The Two Purposes Of Teacher Evaluation - 1347 Words

Summarizing the Handbook The two purposes of teacher evaluation are to ensure teacher quality and promote professional learning. In order to thoroughly address how the instruments and protocols offered in the book support and align with the two purposes of teacher evaluation evidence of practice must be first taken into consideration. The framework uses evidence in order to evaluate teacher performance. According to Danielson (2008), â€Å"the term evidence is intended to convey the conversations about teaching and must be grounded in actual events, in actions or statements in artifacts, or in decisions a teacher has made† (p. 1). Evidence can come from formal and informal observations, and/or the examination of artifacts. Teacher observations serve as an essential purpose since it allows the observer to gain an understanding of the learning environment, rapport and interaction the teacher has established inside the classroom. It also allows the observer to gather evidence regarding student enga gement and learning outcomes. Furthermore, â€Å"observation of classroom practice with the accompanying pre-conference and post-conference, provide the best evidence of Domains 1, 2, and 3 of the framework for teaching: Planning and Preparation, the Classroom Environment, and Instruction† (Danielson, 2008, p. 2). However, evidence of Domain 4: Professional Responsibilities demonstrate skills of maintaining student records, actively communicating with families, and continuousShow MoreRelatedEvaluation Of An Overhaul For Teachers And Administration Alike Essay1367 Words   |  6 PagesTeacher evaluation has long been in need of an overhaul for both teachers and administration alike. Just like the educational system is no longer focused on the industrialized method of teaching (where every kid receives the same instruction the same exact way), teacher evaluation can no longer be focused on one snapshot moment of teaching. In the past teachers have been evaluated on a single moment within their classroom. The evaluation focused on a variety of topics across the state but never hasRead MoreThe Teacher Induction Program At Round Lake Area School District 1161078 Words   |  5 PagesStatement of Purpose for the RLAS Mentor Program Purpose- The purpose of the Teacher Induction Program at Round Lake Area School District 116 is to provide a new teacher in the district the assistance necessary to begin a successful teaching career through a mentoring relationship during their first year of employment in our district. This program will assist new teachers and teachers new to our district in a further understanding of teaching techniques, procedures, requirements, and expectationsRead MoreAssessment And Evaluation Strategies For Nurses Educators Essay859 Words   |  4 PagesAssessment and Evaluation Strategies for Nurse Educators Introduction Kizlik (2014) describes assessment and evaluation as fundamental elements of the knowledge base of professional teachers. Kizlik (2014) also recommends that the implementation of both assessment and evaluation be a principal component of the curricula at colleges and universities. Therefore, understanding the differences between assessment and evaluation is vital in effective teaching for professional teachers and students. AlthoughRead MoreThe Appropriate and Inappropriate Use of Assessments in Instructional Design1368 Words   |  6 Pagesinappropriate practices teachers use in instructional design. Many teachers face ethical conflicts regarding assessment and the design of instructional materials for their students. This paper focuses on defining ethical behavior and examining educators ethical judgments in relation to assessment. According to the study (2008), Educational Leaders Perceptions about Ethical Practices in Student Evaluation, â€Å"little is known about educatorsâ €™ perceptions about the ethics of student evaluation practices.† ThisRead MoreThe Supervision And Evaluation Of Teachers788 Words   |  4 Pagescorrelation between student achievement and teacher quality.† Direct supervision and evaluation of teachers should effectively address teacher quality, and thereby effect student learning and achievement. Bret Range, an associate professor of educational leadership at the University of Wyoming has written two papers and maintains a blog related to teacher supervision. His research indicates, â€Å"the key to teacher development lies within well-planned teacher supervisory activities.† The focus of thisRead MoreEvaluation Project Background Of Physical Education Essay1298 Words   |  6 PagesEvaluation Project Background While the term physical literacy is gaining attention in the US as a goal for physical education (PE), physical literacy (PL) has been used within physical education in other countries such as Europe, Canada, Australia, and New Zealand. The internationally accepted definition of PL is â€Å"the motivation, confidence, physical competence, knowledge and understanding to value and take responsibility for engagement in physical activities for life† (Whitehead, 2013). The conceptionRead MoreEvaluation System For Teachers And Student Growth783 Words   |  4 Pagesevaluate teachers. This year, all teachers attended a mandatory PD session on our new evaluation system. One of the biggest difference for this year, is that we will be using student tests scores as part of our evaluation. Another change will be that teachers are now going to be picking two student growth objects to focus on, and two professional development growth plans. This current system is very aligned to what Robe rt Marzo suggested in his article on the two purposes of teacher evaluation. Our newRead MoreData On Student Learning And Development Of Students1318 Words   |  6 Pagesthe purpose of improving student learning and development. (Assessment Essentials: planning, implementing, and improving assessment in higher education by Palomba and Banta 1999) Assessment can be used for different purposes in education. This is reflected in Wiggins and McTighe’s (2005) definition of assessment as â€Å"the act of determining the extent to which the desired results are on the way to being achieved and to what extent they have been achieved†. Even in this simple definition, two differentRead MoreEvaluating Academic Program Essay example683 Words   |  3 Pagesmany academic programs to students, teachers or educational supervisors or others. It’s obvious that evaluation these academic programs is very significant to bring out better outcomes. Moreover, it is a very important part of the development of an educational process in all its aspects. At some point, educators will need to evaluate an educational program to determine its worth and to get a proper outcome. Thus, there are many committees and accreditation of teacher education revealed lately. I findRead MoreLiteracy Action Is An Essential Blueprint For Improving Student Achievement821 Words   |  4 Pagesthat educators and schools need to focus on professional learning opportunities but also need to follow up workshops to keep their teachers up-to-date with current data research. A program evaluation examines a program to determine its worth, make recommendations for refinement and success (Spaulding, 2014). Plans come in many different sizes and shapes, so evaluations need to be the same way. The goal of RTI and LLI is to accelerate these children’s progress to bring them up to grade level. Both

The Minimum Drinking Age Of South Dakota Vs. Dole

In 1984, the American government raised the minimum national drinking age from 18 to 21 as a method to reduce the number of car crashes and deaths caused by underage drunk drivers. The government placed the minimum drinking age law in the Federal Aid Highway Act, and by doing that states were not technically required to keep their minimum drinking age at 21. Given the fact that the law was a part of the Highway Act, if a state wanted to establish a different minimum drinking age, they would be required to surrender ten percent of their highway funds (Messamore). In 1987, after the act was passed, South Dakota challenged the law by changing their minimum drinking age to 19 and were brought to court in the case South Dakota vs. Dole. The court used the 27th amendment, which limits government spending power, to achieve their federal objectives. In a 7-2 decision, it was decided that Congress was able to use financial penalties on states that did not comply with the law (South Dakota v. Dole). Different federal, state and local laws help to decide alcohol s role in our country. The different governments worked together to decide what laws would be put in place regarding manufacturing alcohol, selling alcohol, who can drink, and any responses to alcohol-related problems (Alcohol Policy). The brain is not fully developed until age 25 and alcohol can affect the hippocampus, a part of the brain that plays an important role in the formation of new memories. Several people mayShow MoreRelatedThe Issue Of A Sanctuary City1624 Words   |  7 Pagesso? To answer this question we have to get a understanding of some cases involving federalism questions. One case that can be related to this question is the 1996 case of Printz vs The United States. This case challenged the Brady Handgun Violence Prevention Act by two state officers from Arizona and Montana. Printz vs The United States is a case in which the Federal Government attempts to force State and Local law enforcement to perform background checks on people trying to buy a gun. This caseRead MoreMarketing Mistakes and Successes175322 Words   |  702 PagesJuggernaut Starbucks: A Paragon of Growth and Employee Benefits Finds Storms Boston Beer: Is Greater Growth Possible? 29 46 PART II MARKETING WARS 61 Chapter 5 Chapter 6 Chapter 7 Cola Wars: Coca-Cola vs. Pepsi PC Wars: Hewlett-Packard vs. Dell Airliner Wars: Boeing vs. Airbus; and Recent Outsourcing Woes 63 86 PART III COMEBACKS Chapter 8 Chapter 9 Chapter 10 McDonald’s: Rebirth Through Moderation Harley-Davidson: Creating An Enduring Mystique Continental Airlines:Read MoreHuman Resources Management150900 Words   |  604 Pagesworkers and the legal issues associated with their use. Demographics and Diversity The U.S. workforce has been changing dramatically. It is more diverse racially, women are in the labor force in much greater numbers than ever before, and the average age of the workforce is now considerably older than before. As a result of these demographic shifts, HR management in organizations has had to adapt to a more varied labor force both externally and internally. The three most prominent dimensions of the

