistical and economic significance, all bringing certain closure to the research question, is our main contribution. 3. Research Design Examples of studies including economic significance tests are Ou and Penman (1989), Stober (1992), Abarbanell and Bushee (1998), and Piotroski (2000). 14 Our research design consists of three stages: (a) in-sample association tests of cash flows (earnings) regressed on lagged values of these variables and accruals, (b) out-of-sample forecasts of cash flows (earnings) based on these variables and accruals and (c) calculation of hedge future excess returns on portfolios constructed from the out-of-sample predicted cash flows (earnings) in stage (b).We conduct the first stage as a link to and departure from previous research by estimating cross-sectional in-sample regressions as in the Barth, Cram and Nelson (2001) study (BCN hereafter). We use several prediction constructs, primarily to distinguish between accruals largely based on facts and those based on estimates. At one extreme of the accruals disaggregation we classify all the accruals in the â€Å"operations† section of the cash flow statement into working capital changes excluding inventory (? WC*) and the remaining accruals, termed â€Å"estimates† (EST): EARNINGSCash from Working Capital Operations Change excluding (CFO) inventory (? WC*) Estimates (EST) ACCRUALS Working capital items with the exception of inventory, such as accounts payable and short-term marketable securities, are generally not materially impacted by managerial estimates,10 whereas 10 The accounts receivable change, net of the provision, is an exception, since it is subject to an estimate. But this estimate is included in our second accruals component, EST. 15 most of the remaining accruals are in fact pure estimates (e. g. , depreciation and amortization, bad debt provision, in-process R&D).At the other end of the accruals disaggregation we separate out the c hange in inventory (? INV) from the aggregate estimates (EST), given the evidence (e. g. , Thomas and Zhang, 2002) that much of the accruals anomaly resides in inventory, probably due to intentional and unintentional misestimations of this item. We further break out depreciation and amortization (D&A) and deferred taxes (DT) from other estimates because the identification of these items is possible from Compustat data over the entire sample period. This disaggregation is depicted thus: EARNINGS CFO WC* (minus inventory) ?Inventory (? INV) Dep. & Amortization (D&A) ACCRUALS Def. Taxes (DT) Other estimates (EST*) The various components of accruals along with cash from operations (CFO),11 depicted in the two exhibits above are the independent variables in the estimation models underlying our in-sample predictions. We add to these variables the cash flow statement figure of capital expenditures (CAPEX), since the dependent variables in our models are future cash flows or earnings, which are generally affected by current investment (capital expenditures). We believe 11We measure CFO as in Barth et al. (2001), namely net cash flow from operating activities, adjusted for the accrual portion of extraordinary items and discontinued operations. 16 that the addition of capital expenditures to the regressors improves the specification of the insample prediction models, and sharpens our focus on the relative performance of the accruals components, our focus of study. Indeed, the capital expenditures variable is statistically significant in most of our annual in-sample predictions models. 12 3. 1 Prediction tests Our prediction tests take the following general form.We predict two versions of cash flows (cash from operations and free cash flows) and two constructs of earnings (net income before extraordinary items and operating income) in years t+1 and t+2, as well as in aggregate years t+1 & t+2, and t+1 through t+3. To gain insight into the usefulness of estimates in predi cting firm performance, we use five prediction models with increasing disaggregation of accruals (regressors): Model 1: current CFO only—the benchmark model; Model 2: current net income (NI) only; Model 3: current CFO and the change in working capital items excluding inventory (?WC*)—namely, largely fact-based regressors; Model 4: current CFO, the change in working capital items excluding inventory ? WC*, and total remaining accruals, largely based on estimates (EST); and Model 5: current CFO, the change in working capital items excluding inventory ? WC*, the change in inventories (? INV), depreciation & amortization (D&A), the change in deferred taxes (DT), and all other estimates (EST*)—the most disaggregated model. The purpose is to examine whether the gradual addition of components of accruals 12 For robustness, we reran our predictions (reported in Table 3) without capital expenditures, and conclude that one of our inferences changes in the absence of capit al expenditures. 