The Effect of Corporate Governance Mechanism on the Quality of Earnings Among Nigeria Money Banks in Nigeria free essay sample

This paper examines whether corporate governance mechanism variable – Board Size, Board Composition, Ownership Concentration, Institutional Shareholders, Dividend Payment, Firm Size have significant impact on the quality of earnings of Nigerian deposit money banks as measured by modified (McNicols and Wilson, 1998), (Gred and Clarke, 2004) and (Chang, 2008) model of specific industry discretionary accruals as against (Dichow and Dichev, 2002), though widely accepted but is hardly industry specific. Secondary data are extracted from the annual reports of 15 banks that form the sample of the study within the period between 2006-2011. Multiple regression was used as a tool for analysis. The result reveals that corporate governance mechanisms affects earnings quality of Nigerian money deposits banks. All the corporate governance examined are positive except for the control variable firm size signifying that none of the explanatory variables is inversely related to quality of earnings amongst Nigerian money deposits banks. It is therefore recommended that amongst others that shareholders of Nigerian DMBs to ensure the inclusion of about 50% outside directors in the board and ensuring a good quantum of both institutional and block holders in the equity holdings of the banks. We will write a custom essay sample on The Effect of Corporate Governance Mechanism on the Quality of Earnings Among Nigeria Money Banks in Nigeria or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Keywords: Earnings, Discretionary, accruals, manipulation, monitoring, quality. Introduction The rising number of corporate failures, scandals and crises such as Enron, WorldCom, Global Crossing, HIH Insurance, Ansett, Pan Pharmaceuticals, Lever Brothers, Cadbury, and Afri bank has precipitated the growing interest on the governance structures of firms by academics, practitioners, the investment community, regulatory agencies, policy makers, national and multilateral government bodies and host of other stakeholders (Tsegba, 2011). Corporate governance is about building credibility, ensuring transparency and accountability as well as maintaining an effective channel of information disclosure that would foster good corporate performance (Matama, 2008). Income smoothing and earnings quality popularly called earnings management can be regarded as two of the attractive and challenging issues in studies related to accounting because investors pay attention to amount of income as an important factor in decision making. It has long been recognized that financial statements play an important role in assessing managers’ performance by the board of directors outside investors and external regulators. It is therefore, not unlikely that managers will manipulate financial reports in order to produce a good image of themselves and the firms that they manage (Shehu and Abubakar, 2012). There are a lot of qualitative empirical studies exist on the relationship between corporate governance mechanisms and earnings quality. However, quantitative studies supporting the existence of a link between corporate governance mechanisms and earnings quality are relatively scanty and inconclusive. Besides the scanty nature of quantitative literature, most of the existing ones are more concerned about the overall quality of corporate governance mechanisms rather than particular features or practices of such governance. In addition, most of the studies are cross-sectional in nature. There is none of these studies that examine either the overall or particular features of corporate governance mechanisms and earnings quality of the banking industry in isolation. The peculiar and sensitive nature of the banking industry as well as the reforms it has continued to undergo indicates the need for special attention. This study attempts to address that omission by examining the effect of corporate governance mechanisms on the earnings quality of Nigerian money deposit banks. The relationship between corporate governance mechanisms and earnings quality is important to the extent that good corporate governance builds confidence in the minds of existing and potential investors as well as other stakeholders of a bank. This in turn creates confidence in the banking industry. The implications of these on the economy as a whole are also obvious. Economic growth will be more sustainable, capital market will be boosted and become more developed and an egalitarian and corrupt-free society will be built. All these are essential for sustained economic growth and development. This study also contributes to the growing body of quantitative research on corporate governance and earnings management. The spate of well publicized corporate failures around the world call for high-quality financial reporting, which gives a proper record of stewardship, provides details of real costs of services and in which the informed individual can have confidence. Moreover, the recent number game amongst banks in Nigeria raises additional concern on the need for financial reports that meet today’s requirements (Bello, 2005). Earnings management involves the manipulation of earnings by companies using financial statement elements that are largely at the discretion of the managers to achieve divergent personal goals. These elements are peculiar to industries depending on their nature of operations and external regulatory framework. Researchers such as (Dockery and Herbert, 2000); (La Porta, Lopez-de-Silanes, (Yakasai, 2001); (Detomasi, 2002); (Fort and Schipani, 2003); (Bai, Liu, Lu, Song and Zhang, 2005); (Barako and Tower, 2006); (Achua, 2007); (Okike, 2007) and (Shehu and Abubakar, 2012) have identified that accruals arising from depreciation are used to manipulate earnings in manufacturing companies, claim loss reserve in insurance and loan loss provision in banking. Loan losses has been identified as one of the most important factors that lead to bank failures and its provision has a direct impact on reported earnings (Grey and Clarke, 2004). The issue of earnings quality arises because financial reports may incorporate adverse information about future cash flows in a more or less timely fashion (Francis et al, 2003). According to (Ball and Shivakumar, 2002), earnings quality is about timely loss recognition that requires estimates of future cash flows from assets or outflows for liabilities. In (Basu’s, 1997) view, accountants have tendency to require a higher degree of verification to recognize good news as gains than to recognize bad news as losses. He consequently relates earnings quality to the accounting concept of conservatism, which supposes that earnings reflect ‘bad news’ more quickly than ‘good news’. In theory, one measure of earnings quality is the relation between current accruals and cash flow (Jindrichovska and Kuo, 2000). Thus, prior researches document an association between earnings pattern and earnings quality (Hunt et al, 2000; Francis et al, 2003). Relating this measure to banking, earnings quality becomes a function of DLLP and earnings pattern. Accordingly, banks with abnormal DLLP are considered as having low quality earnings while banks with normal DLLP are deemed to have high earnings quality. Incidentally, there also, exists an inverse relation between smooth and increasing earning pattern and earnings quality: the higher the smooth earning pattern the lower the earnings quality (Francis et al, 2003). Shehu and Abubakar, 2011) opined that loan loss provision is an expense on the income statement which signifies managers’ assessment of expected future losses. This means that an increase in loan loss provision reduces net income, while a fall in loan losses increase net income. Since it is the result of managers’ assessment of the likely loss that the company would incure should the borrower fail to repay his obligations as at when due, the provision for it is considered to have two (2) p ortions: non-discretionary and discretionary portions. Non-discretionary is a function of specific quality determinants in the loan portfolio- non-accrual loans, renegotiated loans, loans past due over 90 days, specific analyses on troubled large credits, usually implying internal grading system. This means that the non-discretionary portion is the provision that is based on fair and objective analyses of the firm’s economic conditions. While the discretionary portion are those accruals that largely depend on the outcome of the managers’ future expectations of uncertain events. The components of it are both quantitative and qualitative. Grey and Clarke (2004) pointed that the qualitative components include political, economic, geographical and political factors, while the quantitative are statistical analyses of loans not individually analyzed for special reserve and therefore are largely at the discretion of managers. The reasons why banks manipulate earnings are supported by three arguments of signaling argument, income smoothing or earnings quality argument and capital management argument (Zhou and Chen, 2004). The signaling argument suggests that banks use discretionary loan loss provision to insinuate that earnings will be high in subsequent periods (Wahlen, 1994: Liu and Ryan, 1995: Beaver and Engel, 1996). Contrary to the signaling argument, earnings quality argument holds that managers increase the provision for loan losses in periods when earnings are high, under the assumption of income smoothing (Beatty, Chamberlain amp; Moglio, 1995: Collins, Shacklford amp; Wahlen, 1995: Rivard, Bland amp; Morris, 2003). This implies that earnings quality in this area improves bank’s cash flows, capital adequacy, market value and overall performance. While the capital management argument suggests that since increase in loan loss provision increases regulatory capital, management exercises discretion over its provision (Ahmed, Takeda amp; Thomas 1999, Beatty et al. , 1995). Regardless of the industry and the strings attached, managers’ discretionary behavior to achieve personal gains undermines the shareholders’ wealth maximization objective of the firm. Consequently, therefore, this paper examines the influence of corporate governance mechanisms on the quality of earnings among Nigerian Deposit Money Banks (DMBs). In order to achieve this, it is posited that corporate governance mechanisms- board size, board composition, ownership concentration; audit committee, institutional shareholding and dividend have no significant impact on quality of earnings among Nigerian DMBs. It is the constant fear in the banking industry in spite of introduction of new code of corporate governance to enhance the efficiency of the industry practices, and the recognition of the use of discretion by bank managers as well as earnings manipulation that make this work apt and imperative. This study contributes to the sparse of literature that studied the relationship between corporate governance and earnings quality. It also extended to the financial firms by raising and discussing issues on corporate governance mechanism and earnings quality of banks using discretionary loans loss provision in the circumstance of emerging economies like Nigeria. The paper is structured as follows. Section two reviews related literature on corporate governance mechanisms and earnings quality and theoretical framework. Section three is methodology and model specification. In section four, the results and findings of the study are presented and discussed. Finally, section five deals with conclusion and recommendations. 2. 1 Literature Review and Theoretical Framework Literature on corporate governance and quality of earnings is reviewed. Specifically the study concentrates on governance mechanisms of dividend, audit committee, board size, board composition, ownership concentration and institutional shareholding. The theoretical framework that underpins the study is then presented and supported. Earnings quality as the altering of financial statements through the use of judgment in structuring transactions to either mislead the firm’s stakeholders about the true economic picture of the firm or to achieve some contractual benefit that is based on accounting numbers (Healy and Wahlen, 1999). (Schipper, 1989), opined that earnings quality is the deliberate intervention in financial reporting process to achieve personal goals. Earnings quality is the manipulation of financial statement by managers, using accounting choices, estimates and methods, to achieve some objectives that are largely in conflict with the underlying economic status of the firm. Different incentives to manage earnings are widely discussed in the literature, (Bhat, 1996), linked it to the attempt to enhance shareholders’ value and to maximize executive compensation through income smoothing and earnings quality respectively. Income smoothing, occasional big bath, living for today and maximization of variability are identified by (Koch amp; Wall, 2000). (Chang et al. 008) note three incentives to manage earnings: capital market motivation, which includes initial public offerings, seasoned equity offerings, management buoyant plans and plans for mergers to meet earnings forecast, to smooth earnings, management compensation motivation, debt agreement or job security and laws and regulations such as import regulation, antitrust laws, also can serve as incentives. Managers use discretionary accruals for opportunistic earnings quality (Cornet et al. 2009) by attaining some level of performance and affecting stock prices to enhance managers’ wealth through restricted stock returns. . 1. 1 Board Size and Earning Management There are a lot of empirical researches that have documented that board size is related to earning management. The evidence on the role of board size is inconclusive. Yermack (1996) and Eisenberg, Sundgren, and Wells (1998) demonstrate that smaller boards are associated with manipulative accounting. In the analysis of 131 different study-samples with a combined sample size of 20,620 observations (Dalton, Daily, Johnson and Ellstrand (1999) documented a positive and significant relation between board size and income smoothing. These conflicting results provide no conclusive relationship between earnings management and board size. A smaller board may be less encumbered with bureaucratic problems and may be more functional. Smaller boards may provide better financial reporting oversight. Alternately, a larger board may be able to draw from a broader range of experience. In the case of earnings management, a larger board may be more likely to have independent directors with corporate in financial experience. If so, a larger board might be better at preventing earnings management. Small boards are less effective monitors and are easier for CEOs to influence (Jensen, 1993) and (Lipton and Lorsch, 1992). 2. 1. 2 Board Composition and Earnings Quality Board independence simply refers to non-executive external directors, who do not represent any particular shareholder interest and hold no special business interest with the bank, relative to total number of directors on the board (Shehu and Abubakar, 2011). Studies on impact of board composition on earnings quality have produce varied results. Cornet et al. 2007), examine the impact of corporate governance and pay-for-performance on earnings quality. By means of 100 largest firms in the U. S. as ranked by Samp;P between 1994-2003, they find that the presence of independent outside directors reduce earnings quality. Aggregate accruals were used to proxy for earnings quality. (Cornet et al. , 2009), investigate how corporate governance mechanism affects earnings quality at large publicly traded U. S. companies for th e period between 1994 2002. Large independent boards constraint earning quality was found by the study. Roodposhti and Chashmi, 2010) find that for the period between 2004-2008 in Iran, using 196 firms listed on Tehran Stock Exchange, revealed a negative association between board independence and earnings quality. On the contrary, (Hashim and Devi, 2008) examine the relationship between board independence, CEO duality and accrual management in Malaysia. Using 200 top non-financial companies listed on Malaysian Stock Exchange, they find that large percentage of independent executive directors is associated with higher income-increasing earnings quality. Also, (Shah, Zafar and Durrani, 2009), study the relationship between board composition and earnings quality in Pakistani listed companies for the period between 2003 and 2007. They find no significant relationship between board composition and earnings quality. Yet, all studies exclude financial firms, the inclusion of which might have yielded different result. (Macey and O’Hara, 2003) opined that governance structure is industry specific and there is a systematic difference between the governance of different industries 2. 1. 3 Ownership Concentration and Earnings Quality Ownership concentration, which is also referred to as blockholders. It is the proportion of shares (usually more than 5%) owned by a certain percentage of shareholders. There are arguments that the higher the number of shares owned by the blockholders, the more the pressure on managers to act in conformity with shareholders interest (Sanda et al. , 2005). (Ramsy and Blair, 1993) opined that large ownership concentration has more incentives to manage earnings because the expected benefit from equity holding in the firm outweighs the cost associated with monitoring managers If this is true, then we expect ownership concentration to be inversely related to earnings quality. Some researchers observe that high ownership concentration beyond a certain level may lead to abuse of power, which could be detrimental to the value maximization goal of the firm (Sanda et al. , 2005). Inconsistent results were yielded on the relationship between ownership concentration and earnings quality. (Roodposhti and Chashmi, 2010) find a negative relationship between ownership concentration and earnings quality, while they used 196 firms listed on Tehran Stock Exchange as their sample for the period between 2004-2008, to examine the effect of board composition and ownership concentration on earnings quality. In the same vain, (Klai and Omri, 2011), investigate the impact of corporate governance on financial reporting quality in Tunisia. The study used 22 listed firms for the period between 1997-2007. They find that ownership concentration is negatively associated with earnings quality. Conversely, Using top 200 listed non-financial companies, (Hashim and Devi, 2008), examine the association between board independence, CEO duality and accruals management. They find that ownership concentration is associated with high income-increasing earnings quality. Besides the exclusion of financial firms from all the studies mentioned above, economic differences of nations calls for an investigation in of similar problems in an economy like ours. 2. 1. 4 Institutional Shareholding and Earnings Quality Institutional shareholders have both the incentive and power to compel managers to act in consonant with value maximization objective of the firm. (Shehu, 2011) note that institutional ownership has emerged particularly in the banking sector as a tool for protecting minority interest. We, therefore, expect that institutional shareholding and earnings quality will be inversely related. (Cornet et al. , 2007), investigate how governance structure and incentive based compensation influence firm performance when measured performance is adjusted for earnings quality. The study used top 100 firms rated by Samp;P in U. S. , they find that earnings quality is significantly reduced by institutional shareholders whether institutional shareholders is measured based on the proportion of shares owned by all institutional shareholders or by institutional involvement in the firm. This finding is an extension of (Klein, 2002). The study might have revealed different result if carried out in the Nigerian context. (Shehu, 2011) examine the interaction between corporate governance and financial reporting quality in deposit money banks. Using all 21 banks quoted on NSE for the period between 2007-2009, the study reveals a positive and significant relationship between institutional shareholding and earnings quality. The major drawback of this research is that it uses (Dichow and Dichev, 2002) model, which though is widely accepted but is hardly industry specific. The presence of institutional investors with substantial shareholdings restrain managers from engaging in income increasing discretionary accruals when companies have high free cash flow, however, when there is no free cash flow agency problems. 2. 1. 