Jigs and Fixture Essay Example for Free

Jigs and Fixture Essay Jigs r provided with tool guiding elements such as drill bushes.These direct the tool to the correct position on the w/p. Jigs are rarely clamped on the m/c table bcz it is necessary to move the jig on the table to align the various bushes in the jig with the m/c spindle. Fixture hold the w/p securely in the correct position with respect to the m/c during operation. There is sometimes a provision in the fixture for setting the tool with respect to the w/p, but the tool is not guided as in a jig. Fixture are often clamped to the m/c table. Elements of JF(Locating,Clamping,Tool Guiding Setting Elements ) Adv of JF(Productivity,Interchageability,Skill Reduction,Cost Reduction) Limits Fits Diff b/w high and low limit , is called tolerance(unilateral,bilateral). Classification of Fits (Running,Push,Press Fit,Force Fit) Cost Estimation(Matl,M/cing,Heat Treatment, Assembling Cost) Principles of Location (1 Location must be related to the dimensional rqmts stated on the components drawing 2) It is prefable to use a more accurately m/chined surface than a less accurate surface Location, 3) The w/p should be prevented from moving along and rotating around X,Y and Zaxes 4) Location sys should facilitate easy and quick loading and unloading of the w/p and aim at motion economy 5) Redundant Locators must be avoided 6) Location sys should positevely prevent wrong loading of the w/p by foolproofing. Locating Methods of Plane Surfaces 1 A reasonably flat suface can be located by 3 pins of equal height having spherical surfaces at the location points 2 A rough, uneven or tapered plane should be loacted by 3 adjustable location pins having spherical ends 3 Additional adjustable supports are neccesary to prevent vibrations or distortion of the w/p during m/c operation. The force for adjusting the supports should be kept minimum so that the w/p doesnot get dislocated or lifted from the location pins 4) A machined surface can be located by pads having flat surface. 5 There should be ample clearance for burr or dirt to ensure proper seating of the workpiece surfaces. 6 A cube can be prevented from linear movement and rotation around axes X,Y,Z by six location Pads. Profile 1 can be located approx by aligning it with a slightly bigger sighting plate 2 Locating pins can be used to locate a profile or cylindrical w/p 3 Variations in w/p sizes ffrom batch to batch can be taken care of by using eccentric locators whose eccentricity can be set to suit the batch. 4 W/p with little variation can be located precisely with nesting plates with suitable provision for unloading or ejection Cylinder Spigots used for locating bores should have ample lead for easy entry and their length should be short to prevent jamming of the w/p 2 Long locators for fragile w/p should be relieved at the centre 3 Location Posts which are also used for clamping , should be retained by a nut or a grub screw 4 When two location pins are used,the less important one should be made diamond shaped . The important full pin should be longer than the diamond pin in order to facilitate easy loading of the w/p. 5 Rough cored holes and bosses are located by conical locators, which often have integral clamping arrangement and drill bush 6 Fixed V blocks are used to locate approx the outside surface of a cylinder. 7 For precise location, an adjustable guided V block is necessary.The V Block can be adjusted by a screw or a cam. It can be with drawn quickly by using a swinging eyebolt. 8 V blocks should be positioned in such a way that the varition in the w/p would not affect the location for the operation. For drilling central holes, the centre line of V should be vertical. 9 Clearance grooves should be provided at flash line of cast, forged and moulded w/p . Principles of Clamping(Position, strength , prdouctivity,operator fatique, workpiece variation) Types of Clamps 1 Screw , 2 Strap (Retractable strap,swinging strap, edge , pivoted, hinged,swinging latch 3 Quick action (cam,bayonet, quarter turn screw, toggle) 4 Multiple Double, stacking, power clamping pnumatic,hydraulic,magnetic 5 Non Conventional Clamping (adhesive, Fusion- cast of low melting point bismut alloy) Indexing is a process of quick, accurate location of a w/p or fixture in a no of specific positions. Indexing involves periodic linear or rotary movement of the indexed part precisely in each position. Rqmt of a good drill jig: 1 Quick accurate location of the w/p 2 Easy loading and unloading of the w/p and prevention of wrong loading 3 Prevention of bending or movement of the w/p during drilling 4 Ample chip clearance with facilities for swarf removal and cleaning 5 Light weight to minimise operator fatique due to repeated handling 6 Prevention of loss of loose parts by chaining them to the jig body 7 Clearance for overshoot of the drill Drill Bushes( Press Fit, Renewable, Slip, Threaded, Special) Various types of Jigs(Plate jigs and channel jigs with w/p pots, Angle Plate jigs, Turn Over Jigs, Leaf or latch jigs, Box Jigs, Trunion , Sandwich and pump jigs, Jigs for multispindle m/cs Milling Fixtures Essentials (Strength, Thrust, Cutter Setting, Machine tennons, Rigid Clamping, Motion economy,swarf disposal) Facing Fix , Sloting Fixture Boring Fix Chucks(Self centring 3 jaw , Independent 4 jaw, combination, power operated, special jaws, soft jaws) Face Plate, Collets( Push out, pull in, dead length) Mandrels( Tapered, Axial, Expanding, Threaded) Fixture Module Design Concept. A standard self contained unit. It is jargon for standardised, easily connectable, replaceable, sub assembled unit like a timer or acontractor.Modular construction assembles the commercially available modules in an arrangement suitable for the rqd applications. Modular Construction is like universal setup but not built on m/c Modular Fixture base can have t Slots or no of reamed holes. Modular tooling eliminates nned for manufacture procurement of standard parts neccesary accesories like fasteners, springs, washers, etc. Inspection Devices Standard Gauges(Go not go, Calliper , snap), Special Gauges(Key way and slot checking, Flush surface gauge for tapered hole, snap gauge for checking centre dist) Reciever gauges for assembly W/p marking and setting gauge Universal Jig- T nut –stud as T Bolt,Universal Clamp,edge calmp, Face plate Universal Fixture Transfer Machines(in Line tranfer machines (Walking beam, poered roller conveyor, chain drive), Rotary Indexing table m/c (Rack and pinion, ratchet and pawl, Geneva ) Tranfer Devices Conveyor system(Roller , Wheel, Chute, Belt, Chain, Magnetic, Bucket ) Die is a specialized tool used in manufacturing industries to cut or shape material using a press. (Die block, Punch plate ,Blank punch, Pierce punch,Stripper plate, Pilot, Guide / Back gage / Finger stop, Setting (Stop) Block , Shank) . General Die Design(Strip layout and selection of tooling, Economies of the strip- acc to tool shape also, tonnage calculation and selection of the press, Die shoe size, Method of Parts Ejection) Progressive Die Design(Washers and Round Blanks- 19.5, 30 , Feed=Blank dia. +Sp/tan 19.5 and strip width Pilots and pilot Holes, Skipping of stations, Nesting and Locating) Deep Drawing(Blank Holding- clearance 5%, pressure- minimum force necessary to prevent wrinkling, Drawing Ratios-Blank dia/throat dia of die. Punch load increases with blank dia in linear manner ,Die profile radius-sharper the die radius the greater is the max punch load bcz of the inreased process work due to plastic bending under tension, Punch profile radius- t-1.5 t 0.5t over 3.25mm sheetMore generous the punch radii , the more gradual is the rise of punch load and longer punch travel, but the max punch load is almost unaffected., Radial clearance-1.2t 30% for general purpose. Ironing-10%, Drawing speed can affect the yield stress of the material and efficiency of the lubricant, lubrication.

