Wilfred Owen Essay Example for Free

Wilfred Owen Essay Wilfred Edward Salter Owen was born on 18 March 1893 and died on 4 November 1918. He was an English poet and soldier, one of the leading poets of the First World War. His shocking, graphic poetry about the First World War was very heavily influenced by his friend, Siegfried Sassoon. There was a vast contrast between his poetry about the war and that of others, such as Rupert Brooke, as his took on a completely different perspective, and showed the readers a whole new side of the war. This wasn’t how he always looked at the war though. It was out of his own free choice that he joined the army, but it was two traumatic experiences that caused his view point to change so drastically. Firstly, he was thrown into the air when hit by a trench mortar and landed in the remains of a fellow soldier. Then, he was trapped for days in a German dugout. It was these two horrible experiences that caused his dramatic change of mind, and caused him to suffer from ‘shell shock’, which led to him being sent to a hospital for treatment. That was where he met fellow poet Siegfried Sassoon, and this meeting changed his life. In March 1918, he was sent to a command depot in Ripon, and here, a number of poems were written. After he had recovered, he was sent back to the front line, and tragically, a mere week before the war ended, he was shot in the head and died. Owen started writing poems long before the war, and he stated that he started at the age of ten. His friend, Siegfried Sassoon had a large effect on his poetry, especially in ‘Dulce et Decorum est’ and ‘Anthem for Doomed Youth’. These show direct results of Sassoon’s influence. A poem by Pat Barker was written about their relationship. His poetry changed significantly in 1917, where as part of his therapy his doctor got him to write his experiences down into poems. Though thousands of poems were published during the war, very few were acknowledged, and even fewer were loved, but Owen was one of them. Only 5 of Wilfred’s poems were published before he died. It was a popular belief that Owen was a homosexual, and there were some elements of homoeroticism in his poems, though he never actually said this. Historians have speculated as to whether he had an affair with Scott-Moncrieff, as Scott had dedicated many of his works to ‘Mr. W.O.’, but Owen never responded on this matter. It was only as a result of Sassoon being shot that led to his decision to return to the front line back in France, even though he could have chosen not to. He felt he needed to ‘take Sassoon’s place’. However, Sassoon was strongly opposed to the idea, and even threatened to ‘stab him in the leg’ if he tried it. Aware of what Sassoon thought, Owen didn’t tell him he went ahead with it and returned to the front line. He was killed whilst crossing the canal on 4 November 1918.

A safe Choice-but her only choice Essay Example for Free

A safe Choice-but her only choice Essay James Joyces short story Eveline sets the stage for a time between adolescence and maturity. Written in 1914, which was four years short of the womens suffrage in Ireland, the storys protagonist, Eveline, is largely influenced by the feminist issues. Since she has little control over her life, Eveline has grown accustomed to a routine life. She is paralyzed from the thought of leaping into a new path. Eveline faces two extremes: a miserable home life or a dramatic escape to an uncertain future. Both extremes she deals with involve a man controlling her life. Living in the early 1900s women did not have the opportunity to be independent. No matter which path she chooses, she would still answer to a man. She lives in a male-dominated world in which she is stripped of choice and emotion. She is helpless against the way her life is heading. Considering this, one cannot blame her for choosing to stay home because it was not much of a choice, and she has never made an independent choice of her own. If she left with Frank, her lover, then there could be the possibility of danger. â€Å"She felt him seize her hand† (Joyce 7). Joyce’s choice of diction â€Å"seize† tells the audience that Eveline’s guard is up because she knows how a man can be abusive. She saw this with her mother and father and wants to have a life different from her mother but cannot. Furthermore, psychologically, Eveline cannot move towards Frank because she was exposed to a life of domestic violence, which her mother and older brothers endured. She knows how violent a man who at times can be even kind, funny, and sweet. â€Å"She remembered her father putting on her mother’s bonnet to make the children laugh† (Joyce 6). That same man turns into an aggressive, ruthless man who selfishly makes his daughter feel guilty about herself. On the other hand, she has known him her entire life. Her older brothers used to take the beating and now that they are not there â€Å"†¦he had begun to threaten her and say what he would do to her for only her dead mother’s sake† (Joyce 4-5). If she has gone 19 years without a beating, then there would be a good chance of his threats as just talk. Since he says, he will not hit her for â€Å"her dead mother’s sake,† then one would think he would honor his word for the respect of his deceased wife. All of Eveline’s life has revolved around her family. She runs her household domestically and works for a living in which all her earnings wind up with her father. In addition, she manages to care for her two younger siblings seeing them to school and preparing dinner. Since the death of her mother, she took over domestically and maternally with no choice. Her mother, on her deathbed, made Eveline â€Å"promise to keep the home together as long as she could† (Joyce 6). By doing so her mother has caused another obstacle Eveline must face in order to leave, that is the guilt of a broken promise. As any good daughter would, she stays to fulfill her vow. This vow gives Eveline another excuse to stay home and carry out her routine life. In addition, Eveline knows the difficulties of her life but she still prefers it. Joyce explains Eveline’s view of her life â€Å"†¦a hard life but now that she was about to leave it she didn’t find it a wholly undesirable life† (5). Any modern day daughter with those responsibilities would find that a very undesirable life, but Eveline changing her mind about leaving shows the reader how she cannot bear to abandon her family and this life, which has been the only thing, she has known her whole life. Because compared to an unknown destiny, Eveline would much rather stay home and be miserable because she would expect this. Being a woman with little say in her everyday life, the present opportunity is new to her, and she cannot make a major decision on her own because she has never had to. Eveline has been given an opportunity to flee home in hopes of happiness, but she could not risk a life of uncertainty. Frank, a sailor, offers a chance of happiness to her and â€Å"†¦she had begun to like him† (Joyce 6). Eveline says that she â€Å"like(s)† him; not loves. Can their â€Å"like† for one another be enough to survive in the New World? Joyce says that Eveline â€Å"begun† meaning she barely knew if she was interested in him not if she was ready for a lifetime commitment. Eveline’s upbringing influences her adult decisions because she has never known anything but Ireland. The fear of leaving home is essentially, why she doubts Frank. A future with him is not set in stone; thus, it cannot be. As one might foreshadow, â€Å"she chooses the hell she knows rather than the possible hell of the unknown† (Rogers 172). Hell here symbolizes the men and she would much rather be with the familiar than the unfamiliar. She likes to play it safe because if Frank turns out to be the worst, then where will she go since going back home is not an option. As they are ready to begin this epic adventure in her life, Eveline believes that â€Å"†¦he would drown her. She gripped with both hands at the iron railing† (Joyce 7). The first part â€Å"he would drown her† meaning he would not save her from this wretched life. This is a change of setting from the window seal to the sea. The window was sturdy, whereas, the sea is constantly moving. She is unable to adjust to this new path because she believes Frank cannot guarantee a life better than her home. â€Å"She gripped with both hands at the iron railing† symbolizes her paralysis. The iron railing signifies the home ground and she grips on the rail for dear life. Her actions tell the reader how fearful she is to leave her homeland. Eveline does not want to depart the only thing she has known. Eveline’s life is routine from the footsteps in front of her house to turning her wages to her father every week. â€Å"But Eveline†¦ perceives any and every change as a loss†¦ she knows this with her head, her heart rejects it†¦Ã¢â‚¬  (Rogers 171- 172). Eveline cannot seem to grasp the changes around her as a positive because deep inside her she knows where she must be, at home. Meeting Frank was a change to her and instead of embracing it; she ultimately fears it. Even, if staying home will most likely lead to a miserable life one like her mother’s, she would because she cannot accept change. Today, most young women have not had to endure a â€Å"life of commonplace sacrifices† (Joyce 6). Sadly, Eveline has no choice but to stick to the familiar and steer away from any fickle opportunities. If Joyce set the setting during a modern era, then Eveline would be more aware of the opportunities there are now. Furthermore, the world today has come along way and is not as male-dominated as before.