17 estimates to current cash flows (the benchmark) improves the prediction of future cash flows or earnings. Increasing the disaggregation of accruals should, in general, enhance the quality of prediction (from model 1 to 5), since the individual accrual components are allowed to have different effects (multiples) on the predicted values. We examine model 2 because the predictor, earnings, is a summary accounting variable that has been extensively investigated for its information content and has been used in most prior studies (e. . BCN and Kim and Kross 2005). It is important to note that the cross-sectional estimates of the five in-sample prediction models are obtained for 2-digit SIC industry groups. These industry specific estimates make the implicit assumption of constancy of coefficients across firms reasonably tenable. We implement the second stage of our research design by using the industry specific estimated coefficients from each of the above five predict ion models to calculate firm specific predicted values for cash from operations (CFO), free cash flows (FCF), net income (NI) and operating income (OI).We then calculate firm specific prediction errors as the difference between the actual and predicted values of each variable examined. The following examples of the prediction of free cash flows (FCF) will clarify our prediction procedures. A. Prediction of next year’s free cash flows, FCF (t+1) (a) Benchmark Model using CFO only (example for 1990): 1. Estimate cross-sectionally for each 2-digit industry the following regression: FCF (89) = ? + ? CFO(88) + ? . , 2. Predict for each firm in a given 2-digit industry: EFCF (90) = ? + ? CFO(89) using the previously determined industry specific estimated coefficients. . Determine prediction error for each firm in a given 2-digit industry: EFCF (90) . FCF (90) – 18 Here we predict 1990 free cash flows (EFCF(90) from current cash from operations, CFO (89) (and capital expendit ures). First, for each 2-digit industry we regress cross-sectionally free cash flows of 1989 on CFO in 1988, and obtain the estimated coefficients ? and . ? Those coefficients are then used to predict firm specific free cash flows (EFCF) in 1990, using the firm’s actual CFO of 1989. Then, a firm specific prediction error is determined by comparing the firm’s actual 1990 FCF with the predicted one.The same procedure is repeated for every firm and sample year. (b) Restricted Estimates, Model 4 (example for 1990): Estimate cross-sectionally for each 2-digit industry: FCF (89) = ? + ? 1CFO(88) + ? 2? WC * (88) + ? 3EST (88) + ? . The subsequent prediction and error determinations are done as in (a) above. Here we predict 1990 free cash flows from CFO, ? WC* (change in working capital items excluding inventory), EST (estimates), and capital expenditures (not shown in the equation). First, a cross-sectional regression of 1989 free cash flows is run on the 1988 values of CFO, ? WC*, and EST, yielding coefficients ? ? 1, ? 2, and ? 3. Then, firm specific 1990 free cash flows are predicted, using the four industry specific estimated coefficients and the 1989 actual values of CFO, ? WC*, and EST. Finally, these 1990 FCF predictions are compared with the 1990 actual free cash flows to determine the prediction error. The same procedure is repeated for each firm and sample year. (c) Expanded Estimates, Model 5 (example for 1990): Estimate cross-sectionally for each 2-digit industry: FCF (89) = ? + ? 1 CFO(88) + ? 2 ? WC * (88) + ? 3? INV (88) + ? 4 D & A(88) + ? 5 DT (88) + ? 6 EST * (88) + ? . 19The prediction and error determinations are done as in (a) above. Here we predict 1990 free cash flows from 1989 CFO, capital expenditures, and the disaggregated set of estimates (see second diagram at the beginning of this Section). Once more, we run by industry a cross-sectional regression of 1989 FCF on the 1988 values of the independent variables, estimating the ? and ? 1†¦ ? 6 coefficients (and a ? 7 coefficient for 1988 capital expenditures). The firm-specific 1990 free cash flows are predicted using these industry specific coefficients and the actual values of the independent variables in 1989.Computation of the 1990 FCF prediction error follows. B. Prediction of year 2 free cash flows, FCF (t+2) Benchmark Model (example for 1992): 1. Estimate cross-sectionally by 2-digit industry: FCF (90) = ? + ? 1CFO(88) + ? 2. Predict for each firm in a given 2-digit industry: EFCF (92) = ? + ? 