Firm value and share price strategy Essay Example for Free

Firm value and share price strategy Essay BAE facing challenges on Intensive competition and budget defence cuts by their major customers should focus on increasing shareholders’ equity by reduction of costs, adapting capabilities to the changing priorities of their customers and improve their Programme execution. Directors should monitor working capital expenditures to ensure that unnecessary further debt would be incurred that inevitably has an effect on book values. Higher book values (stockholders’ equity) act as a positive in a buyers assessment of purchase price, to some extent providing at least the illusion of a floor in value (Nation’s Business 2006). 4) Recommendations dealing with corporate governance Currently BAE Systems has faced problems facing its shareholders due to its criticism received on corporate governance and ethical conduct (Daily Mail 2010). As a recommendation, BAE should follow the financial reporting council (FRC) proposition on putting greater emphasis on the principles of UK’s corporate governance code, and apply the annual shareholder re-election. This would have a significant impact a wider engagement for the company’s shareholders. A necessary midyear review process should be conducted by an external facilitator to help in the evaluation process, metrics such as board effectiveness by dealing with issues in a timely manner should be considered. Having a wide and complex set of operations, information dissemination in a timely manner is very important to ensure appropriate decisions. Key performance Indicators should be the guideline across all the managing directors and their performance will be evaluated by comparison of their actual results from targets. 5) Critical evaluation of the model used Using financial models can provide actual figures for projection analysis that can create awareness for a company’s board of directors (Palmgren 1999). The Residual Income Model can be used as a valuation of the firm, based on its total book value and residual income (Financial Education 2010). During recent years it has been used as the primary valuation method due to its measurement of internal corporate performance and feasible estimation of the intrinsic value of common stock. The difference between a residual income and traditional financial statements are for the latter its purpose of preparation is to reflect earnings available to its owners, charges incurred for equity capital and dividends are not included, while the former adds the component of cost of equity capital for its calculation (Dodd 2001). Another limitation of the traditional income model is that it may not actually reflect the value of certain business activities. Such in our case with BAE system’s numerous acquisitions, on its accounting model it seems that BAE have significantly improved profitability on its strategies, however this could not be all false, but using the residual income approach some of the acquisitions doesn’t have the kind of effect, due again to the cost of equity capital (Bild, Guest,Cosh and Runsten 2002). 6) Conclusion BAE Systems being in an industry where intense competition exists should apply necessary strategies to ensure profitability in the coming years both for continuous operation and maximizing shareholders equity. Their current strategies for acquisition may have benefited them but the cost of violation of regulation procedures have definitely impacted over all operations. Using financial models like the residual income model, the board of directors can see, what would happen if they continue with their current policies on corporate strategy and governance, it has shown a negative impact on present firm’s value, thus the recommendation for consideration of a new effective strategy to be implemented across the board. List of References BAE Systems (2010) Annual Report 2009.