Nature And Development Of Special Interest Tourism Tourism Essay

Nature And Development Of Special Interest Tourism Tourism Essay SIT- special interest tourism is a part of existing tourism industry today. Nowadays, people are more confident about travelling abroad and looking for something different rather than for sun and sand holidays. Special interest tourism is a type of holiday, replacing the traditional mass market travel packages and allows tourists to choose holidays appealing to their individual and personal needs. According to the World Tourism Industry or WTO, special interest tourism can be defined as the specialized tourism that involved individual or group tours by those people who wishes to develop their given interests or visit sites and places that has a relation or connection with their specific interest or subject. The aim of SIT is to satisfy specific needs or interests of individuals or groups. The structure of SIT is similar to that of the overall tourism industry. There are many sub-sectors serving individual and personalized needs of tourists, such as: Travel intermediaries Travel facilitators Attraction and entertainment Activity and events providers Accommodation providers Transportation Travel intermediaries provide information about destinations packages, travel options also making bookings for the customers. They can be represented in the form of tour operators or travel agencies. The main aim of travel agencies is: to sell holidays and associated products such as insurance, cars hire. Travel agents act as the link between the customer and travel producers. They are usually well trained and can help clients with the advice or provide them with brochures, leaflets or any additional information. They have access online to GDS system, which gives worldwide schedule of all transport. Tour operators sell combined holidays packages via travel agents or direct to the consumers. There are two types of tour operator: the wholesaler operators, who operate only through travel agency, and the direct sell operators, who market their products direct to the public. They purchase separate elements of accommodation (hotels, guesthouses, and self catering apartments), transport (road, sea, air) and travel services to make a tour package. Many tour operators are making special packages around a particular event, e.g., Olympic Games. There are many web sites specialize in certain products, like lastminute.com that specialize in discounted accommodation. Travel facilitators are all the range of services offered to the consumers. It can be: tourist information centre, tour guides, medical providers, currency exchange bureau. Transport providers are those operating any major form of transport. These would include airlines, water based transport and land based, such as roads and rails. Land based transport covers all forms vehicles such as bus, taxi, private car, and bicycle. Rail travel has become very popular since opening of the Channel tunnel. Rail companies provide a scheduled service within a home country and customers can reserved the seats by themselves. The airlines can be divided into scheduled, which operate with regular published schedule, e.g., British Airways, and charter airlines, which fly to certain destinations under charter to a tour operator. Many countries have their national airline, like British Airways in UK. Water based transport is represented by ferries and cruise ships. Ferries operators provide vital links between islands, rivers, seas. Cruising can be river cruises, sea/oceans cruises, e.g. Mediterranean, Atlantic oceans, and can be considered as a special interest when there is something additional from cruise, like education or special hobby. Tourist choice of transport will depend on price, destination, time, accessibility of the destination. Accommodation can be reserved individually or can be purchased by tour operator. Guest facilities will vary according to the type of the place. Accommodation can be divided into two categories: serviced accommodation (where all meals are provided), and self-catering accommodation (where occupants provide their own food). A 5 star hotel can provide a full range of services, such as restaurants, plasma TV, function rooms, mini bars in the rooms, room service available 24/7. In the caravan park you can only find fast food shops and vending machines. Providers of attractions need to undertake the market research in order to meet all the needs of tourists. Typical attractions can be man-made (theme parks, zoos), natural (mountains), cultural (Louvre Gallery in Paris). A lot of destinations are promoted via special events (World Cup, Olympic Games) or various activities (diving, winter skiing resorts) In addition to attractions, a lot of destinations are promoted via special events or activities, which include World Cup, Olympic Games. The development of special interest tourism. Special interest tourism can date back to earliest forms of tourism. The first tourists travelled for specific reasons, e.g., religious, cultural or for trading purposes. Around the same period, the Greeks travelled to religious festivals, leading to construction of sea ports and accommodation. In Medieval Times the pilgrims and missionaries became the most active travelers. Pilgrims travelled to the sacred places such as Santiago de Compostella, Jerusalem, driven by their religious convictions. Tourism grew over the centuries and spread to all over the world. The new part of tourism, known as Grand Tour, was developed in the early 17th century under the reign of Elizabeth 1.The young men from wealthy families were travelling across Europe to complete their education. London, Paris, Venice, Rome were visited by the young aristocrats to improve their knowledge in the arts and literature. The tours lasted as long as 3 years. In 1841 Thomas Cook put together the first package tour in history. Thomas Cooks organized tour consisted of: accommodation, travel tickets, timetables, attractions, travel guides and tours, currency exchange. The first tours were for specific needs and catered more to the mass market with the growth of the company. Thomas Cook started offering tours within UK and soon moved to Europe. The development of tourism in the 19th century increased due to advent of the railway. It became cheaper, easier and safer to travel, so not only the privileged classes were allowed to travel. The industrial revolution brought leisure travel to Europe. The middle class had more time and money to travel thanks to the efficient machinery. In the post war period the development of wide-bodied and faster aircrafts contributed to the growth of the mass tourism. Increase in disposable income has made tourism accessible for a large majority of population. People could afford to take more than one holiday per year. Another factor that contributed to the growth of mass tourism was increase in global wealth leaving people enough disposable income to spend on holidays. The political liberation of the colonized countries built a lot of new tourist destinations, reducing the cost of holidays. Nowadays, it becomes more popular self-drive holidays to Europe, cruising holidays, Middle East destinations such as Dubai, Egypt, etc. Travelling on the cruise liner gives you opportunity to enjoy your time, there are a lot of activities on the board and the social life is very active, which makes you enjoy holidays even more, staying on the board of enormous liner. Low cost airlines leading to mass tourism travel around the world, e.g. Easy jet airlines. The social factor which contributed to the growth of tourism is linked with the new attitude to world travel and leisure. People are searching for new destinations, trying to find something unusual and unexplored. Development of leisure centers along with the increased independence of women has also contributed to the tourism. Changing demographics, such as aging population, grown up children have made a big impact on the SIT market. Sustainable tourism is one of the growing industries, which seeks to protect tourism destinations and reduce an impact of the environment and local culture. With the advent of internet, tourists can attend the locations using web-based interface programmers at the same time reducing the traditional impacts such as travel, accommodation, food wastage. TASK 2 Understand how special interest tourism matches customers, products and services. 2.1. Discuss the range and classification of tourism products and services available to travellers. There are  many kinds of special tourism interest; it can be educational tourism, sports tourism, sex tourism, health and beauty tourism, arts and entertainment tourism and a lot more. Products can also be divided into various categories, such as rural, urban, over or under water, in the air and others. The classification of special interest tourism products: Educational Cultural Adventure pursuits Historical attractions Religious events Health and wellness Sporting and entertainment events Educational Tourism There is no doubt that educational industry has already become one of the most popular types of special interest tourism. The Grand Tours of the 17th century were organized for youth with the purpose of education. Nowadays, many people are travelling to broaden the education, to learn a foreign language and to take a special course. As an example, the short term language courses are designed for students to improve their second language. Cultural tourism People who take cultural holidays are likely to visit museums, galleries and exhibitions, or going to opera or theatre. Heritage tourism is focused on historical attractions and resources. Cultural tourism gives visitors the opportunity to understand and appreciate the essential character of a place and its culture as a whole, including: -history and archaeology -people and their lifestyle -cultural diversity Many cities have had capital of culture status, including London, Dublin and Prague. Religious events tourism Religious holidays focus on visiting places with religious significance, like Lourdes in south of France or Holy Land Tour. The Holy Land is a land filled with history, passion and with presence of Jesus. The tourists can uncover the world in which Jesus lived and also enjoy the activities, such as scuba dive, hike, and camel ride or just have fun on the sun. There are specialist tour operators which organize such tours, like The Pilgrimage Trust, a charity, which organizes tour to Lourdes for children with disabilities. Sporting tourism People can take holidays to watch the sport or participate in special events. There are specialist operators offering packages for World Cup, Olympic Games. For instance, Club La Santa provides luxury Spain holidays, sports holidays and fitness activity holidays. The resort features over 25 different sports and different entertainment is available. Health and wellness tourism Health and wellness tourism is now available for consumers seeking to enhance their well being through their travel experiences. The aim of tourists is to look and feel better, to lose weight, to slow the effects of aging, to relieve pain or discomfort, or to manage stress. This market has become very popular as people are becoming more health conscious. There are two main types of health and wellness tourism: spa resorts and medical tourism. There are many spa hotels offering fitness classes, beauty treatments and different types of massage. Holy Island is one of the best spas in UK, located off the west coast of Scotland. The founder and vision holder of the Holy Isle Project is Lama Yeshe Rinpoche, a Tibetan Buddhist meditation master in the Kagyu tradition. There are many retreat and course programmes taking place in the Centre for World Peace and Health. The island has several areas reserved for birds, animals and tree planting programme. (http://www.holyisland.org/) SIT can be classified according to the type of environment: Land Air Water based Rural/urban Nature/wilderness Trekking, cycling and hiking are examples of land based special interest tourism. The two main modes of travel are road and rail. Some luxurious trains appeal consumers special needs and allow passengers to see spectacular sights from the train. The Blue Train is a magnificent moving five-star hotel. The routes of The Blue Train both scheduled and chartered take guests through some of the most admirable places of the countryside. The train has luxurious suites with baths and double beds .The guests can enjoy exquisite meals freshly prepared on board by top chefs. Water based tourism can be presented in form of underwater activities, like diving, and above water, like swimming, cruising and surfing. The Great Barrier Reef is well known for its diving activities, situated on the north-east coast of Australia. It the worlds most extensive stretch of coral reef and is probably the richest area in terms of faunal diversity in the world. Nature and wilderness tourism focuses on observation of wild animals and birds in their usual environment. As an example it can be tours to Africa Safari or tours to botanical gardens. Wilderness tourism experiences with undeveloped natural environment, which can include isolation and challenging conditions. 2.2. Diversity and classification of tourist types. The key to success in SIT is to ensure various tourist types are well matched to the tourist products. Demand for tourism can be influenced by 3 basic factors: -purpose for travel (educational, cultural, for health, for sporting events) -ability to travel (sufficient disposable income, time, freedom of movement) -travel choices (knowledge about destinations, environmental factors, ability to travel) Various typologies have been made to classify tourists according their preferences. The best known are by Cohen and Plog. Eric Cohen classified tourists according to the nature of the environment they prefer. He places tourists into four following groups: Organized mass tourist-typically they buy pre-organised packages from tour operators; prefer safe and secure environment and are likely to return to familiar places. Individual mass tourist- compare to organised mass tourist show more flexibility and have a lot more personal choice. The explorer- looking for unexplored destinations. The drifter- generally likes adventurous travelling, e.g. camping in the wilderness area. Stanley Plog describes three types of tourists: Allocentric- confident travelers, who enjoy the travel and exploration Midcentric- tend to adopt the destinations after they have been discovered by allocentric Psychocentric- are less confident and prefer secure environment Market segmentation is a process of dividing the market into different groups with common needs and wants. The most common types are: Geographic location Demographic Socio-economic segmentation Psychographic segmentation Geographic location is based upon people live and can be subdivided by country, region, city size, and climate. Where people live in the city can also reflect their income level and ability to buy. Demographic segmentation is the most common in market segmentation. It can be divided by: Age (snowbirds, empty nesters, young budget travellers) Gender (women trying to escape from the usual environment and go for holidays, ex. spa breaks; men prefer to travel to more adventurous places) Religion (retreats, pilgrimages) Psychographic segmentation determines tourists behaviour, their lifestyles, activities and attitudes. Socio-economic segmentation considers aspects such as occupation, status, social class, income level. Task 3 Understand the appeal and motivation of special interest tourism for customers. 3.1. Analyse the appeal to customers of special interest tourism features and benefits. Appeal can be characterised as a kind of tourism products that will enable customers needs to be satisfied. The motivation is closely linked to the appeal and seeks to identify peoples needs and wants. The appeal of the location can be influenced by different factors, like cost, time availability, facilities. If you are planning a family holidays to sea and sun destinations, there are a lot of countries to choose from. The specific location has to appeal to numerous needs and wants of the family, e.g. child-minding facilities, special kids menu, available playground, etc. Appeal can be influenced by features of the destination, like beaches, attractions, number of facilities within the resort. There are a number of other factors that can contribute to the appeal: Uniqueness of the destination (Great Wall of China is one of the most appealing attractions all around the world owing to its architectural grandeur and historical significance). Level of comfort (the tourist seeking luxury accommodation may find the appeal in 5 stars hotels). Authenticity of the location (the authentic cuisine or traditions appeal to many tourists visiting particular country). Political factors ( the political instability in Egypt led to a reduction in the flow of tourists) Environmental factors (tourists tend to avoid places affected by natural disasters, e.g. earthquakes) 3.2. Identify and explain how the motivations of tourists are met by special interest tourism locations and features. Motivation can be defined as internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role, or subject, and to exert persistent effort in attaining a goal.