Wireless Communication Impact on Business

Wireless Communication Impact on Business Technology means invention of techniques and tools. Emerging technology will change the world drastically. As the world continues to move, so does the improvement of technology. Every year discard light on improvements to yesterdays devices and new innovations appearing on the scope. Many scientific events have become possible through technologies which assist humans to do many things we could not do otherwise. Day to day new technologies is emerging very rapidly. New technologies those are currently developing or will be developed over the next few years, and which will substantially alter the business and social environment. These include information technology, wireless data communication, bio-technologies, bio-informatics, man-machine communications, and advanced robotics. Emerging technologies are constantly being developed in order to meet the needs of companies and people. Some of emerging technologies for this year are Bio-electronics and wetware, energy harvesting, printed e lectronics, biofeedback and thought control of electronics, plastic memory, resistive RAM, various battery technologies, single cell analysis, and neutron control. Technology runs in the layers of society. It is one of the fuels that drive our lives. We would discuss two of emerging technologies and its impact on business and society briefly. Introduction An Emerging Technology is a common term used to represent major technological developments, introducing new revolutions in the earlier technologies. Emerging Technologies are the technical innovations which signify progressive developments within a field for competitive advantage. Examples of present emerging technologies are Wireless Communication, Nano technology, Biotechnology, Artificial Intelligence Wireless Energy Transfer, robotics and etc. Emerging Technologies has severe impact on business and society. However, the level of impact on business and society may vary from technology to technology. The way we do our business and live our lives would be much different if the technologies are not continuously changing. Because of Emerging technologies, business has been able to progress in such a way that we can communicate across the globe without leaving their respective offices. Example Web conferencing, Teleconferencing. The entertainment media has progressed because of advancement in technology only. The latest technological advances are not only limited to business but also has severe impact on society. Emerging technology has affected the way we live in many ways. Example: Medical technology, Global Positioning System (GPS) etc. Because of these technologies, we live our lives very comfortably. Technology has brought luxury in the life of the common man. It has saved human effort and time to a large extent. It has brought distant place closer and simplified information access. Emerging technologies has both pros and cons. Emerging Technology I Wireless Communication: Wireless Communication means transfer of information from one place (location) to another place (location) without using wires or electrical conductors. The distance between the locations may be short or long. When the information transferring between two locations without using wires is clear then the term is referred as wireless. In general Wireless communication is considered as a branch of telecommunications. The marginalized technology for wireless communication is wired communication. Wireless System has more propagation and transmission effects compared to wired system. In the olden days of wireless telegraphy, Marconi proved that wireless signals can be cross over the Atlantic and Pacific oceans. Now a days we are not using radio technology to cover large distances. Because of developments in digital electronics and signal processing, so many methods are there to overcome the differences of the mobile channel and thereby accelerating the growth of wireless communication. In addition advanced digital modulation techniques such as spread spectrum or multi carrier modulation (MCM) is suitable for wireless communication. Many new developments in wireless office networks (Hyper LAN or IEEE 802.11) involve spread spectrum transmission, and allow coexistence with other services, Bluetooth and many proprietary solutions use deregulated (ISM) radio bands. Spread spectrum transmission methods i nclude slow and fast frequency hopping, direct sequence CDMA and multi carrier CDMA. Spread spectrum signals are relatively vigorous to multipath dispersion. These methods permit multiple users to share the same radio channel. In future Wireless communication networks or multimedia networks, the multiple access issue becomes significantly more essential than it is for circuit switched voice communication. The ALOHA, CSMA and ISMA all allow multiple users to share the same radio communication resources. How these protocols perform substantially for guided (wired) and an unguided (radio) channels? Performance of these protocols highly depends on the physical propagation characteristics of the channel. (Jean-Paul M.G. Linnartz, 1996-2004) Examples of wireless communication are Cellular telephones and pagers, Cordless computer peripherals, Global Positioning System (GPS), Satellite television, Wireless gaming, Wireless networking and Consumer two way radio including General Mobile Radio Service and Citizens band radios. Cellular communication has modernized the communication industry. In wireless communication Radio Frequency (RF) waves, Electromagnetic (EM) waves, Infrared rays (IR) and microwaves can carry over a part or the entire communication path. Wireless communication can be via: Radio frequency communication. Microwave communication, for example line of sight propagation via highly directional antennas. Infrared (IR) short range communication, for example from remote controls or via Infrared Data Association (IDA). (Wireless Communication, Accessed on April 5th, 2010) Categories: Radio Communication system Amateur radio Land Mobile Radio or Professional Mobile Radio: TETRA, P25, Open Sky, EDACS, DMR. Cordless telephony: DECT (Digital Enhanced Cordless Telecommunications) Cellular Networks: 0G, 1G, 2G, 3G Beyond 3G (4G), Future wireless Short range point to point communication: Wireless microphones, Remote controls, AIRD, RFID (Radio Frequency Identification), Wireless USB, DSRC (Dedicated Short Range Communications), near field communication. Wireless Networks: Wireless LAN (WLAN), IEEE branded as Wi-Fi and Hiper LAN, Wireless Metropolitan Area networks (WMAN) and Broad band fixed Access (BWA) (LMDS, WiMAX, AIDAAS and HiperMAN). Wireless sensor networks: Bluetooth, TransferJet, ZigBee, EnOcean, Personal area networks, Ultra-wideband (UWB from WiMedia Alliance). Advantages: To make available of a backup communication link in case of a regular network failure. To cover a distance away from the capabilities of distinctive cabling. To connect portable or transitory workstations. To surmount situations where standard cabling is not easy or economically unfeasible. To remotely connect mobile users or networks. Disadvantages: Fading Inter and Intra cell interference Capturing effects In wireless networks the above disadvantages are present and considerably influence the performance, such as throughput, stability and delay for a wireless ALOHA-net. Also, the performance seen by each participating terminal differs from the average performance of the network and extremely depends on the terminals location. (Jean-Paul M.G. Linnartz, 1996-2004) Two common assumptions for wire line networks must be refined for the realistic analysis of the performance of wireless networks: If there is no collision occurs simultaneously on the same channel then the data packet is received successfully. Data packets will be lost if they are involved in a collision. Some specific solutions are existing effectively to resolve collisions; they include the tree algorithm, the stack algorithm and dynamic frame length ALOHA. The combined use of CDMA and random access directs to new system concepts. (Jean-Paul M.G. Linnartz, 1996-2004) Applications: The main application of wireless communication is omnipresent network connectivity. Point-to-Point communication, Point-to-multi point communication, Broadcasting, Cellular networks, Security systems, Television remote control, Cellular telephone (phones and modems) Computer interface devices and Other wireless networks. Impact of Wireless communication on business: Wireless communication technology can have a significant impact on business. Wireless communication is also known as Wi-Fi (Wireless fidelity) or WLAN (wireless local area network), uses low-power radio waves to transmit data over distances from one device to another without the use of wires, allowing senders and recipients to access information while on the move. Especially for business, Wi-Fi is invaluable as it allows the boss, who travels frequently, to stay in touch with his employees back at the office. Because of Wireless communication more individuals started work from home. The rapid development of wireless communication is primarily through cell phones and wireless internet. The wireless communication revolution is bringing fundamental changes to data networking, telecommunications, and is making integrated networks a reality. By freeing the user from the cord, personal communication networks, wireless LANs, mobile radio networks and cellular systems, harbour the promise of fully distributed mobile computing and communications, anytime, anywhere. E-mail and company web sites are advantageous communication technology for businesses. Businesses that use these electronic communication tools are able to expand their market place. Because of raising growth of wireless technologies, allow access to the networks for the workplace community. So that customers, clients and employees want network and service from different places of the company. There has been considerable interest lately for all businesses to set up mobile computing workplaces for their employees and also mobile computing for other functions of the business from distributors, suppliers and service