[PDF] Available from http://bae-systems-investor- relations-2009. production. investis. com/results-reports-and-presentations. aspx [09 May 2010]. Brylawski, M. (1995). Developing a circumstance-based Innovation Strategy for a Midsized Aerospace Manufacturer:Fostering Entreprenuership, Opening Boundaries and Seeding Disruption. [PDF] Available from http://dspace. mit. edu/bitstream/handle/1721. 1/34748/56606619. pdf? sequence=1. [09 May 2010]. Bild, M. , Guest,P. , Cosh, A. , and Runsten, M. (2002). Do takeovers create value? A residual income approach on UK data. [PDF] Daily Mail (2010). BAE flies into storm with shareholders. Available from http://www. thisismoney. co. uk/markets/article. html? in_article_id=503922in_page_id= 3. [09 May 2010]. Dodd, J. (2001). Operating income, residual income and EVA: Which metric is more value relevant. Journal of Managerial Issues. Financial Education (2010). The Residual Income Valuation Model. Available from http://financial-education. com/2007/10/30/the-residual-income-valuation-model/ [09 May 2010]. Financial Times (2010). FT Market Data BAE Systems. Available from http://markets. ft. com/ft/tearsheets/analysis. asp? s=BA.:LSE. [09 May 2010]. Nation’s Business (1996). 10 ways to increase your firms value Net Worth. Available from http://findarticles. com/p/articles/mi_m1154/is_n11_v84/ai_18818240/. [09 May 2010]. Palmgren, B. (1999). The Need for Financial Models. Available from http://www. ercim. eu/publication/Ercim_News/enw38/palmgren. html. [09 May 2010]. Smith, T Frost,L. (2008). BAE Buys Tenix Defence to Double Sales in Australia. [Online] Available from http://www. bloomberg. com/apps/news? sid=aV7YIxXunPvspid=20601087 [09 May 2010]. Wachman, R. (2010). BAE Systems hit by defence cuts. Available from http://www. guardian. co. uk/business/2010/mar/22/bae-systems-defence-spending-cuts [09 May 2010]. West, K (2010). BAE goes top of the global arms league. [Online] Available from http://www. thisismoney. co. uk/news/article. html? in_article_id=502716in_page_id=2 [09 May 2010]. Appendices Appendix 1 Five year Summary Income Statement of BAE Systems. Source: retrieved 9 May 2010 Extract from Annual Report 2009 http://bae-systems-investor-relations-2009. production. investis. com/financial-information/five-year-summary. aspx Appendix 2 Group Income Statement. Source: Extract from Annual Report 2009 for the year ended 31 December. Retrieved 10 May 2010 http://bae-systems-investor-relations-2009. production. investis. com/financial-information/group-income-statement. aspx Notes 2009 ?m Total 2009 ?m 2008 ?m Total 2008 ?m Continuing operations Combined sales of Group and equity accounted investments 3 22,415 18,543 Less: share of sales of equity accounted investments 3 (2,041) (1,872) Revenue 3 20,374 16,671 Operating costs 4 (20,060) (15,386) Other income 5 465 415 Group operating profit excluding amortisation and impairment of intangible assets 2,038 2,003. Amortisation 11 (286) (247) Impairment 11 (973) (56) Group operating profit 779 1,700 Share of results of equity accounted investments excluding finance costs and taxation expense 233 132 Financial (expense)/income of equity accounted investments 6 (7) 44 Taxation expense of equity accounted investments (23) (37) Share of results of equity accounted investments 14 203 139 Goodwill impairment in respect of equity accounted investments 14 (121) Contribution from equity accounted investments 203 18 EBITA1 excluding non-recurring items 2,220 1,897 Profit on disposal of businesses2 9. 68 238 Pension curtailment gains2 261 Regulatory penalties3 (278) EBITA1 2,271 2,135 Amortisation (286) (247) Impairments (973) (177) Financial (expense)/income of equity accounted investments 6 (7) 44 Taxation expense of equity accounted investments (23) (37) Operating profit 3 982 1,718 Finance costs 6 Financial income 1,573 3,380 Financial expense (2,273) (2,727) (700) 653 Profit before taxation 282 2,371 Taxation expense 8 UK taxation (105) (351) Overseas taxation (222) (252) (327) (603) (Loss)/profit for the year (45) 1,768 Attributable to: BAE Systems shareholders (67) 1,745 Minority interests 22 23 (45) 1,768 (Loss)/earnings per share 10 Basic (loss)/earnings per share (1. 