Marketing and Management Sociology and Social Policy

Question: Discuss about the Marketing and Management for Sociology and Social Policy. Answer: Introduction: The brand community is particular community that is formed on attachment to a certain product. There have been various developments on the marketing strategies to ensure that the consumers of a particular product get the view of what to expect regarding the commodity. They research on the various consumers behavior that later stresses the connection between the brand, culture and the individual identity. The brand community is also a group of self-selected individuals who share a system of values, standards and a certain culture and also recognize bonds of membership with each other. They are commonly characterized by consciousness, rituals, being morally responsible and traditions. The term brand community was initially presented by Albert Muniz and Thomas C. OGuinn in the year 1995 on a paper for the Association for Consumer Research Annual Conference in the state of Minneapolis, Minnesota. Moreover, it was published in article by the Journal of Consumer Research. The publishers de fined it as a non-geographical bound community that was highly specialized and based among various admirers of a particular brand. The organizations that produce various products utilize them to ensure that they market the commodities to the customers. The discussion outlines about the brand community in the field of marketing. The brand community is highly utilized by the corporations to advertise and market their products and services. It encompasses the brands customers, fans and also the advocates who are inclusive in the field of marketing. Moreover, having a loyal and strong brand community can help ensure that a small brand is successful if it is nurtured and given the appreciation it deserves. The organization is able to generate more income and get the high market share from time to time. The individuals at the market place who embrace the values of the brand as the clients are termed as the brands true owners. The marketers have been organizing and working on the social media campaigns. It ensures that they interact and gain opportunities to access the brand communities so as to leverage the brand (Meister, 2012). However, many people think that the brand communities can only be utilized by the major brand which is not the case. The brand community is a play a significant role in marketing any par ticular brand regardless of its size. It is the duty of the management to decide the marketing criteria it will use to market its commodities. The most affordable method of advertising the products and services is the best to ensure that the organization can be able to cater for it. The funds to carry out the advertisements should be budgeted for to ensure that the process runs smoothly. The managers should select a particular brand community that suits to advertise their products and services. It ensures that awareness is created to designated clients of the commodities. Through this process, the corporations get market to sell their products and make more profits. It is the role of the branding community to do their best to ensure that they show how good a particular product is and its advantages over the others (Ahonen Moore, 2005). According to Burgh-Woodman and Brace-Govans, the emphasis of the brand being the backbone of the brand community seems to be an obvious point that is not taken seriously. It has been taken granted by the analysts that there is no significant and has gone unrecognized while defining the unique characteristics of the m and their peculiar dynamics. However, the analysts have highly struggled to identify the distinguishing traits from the other social figurations. They are also characterized by the acceptance of the mainstream ideology (Jeremy, 2016). It commonly distinguishes a particular brand community from other subcultures. Secondly, the members of the brand community exhibit the self-awareness and that of the communitys relation to the commercial activity. Lastly, the communities are associated with the rituals, traditions and the responsibilities to help the other persons in the brand utilization. The brand communities operate in a particular way that is similar and share the cult ural markers. In addition to that, they are also defined in the opposition to other brands such as Apple vs Microsoft, Toyota vs Ferrari and many others. The management determines how they will carry out the advertising to ensure they market the products to the public. The managers in charge of marketing the products and services of a particular organization should choose various branding communities that are suitable for the task (Burgh-Woodman HD Brace-Govan, 2007). On the other hand, the advertising of the brand communities differs with the products to be advertised. They play an important role in the marketing of the commodities as they are committed and dedicated in ensuring that they attract the intended customers. The management of the corporations should treat the branding communities with the respect they deserve so that they can carry out their tasks accordingly. Moreover, they should be given all the resources they require so as to make the marketing of the products and services attract the public. They plan on the way to carry out the advertisement to their level best. Most of them have the experience in the marketing of the commodities as they helped most of the organizations achieve their set goals and objectives. The managers of the branding communities ensure that the individuals who engage in the advertising and marketing the intended brands are highly qualified. It is important to ensure that they do not mess up while doing the a dvertisements (Humphrey et al, 2016). In conclusion, the corporations should see the need of the brand communities and utilize them in their marketing process. They help leverage a particular brand regardless whether it is small or large. They enable various organizations attract customers from all over the world and hence generating more profits. Their management is very organized to help the different enterprises achieve their objectives of having more clients to purchase their products and services. They are very unique in the way they carry out their activities. However, the analysts do not rely recognize them and mostly prefer others to them. They play a significant role in branding exercise and should be given the priority in advertising and marketing. References Ahonen, T. T., Moore, A. (2005).Communities dominate brands: Business and marketing challenges for the 21st century. London: Futuretext. Burgh-Woodman HD and Brace-Govan J (2007) We do not live to buy: Why subcultures are different from brand communities and the meaning for marketing discourse. International Journal of Sociology and Social Policy 27: 193207. In Bowen, G., In Ozuem, W. (2015).Computer-mediated marketing strategies: Social media and online brand communities. Hershey, PA : Business Science Reference Hartleb, V. (2009).Brand-Community-Management: Eine empirische Analyse am Beispiel der Automobilbranche. (Brand Community Management.) Wiesbaden: Gabler Humphrey, J. W. F., Laverie, D. A., Rinaldo, S. B. (2016).Fostering Brand Community Through Social Media. New York: Business Expert Press. Jeremy N, (2016) Journal of Consumer Culture. Murdoch University, Australia Meister, S. (2012).Brand communities for fast moving consumer goods: An empirical study of members' behavior and the economic relevance for the marketer. Wiesbaden: Springer Gabler. MartiÃÅ' nez-LoÃÅ' pez, F. J., Anaya-SaÃÅ' nchez, R., Aguilar-Illescas, R., Molinillo, S. (2016).Online Brand Communities: Using the Social Web for Branding and Marketing. Cham : Springer International Publishing : Imprint: Springer Storch, B. (2007).What do you think about brand communities?: An insight of consumers' perception towards brand communities and the idea of mutual benefits. Norderstedt: GRIN Verlag.

Thematical Lives Of Dickens Characters Essays -

Thematical Lives of Dickens' Characters Charles Dickens' literary works are comparable to one another in many ways; plot, setting, and even experiences. His novels remain captivating to his audiences and he draws them in to teach the readers lessons of life. Although each work exists separate from all of the rest, many similarities remain. Throughout the novels, Oliver Twist and Great Expectations, the process of growing up, described by the author, includes the themes of the character's ability to alienate themselves, charity given to the characters and what the money does to their lives, and the differences of good and evil individuals and the effects of their influences. Collectively, these major novels overflow with orphans, adoptive parents, guardians, and failed parent-child relationships. Oliver, the main character in Oliver Twist, must forget about his "infantile past" (Marcus 182) in order to seek "the idyllic future" (Marcus 182). He gets hurled from orphanages to foster parents and so on until he finds himself a portion of the "wrong crowd." The pickpockets take him under their authority and attempt to show him the ropes of the embezzling operation. The orphan Carter 2 adapts well to the swindling lifestyle of Fagin and the boys, and through a series of mischievous choices, authorities apprehend him for stealing (although Dodger was the true felon), and Oliver must live with the consequences. Great Expectations also emphasizes the process of growing up through Pip, the main character. Pip's mother and father passed away while he was young, and he was forced to reside in the house of his older sister and her husband. The boy obtains many idealistic fathers, including Joe, Magwitch, Jaggers and Pumblechook, but none of these men can give him what he needs from a predecessor. Dickens demonstrates to the reader the consequences that bad parenting has on children. Some children are warped by the "knottiest roots" (Lucas 141). Pip, Estella, and Magwitch are all examples of hurt children. The bitter children dwell on their past, or "what has been forgotten" (Marcus 182), and blame the parents for their sufferings. Other children such as Joe and Herbert s urvive bad parents and go on with their lives, not letting the history affect the outlook. Personalities in the novels became cut off physically or spiritually from human companionship. Oliver suffers from a sense of estrangement. He fears being abandoned by foster parents and friends, even though the relationships are not healthy for him. Consider his relationship with Dodger. The orphan was told to "take Dodgers advice and do what he does" (Oliver 138) by Fagin in order to succeed. Oliver knew that his new Carter 3 friends were bad influences on him, but yet he remained with the clique to keep from feeling a hint of isolation. In Great Expectations, Ms. Havisham, resembling Pip, Estella, and Jaggers, acquires a sense of mutilation from her locked up feelings. In her past, she was abandoned by her fianc? at the altar on her wedding day. Ironically, the old woman, so terrified of the idea of being alone, alienates herself from most human contact. After the horror of her love's departure, she does not allow anything in the house to change. Wedding cake still sits on tables, clocks unexpectedly stopped at the exact time that she was deserted, and she lives in the past and denies the future. Desperately, she withers away "corpse-like" (Great 54) in solitude. Largely through Joe, Warwick, Herbert, Wemmick and Wopsle, Pip learns to form bonds of love. Bound to Estella through his affection for her, he does not realize her teasing games. She does not seem to display the same feelings towards him, but h e believes that he will win her emotions. This relationship matures into the destruction of Pip, but his fear of existing in seclusion keeps his helpless, constant infatuation burning. This "twist of fate finds Pip sadly and searchingly wanting" (Sucksmith 186). Dickens suggests that charity, like love, will earn integrity only if honest. Indicated in Oliver Twist, is the impression that true concern for people dwells in individuals, not in institutions. From the beginning, in the orphanage, Oliver was the Carter 4 object of people's benevolence. He obtained food, clothing, and shelter, but lived in horrible conditions and

