Essay History of Propaganda in Art - 861 Words

Throughout history, the purpose of art is dedicated to anything from decorative embellishments to religious tributes. However, art was also used by rulers and other powerful figures for propagandistic reasons as well. This can be seen through a survey of art pieces ranging from the Hellenistic period to the Ottonian period. At the beginning of the Hellenistic period Alexander the Great had just passed away, leaving his vast empire fragmented amongst many individual leaders. Many of the Greeks left the Balkan Peninsula to seek commission abroad, thus forsaking their identity and ties to the old Greek city states. The result was a greater focus on the individual, a psychological sense of isolation, as well as a mixture of foreign and†¦show more content†¦The body of the chieftain is particularly exaggerated creating a forceful rippling in the musculature, which is a testament to the Hellenistic Baroque achievement of energetic movement and intense psychological involvement. T he Greeks were largely impressed with the courage and fighting abilities of the Gauls, which had reminded them of their defeat of the Persians. Ultimately, the purpose of glorifying their enemy was to convey the message that the defeat of such an impressive enemy made the Greeks’ victory and power even greater. During the Roman Imperial era, under the rule of Augustus, the idea that the emperor is the principate, or the foremost citizen of the state chosen by the gods to rule, is adopted. This idea is exemplified in the sculpture of Augustus of Prima Porta. Here, Augustus is portrayed in a classicizing manner and a typical Greek contrapposto stance which serves to liken the reign of Augustus to that of the golden age of Classical Athens. This style which had been used to portray great heroes during the Greek Classical era also serves to liken Augustus to the Greek heroes who were idealistically athletic and strong (desirable qualities in a leader). In addition the figures on his armor are images of Greco-Roman gods, who are giving their approval of Augustus’s recent territorial acquirements. Furthermore,Show MoreRelatedWorld War I Was Not Inevitable1681 Words   |  7 Pages such as its art. Not only were new movements created, but also new styles of existing forms of art resulted from the war. Because of the different ways that art developed both on and off of the battlefield during the Great War, WWI is one of the most influential wars on the development of art in the twentieth century. Art in World War I was observed in many forms, from photography to art movements on the home fronts of many countries. What many people did not realize is that art was also usedRead MoreRoman Art : A Picture Book By Christine Alexander Essay1497 Words   |  6 PagesThe Roman Republic is famous for many events, people, and histories. 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Charles Marius Barbeau’s Ethnography and the Canadian...

Charles Marius Barbeau’s Ethnography and the Canadian Folklore Born on 5 March 1883, in Sainte-Marie-de-Bauce, Charles Marius Barbeau is widely seen as the first Canadian educated anthropologist. He graduated from Università © Laval in Quà ©bec, from his studies of law, in 1907; he never practised law. Upon graduating, Marius was awarded – as the first French-Canadian recipient – the Cecil Rhodes scholarship which allowed him to study at Oxford University where he was introduced to the emerging field of Anthropology.  « Je [voulais] savoir comment l’homme a à ©tà © crà ©Ãƒ ©  » he later explained to Marcel Rioux. (Benoà ®t 1959a) During his stay in Europe, Marius also attended classes at the Sorbonne’s École des Hautes Études and at the École†¦show more content†¦But his sometimes contradicting statements require a more precise study, so we will simply present his main positions, and state some of the opposing points without thoroughly analysing them. Marcel Mauss – whose classes Barbeau attended – concludes in a 1902 document on ethnographic method:  « En somme, rester cantonnà ©s sur le terrain des faits religieux et sociaux, ne rechercher que les causes immà ©diatement dà ©terminantes, renoncer à   des thà ©ories gà ©nà ©rales qui sont peu instructives ou qui nexpliquent que la possibilità © des faits, ce sont là   plutà ´t des actes de prudence mà ©thodique que des nà ©gations scientifiques.  » (Mauss 1902) In the same line of thought, Franz Boas – the famous American anthropologist, also a contemporary of Barbeau – stresses the need to focus on collecting data. He even criticizes social and anthropological theory makers. (See Boas 1920) Barbeau was, at the beginning of his career, much influenced by these ideas. He collected data on many aboriginal societies – mainly of the Northwest Coast, of Quà ©bec and of the North of the USA – and later, at the suggestion of Bo as, he started recording folk songs, legends and myths from French-Canadians. But we will see that Barbeau did advance some quite controversial theories later in his career. This collecting of folkloric data opened Barbeau’s eyes to the need to salvage the cultures of Native and French Canadians alike.  « Fortement inspirà © par l’ethnologie de la