9)p 49. 6p Diluted (loss)/earnings per share (1. 9)p 49. 5p Appendix 3 Group Balance Sheet as at 31 December. Source: Extract from Annual Report 2009. Retrieved 10 May 2010 http://bae-systems-investor-relations-2009. production. investis. com/financial-information/balance-sheet. aspx Notes 2009 ?m 2008 Restated ?m Fixed assets Tangible assets 2 4 5 Investments in subsidiary undertakings 3 7,070 5,663 7,074 5,668 Current assets Debtors due within one year 4. 7,468 9,339 Debtors due after one year 4 14 3 Other financial assets due within one year 262 703 Other financial assets due after one year 5 179 478 Cash at bank and in hand 5 2,804 1,988 10,725 12,511 Liabilities falling due within one year Loans and overdrafts 6 (37) (49) Creditors 7 (14,490) (12,873) Other financial liabilities 5 (255) (598) (14,782) (13,520) Net current liabilities (4,057) (1,009) Total assets less current liabilities 3,017 4,659 Liabilities falling due after one year Loans 6 (233) (258) Creditors 7 (3) (6) Other financial liabilities 5 (327) (574). (563) (838) Provisions for liabilities and charges 8 (61) (120) (2,393) (3,701) Capital and reserves Issued share capital 10 90 90 Share premium account 12 1,243 1,238 Statutory reserve 13 202 202 Other reserves 12 119 164 Profit and loss account 12 739 2,007 Equity shareholders’ funds 2,393 3,701 Appendix 4 Group Cash Flow for the year ended 31 December. Source: Extract from Annual Report 2009. Retrieved 10 May 2010 http://bae-systems-investor-relations-2009. production. investis. com/financial-information/cash-flow. aspx Notes 2009 ?m 2008 ?m (Loss)/profit for the year (45) 1,768. Taxation expense 327 603 Share of results of equity accounted investments 14 (203) (139) Net finance costs 700 (653) Depreciation, amortisation and impairment 1,600 755 Gain on disposal of property, plant and equipment 4, 5 (17) (33) Gain on disposal of investment property 5 – (5) Gain on disposal of businesses 5 (68) (238) Cost of equity–settled employee share schemes 52 51 Movements in provisions 52 (115) Decrease in liabilities for retirement benefit obligations (657) (272) Decrease/(increase) in working capital: Inventories 6 46 Trade and other receivables 52 (5). Trade and other payables 433 246 Cash inflow from operating activities 2,232 2,009 Interest paid (250) (249) Interest element of finance lease rental payments (2) (5) Taxation paid (350) (261) Net cash inflow from operating activities 1,630 1,494 Dividends received from equity accounted investments 14 77 89 Interest received 66 156 Purchases of property, plant and equipment (483) (520) Purchases of intangible assets (42) (32) Proceeds from sale of property, plant and equipment 36 44 Proceeds from sale of investment property – 5 Purchase of subsidiary undertakings 27, 29 (357) (1,078). Cash and cash equivalents acquired with subsidiary undertakings 27 33 2 Purchase of equity accounted investments 27 (1) (12) Proceeds from sale of subsidiary undertakings 9 2 131 Cash and cash equivalents disposed of with subsidiary undertakings – (60) Proceeds from sale of equity accounted investments 9 70 16 Net proceeds from (purchase)/sale of other deposits/securities (209) 164 Net cash outflow from investing activities (808) (1,095) Capital element of finance lease rental payments (13) (18) Proceeds from issue of share capital 5 16 Purchase of own shares (25) (43) Equity dividends paid 28. (534) (478) Dividends paid to minority interests (5) (11) Cash inflow/(outflow) from matured derivative financial instruments 36 (440) Cash (outflow)/inflow from movement in cash collateral (11) 106 Cash inflow from loans 920 Cash outflow from repayment of loans (133) (306) Net cash inflow/(outflow) from financing activities 240 (1,174) Net increase/(decrease) in cash and cash equivalents 1,062 (775) Cash and cash equivalents at 1 January 2,605 3,046 Effect of foreign exchange rate changes on cash and cash equivalents 11 334 Cash and cash equivalents at 31 December 3,678 2,605.