The Concept of Global Trade Imbalance as a Policy Issue

Beyond Magic essays

Beyond Magic essays Only David Copperfield, the greatest magician alive and of all time, can put on a show and influence peoples perspective on how things are viewed and seen. Copperfield being named one of 10 outstanding men in American U.S. Jaycees is just one of many achievements Copperfield is proud of. Although people view Copperfield as an illusionist and that is it, Copperfield actually uses his magic in other ways that just in his shows, but most people look at the trick itself and not the entire performance. Although there is more than just the trick to the show, there are certain aspects Copperfield uses in all of his performances. Lights. The lights dim down. The curtain rolls open with thunder. Music. An open elevator is seen up above the stage while fog and rock n roll fill the auditorium. The empty elevator is closed and shown empty with light shining through a screen. Magic. Suddenly, a shadow appears and the elevator is now opened to reveal the star of the show, David Copperfield! Even though the spectators mouths have dropped and some are already on there feet applauding, the show has just begun. Lights, music, and magic are all parts of a spectacular show: a spectacular show that David Copperfield performs over five hundred times a year! Copperfield is considered the master of disappearing acts. (Dawes and Seterington 55). There are not too many things Copperfield hasnt made disappear. He has made everything vanish from assistants to motorcycles to a jet airliner, which was the highlight of the 1981 TV special (Gubernick, Newcomb). On autumn of 1983, Copperfield took his vanishing act a step higher once again by attempting to vanish the Statue of Liberty. It will be known as the most famous object vanished, known by millions of people and by David Copperfield (Current Biography 92 ed. 135). That evening Copperfield temporarily removed the 450,000-pound symbol off freedom form plain view...

Faux Fur for Real Article Example | Topics and Well Written Essays - 1000 words

Faux Fur for Real - Article Example Fashion directors and designers have been increasingly surprised with the ongoing trend of high end sales of faux fur products. Major online sites and retail stores inclusive of the high end designer brands as well as the mass market retailers have been showcasing huge stocks of materials and garments which look like cheetah, beaver or mink. However, the surprising points which the article depicts are that the materials coming from Japan and Europe are extremely high in terms of quality and sustainability. Moreover they offer greater variety in terms of designs and textures and at the same time come at a lower price than real fur. In other words, the article speaks about the emerging trend towards consumption of faux fur over real fur over the years both by the general public as well as the celebrities. Objective of article The objective of the article is to put forth the various attributes of faux fur which has made it immensely popular among consumers. Some of the products which ha ve helped to have an edge over real products are that they allow greater flexibility and resistance towards tough conditions and hazards. Additionally, they are also available at much lower prices in comparison to the products which are made of real fur. ... The target market comprises of both the males and females in society belonging the group mentioned in this context. Globalization has knit the entire world into a single unit which has caused considerable intermingling of the western and the eastern cultures of the world. Thus the influence of the western cultures on the Asian nations has been very prominent and inevitable. With the economic development and improvement of nations, the youth have been increasingly attracted towards stylish products, commodities and accessories. The general consumption of fashionable dresses and products has seen a rise over the years. Thus it is imperative that the use of fur products and accessories would be high in most nations. However, greater demand of the product would be felt from nations having cooler temperatures. Thus the target markets would comprise of the youth belonging to those nations having cold and mild temperatures rather than the tropical countries. Considering both the fashion tre nds as well as the environmental conditions faux fur would be increasingly demanded more in the western countries which demands greater protection on cold temperatures and also showcases the latest fashion trends in the world. Designers and manufacturers must be updated about the latest consumer trends in the sector which the article does successfully. The article provides a very clear depiction about the changing consumption trends of fur products and the emerging changes taking place over the years. The retailers, manufacturers and designers would be benefitted greatly from the trend which the article seeks to put forth. Marketing Concepts The article depicts a marketing strategy

Rape Myths and Rape Prevention Essay Example | Topics and Well Written Essays - 500 words

Rape Myths and Rape Prevention - Essay Example The double standard essentially holds that what is good for the goose is not good for the gander. In the context of rape myths and prevention, the double standard applies when a person believes they do not owe to somebody else the same consideration they themselves expect to receive. That sentiment can become dangerous when a man or woman believes that they can take what they want from another person, including sex, regardless of what they would allow someone else to do to them. Media portrayals can have both positive and negative repercussions, and can be hugely influential on people of all ages and stations in life. In particular, young people can be easily swayed and molded by what they witness in the media, be it magazines, internet, or other outlets. For example, young women are constantly accosted by pictures of skinny, pretty supermodels and may be led to believe that they need to look and act the same way in order to be accepted.

South Carolina Nullification Essay Example for Free

South Carolina Nullification Essay Throughout the great American history, Americans have been through a colossal amount of conflicts, and wars. However, they still figured out a way to compromise and accept each other’s differences. As America improves, they gradually lead to a making of a powerful and organized government. Yet in â€Å"South Carolina Ordinance of Nullification† a conflict arises, where South Carolina is furious at the federal government and wants the best for themselves. Like many other states South Carolina is one of which that had its own negative opinions towards the federal government, leading to a larger problem. The document â€Å"South Carolina Ordinance of Nullification† both supports and contradicts American and constitutional principles. In early 1860’s the Civil war took place, against the North and the South parts of America. In the time that was taken to reach the civil war, many small disagreements and arguments took place that eventually led to having an immense war. However, around three decades earlier, South Carolina had been having disagreements with the federal government. On May 19, 1928 the Congress of the United States passed the Tariff of 1828. The tariff was designed to protect industries in the northern United States which were being driven out of business, by low-priced imported goods by putting tax on them. Well it seems as if this was a great idea, until, the south started to feel the effects of it, on their antebellum economy. The south called the tariff of 1828, â€Å"Tariff of Abominations†. â€Å"South Carolina felt that the protective features of tariffs were harmful to them and they also claimed that they were unconstitutional because they favored North over the South. (u-s-history. com)A government should serve their people with equality and liberty. Instead the federal government chose to be unfair and help the north because that’s where they lived. This case continues to go on, as South Carolina and other southern states get more furious and lead on to making a Nullification of crisis. The Nullification of Crisis includes South Carolina’s opinions and how the tariff of 1828 is the opposit e of, liberty and justice for all. Since the federal government had passed a tariff that is unfair to the south, for the good of the North. South Carolina was so furious that they started talking about the seceding from the union and working their own independent state, where they can have their own laws. However, South Carolina believed that constitutionally, the state government of each state had more power within that state than did the federal government. Therefore, if a state considered it necessary, it had the right to nullify any federal law within its boundaries. The idea South Carolina had was injudicious, they thought of themselves as being more powerful than â€Å"The Federal Government†, the main and the most powerful government in America. The idea of a state being more powerful than a federal government does not exist. It doesn’t say anywhere in the constitution that a state could not follow the federal government laws and have more power than them as well. In addition, if South Carolina and other states had more power than the federal government, you wouldn’t need a federal government and there would be no point of having the â€Å"United States of America†. Moreover, when President Andrew Jackson found out about the nullification of tariffs passed by the congress, he declared an act of open rebellion and ordered U. S. ships to South Carolina to enforce the law. â€Å"Before federal forces arrived Calhoun and Senator Henry Clay had an agreement which lead to congress passing out the tariff of 1833. This lowered the tariff gradually over a decade and prevented any armed conflicts. †(. loc. gov) This shows the strength of the federal government over all the states. In conclusion, the â€Å"Ordinance of Nullification† was a document with many personal opinions and conflicts. For example, the federal government wasn’t equal to the south, by letting north have the positive affect of the tariff of 1928 and south have the negative affect. In result south tried to show that they have more power than the federal government by nullifying the tariffs. However all of this ended with an agreement. Throughout most of our history when a conflict derives a compromise is always made. After all, the conflict and work the Americans went through in the past, made an abundant change for us in the future.