Financial analysis of BG and Shell Free Essays

INTRODUCTION According to the requirements stipulated in this assignment, this essay would be analysing two companies: BG group Plc and Royal Dutch Shell Plc. Both companies are oil and gas producers and they operate in the integrated natural oil and gas industry. They are involved in the exploration, development, production, and marketing of gas and oil. We will write a custom essay sample on Financial analysis of BG and Shell or any similar topic only for you Order Now They are both quoted in the oil and gas industry sector of the FTSE 100 index. a. Background of the Oil and Gas Industry Over the last 50 years, the oil and gas industry has been by far the most successful industry in Britain; providing employment to 380,000 people, adding ?4 billion a year to balance payments and a massive investment over the last 25 years by ?150 billion. This sector has reinforced the British economy by supplying the energy and necessary chemicals for its transport industry and homes. Additionally, since the 1970s, the oil and gas industry generated ?150 billion in taxes and valuable export revenues. b. Royal Dutch Shell Royal Dutch Shell is a Multinational corporation consisting of two companies: Royal Dutch Petroleum Co., of Hague, Netherland, and Shell Transport and Trading Corporation PLC of London, England. These two companies commenced as rivals. In early 1897, Marcus Samuel took over his father’s business and began selling kerosene. After this, he shifted to the oil industry in East Asia and created Shell Transport and Trading Co., Ltd. At same time, in 1890 the Royal Dutch Co was established by a group of Dutch businessmen (Mallin, 2006). The aim of the company was to explore the Oil Wells in the Dutch Indies. To achieve these targets, in 1892 it constructed the first refinery in Sumatra, Indonesia. It was not until 1907 when the two firms merged to become the Royal Dutch Shell Group. The company has become known in different countries such as Egypt, Mexico, Iraq, Romania, Russia and Venezuela. Shell emerged as the largest energy company and the second largest company globally regardin g its revenues. The main interests of this company are liquefied natural gas and petrochemicals, aviation, shipping, and automotive fuels. c. BG group Plc. BG Group plc is one of the most successful companies in the FTSE 100 index. It operates in the integrated natural oil and gas market and engages in the exploration, development, production, and marketing of gas and oil. The company’s headquarters is in Thames Valley Park in Reading, Berkshire, United Kingdom. It is an international firm which operates in 25 countries across the world and produces 680 000 barrels of oil per day (Jahn et al., 2008). The company was founded in 1997 when British Gas plc divested Centrica and became BG plc, which was reorganised in 1999 as BG Group plc (Bryant, 2003). Question 1: Analyse the liquidity, profitability and use of short term assets and liabilities of the two companies you have chosen and compare the ratios with the sector average and explain how the two shares have performed compared with the FTSE during the last financial year. In order to assess the liquidity situation of both companies along with profitability condition, different liquidity ratios have been analysed based on the companies’ annual reports 2010 and Yahoo 2011 financial website for the year ended 2010. The liquidity ratios of BG group and Royal Dutch Shell are illustrated in Figures 1 and 2 (for full tables see the Appendix). Royal Dutch Shell has maintained relatively stable current and quick ratios. Current ratio illustrates whether or not a company maintains enough resources to pay back its debts over the coming financial year (Watson, 2006). It is determined by the ratio of net current assets to net current liabilities. For Shell company the ratio increased by 7.45% over the 5 years period. Furthermore, the current ratios of the last five years exceeded one, which proved that Royal Dutch Shell would be able to honour all its short-term liabilities by its current assets without the need to utilise other sources; such as issuing shares or using new debts. Therefore, this gives clear evidence that the firm’s liquidity situation is in excellent health. The quick ratio represents the ability of a firm to utilise its cash/assets to cover its current liabilities instantaneously , which is calculated