providers. Recently industries have made significant progress in wireless technology to determine some constraints. Because of this wireless technologies become popular. Some of these constraints have included different standards, low bandwidth, and high infrastructure and service cost. Wireless technologies can both support the organizational company mission and offer cost effective solutions. Because of Wireless technologies so many new applications are there such as to connect computers, to permit remote monitoring and data acquisition, to provide con trol and security, and to provide a solution for environments where wires may not be the best implementation. (My Wireless Business Accessed on 19 Mar 2010) Overusing technology in business communication can lead to an overload in overusing communication. Messages began to lose importance with communication overload. Personal use of communication technology in the workplace lost time for businesses. Creating rules for use of communication technology reduces the amount of lost time a business suffers from this problem. Impact of Wireless Communication on Society: The development of wireless technology and wireless devices accessing of information can be possible approximately anywhere and people can be in touch with one another in various places. Wireless technology has both advantages and disadvantages. Wireless Technology is responsible for creating self doubt, disrupting relationships and as a tool for manipulation. However, the market for wireless devices, whether there is everywhere mobile phone, PDAs or wireless enabled computers and appliances, continues to grow and develop with new technologies emerging every day. The rapid development of wireless communication is primarily through cell phones and wireless internet over the past 15 years. Because of mobile phone so many changes in society. It has changed the way of communication between the people. In a home atmosphere, wireless technology simplifies various tasks which can eventually lead to less stress. A wireless network can do many things or plenty of work in a cool environment. Most inventions in history affect society for decades following its introduction in to the consumer market. Sometimes the consequences and side effects of a product do not become apparent until much later when there is more time for the social impact to catch up with the widespread use of the product. This is no exception with wireless communications because the social impacts have not been fully discovered. (Markoff, 2004) Emerging Technology II Artificial Intelligence (AI): Artificial intelligence is the study of how to make computers behave intelligently. Artificial Intelligence is the present generation computer technology. In simple Artificial Intelligence means those computer program and software which would think of its own as an average Human being does. It is related to the similar task of using computers to know human intelligence, but AI does not have to confine itself to methods that are biologically visible. In other way artificial intelligence is the branch of computer science and the intelligence of machines that aims to create it. Text books define artificial intelligence as the study and designing of intelligent agents, where an intelligent agent is considered as a system that perceives its environment and takes actions to maximize its ability of success. John McCarthy, who invented the term artificial intelligence, defines it as the science and e3ngineering of making intelligent machines. The marginalized technology for artificial intelligence is human decision and human analysis. Computer programs have plenty of speed and memory but their capabilities correspond to the intellectual mechanisms that program designers understand well enough to put in programs. One of AIs first projects was the development of mathematical language much like a computer language, in which researchers could encode assertions. If the language was rigorous enough, computer algorithms could be able to comb through assertions written in it and calculate all the logically valid inferences. Once they had developed such languages, AI researchers started using them to encode lot of commonsense assertions, which they sorted in huge databases. Moores law states that for every 18 months the number transistors on the chip will be doubled, processing power doubles while cost hold constant. In fact, when computers were first built, people proposed them for doing nothing but mindless computations, but as the development of newer technologies, computers eventually were limited to arithmetic anymore, they are now called Artificial intelligence. The computer technology has changed the face of the world. Computers can store, organize and handle enormous amounts of data. They can process huge amounts of information. Computers have given increase to the software industry, one of the most progressive industries of the world. (An Introduction to AI, Accessed on Mar 25, 2010) Types of AI: Strong AI and Weak AI Strong AI: A computer running suitable software actually is intelligent. Weak AI: Intelligence is something that only biological systems can posses. The best that can be accomplished with a machine is to stimulate intelligence. Advantages: Unemotional consideration of problems means human mind may have emotions. When people take decisions, sometimes those decisions are based on emotion rather than logic, so it may be wrong decision. That thing could not be happen with AI. Disadvantages: AI replaces human, means people believe that machine work accurately than human. So human become more dependent on AI and trust the results and decisions made by AI. This implies that more jobs are done by AI machines and the fewer are offered to human. Because of unemployment rate, it is likely that more people will be losing their jobs competing with machines. Due to this an economic destruction will occur and because of this an increase in crime rate and starvation. Economic destruction is not only because of using AI but also Technology that could be harmful to minds of small children. Applications: Pattern recognition Optical character recognition Face recognition Speech recognition Computer Vision, virtual reality and image processing Game theory and strategic planning Game artificial intelligence and Computer game boot Hybrid intelligent system Diagnosis (artificial intelligence) Natural language processing, Translation and Chatter Bots Artificial creativity Heuristic clarification Robotics Behaviour based robotics Cybernetics Evolutionary robotics Epigenetic robotics Cognitive robotics The impact of Artificial Intelligence on business: Evolution of artificial intelligence and information technology has effect the business in order to improve their performance. Due to information technologies information gathering, communication between the people will be fast. So the results were very accurate. AI is essential for economy and now is one of the main sources of business and employment. It also gives an additional form of communication and exchange of information which was not accessible before. Technology is relevant in politics as governments are trying to adopt IT for making improvements in the storage of data, and finally it is essential for economy as now it is one of the main sources of business and employment. On the information superhighway, the internet, the world is a very small place and distance, nationality, income are irrelevances, but the existence of such a network with high speed, worldwide communications together with satellites, has meant that news, ideas and other information can be spread, world-wide in the blink of an eye and with this now possible, some of the traditional constraints have been loosened. The development of the internet means can now work from their homes. The so called information superhighway makes a variety of different services and types of information available at the touch of a button, to the point where its next to impossible to avoid exposure to one kind or another. It happens very often that the information you get on the Internet, especially with search engines is too much. In the web you may easily get lost when you are looking for something as you are usually beleaguered by an amount of information that is misdirected and irrelevant for you. With the internet you cannot have the same experience as for instance with a book, where the material is selected and organized with some coherence. There is no way to distinguish the brilliant from the trash, you can never be sure that what you are reading is true. (Harvard Business School Publishing May 2005) The impact of Artificial Intelligence on Society: Artificial Intelligence has been developed for many years and is already widely used in human society. Ex. Hospitals use Artificial intelligence machines to diagnose patients. The invention of the computer and its associated technologies has a major impact on many areas of our everyday lives. Technology affects everyone in the modern society in the aspects of work and leisure activities. Technology is one of the major energetic force of the future, is altering our lives and shaping our future at rates unprecedented in history. Due to different technologies we are satisfied with our lives. Technology is essential for our society, its elaboration, and production at the centre of the cultural, political and economic fields, which are the basis of the society. Human beings solve most of their troubles by means of fast, instinctive judgements rather than the aware, step-by-step subtraction that early AI study was able to model. Artificial Intelligence has made some progress at replicated this type of sub figurative problem solving; personified agent approaches stress the importance of sensor motor skills to advanced reasoning neural net research attempts to rep licate the structure of inside human and animals brain that give rise to this talent. (Harvard Business School Publishing May 2005) Conclusion: As we discuss two types of emerging technologies (wireless communication and artificial intelligence) and their impact on business and society. Because of emerging technologies, we are doing many which would otherwise not possible.