Texting A Use Of Communication English Language Essay

Texting A Use Of Communication English Language Essay Texting is one of the latest forms that people use to communicate. Much like other new technologies at the time, texting has developed its own manner lingo including abbreviations and graphics. It is much different from other forms of written communication; however, many are concerned about how texting affects overall affects the writing abilities of our youth. Does the abbreviated language somehow disrupt and discourage students from learning how to spell or when it is appropriate to use abbreviated speech and when it is not. Contrary to proper belief, Text messaging does not pose a serious threat to standard English spelling or literacy. Many of our fore fathers have advocated what texting has implemented. Benjamin Franklin was among the many brilliant minds of that century who advocated for a simplified spelling system (Hendrick 2008). Merriam Webster of Websters dictionary is responsible for removing the u from words like labor and color in an effort to make words more simplified and easier to spell. Many of these men including The Spelling Society still in existence today, wanted to see an English Language that was free from so many vowels and silent letters (Hendrick 2008). While these men may have been happy to see the various forms that texted words take on, changing the standard spelling of words overall require a great deal more effort than even some of our greatest minds could imagine. There have been many new technologies that have come along that may have appeared as a threat to the English language. When the telegraph was invented and used to transmit messages over long distances, there was never the fear that this type of abbreviated speech would somehow leak out into the public and destroy English as we know it (Sutherland 2008). Besides telegrams, there has been Morse Code, and CB radios. All of these technologies eventually fell by the wayside in favor of new and better ways to communicate. If the past is any indicator as to what we can expect in the future, than text messaging may also find its day on the chopping block. If text speech is here to stay, then it still poses no threat to the English language. As a matter of fact it is a segmented part of the English language. Much like a dialect, text speech has developed as a written form. As well noted, it differs greatly in structure, form and style from Standard English. When the writings of Zora Neale Hurston and many others showed the beauty and creativity of diverse English dialects, some were applauded while others were excited to see such richness and creativity. No one would argue that texting has a social or historical culture that is unique to a people, however, much like other dialects of the English language, there is still a standard enforced and reinforced by society overall. Text speech is very unstructured and has multiple variations for the same expressions. There has been various dictionaries and resource books that attempt to explain some standard abbreviations but there are very few absolutes. For example, According to Plester, Wood, and Bell (2008), when giving a group of middle school children a phrase to translate that included the word night into text speech, there were several variations. They included nite, niht, nyt, nte, and nigt (141). Other words have more common spelling such as L8 for late or the letter u for the word you. As a result of its non-standardized form, the only reliable method of written communications so that everyone understands still remains the standard. Another reason why texting does not pose a threat to the English language is its purpose. It is a spontaneously structured social interaction (Plester, Wood, and Bell 2008). Text spelling is derived from the need to communicate a message in a short amount of characters. This is due mainly to the fact that many cell phones only allow a certain amount of characters per message (Hendrick 2008). To avoid having to continue on to a part two, words are abbreviated and letters are left out and shortened as a means to fit it all in. By these measures, the misspellings that many people are afraid of occur intentionally as oppose to a lack of knowledge of the English language (Baron 2009). Some of the most common abbreviations such as LOL (laugh out loud), ILY ( I love you), OMG (oh my God), and BTW (by the way), and spellings may split over into formal writing in school. This is also a natural phenomenon as students find different ways to express their creativity (Barron 2009). As reported by Coulter (2008), majority of students know the difference between formal and informal writing. They are aware that in formal writing text abbreviations and emoticons are not appropriate. Educators must be prepared to accept text speech as an informal writing style, and should teach the students the difference the same way they teach the difference between appropriate uses for informal wiring such as for notes and email. The developments of these abbreviated words, of many different variations, each come from its phonological roots. In order make words, one has to have phonemic awareness in order to reconstruct the words into something meaningful and understood by others (Mangu-Ward 2010). According to Plester, Wood, and Bell (2008), texting requires a person to use metalinguistic awareness to slip between one register of language to another, as they deem it appropriate (p.143). It was a surprise to these researchers to find that children who use text messaging showed greater performance on verbal reasoning than children who did not. As a matter of fact, their research along with countless others has recorded no negative impact on children who use this as a method to communicate. According to a study done by Britains Coventry University children who use text abbreviations on their phones-lol, l8ter, and the like do better in reading and spelling in school (Mangu-Ward 2008 p. 14). Expanding a bit further, when researching various forms of computer mediated discourse, there has been no negative impact found at all on language skills (Hendrick 2008). There are reasons that can be used to explain why so many people are fearful that texting is destroying the English language. One reason is over exaggeration by the media (Hendrick 2008). Our system of media is famous for taking a subject that has very little research and attempting to sensationalize it to everyone. As reported previously, the fact that research shows that not only does texting not disrupt the education of youth but has also shown to increase test scores in other areas is very rarely reported by public media sources. That information does not make for a great story that impassioned individuals can throw their support behind. Although the research states clearly the benefits of texting, it is doubtful that there will be any impassioned parents or teachers throwing their support the other way. Another unintended benefit of texting is youths as well as adults are reading and writing much more frequently than they normally would. Youths get a chance to practice their reading and spelling everyday of their own choice (Mangu-Ward 2010). Although it is commonly known about the abbreviated versions and intentional misspelling of words, contrary to popular belief it does not occur nearly as much as one would expect. When Barron and Ling conducted a study of college students text messaging they found few more lexical shortenings; yet the grand total of clear abbreviations was only 47 out of 1,473 words, which is hardly overwhelming. The text message spelling myth has been dispelled by many respected professional researchers from various fields of study. Many educational systems are starting to see the light about this controversial form of communicating. Although texting is just one form of communication that has been targeted, other mediums of informal language that use abbreviated speech are used to help students. In one Seattle based high school, students in an American literature class must blog daily about strange and weird laws (Coulter 2008). Much like texting, the students are free to write as they feel with no penalty for grammar or spelling. Many students and teachers feel this is any appropriate way to not just explain, but show the students the difference between formal and informal writing, while letting them be as creative as they would like. This method of instruction encourages and contains the need of this type of expression. No matter how many text speech dictionaries are created, or how many new abbreviations become more common, there will always be a need for a standard form of communication and good writing skills (Coulture 2008). As communicative technology changes, so will the language used in these types of mediums. By understanding that texting is just another variation of the English language and not a full on frontal assault, people will be able to appreciate it for it true creative value and potential. Studies have clearly shown the benefits of texting on the youth in reference to spelling and literacy, so there should no longer be any fear about its harmfulness. Instead, the media should focus on finding solutions to the real issues of education, like resources, qualified teachers, and funding.

F.I.T.T for Life

The F. I. T. T Principle: Frequency: The frequency of exercising must allow the body to adapt but rest and repair at the same time. For Cardio Repertory the recommended frequency is three times minimally a week and five to six times a week at most. Intensity: The intensity principle defines how much effort should be in one training session or in the training program. To make this principle effective there should be enough effort to overload the body to allow it to adapt but not as much as to over-train the body.Type: The Type of exercise you do depends on the outcomes you would like to achieve from you r program. There are 6 different types of training. These include fartlek, interval, continuous, circuit, weight and cross. Each has its own advantages and disadvantages. Time: Time outlines the amount of time spent on each session of training within your program. Time is based on the type of exercise and the intensity. Delete text and place photo here. Year 9 Year 9 Personal Health An d Development Assignment Part A: Research Task Play For Life * Recovery time improves Results appear in a shorter time period * Disadvantages * Strenuous on your body and easy to over train * Knee or leg problems can cause difficulty speeding up between intervals. Continuous: Continuous training improves aerobic fitness and is recommended for people who have not trained for a long time. It is moderate exercise lasting for at least 15-20 minutes without rest. AN overload is achieved by increasing intensity, time and speed. * Advantages * Improves aerobic fitness * Cheap * Can be done Individually or in a group * Range of activities can be used Easy to apply F. I. T. T principle PDHPE Year 9 Delete text and place photo here. Delete text and place photo here. Interval Training Fartlek Training Fartlek: The word ‘Fartlek’ come from the Swedish definition of speed play. It combines low and high intensity and many changes in speed and terrain. * Advantages * Improves speed an d endurance * Can be done over a variety of terrain * Can include hill work and reps * Programs can be flexible * Suits game players * Disadvantages * If you are not trained can create problems such as cramps * Lack of motivation to do your best Can be too easy to skip the hard bits * Difficult to see how hard someone is training Interval: Interval training consists of periods of hard work followed by periods of rest. It improves mainly speed and is done at high intensity at a fast pace. * Advantages * Fitness and performance improves quickly Part A: Research Task Circuit, Weight and Continuous Cross training contains a number of different training methods. It is used for most sports. * Advantages * Allows for a variety of training * Makes training more interesting Training can be adapted to suit the weather * Disadvantages * Spending time on different types of exercises can distract you from the more important ones * There will be more exercises you might want and need to do. * Dis advantages * Doesn’t improve anaerobic fitness so isn’t ideal for team games which require short bursts of speed * Can be Boring Circuit: Circuit training contains 6-10 training sessions at which a particular activity is performed * Advantages * Not much equipment is needed * Fitness and skills * Can be done at home or at the gym Disadvantages * Your program may include equipment you don’t have * Takes time to set up circuit Weight: Weight training is used to increase muscular strength, endurance and speed. It improves bulk and can help you recover after an injury * Advantages * Is easy to monitor improvement and overload * Can use a variety of exercises to work on certain muscular groups * Disadvantages * Muscles can be sore after workout * Can be painful to do Re. PDHPE Year 9 Delete text and place photo here. Cross Training Cross Training PDHPE YEAR 9 Michaela Franz