1CFO(90) 3. Prediction Error for each firm in a given 2-digit industry: FCF (92) – EFCF (92) This is the prediction of free cash flows in t+2. It follows the earlier procedure with one difference: Here the cross-sectional estimate (first equation) and the forecast (second equation) involve a two-year lag (e. . , FCF in 1990 regressed on CFO of 1988). Same procedure is performed for each firm and sample year. The expanded prediction models incorpora ting disaggregated accruals follow steps (b) and (c), above. We also predict free cash flows for aggregate years t+1 plus t+2, and t+1 through t+3. These predictions are based on the procedures described above, except that aggregated future free cash flows are substituted for single year free cash flows as left-hand variables in the various models. The procedure demonstrated above for FCF is also used to predict cash from operations 20 CFO) in t+1, t+2, and aggregated future years, and to predict earnings in t+1, t+2 and aggregated future years. Two versions of earnings—net income before extraordinary items (NI) and operating income (OI)—are predicted. The various prediction models for earnings are identical to those of free cash flows described above, except that earnings in t+1 and t+2 are substituted for FCF in those models. To summarize, we perform out-of-sample predictions of two versions of cash flows and two versions of earnings from current values of CFO, curre nt values of NI, and CFO plus changes in working capital and various combinations of accruals.To evaluate the quality of the out-of-sample predictions, we compute summary measures of prediction errors derived from the firm- and year-specific estimated errors: the mean and median signed prediction errors indicating the bias in the forecasts, and the mean and median absolute prediction errors which abstract from the sign of the error and indicate forecast accuracy. The firm-specific prediction error in a given year is computed as the realized value of cash flow or earnings minus the predicted cash flow or earnings, divided by average total assets in year t. . 2 Portfolio analysis The third stage of our research design is motivated by Poon and Granger (2003, p. 491) who note: â€Å"Instead of striving to make some statistical inference, [prediction] model performance could be judged on some measures of economic significance. † We interpret their statement as saying that we shoul d not rely solely on the statistical significance of our prediction errors calculated in stage two but should also examine and perhaps even rely more on measures of economic significance.To gauge the economic significance of the contribution of estimates to the usefulness of financial information we perform a series of portfolio tests focusing on the incremental stock returns generated by the estimates-based prediction models. 21 Essentially, we use the out-of-sample predicted values of cash flows (CFO and FCF) and alternatively of earnings (NI and OI), obtained in the second stage of our analysis, to form portfolios.Specifically, for each sample year we rank all firms (across all industries) on predicted firm-specific cash flows or earnings (four rankings, two for cash flows and two for earnings), scaled by average total assets in the end of year t. We then form ten portfolios from each annual ranking and compute risk-adjusted (size & book-to-market adjusted) returns from holding t hese portfolios over several future periods. In assessing the performance of the various predictors (CFO, NI, ? WC*, accruals of estimates), we primarily focus on a zero-investment (hedge) strategy: going long (investing) in the top ortfolio (the 10% of firms with the largest (scaled) predicted cash flows or earnings), and shorting (selling) the bottom portfolio (10% of firms with the lowest predicted cash flows or earnings). The abnormal returns on these zeroinvestment portfolios indicate the economic contribution to investors of using accounting estimates as predictors. Thus, if estimates are useful to investors then portfolios constructed from predictions based on current cash flows and estimates-based accruals should consistently outperform portfolios formed from predictions based on current cash flows only.It should be noted that if markets are efficient concerning the information in accruals—a big if, in light of Sloan (1996)—and if investors select securities us ing procedures similar to our industry-based prediction models specified above, then our subsequent portfolio abnormal returns should be roughly zero. Our purpose in these portfolio tests, however, is not to examine market efficiency, rather to compare the performance of portfolio selection procedures with the estimates-based accruals against similar procedures without accruals (based on past cash flows only).We are thus focusing on the with- and without-accruals comparisons, being agnostic about market efficiency. Stated differently, the comparative abnormal hedge returns across the 22 five prediction models, rather than the statistical significance of those returns, is our focus of analysis. 4. Sample Selection and Descriptive Statistic We obtain accounting data from the 2006 Compustat annual industrial, full coverage, and research files, and use data from the statement of cash flows because Collins and Hribar (2002) suggest that such data are preferable to accruals derived from t he balance sheet.Since reporting a statement of cash flows was mandated by SFAS 95 in 1987, our accounting data span the period 1988 to 2005. 