(Businessdictionary.com) Abraham Maslow outlined a motivational hierarchy consisting of five categories of human needs arranged in ascending order: physiological- basic needs satisfied by such stimulus as food and sleep; security- need for a safe environment free from immediate threat; social-love needs and desire for social acceptance; esteem-need for enhancement and acceptance of self; and self-actualization-striving for full realization of unique characteristics and potentials. The key notion in the model is that as a need category lower in the hierarchy becomes satisfied, its determination of behaviour diminishes and the next higher need category becomes proponent (Adler, S., 1999, p 7). Maslows hierarchy of needs assumes that we all have similar needs and wants to be satisfied. Therefore, it is important to apply motivations in relation to different tourist types. Motivations for SIT can be divided into two groups: Intrinsic motivation Extrinsic motivation Intrinsic motivation includes internal desires to perform a particular task, do certain activities because it gives you pleasure, such as challenge, skill improvement or relaxation. The skill improvement relates to educational tourism and gives people opportunity to increase their knowledge in particular field (foreign languages courses, cookery schools in France). One of the main motivations for holidays can be a need to rest, to escape from everydays routine. Extrinsic motivation is the factors external to the individual and unrelated to the task they are performing.   Examples include money, status, rewards, and sustainability. Motivation can also be influenced by demographic factors: Education (tourists with high level of education are likely to participate in education based activities) Age ( old couples are seeking comfort and opportunity for sightseeing, while young people are looking more for fun and relaxation) Family life cycle ( parents with children are motivated by places with numerous kids facilities) TASK 4 Understand management needs and issues of special interest tourism. 4.1. Evaluate the organizational and support logistics involved in the management of special interest tourism trips. Profitability- is the main goal of all the businesses. Meeting the tourist expectations and providing safe and secure travel arrangements will lead to profitable growth for travel companies. The main thing is to make products profitable attractive for customers by putting correct prices and making them attractive for the market. Market research is an essential tool for any businesses. It helps to identify potential customers, their needs and expectations. Target marketing is a group of customers to be aimed. Potential customers with similar needs and characteristics are identified and divided by market segments based on age, income level, etc. Each travel product is made up of several segments, e.g. hotel, transport, accommodation facilities and for the tourists is all have to be organized and put together well. There is a range of challenges coming with travel products, e.g. Tour packages, where the travel agents are responsible for every aspect of the trip. Examples of operational challenges may include: Travel permits: visas requirements Infrastructure: essential shops, medical facilities Language: difficulties in understanding the foreign language Transport: availability of transfer coaches or taxis. Logistics is the management of business operations, such as the acquisition, storage, transportation and delivery of goods along the supply chain. (http://www.investorwords.com) An SIT sporting event package tour will include a number of logistical issues to take care of, including: Transportation Accommodation providers Tour guides Equipment suppliers Access to the destination Apart from all the operational and logistical challenges, the SIT providers have a number of administrative requirements to deal with. Travel insurance provides the financial protection in the case of unexpected loss of luggage or cancellation of the trip. It is important to read and understand all the policies before making a purchase. Visas issues may vary according to the country tourists going to. For example, members of the family of the EU citizens do not need visa to travel to the EU countries. Vaccination against diseases is an important requirement for tourists travelling to remote destinations, e.g. some parts of Africa. All the tour operators and travel agents should be aware of the laws concerning travel and tourism and pass the relevant information to the tourists. One of the main points to be considered for all the businesses is to have satisfied customers. It will results in more profitability, less marketing cost and a good reputation for the company. 4.2. Discuss the ways operators resolve issues that affect special interest tourism. There are many issues that can affect special interest tourism, some of them are known in advance and others are unexpected. It is always better to identify the potential problem and create the awareness of possible outcome. The main categories of the possible issues in SIT are: Risk management Socio-cultural issues Environmental issues Economic issues (recession, oversupply) Quality assurance Risk management is an important part of planning for businesses. The process of risk management is designed to reduce or eliminate the risk of certain kinds of events happening or having an impact on the business. ( http://www.whatisriskmanagement.net/) There are many different types of risk that can be classified as follows: Health- unexpected accidents, food poisoning Travel- delays of the flight, flight cancellation due to natural disaster Theft- loss of personal documents, etc. Furthermore, risk can be classified as known risks (tourists are travelling to politically unstable areas) and unexpected risks (loss of documents, illness). The main goal of risk management is to protect the customers from unacceptable levels of risk and also build the reputation for travel organisations, avoiding financial losses. According to Sadgrove (2005), the process of risk management is as follows: Identify and assess risks Set policies Implement policies; manage risks Monitor risks Tourism providers should always advise customers on risks by giving advice how to behave in unfamiliar situations or providing the current information about the risks that might be present in the resort. Socio-cultural issues can result in social breakdown of the destination, increase in crime and loss of local culture. The ecotourism is becoming very popular nowadays. Tour operators and travel agents have to be aware of the environmental issues relating to products they offer. Some of the issues are: ecotourism and sustainable tourism. Sustainable tourism provides information how to respect local cultures and the natural environment and protect the diverse wildlife of the destination. The need to provide the best quality and to keep the standards high is one of the main issues of SIT providers. The best quality could be achieved by: Providing the full training for the staff Good knowledge about the products being sold Right people on the right job Requesting feedback from customers Conclusion   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   There is no doubt that tourism had been the most important industry of any country that is why most of them are doing their best in order to maintain and preserve all of their resources that can attract the attention of their target tourist.

Relationship between philosophy and science

Relationship between philosophy and science The essence of philosophy lies in know thyself as Greek philosopher Socrates defined his motto of life. Indeed, this search for self identity arose when human race first experienced consciousness in the course of evolution. So, it may be argued that philosophy (which comes from the Greek word, phileÃÆ'Â ®n, which means to love) is as old as the very beginning of human civilization.If we analyze the works of great ancient philosophers, for example, Aristotle and Plato, then it will reveal that their scientific attempt was also significant. In fact, they were the predecessors of modern science. Until the medieval ages, the separation between philosophy and science (which comes from a Latin word for knowledge) was not distinctive. However, due to stubbornness of the church controlled society in Europe the severe conflict between science and theology was set off, especially during 17th century, when the era of historical unfriendliness between philosophy, and science began. During this time, due to fast development of science, the independence of science from philosophy became clear. Unlike theology both philosophy and science follow logical methods to gather knowledge. However, the methods they use are a lot different. Philosophy naturally highlights on a biased mould in gaining knowledge as it states the importance of an individual in the universe as well as in the society. On the other hand, science concentrates on the realistic world and tries to find out relationships among measurements of various facts in the real world. Science and philosophy are very different things. Science tells us the facts of the universe, where philosophy helps us interpret them. I think that there is certainly a mutual effect between the two, philosophy may help determine what science investigates, and science may support or prove false philosophy with factual exposure, but in many ways they do not have common characteristics. A philosophy explanation is based on reasoning and argu ments from values, whereas a scientific explanation is based on reasoning from observed facts. I find that philosophy is the reasonable, and sometimes unreasonable, search of the truth. They question what is true, how does one test that something is true, what are good ways to search for truth and how should the truth be structured? The biggest question tends to be, what is? These are all philosophical questions. Science is the study to find how things work, but must assume a certain philosophical basis. First, it must assume that what we observe is real and not imagined. Second, it must assume that what we are observing is objective and repeatable. Finally, science states that all the knowledge it gathers is testable. If I declare that something is true, then I must be able to observe something that can tell me whether or not it is true. The truly interesting fact about science is that nothing can ever be considered really true, just not falsified. Scientific theories are always ca utious, and they are always either improved upon or abandoned in favour of new ones. So then I find myself thinking, how come we are willing to live with uncertainty and constant revision in science, but demand some sort of definitive truth from philosophy? Now why is it that so many people take sides on a dispute that doesnt make much sense, rather than be pleased about what the mind can achieve through the joint efforts of two of its most familiar intellectual traditions? I think the answer here is that scientists have been made conceited in recent times by their acquired status and improved financial resources, so that they dont think they need to bother with activities that dont bring in large amounts of money in funding every year. Philosophy, on the other hand, ismuch harder to define. Generally speaking, it can be thought of as an activity that uses reason to explore issues that include the nature of reality (metaphysics), (The first philosophy (Metaphysics) is universal and is exclusively concerned with primary substance. And here we will have the science to study that which is just as that which is, both in its essence and in the properties which, just as a thing that is, it has. (Aristotle, 340BC)) the structure of reasonable thinking (logic), the limits of our understanding (epistemology), the meaning implied by our thoughts (philosophy of language), the nature of the moral good (ethics), the nature of beauty (aesthetics), and the internal workings of other disciplines (philosophy of science, philosophy of history, etc.). Philosophy does this by methods of study and questioning that include rational arguments. Now, it seems to me that: a) philosophy and science are two distinct activities, b) they work by different methods (observation-based hypothesis testing vs. reason-based logical analysis), and c) they inform each other in a co-dependent manner. Science depends on philosophical theories that are outside the range of experimental validation, bu t philosophical investigations should be informed by the best science available in a range of situations, from metaphysics to ethics and philosophy of mind. So when some critic for instance defends that science can start an attack on all religious beliefs, they are surrendering too much to science and too little to philosophy. Yes, science can experimentally test specific religious claims, but the best objections against the thought are philosophical in nature. The issue is can philosophy advance by itself, without the support of science? Can science work without philosophy? The answer is even though philosophy and science are now two unique areas, to achieve significant knowledge, mix together the outcomes of both domains is a must. In fact, philosophy and science have always learned from each other. Scientists filter what they observe as best they can. They hypothesize, waiting for someone to make a more sophisticated estimate. Scientists consider doubt as a condition they must li ve with. They can live with mistaken belief. For example, a scientist might see only grey squirrels all his life and conclude that all squirrels are grey. His theory is then destroyed when he sees a red squirrel. There is a difference between science as a method and the philosophy of science. Although the scientific method has origins in philosophy, people are free to use the scientific method which rejects the philosophy of science. The science of biology can be educated in a classroom without teaching the philosophy of science. Science as a method tackles experimental questions, and an individual can work at science without believing in the supernatural. The philosophy of science holds that people should limit their beliefs to that which is experimental, in other words rule out the supernatural. The philosophy of science is sceptical about matters away from the untested. The function of philosophy draws imaginary pictures of whatever we observe or feel. Philosophy should be concer ned as much with generating questions as to the finding of answers. Philosophy is biased by nature, but to be biased does not mean to be inferior. Science certainly has its qualities. It is logical and highly organized and it pays attention to the evidential truth. It has producedtechnological surprises and speeded up the materialistic progress of human civilization. It is also basically whatever can be proved independently. And whatever can be proved without bias, as at first it was known to humans in a prejudiced style. Though science has a major relevance in the world, philosophy is much broader than science. I feel that science is what questions have been objectively answered. Whereas philosophy is what could be the more and more questions and what could be all the possible answers to those more and more questions. Philosophy takes priority over science because it is philosophy which has to raise questions and then to propose answers. Science takes only the answers, out of all t he proposed answers, which can be experimentally proved by using the accessible experimental procedures. It is often said that philosophers create knowledge by simply thinking, whereas scientists create knowledge by observing. Galileos experiments about speed of falling objects having different weights as well as about the projectile motion were actually his purposeful attempts to just check the legitimacy of the previously well-known Greek philosophical views regarding these matters. In my opinion, the formation of knowledge is not the role of the scientist. To create new knowledge is actually the role of the philosopher. The role of the scientist is just to extract the objective truths out of already existing ideas. Through experimentation the scientist would bring alterations in many already existing vague philosophical ideas by setting up the exact quantitative relationships between already existing variables. There is a positive role of a scientist. He has to put into operation his advanced theories by discovering and applying new technologies. Science, without philosophical process, turns into no reasonable findings. But, philosophy, without the logical methods of science, results in nonsense. One compliments the other and both are essential to the systematic growth of knowledge. In conclusion, I believe that if a study does not pass the tests of reason, and experimentation, where practical, we have accomplished nothing. Science and philosophy both posses their own qualities and faults in unique ways. Their relationship is competitive at times but neither one would stand at the level of development they have achieved today, without the other.