5 Dividend Payment and Earnings Quality While many studies ignore this variable as corporate governance mechanisms, this study consider dividend payment as a n important parameter that measures the overall efficiency of the board. A board that has high frequency of dividend declaration may force earnings managers to have less discretion in manipulating earnings. This is because higher earnings will attract high dividends leading to free cash flow. Larger free cash flow payout reduces managers’ ability to make bad investment (Jensen, 1986). Likewise, high payment obliges managers to raise additional capital via stock market there by being exposed to specialist, financial analyst, investment bankers, regulatory authorities and the press (Goergen, 2007). From these views, apart from the fact that high dividend is a signal to management effectiveness; it serves as a disciplinary mechanism in limiting management discretion over cash flow. In absence of priority we hypothesized that firms with high level of dividend history will have less level of unethical accounting practice that has to do with earnings misrepresentations (Bello, 2013). 2. 2 Theoretical Framework and Model Development In order to link corporate governance with earnings quality, the study first looks at the theories that induced earnings manipulations. Two prominent are opportunistic and desirous. The first theory which embedded the philosophy of this paper is opportunistic tendency of managers to engage in unethical in absence of good governance structure. Secondly, from corporate legal point of view board are to act as trustees of shareholders. Infact they are like operating shareholders directly overseeing the affairs of management. Agency theory, postulates an inevitable conflicts. Whereas, managers will be targeting better performance for short term gains, the interest of shareholders would be that of long term benefit of capital appreciation and return (dividend). Within the agency framework, it is both logical and inescapable that management behavior will be self serving (Amat, 1996). The end result will be that of managers manipulating earnings. These two theories; agency theory and opportunisms theory provide a complete framework for understanding corporate governance and earnings quality. 3. 1 Methodology The research design is inclined to use ex-post financial data because of its empiricism as well as practicality. The period of the study is six (6) years (2006 to 2011) both years inclusive. The period is considered more appealing because all DMBs for which relevant financial data from 2006 to 2011 is obtained would have survived the distress syndrome of the early 1990s and 2005 consolidation saga in Nigeria. We believe also that the six-year period would provide an adequate time series of data (observations) to realistically identify Nigerian DMBs that have been managing earnings over a number of years. This is consistent with Michelson et al (2000) idea that adequate time series studies captures incidence of smoothing, whereas one period studies reflect attempts to smooth. The data is extracted from the consolidated annual reports of the sampled banks sourced in the Nigerian Stock Exchange fact book 2010/2011. The population of the study is all the 25 DMBs that survive consolidation exercise as at 31st December 2006. The ample is drawn using criteria of complete data availability in which 15 banks automatically formed the sample of the study. Two steps Panel regression is used as tool of analysis because it satisfies our purpose of predicting and explaining relations between variables and also providing residuals of the LLP model to represent the explained variable in the second regress ion model. A pre-requisite for the use of any variant of earnings quality detection models is computation of the smoothing instrument. Theoretically and in practice, the smoothing instrument relevant to earnings quality studies in the banking industry is the LLP. Previous studies have investigated earnings quality instruments such as dividend income, changes in accounting policies, pension costs, extraordinary items, investment tax credit, depreciation and fixed charges, and many others (Kamarudin et al, 2001). However, (Kanagaretnam et al, 2001), specifically conclude that banks use LLP and charge-offs to smooth income. 3. 1. 1 Estimation of Discretionary Loan Loss Provision and Variables Measurement Now, in order that we use LLP in detecting earnings quality, we need to estimate the LLP made by sample banks in the industry. Nonetheless, we begin by making distinction between regulatory LLP as per the requirements of the PGs and discretionary loan loss provisions (DLLP) that is used for earnings quality. The distinction is useful because, where banks provide only in compliance with the PGs (non-discretionary LLP), it would be wrong to conclude that it uses LLP for earnings quality. The DLLP therefore contains an element of provision in excess of PGs requirements. It follows that to conclude that banks smooth their reported earnings; there must be evidence of DLLP in the financial reports. Stated differently, the presence of DLLP is a prima facie pointer to the possibility of earnings quality behaviour among the banks. (McNichols and Wilson, 1998), (Grey and Clarke, 2004) and (Chang, 2008) adapted measuring earning management in banks with discretionary loan loss provision. Consistent with prior studies (e. g. , Kim and Kross, 1998; and Kanagaretnam et al, 2001), the beginning balance of nonperforming loans, change in non-performing loans and change in total loans to estimate the non-discretionary component of LLP is used. Because the beginning balance of nonperforming loans (NPL) is usually positively related to LLP, therefore, with a higher level of beginning nonperforming loans, banks will have to make a higher LLP. In addition, change in nonperforming loans (CHNPL) in the current period to have a positive effect on LLP is expected. The sign of the coefficient of change in the value of loan deflated by beginning loans (CHLOAN) is also positive. An increase in loan portfolio will most likely result in an increase in LLP. Equation (1) provides an estimate of the non-discretionary LLP: LLPit = 0 + 1NPLit + 2CHNPLit + 3CHLOANit + it[1] Where, LLPit = provision for loan losses deflated by beginning loans; NPLit-1 = beginning of period nonperforming loans deflated by beginning loans; CHNPLit = change in the value of nonperforming loans deflated by beginning loans; and CHLOANit = change in value of loans deflated by beginning loans. In equation (1) above, the independent variables account for the non-discretionary component of LLP, and consequently, the DLLP is given by the residual term. In order to explain the cross-sectional differences in the level of DLLP, it requires a two-stage analysis where the first stage explicitly models the non-discretionary portion of LLP using a model as per equation (1). In the second stage, the residual from the first stage regression, representing the discretionary portion, is subsequently used as the dependent variable. A drawback of this stepwise estimation procedure is that, it systematically underestimates the absolute value of the regression coefficients in the second stage (Kanagaretnam et al, 2001). Hence, to alleviate this potential problem, analysis using a single regression model is conducted including the three variables used in equation (1) to explicitly account for the non-discretionary component of the LLP. The empirical model is given thus: LLPit = 0 + 1EBTPit + 2L/DEPit + 3 WELLit + 4 LASSETit +5 CHNPLit + 6 NPLit-1 + 7 CHLOANit + it †¦Ã¢â‚¬ ¦ [2] Where, EBTPit = earnings before tax and provisions deflated by beginning assets; LLPit = provision for loan losses deflated by beginning loans; L/DEPit = ratio of loans to deposits; WELLit = a dummy variable which equals 1 when industry capital ratio is well above the legal requirement (i. e. , when the total risk-based capital ratio exceeds 10% and the tier 1 risk-based capital ratio exceeds 8%), and equals 0 otherwise; LASSETit = the natural logarithm of total loan assets; CHNPLit = change in the value of nonperforming loans deflated by beginning loans; NPLit-1 = beginning of period nonperforming loans deflated by beginning loans; and CHLOANit= change in value of loans deflated by beginning loans. The first three variables (EBTP, L/DEP, and WELL) explain cross-sectional differences in DLLP; the third variable (LASSET) is a control variable and the last three variables (CHNPL, NPL, and CHLOAN) account for the non-discretionary component of LLP. The corporate governance variables of the study- board size, board composition, ownership concentration, dividend and institution shareholding are measured below: Board size (BS) is the total number of directors in the board Board composition (BC) is the ratio of independent or outside directors to total board size. Ownership concentration (OC) is the percentage of shares owned by blockholders (more than 5%). Institutional shareholding (IS) is the ratio of equity share owned by institutional investors to total number of shares issued. Dividend payment (DP) is the total amount of dividend paid. Firm size (FS) is the control variable which is the natural log (1n) of total assets. Such control is necessary because the bigger the bank, the larger the expected agency problem it will experience. Grey and Clark, 2004) note that large banks likely to avoid using discretionary loan loss provisions to manipulate earnings. A lot of researchers controlled for firm size in corporate governance studies including (Sanda et al. 2005), (Dabo and Adeyemi, 2007) and (Roodposhti and Chasmi, 2011). The regression model for testing the hypothesis of this study is presented below: LLPit = ? it + ? 1BSit + ? 2BCit + ? 3OCit + ? 4ISit + ? 5DPit + ? FSit + eit LLP= Loan Loss Provision BS=Board Size BC = Board Composition OC = Ownership Concentration IS = Institutional Shareholding DP = Dividend Payment FS = Firm Size 4. 1 Result and Discussion The analysis begins with a range of descriptive statistics on dependent variable and independent variables with mean, standard deviation, minimum and maximum presented below: Table 1: Summary of Descriptive Statistics | BS| BC| OC| IS| DP| FS| Mean| 14. 5444| 0. 2644| 0. 3177| 0. 5608| 2. 6556| 11. 2100| Std. Dev. | 2. 65703| 0. 11349| 0. 10243| 0. 5267| 0. 33000| 0. 11000| Minimum| 9. 00| 0. 0| 0. 12| 0. 43| 10. 37| 68. 97| Maximum| 20. 00| 0. 50| 0. 60| 0. 68| 4. 15| 83. 20| Observation| 90| 90| 90| 90| 90| 90| Source: Output of data analysis using E-view The table 1 shows the average independent directors in the board composition of the Nigerian banks is 26%, board size accounted for about 14 directors, block holders and institutional shareholding averaging 56% and 32% respectively of the shares issued and N2. 66k is the average dividend paid by Nigerian banks. The control variable is a veraging 11. 1 billion naira worth of assets by the banks. The standard deviations of most of the variables are not far away from their respective means values. This indicates a favourable level of dispersion that the data is not skewed and good to produce a reliable result which is confirmed by the values of skewness and kurtosis though not reported but attached. The minimum and maximum number of both executives and non-executives directors are 9 and 20 and that of independent directors of the banks are 10% and 50% respectively. In addition, the block holders and institutional shareholders of Nigerian banks range from 12% to 60% and 43% to 68% respectively. The total assets of the banks range from 68. 97 to 83. 20 billion naira during the period of the study. Table 2: Correlation Matrix | FIQ| BS| BC| OC| IS| DP FS| FIQ| 1| | | | | | BS| 0. 25| 1| | | | | BC| 0. 21| -0. 025| 1| | | | OC| 0. 29| 0. 090| 0. 024| 1| | | IS| 0. 42| 0. 035| -0. 034| 0. 34| 1| | DPFS | 0. 170. 31| -0. 146 0. 70| -0. 015-0. 034| 0. 158-0. 071| 0. 4890. 415| 10. 74 1| Source: Output of data analysis using E-view The correlation results presented in table 2 shows that all the explanatory variables are positively and strongly associated with explained variable except institutional shareholders and dividend paid. Thus, there is a strong relationship between corporate governance mechanisms and loan loss provision of the Nigerian money deposit banks. On the other hand, most of the independent variables are negatively and not significantl y associated between them. This indicates an absence of multicolinearity between the explanatory variables of the study. The correlation matrix reveals the relationship between all pairs of explanatory variables involved in the regression model. High correlation among the independent variables point the possibility of multicollinearity (excessive correlation), a situation which distorts the standard errors of estimates and the validity of the result became questionable. The correlation coefficients showed that multicollinearity does not exist among the variables. Additionally, this study adopts further test for excessive correlation using the variance inflation factor (VIF) and tolerance values. The purpose of additional investigation is to provide adequate assurance that the research findings are robust to the model specification. Table 4:Multicollinearity Test Variable| VIF| Tolerance| BS| 1. 081| 0. 925| BC| 1. 003| 0. 997| OC| 1. 080| 0. 926| IS| 1. 407| 0. 711| DP| 1. 657| 0. 603| FS| 1. 440| 0. 694| | | | Source: Output of data analysis using E-view To formally substantiate the lack of multicollinearity between the independent variables, colinearity diagnostics are observed and that the variance inflation factors (VIF) and tolerance values indicate no multicollinearity in the data. The values for tolerance and VIF are shown in Table 4. The tolerance value and the variance inflation factor (VIF) are two advanced measures of assessing multicollinearity between the independent valuables. The variance inflation factors and tolerance values are computed and found to be consistently smaller than ten and one respectively indicating absence of multicollinearity (Neter, Kutner, Nachtsheim, and Wasserman, 1996 and Casey and Anderson 1999). In addition, the tolerance values are consistently smaller than 1. 0 thus further substantiates the fact that there is no multicollinearity between independent variables (Tobachnick, and Fidell, 1996). The following regression result of the study is presented and discussed. Table 3: Regression Results Variable| Coefficient| T-Statistic| Sig. | | BS| 0. 355| 4. 123| 0. 000*| | BC| 0. 196| 2. 360| 0. 021**| | OC| 0. 144| 3. 673| 0. 008*| | IS| 0. 186| 4. 890| 0. 002*| | DP| 0. 520| 4. 873| 0. 000*| | FS| -0. 488| -4. 908| 0. 000*| | R-sq uared| 0. 43| Adjusted R-squared| 0. 40| F-statistic| 10. 46| F-Sig| 0. 000*| Durbin-Watson stat| 1. 99| | | Source: Output of data analysis using E-view The results show that the estimated model of the study is fit because all the explanatory variables are significant in determining the dependent variable. It can also be observed that the coefficients of all the explanatory variables are positive except for the control variable firm size signifying that none of the explanatory variables is inversely related with quality of earnings among Nigerian deposit money banks. The cumulative influence of all the explanatory variables put together is able to explain the dependent variable to 40% as indicated by the adjusted R2 and the remaining 60% is controlled by other factors. Again, the value of the F- statistic 10. 46 and significant at 1% confirms that the model is well fitted. This provides evidence of rejecting the null hypothesis that corporate governance mechanisms have no significant impact on the quality of earnings among Nigerian deposit money banks. The Durbin- Watson of 1. 99 reveals that serial correlation will not pose a problem to the statistical result of the study. The result in respect of board size and board composition shows that both of them positively and statistically significant at 1% and 5% respectively. This implies that the more their numbers the better the quality of earnings among Nigerian DMBs. For board size, the result reveals that Nigerian banks should have a minimum of 9 and maximum of 20 executive and non-executive directors for their reported earnings to be of quality. The finding supported that of Jensen (1993) and Lipton and Lorsch (1992) who suggest that small boards are less effective monitors and are easier for CEOs to influence and contradicts those of Yermack (1996), Eisenberg et al. (1998) and Loderer and Peyer (2002). The findings related to board composition or independence is line with (Hashim and Devi, 2008; Cornet et al. , 2009), and contrary to (Cornet et al. 2007; Roodposhti and Chashmi, 2010; Shah, Zafar and Durrani, 2009). Therefore, the policy implication is for Nigerian banks to have atleast 10% and not more than 50% independent directors out of the total maximum number of directors of 20. Moreover, for institutional share holders the result reveals that institutional shareholding is positively significant in influencing the quality of earnings among the Nigerian DMBs. This implies that banks with high number of institutional holders, their managers are easily restrained to manipulate accounting numbers. Looking at the level of association between institutional ownership and loan loss provision, a positive relation emerged and supported statistically. This significant association indicates that institutional investors are a major consideration in managers aggressive earnings management strategy. This result is not surprising as it shows institutional investors in Nigerian banks are effective in constraining managerial behaviour of earnings management. Consistent with the argument that institutional investors in Nigeria create incentives for managers of their portfolio firms to manage earnings aggressively, these institutional investors focus excessively on current earnings performance (Koh, 2003). Interestingly, this study extends the findings of Shehu (2011) who used a sample of 63 firm-year observations to document a positive relationship between institutional investors and financial reporting quality in the Nigerian banking industry. It also supports Cornett et al. (2008) who used 24,005 sample of U. S. industrial firms to document a postive and robust relationship between institutional investors and firm performance even when performance is stripped of the discretionery accruals. However, it contradicts that of Dabo and Adeyemi (2009) who fail to establish a statistically significant association between institutional shareholding and managers’ opportunistic behaviour using 20 most active quoted firms on the Nigerian Stock Exchange. Moreso, it conflicts with the finding of Al-Fayoum (2010) in their sample of Jordanian industrial firms. It can therefore be concluded that large institutional shareholding in the Nigerian manufacturing firms helps to allay the agency problem and leads to the protection of minority shareholders’ interest. In addition, the result in respect of ownership concentration and earnings quality reveals that ownership concentration is positively and strongly impacting on earnings quality at 1% level of significance among Nigerian deposit money banks. This is in line with our expectation, because given the fact that in most cases the institutions are the blockhoders of the company, therefore the results of the two variables would go in the same direction. The result contradicts the findings of Roodposhti and Chashmi (2010), Klai and Omri (2011) and supports the findings of Hashmi and Devi (2008). The implication of this finding is that the concentration of equity ownership in the hands of few individuals should be encouraged by the bank regulatory authorities. An equity ownership ceiling that should be raise. The result regarding dividend payment and earning management shows that managers will decline from managing earnings to enable them pay dividend to share holders. Statistically, dividend payment influences earning quality at 1% level of significance. This finding is in line with Bello (2013), Goergen,(2007) and Jensen (1986). Finally, the control variables banks’ size significantly and inversely affected the quality of earnings of DMBs in Nigeria. Size appears to affect earnings management inversely indicating that banks with larger assets have low earnings quality since they engage more in earnings management. This may be as result of the availability of much asset may motivate the managers to discretionary take selfish decisions to benefit their personal interest. 5. Conclusion and Recommendation Boards of directors, institutional and block holdings are responsible for monitoring, evaluating, and disciplining banks’ management. Perhaps one of the most important responsibilities of the board from a creditor’s perspective is oversight of earnings quality. Consistent with this idea, it is found that board size, board composition, ownership concentration, institutional shareholdings and dividend paid are all st rongly playing a prominent role in restraining management toward earning management.