depletion of the ozone layer :: essays research papers fc

Our Radiant Planet: Depletion of the Ozone Layer Ozone is a relatively unstable form of molecular oxygen containing three oxygen atoms produced when upper-atmosphere oxygen molecules are split by ultra violet light. Stratospheric ozone is found in a broad band, extending generally from 15 to 35km above the earth. Although the ozone layer is surprisingly thin, it acts as a protective shield to the earth, as it filters out most of the harmful solar ultraviolet radiation (in particular UV-B) that would otherwise reach our planets surface. Humans have damaged the ozone layer by adding molecules containing chlorine and/or bromine that lead to ozone destruction. The largest group among these are chloroflurocarbons (CFC's). At ground level, these molecules are very stable and have many uses in industrial and domestic applications, such as in spray cans, industrial solvents, degreasing compounds, and cooling in fridges. However when released into the stratosphere, such molecules can be broken down by energetic light rays (UV-C radiation) in a reaction that liberates an atom of chlorine, which destroys ozone by oxidising with the Ozone molecules, forming Cl-O and Oxygen. One atom of chlorine can destroy 10,000 ozone molecules! Atoms containing bromine, nitrous oxide, and hydrogen oxide radicals are also primarily dangerous. As a result, the Ozone in the stratosphere has been reduced to such an extent that ozone holes are appearing around the globe, in particular one over Antarctica that in 1995 measured 8.2 million square m iles. This depletion has allowed more dangerous UV-B radiation to reach the earths surface. So what effects will ozone depletion have on us? Although, at present, the ozone layer blocks out most of the damaging UVB radiation received from the Sun, a small amount slips by, damaging out skin in the form of sunburns and suntans. UVB radiation is strongly absorbed in the skin and in the outer layers of the eye. Human skin has developed various defence mechanisms against the damaging effects of UV radiation. The skin adapts to increased UV exposure by thickening its outer layer and by developing pigmentation that serves to shade the more vulnerable and deeper residing dividing cells. Overly damaged cells will normally self destruct through a process called apoptosis, and if this fails, the immune system should get rid of any resulting aberrant cells. It is when these natural safeguards fail or are overcome by UVB that real trouble can ensue. The most depletion of the ozone layer :: essays research papers fc Our Radiant Planet: Depletion of the Ozone Layer Ozone is a relatively unstable form of molecular oxygen containing three oxygen atoms produced when upper-atmosphere oxygen molecules are split by ultra violet light. Stratospheric ozone is found in a broad band, extending generally from 15 to 35km above the earth. Although the ozone layer is surprisingly thin, it acts as a protective shield to the earth, as it filters out most of the harmful solar ultraviolet radiation (in particular UV-B) that would otherwise reach our planets surface. Humans have damaged the ozone layer by adding molecules containing chlorine and/or bromine that lead to ozone destruction. The largest group among these are chloroflurocarbons (CFC's). At ground level, these molecules are very stable and have many uses in industrial and domestic applications, such as in spray cans, industrial solvents, degreasing compounds, and cooling in fridges. However when released into the stratosphere, such molecules can be broken down by energetic light rays (UV-C radiation) in a reaction that liberates an atom of chlorine, which destroys ozone by oxidising with the Ozone molecules, forming Cl-O and Oxygen. One atom of chlorine can destroy 10,000 ozone molecules! Atoms containing bromine, nitrous oxide, and hydrogen oxide radicals are also primarily dangerous. As a result, the Ozone in the stratosphere has been reduced to such an extent that ozone holes are appearing around the globe, in particular one over Antarctica that in 1995 measured 8.2 million square m iles. This depletion has allowed more dangerous UV-B radiation to reach the earths surface. So what effects will ozone depletion have on us? Although, at present, the ozone layer blocks out most of the damaging UVB radiation received from the Sun, a small amount slips by, damaging out skin in the form of sunburns and suntans. UVB radiation is strongly absorbed in the skin and in the outer layers of the eye. Human skin has developed various defence mechanisms against the damaging effects of UV radiation. The skin adapts to increased UV exposure by thickening its outer layer and by developing pigmentation that serves to shade the more vulnerable and deeper residing dividing cells. Overly damaged cells will normally self destruct through a process called apoptosis, and if this fails, the immune system should get rid of any resulting aberrant cells. It is when these natural safeguards fail or are overcome by UVB that real trouble can ensue. The most

The Style of Beowulf Essay -- Epic Beowulf essays

The Style of Beowulf  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚        Ã‚  Ã‚   Ursula Schaefer in â€Å"Rhetoric and Style† gives an overview of the history of criticism of style:    Examination of the poem’s rhetoric and style started out with investigating common Germanic features. On the other end of the scale, attention was given to a possible Latin influence on the poem’s style. Recently, there have been reconsiderations of authochthonous traditions linked mainly with the analysis of larger narrative patterns (105).    Beowulf ‘s stylistic features will be examined in this essay, along with the perspectives of various literary critics.    T. A. Shippey in â€Å"The World of the Poem† expresses himself on the subject of a point of style in the Old English poem Beowulf: â€Å"The poet reserves the right to say what people are thinking; he does not, however, regard this as ultimately important† (39). It is true that the reader is forced to draw conclusions, from the words and actions of the characters, about the thoughts of the characters. This is one of the many preferences of the author which contribute to the style or â€Å"how† writers say what they say (Abrams 303).    Joan Blomfield in â€Å"The Style and Structure of Beowulf† takes note of two important features of the poem’s style – the irony and the tendency to antithesis:    This tendency to antithesis, frequently verging on paradox, and the constant play of irony are but stylistic manifestations of those movements of the poet’s thought which shape the very stuff of the poem (Blomfield 58).    Antithesis abounds: The poem has a reference to the burning of Heorot included in the description of its first glories, and the prediction of family strife with Ingeld while yet all is well in ... ...oks, 1977.    Donaldson, E. Talbot. â€Å"Old English Prosody and Caedmon’s Hymn.† Beowulf: The Donaldson Translation, edited by Joseph F. Tuso. New York, W.W.Norton and Co.: 1975.    Magoun, Frances P. â€Å"Oral-Formulaic Character of Anglo-Saxon Narrative Poetry.†Ã‚   In TheBeowulf Poet, edited by Donald K. Fry. Englewood Cliffs, NJ: Prentice-Hall, Inc., 1968.    Schaefer, Ursula.   â€Å"Rhetoric and Style.† In A Beowulf Handbook, edited by Robert Bjork and John D. Niles. Lincoln, Nebraska: Uiversity of Nebraska Press, 1997.    Shippey, T.A.. â€Å"The World of the Poem.† In Beowulf – Modern Critical Interpretations, edited by Harold Bloom. New York: Chelsea House Publishers, 1987.    Tharaud, Barry. â€Å"Anglo-Saxon Language and Traditions in Beowulf.† In Readings on Beowulf, edited by Stephen P. Thompson. San Diego: Greenhaven Press,1998.      

