Accounting Ratio Analysis And Comparison Of Companies Finance Essay

Accounting Ratio Analysis And Comparison Of Companies Finance Essay 1) Question 1 Find the most recent financial statements for two companies of same company industry which are listed in KLSE (Kuala Lumpur Stock Exchange).Evaluate the financial position and performance for each of these two companies using accounting ratio analysis. You are required to compute and compare the accounting ratio between these two companies, and conclude the results of your finding. The limitations or problems of using accounting ratios for performance analysis should be included in your conclusion. entify and discuss three different ways for transferring capital or fund from saves to borrowers in the financial market. Table of content Page Questions 1 Introduction for question 1 3 7 Calculation for Gamuda and WCT Berhad 8 14 The ratio comparison between two companies 15 16 Conclusion 17 Question 2 18 24 Bibliography 25 Appendix 26 2) Question 1 Introduction Accounting ratios are the ratios that expressed and counted based on the financial statement of a company. Besides that, accounting ratios are also useful indicators of a firms performance and financial situation. Most of the ratios can be calculated from the information that is provided by the financial statements. Each type of accounting ratio provides an important data about a firms ability to repay its debts, its financial standing, and the potential for profit and how valuable stocks or investments in the company are. On top of that, accounting ratio also can be used to analyze the calculation and comparison of ratios which are derived from the information in a companys financial statements. Accounting ratios are a valuable and easy to interpret the numbers that is found in statements. When computing financial relationships, a good indication of the companys financial strengths and weaknesses becomes clear. Accounting ratio analysis the ratios into categories which tell us about different facets of a companys finances and operations. The following types of accounting ratios that is used, Liquidity ratios Asset turnover ratios Financial leverage ratios Profitability ratios Dividend policy ratios The purpose of an accounting ratio is to make financial reports regarding the performance of a company in a specified period normally by a year. These financial reports are later made available to the tax authorities, investors and creditors of the firm. Accounting ratios are calculated and grouped into five different categories for measuring the five different aspects of the business performance. There are five aspects of business measured by an accounting ratio. Profitability of company Liquidity of company Asset management of company Debts management and gearing of company Market value of investment to ordinary shareholders and common stockholders The formula for accounting ratio that are used to measure each aspect or area of business by accounting ratios are Profitability of company Gross profit markup (%) = Gross profit à · Cost of goods sold 100 Gross profit margin (%) = gross profit à · net sales value 100 Operating profit margin (%) = operating profit before interest and before taxation à · net sales valuex100 Profit margin on sales (%) = net income available to common stockholders à · Net sales value -100 Basic earning power (BEP) = operating profit before interest and before taxation à · total assets 100 Return on total assets (ROA) = net income available to common stockholders à · total assets 100 Return on common equity (ROE) = net income available to common stockholders à · common equityx100 Liquidity of company Current ratio/working capital ratio = current assets à · current liabilities Liquid ratio/quick ratio/acid-test ratio = liquid assets à · current liabilities Asset management of company Inventory turnover or stock turnover = cost of salesà · average stock value OR cost of salesà · closing stock value Total assets turnover = net sales à · total assets Debtor ratio = debtor à · credit sales Days sales outstanding (DSO) = debtor à · credit sales 365 days Debts management and capital gearing of company Debts ratio = total debts à · total assets Debts equity ratio = total debts à · common equity Times interest earned = profit before interest and before taxation à · interest charges Market value of investment to ordinary shareholders/common stockholders Earnings per share = net income available to common stockholders à · number of ordinary shares in issue Price/earnings ratio = market price per ordinary share à · earnings per share Earnings yield = gross earnings per share à · market price per ordinary share 100 Market price/book value ratio = market price per ordinary share à · net book value per ordinary share Besides that, there are three methods to compare accounting ratios for business performance measurement which are inter-temporal comparison between two periods, inter-firms comparison between two companies and comparison with industry averages. The two companies that are selected for business performance measurement are Gamuda Berhad and WCT Corporation Berhad. Gamuda Berhad is a Malaysia-based investment holding company which is the most famous in civil engineering construction. The industry of this company also operates in three business segment which involves engineering and construction, construction of highways and bridges, airfield facilities, railway, water treatment plants, dams and general and trading services. WCT Berhad is a Malaysia-based company which provides the provision of engineering services. The Company operates in three segments: civil engineering and construction, civil engineering works specializing in earthworks, infrastructure works, and property development. The information for these two companies which are required for business performance is measurement by accounting ratios in income statements and balance sheets of the two companies. Ratio with formula (Profitability of company) Calculation for 1st company (Gamuda Berhad) Calculation for 2nd company (WCT Berhad) Gross Profit Markup(%)= Gross profit=2455143000-1580125000-363348000-8595000-19973000-19260000-40866000 =RM422976000 Cost of goods sold =1580125000+363348000+8595000+19973000+19260000+40866000 =RM2032167000 =20.81% Gross profit =RM354659000 Cost of goods sold =RM4311943000 =8.23% Gross Profit Margin(%)= Net sales value=2455143000-0 =2455143000 Gross profit=2455143000-1580125000-363348000-8595000-19973000-19260000-40866000 =422976000 =17.23% Gross profit =RM354659000 Net sales value =sales return inwards =4666602000-0 =RM4666602000 =7.60% Operating Profit Margin On Sales(%)= Net sales value=2455143000-0 =2455143000 Operating profit before interest and taxation =259852000 =10.58% Operating profit before interest and taxation =RM244145000 Net sales value =sales return inwards =4666602000-0 =RM4666602000 =5.23% Profit Margin On Sales(%)= Net income available to common stockholders =280693000 Net sales value =2455143000-0 =2455143000 =11.43% Net income available to common stockholders =RM147098000 Net sales value =sales return inwards =4666602000-0 =RM4666602000 =3.15% Basic Earning Power= Operating profit before interest and taxation =RM259852000 Total assets =total non-current assets + total current assets =2347737000+4203173000 =RM6550910000 =3.97% Operating profit before interest and taxation =RM244145000 Total assets =total non-current assets + total current assets =RM1925297000+RM2553187000 =RM4478484000 =5.45% Return On Total Assets= Net income available to common stockholders =RM280693000 Total assets =total non-current assets + total current assets =2347737000+4203173000 =RM6550910000 =4.28% Net income available to common stockholders =RM147098000 Total assets =total non-current assets + total current assets =RM1925297000+RM2553187000 =RM4478484000 =3.28% Return On Common Equity= Net income available to common stockholders =RM280693000 Common equity =Ordinary share capital + Reserves =2025888000+1231637000 =RM3257525000 =8.62% Net income available to common stockholders =RM147098000 Common equity =Ordinary share capital + Reserves + Share premium =388856000+369256000+492134000 =RM1250246000 =11.77% Ratio with formula (Liquidity of company) Calculation for 1st company (Gamuda Berhad) Calculation for 2nd company (WCT Berhad) Current Ratio= Current assets =RM4203173000 Current liabilities =RM1930241000 =2.18:1 Current assets =RM2553187000 Current liabilities =RM1807550000 =1.41:1 Acid-test ratio= Liquid assets =Current assets Inventories =4203173000-79738000 =RM4123435000 Current liabilities =RM1930241000 =2.14:1 Liquid assets =Current assets- Inventories =2553187000-113709000 =RM2439478000 Current liabilities =RM1807550000 =1.35:1 Ratio with formula (Asset Management of Company) Calculation for 1st company (Gamuda Berhad) Calculation for 2nd company (WCT Berhad) Inventory Turnover= Cost of goods sold=1580125000+363348000+8595000+19973000+19260000+40866000 =RM2032167000 Closing inventories or stock =RM79738000 =25.49 times Cost of goods sold =RM4311943000 Closing inventories or stock =RM113709000 =37.92 times Total Assets Turnover= Net sales value =sales return inwards =2455143000-0 =RM2455143000 Total assets =total non-current assets + total current assets =2347737000+4203173000 =RM6550910000 =0.37 times Net sales value =sales return inwards =4666602000-0 =RM4666602000 Total assets =total non-current assets + total current assets =RM1925297000+RM2553187000 =RM4478484000 =1.04 times Debtor Ratio= Debtor or receivables =RM1607772000 Credit sales =RM2455143000 =0.65:1 Debtor or receivables =1206971000+265684000 =RM1472655000 Credit sales =RM4666602000 =0.32:1 Day Sales Outstanding= Debtor or receivables =RM1607772000 Credit sales =RM2455143000 =237.25 days OR =0.65-365days=237.25 days Debtor or receivables =1206971000+265684000 =RM1472655000 Credit sales=RM4666602000 =116.8 days or =0.32-365days=116.8 days Ratio with formula (Debts Managements of company) Calculation for 1st company (Gamuda Berhad) Calculation for 2nd company (WCT Berhad) Debts Ratio= Total debts =total non-current liabilities + current liabilities =1312946000+1930241000 =RM3243187000 Total assets =total non-current assets + total current assets =2347737000+4203173000 =RM6550910000 =0.50:1 Total debts =total non-current liabilities +current liabilities =1183958000+1807550000 =RM2991508000 Total assets =total non-current assets + total current assets =1925297000+2553187000 =RM4478484000 =0.67:1 Debts Equity Ratio= Total debts =total non-current liabilities + current liabilities =1312946000+1930241000 =RM3243187000 Common equity =Ordinary share capital + Reserves =2025888000+1231637000 =RM3257525000 =1:1 Total debts =total non-current liabilities +current liabilities =1183958000+1807550000 =RM2991508000 Common equity =Ordinary share capital + Reserves + Share premium =388856000+369256000+492134000 =RM1250246000 =2.39:1 Times Interest Earned Or Interest Cover= Operating profit before interest and taxation =RM259852000 Interest charge or cost =RM43813000 =5.93 times Operating profit before interest and taxation =RM244145000 Interest charge or cost =RM50308000 =4.85 times Ratio with formula (Market Value of Investment to Stockholders of Company) Calculation for 1st company (Gamuda Berhad) Calculation for 2nd company (WCT Berhad) Earnings Per Share= Net income available to common stockholders =RM280693000 Number of ordinary shares issue or ordinary share capital =2025888000 shares =RM 0.14 Net income available to common stockholders =RM147098000 Number of ordinary shares issue or ordinary share capital=388856à ·RM0.50=777712 shares =RM0.19 Price Earnings Ratio= Market price per ordinary share=RM3.20 Earnings per share=RM0.14 =22.86 times Market per ordinary share=RM2.60 Earnings per share=RM0.19 =13.68 times Earnings Yield= Gross earnings per share =100à ·75 Rm0.14 =0.187 Market price per ordinary share=RM3.20 =5.83% Gross earnings per share =100à ·75-RM0.19 =0.253 Market price per ordinary share=RM2.60 =9.74% Market Price Per Book Value= Market price per ordinary share=RM3.20 Net book value per ordinary share =Common equity / ordinary share in issue = Common equity =Ordinary share capital + Reserves =2025888000+1231637000 =RM3257525000 Number of ordinary shares issue or ordinary share capital =2025888000 shares ==Rm1.61 = =1.99:1 Market price per ordinary share=RM2.60 Net book value per ordinary share =common equity / ordinary share in issue Common equity =Ordinary share capital + Reserves + Share premium =388856000+369256000+492134000 =RM1250246000 Number of ordinary shares issue or ordinary share capital =388856à ·RM0.50=777712 shares ==RM1.61 = =1.61:1 Profitability of company: Gross profit markup, Gross profit margin, Operating profit margin, Basic earning power, and return on total asset of Gamuda Berhad is higher than the second company that is WCT Berhad. This indicates that the company was effective in controlling the expenditures. Besides that, for Basic earning power and Return on common equity, the first company is lower than the second company. This is because the ineffective use of assets and capital employed in business activities are at higher costs to reduce the production volume and sales volume. Liquidity of company The current ratio and the Acid test ratio for the companies Gamuda Berhad is higher than the second company WCT Berhad because the has the Gamuda Berhad highest amount of current assets and also highest amount of liquid assets that can be used to finance its current liabilities so that the company has highest liquidity to finance its short-term liabilities and also got chances to face short-term liabilities financial problem. Asset Management of company The inventory turnover for the Gamuda Berhad is much lower than the WCT Berhad because Gamuda has a slow stock turnover in the business which kept in store was very slowly taken out for resale, resulting large