Cash Management Report Essays

Cash Management Report Essays Cash Management Report Essay Cash Management Report Essay This indicates that this business has slightly worse ability to meet its immediate debts within the near future. We can see from the chart this is a favorable result. CUFF The CUFF has decreased from 12. 38 times to 0. 17 times from 2011 to 2012. This indicates that this business is less able to cover its average current liabilities or its horn term debts. We can know from the table this is an unfavorable result. Efficiency Debtors Turnover Ratio (DOT) days days Creditors Turnover Ratio (COT) days Stock Turnover Ratio (STOP) days days STOP In 2011, it took average 60 days for the business to sell their stock to customers,but in 2012 it was 67 days. The STOP increased slightly from 201 Tit 2012. This represents an dreads of the STAR. This meaner that the business is selling its stock slower. Without further detail of the type of stock that is sold by Tuscan Foods we cannot know whether this is satisfactory or unsatisfactory. DOT In 2011 it took on average 98 days for the business for the debtors to settle their accounts with business but in 2012 it was 95 days. The DOT was slightly decreased from 2011 to 2012. Conclusion need to more efficient to its collection from debtors If they do so they can solve its liquidity problem. It has to contact debtors as soon as their payments are due. To improve its collection from debtors, it could then pay the creditors on time. It could also increase advertising to increase Cash sales which would increase net cash from operating activities.