Pauls Character in Pauls Case :: Paul

Paul's Character in Paul's Case Pauls's Case is the story of a young man who struggles with his identity. Paul feels that he knows where he belongs, but his family and teachers refuse to support his choices. In the middle of Paul's Case, there is a switch in narration. At this point, the reader can associate with Paul and his problems. Paul struggles with both internal and external conflicts, causing him to be quite a puzzling character. From tha perspective of his family and teachers, Paul seems abnormal. From his perspective, however, he seems misunderstood. In the beginning of the story, Paul seems to be a typical teenage boy: in trouble for causing problems in the classroom. As the story progresses, the reader can infer that Paul is rather withdrawn. He would rather live in his fantasy world than face reality. Paul dreaded returning home after the Carnegie Hall performances. He loathed his "ugly sleeping chamber with the yellow walls," but most of all, he feared his father. This is the first sign that he has a troubled homelife. Next, the reader learns that Paul has no mother, and that his father holds a neighbor boy up to Paul as "a model" . The lack of affection that Paul received at home caused him to look elsewhere for the attention that he craved. The theater and Carnegie Hall was where Paul "really lived". To him, the rest of his life was but "a sleep and a forgetting". The moment Paul stepped into either one of those places, he felt he was in his element. He "breathed like a prisoner set free". Paul's life was so monotonous and dull in comparison to his theater life, which he felt was his "secret temple". This alone provides insight into his character. He truly believed that he belonged to the arts. This makes Paul's case so sad because no one believed in him. This is what caused him to flee to New York to be in a place where he would be accepted for his true selt. Paul's train trip is where the change in narration occurs. Prior to this point, the author used an omniscient point of view. From this point on, the reader reads from Paul's point of view. The change in narration helps the reader understand Paul's perspective. He is not, as it seemed in the beginning, an abnormal person.

Assessment of Financial Health

Reocities Home Neighborhoods Making Of Cases in Finance – Final Project Report Friendly Cards, Inc. (1988) Gary Cao Noah N Flom Robert Harris Srini Pidikiti May 1997 TABLE of CONTENTS 1 Assessment of Financial Health & Pro Forma Financial Statements 1. 1 Review of History and Statement of Financial Health 1. 1. 1 Industry 1. 1. 2 Friendly Cards History 1. 1. 3 Friendly Financials 1. 2 Review and Evaluation of Pro Forma Statements 1. 3 Financial Policy / Covenants 2 Beaumont's Decisions 2. 1 Envelope Machine Proposal 2. 1. 1 Evaluation 2. 1. 2 Financial Effect of Investment 2. 1. Recommendation 2. 2 Evaluation of West Coast (new equity offer) 2. 2. 1 Advantages 2. 2. 2 Disadvantages 2. 3 Valuation of Creative Designs, Inc. 2. 3. 1 Capital Structure Argument 2. 3. 2 Weighted Average Cost of Capital Assumptions (WACC) 2. 3. 3 Cash Flows, Terminal Value, Equity Value Valuations 2. 4 Pooling Implictions (Friendly + CD) 2. 5 Friendly Cards Stock Valuation 3 Overall Assessment 4 Goal s for the Financial Structure of Friendly Cards, Inc. ——————————————————————————- PART 1. Assessment of Financial Health & Pro Formas 1. Review of History and Statement of Financial Health Wendy Beaumont, president of Friendly Cards, Inc. , has rapidly expanded her greeting card business through internal growth and acquisitions. Ms. Beaumont realizes that money is currently tight, however, she is adamant about future growth and has sought our opinion as to determine her best course of action. In presenting a decision we will first conduct an analysis of the industry, then give a short history of Friendly Cards, Inc. (Friendly), and then examine Friendly's financial statements to determine the financial health of the company. Industry Information The greeting card industry is dominated by three large companies, (Hallmark, American Greetings, & Gibson), which are referred to as ‘The Big Three'. ‘The Big Three' dominate market share, and the remaining competitors are predominantly small private and family owned firms. The greeting card industry is characterized high fixed costs due to: large inventory costs, large investment costs in the establishment of efficient distribution lines, and the need for a highly diversified product lines. Market leaders enjoy great economies of scale which tends to hinder new ntrants into the market. As a result, the card industry is capital intensive and very competitive. The number of firms competing in the industry has decreased by an annualized rate of 15% over the last three decades. Exiting firms were typically smaller in size, the majority of which had less than 50 employees. Additionally, the competitive nature of the market results in a high degree of pric e sensitivity which culminates in smaller margins on sales. Sales tend to be very seasonal in nature with peaks during major holidays. There is trending toward a larger variety of card offerings (increasing inventories), shorter carrying/selling periods, increased diversification of product lines, and an increase in sales of everyday cards as compared to holiday cards. Friendly Cards, Inc. Beaumont Greeting Card Co. was founded by Wendy Beaumont in 1978, in New York City. She later acquired Lithograph Publishing Co. and took these companies public a year later for $3 a share under the name Friendly Cards, Inc. Friendly has rapidly expanded by acquiring Glitter Greetings of Lansing, Michigan (for cash and equity), whose primary market was selling cards to supermarkets. Soon thereafter, it acquired Edwards & Co. of Long Beach, New York (for cash), whose primary market was selling juvenile valentines through chain, drug, variety, and discount stores, as well as, to wholesalers and supermarkets. These acquisitions greatly enhanced Friendly's distribution line expanding it to a regional power. Later Friendly acquired a California firm (Friendly Artists) which extended the distribution line to a national basis. Friendly Artists' primary market was prepackaged cards direct to the warehouse. Twenty-five percent of Friendly's sales are prepackaged boxes, which have a higher margin than regular cards due to lower return rates and lower handling costs. Currently, Friendly appears to be a niche player in the prepackaged box cards market and has avoided entry into the premium card market, thus, avoiding direct competition with the ‘Big Three. ‘ Friendly's sales are more concentrated than the industry with the majority of sales occurring near Christmas at 30% (vs. Industry 32%), and Valentines Day at 25% (vs. Industry 7%). Thus, over 55% of sales occur within a 3 month period. Plants at Friendly are being used at capacity thus, growth would necessitate further additions or acquiring contract services. Friendly's distribution line is effective for a smaller firm due to its structure. Of twenty salesmen, one-third work on commission thus lowering Friendly's costs. However, one problem with using salesmen on commission and having such a small sales force is the tendency to sell to rack jobbers and wholesale distributors. This decreases the potential margin on cards by two-thirds. Friendly's Financials Sales have increased by over 50% between 1985 to 1987. Cost of goods sold has decreased as a percentage of sales in each of those years thus, producing an increasing margin ( 29. 36% in 1985 to 35. 15% in 1987). The rapid growth by acquisition and the national distribution channels that were accomplished by it, have affected the number slightly. In 1986 selling and delivery expenses increased by 1. 