Opposing Viewpoints in Kurt Vonneguts Slaughterhouse-Five Essay

Opposing Viewpoints in Kurt Vonnegut's Slaughterhouse-Five The Allied firebombing of Dresden has been called the worst and most unnecessary air raid in military history. The German city was home to no military bases or stations, but on February 13, 1945, death rained down from the air on nearly 135,000 people, most of them civilians, compared to the 74,000 deaths caused by the atom bomb dropped on Hiroshima (Novels 270). Kurt Vonnegut, Jr. was a Allied prisoner of war during this raid, hidden underground in an abandoned slaughterhouse. After surviving the war, Vonnegut came home to the United States to become an author. Though he had published several books before Slaughterhouse Five, this book became his most famous and best-selling book. Slaughterhouse Five was Vonnegut's breakthrough work because he finally addressed the most distressing and pivotal point in his life, the Dresden firebombing (Novels 270). Vonnegut writes in the first chapter that he was once given advice against writing an anti-war novel, because "...there would always be wars, [and] that they were as easy to stop as glaciers" (Vonnegut, Slaughterhouse 3). However, rather than writing an anti-war novel, Vonnegut writes a response to the tragedy of war through the eyes of a soldier (Novels 272). Vonnegut narrates the story of Billy Pilgrim, a soldier who went through the same experiences as Vonnegut did. Narrating the story of someone else allows Vonnegut distance and separation from the painful events at Dresden (Harris). Through Billy's story, Vonnegut introduces opposing ideas throughout his novel, creating tension between conflicting forces and philosophies. The opposing ideas in Slaughterhouse Five are differing views of time, and inco... ...s, it is the one that states war is stupid, pointless, and cruel, yet it is inevitable. Works Cited Harris, Charles B., "Time, Uncertainty, and Kurt Vonnegut Jr.: A Reading of 'Slaughterhouse Five,'" Farmington Hills: Gale Group. October, 2001. http://galenet.galegroup.com/servlet/DC/ Reed, Peter J., "Authenticity and Relevance: Kurt Vonnegut's Slaughterhouse Five," Farmington Hills: Gale Group. October, 2001. http://galenet.galegroup.com/servlet/DC/ Schatt, Stanley, Kurt Vonnegut, Jr., Farmington Hills: Gale Group. October, 2001. http://galenet.galegroup.com/servlet/DC/ "Slaughterhouse Five" Novels For Students. Vol. 3 1998 ed. Vonnegut Jr., Kurt. Fates Worse Than Death. New York: G. P. Putnam's Sons, 1991 ---, Palm Sunday. New York: Delacorte Press, 1981 ---, Slaughterhouse Five. New York: Dell Publishing, 1969

Gek1522 Essay

Ever since the advent of industrialization, there has been an increase in the emission of several greenhouse gases (GHG) mainly due to the burning of fossil fuels. Carbon dioxide emissions account for 80% of global warming of GHG emission, as compared with 57% in the 1980s (Lashof & Ahuja, 1990). Panwar, Kaushik & Kothari (2011) also states that excessive fossil fuel consumption will have adverse impacts on the environment, and increase threat of global climate change. Fortunately, more and more countries are starting to be aware of climate change, which comes as a result of the increase of emission of GHG.Therefore, various proposals to reduce emission of GHG have been drawn up to suggest possible solutions to reduce the impact of climate change. While all of these proposals are useful to reduce emission of GHG, some will be more practical and effective due to other problems, which may arise. One of these proposals includes developing more non-polluting renewable energy sources (RES ). This is a practical way to reduce the impact of climate change as it directly reduces GHG emissions. Currently, RES supply 14% of the total world energy demand (Panwar et. l. , 2011). RES includes biomass, hydropower, geothermal, solar, wind and marine energies. By harnessing energy from RES, dependence on conventional energy sources that produce GHG will be reduced. For example, solar energy is the most abundant RES and is available as both direct and indirect form. Solar energy can be used directly in solar thermal applications, or indirectly in photovoltaic systems to generate electricity. Carbon dioxide (CO2) emission mitigation potential from 1. kWp solar pump is about 2085kg from diesel-operated pumps (Panwar et. al. , 2011). Therefore, by using RES, we can directly reduce the GHG emissions by moving away from energy sources that produce GHG. This is also the most practical solution as RES are readily available and abundant all around us. What needs to be done is to build t he infrastructure required to harness RES so we can become less reliant on GHG-producing energy sources and thus reduce GHG emissions. Another such proposal involves reforestation to â€Å"soak up† more