amount of stock accumulated to tie up money, which were having poor inventory management. For total assets turnover, the first company is low than the WCT because the Gamuda has a lowest sales from the assets indicating that company was inefficiently using the assets in business. On top of that, debtor ratio and day sales outstanding of the first company is higher than the WCT because the company got longer credit time to collect money slowly from debtors so that the balance is collected to tie up money and thus, having poor management on debtor collection. Debts Management The debts ratio for the Gamuda is less than the second company because the Gamuda got lower debts burden with smaller amount of debts and also bearing low interest cost to the available profit. Therefore, times interest earned for the Gamunda is much higher than the WCT because it has a bearing high interest charges to the available profit. Market value of investment to stockholders Earnings per share and earnings yield for the Gamuda is less than the WCT which indicates that the company has less growth in business profit , resulting lower net income available to each unit share , being less attractive and lower value to the common stockholders. Due to lower earnings per share, stockholders have to use more times of profit earning, more times of net cash inflow and a longer period to recover back their share investment. Besides, the price earnings ratio for the Gamuda is higher than the WCT. Market price per book value for the Gamuda is higher than the WCT that shows the company share price has inequitably risen up above its real asset value or book value for not being realistic to the stockholders. Conclusion As a conclusion, I will like to choose WCT Berhad because this company has a better performance in the business and here are some goods points of this company. On top of that, the WCT berhad company also have the highest Basic earning power and Return on common equity which is meant to increase the production volume and sales volume at lower costs as well as to increase the profit earning. Other than that, WCT berhad also has the is highest Inventory turnover which indicates a fast stock turnover where the goods purchased kept in store are fast taken out for resale so that the stock is not accumulated and money is not tied up with stock. Thus, the WCT berhad company did not face any short-term liabilities, and they are stable. The different firms using different financial policies which are also the comparison problems in inter firm. Question 2 Definition Financial markets are an organization for the people who are shortcoming of money and want to borrow money. Besides that, each financial market has different ways of financial methods in terms of its maturity and the asset backing it. Different financial markets have different ways of serving customers and operate different types the country. Financial markets dissent from physical asset markets because it is called tangible asset markets or real asset markets to deal with the tangible and physical manufacture such as machinery, computer and other physical assets. Physical asset market and financial market can also work as the future or spot market. Future market defines as the deals being sold for on the future delivery at some future date such as a year into the future whereas the spot market is define as the deals is being bought on the spot delivery within a few days. There are many types of various in financial market for an example such as money markets, capital markets, mortgage markets, consumer credit markets, primary markets, secondary markets, initial public offering (IPO) market and last but not least private market.   Money markets: Money market is a market dealing with short-term financial methods. Money market methods are include bankers acceptance, commercial paper, federal funds, treasury bills, and highly liquid debt securities which funds are loaned or borrowed for a short periods of less than one year. Money market is a segment of the financial  market in which financial instruments with high liquidity and very short maturities are traded. The money market  is used by participants as a means for borrowing and  lending in the short term, from several days to just under a year. Money markets do not have a fixed physical location. A money market fund is also called a mutual fund that empower in money market securities. Capital markets: Financial market that works as a conduit for demand and supply of primarily long term debt and equity capital. It channels the money provided by savers and depository institutions banks, credit unions, and insurance companies to the borrowers and investors through a variety of financial instruments called securities. It transports the money that is provided by depository institution and savers to invest or borrow through choices of financial methods called securities. Capital market also runs as an interchange for trading existing that request on capital in the form of shares or stock. Mortgage markets: A market for loans to people and organizations buying property a market for mortgages those has been bought by financial institutions and are then traded as asset backed securities. This arrangement will sum up the transaction in commercial mortgage, multi-family residential mortgage, home mortgage and farm mortgage. The holders of mortgage including the lenders that both originate the investment and change them as assets, such as thrift institution, commercial banks and insurance companies as well as those institutions that gets the loans in the secondary market.   Consumer credit markets: Consumer credit market is about a borrower uses any line of credit or loan to purchase goods services at the retail level. The cost of credit is the additional amount, over and above the amount borrowed, that the borrower has to pay. It includes interest, arrangement fees and any other charges. Consistently, consumer credit finances can be use at any asset that it will minimize quickly and it is not use for investment purpose. Loans for education, vacation or cars are also examples of consumer credit. However, consumer credit does not include loans that are for real estate. Primary markets: Primary market consists of the first buyers and issuer of the issues. Investors who buy shares in a new security issue meant they are buying from the primary market. Besides that, investors who purchase bonds and stocks in the primary market normally are not refundable commissions because the fees for selling the issue are built into its price and collected by the issue. Secondary markets: This market in which the existing and already purchases a security or other financial assets are able to trade among the investors after they have been issued by the institutions or corporation. Secondary markets is a market which investor buys a security from another investor rather than the issuer, the consequences to the original issue in the primary market is also called as aftermarket.   