Teenager in an extreme credit card debt Essay Example | Topics and Well Written Essays - 500 words

Teenager in an extreme credit card debt - Essay Example One of the issues is teenagers and the credit card debt. Credit card debt has been an issue especially on campuses. It is said that most of the students have competence in handling these cards. However, it has been found that some of the students get into debt. The causes of these debts among teenagers have been shown to be a belief about future earnings, debts attitudes and financial knowledge (Jill and Phillip 1). Most of the teenagers lack proper financial training. Likewise, those with necessary financial training are not willing to change their behavior. As a result, it has been a big problem with most of the teenagers becoming consumers debtor. Most of the teenagers using these cards lack the necessary information. This is because most teens fail to realize the reality of excessive interest rates and fees on these cards. Majority of the students arrive in schools with cards. Most of the teenagers underscore the time it will take to repay the money with interest (Jill and Phillip 1). The other issue is the reason behind increasing number of teenagers with the cards. The companies make teens their target through promotion. These promotions are meant to lure teenagers to get cards. One of the promotion strategy adopted by the companies is through giving of incentives. Such incentives include giving t-shirts or mugs (Jill and Phillip 1). In addition, the companies remove some of the requirements of getting cards. For example, some companies waive the information requires on the previous cardholder. Some other companies even offer food items. As a result, most of the teenagers are lured into getting these cards without knowing the consequences. Promotion of cards has also been taken in schools. This has occurred as some of the schools accept these cards as a way of paying tuition. In some institutions, students groups sponsor the card companies. In the end, the group retains some amount for each application the

BFS 3460-08B-2 FIRE PROTECTION SYSTEMS (BFS3460-08B-2) Essay

BFS 3460-08B-2 FIRE PROTECTION SYSTEMS (BFS3460-08B-2) - Essay Example Fire protection system designers also need the drawings of all electrical installations and drawings of the Heating, Ventilation and Air-Conditioning (HVAC) system in the building (Edwards, 2000). Information on electrical installations is also needed as this would help to decide on the most suitable place to put the alarm that would be triggered in the event of a fire outbreak. Information on the HVAC system is also needed in order to know their location and design the smoke detection system in such a way that it does not sense the flue from the HVAC system as smoke from a fire. The fire protection system designer also needs to have the drawings of strategic areas in the building where the fire protection system would be easily accessible and would then design the protection system, bearing in mind that the system would be placed in this location. The designer would also need to know the number of floors & basement in the building. He also needs to have information on the staircase, structural members, truss construction, the number & size of openings in the exterior walls and the configuration of the ceilings. The designer also needs to know how the building is used and purpose the building is used

Leadership Communication Research Paper Example | Topics and Well Written Essays - 750 words

Leadership Communication - Research Paper Example The reason that a plan to change the image of the company is important is because bad press leads to a decline in sales for an organization. The firm has to implement a variety of strategies to improve the corporate image of the company. The first strategy I would implement is to develop a corporate news bulletin to be released to the general public. The booklet should explain the operations of the company. It should mentioned all the safety measures the company takes to prevent accidents and it should provide a history of the company to prove to the general public that the explosion at the plant was an isolated incident. The firm must include an article explaining the reason that the explosion occurred to demonstrate to the public that the explosion was an industrial accident that could not have been prevented. In the news bulletin the firm should make public the new safety plan that the company is going to use to prevent accidents in the future. There should also be testimonials in the news bulletin from the employees expressing how happy the employees are working for the company. The company should also implement a strategy to move attention away from the explosion incident to demonstrate that XYZ Corporation is a socially responsible corporation. ... One of those causes should be the battle against hunger. The company will donate $250,000 to help support hunger in the continent of Africa. Over 41% of the people in the Sub-Sahara African region lives on less than $1 a day and 32% are undernourished (Thp). A good non-profit organization to donate the money to is Feed The Children. The company will donate an additional $250,000 to support the victims of HIV/Aids and cancer patients. The firm is not going to limit itself to monetary donations. The company is going to also donate the time of its employees to provide valuable labor to non-profit organizations throughout America. The firm will donate an amount of 1000 labor hours of its employees over a period of one year. The philanthropic initiatives the company is going to implement are a great way to change the corporate image of the firm, but these initiatives are only effective if the general public knows that they are occurring. The firm will launch an advertising campaign to sho wcase the socially responsible initiatives the company is undertaking. The company will spend $500,000 in advertisements using a variety of marketing channels including the written press, television, radio, internet, and cellular advertising. The public relations campaign is going to help build up the reputation of the company and it will stir attention away from the explosion incident that occurred at the organization. In today’s competitive business environment companies cannot afford to get their reputation tarnished. Companies with bad reputations are firms that customers do not realize business with. XYZ Corporation has to act quickly to minimize the damage to its image that the explosion caused. The plan that the firm will implement is going to help revive the