as a ratio of total assets to total liabilities. This has fallen by 8.87% over the past five years to 1.8669 in 2010. In 2010, the current and quick ratios of Royal Dutch Shell were 1.1227 and 1.8669. These are below the average ratios of the company over last five years: 1.15694 and 1.88726 respectively. This ideally shows that the liquidity of the company has been slightly decreasing in recent years. Figure (1): Current and Quick ratios of Royal Dutch shell over the last 5 years On the other hand, the quick ratio of BG group has also decreased over the last five years; it began with 2.13 in the first period and decreased to reach 2.0389 in 2010. Moreover, the current ratio also diminished from 1.4684 to 1.1214. One reason could be that the reduction in the firm’s liquidity is as a result of the major issues that have affected the oil and gas industry recently. For instance, the oil spill in Mexico, and the massive impact on BP and other oil companies caused cost of drilling and exploring call in certain regions to rise. Figure (2): Current and Quick ratios of BG group over the last 5 years According to Watson (2006) having a liquidity ratio over one is not enough to assess whether a firm would have difficulties to confront any short term risk arising from the liabilities and, for this reason, the company’s current ratio should be compared to the overall industry or sector average ratio. Hence, after comparing the current ratios of both companies to the average of eight leading companies in major integrated oil and gas industry (see Appendix), the two companies hold almost the same amount of current ratio (1.12). However, they were below the average ratio of the industry by 8%. In a conventional industry, if the current ratio is over one then it is a good indicator. However, in major integrated oil and gas industries the average ratio is 1.2 which imposes on the two companies to adjust their ratio, or else they will face increasing threat of being cash strapped if they are not able to increase profitability, cash flow or reduce liabilities. The profitability ratios of Royal Dutch Shell Plc and BG group Plc were calculated based on its ROE, ROA, profit, operating and gross profit margin. These were all compared to the average industry in order to draw an accurate representation of the companies’ financial situation. For both companies, Return on Equity and ROA exceeded the average sector by 1.63 and 2.62 for BG group Plc, and 1.7, 0.33 for Royal Dutch Shell Plc respectively. However, BG group Plc overperformed Royal Dutch Shell Plc and industry regarding the profit and operating marginal, but both companies were overtaken by the industry gross profit ratio. Profitability ratios attempt to determine a company’s ability to use and control its assets and expenses in a rational manner to generate acceptable rate of return (Buckley, 2004). Based on the ratios calculated, both companies have been able to improve their profitability sufficiently over the average sector ratios. In summary, both companies are liquid firms and have been able to withstand the effects of the oil spill and oil price increases through effective cash management. They have constant and above average liquidity ratios, positive networking capital and acceptable profitability ratios. Figure (3): Percentage change in stock price for BG group, Royal Dutch Shell and FTSE 100 index Key: BG.L (blue): BG group Plc; ^FTSE (red): FTSE 100 index; RDSA.L (green): Royal Dutch Shell plc. Source: Yahoo Finance (2011) As illustrated in Figure (3), the stock market prices of BG group and Royal Dutch Shell fell during the middle of 2010, specifically in early May. The oil spill by BP in Mexico had hugely deteriorated the market value of both stocks. However, the stocks of both companies tended to increase after the oil spill issue was solved. Moreover, the stocks of both companies and FTSE 100 seem to move in same manner to reach their peak by the end of 2010. In the beginning of 2010, both companies and FTSE100 stocks were moving in very close way, but the Mexico’s oil disaster caused investors to walk away from investing on oil companies’ shares. By the end of August 2010 stocks of both companies started to rise, along with FTSE 100, and by the end of 2010 all stocks of both companies and FTSE 100 reappeared to move in the same way but with higher values. Question 2: Critically evaluate each firm’s choice of capital structure and how their method of financing has affected shareholder wealth and explain whether or not it is possible for a company to have an optimum capital structure. The capital structure of a company, as defined by Fridson and Alvarez (2002), as the ratio to which the company’s operating, financing or investing activities are financed through debt and equity. It is simply a ratio of the company’s