Initial public offering (IPO) market: IPO is the first sale of stock to a company. Furthermore, the most common reason is by offering securities or shares to the public for the first time. The most difficult part of an IPO is to find out the proper price to initially proffer the new stock. If the price is too high, the buyers will not be interested but if its too low, the company will sacrifice a lot of money that might have been made if others are higher. Private market: Private markets in financial transactions are worked out directly and privately between the two parties without going to the public where the transactions may be structured in any manner to those who appeals to the two parties. The three different ways for transferring capital or fund from savers to borrowers in the financial market are direct transfer from savers to borrowers, indirect transfer from savers to borrowers through investment banking house and indirect transfer from savers to borrowers through a financial intermediary. Direct transfer from savers to borrowers: Direct transfer takes place when an organization issues and sells its stock or shares immediately to the savers without passing through any other financial institution so that the organization as borrower immediately delivers its securities to the saver who in turn gives money to the organization. By this, the fund or capital is immediately transferred from savers to the organization or borrower. Issue corporations securities to Business Corporation -Æ’Â   Savers (Borrower)   Æ’Å ¸Ã‚  (Money Lender)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Receive capital of fund from Indirect transfer from savers to borrowers through investment banking house: This takes place when investment underwrites the issuance of a cooperations securities and where the contributors bank serves as a middleman to facilitate the issuance by buying the securities of the organization and then resell the same securities of the organization to the savers so that the money paid by the savers for buying of organizations securities are passed by the investment bank and will be received by the organization which acts as borrower. Issue Corporations Resell corporations Securities to Securities to Business Æ’Â   Investmentâ‚ ¬Ã‚   -Æ’Â  Ã¢â€š ¬Ã‚  Savers (Money CorporationÆ’Å ¸ Banking House Æ’Å ¸ Lender) Receive fund from Receive fund from Indirect transfer from savers to borrowers through a financial intermediary: This takes place when a financial intermediary also know as a bank or a mutual fund that is obtain fund that are from the savers and by issuing its own certificate or securities of deposit to the savers. Then, the financial intermediary uses the fund that is collected from the savers to buy and to hold the securities of other company as contributors. In this case, the fund or the capital is transferred from the saver to financial intermediary when the saver has pay the money to the financial intermediary in interchange for receiving a certificate if securities or deposit issued by the financial intermediary. Therefore, the financial intermediaries will incredibly increase the efficiency of money and capital markets. This is shown in the following diagram:   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Issue corporations securities to  Issue intermediarys own securities to Business Corporation -Æ’Â  Ã¢â€š ¬Ã‚  Financial intermediary Æ’Â  Savers (Borrow) Æ’Å ¸Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Æ’Å ¸ (Money Lender)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Receive fund from  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Receive fund from Investment banking house: The investment banking house runs by buying all the new security issue from a company or organization at one price and selling the issue with a smaller unit to the investing public at a inadequate high price to cover the expenses of sale and earn a profit. The company or corporation that distributes and underwrites the new issue of business organizations securities to assist the organization to collect fund for financing.   Financial intermediaries: Since the financial intermediaries are usually very large and they have gain economies of scale in analyzing the creditworthiness of those borrowers potential in collecting and processing loans. There are many type or various in financial intermediaries and those are commercial banks, savings and loan associations, mutual savings fund, credit unions, pension funds, life insurance companies and mutual funds. Commercial banks: Commercial banks are totally different from investment banks because commercial banks, they lend out money to the borrowers whereas the investment banks, they assist business company to raise fund or capital from the savers. Savings and loan associations: Savings and loan associations served residential and commercial mortgage borrowers where they likes to collect money or funds from those small savers and lend out this money to his house buyers or any other types of borrowers. Mutual savings fund: Mutual savings fund and savings and loan associations are almost the same process because they also accept savings from individual savers and lend out the money on a long-term basis to his house buyers and consumers.   Credit unions: This is a cooperative association which members are supposed to have something in common, so that the association collects funds from members and then lend to other members who need money to finance their house mortgage, house improvement and auto purchases. Pension funds: This is a retirement plans that given by the organization or government agencies for their employee   and administered primarily from the life insurance companies or the trust departments of commercial banks. Life insurance companies: Life insurance companies collect funds in the term of annual premiums and then invest back in to real estate, bonds, mortgages and shares, after that they will make their payments to the beneficiaries of the insured parties. Mutual funds: Mutual funds will collect savings from those savers and then use the savings to buy shares, short-term debt and long-term bonds method

Bang & Olufsen