SWOT and PESTEL analysis of StratSim

SWOT and PESTEL analysis of StratSim The StratSim is a growing and wide spread industry around the global among automobile sellers. Notwithstanding the economic and energy instabilities that led to decreased vehicle demand, sales revenues slowly grew as Gross Domestic Products (GDP) increased from period 1- 4, and remained constant in period 5, and inflation rate decreased from 2.5% in period 1 to 1.0% during period 3. However, in some circumstances, sales were increased and/or decreased as firms started making decisions. The 7 competitors were; firm A, B, C, D, E, F and G. Seven vehicle classes include Minivan (M), Family (F), Sports (S), Luxury (L), Utility (U) Economy (E), and Truck (T). Attributes considered were; performance, styling, quality, interior and safety. Furthermore, advertisement plays a significant role especially when firms are striving to create brand image, awareness as well as interests to target customers. Dealerships contributed in generating revenues through sales of a range of vehicles which in turn enabled the firm to increase its market share while maximising shareholders wealth. Firm B has had 3 vehicle classes, namely; Boss -Truck, Boffo Family and Buzzy Economy. 2.0 Strategic Analysis Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through the use of resources and competence aiming to fulfil shareholder expectations (Johnson et al, 2006, p 9). Figure 1, processes by which strategy is described and executed Source:http://www.12manage.com/description-deliberate-strategy.html. In a competitive business environment such as StratSim, analysing firms strategies is vital in order to enhance firm performance and customer satisfaction. 2.1 Strategic Intent Firm Bs mission was to become the leader in automobile industry worldwide by offering highly innovative vehicles to diverse customer segments aiming at consistently satisfying their dynamic needs. 2.2 Basic Strategy Firm B strategy was to provide high quality vehicles at premium price while trying to differentiate its vehicles from incumbents to avoid encouraging price war. By doing so, firm B was the leader twice in economy (Buzzy) car in period 2 and 5. To meet diverse customer tastes and preferences, the firm made minor upgrades to its vehicles during decision making periods, e.g. technology, promotion, advertising, etc. 2.3 External Analysis Scanning the macro-environment is vital since there are several factors that hinder firms performance and growth. In order for managers to come up with effective and suitable strategies that will enable the firm exploit overt and hidden opportunities while overcoming threats, those factors need to be thoroughly tackled before decisions are made. The external analyses considered were; The Michael Porters five forces. PESTEL analysis. Opportunities and Threats (OT) from SWOT analysis, And Critical Success Factors (CSF). 2.3.1 PESTEL PESTEL framework is a useful tool that is applied by organisations to analyse the complexity of macro-environment variables. It also provides a picture on how these key factors may influence firms success or failure of its particular strategies in future in order that managers can find ways of overcoming them. PESTEL refers to; political, economic, social, technology, environment and legal. Figure 2, PESTEL Framework Source: (Johnson et al, 2006. p 68) The Organisation Political Taxation policy Government stability Social welfare policies Foreign trade regulations Legal Health and safety Competition law Product safety Employment law Economic factors Business cycle Inflation Interest rates Unemployment GNP trends Money supply Disposable income Environmental Environmental protection laws Waste disposal Energy consumption Sociocultural factors Population Demographic Socio mobility Consumerism Income Distribution Lifestyle changes Level of Education Attitudes to work and leisure Technological Government spending on research Speed of technology transfer New discoveries/developments Government and industry focus on technological effort Rates of obsolescence Political/Legal Since 1960, laws and government regulations have affected the automobile industry (Highfill et al, November, 2004). Political changes may favour or hinder the firms production because anti-pollution laws and taxes can be imposed, and hence firm B should continuously pay special attention to any rules, codes and regulations that dwell on carbon-dioxide emissions. Economic During simulation, firm B had experienced unstable economic growth. Its variables like inflation, interest rates, gas prices, and material costs were fluctuated. These have affected the firms profitability. Social Due to increased health awareness, people tend to change their lifestyles, while turning to low carbon emission vehicles. Also income distribution and demographic changes both affect vehicle production either positively or negatively. Technology Advanced technology has provided both opportunities and threats to the automobile industry. Those who employ it effectively, it enables them to enhance firms efficiency in producing vehicles that appeal to customers whilst lowering costs. So far, internet and firm websites as part of technology have been used by many buyers as a reference tool before making their purchase decisions. Environmental Environmentalists stress on minimising carbon-dioxide emissions, noise as well as air pollution, in order to keep the environment clean. This move no doubt affects vehicle production as well as firm profitability. 2.3.2 Critical Success Factors (CSF) Johnson et al (2009) defined CSF as those product features that are particularly valued by a group of customers and, therefore, where the organisation must excel to outperform competition. CSF comprises; threshold features and differentiators. Source: Johnson et al (2009) CRITICAL SUCCESS FACTORS (CSF) THRESHOLD FEATURES DIFFERENTIATORS Threshold features These are features that the customer values mostly, and is not likely to buy a product or service that lacks one of them. Firm B, threshold features were; quality, performance, safety and size for all of its three vehicles; family-Boffo, economy-Buzzy and truck-Boss. Differentiators These are customised/added qualities which some customers may or may not consider before purchasing a service or products. Firm B regarded price, styling and interior as differentiators to its vehicles. Differentiators gave difficult moments when trying to distinguish what was preferred most, as many vehicles were similar to competitors after modifications had been made. Innovations are necessary for firms to meet CSF features and outwit their competitors through customer satisfaction. 2.3.3 Porters Five Forces Model The model was developed by Michael Porter in 1980 (Johnson et al, 2006). Since then, the model is applied by firms as a tool to analyse the profit potential while determining the intensity of competition (threats) of an industry, and finally coming up with the right strategies that will support in exploiting opportunities, neutralise threats and hence grow. Figure 3 Porters Five Competitive Forces Model SUPPLIER POWER Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Supplier concentration Importance of volume to supplier Impact of inputs on cost or differentiation Differentiation of inputs Cost relative to total purchase in industry BARRIERS TO ENTRY Government Policy Capital requirements Access to distribution Economies of scale Switching costs Proprietary learning curve Access to inputs Expected retaliation Brand identity Absolute cost advantages Proprietary products BUYER POWER Price sensitivity Threat of backward integration Substitutes available Bargaining leverage Buyer concentration vs industry Buyer information Buyer volume Buyers incentives Brand identity Product differentiation www.scribd.com DEGREE OF RIVALRY Brand identity Exit barriers Switching costs Product differences Industry growth Fixed cost/ value added Diversity of rivals Industry concentration Corporate stakes Intermittent overcapacity RIVALRY THREAT OF SUBSTITUTES Buyer inclination to substitute Switching costs Price-performance trade-off of substitutes Threat of New Entrants The threat of new entrants in automobile industry is low, since barriers to enter are very high, such as high start-up capital required. Moreover, adequate experience curve, distribution access, economies of scale, strong research and development (RD) and even brand and customer loyalty all of which the incumbents have. It therefore becomes difficult for new entrants to manage compared to incumbents. Bargaining Power of Suppliers Suppliers power in automobile industry is low, since producing a car/vehicle requires a range of inputs (parts) from diverse suppliers. If some inputs are not available in one source, they will be sought from another supplier due to low switching costs. Threat of Substitutes Substitute threats in this industry are likely to be moderate and depend much on customer geographical location. Other customers prefer walking, taking train or riding on a bike. But in Dar es Salaam city for example, people prefer public transport, motorcycles (BAJAJ, known as rickshaw in India) as alternative means to automobile due to increased congestion. Bargaining Power of Buyers In this industry, buyers power is a bit high. Low switching costs from one firm to another seeking for substitutes since most of the customers are price sensitive. For the case of the simulation game we played, most of the products were undifferentiated, so, buyers can easily shift to an alternative producer as well as products when seeking satisfaction. Competitive Rivalry The intensity of competition in automobile industry is high due to lack of strong differentiation strategy and innovation among incumbents, especially in the case of the three vehicle classes, i.e. family, economy and truck, because most of the firms use similar strategies like price; this reduces market growth as well as profitability. 2.3.4 SWOT- Opportunities and Threats Opportunities: Advanced technology Firms can use it more efficiently in enhancing product features that can appeal to the eyes of customers. Also use e-commerce to advertise and sell globally. Bargaining power of suppliers. Low supplier power is an advantage to automobile firms since they can set input prices, and hence be able to enjoy cost advantages while offering good quality products that will satisfy customers. European Union (EU) Automobile manufacturers can use the EU to sell their products. Diversification Diversification can be done to widen the market to other untapped segments like high income earners or go internationally and also locate the firms near raw materials sources where they can enjoy location economies. Differentiation strategy In order to sustain customers, after satisfaction has been met, differentiation strategy can be used as a weapon in delivering a range of added values that surpass those of competitors, since most of the firms use similar strategies. Threats: Bargaining power of buyers Strong bargaining power of buyers associated with low switching costs to alternative products, force suppliers to face an increased competition in order to provide the best that will satisfy their customers. Increased gas prices Gas being one of the operating energy, increased price will affect firms production as well as profitability e.g. in simulation that we played, period 1 $/gal was 3.15 rise to 3.50 in period 5. New laws New rules and regulations on carbon-dioxide emissions in environmental protection hinder production of cars that use petrol engines. World economic recession Recession discourages consumption of luxury goods, and streamlines production while people turn to public transports. High competition Initially, all firms in the StratSim industry were in similar position e.g. financially and other resources; however, this proved difficult when making decisions on how to create demand in order to enhance market shares as well as profits. Each firm was competing. Inflation Inflation started to increase in period 4 from 2.0% to 2.5%, this rise affected consumer prices. Fuel price instability. Rapid change in technology This poses a threat to vehicle production since other substitutes to vehicles may be produced. 2.4 Internal Analysis 2.4.1 Resources and Capabilities These are those which will create a strategic fit in order for the firm to survive and prosper even in a competitive business environment. Lucino Noto, (2007, p 125) Analyzing resources and capabilities: The interface between strategy and the firm THE FIRM Resources and Capabilities Goals and Values Structure and System STRATEGY THE INDUSTRY ENVIRONMENT Customers Competitors suppliers The firm-Strategy Interface The Environment-Strategy Interface Resources Organisation resources are divided into two categories (Johnson et al (2009); Tangible Resources These are firms physical assets. Firm B tangible resources were; Three vehicle classes, each of these represents a unique configuration while targeting different customer segments like value seekers, families, singles, high income and enterprisers (the StratSim Case, 2010). Financial resources, at period 0, each firm were given sales amounted to $ 15.5 billions (the StratSim case, 2010). Manpower, firm B had 4 competent human resources who made diverse valuable decisions and hence became twice the leader of economy car (Buzzy). Intangible Resources. These are non-physical resources such as; information, reputation and knowledge i.e. intellectual capital. (Johnson et al, 2008). Firm B holds a number of unique competences over its rivals. Firm B capabilities were; Quality. Safety. Performance. Style. Interior. 2.4.2 V.R.I.O Are criteria that are used to assess the sustainability of an organisations resources and capability that will enable the firm to achieve durable competitive advantage. V.R.I.O stands for Value, Rarity, Inimitability and Organisation. (Johnson et al, 2008). Value As the game started, firm B had enough resources and capabilities i.e. unique brand name that facilitated it in formulating and implementing different strategies to meet customer needs. But due to increased market demand, demand exceeded production throughout the periods as the firm lacked efficiency. Rareness At the beginning, all firms had a similar starting point which led them to have a low degree of rarity. This positioning by StratSim, made firm B to create more appealing strategies like vehicle enhancements and improvements in terms of its attributes which allowed it to come up with things which turned out to be less common among the firms. Inimitability During simulation game, product imitation was very high since previous results and almost all modifications and other statistics were openly published for other firms to see. This means that competitors could possibly copy other firms techniques. Organisation In StratSim industry, there were 7 firms producing identical vehicles, because they used similar strategies that lacked differentiation. Due to these, it therefore became easy for customers to switch from one firm to another if satisfactions were not yet met. 2.4.3 SWOT- SW SW is a tool that is used in identifying or analysing firms internal strengths and weaknesses and enables it to use the available strengths to minimise or turned those weaknesses to strengths. SW means Strengths and weaknesses. Strengths: Unique brand name Best Motor Works. Unique product names like Buzzy, Boffo, and Boss. Twice leader of Buzzy-Economy car, period 2 and 5. Reliable dealerships. Innovation, almost every decision period, firm B upgraded its vehicle attributes to meet emerging customer needs. Weaknesses: Weak financial position. Unstable growth of market shares. Limited product lines, this means that firm B did not exploit the available opportunities of unsatisfied and potential new customers to launch any new vehicle that would satisfy their needs. 3.0 Decisions 3.1 Technology Firm B upgraded its technology capabilities during decision periods considering dynamic business environment and customer tastes and preferences, while special attention was given to economy (Buzzy) and family (Boffo) cars. Investment in technology facilitated firm B in enhancing its production capacity as well as vehicle attributes that appealed to target customers and hence satisfying their emerging needs (see appendix 2.1) 3.2 Marketing Firm Bs marketing mix was to create leverage with customers and build strong brand loyalty which would enable customers purchase our products even in intense competition as in StratSim industry. Firm Bs unique selling price USP was quality. Quality being the key in our vehicle while charging premium price that enabled Buzzy (economy) car to become the leader in period 2 and 5. Despite this success, it was hard for firm B to survive in just a success of one car brand and become the market leader. Though the marketing mix was thoroughly applied by adding or reducing the number of dealers in each area, increasing dealer discounts and product promotions to attract customers, firm Bs market share was increased and decreased during decisions due to overspending and other factors. (For more marketing and distribution details for period 5, see appendix 2.2 2.3) 3.3 Finance During simulation, firm Bs financial performance was somehow weak despite a slight increase in sales ($). Net income was negative during period 2 and 5 results. It was discovered that one of the problems could possibly have been overspending, however, unit market share increased and total debts continued to decrease (Firm B financial and performance summary period 5, see appendix 3.0). 3.4 Production Throughout all the decision periods, production was increased as well as vehicle attributes to meet customer demand. Though Boss (truck) and Buzzy (economy) vehicles were upgraded in period 4, there were some shortages with regard to Boss vehicle model; this means that if the firm was given a chance to continue making decisions, it could probably increase production to meet the demand (see appendix 4.0). 4.0 Conclusion Firm Bs mission was to become the leader in automobile industry worldwide by offering highly innovative vehicles to diverse customer segments aiming at consistently satisfying their dynamic needs. Unfortunately, firm B did not meet its expectations. Though it became the leader twice in Buzzy (economy) car, this means that its strategies fit in the economy car brand market, having had success in one vehicle does not guarantee survival, and this is why firm Bs income and market share fluctuated. The firm was not yet pretty sure of what contributed to the unstable financial performance, though the firm speculated that overspending was one of the major problems. 4.1 What I Have Learned I learned that, in practical business, taking risks is only way to achieve success. In StratSim industry, for each time period, market research had identified some potential new customers whose needs were not yet satisfied by current vehicle (the StratSim case, 2010). But firm B overlooked this market potential to timely take advantage of launching new vehicle models in order to exploit these opportunities and hence increase its turnover and profit margins. 5.0 Reference and Bibliography: Johnson G, Scholes K, and Whittington R, (2006), Exploring Corporate Strategy, 7th Edition, Prentice Hall. Johnson G, Scholes K, and Whittington R, (2009), Exploring Corporate Strategy, Prentice Hall. Highfill D, Baki M, Copus S, Green M, Smith J and Whineland M, (November, 2004). Automotive Industry Analysis-GM, DaimlerChrysler, Toyota, Ford, Honda, overview of industry analysis, available at http://www.academicmind.com/unpublishedpapers/business/management/2004-11-000aaa-automotive-industry-analysis.html. Accessed on 19/11/1010. The StratSim Case (2010), Automobile industry. Lucino Noto, (2007), Analysing resources and capabilities: the interface between strategy and the firm, available at. http://www.blackwellpublishing.com/grant/files/CSAC05.pdf . Figure , Porters Five Forces Available at www.scribd.com/doc/16998313/Diagram-of-Porters. Accessed on 20/11/2010. 6.0 APPENDIXES: 1. DECISION SUMMARY FIRM B, FOR PERIOD 5 Product Development Dev Ctr Project Class Status Size HP Int Sty Saf Qua Curr Exp 1 Buzzy Economy upgr: launch Now 10 120 2 2 2 2 $275 2 Boss Truck upgr: launch Now 70 200 3 3 2 2 $275 3 (unused) Total (mill.) $551 Consumer Marketing Budget (mill.) Regional Corp. Adv. $48 Direct Mail $6 Public Relations $12 Total $66 Direct Mail Targets: Value Seekers(1), Families(2), High Income(4), Enterprisers(5) Product Marketing Vehicle Platform MSRP Dealer Disc. Adv. (mill.) Adv. Theme Promo. (mill.) Boffo No Change $20,400 15.0% $34 Safety $29 Boss Upgraded $20,499 13.0% $28 Perform $15 Buzzy Upgraded $11,550 12.0% $33 Quality $20 Total $95 $64 Plant Capacity Current Capacity (000s) 1,350 Capacity Change (000s) 0 Vehicle Production Vehicle Previous Sales (000s) Current Inventory (000s) Scheduled Production (000s) Flexible Production Retooling Costs (mill.) Boffo 646 25 671 X $0 Boss 200 *13 213 X $80 Buzzy 298 *109 345 X $123 Total 1,144 147 1,229 $203 *Vehicle being upgraded: this inventory will be written off. Be sure to produce enough to match forecast. Dealerships North South East West Total Dealer Inc./Dec. 10 9 11 12 42 Training and Support (mill.) $34 Financing Amount ($ mill.) Bonds Issued $0 Stock Issued $0 Dividends Paid $100 StratSim Ind:ind1 Firm:b Period 4 2. RESULTS FOR PERIOD 5 2.1 Technology Capabilities Period 5 Firm Ratings (1=low capability) Dev. Centers Interior Styling Safety Quality Max. Feasible 5 11 12 11 12 Firm A 3 4 6 4 7 Firm B 3 4 6 5 7 Firm C 2 4 7 6 6 Firm D 2 4 6 5 6 Firm E 2 6 8 6 8 Firm F 2 4 6 4 6 Firm G 3 5 8 7 9 Tech Dim Considerations Interior flexibility of cargo space Styling general curb appeal, styling, handling, finish Safety structural design, braking system, safety features Quality overall reliability, durability, consistency of products StratSim Ind:ind1 Firm:b Period 5 2.2 Marketing Detail Period 5 Consumer Budget (mill.) Company Owned /Fleet Budget (mill.) Regional Corp. Adv. $48 Direct Sales Force $0 Direct Mail $6 Direct Mail $0 Public Relations $12 Total $66 Total $0 Vehicle Val Mkt Share MSRP Dealer Disc. Avg Sell Price Adv. (mill.) Adv. Theme Promo. (mill.) Days Inv. Buzzy 2.4% $11,550 12.0% $10,572 $33 Quality $20 18 Boffo 9.4% $20,400 15.0% $18,749 $34 Safety $29 0 Boss 3.2% $20,499 13.0% $19,859 $28 Perform $15 0 Total $95 $64 StratSim Ind:ind1 Firm:b Period 5 2.3 Distribution Detail Period 5 North South East West Total Full Coverage 200 250 150 200 800 Established Dealers 137 137 133 133 540 Coverage 69% 55% 89% 67% 68% Planned Openings 10 9 11 12 42 Support/Dealer (000s) $150.6 $150.6 $153.2 $153.2 $151.9 Units/Dealer 2,187 2,284 2,389 2,756 2,401 Sales/Dealer (mill.) $36.9 $38.9 $40.2 $46.3 $40.5 Service/Dealer (mill.) $1.4 $1.5 $1.6 $1.7 $1.5 Gross/Dealer (mill.) $3.3 $3.6 $3.6 $4.1 $3.7 Dealer Rating 59 60 60 61 60 StratSim Ind:ind1 Firm:b Period 5 2.4 Product Contribution Period 5 Firm B Product Contribution Vehicle Units (000s) Dealer Sales (mill.) Direct Sales (mill.) COGS (mill.) Gross Margin (mill.) Adv Promo (mills.) After Mkting (mill.) Boffo 734 $12721 $0 $9797 $2924 $63 $2861 Boss 234 $4179 $0