CO2.Reforestation is the next most effective solution as it also deals with removing CO2 emissions directly from the atmosphere. Trees have the ability to absorb CO2 and convert it to stable carbon â€Å"sinks† in the form of biomass stored in trunks, branches and organic matter in the soils (Moulton & Andrasko, 1990). This carbon â€Å"sequestration† is important as it removes CO2 in the atmosphere and locks it in wood that can be used for furniture and other construction applications. In addition, reforestation offers an opportunity for emission control investments (Niskanen, 1997).However, it may not be as practical as developing more non-polluting RES as reforestation requires a large area of land and not many countries will be willing to give up land space, which could potentially bring economic benefit. Also, reforestation efforts are expensive. According to Moulton and Andrasko (1990), a budget of $65 million is proposed in the USA for the President’s proposed tree-planting initiative. This huge amount coupled with limited economic benefits the country will gain from reforestation may deter governments from supporting the proposal.Thus, while reforestation provides a sink for CO2, it may not be a practical solution due to economic and land concerns. Governments must be able to prioritise the long-term environmental benefits involved to make better decisions. The next proposal involves reducing energy use by conservation. By reducing energy use by conservation, the global energy demand will be reduced, and thus less non-renewable energy sources will be burnt at power plants, reducing GHG emissions. This is another possible solution to reduce GHG emissions.For example, this can come by using solid-state lighting instead of incan descent bulbs. Government agencies have introduced policies to conserve energy usage through more efficient use of energy (Sen, Khazanov & Kishimoto, 2011). Incandescent light bulbs typically convert 5% of energy into visible light. Solid-state light-emitting semiconductors promise to offer conversion efficiencies of 50% or more (Sen et. al. , 2011). However, the success of this solution is dependent on the collective mindset of the community on a global scale.This will require time and education to encourage reduced energy use through conservation. In addition, with an increasing number of countries becoming more affluent, the global energy demand will increase. Therefore, reduction of energy use by conservation is limited to the affluence of the country, and research can then be used to develop more efficient technology to reduce energy use. This is harder to achieve, as it is more difficult to develop a culture to conserve energy, than to convince governments on reforestation.The next proposal involves adding more nuclear power plants to replace current conventional coal-burning power plants. Nuclear energy provides carbon free production of electrical energy, and produces much more energy than conventional energy sources (Grandin, Jagers & Kullander, 2010). One uranium fuel pellet contains the same amount of energy as 1,780 pounds of coal or 149 gallons of oil (Palliser, 2012). Thus, much more energy can be generated from a small amount of nuclear source. Nuclear waste is small in physical size compared to waste produced by other forms of energy (Palliser, 2012).While this provides a clean source of energy and reduces the emission of GHG, it may not be the most practical idea due to the concerns of radioactivity. Nuclear waste has to be stored in steel-lined, concrete vaults filled with water or in aboveground steel or steel-reinforced concrete containers with steel inner canisters (EPA, 2010). In addition, uranium is a nonrenewable resource that cannot be replenished on a human timescale. Fossil fuel emissions are also associated with uranium mining and enrichment process and the transport of uranium fuel to the nuclear power plant (EPA, 2010).Therefore while nuclear power plants produce zero GHG, the processes involved may still produce GHG. The radioactive risks involving the waste and storage could become another environmental problem. Hence, while adding more nuclear power plants will definitely reduce GHG emissions, it is not very practical as it will create numerous environmental problems as mentioned above. The last proposal involves removing carbon in fossil fuels before combustion and â€Å"sequestering† that carbon in underground reservoirs. This involves hydrogen production from fossil fuels that include steam reforming and water gas shift (Steinberg, 1999).In order to suppress CO2 emission from the steam reforming process, CO2 must be sequestered underground. This removes CO2 emission into the atmosphere, thereby reducing GHG emissions making it an effective solution to reduce GHG emissions. However, such a process