13 In the in-sample regression analysis, each year from 1988 to 2004 is a predictor year (generating the independent variables) while each year from 1989 to 2005 is a predicted year (providing the dependent variables). Thus, 17 in-sample annual regressions are estimated for each industry. Our sample selection procedure is as follows. We start with 75,571 observations with values for NI, CFO, ? WC*, INV, D&A, DT, EST, EST* and CAPEX for the current year, year t, and for NI over a three-year horizon, t-1 to t+1. Firms with all fiscal year ends are included. We control for outliers by following the procedures in Barth et al. (2001). Thus, after eliminating the top and bottom one percentile of current NI and CFO we are left with 73,324 firm-year observations. By excluding observations with market value of equity or sales of less than $10 million, or with share prices below $1, to eliminate economically marginal firms, the number of observations decreases to 51,301.By deleting observations with studentized residuals greater than 3 or less than -3, we are left with 50,288 observations. Since we conduct industry-byindustry in-sample regression analysis we require each industry to have a minimum of 600 observations over the period 1988 to 2004. This criterion reduces the sample to its final size of 13 Valid statement of cash flows data for the year 1987 are available for a relatively small number of firms not enough to do a meaningful industry-by-industry analysis. Thus, we do not use 1987 data. 23 41,124 observations.We obtain stock returns data for the portfolio analysis from the 2006 CRSP files. 14 Table 1 provides summary statistics (variables are scaled by average total assets) and a correlation matrix for out test variables. Panel A shows that depreciation and amortization (D&A) constitutes the bulk of the estimates underl ying accruals (EST): The mean (median) of D&A is 0. 054 (0. 047), close to the mean (median) of EST, 0. 059 (0. 052). The mean of net estimates (EST*), excluding D&A and deferred taxes, is quite large, 0. 019, and is driven mainly by large positive values, as the median value of 0. 04, Q1 of 0. 000 and Q3 of 0. 019 imply. CFO has the lowest while NI has the highest variability (standard deviations of 0. 129 versus 0. 149) among the various earnings and cash flow variables. In panel B all correlations are significant at the 5% level or better. We note the high negative correlations of our estimates variables, EST and EST*, with the income variables, NI and OI. However, the correlations of EST and EST* with both the cash flow variables, CFO and FCF, are much lower; positive for EST and negative for EST*. 4 We repeated all of our analyses with a sample without any outlier removal, namely where we only require non- missing values for the key variables, and at least 600 observations in e ach 2-digit SIC over the sample period 19882004. This sample consists of 65,178 observations and is substantially larger than the sample of 41,124 observations used in the analysis reported below. We find that for many industries the R-squares in the in-sample regressions are higher for the un-truncated data than for the truncated data.The forecast error results are essentially identical to the results from the truncated sample in terms of inferences but the errors are larger. The portfolio abnormal returns results exhibit similar patterns to the results from truncated data. Overall, the un-truncated data yield very similar results to those of the truncated data reported below. 24 5. Empirical Findings: Prediction Tests 5. 1 Stage one: In-sample Regressions Table 2 reports cross-sectional annual regressions, by industry, of CFO (cash from operations) on lagged values of CFO and earnings components (Model 5 in Section 3).The reported coefficient estimates for each industry are the me ans of the yearly coefficients over the 17 year period, 1988 to 2004. The significance of these mean coefficients is based on (nonreported) t-statistics calculated using the mean and standard errors of the 17 yearly coefficients, as in Fama and MacBeth (1973). We report the results for the CFO regressions so that they can be compared to the CFO results reported by BCN. The, in-sample regression results for FCF, NI and OI are very similar to those reported in Table 2. It is evident that in each of the twenty-three ndustries in Table 2 the lagged CFO and ? WC* (change in working capital minus inventory) are highly significant. In the majority of the industries, ? INV (inventory change) is also significant, as is D&A. However, DT (deferred taxes) and EST* (other accruals estimates) are significant for about half of the industries only. These results are quite consistent with BCN’s results reported in their Table 6, Panel B (note that the sum of our DT and EST* variables is the O TH variable in BCN). The fairly large R2s, ranging across industries from 0. 29 to 0. 