debt to its equity, otherwise known as gearing or leverage. The capital structure determines the long term functioning capacity and also its attractiveness to banks and investors (Watson and Head, 2006). Consequently, the capital structure is an indicator of the company’s financial fitness. As illustrated in figure 4 below, Royal Dutch Shell’s capital structure is based mostly on equity. Its gearing has fallen to over 85% in 2010, compared to 87% in 2009. This is due to falling profits. However, the amount of equity is five and half times the amount of debt. Therefore it represents a low geared company that relies on equity to finance a vast majority of its activities. Figure 4: Comparison of the capital structure for Royal Dutch Shell between 2009 and 2010 A company that is considered as low-leveraged has complete freedom in its operations without the need to be concerned about issues that debt may have due to inaccessibility to future credit. Figure 5: Capital structure of BG group Plc between 2009 and 2010. Examining BG group Plc’s capital structure above shows that its gearing has increased by 4.8% to move up to 25.2% in 2010. The balance sheet therefore shows that it has changed its capital structure by increasing levels of debt from $19.212 billion to $23.615 billion, as well as also increasing shareholder equity from about $23.23 billion to over $26.684 billion in 2010. However, the debt increase exceeded the equity increase, thus resulting in a debt/equity ratio increased (BG group Plc, 2010). Furthermore, analyses of the company’s financial annual report illustrates that it has issued ˆ750 million and ?750 million of bonds maturing in 2019 and 2025 respectively. Both of these are under the euro medium term note programme, and $350 million and $650 million of bonds maturing in 2015 and 2020 respectively could be taken as strong evidence that the company has shifted its system of rising money from equity to debt by issuing bonds. Therefore, measuring BG group’s capital structure based on its ability to repay future debts may be difficult due to the massive bond issues, which considerably exceeds the net amount raised from equity. Judging by the current credit markets in which loan provisions are scarce and conditions for getting one are hard, BG would have slightly more difficulties than Royal Dutch Shell in obtaining working capital or long-term loans. Though its capital structure does look healthy from an external point of view, comparing the average sector debt to equity ratio which was 37.45% in 2010, both companies are in excellent positions as both of them are far away from any risk of interest rate volatility. Therefore, a good conclusion could be drawn about the ability of both companies to meet interest repayments, and to operate in an efficiently manner to expand their business as a result of their relatively low liabilities. As mentioned, Fridson and Alvarez (2002) state that capital structure refers to the manner in which an organisation finances its assets; this could be either by combination of equity, debt, or hybrid securities. The relationship between capital structure and company value has fuelled the researcher’s interests to conduct more research on this area. According to literature, the debate has concentred on whether there is an optimal capital structure for a firm or the proportion of debt used in constructing the capital is irrelevant to the firm’s value. The Modigliani-Miller theorem states that under a certain market characteristics such as: price random walk, in the absence of taxes, agency costs, asymmetric information, and bankruptcy and in an efficient market, the proportion of debt which has been used by company will not affect its value moreover it does not matter how the firm is financed (issuing stocks or selling debt). The Modigliani-Miller theorem is generally called the â€Å"capital structure irrelevance principle†(Hatfield et al., 1994). The aim of this theory is to establish capital structure which balances the risk of bankruptcy with the tax savings of debt. Therefore, it would provide better returns to shareholders than they would receive from an all-equity firm. Despite its theoretical appeal and all efforts behind it, academics and practitioners in financial management have not found the optimal capital structure yet. The only prescription that could be achieved is to satisfy short-term goals. The main flaws of this idea are that it fails to consider either the complexities of the competitive environment, or the long-term survival needs of the organization. According to Welc (2008): â€Å"The fact that an optimal capital structure has not been found is an indication of some flaw in the logic. We believe that the original question was framed incorrectly. Rather than: What is an optimal mix of debt and equity that will maximize shareholder wealth; it should have been: Under what circumstances should leverage be used to maximize shareholder wealthWhyBecause debt and equity have profound long-term implications for corporate governance that far exceed the exigencies of the moment.