Bang & Olufsen How the tiny family-owned company Bang and Olufsen survives and prospers in spite of all the multi-nationals can do. Consumer electronics is dominated by multi-nationals who believe growth and acquisitions are the keys to survival in this price-point conscious industry. So how come in a remote country town in the north west of Denmark, an organisation with a mere 3000 employees is prospering and charging premium prices? B&0 is still in the hands of the families who started it back in 1925. Young Peter Bang and Svend Olufsen were both keen experimenters from boyhood with electricity and their first radios were built in the attic of the Olufsen house. Right from the start the company followed a philosophy of innovation. The company has always striven to set higher standards of performance than its competitors and, as a consequence found itself moving inevitably towards the upper-end of the market. Along the way styling became an important element of the B&O philosophy. A number of their products are in the permanent design collection of the Museum of Modern Art in New York. The company uses freelance designers who are answerable to the product strategy department who are responsible for marketing planning and the technical feasibility of ideas. It took more than style, however, to give Bang & Olufsen its unique positioning in the marketplace. A long time ago it was realised that the key to survival lay in offering products which were not only different but had qualities which could not be found elsewhere. Back in 1938 they produced a radio with a preset programming function for 16 stations. In 1943 a B&O gramophone had an option for rogramming a 3 minute pause between tracks – time to allow you to bow to your new dancing partner! The first B&O TV receiver appeared in 1952. In 1951 they produced the world's first stereo cartridge. They invented the HX professional recording system which increases the headroom available for recording high frequency signals on all tape types. This system is now found in most good quality tape decks. In 1982 they int roduced the Beolink system which gives round the house sound and round the house remote-control. For all their small size Bang and Olufsen produce practically everything themselves. They even ake much of their own production equipment. Such are their capabilities that they supply injection moulding equipment to other manufacturers and have developed such diverse products as an insulin pen and extension units for telephone switching exchanges. Their entry into the telephone receiver business grew out of a contract to develop a new standard telephone for Danish Telecom. Since then they have sold over 200, 000 units of their elegant and distinctive handsets. The company regularly gets suggestions for new product categories. These are considered but unless there is scope for a distinctively B&0 concept, it will not proceed. Car audio is an example. Because the car stereo has to fit into a set size hole in a console, there is little or no scope to produce a distinctively different product that would fit into the B family of products. Today, B operate in more than 20 countries around the world. Their biggest single export market in terms of combined TV, video and hi-fi sales is the United Kingdom. As mentioned earlier, this equipment does not fit into an existing selling or price-point structure and would face an uphill struggle in the bazaar atmosphere of the typical electrical retailer. This led to the decision to carry out the entire marketing, distribution, and selling (retailing) operations in- house. The calm and luxurious atmosphere of a Bang and Olufsen showroom is highly conducive to the appreciation not only of the performance of the product but the elegant styling too. The arrangement leaves no place for opposition or competitors for, as B&0 will gladly tell you, there aren't any. At the same time, haggling over such mundane matters as discounts seems very much out of place in such surroundings. It’s a far cry from the rest of the industry where the sales staff can usually tell you very little but the price. The showroom decor is simple and subdued to highlight the discreet styling of the equipment. The staff are very much part of this presentation. Fast talking and pressure to buy have no place here. When people are spending the kind of money a B&O system costs (the 1owest priced sound system is listed at $8,000 and you can go over $30,000 with the greatest of ease) they want time to relax and consider their choice very carefully indeed. The staff are there as consultants and advisors. In fact, of course they are very effective sales people who really know their products and ow to present them. There are several six B&O showroom in Australia, all in major capital cities. Sales of audio and video products run 50/50 and in both categories the best sellers are the top models in the range. So who buys this expensive equipment? It is probably easier to say who does not. The true hi-fi buff who loves electronics and fiddling dials & buttons tends to treat B&O with the same disdain that a spor ts-car buff has for an automatic Mercedes family car. Your typical B&O owner is more interested in music and entertainment than electronics. While he r she appreciates the unique styling, sheer quality and performance of the equipment, it is the ability to deliver at the touch of a button or even a glass plate which probably counts for more. B&0 have recognised that the hi-fi industry has made its products so complex and intimidating to the average person that he only become frustrated and confused by all the conflicting advice he receives. Visiting the hi-fi specialist can be an unnerving experience which ends up giving the prospective buyer an inferiority complex. B&0's approach is to put all the complexity to one side. Technology is used to simplify. So, lthough B equipment has possibly the most sophisticated control systems of anyone in the industry, it is, paradoxically, probably the simplest of all to operate. Once you have a B unit in your home you become a prospect for upgra des and extensions. B were the first to bring round-the-house sound and later video which can be controlled from anywhere in the house. Called the Beolink, it first came out in l982 and it is only 10 years later that any other such systems are beginning to appear. Any B model can be extended to give quality hi-fi or video to any room in the house. It is not B po1icy to bring out new models each year. Rather they introduce them to meet market requirements and then upgrade them when and as required. Very often existing equipment can be brought up to the latest specifications. It is also policy that all parts are fully available for 8 years after a model goes out of production. B still regularly gets calls to service equipment over 20 years old. All parts are airfreighted from Denmark. B are too small to develop original products like the CD or even the VCR. Their role is to take such products and enhance them, make them easier to use, and package them very uniquely and attractively. A considerable proportion of B systems are sold with an older model taken as a trade-in. The quality of the products is such that they have a ready second-hand market and owner loyalty is the highest in the industry. An organisation pf just 3000 people in a very high cost country taking on the established giants of the electronics world sounds like an extreme case of wishful thinking. Band and Olufsen will tell that they think differently. They do. And it works. Do you know of any other business which has no direct competitors? Q: Identify, Understand Analyse competition and suggest appropriate competitive positioning strategies.