PATRIOT ACT :: essays research papers

1. Shannon, McCaffrey (2004, May 23). New laws to combat terrorism are working their way through Congress. Knight Ridder tribune Washington Bereau (D.C.) The Justice Department wants to find a way to expand its anti-terrorism powers by adding other methods such as a FBI subpoena power. Some may say that the changes in the bills are of the most significant since Congress passed the Patriot Act after the September 11, 2001, terror attacks. Some of the actions that were taken place have been recycled from a controversial Justice Department draft of a bill, called "Patriot II," which was discarded after details of its provisions were given to the media. Daniel Bryant, the assistant attorney general for legal policy, said the Patriot Act has helped law enforcement detect and disrupt terrorist plots. "But while Congress and the administration working together have made significant strides in improving the department's capacity to gather the intelligence necessary to prevent terrorist attacks, there is still more that needs to be done," Bryant told lawmakers at a May 18 hearing. Critics do not think giving law enforcement officials more power, complaining that there is not enough information has been made available about how the Justice Department is using the tools in the Patriot Act. There giving reasons why the patriot Act is being force and people complaining and telling why it not right to I am using this to show that the Partiot Act will help enforce certain rules and regulations that the government do not pay attention to. This article also talks about a new way to expand anti- terrorism powers by adding other methods. 2. Pike, George H. (2004, June 20) A Safer USA Patriot Act. Information Today. This article offers facts about the U.S. Patriot Act, which was ratified following the terrorist attacks in the country on September 11, 2001. It restructured several existing laws involving intelligence gathering, criminal law and procedure, and immigration practices. Though passed nearly unanimously by both houses of Congress, the act was controversial, particularly within the library and information communities in the U.S. The major initiatives of the Patriot Act is as follows: first, it expanded the type of information that could be obtained by

Comparing Society Today with Ayn Rands, Anthem Essay -- Government

Imagine a world where people are only expected to live up to 45 years old. In today's society, there are countries that experience this. In the novel Anthem, by Ayn Rand; there are many factors like lifestyle, government, medicine, and education that lead to this. There are a couple of ways where the world in the novel is similar and different to today's society. A reason why life expectancy is so short in the novel is because of the "Great Rebirth", the "Great Rebirth" led to a new world that doesn't have machinery or electronics. Because of this there was a lack of medicine. Life expectancy is so short in this society because there isn't any advanced medicine. They think that by cutting them open and letting them bleed the infections would go away. In fact, this would cause someone to bleed to death. This relates to us because in the beginning we didn't know much about medicine or technology, which lead to many deaths. Now, our society has greatly improved because medicine has been greatly developed and diseases that were once thought to be incurable now have a cure. Also, educa...

Psychological Profiles of Characters in Julius Caesar Essay

Five most interesting characters in The Tragedy of Julius Caesar, Acts I & II, are the following: Julius Caesar, Mark Antony, Brutus, Cassius, and Portia. Julius Caesar is described to be a powerful, tyrant king of Rome. He is the figure people loved, but conspired to be assassinated by his own senators. Mark Antony is the most loyal subject of Julius Caesar. He loved Caesar so much that’s why he’s well-trusted, and is feared by conspirators for his loyalty. Brutus is one of the senators who saw a great need to stop Caesar from becoming a more powerful king. He is believed to be a protagonist here, if Caesar’s death is justified due to Caesar’s cruelty as a king. Cassius is one of the senators who conspired to plot against Caesar too. Somehow, Caesar felt that Cassius should not be trusted because â€Å"he thinks too much. † Portia is the loving wife of Brutus. She knows the secrets of her husband, and she’s always worried for him. (Shakespeare, W. Act I) Caesar got scared at one point, when his wife dreamed of his assassination. Mark Antony was also believed by conspirators that his loyalty will get buried along with Caesar’s body. Brutus, though the main conspirator, didn’t want Caesar to be â€Å"dismembered,† and he does show some respect to Caesar all along. Cassius, as a senator, should protect Caesar, but he is one of the main conspirators too. Portia wasn’t able to tolerate her husband’s silence on the fact he’s hiding something for her. (Shakespeare, W. Act II). All the characters mentioned have believable qualities, but most of them turned out to have a weak side. This is true too amongst us, because we are our own characters, but our weak side is what makes us human. That makes this tragedy a real life story we can relate to.

Additional Solved Sums, Financial Management, Prassanna Chandra

CHAPTER 2 1. As a rule of thumb, real rates of interest are calculated by subtracting the inflation rate from the nominal rate. What is the error from using this rule of thumb for calculating real rates of return in the following cases? Nominal rate (%)7121822 Inflation rate (%)4 6 810 Solution: [pic] 2. As a rule of thumb, real rates of interest are calculated by subtracting the inflation rate from the nominal rate. What is the error from using this rule of thumb for calculating real rates of return in the following cases? Nominal rate (%)481119 Inflation rate (%)13 2 4 Solution: [pic] CHAPTER 3 1. At the end of March, 20X6 the balances in the various accounts of Dhoni & Company are as follows: Rs. in million Accounts Balance Equity capital 120 Preference capital 30 Fixed assets (net) 217 Reserves and surplus 200 Cash and bank 35 Debentures (secured) 100 Marketable securities 18 Term loans (secured) 90 Receivables 200 Short-term bank borrowing (unsecured) 70 Inventories210 Trade creditors 60 Provisions 20 Pre-paid expenses 10 Required: Prepare the balance sheet of Dhoni & Company as per the format specified by the Companies Act. Solution: Balance Sheet of Dhoni & Company As on March 31, 20 X 6 Liabilities | |Assets | | |Share capital | |Fixed assets |   | |Equity |120 |Net fixed assets |217 | |Preference |30 | |   | |Reserve & surplus |200 |Investments |   | |   | |Marketable securities |18 | |Secured loans | |Current assets, loans & advances |   | |Debentures |100 | |   | |Term loans |90 | | | |   | |Pre-paid expenses |10 | |Unsecured loans | |Inventories |21 0 | |Short term ank borrowing |70 |Receivables |200 | |Current liabilities & provisions | |Cash & Bank |35 | |Trade creditors |60 | |   | |Provisions |20 | |   | |   |690 |   |690 | 2. At the end of March, 20X7 the balances in the various accounts of Sania Limited are as follows: Rs. in million Accounts Balance Equity capital 250 Preference capital 80 Fixed assets (net)380 Reserves and surplus350 Cash and bank100 Debentures (secured)190 Marketable securities 30 Term loans (secured)120 Receivables420 Short-term bank borrowing (unsecured) 110 Inventories310 Trade creditors 90 Provisions 70 Pre-paid expenses 20 Required: Prepare the balance sheet of Sania Limited as per the format specified by the Companies Act. Solution: Balance Sheet of Sania Limited as on March 31, 20 X 7 Liabilities | |Assets | | |   | | |   | |Share capital | |Fixed assets |   | |Equity |250 |Net fixed assets |380 | |Preference |80 | |   | |Reserve & surplus |350 |Investments |   | |   | |M arketable securities |30 | |Secured loans | |Current assets, loans & advances |   | |Debentures |190 | |   | |Term loans |120 | | | |   | |Pre-paid expenses |20 | |Unsecured loans | |Inventories |310 | |Short term bank borrowing |110 |Receivables |420 | |Current liabilities & provisions | |Cash & Bank |100 | |Trade creditors |90 | |   | |Provisions |70 | |   | |   |1260 |   |1260 | 3. The comparative balance sheets of Evergreen Company are given below: (Rs. in million) Owners' Equity and Liabilities As on 31. 3. 20X6 As on 31. 3. 20X7 Share capital 70 70 Reserves and surplus 40 80 Long-term debt 80 90 Short-term bank borrowings 80 85 Trade creditors 40 70 Provisions 10 20 Total320415 Assets Fixed assets (net)120210 Inventories 90 95 Debtors 60 65 Cash 25 30 Other assets 25 15 Total320415 The profit and loss account of Evergreen Company for the year ending 31st March 2007 is given below: (Rs. in million) Profit & Loss Account for the Period 1. 