45% and this leveled out in 1987. G&A expenses also spiked in '86, reflecting the recent purchase of another company, and then settled back in 1987. However, while sales may have grown rapidly they have not matched the increase in asset growth, which nearly doubled in 1986. Growth in this company is being funded by improving margins and by increasing leverage, as indicated by the Dupont Data. Although the acquisitions were acquired by both cash and equity, the majority were debt financed, which explains why the ROE figures have increased so dramatically (almost 16%) in the last three years. The activity ratios indicate that the receivable to payable were in arrears by 36 days in 1985 increasing to 52 days in 1987. This is probably a result of increased sales to less creditworthy individuals or inattention to collections. Inventory turnover umbers are shrinking due to the continually larger inventories being carried. Net fixed asset turnover has decreased by 2. 3% between 1985 and 1987. This can be explained by higher growth in assets than in sales. The liquidity ratios indicate that the asset to liability ratio for this company is trending down. The current ratio indicates that the company is becoming slightly more insolvent with a current ratio of 1. 1 8 during '87. However, by looking at the Quick ratio and discounting for the affect of inventory in the asset number, the company is dramatically less liquid at 0. 67 in 1987. This indicates that the company is very highly leveraged and is using its large inventory levels in order to support its substantial borrowing needs. Friendly's actual growth rate exceeded the sustainable growth rate in 1986 and was equivalent in 1987. This difference in 1986 produced a need for added debt to finance growth. However excess funds were not needed to fund additional growth in 1987 since the actual rate of growth did not exceed the sustainable rate of growth. This can also be seen in the total debt to equity ratio which increased from 3 in 1985 to 5. 21 in 1986 and reduced to 4. 1 in 1987. The leverage ratios indicate that the bank loans to debt are fairly well matched, with loans being less than receivables, however, increasing in percentage. Interest bearing debt jumped dramatically in 1986 as a result of debt funded acquisitions but continues to level off along with total debt to equity figures in 1987. Finally, debt to assets has increased dramatically in the last th ree years, increasing by 7. 5% to 82. 5% in 1987. Thus Friendly Cards seems to be very highly leveraged, even more so than other firms in the industry although the trend is to increase debt. This highly leveraged position coupled with the high fixed costs and low margins characteristic of the industry, exposes Friendly as extremely susceptible to fluctuations in the market. Therefore, further debt growth may not be advisable–especially since it is currently violating its existing debt covenants. However, Continued growth, however, is needed as to allow the company to further take advantage of its existing distribution lines and realize further economies of scale. 1. 2 Review and Evaluation of Pro Forma Statements The parameters that Ms. Beaumont has set for the pro formas seem reasonalbe for the most part. There are, however, some questionable numbers. For instance, all the forecasts are based on continued sales growth at 20% per year. When compared to astronomical growth rates of 58% in 1986 and 27% in 1987, these estimates appear almost conservative. The majority of the growth in the past, however, were associated with major acquisitions which served to inflate the sales numbers. The historical reluctance to use equity to grow would serve to limit growth if continued into the future. Furthermore, it may be difficult to continue to grow at such a high rates in an increasingly competitive market. Holding costs of goods runs at 65% of sales and may also present a problem depending on whether the company can continue to manage its costs as it continues to grow. It could be argued that the reason CGS has dropped recently is due to the acquisition of Friendly Artists and the increasing reliance on a sales mix made up of low cost prepackaged boxes of cards. A shift in the mix away from these items could increase costs. Also, further acquisitions will serve to push up delivery and selling costs. For our purposes, however, holding them flat seems reasonable. The tax rate seems low at 38% but, depending on the new volume of sales and the maximum tax rate for a corporation, this rate could be even higher. And while the rest of the numbers seem to follow their previous assumptions, the inventory turnover, debt to asset, and interest rate assumptions could be assumed differently. As a result of increased competition in the industry, increasing variations of cards as well as shorter holding duration, it is very unlikely that inventory turnover would improve to 1. 1, and it may very well drop well below this number, possibly to 1. 75. Since growth is likely to continue into the future, an increased amount of inventory will be needed for new market areas. Debt to assets needs to decrease, but this will be difficult to do without funding growth by equity rather than debt. The large sales growth assumptions are directly related to acquisitions, thus increasing assets. If this is done through equity, this number is very realistic. Finally, there may be a problem with the assumption that interest rates on LTD will be 11%. The Monetary Policy Report to Congress indicates that rates should tend to decrease in the future so this rate may be attainable even to such a highly leveraged firm as Friendly. Without more information this estimate seems fine. 1. 3 Financial Policy / Covenants Friendly's apparent financial policy is rapid growth by debt. This debt-financed growth may be due to a ownership issues that could affects Ms. Beaumont's control over her company. The financials indicate that growth is also taking place at the expense of margins, as indicated by the Dupont data. The company believes in the economies of scale of the industry and appears to be establishing a national distribution network. While costly in the short run, this strategy may enable a viable and profitable position in the industry. The elements of Friendly's financial policy appear to be the following. Friendly's capital structure mix is governed by a debt orientation. Its debt/assets ratio is currently at 82. 5% which places is significantly below the AAA rate. AAA bonds are listed at 9. 7% while Friendly can only borrow at 11. 5%. While equity has been used in recent acquisitions there is a strong preference by management to use debt funding. Without question, Friendly is at an integral juncture. Existing lines of credit are maxed out and the bank is imposing new covenants on future loans: bank loans ; 85% of AR and liabilities not to exceed three times the BV of the company. Friendly currently has a $6. 25 million line of credit. Under the current structure Friendly will be in violation in 1987 with bank loans at 87% of AR and debt to equity is at 3. 13 times. Significantly, bank and trade credit for Friendly is expected to reach over $9 million in Dec. '87. Long term and short term debt are both fueling growth. The basis is assumed to be the prime rate (which is 8. 5%) plus 2. 5% points. This is assumed to be a fixed rate established at the time of borrowing. The company's currency is the U. S. dollar and the company does not have any exotica policy to mention. Control of the company rests solely with Ms. Beaumont as she is both the president and the leading shareholder, possessing 55% of the stock. An additional 20% of the stock is owned by employees and officers of the company. Finally, earnings are retained for future growth and meeting current obligations. There are no dividend payments and the stock has depreciated in value from a high of $15 a share. PART 2. Decisions faced by Ms. Beaumont 2. 