The Unification of Germany Essay example -- History Historical German

The Unification of Germany   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  In 1871 the thirty-eight states of what was once the Holy Roman Empire, re-united to become what was known in the early twentieth century as simply, The German Empire, united under the rule of the German Emperor, or Kaiser. There are many factors which led to the unification of the German states; liberalism, nationalism, Otto Von Bismarck, fear of ‘another Napoleon’, the Prussian King William I, and the three wars Prussia fought.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  One of the key factors which led to the Unification was nationalism. Nationalism is the idea that certain things such as race, culture, religion, language or territory set them apart from those around them, and they could identify their interests with a group of people not just a local monarch. This idea created the belief that one’s loyalty was first to the ‘nation’ not the monarch. On 23 February 1848, there was a demonstration in Paris that resulted in the abdication of King Louis Philippe. Then on 13 March students in Vienna staged a rebellion which later that day forced Prince Metternich to resign as Austrian Foreign Minister. Prussian King, Frederick William IV, stood against reform and used troops to break up demonstrations. But on hearing of Metternich’s resignation he lost his nerve and called together a Diet, granting a constitution. When a crowd gathered at the Palace in Berlin the royal guard opened fire. The resulting revolution ended by November of that year as the people began to fear the consequences of prolonging it. The failure of this revolution, and the failure to achieve national unity, broke the link between liberalism and nationalism. In the end it was the nationalistic ideals of the German aristocracy, not the general populace that brought about the Unification of the German States in 1871. (1) ** I remember to have been so entirely absorbed by what was happening that I could hardly turn my thoughts to anything else. Like many of my friends, I was dominated by the feeling that at last the great opportunity for giving the German people the liberty which was their birthright and to the German fatherland its unity and greatness, and that it was now the first duty of every German to do and to sacrifice everything for this sacred object. We were profoundly, solemnly in earnest. **   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Liberalism was an important factor of the German Unification. ... ...ded and supremely outmatched. These three wars achieved Bismarck’s goals of obtaining support for the army reforms and unifying Germany under Prussian leadership (which meant the expulsion of Austria from Germany’s affairs). So, the unification of Germany in 1871 was achieved through a combination of factors; the idea held by the German people of a unified nation (nationalism), the fear held by the German aristocracy of anything which may result in a reduction to their power, such as liberalism and the ‘Napoleonic Fear’, the Prussian King William the first whose most important roles were appointing Bismarck and the introduction of the army reforms, and of course, Otto Von Bismarck. Bismarck was the reason for the three wars against Austria, France and Denmark, the implication of the Prussian army reforms and he made sure that the German states finally unified under the rule of a Prussian monarch, or ‘German Kaiser’, ruler of the newly founded German Empire in 1871.  Ã‚  Ã‚  Ã‚  Ã‚   Works Cited www.schoolshistory.org.uk/ ASLevel_History/unificationofgermany.htm mars.acnet.wnec.edu/~grempel/ courses/wc2/lectures/germanunif.html www.fordham.edu/halsall/mod/germanunification.html

Flexibility of Adapting Essay

Task 5 Given:â€Å"Curriculum guides allow you the flexibility of adapting your instruction to the individual learning needs of your students. . . . You will also want to remain flexible in choosing the level of behavioral complexity of your unit and lesson outcomes. For these decisions, the information you will need to match the complexity of your objectives to the needs of your learners will come from their in-class oral responses, practice exercises, performance assessments, homework, and tests. You will want to use these often to adjust the level of your instruction to your learners† (Borich, 2004, p. 130). View the video clip appropriate to your area of emphasis (see web links below).Elementary: â€Å"Content Area Reading† Secondary: â€Å"Memory† Note: Do not respond to any prompts or questions included in the video clips. If the video stops when a question appears, press the play symbol to resume the video. Task: A. After viewing the video, write responses to the prompts (1–2 paragraphs per prompt) using the Guided Reflection Protocol Form. To access the form, follow these instructions: †¢ Click on the Add/Edit Work button. †¢ Click on the Form tab. †¢ Answer the questions in the form. If you need additional space, include a Word attachment with your response. B. Review your state standards and select a lesson or lesson plan that includes a skill or concept appropriate to your area of emphasis. Write an essay (suggested length of 2–3 pages) in which you: 1. Describe how to adjust guided and independent practice for the skill or concept you selected in part B that is appropriate for: a. students experiencing difficulty understanding the skill or concept b. students progressing at a faster rate than average 2. Include five techniques appropriate for monitoring student performance in order to adjust interactive instruction. Note: These techniques should be based on an analysis of student performance during different phases of direct instruction (e.g., daily review and prerequisite checks, presentation of new concepts, guided practice, independent practice, periodic reviews). a. Identify which phase/stage of direct instruction matches each of your chosen monitoring techniques from part B2. i. Justify each of the pairings from part B2a. 3. Describe how you might adjust instruction using information gained from two of the monitoring techniques from part B2 to reteach, remediate, and/or accelerate student performance as feedback data directs. Note: Be sure your instructional adjustments address the needs of students experiencing difficulty as well as students progressing at a faster rate than average. Task 6 Introduction:Psychologists have long known that our interpretation, assimilation, and mastery of new learning is influenced by our existing mental sets, which are formed by our past and current experiences, learning, and interests. The current brain research on memory and learning is helping us to understand exactly how the brain works and how educators can best tap into the brain’s natural learning potential. Slavin (2006) writes: The human mind is a meaning maker. From the first microsecond you see, hear, taste, or feel something, you start a process of deciding what it is, how it relates to what you alre ady know, and whether it is important to keep in your mind or should be discarded. (p. 166) We not only assimilate new learning with our former understandings, but our very perception of what we consider reality is influenced by our learning, preconceived notions, and mental integrations of the past. While the notion of prerequisite skills in learning is a recognition that prior learning and experience can affect the current learning of new skills or concepts, the effect of the past often extends beyond classroom skills and concepts into a student’s total life.Review chapter 6 of Educational Psychology: Theory Into Practice to get a better understanding of what current brain research tells us about the importance of linking instruction to prior experiences or interests. Another resource that you will find useful as you work on this task is â€Å"Connecting Brain Research with Dimensions of Learning† (see web link below). Requirements:Write a brief essay (suggested length of 2 pages) in which you do the following: A. Explain how students’ past experiences, interests, and thought processes can influence the learning of current content area concepts. 1. Illustrate the link between past experiences, student interest, and present learning. 2. Discuss each of the following key principles of brain-based learning: †¢ importance of meaningful learning †¢ knowledge background †¢ levels of processing †¢ development of neural connections †¢ relevance†¢ activating prior knowledge (schema theory) B. Explain why consideration of past experiences, learning, and student interests should be an important part of lesson planning for the teacher. 1. Include specific examples from brain-based research to support your explanation. Task 7 Introduction: In this task, you will assess the adequacy of the lessons in terms of the attributes of curricular design. View the following videos. Teachscape Directions: 1. Select the title or topic of the video to be viewed from the list of web links provided at the bottom of this task. 2. Scroll down the left side bar to find the Topic of the video specified below. Click to open the folders and locate the tab labeled video. You may need to open various folders to identify the correct video folder located on the left side bar. 3. Click the triangle to begin the video.Note: Do not respond to any prompts or questions included in the video clips. Elementary and secondary program students should access the following video clips: Topic: Pre-Algebra: Pan Balance Equations Requirements: A. Write an essay in which you evaluate the lesson in terms of the following attributes of curricular design (1–2 paragraphs per attribute): 1. The lesson has a clear purpose that is transmitted during the lesson presentation. 2. The lesson refers to background knowledge and information from previous lessons. 3. The lesson has a clear delivery method(s) (e.g., direct instruction, indirect instruction, cooperative learning, inquiry, self-directed learning). 4. The lesson addresses a variety of learning styles and intelligences. 5. The lesson provides for assessment of student understanding. Task 8 Introduction:According to Alan Hofmeister and Margaret Lubke, â€Å"Pacing has two dimensions.† They say, One dimension, curriculum pacing, is concerned with the rate at which progress is made through the curriculum. The second dimension, lesson pacing, is concerned with the pace at which a teacher conducts individual lessons. One team of researchers summed up the importance of pacing as follows:Researchers have shown that most students, including low-achieving students, learn more when their lessons are conducted at a brisk pace, because more content gets covered by students. This assumes, of course, that the lesson is at a level of difficulty that permits a high rate of student success; material that is too difficult or presented poorly cannot be learned at any instructional pace [Wyne, Stuck, White, & Coop, 1986, p. 20]. (Hofmeister & Lubke, 1999, p. 19) Requirements: If you are enrolled in the Early Childhood Education program, focus your discussion on grades 1–3. If you are pursuing a K–8 teaching certification, focus your discussion on grades 5–8. If you plan to teach science, math, or social science at the secondary level, focus your discussion on grades 9–12. Write a brief essay (suggested length of 2–3 pages) in which you do the following: A. Explain the need for lesson pacing in a classroom. B. Explain how pacing differs for a class that includes English language learner (ELL) students from a class that does not include ELL students. C. Explain how the complexity of lesson content can influence lesson pacing with a class that includes ELL students. D. When you use sources, include all in-text citations and references in APA format. Task 9 Inrtroduction:The analysis and evaluation of student work is an important component of your skills as a teacher. The development and use of tools to aid in your analysis and evaluation are tasks that should be applied in all areas of the curriculum.Find one of your state objectives that could be appropriately assessed by having students give oral and written presentations. For example, the objective â€Å"Compare cultures from different parts of the Eastern Hemisphere in terms of each of the following components: politics, society, the arts, nutrition, economics, and ethnicity† could be measured by having students give oral presentations and write reports on what they have learned about Eastern Hemisphere cultures.Requirements: A. Identify a state objective from one of the core content academic areas that can be measured through oral presentations and written reports. Note: Clearly identify the state from which the objective was taken, the grade level, and the subject. The obj ective must be focused on the core content area (i.e., science, math, social studies, history, geography, or another core content area) and not on an oral presentation or written report skill. B. Develop a rubric that could be used to assess the students’ oral presentations. Your rubric should include the following: 1. a scoring component that indicates at least three levels of performance (e.g., the student met expectations, exceeded expectations, or was below expectations) 2. a scoring component that addresses at least three aspects of the students’ presentation (e.g., length of presentation, ability to answer questions, content level) C. Develop a rubric that could be used to assess the students’ written reports. Your rubric should include the following: 1. a scoring component  that indicates at least three levels of performance (e.g., the student met expectations, exceeded expectations, or was below expectations) 2. a scoring component that addresses at least three aspects of the student’s report (e.g., grammar and mechanics, inclusion of all required components, accuracy of content, length of report) Task 10 Introduction: The sample worksheet (see attachment below) was given to students in a math class to complete independently. The rubric used to assess the responses and a sampling of student answers and scores are also included. Requirements: A. Identify which students will need to be retaught the math content. B. Describe (suggested length of 2–3 paragraphs) two mathematical strengths for each student whose response indicates the need to reteach the math content. C. Briefly describe (suggested length of 2–3 paragraphs) two mathematical weaknesses for each student whose response indicates the need to reteach the math content.