involves higher cost and lower efficiency (Hetland, 2008) making this solution is the least practical as up to 40% of the energy is lost through â€Å"sequestering† in underground (Steinberg, 1999). Therefore the efficiency of such a solution is compromised, as it is not as efficient as conventional coal burning.In addition, by â€Å"sequestering† carbon in underground reservoirs, these reservoirs are susceptible to leaks and this gas might be released again. Also, fossil fuels are considered non-renewable energy sources and therefore such a solution is only effective so long as there are such resources. Therefore, this is the least practical and least efficient solution available. In conclusion, even though there are many solutions to reduce GHG emissions, critical analysis of each proposal is required to determine which solution is the most practical and the most e fficient, according to the local constraints and economic cost-benefit analysis.Ultimately, the onus is on governments to recognise the impact of each possible proposal, and to decide which path to take in terms of reducing GHG emissions to reduce the impact of climate change. References Environmental Protection Agency (EPA) 2010. Nuclear energy, Environmental Protection Agency. Retrieved 29/03/2013 from http://www. epa. gov/cleanenergy/energy-and-you/affect/nuclear. html Grandin, K. , Jagers, P. , Kullander, S. (2010). Nuclear energy. A Journal of the Human Environment, 39, 26-30. Hetland, J. (2008).Assessment of pre-combustion decarbonisation schemes for polygeneration from fossil fuels. Clean Technology Environmental Policy, 11, 37-48. Lashof, D. A. , Ahuja, D. R. (1990). Relative contributions of greenhouse gas emissions to global warming. Nature, 344, 529-531. Moulton, R. J. , Andrasko, K. (1990). Reforestation. EPA Journal, 16 (2), 14-16. Niskanen, A. (1997). Value of external environmental impacts of reforestation in Thailand. Ecological Economics, 26 (1998), 287-297. Palliser, J. (2012). Nuclear Energy. Science Scope January 2012, 14-18.Panwar, N. L. , Kaushik, S. C. , Kothari, S. (2011) Role of renewable energy sources in environmental protection: A review. Renewable and Sustainable Energy Reviews, 15, 1513-1524. Sen, S. , Khazanov, G. , Kishimoto, Y. (2011) Environment, renewable energy and reduced carbon emissions. Radiation Effects and Defects in Solids: Incorporating Plasma Science and Plasma Technology, 166 (10,) 834-842. Steinberg, M. (1999). Fossil Fuel decarbonisation technology for mitigating global warming. International Journal of Hydrogen Energy, 24 (8), 771-777.

Current Perspectives, Research Findings, Synthesis And...

Current Perspectives, Research Findings, Synthesis and Analysis According to Knowles (1973), self-actualization is the goal of adult education. Knowles would champion the term and use of andragogy for adults. Post-secondary higher education for adult learners is a need that can be addressed by broadening accessibility and through the use group learning. Eventually, this objective is met in 1976 by the University of Phoenix by focusing on addressing an appropriate pedagogical learning approach called collaborative; which is â€Å"viewed as a pillar of adult education† (Harasim, 2012, p. 128). An alternative approach to pedagogy and andragogy was raised by Knudson in 1980, as he proposed replacing the term with humanagogy (Holmes †¦show more content†¦An additional perspective was proposed by Davenport as he believed the two terms need not be mutually exclusive as both have value but needed to be tested empirically for validity and conceptual clarification (Holmes Abington-Cooper, 2000). â€Å"The literal and original definition of pedagogy and andragogy also can allow for both teacher-centered and learner-centered activities. Both the child leader and the adult leader may be at different times directive and nondirective, authoritative and facilitative, etc. (Davenport, 1987)† (Holmes Abington-Cooper, 2000, para. 30). Rachal was also in agreement with Davenport that the two approaches are not mutually exclusive, in addition, also not dichotomous (Holmes Abington-Cooper, 2000). According to Holmes Cooper (2000), pedagogy has little to do with children learning and is concerned more with their obedience to adhere to the instruction of the teacher (Samaroo et al., 2013). There is no concern for how adults learn or are taught. Pedagogy is an authoritarian model that assumes the â€Å"adult knows what the child needs to know† (Samaroo et al., 2013, p. 90). Another alternative perspective is of another combined approach to pedagogy and andragogy which is pedandragogy (Samaroo et al., 2013). Pedandragogy while a main proponent is self-directedness, it calls for the creation and development of learning tools to promote self-engagement; this model associates student engagement