1 Envelope Machine Investment Evaluation of the Envelope Machine We do not agree that the investment in the envelope machine will result in a return of 31%. The reason for this is that the working capital needed to fund the machine would be funded by additional debt by the company. The interest on the debt needs to be considered before evaluating the total return on the investment. Under this scenario, and considering that Friendly Cards' interest on debt is 11% the interest expense is $22,000 per year before taxes. Our Estimated Annual savings from Operation of Envelope Machine, Years 1 through 8 ( Dollar figures in thousands) is as follows: Savings: Outlays for envelopes purchased in 1987 $1,500 Incremental expenses from manufacturing envelopes: Materials$ 902 Warehouse 94 Labor 91 Depreciation 62 Total Expenses $1,149 Increase in Profit before Taxes (decrease in COGS) 351 Interest Expense on Working Capital 22 Actual Increase in Profit before Taxes 339 Increase in Income Taxes @. 38 125 Increase in profit after taxes $ 204 The projected Cash flows for the investment in the machine are: (attachments). Based upon the cash flows projected in the above Table the internal Rate of Return on the investment is 26%. Based upon Friendly Cards Cost of Equity which is 20% (Appendix WACC) buying the machine with all equity at 20% or debt at 11% is recommended Financial Effects of Investment The Financial effects of buying the envelope machine are can be examined in detail in Appendix Machine. The activity ratios for Friendly if the investment in the machine is made are: (attachments). The investment in the machine has the following effects: * Decreases Cost of Goods Sold by about 1. 5 % which in turn increases the Gross Margins * Decreases Inventory Turnover from 1. 91 to 1. 86 * Increases Funds needed in 1988 by $418,000, in 1989 by $323,000 and in 1990 by $112,000. * Earnings per share increase to $2. 89 in 1990 from $2. 53 in 1990 without investment * By making the investment in the machine Friendly would not be able to meet both of the covenants required by the bank The ratio of the bank loans to receivables exceeds . 85 in all three periods. * Ratio of Friendly's total liabilities to the book value of the company's net worth exceed 3 in 1988 and 1989 which do not meet the covenant but in 1990 the ratio drops down to 2. 94 where it meets the covenants. 2. 2 Evaluation of West Coast Offer (New Equity) We agree with Ms. McConville's conclusion that Friendly should accep t the offer from the West Coast Group at the terms stated if that was the only option available to Friendly Cards. The advantages of this proposal would be: Agency costs will be only 5% compared to the actual costs if an investment bank was used to sell securities of the company in a public offering. * The infusion of equity would enable Friendly to meet all the covenants required by the banks (Appendix WC) enabling Friendly to continue its rapid growth without any financial restrictions from the bank. * The equity infusion would enable Friendly to invest in the envelope making machine and reduce its cost structure and still meet all covenants required by the bank. * The uncertainty about how many securities will be sold if a public stock offering is held is eliminated. Continuing rapid growth would enable Friendly to retain most of the sales representatives who might shift to a competing firm if growth is slowed to enable Friendly to meet its financial covenants * The price that Fr iendly is getting is more than reasonable based upon the present value of the discounted cash flows as shown in (Appendix Valuation) Disadvantages of accepting the proposal would be: * Loss of control. Ms. Beaumont's who presently owns 55% of the outstanding shares would own 40. 37% of the company after the equity infusion. Even though along with the employees of the company she would own 60% of the company she would not be able to make unilateral decisions. * The West Coast Investors who would own 26% of the company would have a significant say in how the company should be run which may affect the current management structure and aversely effect their ability to mange the company as they wish. * Reduction of EPS. Earnings per share would be reduced to $2. 29 per share from the projected $2. 89 per share in 1990 with the purchase of the machine and without equity infusion due to the dilution effect of the new shares. This earnings dilution would probably result in a lower share price. (Approximately $18. 32 instead of $23. 12 considering a price multiple of 8). 2. 3. Valuation of Creative Designs, Inc. Capital Structure Argument Ms. Beaumont had been considering a possible acquisition of Creative Designs, Inc. (CD), a small mid-western manufacturer of studio cards. She had examined the details of CD's operations for four months, and believed that under her management, CD could immediately reduce cost of goods sold by 5%, and reduce other expenses by 10%. If Friendly acquires CD in early 1988, assumptions are made that CD's sales would stay flat during 1988 but would grow at 6% per year thereafter. Based on the following table from case facts, there is a wide range of Debt-to-Equity Ratios for the four companies within the same industry. American Greetings'(AG) D/E ratio increased from 0. 35 in 1985 to 0. 63 in 1987. The reason for this upward trend was that American Greetings had diversified its business segments; from solely relying on greeting card sales AG expanded into gift wrap and stationary goods, such as playing cards, gift-books, and college study guides. Such diversification efforts demanded higher debt levels. In addition, AG was a large company with annual sales of $1,174 million in 1987, up 16% from 1985. Gibson Greeting's (GG)D/E ratio decreased from 0. 71 in 1985 to 0. 49 in 1987. The reason for this downward trend was that Gibson was a relatively small company, with annual sales of $359 million in 1987, an 8. 8% increase from 1985. GG's growth rate was significantly lower than American Greetings. The total debt-to-equity ratio of Creative Designs would decrease over the next several years. Since CD's sales in 1987 was $5 million, it was much smaller than the above two companies. Based on the pro forma financial statements for the period of 1988 to 1990, we see growing sales and EBIT. As a small-size manufacturer, the best capital structure would be: financing its operations mainly by internal growth and a significant reduction in the company's debt levels. Ms. Beaumont wanted to acquire CD for the following reasons: * In the highly competitive market with high cost in distribution and low margin, Friendly had to grow in order to survive, and CD was a good target; Since CD's shareholders agreed to the acquisition by stock-exchange, â€Å"pooling of interests† accounting method would be used, and the consolidated financial statements more attractive than without CD, and Friendly need not record goodwill (if any) and avoid amortization of goodwill; * Since CD had a relatively low debt level and a very low â€Å"bank loan to receivable ratio†, while Friendly had difficulty meeting its bank borrowing restrictions, acquiring CD would make possible for Friendly to meet the covenants; Friendly can easily integrate CD to its high growth strategy, and expand Friendly's market presence in the mid-western region. Weighted Average Cost of Capital Assumptions (WACC) Based on the case facts that the premium for equity risk was 6% on long-term governmental bond rate of 8. 