4. 20X6 to 31. 3. 20X7 Net sales750 Cost of goods sold 505 Stocks290 Wages and salaries105 Other manufacturing expenses110 245 Gross profit Operating expenses135 Selling, administration and general120 Depreciation 15 Operating profit110 Non-operating surplus or deficit(20) EBIT 90 Interest 25 Profit before tax 65 Tax 15 Profit after tax 50 Dividends 10 Retained earnings 40 Required: (a) Prepare the classified cash flow statement for the period 1. 4. 20X6 to 31. 3. 20X7 b) Develop the cash flow identity for the period 1. 4. 20X6 to 31. 3. 20X7 Solution: |A. Cash flow from operating activities | | |- |Net profit before tax and extraordinary items | |85 | | |- |Adjustments for | | | | | |Interest paid | |25 | | | |Depreciation | |15 | | |- |Operating profit before working capital changes |125 | | |- |Adjustments for | | | | | |Inventories | |(5) | | | |Debtors | |(5) | | | |Trade creditors | |30 | | | |Provisions | |10 | | | |Increase in other assets | |10 | | |- |Cash generated rom operations | |165 | | | |Income tax paid | |(15) | | |- |Cash flow before extraordinary items | |150 | | | |Extraordinary item | |(20) | | |- |Net cash flow from operating activities | |130 | |B. |Cash flow from investing activities | | | | |- |Purchase of fixed assets | |(105) | | |- |Net cash flow from investing activities | |(105) | | | | | | | |C. Cash flow from financing activities | | | | |- |Increase in loans | |15 | | |- |Dividends paid | |(10) | | |- Interest paid | |(25) | | |Net cash flow from financing activities | |(20) | | | | | | | |D. |Net increase in cash and cash equivalents | |5 | | |- |Cash and cash equivalents as on 31. 03. 0X6 |25 | | |- |Cash and cash equivalents as on 31. 03. 20Ãâ€"7 | |30 | NoteIt has been assumed that â€Å"other assets† represent â€Å"other current assets†. (b) A. Cash flow from assets -Operating cash flow90 -Net capital spending (105) -Decrease in net working capital35 -Cash flow from assets20 B. Cash flow to creditors -Interest paid25 -Repayment of long term debt (15) -Cash flow to creditors10 C. Cash flow to shareholders -Dividends paid10 -Net new equity raised 0 -Cash flow to shareholders10 We find that (A)=(B) + ( C) i. e. Cash flow from assets=Cash flow to creditors + Cash flow to shareholders 4. The comparative balance sheets of Xavier Limited are given below: (Rs. in million) Owners' Equity and Liabilities As on 31. 3. 20X6 As on 31. 3. 20X7 Share capital 20 30 Reserves and surplus 10 18 Long-term debt 30 25 Short-term bank borrowings 15 15 Trade creditors 10 15 Provisions 5 8 Total 90 111 Assets Fixed assets (net) 16 20 Inventories 44 55 Debtors 20 21 Cash 5 8 Other assets 5 7 Total 90 111 The profit and loss account of Xavier Limited for the year 2007 is given below: (Rs. in million) Profit & Loss Account for the Period 1. 4. 20X6 to 31. 3. 20X7 Net sales220 Cost of goods sold 140 Stocks 90 Wages and salaries 35 Other manufacturing expenses 15 80 Gross profit Operating expenses 40 Selling, administration and general 20 Depreciation 5 Operating profit 15 Non-operating surplus or deficit 1 EBIT 16 Interest 4 Profit before tax 12 Tax 2 Profit after tax 10 Dividends 2 Retained earnings 8 Required: (a) Prepare the classified cash flow statement for the period 1. 4. 20X6 to 31. 3. 20X7 b) Develop the cash flow identity for the period 1. 4. 20X6 to 31. 3. 20X7 Solution: |A. Cash flow from operating activities | | | | |- |Net profit before tax and extraordinary items | |11 | | |- |Adjustments for | | | | | |Interest paid | | 4 | | | |Depreciation | | 5 | | |- |Operating profit before working capital changes | 20 | | | | Adjustments for | | | | |- | | | | | | |Inventories | |(11) | | | |Debtors | | (1) | | | |Trade creditors | | 5 | | | |Provisions | | 3 | | | |Increase in other assets | | (2) | | |- |Cash generated from operations | | 14 | | | |Income tax paid | | (2) | | |- |Cash flow before extraordinary items | | 12 | | | |Extraordinary item | | 1 | | |- |Net cash flow from operating activities | | 13 | |B. |Cash flow from investing activities | | | | |- |Purchase of fixed assets | | (9) | | |- |Net cash flow from investing activities | | (9) | | | | | | | |C. Cash flow from financing activities | | 10 | | |- Increase in equity | | | | |- |Repayment of term loans | | (5) | | | |-Dividend paid | |(2) | | |- |Interest paid | | (4) | | |Net cash flow from financing activities | | (1) | | | | | | | |D. |Net increase in cash and cash equivalents | | 3 | | |- |Cash and cash equivalents as on 31. 03. 20X6 | 5 | | |- |Cash and cash equivalents as on 31. 03. 20Ãâ€"7 | | 8 | NoteIt has been assumed that â€Å"other assets† represent â€Å"other current assets†. (b) ACash flow from assets -Operating cash flow19 -Net capital spending(9) -Decrease in net working capital(9) Cash flow from assets 1 B. Cash flo w to creditors -Interest paid 4 -Repayment of long term debt 5 -Cash flow to creditors 9 C. Cash flow to shareholders -Dividends paid 2 -Net new equity raised(10) -Cash flow to shareholders (8) We find that (A)=(B) + ( C) i. e. , Cash flow from assets=Cash flow to creditors + Cash flow to shareholders CHAPTER 4 1. Premier Company's net profit margin is 8 percent, total assets turnover ratio is 2. 5 times, debt to total assets ratio is 0. 6. What is the return on equity for Premier? Solution: Net profit Return on equity = Equity = Net profit Net sales Total assets x x Net sales Total assets Equity 1 = 0. 08 x 2. 5 x = 0. 5 or 50 per cent 0. 4 Debt Equity Note : = 0. 6 So = 1- 0. 6 = 0. 4 Total assets Total assets Hence Total assets/Equity = 1/0. 4 2. The following information is given for Alpha Corporation Sales3500 Current ratio1. 5 Acid test ratio1. 2 Current liabilities1000 What is the inventory turnover ratio? Solution: Current assets = Current liabilities x 1. 5 = 1000 x 1. 5 = 1500 Quick assets= Current liabilities x 1. 2 = 1000 x 1. 2 = 1200 Inventories= 300 3500 Inventory turnover ratio == 11. 7 300 3. The following information is given for Beta Corporation. Sales5000 Current ratio1. 4 Inventory turnover5 ratio Acid test ratio1. 0 What is the level of current liabilities? Solution: 4. Safari Inc. has profit before tax of Rs. 90 million. If the company's times interest covered ratio is 4, what is the total interest charge? Solution: PBT= Rs. 90 million PBIT Times interest covered = = 4 Interest So PBIT = 4 x Interest PBT = PBIT – interest = 4x interest- interest = 3 x interest = 90 million Therefore interest = 90/3 = Rs. 30 million 5. A has profit before tax of Rs. 0 million. If its times interest covered ratio is 6, what is the total interest charge? Solution: PBT= Rs. 40 million PBIT Times interest covered = = 6 Interest So PBIT = 6 x Interest PBIT – Interest = PBT = Rs. 40 million 6 x Interest – Interest = Rs. 40 million 5 x Interest = Rs. 40 million Hence Interest = Rs. 8 million 6. McGill Inc. h as profit before tax of Rs. 63 million. If the company's times interest covered ratio is 8, what is the total interest charge? Solution: PBT= Rs. 63 million PBIT Times interest covered = = 8 Interest So PBIT = 8 x Interest PBIT – Interest = PBT = Rs. 63 million x Interest – Interest = 7 x Interest = Rs. 63 million Hence Interest = Rs. 9 million 7. The following data applies to a firm : Interest chargesRs. 200,000 SalesRs. 6,000,000 Tax rate40 percent Net profit margin5 percent What is the firm's times interest covered ratio? Solution: Sales = Rs. 6,000,000 Net profit margin = 5 per cent Net profit = Rs. 6,000,000 x 0. 05 = 300,000 Tax rate = 40 per cent 300,000 So, Profit before tax = = Rs. 500,000 (1-. 4) Interest charge = Rs. 200,000 So Profit before interest and taxes = Rs. 700,000 Hence 700,000 Times interest covered ratio = = 3. 5 200,000 8. The following data applies to a firm: Interest chargesRs. 50,000 SalesRs. 300,000 Tax rate 25 percent Net profit margin 3 percent What is the firm's times interest covered ratio? Solution: Sales = Rs. 300,000 Net profit margin = 3 per cent Net profit = Rs. 300,000 x 0. 03 = 9,000 Tax rate = 25 per cent 9,000 So, Profit before tax = = Rs. 12,000 (1-. 25) Interest charge = Rs. 50,000 So Profit before interest and taxes = Rs. 62,000 Hence 62,000 Times interest covered ratio == 1. 24 50,000 9. The following data applies to a firm : Interest chargesRs. 10,000,000 SalesRs. 80,000,000 Tax rate 50 percent Net profit margin 10 percent What is the firm's times interest covered ratio? Solution: Sales = Rs. 80,000,000 Net profit margin = 10 per cent Net profit = Rs. 80,000,000 x 0. 1 = 8,000,000 Tax rate = 50 per cent 8,000,000 So, Profit before tax = = Rs. 16,000,000 (1-. 5) Interest charge = Rs. 10,000,000 So Profit before interest and taxes = Rs. 26,000,000 Hence 26,000,000 Times interest covered ratio == 2. 