71, are also consistent with the R2s reported by BCN.Thus, the BCN regression results over the period 1987 to 1996 hold well over our longer period, 1988-2004. Overall, the estimates indicate a strong association between CFO and lagged earnings components, raising expectations about strong out-of-sample performance as well. However, it is important to note that a regression analysis of a given variable on lagged values of that variable along with other data, as frequently conducted in accounting and finance research, is not a conclusive test of predictive ability. As noted in Poon and Granger’s (2003, p. 25 92) survey: â€Å"In all forecast evaluations, it is important to distinguish in-sample and out-ofsample forecasts. In-sample forecast, which is based on parameters estimated using all data in the sample, implicitly assumes parameter estimates are stable through time. In practice, time v ariation of parameter estimates is a critical issue in forecasting. A good forecasting model should be one that can withstand the robustness of an out-of-sample test, a test design that is closer to reality. In our analyses of empirical findings†¦ we focus our attention on studies that implement out-of-sample forecasts. A dramatic example of misplaced inferences drawn on the basis of regression analysis has been recently provided by Goyal and Welch (2007). Their focus is on the prediction of stock market returns based on a variety of variables suggested by prior studies (e. g. dividend yield, earnings-price ratio, book-to-market ratio), using in-sample regression models. After a comprehensive analysis, Goyal and Welch conclude that â€Å"these models have predicted poorly both in-sample and out-of-sample for thirty years now; these models seem unstable, as diagnosed by their out-of-sample predictions nd other statistics; and these models would not have helped an investor with access only to available information to profitably time the market† (Abstract). This important insight motivates our primary analysis which focuses on out-of-sample prediction tests. In the case of predicting stock returns, Goyal and Welch’s concern, in-sample regression results are generally weak and it is therefore not surprising that the out-of-sample predictions of Goyal and Welch perform poorly too.In contrast, in our case of predicting cash flows and earnings, the in-sample regressions (Table 2) perform well, so, whether the more realistic out-of-sample predictions of cash flows and earnings perform equally well is an important empirical issue which we examine next. 26 5. 2 Stage two: Out-of-sample Prediction Tests Table 3 summarizes our main out-of-sample prediction findings. Recall that we predict four key performance indicators: cash from operations (CFO); free cash flows, defined as CFO minus capital expenditures (FCF); net income before extraordinary items (N I); and operating income (OI).There are four prediction horizons: next year, second year ahead, aggregate next two years, and aggregate next three years. Five prediction models are examined (they were discussed and demonstrated in Section 3), where the predictive (independent) variables are: (1) CFO only—the benchmark model, (2) NI only, (3) CFO and the annual change in working capital items excluding inventory (? WC*), (4) CFO plus the change in working capital items excluding inventory (? WC*), as well as the total remaining accruals (EST) which are largely estimates based, including the change in inventory, and (5) our most disaggregated model: CFO, ?WC*, the change in inventories, depreciation and amortization, deferred taxes, and all remaining estimates. Current capital expenditure is included as an additional variable in each of the five models. We report in Table 3 four summary statistics for the prediction errors of our five models: the pooled firm-specific mean absol ute error (MAER) of each of the five models, the pooled mean signed error, or bias (MER), the mean R2s from annual regressions of firm-specific actual values of future cash flows or earnings on the corresponding predicted values, and the average over the years of Theil’s U-statistics. 5 We indicate with an ampersand (&), asterisk (*) or a hash (#) the pooled mean absolute prediction errors (MAER) which are significantly different 15 The reported Theil's U-statistic is the average of the yearly U-statistics. Theil’s U is defined as the square root of ?(actual-forecast)2/? (actual)2. The U statistic can range from zero to one, with zero implying a perfect forecast. Thus, models generating better predictions should have lower U statistics. 27 between Models 1 and 2, Models 1 and 3, and Models 3 and 4, and Models 3 and 5, respectively. 