† Question 3 Explain whether or not the share price on the 5th of November represents fair valuefor would be investor and explain whether or not the investor ratios give a guide as to the future share price. Critically evaluate the arguments for and against the efficient market hypothesis and explain how the npv criteria relate to investing in shares. The term, â€Å"market efficiency†, has always been a fundamental concept in the financial literature. It describes the decisive impact of information on the price of financial assets and economists refer to it as operational efficiency, highlighting the way resources are utilised to ease the workings mechanisms of the market. However, the most common definition was provided by Fama (1970) who stated that at any given time, securities’ price on a particular stock market fully reflects all the available information on this stock market. Hence, according to the efficiency market hypothesis (EMH), all investors have access to the same information that is already available on the market; therefore, no advantage is taken from private or inside dealing information. In other words, market efficiency reflects the impact of changes in information about a given security on its price. Favourable information is expected to result in an immediate increase in a security price while u nfavourable information will have the opposite effect. The efficient market hypothesis is linked with the term â€Å"random walk† which has been used in the financial literature to refer to a price series where all changes in the prices reflect a random change, regardless of previous prices. This concept emerged from the works of Kendall (1953) and Roberts (1959) where, after analysing the UK stock and commodity prices series and the US stock market, they found clear evidence that the prices change randomly. The logic behind the random walk concept is that if the information is instantly reflected in stock prices, then the day after any price change would only reflect the news of that day and will be independent of the price change of previous day. According to the unpredictability of the news, the price changes must therefore be unpredictable and random. Hence, this statement implies that the investor would achieve the same result of buying and selling securities by himself as by the experts. It was in the early years of the twenty-first century when many financial economists and statisticians started doubting that stock prices could be accurately predicted by emphasising the psychological and behavioural character of stock price determination. Moreover, these financial experts believed that future stock prices can only be slightly predictable based on the patterns of past stock prices and certain fundamental valuation metrics. However, some economists exaggerated by stating that these predictable patterns would allow investors to reap benefits from reducing risk and increasing the levels of return of their securities. In order to assess whether the price of share for both companies fairly reflects the information available in the market, at 5th November 2010, a comparison was provided for the both stocks one week before and after that day (the result depicts in figure 5): Table (1): stock prices of BG group and Royal Dutch Shell Stock 1st November 2010 5th November 2010 8th November 2010 Closing price Day’s change Closing price Day’s change Closing price Day’s change BG group ?12.11 -0.05 ?12.9 -0.04 ?12.7 -0.14 Royal Dutch Shell ?20.16 +0.17 ?20.44 -0.10 ?20.26 -0.18 Source: Financial Times 2011 It is clear from table (1) that over the period of one week before and after 5th November 2010, the prices of both companies’ stock have moved relatively in stable manner. Moreover, regarding the available public information at that point, the prices of the stocks fully and fairly reflected all the information and data that was available which confirms that the UK stock market is an efficient market where all the past and available information is already reflected on its prices. As the UK stock market is a developed market, the market is meant to be efficient. Therefore stock prices are expected to reflect all past and public information. So when investors invest money on BG group or Royal Dutch Shell stocks, they would obviously take its past performance into account. As it has been found in the previous question, both companies have outperformed the average industry in term of ROE, ROA and book value per share (see table (2) in appendix) which should ideally encourage prospective investors to