Pepe jeans Essay

The company maintains contact with its independent retailers via group of 10 agents and each agent is responsible for retailers in a particular area of the country. Pepe is convinced that a good relationship with the independent retailers is vital to its success. Pepe’s requirement to place firm orders six months in advance with no possibility amendments, cancellation, or repeat ordering. Some claimed that the inflexible order system forced them to order less, resulting in stock outs. Pepe felt that a change was going to be needed soon. The easiest solution would be work with the Hong Kong sourcing agent to reduce the lead time associated with orders but this was going to increase the cost significantly. Even with the significant increase in cost, consistent delivery schedules would be difficult to keep. Another suggestion was to build a finishing operation in United Kingdom. Pepe was interested to see how system worked at U. S. operations. They found that they would have to keep about six weeks’ supply of basic jeans on hand in the United Kingdom and they have to invest ? 1,000,000 worth of equipment. They also estimated that it would cost about ? 500,000 to operate the facility each year. They could locate the facility in the basement of current office building, and the renovations would cost ? 300,000.

Free Essays on Their Eyes Were Watching God Character

Joe Starks Joe Starks, Janie’s second husband in Zora Neale Hurston’s novel Their Eyes Were Watching God, had most of the common characteristics of a white individual during the late nineteen century. Joe, nicknamed Jody by Janie, proudly displays his wardrobe, which replicated that of the wealthy white bosses of the time, â€Å"[He] was a citified, stylish dressed man with his hat set at an angle that didn’t belong in these parts,† (27, Chapter 4). Other characteristics link Joe with such individuals, such as his rounded belly, his cigar, as well as his stark white home in Eatonville, Florida, where he presides as the mayor of the town. Hurston allows for these commonalities to occur in order to present Joe’s personality through his role models (the wealthy, white men) and his attitude toward his wife as well as his environment. Joe treats his Janie with his cruelty through his sexist attitude. His actions towards Janie reflect his values and ethics, grappling any sense of power and wealth to provide a symbol of his control over his surroundings a well as Janie, â€Å"He wanted her submission and he’d keep on fighting until he felt he had it,† (71, Chapter 6). After the two move to Eatonville, Joe becomes the mayor of the black town, taking any opportunity to swank about his intelligence. Other members of the town recognize his actions as boastful and maintained that if others who were educated lived in Eatonville, he would not make such claims in front of the town members.... Free Essays on Their Eyes Were Watching God Character Free Essays on Their Eyes Were Watching God Character Joe Starks Joe Starks, Janie’s second husband in Zora Neale Hurston’s novel Their Eyes Were Watching God, had most of the common characteristics of a white individual during the late nineteen century. Joe, nicknamed Jody by Janie, proudly displays his wardrobe, which replicated that of the wealthy white bosses of the time, â€Å"[He] was a citified, stylish dressed man with his hat set at an angle that didn’t belong in these parts,† (27, Chapter 4). Other characteristics link Joe with such individuals, such as his rounded belly, his cigar, as well as his stark white home in Eatonville, Florida, where he presides as the mayor of the town. Hurston allows for these commonalities to occur in order to present Joe’s personality through his role models (the wealthy, white men) and his attitude toward his wife as well as his environment. Joe treats his Janie with his cruelty through his sexist attitude. His actions towards Janie reflect his values and ethics, grappling any sense of power and wealth to provide a symbol of his control over his surroundings a well as Janie, â€Å"He wanted her submission and he’d keep on fighting until he felt he had it,† (71, Chapter 6). After the two move to Eatonville, Joe becomes the mayor of the black town, taking any opportunity to swank about his intelligence. Other members of the town recognize his actions as boastful and maintained that if others who were educated lived in Eatonville, he would not make such claims in front of the town members....

Threats to Homeland Security essays

Threats to Homeland Security essays The United States has always faced threats from abroad, but also increasingly from within. In the 21st century, new threats have been introduced due to technological, biological, and chemical advances. These new concerns compromise the security of our nation, while the threats of classic warfare that have existed in the past still exist. The War on Terror has made terrorists abroad seek new ways to harm our country. Besides the fear of international terrorists, the threat from within in country from anarchists or rebels is an equally important concern. Our country has two major fronts of concern, the domestic threat, and the growing international one. Although the War on Terrorism focused on threats from abroad, many of the new threats to our country lie within our own borders. One form of domestic terrorism is Lone Wolf terrorism. This form occurs when an individual believes strongly in a certain cause and is willing to inflict violence on his own country. The most well known lone wolf is Timothy McVeigh, known for the Oklahoma City Bombing. McVeigh believed he was a crusader, defending the constitution. He hoped to start a revolution against what he believed to be a tyrannical federal government. In order to carry out his attack he parked a van containing 4,000 pounds of explosive material outside of the Federal Alfred P. Murrah Building, where it destroyed about half of the building, killing 168 people, including children in a day care on one of the floors. This attack was the second most deadly terrorist attack in the United States, the first being 9/11. This is one example of domestic terrorism that our own citizens have p articipated in. Although this is a severe problem, the most dangerous threat comes from outside of our borders. Therefore, securing our nations entry ways, including our ports and expansive borders, is vital for our security. The United States has over 300 sea and...

Global Marketing, Foreign Markets and Strategies for Successful Entry Assignment - 1

Global Marketing, Foreign Markets and Strategies for Successful Entry - Assignment Example When analyzed through GE Matrix, both Egypt and Russia presented markets that would be highly attractive given the medium strength of Bats Bank as a business unit. While Egypt is the holder of the proud legacy of a bygone glorious civilization, the present condition of the country is not that glorious and its main importance in world commerce and industry is in its guardianship of Suez Canal. But the positive aspect of the Egyptian economy is its stable agriculture and a large concentration of population along both sides of the Nile River that practically bisects the country. However, the high levels of public debt leave very little opportunity for Egyptian Government to invest large amounts in industry. Hence, the scope of other financiers entering the market is rather rosy. And, this is true irrespective of the current political turmoil that the nation is going through. Russia has finally been able to come out of the trauma of disintegration of the Soviet Union and its loss of global superpower status. The free market mechanism has gradually taken a firm grip on Russian economy right from the advent of Perestroika a decade and a half ago and the political and economic stability of the country presents a very attractive opportunity for doing business there. Also, there is a dearth of finance in the market and financial services companies could do very well to bridge this gap. Any company entering Russian markets must take extreme care not to violate the statutory requirements of doing business in that country as any violation of local laws usually leads to the exemplary penalty. Globalization has become the norm of today’s industry and commerce. Business entities are finding it imperative that in order to survive and prosper in this age of cutthroat competition; they must cross national boundaries and mark their presence in foreign markets (Kay 1995). Foreign markets, through a treasure trove of opportunities, also present many issues and problems that need to be solved in a novel manner as business environments in these foreign shores need not be identical to those prevailing in the mother country.