6 We have also computed the sample median signed errors, median absolute errors, and root mean square errors. Results from these indicators are very similar to those reported in Table 3 (we comment in the text on the occasional differences). Below are the main inferences we draw from Table 3, and additional analyses: 1. Prediction of cash flows. Considering the prediction of cash from operations (CFO) and free cash flows (FCF)—left two quadruples of columns in Table 3—we note that the predictions derived from net income only (Model 2) are always significantly inferior to the predictions based on cash from operations only (Model 1).This is true across the four forecast horizons and the four error summary statistics. For example, in predicting one-year-ahead cash from operations (top left panel), the MAER, MER and Theil’s U are lower for Model 1 than for Model 2 (0. 056 vs. 0. 062, 0. 001 vs. 0. 003, and 0. 58 vs. 0. 64, respectively), while the R2 of Model 1 is higher than that of Model 2 (0. 46 vs. 0. 37). The difference in the MAERs is statistically significant, as indicted by the & sign. This pat tern is evident across all eight panels reporting predictions of cash from operations and free cash flows for various horizons.Thus, for one- to three-year forecast horizons, current cash from operations is a better predictor of future cash from operations and free cash flows than current net income. This result is inconsistent with Kim and Kross (2005) findings that in one-year-ahead predictions of cash flows current earnings performs better than current cash flows. 17 16 All the absolute forecast errors (MAER) in Table 3 are statistically significant, with p-values of 0. 01 or better. The majority of the signed errors (MER) are also significant at p-values of 0. 1 or better, and many are statistically significant at least at p-values of 0. 05. The following signed errors are insignificant: Model 1 in forecasting Years 12 CFO, Models 1 and 3 in forecasting Years 1-3 CFO, and Models 2, 4 and 5 in forecasting Years 1-3 OI. 17 It is important to note that Kim and Kross (2005) use bala nce sheet items to calculate cash from operations while we use statement of cash flows data. We were able to replicate the out-of-sample prediction results of Kim and 28Moving on to Model 3, (predictors: CFO and the change in working capital items minus inventory), we note that the CFO and FCF predictions derived from current CFO only (Model 1) under-perform predictions based on current CFO and the change in working capital items excluding inventory, ? WC*. Thus, the mean absolute errors of Model 3 are significantly lower than those of Model 1 in all CFO and FCF panels, except in the FCF panel for the aggregate next three years horizon (bottom FCF panel). 18 The reported R2s and Theil’s U statistics also indicate the under-performance of Model 1 relative to Model 3.For example, in predicting one-yearahead cash from operations (top left panel), the MAER and Theil’s U are lower for Model 3 than for Model 1 (0. 054 vs. 0. 056, and 0. 56 vs. 0. 58, respectively), while the R2 of Model 3 is higher than that of Model 1 (0. 50 vs. 0. 46). Thus, for one- to three-year forecast horizons, the total change in working capital items excluding inventory is incrementally informative over current cash flows. This is relevant for our focus on the usefulness of accounting estimates, because the working capital items, excluding inventory, and with the exception of accounts receivable, are largely free of estimates.We now move to examine the contribution of accounting estimates to cash flow prediction. We do this by comparing the performance of Models 4 and 5 to that of Model 3, where Model 3 becomes now our benchmark given its superior performance up to this point. We note that CFO and FCF predictions derived from Model 4 (based on CFO, the change in working capital items excluding inventory (? WC*), as well as all other accruals including the change in inventory) and Model 5 (based on CFO, ? WC*, the change in inventories, depreciation and amortization, Kross usin g balance sheet items for our sample period.Accordingly, the difference in the results between the two studies is due to the data used. As shown by Collins and Hribar (2002), the cash from operations, and accruals derivation from the statement of cash flows is preferable. 18 Note that despite the very small difference between the MAERs of Models 1 and 3, the mean differences are statistically significant at the 0. 05 level or better (see asterisks). 29 deferred taxes, and all remaining accruals) equally perform or under-perform the predictions from Model 3 (based on CFO and ?WC*). Specifically, the mean absolute errors of Model 3 are significantly lower than or equal to the mean absolute errors of Models 4 and 5 in all the CFO and FCF panels. Furthermore, the reported MERs, R2s and Theil’s U statistics are also consistent with the under-performance of Models 4 and 5 relative to Model 3. For example, in predicting one-year-ahead cash from operations (top left panel), the MAER, MER and Theil’s U for Model 3 are either equal to or lower than for Models 4 and 5 (0. 054 vs. 0. 054 and 0. 055; 0. 001 vs. 0. 02 and 0. 002; and 0. 56 vs. 0. 57 and 0. 57, respectively), while the R2 of Model 3 is equal to or higher than the R2s of Models 4 and 5 (0. 