invest in those companies. This would make their stock more attractive to investors. One of the most commonly used techniques in finance is the Net Present Value (NPV). The NPV represents the expected change in the value of the firm in current time if a project is accepted. NPV adopts the time value of money principle in calculating all investments, which depicts that the cash flow on an investment is discounted based on the cost of capital, which decreases over the period in which the project is active (Watson and Head, 2006). Under the efficient market hypothesis EMH assumptions, the price of a random share in the market has to be allocated on the Security Market Line (SML) or Capital Market Line (CML), therefore the share prices is consistent with share asset market values (intrinsic values) so theoretically it is meaningless to conduct any earned value analysis â€Å"EVA† (NPV and investors ratios). Share price allocated on the SML/CML by definition will have net present value NPV equals to zero and cost of capital equals to the internal rate of return, in which any evaluation of this measurements would be useless because EVA must equals zero. Since NPV measures the present value of any future cash flows, in an EMH world, NPV attempting to calculate a measurement which has already been reflected on the share price. Arbitrage theory ensure that any abnormal profit should not exist or occur, if the earned value analysis EVA were to be observed, it should occur in random value or statistically non-s ignificant and the positive earned value analysis should be offset by negative earned value analysis (Chen, 2001). Furthermore, in an efficient market world it is unlikely to earn excess returns consistently. Thus within the logic of this theory EMH, earned value analysis which consists of calculating the investors’ ratios and NPV is a fiction and useless. In conclusion, the price of the both companies appears to be fully and fairly reflected in all the data and available information, such as investor’s ratio (ROE, ROA and the positive NPV value). Therefore, investors cannot beat the market price under the efficient market hypothesis assumption even though the investor ratios and NPV show the attractiveness of the stock because the price of share is already reflect all the past information (ratios and NPV) Bibliography BRYANT, L. 2003. Relative value relevance of the successful efforts and full cost accounting methods in the oil and gas industry. Review of accounting studies, 8, 5. BUCKLEY, A. 2004. Multinational Finance, Pearson Education. CHEN, S. A. J. L. D. 2001. Operating Income, Residual Income and EVA: Which Metric is More Value Relevant. Journal of Managerial 65-86. CAPITAL STRUCTURE: THE EFFECT OF FIRM AND INDUSTRY DEBT RATIOS ON MARKET VALU. Financial And Strategic Decision, 7. FRIDSON, M. S., AND ALVAREZ, F. 2002. Financial statement analysis: a practitioner’s guide, John Wiley and Sons. FAMA, E. F. 1970. Efficient capital markets: A review of theory and empirical work. The journal of finance, 25, 383. HATFIELD, G. B., , L. T. W. C. , A. W. N. D., III 1994. THE DETERMINATION OF OPTIMAL HAUSHALTER, G. D. 2000. Financing Policy, Basis Risk, and Corporate Hedging: Evidence from Oil and Gas Producers. The Journal of Finance, 55, 107-152. HEMINGWAY, R. W. 1971. Law of oil and gas. KENDALL, M. 1953. The Analysis of Economic Time Series. Journal of the Royal Statistical Society, Series A, pp. 11-25. JAHN, F., COOK, M. GRAHAM, M. 2008. Hydrocarbon exploration and production, Elsevier. MALLIN, C. A. 2006. International corporate governance: a case study approach, Edward Elgar Pub. MONEY, C. 2011. A Time Warner Company ALL RIGHTS RESERVED [Online]. Cable News Network. [Accessed 29/04/2011 2011]. ROBERTS, H. 1959. Stock Market `Patterns’ and Financial Analysis: Methodological Suggestions. Journal of Finance, 44, pp. 1-10. UNGERER, P., TAVITIAN, B. BOUTIN, A. 2005. Applications of molecular simulation in the oil and gas industry: Monte Carlo methods, Editions Technip. WATSON, D., AND HEAD, A. 2006. Corporate Finance: Principles Practice, Pearson Education. WELC, I. 2008. Common Flaws in Empirical Capital Structure Research. Brown University and NBER. Appendix Table (2): Represents the financial ratios of the 8 companies in the industry BP Plc (BP.L) Petroleo Brasileiro SA Petrobras (APBR.BA) Exxon Mobil Corporation (XOM) Royal Dutch Shell PLC BG Group PLC (BG.L) Total SA (TTA.L) ConocoPhillips (COP) Encana Corporation (ECA) average industry Profit Margin -1.25% 16.50% 8.89% 5.47% 19.52% 7.53% 6.46% 1.24% 8.05% Operating Margin -4.58% 22.21% 12.01% 7.48% 34.11% 14.19% 7.99% 6.11% 12.44% Return on Equity: -3.36% 15.05% 23.43% 14.22% 14.15% 18.83% 17.34% 0.50% 12.52% Return on Assets -3.35% 6.80% 9.60% 5.60% 7.89% 9.18% 5.69% 0.78% 5.27% Current Ratio 1.16 1.88 0.94 1.12 