37%, we may calculate the unleveraged beta for American Greetings and Gibson Greeting, and use a derived estimate as a proxy for CD's unleveraged beta. 1987 Financial Data for Two Large Publicly Traded Companies To be conservative, we assume the unleveraged beta for CD is 0. 77. Since the cost of debt was 11% and the tax rate was 38%, we calculated CD's cost of equity is 13. 97% in 1988, and the weighted average cost of capital (WACC) is 11. 07%. Over the next five years, CD's WACC would increase to 11. 92% in 1992 due to the decreasing D/E ratio and therefore the tax shield effect. Cash Flows, Terminal Value, Equity Value Valuations In addition to the above information on WACC and sales growth rate, we have made the following assumptions: * Sales will stay flat in 1988, but will grow at 6% per year after 1989. * Cost of goods sold will stay at 55. 2% of sales level. * Depreciation, â€Å"Selling, delivery, and warehousing expenses†, and â€Å"general and administrative expenses† will grow proportionately to sales growth. * Increased Retained Earnings will be used to reduce long-term debt. * Prepaid expenses will increase by a small amount each year. * Interest expenses will decrease over the period since the debt level will decrease. * No divi dend will be paid after 1988. Based on the above assumptions, we found that the total present value for CD was $4. 349 million. Adjusting for the interest-bearing loans totaling $1. million, the net worth of CD would be $3. 049 million, $1. 168 million higher than the calculated value of the stock exchange ($1. 881 million). This indicates that acquiring CD is a good transaction for Friendly. 2. 4 Pooling Implications (Friendly + CD) By using the â€Å"pooling of interests† accounting method, we constructed the Friendly and CD consolidated financial statements. (see Appendix Valuation – Friendly + CD) The impact on 1988 pro forma financial statements is as follows: * New bank loans needed decreased from $1. 585 million to $1. 357 million; * EPS increased from $1. 7 to $1. 73; * Net profit margin increased from 4. 96% to 5. 49%; * Assets turnover increased from 1. 01 to 1. 03; * ROA increased from 5. 01% to 5. 49%; * ROE decreased from 25. 23% to 20. 5%; * Days in Recei vable reduced from 157 to 149; * Bank loan to receivable ratio decreased from 0. 9 to 0. 74; * Interest bearing debt to equity ratio decreased from 2. 62 to 1. 92; * Total debt to equity ratio decreased from 4. 04 to 2. 62. The overall impact of acquiring CD to CF is positive. The result of pooling is in line with Friendly Cards' financial strategy. In the long run, acquisition of CD would become an integral part of Friendly Cards' strategic plan for the next few years to achieve a higher growth rate and increased market share. In the short run, acquisition of CD would meet Friendly Cards' immediate financial needs enabling the company to meet the bank's covenants, specifically, to reduce the â€Å"bank loan to receivable† ratio to an estimated 0. 9 in 1988 to 0. 85 or lower, and to decrease â€Å"total liabilities to equity ratio† from an estimate 4. 04 in 1988 to 3 or lower. The result of pooling shows that these two requirements are met. 2. 5 Friendly Cards Stock Valuation Assumptions: Capital structure Based upon the pro forma financial statements and the bank covenants' requirements, we assume the capital structure to be 75% debt and 25% equity. Any other capital structures with the reduction of debt would make it more difficult to get additional capital through equity. We need the debt financing to be able to meet Ms. Beaumont's growth requirment. Discount rates We assume the cost of debt to be 11%. This is based upon the following facts: In early 1988, interest rates were declining, the 10-year Treasury Notes rate declined from 9. 52% in October 1987 to 8. 9% in January 1988; even though the short-term Prime Rate increased to 9. 07% by October 1987, it had decreased to 8. 5% by January 1988; furthermore, the Federal Reserves Monetary Policy Report(Jan. 1988) stated that â€Å"high rates of capacity utilization and low unemployment suggest the needs in maintaining progress toward price stability†, indicating that interest rates would stabiliz e at the present level. Also the need to reduce the trade deficit, business and labor would continue to exercise restraint in price and wage behavior, indicating the Fed would hold interest rate at the present level, or even reduce them. We assume the interest rates would hold stable at the present level of 8. 5% and that the lending institution will continue its premium of 2. 5% over prime. We assume all the funding for the debt to be short term as most of the debt would be used to fund the current assets (receivable and inventories). This would be a proper matching of funds. Based on the valuation of Friendly Cards, we found that * FCFE Method (Free Cash Flows for Equity): the valuation was -$ . 95 per share ; * Free Cash Flow for Capital: the valuation was -$5. 5 per share ; * Book Value Method: using 11/2 times Book Value the valuation was $7. 40 ; * P/E ratio (multiple) method: using the industry average P/E ratio of 7, the valuation was $9. 50 per share. (Please refer to appendix Valuation – Friendly Cards, Inc. ) The only way the company's stock price was worth $8 to $9. 50 per share was that West Coast Investors and Creative Designs valued the company using a Price to Earnings multiple method. **Note** We attempted to back out a discounted cash flow model that would justify an $8 or $9. 50 share price. By altering certain assumptions, most specifically the sales growth rate we can achieve positive valuations of the stock price. Slower growth in sales PART 3 Overall Assessment Our recommendation to Ms. Beaumont is to (1) First, acquire CD with a stock exchange of 198,000 shares at $9. 5/share, (2) With the additional leverage obtained by the CD acquisition, purchase the envelope machine. As evidenced by the above matrix and graphs, even though Friendly Cards would achieve a higher EPS by not acquiring CD but buying the machine, it would not meet the bank covenants. Advantages of our recommendation: * Meet all of the bank's covenants; * Meet Ms. Beaumont's growth needs; * Meet Ms. Beaumont's requirement on D/E ratio of 2 by 1990; * Maintain a relatively high level of control for Ms. Beaumont over the company; * Position the company for future growth by providing a more favorable D/E ratio. Disadvantages of our recommendation: * EPS dilution by acquiring CD from $4. 64 per share in 1992 as compared to $4. 15 with the CD acquisition; * Reduce Ms. Beaumont's control from currently 55% to 41. 5% with CD acquisition. PART 4 Goals for the Financial Structure of Friendly Cards, Inc. 4. 1 Friendly Cards capital structure consideration Our recommendation is that Ms. Beaumont to move Friendly Cards' capital structure closer to 60% debt and 40% equity (a D/E ratio of 1. 5). Our reasoning for such a recommendation is as follows: Flexibility: For future growth and possible acquisitions, Funds for acquiring more assets (another envelope machine! ) to reduce costs. Risk: Ability to deal with possible adversity into the future (i. e. , low sales) Lower risk level than current D/E ratio Income: Future growth in earnings due to ability to acquire market share through acquisitions. Further exploit the economies of scale to reduce CGS, Handling and Distribution Costs Control: Maintain controlling interests in the company Timing: Having a higher D/E Friendly can issue equity at more favorable terms at a later date when EPS is higher, the market environment is â€Å"friendlier†, and the company will be in a better financial position. Our recommended target capital structure for Friendly Cards, Inc. of 60/40 D/E is realistically attainable within 3-4 years (mid 1991). Friendly Cards Case Attachments