50 vs. 0. 50 and 0. 49). Accordingly, we conclude that for one- to three-year forecast horizons the accounting estimates embedded in accruals, either as a lump sum or disaggregated, do not improve cash flow predictions over current cash from operations and the change in working capital (excluding inventory). 19 Conclusions: Neither total earnings, nor disaggregated estimates-based accruals ystematically improve the prediction of cash flows (CFO or FCF) over the predictions based on current CFO and the change in working capital (excluding inventory). This finding is inconsistent with the FASB’s conceptual stipulation that â€Å"Information about enterprise earnings†¦generally provides a better indi cation of an enterprise’s present and continuing ability to generate favorable cash flows than information limited to the financial aspects of cash receipts and payments† (FASB, 1978, p. IX), though our data start ten years after this statement was issued 2. Prediction of earnings.The two quadruples of columns to the right of Table 3 report prediction performance statistics for net income (NI) and operating income (OI). Here, the 19 These inferences do not change when we examine median signed and absolute prediction errors (available on request). 30 predictions derived from net income (Model 2) significantly outperform those based on cash from operations only (Model 1), for the one-year-ahead forecasts. For example, in predicting next year’s operating income (top right panel), the MAER of Model 2 is significantly lower than that of Model 1 (0. 057 vs. 0. 061).The R2s and Theil’s Us confirm the stronger performance of Model 2, for one-year predictions. Inte restingly, Model 2’s predictions are significantly inferior to Model 1’s in the two-years-ahead and aggregate next three years predictions (second and bottom NI and OI panels). For example, in predicting aggregate three-years-ahead operating income (bottom right panel), the MAER of Model 2 is significantly higher than that of Model 1 (0. 257 vs. 0. 253). Thus, for a one-year-ahead forecast horizon, current net income is a better predictor of future net income and operating income than current cash from operations. 0 Of the five models examined for earnings predictions, the best performer is Model 4— with three variables: CFO, ? WC* (change in working capital excluding inventory), and EST (all other accruals)—for all forecast horizons. Intriguingly, Model 5, where EST is disaggregated to several estimates-based accruals, is somewhat inferior to Model 4. Apparently, predicting from disaggregated accruals results in noisy forecasts. Conclusions: Earnings is a better predictor of near-term earnings than cash flow.Accounting accruals, when disaggregated to working capital items and other accruals, improve further the prediction of operating and net income. No further improvement is achieved from a finer disaggregation of accruals. 6. Robustness Checks 1. How good are our prediction models? 20 Our prediction models are admittedly The median absolute errors are lower for Model 2 than for Model 1 in all NI and OI panels except in the bottom two panels (for the aggregate next two and three years horizons). 31 simple—they obviously abstract from many of the complexities of real life security analysis.Nevertheless, the R2s in Table 3—derived from annual regressions of actual values (future cash flows or earnings) on predicted values—are quite large. Thus, for example, for next year’s predictions (top panels of Table 3), the R2 range is 0. 33-0. 58. As expected, the R2s drop for second year predictions, yet they are still in the reasonable range of 0. 21-0. 37. Thus, despite their simplicity, our prediction models perform reasonably well. 2. Trimming extreme prediction errors. The results of Table 3 are after trimming the top 2% of the absolute forecast errors.We also computed prediction errors after trimming the top and bottom 1% of the forecast errors and without any trimming. The resulting patterns of prediction errors (not reported) are in both cases very similar to those of Table 3. As expected, Table 3 trimmed errors are substantially smaller than the non-trimmed errors, the R2s are larger, and the Theil’s U statistics are lower, yet our conclusions regarding the relative performance of the five models equally apply to the non-trimmed errors. substantially our inferences. 3. Classification by size of accruals.Since the estimates we examine are components of total accruals, we classified the sample firms into three groups, by the size of accruals, to check whether accruals size affe cts our findings. Specifically, for each sample year we ranked the firms by the size of total accruals (scaled by total assets), and then formed three groups: the top 25% of firms (high accruals), the middle 50% (medium accruals), and the bottom 25% (low accruals). We then generated cash flow and earnings predictions for each of the three accruals g