6 10,000,000 10. A firm's current assets and current liabilities are 25,000 and 18,000 respectively. How much additional funds can it borrow from banks for short term, without reducing the current ratio below 1. 5? Solution: CA = 25,000CL = 18,000 Let BB stand for bank borrowing CA+BB = 1. 35 CL+BB 25,000+BB = 1. 35 18,000+BB 1. 35x 18,000 + 1. 35 BB = 25,000 + BB 0. 35BB = 25,000- 24,300 = 700 BB = 700/0. 35 = 2,000 11. LNG’s current assets and current liabilities are 200,000 and 140,000 respectively. How much additional funds can it borrow from banks for short term, withou t reducing the current ratio below 1. 33? Solution: CA = 200,000CL = 140,000 Let BB stand for bank borrowing CA+BB = 1. 33 CL+BB 200,000+BB = 1. 33 140,000+BB 1. 33 x 140,000 + 1. 33BB = 200,000 + BB 0. 33 BB = 200,000- 186,200 = 13,800 BB =13,800/0. 33 = 41,818 12. Navneet’s current assets and current liabilities are 10,000,000 and 7,000,000 respectively. How much additional funds can it borrow from banks for short term, without reducing the current ratio below 1. 4? Solution: CA = 10,000,000CL = 7,000,,000 Let BB stand for bank borrowing CA+BB = 1. 4 CL+BB 10,000,000+BB = 1. 4 7,000,000+BB 1. 4 x 7,000,000 + 1. 4BB = 10,000,000 + BB 0. 4 BB = 10,000,000- 9,800,000 = 200,000 BB = 200,000/0. 40 = 500,000 13. A firm has total annual sales (all credit) of 25,000,000 and accounts receivable of 8,000,000. How rapidly (in how many days) must accounts receivable be collected if management wants to reduce the accounts receivable to 6,000,000? Solution: 25,000,000 Average daily credit sales = = 68,493 365 If the accounts receivable has to be reduced to 6,000,000 the ACP must be: 6,000,000 = 87. 6 days 68,493 14. A firm has total annual sales (all credit) of 1,200,000 and accounts receivable of 500,000. How rapidly (in how many days) must accounts receivable be collected if management wants to reduce the accounts receivable to 300,000? Solution: 1,200,000 Average daily credit sales = = 3287. 67 365 If the accounts receivable has to be reduced to 300,000 the ACP must be: 300,000 = 91. 3 days 3287. 67 15. A firm has total annual sales (all credit) of 100,000,000 and accounts receivable of 20,000,000. How rapidly (in how many days) must accounts receivable be collected if management wants to reduce the accounts receivable to 15,000,000? Solution: 100,000,000 Average daily credit sales = = 273,972. 6 365 If the accounts receivable has to be reduced to 15,000,000 the ACP must be: 15,000,000 = 54. 8 days 273,972. 6 16. The financial ratios of a firm are as follows. Current ratio = 1. 25 Acid-test ratio = 1. 10 Current liabilities=2000 Inventory turnover ratio=10 What is the sales of the firm? Solution: Current assets = Current liabilities x Current ratio = 2000 x 1. 25 = 2500 Current assets – Inventories = Current liabilities x Acid test ratio 2000 x 1. 10 = 2200 Inventories = 300 Sales = Inventories x Inventory turnover ratio = 300 x 10 = 3000 17. The financial ratios of a firm are as follows. Current ratio = 1. 33 Acid-test ratio = 0. 80 Current liabilities=40,000 Inventory turnover ratio=6 What is the sales of the firm? Solution: Current assets = Current liabilities x Curre nt ratio = 40,000 x 1. 33 = 53,200 Current assets – Inventories = Current liabilities x Acid test ratio = 40,000 x 0. 80 = 32,000 Inventories = 21,200 Sales = Inventories x Inventory turnover ratio = 21,200 x 6 = 127,200 18. The financial ratios of a firm are as follows. Current ratio = 1. 6 Acid-test ratio = 1. 2 Current liabilities=2,000,000 Inventory turnover ratio=5 What is the sales of the firm? Solution: Current assets = Current liabilities x Current ratio = 2,000,000 x 1. 6 = 3,200,000 Current assets – Inventories = Current liabilities x Acid test ratio = 2,000,000 x 1. 2 = 2,400,000 Inventories = 800,000 Sales = Inventories x Inventory turnover ratio = 800,000 x 5 = 4,000,000 19. Complete the balance sheet and sales data (fill in the blanks) using the following financial data: Debt/equity ratio= 0. 80 Acid-test ratio= 1. 1 Total assets turnover ratio= 2 Days' sales outstanding in Accounts receivable= 30 days Gross profit margin= 30 percent Inventory turnover ratio = 6 Balance sheet Equity capital 80,000Plant and equipment. . . . Retained earnings 50,000Inventories. . . . Short-term bank borrowings . . . . Accounts receivable. . . . Cash. . . . . . . .. . . . Sales. . . . Cost of goods sold †¦Ã¢â‚¬ ¦.. Solution: Debt/equity = 0. 80 Equity = 80,000 + 50,000 = 130,000 So Debt = Short-term bank borrowings = 0. x 130,000 = 104,000 Hence Total assets = 130,000+104,000 = 234,000 Total assets turnover ratio = 2 So Sales = 2 x 234,000 = 468,000 Gross profit margin = 30 per cent So Cost of goods sold = 0. 7 x 468,000 = 327,600 Day’s sales outstanding in accounts receivable = 30 days Sales So Accounts receivable = x 30 360 468,000 = x 30 = 39,000 360 Cost of goods sold 327,600 Inventory turnover ratio === 6 Inventory Inventory So Inventory = 54,600 As short-term bank borrowing is a current liability, Cash + Accounts receivable Acid-test ratio = Current liabilities Cash + 39,000 = = 1. 1 104 ,000 So Cash = 75,400 Plant and equipment = Total assets – Inventories – Accounts receivable – Cash = 234,000 – 54,600 – 39,000 – 75,400 = 65,000 Putting together everything we get Balance Sheet Equity capital 80,000Plant & equipment65,000 Retained earnings50,000Inventories54,600 Short-term bank borrowings 104,000Accounts receivable39,000 Cash75,400 234,000 234,000 Sales 468,000 Cost of goods sold327,600 20. Complete the balance sheet and sales data (fill in the blanks) using the following financial data: Debt/equity ratio= 0. 40 Acid-test ratio= 0. 9 Total assets turnover ratio= 2. 5 Days' sales outstanding in Accounts receivable= 25 days Gross profit margin= 25 percent Inventory turnover ratio = 8 Balance sheet Equity capital 160,000,000Plant and equipment——–Retained earnings 30,000,000Inventories †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Short-term bank borrowings . . . †¦Ã¢â‚¬ ¦ Accounts receivable †¦.. . . . Cash . . . . . . . . . . . . Sales †¦. †¦. Cost of goods sold †¦Ã¢â‚¬ ¦. Solution: Debt/equity = 0. 40 Equity = 160,000,000 + 30,000,000 = 190,000,000 So Debt = Short-term bank borrowings = 0. 4 x 190,000,000 = 76,000,000 Hence Total assets = 190,000,000+ 76,000,000 = 266,000,000 Total assets turnover ratio = 2. 5 So Sales = 2. 5 x 266,000,000 = 665,000,000 Gross profit margin = 25 per cent So Cost of goods sold = 0. 75 x 665,000,000 = 498,750,000 Day’s sales outstanding in accounts receivable = 25 days Sales So Accounts receivable = x 25 360 665,000,000 = x 25 = 46,180,556 360 Cost of goods sold 498,750,000 Inventory turnover ratio == = 8 Inventory Inventory So Inventory = 62,343,750 As short-term bank borrowings is a current liability, Cash + Accounts receivable Acid-test ratio = Current liability Cash + 46,180,556 = = 0. 9 76,000 ,000 So Cash = 22,219,444 Plant and equipment = Total assets – Inventories – Accounts receivable – Cash 266,000,000 – 62,343,750 – 46,180,556 – 22,219,444 = 135,256,250 Putting together everything we get Balance Sheet Equity capital 160,000,000Plant & equipment 135,256,250 Retained earnings 30,000,000Inventories62,343,750 Short-term bank borrowings 76,000,000Accounts receivable46,180,556 Cash22,219,444 266,000,000 266,000,000 Sales 665,000,000 Cost of goods so ld 498,750,000 21. Complete the balance sheet and sales data (fill in the blanks) using the following financial data: Debt/equity ratio= 1. 5 Acid-test ratio= 0. 3 Total assets turnover ratio= 1. 9 Days' sales outstanding in Accounts receivable= 25 days Gross profit margin= 28 percent Inventory turnover ratio = 7 Balance sheet Equity capital 600,000Plant and equipment. . . . Retained earnings 100,000Inventories. . . . Short-term bank borrowings . . . Accounts receivable. . . . Cash. . . . . . . .. . . . Sales. . . †¦.. Cost of goods sold†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Solution: Debt/equity = 1. 5 Equity = 600,000 + 100,000 = 700,000 So Debt = Short-term bank borrowings =1. 5 x 700,000 = 1050,000 Hence Total assets = 700,000+1050,000 = 1,750,000 Total assets turnover ratio = 1. 9 So Sales = 1. 9 x 1,750,000 = 3,325,000 Gross profit margin = 28 per cent So Cost of goods sold = 0. 2 x 3,325,000 = 2,394,000 Day’s sales outstanding in accounts receivable = 25 days Sales So Accounts receivable = x 25 360 3,325,000 = x 25 = 230,903 360 Cost of goods sold 2,394,000 Inventory turnover ratio === 7 Inventory Inventory So Inventory = 342,000 As short-term bank borrowings is a current liability , Cash + Accounts re ceivable Acid-test ratio = Current liabilities Cash + 230,903 = = 0. 