Free Essays on Free Blacks In Antebellum Period

In 1860, roughly half a million free people of African descent resided in the United States. Known alternately as free Negroes, free blacks, free people of color, or simply free people (to distinguish them from post-Civil War freedpeople), they composed less than 2 percent of the nation's population and about 9 percent of all blacks. Although the free black population was increasing during the antebellum years, it was growing far more slowly than either the white or the slave population, so that it was a shrinking proportion of American society. But free Negroes were important far beyond their numbers. They played a pivotal role in society during slave times and set precedents for both race relations and relations among black people when slavery ended. Their status and treatment were harbingers of the postemancipation world. Often the laws, attitudes, and institutions that victimized free blacks during the slave years - political proscription, segregation, and various forms of debt peonage - became the dominant modes of racial oppression once slavery ended. Similarly, their years of liberty profoundly influenced the pattern of postemancipation black life. They moved in disproportionate numbers into positions of leadership in black society when slavery ended. For example, nearly half of the twenty-two black men who served in Congress between 1869 and 1900 had been free before the Civil War. Although free Negroes have been described as more black than free, they were not a monolithic group. They can be best understood from a regional perspective, for by the nineteenth century three distinctive groups of free Negroes had developed: one in the northern, or free states, a second in the Upper South, and a third in the Lower South. Each had its own demographic, economic, social, and somatic characteristics. These differences, in turn, bred different relations with whites and slaves and, most important, distinctive mode... Free Essays on Free Blacks In Antebellum Period Free Essays on Free Blacks In Antebellum Period In 1860, roughly half a million free people of African descent resided in the United States. Known alternately as free Negroes, free blacks, free people of color, or simply free people (to distinguish them from post-Civil War freedpeople), they composed less than 2 percent of the nation's population and about 9 percent of all blacks. Although the free black population was increasing during the antebellum years, it was growing far more slowly than either the white or the slave population, so that it was a shrinking proportion of American society. But free Negroes were important far beyond their numbers. They played a pivotal role in society during slave times and set precedents for both race relations and relations among black people when slavery ended. Their status and treatment were harbingers of the postemancipation world. Often the laws, attitudes, and institutions that victimized free blacks during the slave years - political proscription, segregation, and various forms of debt peonage - became the dominant modes of racial oppression once slavery ended. Similarly, their years of liberty profoundly influenced the pattern of postemancipation black life. They moved in disproportionate numbers into positions of leadership in black society when slavery ended. For example, nearly half of the twenty-two black men who served in Congress between 1869 and 1900 had been free before the Civil War. Although free Negroes have been described as more black than free, they were not a monolithic group. They can be best understood from a regional perspective, for by the nineteenth century three distinctive groups of free Negroes had developed: one in the northern, or free states, a second in the Upper South, and a third in the Lower South. Each had its own demographic, economic, social, and somatic characteristics. These differences, in turn, bred different relations with whites and slaves and, most important, distinctive mode...