1.12 1.42 1.26 0.67 1.20 Total Debt/Equity 47.28 38.01 9.83 29.60 36.37 49.69 41.39 47.41 37.45 Revenue Per Share 95.02 27.51 70.13 120.03 25.39 62.86 118.81 9.49 66.16 Gross Profit Margin 16.46 53.80 43.63 13.53% 25.39% 29.26% 29.74% 88.84% 38% Book Value Per Share 30.33 29.95 29.49 48.10 38.87 27.00 47.92 22.97 34.33 Total Cash Per Share 6.42 5.50 1.58 4.37 3.74 6.88 7.91 1.10 4.69 Table (3): Represents the liquidity ratios of BG group and Royal Dutch Shell over last 5 years Ratios Company 2010 2009 2008 2007 2006 Quick ratio Royal Dutch Shell 1.8669 1.8967 1.8393 1.8778 1.9556 BG group 2.13 2.2091 2.0637 1.9159 2.0389 Current ratio Royal Dutch Shell 1.1227 1.1376 1.1046 1.2226 1.1972 BG group 1.1214 1.10125 1.0542 1.3041 1.4684 Net working capital Royal Dutch Shell 12342 11668 11041 21013 15137 BG group 1079 104 506 2351 2584 Net profit Royal Dutch Shell 20127 12518 26277 31331 25442 BG group 3532 3462 5907 3460 3198 Figure (5): The Net profit of the two companies Figure (6): Net working capital of the two companies Table (4): The financial ratios of the two companies in 2010 Financial ratios Formula BG Shell Profitability ratio Tax Burden Net Profit/Pre-tax Profit = 3500/5730 = 61.08% = 20474/35344 = 57.93% Interest Burden Pre-tax/EBIT = 5730/5562 = 103.02% = 35344/36340 = 97.26% Margin EBIT/Sales = 5562/17166 = 32.40% = 36340/368056 = 9.87% Turnover Sales/assets = 17166/50299 = 34.13% = 368056/322560 = 114.10% Leverage Assets/Equity = 50299/26684 = 188.50% = 322560/149780 = 215.36% ROE Net Profit/Equity = 3500/26684 = 13.12% = 20474/149780 = 13.67% Return on asset ROA Net Income / total asset = 3500/50299 = 6.96% =20474/322560 = 6.35% Net gearing Net debt / equity = 23615/26684 = 88.50% = 172780/149780 = 115.36% Basic earning power ratio EBIT / Total asset = 5562/50299 = 11.06% = 36340/322560 = 11.27% Liquidity ratio Current ratio Current assets / current liabilities = 9965/886 = 112.14% = 112894/100552 = 112.27% How to cite Financial analysis of BG and Shell, Essay examples

Effects of Unethical Behavior free essay sample

There are several situations that can unethical behaviors and practices. In 2002 the Sarbanes-Oxley Act was made law to stop unethical situations that where taken place in many companies, big or small when a company practice unethical practices, there can be lots of damage to the company. In many instances law has at best led to a culture of compliance rather than a culture of integrity. Even more disappointing is that too often the very activities Sarbanes Oxley was designed to prevent companies to slip past regulators until it is too late and the damage incurred (Hazels, B. (2010). The best example of an unethical accounting situation is when a company falsifies their earning reports to make the company appear to be more profitable. This is a clear case of accounting fraud and is a false report given to the stockholders, a real lie. The list goes on and on about companies that violate financial reports and end up in prison. We will write a custom essay sample on Effects of Unethical Behavior or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Many argue that the implementation and ongoing requirements of Sarbanes Oxley and other laws are costly, time consuming, and as yet ineffective. Recent evidence suggests that for some organizations these requirements and the associated punishments are not a sufficient deterrent. In many instances law has at best led to a culture of compliance rather than a culture of integrity. Even more disappointing is that too often the very activities Sarbanes Oxley was designed to prevent continue to slip past regulators until it is too late and the damage incurred (Hazels, B. (2010). After studying about the success rate of the SOX, it appears that the victories are far and few especially for the whistle blowers. The provisions of SOX are supposed to make it easier and less risky for employees to report bad corporate behavior by protecting employees from retaliation. But few, if any, complaints filed to date by whistleblowers that have faced alleged retaliation have resulted in wins. In part, this is due to the costly and arduous legal task of starting a complaint with the Department of Labor. Companies are also required by SOX section 806 to file within 90 days of the violation (Bannon, S; Ford, K; Meltzer, L, Jul 2010). Take a look at these statics and give your opinion if the rules SOX are working. Employees reported an increase in the ethical culture of their workplace, from 53% in 2007 to 62% in 2009. Measures of ethical culture include ethical leadership, accountability, and values. In the 2009 survey, 49% of employees observed misconduct, compared to 56% in 2007. In the aftermath of Enron and the dot-com bubble, there was also a significant decline in this measurement, from 55% in 2000 to 46% in 2003.