3 1050 ,000 So Cash = 84,097 Plant and equipment = Total assets – Inventories – Accounts receivable – Cash = 1,750,000 – 342,000 – 230,903 – 84,097 = 1,093,000 Putting together everything we get Balance Sheet Equity capital 600,000Plant &equipment 1,093,000 Retained earnings100,000Inventories 342,000 Short-term bank borrowings 1050,000Accounts receivable 230,903 Cash 84,097 1,750,000 1,750,000 Sales 3,325,000 Cost of goods sold2,394,000 22. Compute the financial ratios for Acme Ltd. Evaluate Acme's performance with reference to the standards. Acme Limited Balance Sheet, March 31, 20X7 Liabilities and Equity Equity capital Rs. 60,000,000 Reserves and surplus45,000,000 Long-term debt72,000,000 Short-term bank borrowing40,000,000 Trade creditors30,000,000 Provisions15,000,000 Total 62,000,000 Assets Fixed assets (net) Rs. 110,000,000 Current assets Cash and bank 30,000,000 Receivables45,000,000 Inventories 61,000,000 Pre-paid expenses 10,000,000 Others 6,000,000 Total 262,000,000 Acme Limited Profit and Loss Account for the Year Ended March 31, 20X7 Net sales Rs. 320,000,000 Cost of goods sold 204,000,000 Gross profit 116,000,000 Operating expenses 50,000,000 Operating profit 66,000,000 Non-operating surplus 4,000,000 Profit before interest and tax 70,000,000 Interest 12,000,000 Profit before tax 58,000,000 Tax 20,000,000 Profit after tax 38,000,000 Dividends 4,000,000 Retained earnings 34,000,000 AcmeStandard Current ratio 1. 3 Acid-test ratio 0. 70 Debt-equity ratio 2. 0 Times interest covered ratio 4. 5 Inventory turnover ratio 5. 0 Average collection period 45 days Total assets turnover ratio 1. 5 Net profit margin ratio 8 % Earning power 20 % Return on equity 18 % Solution: For purposes of ratio analysis, we may recast the balance sheet as under. Let assume that ‘Others’ in the balance sheet represents other current assets. Liabilities and Equity Equity capital . 60,000,000 Reserves and surplus45,000,000 Long-term debt72,000,000 Short-term bank borrowing40,000,000 Total 217,000,000 Fixed assets (net) 110,000,000 Current assets Cash and bank30,000,000 Receivables45,000,000 Inventories61,000,000 Pre-paid expenses10,000,000 Others 6,000,000 152,000,000 Less: Current liabilities Trade creditors30,000,000 Provisions15,000,000 45,000,000 Net current assets 107,000,000 Total 217,000,000 Current assets (i) Current ratio = Current liabilities 152,000,000 == 1. 8 85,000,000 (Current liabilities here includes short-term bank borrowing also) Current assets – Inventories 91,000,000 (ii) Acid-test ratio = == 1. 1 Current liabilities 85,000,000 Current liabilities here includes short-term bank borrowing also) Long-term debt + Short-term bank borrowing (iii) Debt-equity ratio = Equity capital + Reserves & surplus 72,000,000 + 40,000,000 = = 1. 1 60,000,000 + 45,000,000 Profit before interest and tax (iv) Times interest coverage ratio = Interest 70,000,000 == 5. 83 12,000,000 Cost of goods sold204,000,000 (v) Inventory turnover period = = = 3. 34 Invent ory61,000,000 365 (vi) Average collection period = Net sales / Accounts receivable 365 = =51. 3 days 320,000,000/45,000,000 (vii) Total assets =Equity + Total debt =( 60,000,000 + 45,000,000 ) +(72,000,000+40,000,000) = 217,000,000 Net sales320,000,000 Total assets turnover ratio = == 1. 5 Total assets217,000,000 Profit after tax 38,000,000 (ix) Net profit margin= = = 11. 9% Net sales 320,000,000 PBIT 70,000,000 (x) Earning power = = = 32. 3 % Total assets 217,000,000 Equity earning 38,000,000 (xi) Return on equity = = = 36. 2 % Net worth 105,000,000 The comparison of the Acme’s ratios with the standard is given below AcmeStandard Current ratio 1. 8 1. 3 Acid-test ratio 1. 1 0. 7 Debt-equity ratio 1. 1 2. 0 Times interest covered ratio 5. 8 4. 5 Inventory turnover ratio 3. 3 5. 0 Average collection period 51. 3 days 45 days Total assets turnover ratio 1. 5 1. 5 Net profit margin ratio 11. 9 % 8 % Earning power 32. 3 % 20 % Return on equity 36. 2 % 18 % 23. Compute the financial ratios for Nainar Ltd. Evaluate Nainar's performance with reference to the standards. Nainar Limited Balance Sheet, March 31, 20X7 Liabilities and Equity Equity capital Rs. 100,000,000 Reserves and surplus 65,000,000 Long-term debt 140,000,000 Short-term bank borrowing 70,000,000 Trade creditors 24,000,000 Provisions 19,000,000 Total 418,000,000 Assets Fixed assets (net) Rs. 206,000,000 Current assets Cash and bank 25,000,000 Receivables 70,000,000 Inventories 85,000,000 Pre-paid expenses 20,000,000 Others 12,000,000 Total 418,000,000 Nainar Limited Profit and Loss Account for the Year Ended March 31, 20X7 Net sales Rs. 740,000,000 Cost of goods sold 520,000,000 Gross profit 220,000,000 Operating expenses 102,000,000 Operating profit 118,000,000 Non-operating surplus 12,000,000 Profit before interest and tax 130,000,000 Interest 22,000,000 Profit before tax 108,000,000 Tax 46,000,000 Profit after tax 62,000,000 Dividends 20,000,000 Retained earnings 42,000,000 NainarStandard Current ratio 1. 7 Acid-test ratio 1. 0 Debt-equity ratio 1. 4 Times interest covered ratio 5. 5 Inventory turnover ratio 6. 0 Average collection period 40 days Total assets turnover ratio 2. 0 Net profit margin ratio 8 % Earning power 30 % Return on equity 35 % Solution: For purposes of ratio analysis, we may recast the balance sheet as under. Let assume that ‘Others’ in the balance sheet represents other current assets. Liabilities and Equity Equity capital 100,000,000 Reserves and surplus 65,000,000 Long-term debt 140,000,000 Short-term bank borrowing 70,000,000 Total 375,000,000 Assets Fixed assets (net) 206,000,000 Current assets Cash and bank 25,000,000 Receivables 70,000,000 Inventories 85,000,000 Pre-paid expenses 20,000,000 Others 12,000,000 212,000,000 Less: Current liabilities Trade creditors24,000,000 Provisions19,000,000 43,000,000 Net current assets 169,000,000 Total 375,000,000 Current assets (i) Current ratio = Current liabilities 212,000,000 == 1. 9 113,000,000 ( Current liabilities here includes short-term bank borrowing also) Current assets – Inventories 127,000,000 (ii) Acid-test ratio = == 1. 1 Current liabilities 113,000,000 ( Current liabilities here includes short-term bank borrowing also) Long-term debt + Short-term bank borrowing (iii) Debt-equity ratio = Equity capital + Reserves & surplus 140,000,000 + 70,000,000 = = 1. 3 100,000,000 + 65,000,000 Profit before interest and tax (iv) Times interest coverage ratio = Interest 130,000,000 == 5. 9 22,000,000 Cost of goods sold520,000,000 (v) Inventory turnover period = = = 6. 1 Inventory85,000,000 365 (vi) Average collection period = Net sales / Accounts receivable 365 = =34. 5 days 740,000,000/70,000,000 (vii) Total assets = Equity + Total debt =(100,000,000 + 65,000,000 ) +(140,000,000+70,000,000) = 375,000,000 Net sales740,000,000 Total assets turnover ratio = == 2. 0 Total assets375,000,000 Profit after tax 62,000,000 (ix) Net profit margin= = = 8. 4 % Net sales 740,000,000 PBIT 130,000,000 (x) Earning power = = = 34. 7 % Total assets 375,000,000 Equity earning 62,000,000 (xi) Return on equity = = = 37. 6 % Net worth 165,000,000 The comparison of the Nainar’s ratios with the standard is given below NainarStandard Current ratio 1. 9 1. 7 Acid-test ratio 1. 1 1. 0 Debt-equity ratio 1. 3 1. 4 Times interest covered ratio 5. 9 5. 5 Inventory turnover ratio 6. 1 6. 0 Average collection period 34. 5 days 40 days Total assets turnover ratio 2. 0 2. 0 Net profit margin ratio 8. 4 % 8 % Earning power 34. 7 % 30 % Return on equity 37. 6 % 35 % 24. The comparative balance sheets and comparative Profit and Loss accounts for Nalvar Limited, are given below: Comparative Balance Sheets, Nalvar Limited (Rs. in million) | |20X3 |20X4 |20X5 |20X6 |20X7 | |Share capital |1. 6 |1. 6 |1. |1. 8 |2 | |Reserves and surplus |1. 0 |1. 6 |2. 4 |2. 3 |3 | |Long-term debt |1. 4 |1. 5 |1. 8 |1. 6 |1. 4 | |Short-term bank borrowing |1. 3 |1. 5 |1. 7 |1. 5 |1. 2 | |Current liabilities |1. 1 |1. 3 |1. 5 |1. 6 |1. 8 | |Total |6. 4 |7. 5 |9. 2 |8. |9. 4 | |Assets | | | | | | |Net fixed assets |1. 2 |1. 4 |2 |1. 7 |2 | |Current assets | | | | | | | Cash and bank |0. 3 |0. 3 |0. 2 |0. 4 |0. 3 | | Receivables |1. 8 |2. 1 |2. 5 |2. 4 |2. | | Inventories |1. 8 |2. 2 |2. 8 |2. 4 |2. 8 | | |1. 3 |1. 5 |1. 7 |1. 9 |1. 8 | |Other assets | | | | | | |Total |6. 4 |7. 5 |9. 2 |8. 8 |9. 4 | | | | | | | | Comparative Profit and Loss Accounts, Nalvar Limited (Rs. in million) | | |20X4 |20X5 |20X6 |20X7 | | |20X3 | | | | | | | | | | | | |Net sales |3. 8 |4. 2 |5. 3 |6. 5 |7. 8 | |Cost of goods sold |2. 6 |3. |3. 9 |4 |4. 8 | |Gross profit |1. 2 |1. 1 |1. 4 |2. 5 |3 | |Operating expenses |0. 3 |0. 3 |0. 4 |0. 6 |0. 6 | |Operating profit |0. 9 |0. 8 |1 |1. 9 |2. 4 | |Non-operating surplus deficit |0. 1 |0. 2 |0. 1 |0. 3 |0. 3 | |Profit before interest and tax |1 |1 |1. |2. 2 |2. 7 | |Interest |0. 1 |0. 1 |0. 2 |0. 1 |0. 1 | |Profit before tax |0. 9 |0. 9 |0. 9 |2. 1 |2. 