A Brief Note On Broken Windows Theory And Community Policing

Broken Windows theory is important to community policing. Wilson and Kelling(1989) showed that crime and disorder are related, which shows if police are able to keep the community, environment in order it can prevent crime. Popularity of community policing was high in the late 20th century with 85% having some community policing involvement with police departments (Skogan 2004, which was even more popular with big cites. Community involvement is a key to community policing and at the end of the 20th century 70% of departments had meetings with citizens (BJS 2001). A main concept of community policing is to create a positive relationship with the community. This allows community to help police prioritize its goals and change it tactics which in return the community is able to help itself. Community policing should be unique to the city since each city has its own problem, an example of this would be Los Angeles wouldn t have the same exact tactics as a city in New Hampshire because th ere are different problems and a different culture in each. If community believes its main problem is gang member than the police needs to prioritize that issue but if the community considers its main problem is prostitution this needs to be dealt with by the police. This is much different than traditional policing in the way that the police prioritize their assignments. Many police who aren t involved with the community will not take advice from them and mostly interact with only the partShow MoreRelatedCommunity Policing Models3115 Words   |  12 Pagesapproaches to engaging a police force with the community in order to most effectively prevent and respond to crime, and considering the relative strengths and weakness of each of these strategic models will demonstrate how models can impact the operation of daily policing practices and activities. 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Coral Eugene Watts The Sunday Morning Slasher

Carl Eugene Watts, dubbed â€Å"The Sunday Morning Slasher,† murdered 80 women in Texas, Michigan and Ontario, Canada, from 1974-1982. Watts kidnapped his victims from their homes, tortured them either by slashing them with a knife until they bled to death or drowned them in a bathtub. Early Years Carl Eugene Watts was born in Fort Hood, Texas on November 7, 1953, to Richard and Dorothy Watts. In 1955, Dorothy left Richard. She and Carl moved to Inkstar, Illinois, right outside of Detroit. Dorothy taught art to kindergarten children, leaving much of Carls young development in the hands of her mother. She also started dating again, and in 1962 she married Norman Caesar. Within a few years, they had two girls. Watts was now the big brother, but it was a role he never embraced. Sadistic Sexual Fantasies At the age of 13, Watts suffered from meningitis and high fevers and he was pulled out of school for several months. During his illness, he entertained himself by hunting and skinning rabbits. He also enjoyed constant fantasies that involved torturing and killing girls. School had always been challenging for Watts. When he was in grammar school, he was a shy and withdrawn child and was often teased by the class bullies. His reading skills were far below that of his peers, and he struggled with retaining much of what was being taught. When Watts finally returned to his class after being sick, he was unable to catch up. The decision was made to have him repeat the eighth grade, which humiliated him. Watts, an academic failure, turned into a good athlete. He participated in the Silver Gloves boxing program that helped teach boys respect for themselves and discipline. Unfortunately for Watts, the boxing program stimulated his aggressive desire to attack people. He was constantly in trouble at school for physically confronting classmates, especially the girls. At the age of 15, he attacked and sexually assaulted a woman in her home. She was his customer on his paper route. When Watts was arrested, he told the police he attacked the woman because he just felt like beating someone up. Institutionalized In September 1969, after being prompted by his lawyer, Watts was institutionalized at the Lafayette Clinic in Detroit. It was there that doctors discovered that Watts had an IQ in the low 70s and suffered from a mild case of mental retardation that impeded his thought processes. However, after only three months, he was evaluated again and placed on outpatient treatment, despite the doctors final review which described Watts as paranoid with strong homicidal impulses. The doctor wrote that Watts behavioral controls were faulty and that he displayed a high potential for violently acting out. He ended the report by saying Watts should be considered dangerous. Despite the report, the young and dangerous Eugene Watts was allowed to return to school, his penchant for violence unknown to his unsuspecting classmates. It was a baffling decision that almost assured a deadly outcome. High School and College Watts continued high school after his release from the hospital. He returned to sports and poor grades. He also took drugs, was described as severely withdrawn. He was often disciplined by school officials for being aggressive and stalking his female classmates. From the time that Watts was released to the outpatient program in 1969 until the time he graduated high school in 1973, he only went to the outpatient clinic a few times, despite the fact that school officials were constantly having to deal with his violent episodes. After finishing high school. Watts was accepted to Lane College in Jackson, Tennessee on a football scholarship, but he was expelled after three months for stalking and sexually assaulting women and for being a prime suspect in the unsolved murder of a female student. Second Psychological Evaluation Watts was, however, able