Equity valuation& analysis Essay Example | Topics and Well Written Essays - 500 words

Equity valuation& analysis - Essay Example The given quotes indicate that the general principles adapted by the market participants do not include the use of discounted cash flow method. Most of the market participants use their professional judgment in valuing the securities and their judge their returns rather than using more sophisticated methods to value securities. Literature on investment and corporate finance indicates that the best method to find out the value of any investment is to discount the future stream of cash flows that an investor expects to receive with an appropriate discount rate. This discounting of future cash flows i.e. dividends, therefore lead to finding out the intrinsic value of an investment. The critical difference between intrinsic value of any investment and its market price lies in the fact that intrinsic value is what the value of security should have been and market price is the actual money placed by the market on that security. The difference between the two values therefore indicates whether a security is under-valued or over-valued. Value investors therefore often tend to find out this difference in order to make their investment decisions. It is also important to note that the discounted cash flow method takes into account the element of risk which other methods fail to integrate. The discount rate which is used to discount the future streams of cash flows takes into account the risk premium which compensates an investor for taking risk by buying a particular security. Discount rate is often calculated with the help of Capital Asset Pricing model which is based upon the risk free rate, the correlation of individual security returns with that of the market returns and the market risk premium. Thus if an investor uses discounted cash flow method to find the true value of an investment, the element of risk is already

Ethnographic Report Essay Example | Topics and Well Written Essays - 1000 words

Ethnographic Report - Essay Example n a foreign country share a common language; the language serves multiple purposes and sustains a margin between the members of this community and the local population of that foreign country. Our community consists of 10 people who are experts in their own field. Some concerns like maintenance activities, enhancing the life of power production units and maintenance of a safe operation of the industry are common between China and the English community. The members of the community share the values of honesty, hard work, dedication, spirit, passion, and courage. The English community helping out Chinese power industry may be considered to be a discourse community due to the fact that it shares common objectives, goals, and perspectives. We have a shared commitment with the industry in solving their issues and problems. The most important part of the discourse community is the strong communication between members to keep each other updated regarding the activities of the community and helping each other out in matters of work. We have established several modes of communications such as emails, phone calls, SMS, and live meetings that take place once a week to review the effectiveness of our working in helping out Chinese. The main factor that unites the members of the English community together, while residing in China is their common language, English. With same native language, it is quite easy to share views and understand each other. The composition of the community has become very facilitating in nature, due to common language. The group members consider each other their close friends and make sure never to function against the benefits of the English community as a whole. The main focus is on solving the issues of the Chinese in running power industry. There is a close relation between language and consensus. When member of the community share a common language, they feel pride in speaking this language in front of outsiders. In this way, harmony and

Goal of My Life Essay Example for Free

Goal of My Life Essay There are many goals in life that I have planned to accomplish. When I was in high school the most important goal was to finish the school with a G. P. A. 3. 0 or higher so that I could get into prestigious colleges. I have accomplished that goal, I graduated high school with a 3. 2 G. P. A. However, when I got into college people start asking me, â€Å"What are you planning to do after you finish college? † This is one of the toughest questions for a college student. Since I have been a student for all my life, I would have a hard time to answer the question. For every typical graduates would do is to find a job that suits with the field that they have learnt or help with their family business. People said that if you don’t have any idea on what you really want to do in your life, start with the things that interests you, things that you enjoy doing. Therefore, my goals in life are to take care of my parents when they are old, marry the best man, help the community, get a good job that makes me happy and gives me enough money to support my family. The first major goal in my life is to take care of my parents because in the Buddhist world, taught me that to take care of your parents is the most virtuous thing in life. Parents are the people that give birth and raise me to be a good person in the society, therefore I have to give back what they have given me for all their lives. The second goal in my life would be every girls’ dream that is to marry the best man (on earth). These days to find the right guy is very difficult thing to do because it is almost impossible. From the research of 100 guys, found that at least 50 guys are gay, 20 guys are married, 10 are in jail, 5 became monks, 5 are unattractive, 5 are disabled, 3 have HIV, 1 is in asylum(27 August 2012). However, I still believe that every person are destine to be with someone, and I will find my best man someday. Another goal in my life is to help others. I believe that every people should learn how to give and take, it’s the only way to make this world a better place. When you make more then you should give back more. By that I mean helping the community. I may not be able to donate tons of money to the people in need but I started off with little things such as littering in proper places and donate essentials to the orphanage. And in the future I would promote education for children that are in need. My last important goal is to get a good job with ood money. In this life I don’t expected to be a millionaire, I just want a job that makes me happy and gives me enough money to support my family. The reason why I don’t want to be a millionaire is because when you make more money, money will consume more of your time and you won’t be able to enjoy your happiness. I have set these goals to remind me that these are the reasons why I am here. And everyday that I live, everything that I do more or less would help me to accomplish these goals.

An Examination of Factors Contributing to Identity Development and Adj

The process of adopting a child internationally is lengthy, costly, and both physically and emotionally exhausting.Since it takes so much to adopt, only a small number of Americans can and do; mostly middle- and upper-middle class couples.Therefore, many internationally adopted children grow up in an environment with ready access to resources, with adults who are able to support them financially and emotionally.In such narrow socioeconomic circumstances, the question then arises: What accounts for those internationally adopted children and youth who do not adjust well?What factors contribute to the normal, healthy development of these individuals?Examining international adoption also brings up this point:Is there really a significant difference between the development of trans-racial, internationally adopted children and their peers who are raised by their biological parents?In order to try and answer these questions, this essay will look at a number of studies from several countries , including America, which cover a range of influences: from secure attachment to the pre-adoption situation, to location, to patterns of normal cognitive development which may negatively impact the emerging identity of a trans-racial adoptee. In infancy, researchers study attachment patterns between mother and infant and determine if they are securely attached.Overall, infants who are securely attached tend to cry when their mother leaves, but are happy to see her when she comes back (Papalia, Olds, & Feldman, p. 212). How do internationally adopted, trans-racial infants compare?Juffer and Rosenbloom (1997)?s Netherlands study found that there was no significant difference in attachment between infant-adopted mother and infant-birth mother dyads (... ... passport and inability to speak their birth language. Their development is often accompanied by feelings of anger, frustration, and confusion, which they are confronted with in college, and subsequently address. The literature reviewed in this paper examines factors of attachment, the pre-adoption situation, parenting styles, normal development in middle childhood, the development of ethnic identity, place, and the search for birth origins, in the ways that they impact the adoptees? identity development. Further research could examine the influence of a sibling cohort adopted from the same country as the adoptee, long-term effects of an orphanage stay into adolescence and adulthood [using the People?s Republic as an example], and mono-zygotic, trans-racial twin pairs reared apart, in an effort to control the factors that contribute to a negative sense of identity.