6 | |Tax |0. 05 |0. 08 |1 |1. 2 |1. 2 | |Profit after tax |0. 85 |0. 82 |-0. 1 |0. 9 |1. 4 | Required: Compute the important ratios for Nalvar Limited for the years 20X3-20X7. You may assume that other assets in the balance sheet represent other current assets. †¢ Current ratio †¢ Debt-equity ratio †¢ Total assets turnover ratio †¢ Net profit margin †¢ Earning power †¢ Return on equity Solution: We will rearrange the balance sheets as under for ratio analysis. It is assumed that ‘Other assets’ are other current assets |Liabilities and Equity | | | | | | |†¢ Current ratio |2. 2 |2. 2 |2. 3 |2. 3 |2. 5 | |†¢Ã‚  Ã‚  Ã‚  Debt-equity ratio |1. 0 |0. 9 |0. 8 |0. 8 |0. | |Total assets turnover ratio |0. 7 |0. 7 |0. 7 |0. 9 |1. 0 | |†¢Ã‚  Ã‚  Ã‚  Net profit margin(%) |22. 4 |19. 5 |-1. 9 |13. 8 |17. 9 | |†¢Ã‚  Ã‚  Ã‚  Earning power (%) |18. 9 |16. 1 |14. 3 |30. 6 |35. 5 | |†¢Ã‚  Ã‚  Ã‚  Return on equity (%) |32. 7 |25. 6 |-2. 4 |22. 0 |28. 0 | 26. The comparative balance sheets and comparative Profit and Loss accounts for Somani Limited, a machine tool manufacturer, are given below: Comparative Ba lance Sheets, Somani Limited (Rs. in million) | | | 20X5 | 20X6 | 20X7 | | | |20X4 | | | | | |20X3 | | | | | |Share capital |41 |50 |50 |50 |55 | |Reserves and surplus |16 |36 |72 |118 |150 | |Long-term debt |28 |25 |30 |29 |22 | |Short-term bank borrowing |35 |30 |36 |38 |38 | |Current liabilities |24 |28 |30 |30 |25 | |Total |144 |169 |218 |265 |290 | |Assets | | | | | | |Net fixed assets |72 |80 |75 |102 |103 | |Current assets | | | | | | | Cash and bank |8 |9 |15 |12 |11 | | Receivables |24 |30 |59 |62 |85 | | Inventories |35 |42 |55 |75 |79 | |Other Assets |5 |8 |14 |14 |12 | |Total |144 |169 |218 |265 |290 | | | | | | | | |Comparative Profit & Loss Account of Somani Ltd | | (Rs. n million) | | | |20X4 |20X5 |20X6 |20X7 | | |20X3 | | | | | |Net sales |285 |320 |360 |350 |355 | |Cost of goods sold |164 |150 |170 |175 |174 | |Gross profit |121 |170 |190 |175 |181 | |Operating expenses |64 |66 |68 |68 |64 | |Operating profit |57 |104 |122 |107 |117 | |Non-operating surplus defic it |3 |4 |4 |3 |3 | |Profit before interest and tax |60 |108 |126 |110 |120 | |Interest |8 |6 |10 |12 |12 | |Profit before tax |52 |102 |116 |98 |108 | |Tax |15 |26 |30 |26 |29 | |Profit after tax |37 |76 |86 |72 |79 | | | | | | | | Compute the following ratios for years 20X3-20X7: †¢ Current ratio †¢ Debt-equity ratio †¢ Total assets turnover ratio †¢ Net profit margin †¢ Earning power †¢ Return on equity For ratio analysis purpose, we will rearrange the balance sheet as under. It is assumed that ‘Other assets’ are other current assets 20X3 20X4 20X5 20X6 20X7 |Share capital | |41 | |50 | | |†¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Current ratio |1. 2 |1. 5 |2. 2 |2. 4 |3. 0 | |†¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Debt-equity ratio |1. 1 |0. 6 |0. 5 |0. 4 |0. | |†¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Total assets turnover ratio |2. 4 |2. 3 |1. 9 |1. 5 |1. 3 | |†¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Net profit margin (%) |13. 0 |23. 8 |23. 9 |20. 6 |22. 3 | |†¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Earning power (%) |50. 0 |76. 6 |67. 0 |46. 8 |45. 3 | |†¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Return on equity (%) |64. 9 |88. 4 |70. 5 |42. 9 |38. 5 | 26. The Balance sheets and Profit and Loss accounts of LKG Corporation are given below. Prepare the common size and common base financial statements |Balance Sheets (Rs. n million) | | |20Ãâ€"6 |20Ãâ€"7 | |Shareholders’ funds |256 |262 | |Loan funds |156 |212 | |Total |412 |474 | |Fixed assets |322 |330 | |Investments |15 |15 | |Net current assets |75 |129 | |Total |412 |474 | |Profit & Loss Accounts | |(Rs. n million) | | |20Ãâ€"6 |20Ãâ€"7 | |Net sales |623 |701 | |Cost of goods sold |475 |552 | |Gross profit |148 |149 | |PBIT |105 |89 | |Interest |22 |21 | |PBT |83 |68 | |Tax |41 |34 | |PAT |42 |34 | Solution: Common Size statements: Profit and Loss Account | |Regular ( in Rs. |Common Size(%) | | |million) | | | | |20Ãâ€"6 |20Ãâ€"7 | |20Ãâ€"6 |20Ãâ€"7 | |Net sales |623 |701 | |100 |100 | |Cost of goods sold |475 |552 | |76 |79 | |Gross profit |148 |149 | |24 |21 | |PBIT |105 |89 | |17 |13 | |Interest |22 |21 | |4 |3 | |PBT |83 |68 | |13 |10 | |Tax |41 |34 | |7 |5 |PAT |42 |34 | |7 |5 | | | | Balance Sheet | | |Regular ( in million)| |Common Size(%) | | |20Ãâ€"6 |20Ãâ€"7 | |20Ãâ€"6 |20Ãâ€"7 | |Shareholders' funds |256 |262 | |62 |55 | |Loan funds |156 |212 | |38 |45 | |Total |412 |474 | |100 |100 | |Fixed assets |322 |330 | |78 |70 | |Investments |15 |15 | |4 |3 | |Net current assets |75 |129 | |18 |27 | |Total |412 |474 | |100 |100 | 27. The Balance sheets and Profit and Loss accounts of Grand Limited are given below. Prepare the common size and common base financial statements Balance Sheet | | |20Ãâ€"6 |20Ãâ€"7 | |Shareholders’ fund |85 |85 | |Loan funds |125 |180 | |Total |210 |265 | |Fixed assets |127 |170 | |Investments |8 |10 | |Net current assets |75 |85 | |Total |210 |265 | |Profit & Loss Account | | |20Ãâ€"6 |20Ãâ€"7 | |Net sales 450 |560 | |Cost of goods sold |320 |410 | |Gross profit |130 |150 | |PBIT |85 |98 | |Interest |12 |17 | |PBT |73 |81 | |Tax |22 |38 | |PAT |51 |43 | Solution: |Balance Sheet |Regular (Rs. n million) |Common Size(%) | | |20Ãâ€"6 |20Ãâ€"7 |20Ãâ€"6 |20Ãâ€"7 | |Shareholders' funds |85 |85 |40 |32 | |Loan funds |125 |180 |60 |68 | |Total |210 |265 |100 |100 | |Fixed assets |127 |170 |60 |64 | |Investments |8 |10 |4 |4 | |Net current assets |75 |85 |36 |32 | |Total |210 |265 |100 |100 | |Profit & Loss Account |Regular (Rs. n million) |Common Size(%) | | |20Ãâ€"6 |20Ãâ€"7 |20Ãâ€"6 |20Ãâ€"7 | |Net sales |450 |560 |100 |100 | |Cost of goods sold |320 |410 |71 |73 | |Gross profit |130 |150 |29 |27 | |PBIT |85 |98 |19 |18 | |Interest |12 |17 |3 |3 | |PBT |73 |81 |16 |14 | |Tax |22 |38 |5 |7 | |PAT |51 |43 |11 |8 | |Common base year statements | |Balance Sheet |Regular (Rs. n million) |Common base year (%) | | |20Ãâ€"6 |20Ãâ€"7 |20Ãâ€"6 |20Ãâ€"7 | |Shareholders' funds |85 |85 |100 |100 | |Loan funds |125 |180 |100 |144 | |Total |210 |265 |100 |126 | |Fixed assets |127 |170 |100 |134 | |Investments |8 |10 |100 |125 | |Net current assets |75 |85 |100 |113 | |Total |210 |265 |100 |126 | |Profit & Loss Account |Regular (Rs. n million) |Common base year (% ) | | |20Ãâ€"6 |20Ãâ€"7 |20Ãâ€"6 |20Ãâ€"7 | |Net sales |450 |560 |100 |124 | |Cost of goods sold |320 |410 |100 |128 | |Gross profit |130 |150 |100 |115 | |PBIT |85 |98 |100 |115 | |Interest |12 |17 |100 |142 | |PBT |73 |81 |100 |111 | |Tax |22 |38 |100 |173 | |PAT |51 |43 |100 |84 | CHAPTER 5 1. The profit and loss account of Sasi Industires Limited for years 1 and 2 is given below: Using the percent of sales method, prepare the pro forma profit and loss account for year 3. Assume that the sales will be 3500 in year 3. If dividends are raised to 40, what amount of retained earnings can be expected for year 3? |Year | | |1 |2 | |Net sales |2300 |2700 | |Cost of goods sold |1760 |2000 | |Gross profit |540 |700 | |Selling expenses |150 |180 | |General and administration expenses |120 |124 | |Depreciation |94 |84 | |Operating profit |176 |312 | |Non-operating surplus deficit |12 |10 | |Earnings before interest and tax |188 |322 | |Interest |30 |38 | |Earnings before tax |158 |284 | |Tax |56 |96 | |Earnings after tax |102 |188 | |Dividends |35 |35 | |Retained earnings |67 |153 | Solution: |Year | | | | |1 |2 |Average percent |Proforma Profit & Loss| | | | |of sales |account for year 3 | | | | | |assuming sales of 3500| |Net sales |2300 |2700 |100 |3500 | |Cost of goods sold |1760 |2000 |75. 30 |2635. 43 | |Gross profit |540 |700 |24. 70 |864. 57 | |Selling expenses |150 |180 |6. 59 |230. 80 | |General and administration expenses |120 |124 |4. 90 |171. 7 | |Depreciation |94 |84 |3. 60 |125. 97 | |Operating profit |176 |312 |9. 60 |336. 14 | |Non-operating surplus deficit |12 |10 |0. 45 |15. 61 | |Earnings before interest and tax |188 |322 |10. 05 |351. 75 | |Interest |30 |38 |1. 36 |47. 46 | |Earnings before tax |158 |284 |8. 69 |304. 29 | |Tax |56 |96 |3. 00 |104. 3 | |Earnings after tax |102 |188 |5. 70 |199. 46 | |Dividends(given) |35 |35 | |40 | |Retained earnings |67 |153 | |159. 46 | 2. The profit and loss account of KG Electronics Limited for years 1 and 2 is given below: Using the percent of sales method, prepare the pro forma profit and loss account for year 3. Assume that the sales will be 26,000 in year 3. If dividends are raised to 500, what amount of retained earnings can be expected for year3 . |Year | | |1 |2 | |Net sales |18,230 |22,460 | |Cost of goods sold |13,210 |16100 | |Gross profit |5020 |6360 | |Selling expenses |820 |890 | |General and administration expenses