to return to college and was even accepted into a special scholarship and mentoring program sponsored by Western Michigan University in Kalamazoo. Before attending the program, he was again evaluated at the outpatient facility and again the doctor said that Watts was still a danger and had a strong impulse to beat up women, but due to patient confidentiality laws, staffers were unable to alert Kalamazoo authorities or officials at Western Michigan University. On October 25, 1974, Lenore Knizacky answered her door and was attacked by a man who said he was looking for Charles. She fought back and survived. Five days later, Gloria Steele, 19, was found dead with 33 stab wounds to her chest. A witness reported speaking with a man at Steele’s complex, who said he was looking for Charles. Diane Williams reported being attacked on November 12, under the same circumstances. She survived and managed to see the attackers car and make a report to the police. Watts was picked out in a line-up by Knizacky and Williams and arrested on assault and battery charges. He admitted to attacking 15 females but refused to talk about the Steele murder. His attorney arranged for Watts to commit himself into the Kalamazoo State Hospital. The hospital psychiatrist investigated Watts background and learned that at Lane College, Watts was suspected of having possibly killed two women by choking them. He diagnosed Watts as having an anti-social personality disorder. Competently Dangerous Before Watts trial for assault and battery charges, he had a court-ordered evaluation at the Center for Forensic Psychiatry in Ann Arbor, Michigan. The examining doctor described Watts as dangerous and felt he would most likely attack again. He also found him competent to stand trial. Carl, or Coral as he started to call himself, pleaded â€Å"no contest,† and received a one-year sentence on the assault and battery charges. He was never charged in the murder of Steele. In June 1976, he was out of jail and back home in Detroit with his mother. The Sunday Morning Slasher Emerges Ann Arbor is 40 miles west of Detroit and the home of The University of Michigan. In April 1980, the Ann Arbor police were called to the home of 17-year-old Shirley Small. She had been attacked and repeatedly cut with an instrument resembling a scalpel. She bled to death on the sidewalk where she fell. Glenda Richmond, 26, was the next victim. She was found near her doorway, dead from over 28 stab wounds.  Rebecca Greer, 20, was next. She died outside her door after being stabbed 54 times. Detective Paul Bunten headed a task force that had been formed to investigate what the newspapers had dubbed the murders of women by The Sunday Morning Slasher, but there was very little for Bunten to investigate. His team had no evidence and no witnesses to a long list of murders and attempted murders that had occurred within five months. When Sergeant Arthurs from Detroit read about the Slasher murders going on in Ann Arbor, he noticed that the attacks were similar to those that he had arrested Carl Watts for when he was a paperboy. Arthurs contacted the task force and gave them Watts name and the details of the crime. Within months, attacks in neighboring Wisteria, Ontario, were being reported that were of the same nature as those in Ann Arbor and Detroit. Adult, Father, and Husband By now, Watts was no longer a failing student with drug problems. He was 27 years old and working with his stepfather at a trucking company. He had fathered a daughter with his girlfriend, and later met another woman whom he married in August 1979, but who divorced him eight months later because of Watts’ strange behavior. More Murders, 1979-1980 In October 1979 Watts was arrested for prowling around in a Southfield, Detroit suburb. The charges were later dropped. Investigators noted that during the previous year, five women in the same suburb were assaulted on separate occasions, but with similar circumstances. None were killed, nor could any of them identify their attacker. During 1979 and 1980, attacks on women in Detroit and surrounding areas became more frequent and violent.  By the summer of 1980, whatever had been keeping Coral Watts uncontrollable urge to torture, and murder women at bay were no longer working. It was as if a demon had possessed him. Additionally, he was under tremendous stress as the investigators from Ann Arbor, and Detroit seemed to be getting closer to solving the identity of the â€Å"Sunday Morning Slasher.† Watts had no alternative: he needed to find a new killing zone. The Windsor, Ontario Connection In July 1980, in Windsor, Ontario Irene Kondratowiz, 22, was attacked by a stranger. Despite her throat being slashed, she had managed to live. Sandra Dalpe, 20, having been stabbed from behind, had also survived. Mary Angus, 30, of Windsor, escaped attack by screaming when she realized she was being followed. She picked Watts out of a photo line-up, but she was unable to identify for certain that her attacker had been Watts. Detectives discovered through highway cameras that Watts car was recorded as leaving Windsor for Detroit after each episode. Watts became Bunten’s leading suspect, and Bunten had a reputation for being a relentless investigator. Rebecca Huff's Book Is Found On November 15, 1980, an Ann Arbor woman contacted police after she became frightened when she discovered that she was being followed by a strange man. The women hid in a doorway, and the police were able to observe the man frantically searching for the woman. When the police pulled the man over in his car, they identified him as Coral Watts. Inside the car, they found screwdrivers and wood filing tools, but their most important discovery was a book that had Rebecca Huff’s name on it. Rebecca Huff had been murdered in September 1980. A Move to Houston In late January 1981, Watts was brought in on a warrant