Linking Financial Ratios and Stock Returns

Chapter I INTRODUCTION Financial ratio analysis is a technique for trying to help interpret financial accounts and to determine the intrinsic value of a security by careful examination of key value drivers such as risk, growth, and competitive position. Various ratios can be calculated from the financial accounts. These ratios will then help us to examine the company’s performance over a number of periods by comparing the same ratios in previous years’ accounts and also the accounts of other businesses operating in a similar environment (Most common benchmarks are industry leaders and industry averages). Financial ratio analysis provides essential information and serve (Investors, Stockholders, lenders, corporation management, Fundamental analysts†¦. ) with a lot of different contexts for different kinds of decisions. 1. 1 Statement of the Problem The enormous number of financial ratios used by financial managers and financial analysts and their relationship with stock return is the main problem in interpreting the financial statements. Based on, the ultimate goal of financial managers is to maximize the wealth of their stockholders; financial managers must understand the impact of their managerial decisions on their company’s financial statements and financial ratios concluded which will consequently affect the stock price of their company. Interpreting such a huge number of ratios distracts attention from the most relevant factors that affect stock prices. 1. 2 Purpose of the study A number of studies such as Timo Salmi (1990) were conducted to reduce the information load resulting from computing a large number of ratios and categorize those ratios that were believed valuable. This study aims to identify those variables that are most relevant to the stock returns of pharmaceutical sector in Egyptian stock market. 1. 3 Statement of objectives This study attempt to achieve the following objective: -The most relevant independent variables (financial ratios) with stock returns as a dependent variable. Chapter II FINANCIAL RATIOS AND STOCK MARKET 2. 1 Literature Review The main goal of our research is to evaluate the relationship between common financial ratios as independent variables and stock returns of the pharmaceutical firms as dependent variable. The relation between financial statement information and stock return was examined by Ou and Penman (1989) who observed returns to investment strategies that are based on a measure that summarizes the information in financial statements to identify the relevant financial ratios. Their study indicate that the predicted returns can not be explained by return based risk measures and that financial statements capture fundamentals that are not reflected in stock prices. The results of the study suggest that it is possible for investors to make excess profits using publicly available information. More recently, the relation between financial statement information and stock return was extended by Holtausen and larcker (1992) who identify value-relevant fundamentals in the context of a return-fundamentals relation. Holtausen (1992) examined the ability of accounting information to generate profitable trading strategies (using 60 accounting ratios). The excess returns were observed in the fourth month following the company’s fiscal year end. The results of the study suggest that the trading strategy was able to earn significantly abnormal returns during the period of 1978-1988. The same issue was examined later by Lev and Thiagarajan (1993) who used fundamental ratios as the basis of analysts’ description of different ratios to identify the value relevance of the financial ratios and their usefulness in security valuation. Afterward, Belkoui (1997) employed the popular financial ratios to show the value relevance, where the popularity of these financial ratios is matched by their usefulness in security valuation. He shows that value relevance of popular financial ratios in both a non contextual setting and a setting conditioned by levels of inflation and growth. 2. 2 Classification of financial ratios The classification of financial ratios was studied by Timo Salmi (1990) who split these financial ratios into five somewhat arbitrary groups: †¢Profitability – how good is the business as an investment. Liquidity – the amount of working capital available. †¢Capital Adequacy – measure the leverage percentage. †¢Debt service coverage – how near is the business to bankruptcy. †¢Efficiency – how good is the management of the business. Each financial ratio has its own signal and its own relation to the stock return. Based on these previous studies, the stu dy selected the most popular financial ratios guided in major financial analysis books such as Mishkin (2001) 2. 3 An overview of Egyptian stock exchange EgyptWatch (2002) studied the history of the egyptian stock exchange and mentioned that the Egyptian Stock Exchange is comprised of two exchanges: the Cairo & Alexandria Stock Exchanges (CASE), and is governed by the same board of directors that share the same trading, clearing & settlement systems. The Alexandria Stock Exchange was officially established in 1888 followed by that of Cairo in 1903. The two Exchanges were very active until the 1940s, when the Egyptian Stock Exchange ranked fifth in the world. Nevertheless, the political turmoil of the mid-1950s led to the demise of activity on the Exchange, which remained dormant throughout the period between 1961 and 1992 (MohieEldin and Sourial, 2000). In 1990, the Egyptian government started on economic reform & restructuring program. The move towards a free-market economy has been remarkably swift and the process of deregulation and privatization has simulated stock market activity. The Capital Market Authority (2002) played an instrumental role in initiating and leading the effort for the revival of the Egyptian stock market in the period between 1992 and 1996. The Capital Market Authority (CMA) is the regulatory body in charge of enforcing, regulating & ensuring compliance as well as monitoring market performance. Relevant policy actions undertaken by the CMA include introducing all types of investment vehicles, allowing open competition in the pricing of market services; and providing full investor protection. The main features of the operational framework are fair trading procedures and practices as well as an immediate transfer of ownership of traded securities; optional listing on the stock exchange; quarterly disclosure requirements for companies; adequate protection of minority shareholder rights; and improved data collection schemes. Capital Law 95/1992 has put in place the regulatory framework in which financial intermediaries such as brokers, venture-capital firms, underwriters and fund managers are to operate. With respect to the managerial framework of CASE, a coherent organizational structure with a clear division of authority & responsibilities was established, creating new divisions & departments such as Publications & Public Relations, Research, Surveillance & Market Control, and Information Technology. Additionally, in May 1998, CASE signed a contract with EFA Software Ltd. , to deliver the new electronic trading, clearing & settlement system that will replace the existing one. The Board of Directors also set up several committees with specific responsibilities. At the senior level, an international advisory committee made up of internationally prominent economists, investment bankers, financiers & investors has been developed in order to ensure that CASE stays closely linked to the int’l arena. This group also provides continuous feedback on its policies. Both the CMA & the CASE monitor market activity to detect possible market manipulation or insider trading. Accordingly, they may suspend offers & bids for institutions suspected of price manipulation. In the case of an emergency, the CASE and/or the CMA may halt trading and/or place ceilings on floors trading prices (maximum 5% up or down), based on the closing prices of the preceding day. In the case of individuals, mutual funds & international funds, no taxes are levied on dividends, capital gain & interest on bonds. Profits of Egyptian corporations from securities investments are subject to a capital gains tax. 2. 3. 1 Recent developments On 21 July 2002, CASE commenced its new price ceiling system with regard to the most actively traded stocks. According to the new practice, the five-percent ceiling on daily prices was removed for a set of selected active stocks (currently twelve). This set of stocks comprises 12 out of the most actively traded stocks on CASE. The chosen of this set of stocks was based on meeting some stated criteria decided by CASE (2002): †¢Stocks must be dematerialized. †¢Minimum trading days per company per year is 220. †¢Average number of transactions per stock must be 20. †¢Minimum market capitalization per company amounts to LE 200 million. Minimum free float amounts to 15 percent of the total listed shares. †¢Minimum turnover ratio per company is 10 percent. †¢The company must prepare financial statements for three consecutive years. †¢Transactions conducted on the shares of the company must be executed by at least 20 brokerage firms. The new practice will stipulate the halt of trading on any of the twelve stocks for a period of thirty minutes, forty-five minutes o r till the end of the trading session, if the stock prevailing weighted average price exceeds 10 percent, 15 percent or 20 percent respectively over opening price. When trading is halted, brokers should inform their clients about the temporary suspension, its reasons, duration and should take the necessary actions in order to fulfill their clients requests. Brokers are allowed to cancel, any of their clients’ orders, when trading is halted. 2. 3. 2 Background of Privatization Program The Ministry of Public Enterprise (MPE) is dedicated to achieve the long-term goal of complete implementation of Egypt’s overall privatization plan. In 1991 Public Enterprise Law No. 203 was introduced as a transitional measure. Dr. Khatab M. (Minister of Public Enterprise) (2002) has explained his Ministry’s plans and objectives to facilitate privatization in Egypt and the methods that have been followed in this regard. Also Dr. Mokhtar Khatab has mentioned to the Government of Egypt (GOE) his efforts in undertaking an extensive privatization program whereby state-owned companies are transferred to the private sector through several methods McKinney (1996). †¢The transfer of ownership & control of state-owned enterprise to the private sector through a partial or a full public share flotation on both the domestic or foreign stock exchanges. †¢Direct sale of a controlling interest to domestic or foreign investors. Direct sale of a controlling interest to employees. †¢The law also allows the sale or lease of company assets, unlimited sale of government-owned shares, or liquidation. Primary objectives of the plan are to generate higher productivity and faster (but sustainable) growth, and as a consequence an increase in returns on assets and equity while at t he same time raising internal efficiency, improving capital structure and increasing capital expenditure. Since the early 1990s a number of key programs have been put into place to greatly liberalize commerce and trade; and to re-frame the country’s legal, regulatory, judicial, and tax structures. An equally important focus of the plan is the creation of new jobs that an expanding economy will provide for the workforce. Over the past five years, the GOE has achieved very gratifying results in macroeconomic terms. This is due to the creation of policies to remove trade barriers, the reform of trade and financial markets, and the reform of the legal taxation and regulatory frameworks, Field (1995) 2. 3. 3 Updates on the Situation of the Privatized Companies The Government of Egypt (GOE) has designed a balanced privatization program, which includes the following share sales strategies. The Egyptian Ministry of Public Enterprise Sector (2001) revealed that: †¢Public Offerings on the Cairo and Alexandria Stock Exchange 37 companies have so far been approved by the GOE for privatization and have been sold through Initial Public Offering (IPO) or second offerings. The sales of these companies netted 5. 