Crim Essay Example

Crim Essay Example Crim Essay Crim Essay Modelo AS-29 (Rev. Dic. 2005) Form AS-29 (Rev. Dec. 2005) Liquidador Reviewer Fecha Date IMPORTANTE: ESTA PLANILLA DEBERA RADICARSE EN O ANTES DEL 15 DE MAYO. IMPORTANT: THIS TAX RETURN SHOULD BE FILLED NO LATER THAN MAY 15TH. PLANILLA DEBE SER RADICADA EN ORIGINAL Y NO GRAPADA. RETURN MUST BE FILLED IN ORIGINAL AND NOT STAPLED ESTADO LIBRE ASOCIADO DE PUERTO RICO COMMONWEALTH OF PUERTO RICO CENTRO DE RECAUDACION DE INGRESOS MUNICIPALES Corrector Fecha Date MUNICIPAL REVENUE COLLECTION CENTER Planilla Mueble Enmendada Amended Personal Tax Return ReturnPage 2 2 PLANILLA DE CONTRIBUCION SOBRE LA PROPIEDAD MUEBLE PERSONAL PROPERTY TAX RETURN R-3 0 ANO / YEAR SELLO DE PAGO PAYMENT STAMP Investigador Field Audited by Fecha Date T P D R-1 R-2 SOLICITUD DE EXONERACION CONTRIBUTIVA REQUEST FOR TAX EXONERATION Num. Cuenta (Seg. Soc. ) / Account No. (Soc. Sec. ) Nombre del Contribuyente / Taxpayers Name Nombre y Apellidos del Conyuge (Para casos de individuos solamente) Name and Last Name of Spouse (In case of individual only) ZIP CODE FECHA DE INICIO DE OPERACIONES DATE BEGAN OPERATIONS Dia / Day Mes / Month Ano / Year Num. Cuenta (Seg. Soc. ) / Account No. (Soc. Sec. ) Direccion Postal / Postal Address Municipio / Municipality Localizacion Industria o Negocio Principal Numero, Calle y Pueblo Location of Principal Industry or Business Number, Street and City Tel. Negocio / Business Phone _____ _____ _____ FECHA DE RECIBO DATE RECEIVED PARA USO OFICIAL / OFFICIAL USE Nombre del Negocio / Business Name SI / YES NO Cambio Direccion / Address Change Contribuyente Nuevo / New Taxpayer MUNICIPIO MUNICIPALITY CODIGO CODE (Vease Instrucciones Planilla) (See Tax Return Instructions) SI / YES NO CLASE DE CONTRIBUYENTE Y CODIGOS / TYPE OF TAXPAYER AND CODES 1. INDIVIDUO (I) INDIVIDUAL (I) CORPORACION (C) CORPORATION (C) 3. SOCIEDAD (S) PARTNERSHIP (S) COOPERATIVA (P) COOPERATIVE (P) 5. SUCESION (U) ESTATE (U) FIDEICOMISO (F) TRUST (F) 7. OTROS (O) OTHERS (O) 2. 4. 6. INDIQUE NATURALEZA DEL NEGOCIO / INDICATE KIND OF BUSINESS GRUPO I COMERCIAL GROUP I COMMERCIAL GRUPO II INDUSTRIAL GROUP II INDUSTRIAL GRUPO III V SERVICIOS GROUP III V SERVICES GRUPO IV AGRICULTURA GROUP IV AGRICULTURE GRUPO VI NEGOCIOS MIXTOS GROUP VI MIXED BUSINESS Dia / Day ESPECIFIQUE NATURALEZA DE NEGOCIO / SPECIFY KIND OF BUSINESS FECHA DE RECIBO DATE RECEIVED Mes / Month Ano / Year _____ _____ _____ PARA USO OFICIAL SOLAMENTE FOR OFFICIAL USE ONLY LOS PAGOS POR CORREO SE ENVIARAN A LA SIGUIENTE DIRECCION: PAYMENTS SENT BY MAIL SHOULD BE ADDRESSED TO: $ , , . CENTRO DE RECAUDACION DE INGRESOS MUNICIPALES MUNICIPAL REVENUE COLLECTION CENTER DIA / DAY MES / MONTH ANO / YEAR Pagado con esta Planilla / Paid with this Return PO Box 195387 San Juan, Puerto Rico 00919-5387 $ , , . Pagado con Prorroga Automatica / Paid with Automatic Extension 0 FECHA DE RADICACION / DATE SUBMITTED (www. crimpr. net) 2006 2979 Modelo AS-29 (Rev. Dic. 2005) Form AS-29 (Rev. Dec. 2005) IF PERSONAL PROPERTY IS OWNED IN MORE THAN ONE MUNICIPALITY OMIT ITEMS 1 THRU 6 AND GO TO ITEM 7, (B) OF SCHEDULE A. Planilla Mueble / Pagina 2 Personal Tax Return / Page 2 SI POSEE PROPIEDAD MUEBLE EN MAS DE UN MUNICIPIO OMITA LAS PARTIDAS 1 A LA 6 Y PROCEDA DIRECTAMENTE A LA PARTIDA 7, (B) DEL ENCASILLADO A. Num. Cuenta (Seg. Soc. ) / Account No. (Soc. Sec. ) 1. VALORACION TOTAL (Encasillado C) TOTAL VALUATION (Schedule C). 2. MENOS: VALORACION EXENTA (Partida 4, Encasillado G) LESS: EXEMPT VALUATION (Item 4, Schedule G).. , , , , , , , , , , 00 $ $ $ $ $ 00 3. VALORACION BRUTA GROSS VALUATION 0 4. MENOS: VALORACION EXONERADA (Partida 2, Encasillado H) LESS: EXONERATED VALUATION (Item 2, Schedule H) 00 5. VALORACION SUJETA A CONTRIBUCION VALUATION SUBJECT TO TAX. 6. MUNICIPIO MUNICIPALITY CODIGO CODE (Vease Instrucciones Planilla) (See Tax Return Instructions) (Vease Instrucciones Planilla) (See Tax Return Instructions). 0 TIPO CONTRIBUTIVO TAX RATE_____________________________________________________ 7. CONTRIBUCION DETERMINADA (Seleccione solo una alternativa) TAX DETERMINED (Select only one Alternative) . ENCASILLADO A / SCHEDULE A A) PROPIEDAD EN UN SOLO MUNICIPIO (Multiplique la partida 5 por la 6 de este Encasillado) PROPERTY IN ONLY ONE MUNICIPALITY (Multiply item 5 by item 6 this schedule) B) PROPIEDAD EN MAS DE UN MUNICIPIO. Especif ique Cantidad ________ (Incluya Modelo AS. 29. 1, Vease Linea 79) PROPERTY IN MORE THAN ONE MUNICIPALTY. Specify Quantity ________ (Include Form AS. 9. 1. I, See Line 79) 8. MENOS 5% DESCUENTO (Determine el 5% de la partida 7 si paga total y no mas tarde del 15 de mayo) LESS 5% DISCOUNT (Compute 5% of item 7 if payment in full and not later than may 15). $ $ $ $ , , , , , , , , . . . . 9. MAS: A) Intereses___________________ B) Recargos___________________ C) Penalidad____________________ PLUS: Interest Surcharges Penalty 10. ESTA ES SU RESPONSABILIDAD CONTRIBUTIVA (Reste o sume las lineas 8 o 9 de la linea 7) TAX LIABILITY (Substract or add item 8 or 9 from line 7). 11. MENOS: IMPORTE PAGADO LESS: AMOUNT PAID A) CON ESTA PLANILLA WITH THIS RETURN B) CON PRORROGA AUTOMATICA WITH AUTOMATIC EXTENSION $ $ , , , , , . . , C) CREDITO POR PAGO EN EXCESO DE ANOS ANTERIORES CREDIT FOR TAX OVERPAID OF PRECEDING YEARS $ (SOMETA EVIDENCIA) (INCLUDE EVIDENCE) . $ , , , , . . 12. BALANCE (No mayor de cero para acogerse al descuento. Si el balance es negativo traslade a partida 13 de este encasillado) BALANCE (No greater than zero in order to be entitled to the discount. If balance is negative tranfer it to item 13 of this schedule) 13. CONTRIBUCION PAGADA EN EXCESO AMOUNT OF TAX OVERPAID A) ACREDITAR A LA CONTRIBUCION DEL ANO 20____ , _______________________________________________ TO BE CREDIT TO TAX FOR B) A REINTEGRAR__________________________________________________ _______ TO BE REFUNDED $ $ , , . (www. crimpr. net) 2006 2979 Modelo AS-29 (Rev. Dic. 2005) Form AS-29 (Rev. Dec. 2005) COMPUTOS GANANCIA BRUTA GROSS PROFIT COMPUTATION Planilla Mueble / Pagina 3 Personal Tax Return / Page 3 Num. Cuenta (Seg. Soc. ) / Account No. (Soc. Sec. ) ANO FINALIZADO EN __________ 20 _____ YEAR ENDED $ 00 VENTAS BRUTAS O INGRESOS POR SERVICIOS GROSS SALES OR INCOME FROM SERVICES ENCASILLADO B / SCHEDULE B MENOS / LESS: Descuentos en ventas Discount on sales.. $ Devoluciones y rebajas en ventas Sales returns and allowances.. $ Otros / Others_____________________ $ 00 00 00 $ 00 VENTAS NETAS O INGRESOS POR SERVICIOS / NET SALES OR INCOME FROM SERVICES.. MENOS / LESS: COSTO DE VENTAS / COST OF GOOD SOLD: Inventario Inicial / Beginning Inventory $ Mas / Plus: Compras Netas / Net Purchases: $ Sub-Total. $ Menos / Less: Inventario Final / Ending Inventory $ $ , 00 00 00 00 , , 00 COSTO DE VENTAS / COST OF GOOD SOLD INGRESO BRUTO (Ventas Netas menos Costo de Ventas) GROSS PROFIT ON SALES(Net Sales less Cost of Good Sold) $ $ , , 00 00 Costo de Ventas / Cost of Sales Ventas / Sales Costo de las ventas / Cost of Sales: (____________________________ ? ________________________) igual al / equal _______% para usarse / to be used en la columna (3) Ventas al Costo, Seccion 2 del Modelo AS-29. 3 / in column (3) Sales at Cost, Section 2, Form AS-29. 3. I RESUMEN DE VALORACION DE LA PROPIEDAD TRIBUTABLE, EXENTA Y EXONERADA VALUATION SUMMARY OF TAXABLE, EXEMPT AND EXONERATED PROPERTY ENCASILLADO C / SCHEDULE C 1. Efectivo en caja / Cash on Hand . Inversiones / Investments. . $ $ $ $ $ $ $ $ , , , , , , , , , , , , , , , , 00 00 00 00 00 00 00 00 3. Inventarios / Inventories. 4. Materiales y Efectos / Materials and Supplies. 5. Maquinaria y Equipo / Machinery and Equipment. 6. Mejoras / Improvements 7. Cualquier Otra Propiedad Tributable / Any Other Taxable Property TOTAL (Traslade al Encasillado A, partida 1 o al Modelo AS-29-1, Columna 2, segun sea el caso) TOTAL (Transfer to Schedule A, item 1 or Form AS-29-1. I, Column 2, as the case may be ) ENCASILLADO D / SCHEDULE D PROPIEDAD MUEBLE SUJETA A CONTRIBUCION PERTENECIENTE A OTROS EN PODER DEL CONTRIBUYENTE, SUMINISTRE DESGLOSE (Propiedad arrendada, Inventarios consignados, etc. ) TAXABLE PERSONAL PROPERTY BELONGING TO OTHERS IN HAND OF THE TAXPAYER, COMPLETE FOLLOWING SCHEDULE (Leased property, consigned inventories, etc) Clase de Propiedad / Type of Property Dueno y Direccion / Owner and Address $ $ $ Valor de la Propiedad / Value of Property Arrendada o en Consignacion / Leased or Consigned ENCASILLADO E / SCHEDULE E INFORMACION MANDATORIA PARA CORPORACIONES / MANDATORY INFORMATION FOR CORPORATIONS INFORMACION ADICIONAL: Numero de Acciones Comunes _______________ y Preferidas _______________ Poseidas por Residentes en P. R. ADDITIONAL INFORMATION: Number of Common Share _______________ and Preferred _______________ Owned by Puerto Rico residents. Nombre de Directores y Oficiales Name of Officers and Directors Capacidad Oficial Official Title Direccion Postal Postal Address Num. No. Calle Street Fecha de Expiracion del Termino Date of Expiration of Terms (www. crimpr. net) 2006 2979 Modelo AS-29 (Rev. Dic. 005) Form AS-29 (Rev. Dec. 2005) JURAMENTOS / OATHS Planilla Mueble / Pagina 4 Personal Tax Return / Page 4 Num. Cuenta (Seg. Soc. ) / Account No. (Soc. Sec. ) I- INDIVIDUOS, SUCESIONES, FIDEICOMISOS Y OTROS CONTRIBUYENTES O AGENTES EN SU CARACTER INDIVIDUAL O REPRESENTATIVO INDIVIDUALS, ESTATES, TRUSTS AND OTHER TAXPAYER OR AGENTS AS AN INDIVIDUAL OR REPRESENTATIVE CHARACTER Declaro bajo las penalidades de perjurio que he examinado esta planilla, incluyendo los Estados Financieros y Anejos que se acompanan, y que segun mi mejor informacion y creencia, es cierta, correcta y completa. I declare under the penalties of perjury that this return, including any accompanying schedules and statements, has been examined by me and to my best knowledge and belief is a true, correct and complete return. Nombre en letra de molde / Print name Fecha / Date Firma del Contribuyente o Agente / Signature of Taxpayer or Agent Direccion del Agente / Address of Agent II- CORPORACIONES, SOCIEDADES Y COOPERATIVAS CORPORATIONS, PARTNERSHIPS AND COOPERATIVES ENCASILLADO F / SCHEDULE F NOSOTROS, los infrascritos, presidente (o vicepresidente u otro oficial principal) y tesorero (o tesorero auxiliar), o agente de la corporacion o socio gestor o agente de la sociedad a nombre de la cual se hace esta planilla, separada y debidamente juramentada, cada uno por si declara que esta Planilla de Contribucion sobre Propiedad Mueble (incluyendo los anejos y estados que le acompanan) ha sido examinada por el y es, segun su mejor informacion y creencia, una planilla exacta, correcta y completa para el ano contributivo indicado, hecha de buena fe, de acuerdo con las disposiciones de la Ley Num. 3 de agosto de 1991, segun enmendada y los Reglamentos promulgados para su ejecucion. WE, the undersigned, president, (or vicepresident or other principal officer) and treasurer or (assistant treasurer), or agent of the corporation or managing partner or agent of the partnership for which this return is made, being severally duly sworn, each for himself deposes and says that this return ( including any accompanying schedules and statements) has been examined by him and is, to the best of his knowledge and belief, a true, correct, and complete return, made in good faith, for the taxable year stated, pursuant to Act. 3 of August 30, 1991, as amended, and the Regulations issued thereunder. Presidente o Vice-Presidente o Socio Gestor President or Vice-President or Managing Partner (Indique Titulo) (State Title) Tesorero o Tesorero Auxiliar Treasurer or Assistant Treasurer (Indique titulo) (State Title) Agente / Agent Affidavit Num. / No. Jurado y suscrito ante mi por Sworn and subscribe before me by , mayor de edad, de ocupacion of legal age, occupation y vecino de SELLO NOTARIAL NOTARIAL SEAL and resident of , y por and by , mayor de edad, de ocupacion of legal age, occupation y vecino de and resident of personalmente conocidos por mi, en ersonally known to me, at , Puerto Rico, a Puerto Rico, this de day of de 20 of 20 Titulo Oficial / Official Title Firma del Oficial que toma el juramento Signature of Officer Administering Oath III- INDIVIDUOS, SOCIEDADES, COOPERATIVAS, SUCESIONES, FIDEICOMISOS O CORPORACIONES PREPARADOR Y/O REVISADOR INDIVIDUALS, PARTNERSHIPS, COOPERATIVES, ESTATES, TRUSTS, OR CORPORATIONS PREPARER AND / OR REVIEWER Declaro bajo las penalidades de perjurio que he examinado esta planilla, incluyendo los Estados Financieros y Anejos que se acompanan, y que segun mi mejor informacion y creencia,es cierta, correcta y completa. I declare under the penalties of perjury that this return, including any accompanying schedules and statements, has been examined by me and to my best knowledge and belief is a true, correct and complete return. Nombre del Negocio (o el suyo propio, si es patrono independiente) / Businesss name (or yours if self employed) Direccion (Numero, Calle y Pueblo) / Address (Number, Street and City) Zip Code Numero de Seguro Social / Social Security Number ESTAMPILLA DEL COLEGIO DE CPA CPA STAMP Marque si es patrono independiente Check if self employed Preparador / Preparer: Revisador / Reviewer: Fecha / Date Firma del Revisador / Signature of Reviewer Licencia Num. / License No. Fecha / Date Firma del Preparador / Signature of Preparer (www. crimpr. net) 2006 2979 Modelo AS-29 (Rev. Dic 2005) Form AS-29 (Rev. Dec 2005) Planilla Mueble / Pagina 5 Personal Tax Return / Page 5 Num. Cuenta (Seg. Soc. ) / Account No. (Soc. Sec. ) VALORACION EXENTA EXEMPT VALUATION DECRETO NUM. __________________ DECREE NO. 1. Ley Num. 57 del 13 de junio de 1963, segun enmendada Act. No. 57 of June 13, 1963, as amended FECHA DE EFECTIVIDAD_______________________ FECHA DE EXPIRACION __________________ EFFECTIVE DATE EXPIRATION DATE A) Valoracion totalmente exenta Totally Exempt Valuation.. (IN57T) $ (IN57P) 00 00 00 00 $ B) Valoracion sujeta a exencion parcial Valuation subject to partial exemption.. C) Porciento de exencion (Vease Decreto) Percentage of exemption (Refer to Decree) D) Valoracion exenta (Multiplique partida 1 B por 1 C) Exempt Valuation (Multiply item 1 B by 1 C). ENCASILLADO G / SCHEDULE G E) Total de Exencion (Partidas 1 A + 1 D). Total Exemption (Items 1 A + 1 D) 00 2. Ley Num. 26 del 2 de junio de 1978, segun enmendada y Ley Num. 8 del 24 de enero de 1987, segun sea el caso Act. No. 26 of June 2 1978, as amended and Act. No. 8 of January 24, 1987 as the case may be DECRETO NUM. __________________ DECREE NO. FECHA DE EFECTIVIDAD_______________________ EFFECTIVE DATE FECHA DE EXPIRACION __________________ EXPIRATION DATE A) Valoracion total cubierta por decreto (Vease Instrucciones Planilla) Total valuation covered by decree (See Tax Return Instructions) B) Menos exencion Sec. 3 (b) (4) No aplica a la Ley Num. 8 del 24 de enero de 1987 Less exemption Sec. 3 (b) (4) Do not apply to Act. No. 8 of January 24, 1987 (IN26T) $ 00 00 00 00 00 $ $ INC8P) o / or (IN26P) C) Valoracion sujeta a exencion parcial Valuation subject to partial exemption .. D) Porciento de exencion (Vease decreto) Percentage of exemption (Refer to decree).. E) Valoracion exenta (Multiplique partida 2 C por 2 D) Exempt Valuation (Multiply items 2 C by 2 D). F) Total de Exencion (Partidas 2 B + 2 E) Total of Exemption (Items 2 B + 2 E).. . Otras exenciones (Especifique) Others Exemptions (Specify)__________________________________________________________ 4. Valoracion exenta. [Su me las partidas 1 E + 2 F +3 y traslade al Encasillado A, partida 2 o al Modelo AS-29. 1, columna 3 en la linea correspondiente al municipio con derecho a exencion, segun sea el caso] Exempt Valuation. [Add the items 1 E + 2 F + 3 and transfer to Schedule A, Item 2 or Form AS-29. 1. I, column 3 on the line