to give a blood sample. Bunten also interviewed Watts, but he could not charge him. The blood test also failed to link Watts to any crimes. By spring, Coral was sick of being hounded by Bunten and his task force and so made a move to Columbus Texas, where he found work at an oil company. Houston was 70 miles away. Watts began spending his weekends cruising the city streets. Houston Police Get a Heads Up, but Murders Continue Bunten forwarded Watts file to the Houston police, who located Watts at his new address, but they were unable to find any evidence linking him directly to any of the Houston crimes. On September 5, 1981, Lillian Tilley was attacked at her Arlington apartment and drowned. Later that same month, Elizabeth Montgomery, 25, died after being stabbed in the chest while out walking her dogs. Shortly afterward, Susan Wolf, 21, was attacked and murdered as she got out of her car to enter her home. Watts Is Finally Caught On May 23, 1982, Watts ambushed roommates Lori Lister and Melinda Aguilar at the apartment that the two women shared. He tied them up and then attempted to drown Lister in the bathtub. Aguilar was able to escape by jumping head first off of her balcony. Lister was saved by a neighbor and Watts was caught and arrested. The body of Michele Maday was found the same day, drowned in her bathtub in a nearby apartment. A Shocking Plea Deal Under interrogation, Watts refused to talk. Harris County Assistant District Attorney Ira Jones made a deal with Watts to get him to confess. Incredibly, Jones agreed to give Watts immunity to the charge of murder, if Watts would agree to confess to all of his murders. Jones was hoping to bring closure to the families of some of the 50 unsolved murders of women in the Houston area. Coral eventually admitted attacking 19 women, 13 of which he confessed to murdering. Admitting There Were 80 More Murders Eventually, Watts also admitted to 80 additional murders in Michigan and Canada but refused to give details because he did not have an immunity agreement for those murders. Coral pleaded guilty to one count of burglary with intent to kill. Judge Shaver decided that the bathtub and the water in the bathtub could be defined as deadly weapons, which would result in the parole board not being able to count Watts â€Å"good conduct time,† for determining his parole eligibility. Slippery Appeals On September 3, 1982, Watts was sentenced to 60 years in prison. In 1987, after a failed attempt to escape prison by slipping through the bars, Watts decided to begin appealing his sentence, but his appeal lacked the support of his attorney. Then in October 1987, unrelated to any of Watts appeals, the court decided that criminals must be told that a â€Å"deadly weapon† finding had occurred during their indictment and that failure to inform the criminal was a violation of the criminal’s rights. Watts Gets a Lucky Break In 1989, the Texas Court of Criminal Appeals decided that, because Watts was not told that the bathtub and the water had been judged lethal weapons, he would not be required to serve his entire sentence. Watts was reclassified as a nonviolent felon which made him eligible for retroactive â€Å"good time earned† equaling three days for every one day served. Model prisoner and confessed murderer  Coral Eugene Watts would be  getting out of prison on May 9, 2006. Victims Say Hell No to Early Release Law As news spread about the possibility of Watts getting out of prison, there was a tremendous public outcry against the good time earned early release law, which eventually was abolished, but, because it was an applicable law during Watts trial, his early release could not be reversed. Lawrence Fossi, whose wife was murdered by Watts, fought the release with every possible legal maneuver he could find. Joe Tilley, whose young daughter Linda fought so hard to live, but lost her battle against Watts, as he held her under the water at the apartment complex swimming pool, summed up how most of the other families felt about Watts: Forgiveness cannot be bestowed when forgiveness is not sought. This is a confrontation with pure evil, with principalities and the powers of the air. Michigan's Attorney General Asks for Help When Mike Cox, who was Michigans Attorney General at the time, found out about the change in Watts sentence, he ran televised spots, asking the public to come forward if they had any information about the women that Watts was suspected of having killed. Texas had a plea arrangement with Watts, but Michigan did not. If they could prove Watts murdered any of the women who had turned up dead over the past few years in Michigan, Watts could be put away for life. Coxs efforts paid off. A Westland, Michigan resident named Joseph Foy came forward and said that Watts looked like the man whom he saw in December 1979 stabbing 36-year-old Helen Dutcher, who later died from her wounds. Watts Will Finally Pay for His Crimes Watts was shipped to Michigan  where he was  charged, tried and found guilty of murdering Helen Dutcher. On December 7, 2004, he was sentenced to life imprisonment. In late July 2007 Watts again faced a jury after being arrested for the 1974 murder of Gloria Steele. He was found guilty and received a life sentence without possibility of parole. Slipping Through the Bars One Last Time Watts was sent to Ionia, Michigan where he was housed at the Ionia Correctional Facility, also known as the I-Max because it is a maximum security prison.  But he did not stay there long. About two months into his sentence he managed to slide his way out from behind the prison bars yet again, but this time would be his last time as only a miracle would save him now. On September 21, 2007, Coral Eugene Watts was admitted to a hospital in Jackson, Michigan and shortly after died of prostate cancer. The case of the â€Å"Sunday Morning Slasher† was permanently closed.