6 billion pounds which represents 36% of privatization proceeds to date. 16 companies have achieved partial privatization netting the government nearly 1. 76 billion LE. †¢Sale to Anchor and Strategic Investors 3 companies have been privatized by this method, accounting for 6. 4 billion pounds LE in proceeds to the government. Sales to anchor investors have amounted to 42% of the total privatization proceeds thus far. †¢Employee Stock Ownership Programs (ESOPs) The GOE has approved the allocation through the sale of 10 percent of the public enterprises’ share offerings to the employees as part of the â€Å"Employee Stock Ownership Program†. I n other cases, and according to the particular circumstances of each company, the majority of shares have been sold to its management and employees. To date, mainly medium-sized companies in the public works sector have implemented this scheme. So far, 30 Employee Shareholder Association (ESA) sales transactions have taken place bringing in 870 million pounds LE. †¢Lease Management Contracts In this method, Companies were offered for management by the government to the private sector with an option to buy at a future date. This alternative is not very different to the anchor investor approach if and when the managing company exercises its option to buy. Five contracts of this type are currently active. Chapter III PHARMACEUTICAL SECTOR OVERVIEW The government has set a 40% ceiling (maximum that could be privatized), 10% of which is reserved for Employee Shareholder Associations (ESA), on the privatization of any public pharmaceutical company. The restriction relates to the government’s desire to maintain control of the industry for its significant role in society, The Egyptian Ministry of Public Enterprise Sector (2001). The first five companies that have been privatized: Alexandria, Cairo, Memphis, Arab and Nile pharmaceuticals. These companies have already been 40% privatized. The privatization plan then expanded to cover 11 companies at the end of June 2002. . 1 Pharmaceutical Industry Highlights Drug policy and planning center (2002) has published the following statistics: 199920002001 Market Size (LE bn)4. 655. 42 No. of Products (thousand)3. 63. 84 Per capita spending (LE)72. 6677. 1882. 14 3. 2 Pharmaceutical Products Total exports made by Egypt to the whole world includes a lot of commodities which are classi fied to (Fuels Products, Cotton, Raw Materials, Semi finished commodities and finished commodities). Central Bank of Egypt (2002) revealed that Pharmaceutical products are considered as part of finished commodities, they represent 3% of finished commodities and 1. % of the total export. Also, Pharmaceutical products play a significant role in Egypt’s import. They represent 4% of the total import and 21% of their classification division (consumer goods). Figure (1) shows Pharmaceutical Export and Import situation. Figure (1) Local production of medicine satisfies 92% of the market demand, whereas the remainder is balanced by imports. Kompass Egypt (2002-2003) classified the local market players as: 1) Public-sector companies. 2) Private-sector companies. 3) Multinationals Figure (2) Note: The term Private sector encompasses Multinationals and other Private companies. The government has set a relatively low tariff on imported drugs, which averages around 5%. The main reason for this comparatively low duty is the state’s policy of making medicine available to the bulk of the population at the cheapest possible price. 3. 3 Pricing Policy Prior to the reform program in 1991, the government’s major consideration when setting prices for drugs was to make medicine affordable to the bulk of the population regardless of a company’s cost structure. The focus on the social role of medicine, rather than the profitability of pharmaceutical companies, is the main reason behind this policy. The Drug Policy & Planning Center (DPPC) is the main regulatory authority controlling the pharmaceutical industry. The center is in charge of drug registration and pricing. The DPPC (2002) uses a â€Å"Cost Plus Formula† to price drugs. The formula stipulates a price equivalent to the products cost plus a certain profit margin. The profit margin is 25% for nonessential products, and 15% for essential products. It is noteworthy that once a product has been priced, it is seldom eligible for re-pricing to account for increasing costs. The heavy drop in the value of the Egyptian pound was mirrored in an increasing raw material costs burdening the Egyptian Pharmaceutical companies, which import around 80% of their raw material requirements. In order to save the profit margins from the aftermath of the devaluation, the Ministry of Health finally agreed to raise the prices of five products for each pharmaceutical company starting February 2002. 3. 4 GATT and TRIPS Egypt is a signatory to the General Agreement on Tariffs and Trade (GATT) which will come into effect for the pharmaceutical sector in Egypt in 2005. The agreement is likely to have serious repercussions for the pharmaceutical industries of developing countries including Egypt. The agreement calls for the abolition of both quantitative and qualitative barriers to entry for pharmaceutical products, thus eliminating any governmental protection of the industry. Under GATT, Egyptian companies have to abide by the restrictions imposed by patents and property rights for a period of 20 years. Based on the Egyptian commitment with the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which is part of the GATT, President of Egypt published The Law No. 2 for year (2002), calling for the Protection of any invention whether industrial or intellectual. The agreement will result in the extension of a patent to 20 years and will grant protection to the product and the production process. Chapter IV METHODOLOGY AND EMPERICAL MODELS 4. 1 Data Set In our study, we select all the pharmaceutical companies quoted in the Egypt ian stock exchange which consists of 11 pharmaceutical companies representing the pharmaceutical sector. We covered the period from 1996 to 2001. Analyzing six continuous years of data, strengthen and support results and give our conclusion stability and reasonability. Kompass Egypt Financial Year Book and the Egyptian Capital Market Authority were the prime sources for our data set. Additionally, for the purpose of this analysis, we calculate the returns using annually prices of securities for years starting from 1996 to 2001. 4. 2 Selection of Financial Ratios (Independent variables) According to the literature, we determine the most useful financial ratios that could be functional in security valuation by analyzing and comparing several papers and texts were analyzed and compared. The reasons behind the selection of these financial ratios: †¢Their talent in theoretical explanation of fundamental relationships and signals experienced by the firms. [Foster 1986] †¢The importance of their existence in published annual reports. [Gibson 1982] †¢Surveys proved that chief executive officers and other senior executives are concerning popular financial ratios for various types of decision making. [Walsh 1984] The following table provides the most common financial ratios that might affect stock returns. For each financial ratio, we provide the way of calculation, the hypothesized positive or negative relationship with stock returns. Table (1) The common financial ratios and their prediction with stock returns GroupFinancial ratiosVariablesEquationsPrediction of relationship ProfitabilityEarning per ShareEPSNet income / Number of shares outstandingPositive Return on EquityROENet income / owners’ equity Return on AssetsROANet income / total assets Profit MarginPMNet income / total sales LiquidityCurrent RatioCTRCurrent assets / Current liabilitiesNegative Quick RatioQR(Current assets – Inventory) / Current liabilities Operating Cash flow RatioOCFCash flow from operations / Current liabilitiesPositive LeverageDebt to Equity RatioDERLong term liabilities / owners’ equityNegative CoverageInterest CoverageICEBIT / interest expensePositive EfficiencyAssets TurnoverATOSales revenue / Total assetsPositive Receivables TurnoverRTOSales / Account Receivables EBIT: Earnings before Interest and Taxes We refer to the explanantion of these financial ratios (independent variables) in the Appendix section. . 3 Buy-and-Hold Returns (BHR) As far as the dependent variable is concerned, stock returns, there is no consensus on the appropriate methodology for calculating the long-run stock returns (see among other, Barber and Lyon, 1997; Kothari and Warner, 1997; Brav and Gompers, 1997; and Barber, Lyon and Tsai, 1999). Researchers use several methods to calculate long run returns, in particular Buy-and-Hold returns (BHRs) method. The first s tep in calculating Buy-and Hold return method is to calculate rate of return on stocks. We consider that the appropriate rate of return on a given stock is the difference between the stock prices in time t plus dividends in time t-1 and the stock prices in time t-1 , as follows: (1) Where is the return for security I for period t, refers to the closing price of security I at time t , and is the price of security I at time t-1 , is the dividend received for period t-1 for the firm I As far as we consider time t as a year, rate of return on stocks ( ) that we calculated from the previous equation is the Buy-and-Hold return method for a financial year. (2) Where is Buy-and-Hold Return for security i in period t. we consider it a year. 4. 4 Regression Model To determine the relationship between the independent variables (financial ratios) and the dependent variable (stock return), we follow a similar methodology to that of Belkaoui (1997) and estimate the following regression: (3) Where is the annual stock return of firm I at time t, is the earning per share for firm I at t ime t, is the return on equity for firm I at time t, is the return on assets for firm I at time t, is the profit margin for firm I at time t, is the current ratio for firm I at time t, is the quick ratio for firm I at time t, s the operating cash flow for firm I at time t, is the debt to equity ratio for firm I at time t, is the interest coverage ratio for firm I at time t, is the asset turnover for firm I at time t, is the receivable turnover for firm I at time t. Since the return of a given stock is based on a period extending from 9 months prior to the fiscal year-end and 3 months after the fiscal year-end, corresponding roughly with the period between announcing the financial statement, the starting month would be December for firms whose fiscal years end at Jun, the 30th and June for firms whose fiscal years end at December the 31st. CHAPTER V RESEARCH FINDINGS 5. 1 Results We present results of a regression model where independent variables in the regression equation are chosen in two ways (both general and step wise regression). Multicollinearity tests the correlation among two or more of the independent variables (financial ratios) used in the regression equation. Multicollinearity is a problem because it increases the likelihood of rounding errors in the calculation of the beta estimates and standard error, and also it may produces confusing and misleading (signs of beta parameters are different from those signs expected) results (Mendenhall, 1996). Table (2) shows that the existing problem in this Multicollinearity is especially evident for the correlation between the Current Ratio and the Quick Ratio reaching 0. 92 and significant at 99% level. Current Ratio and Quick Ratio are two faces for the same coin. They are categorized under liquidity ratios group, they have the same explanation about the result and there is a little bit difference in their equations (In Quick Ratio, Inventory is excluded from the Current Assets). So we eliminate Quick ratio from the independent variables (financial ratios) and retain on Current Ratio because it is more popular. Table (2) Correlation Matrix to explain the relationships among the financial ratios as independent variables VariablesQRATODERCTRICEPSOCFPMRTOROAROE QR1. 000 ATO-0. 4204*1. 000 DER0. 03920. 3860*1. 000 CTR0. 9239*-03478*0. 08801. 000 IC0. 3752*-0. 3246**-0. 15040. 3610*1. 000 EPS0. 1884-0. 2604**-0. 12480. 0724-0. 03061. 000 OCF0. 0641-0. 3243-0. 29300. 15720. 19970. 32021. 000 PM0. 1659-0. 4338*-0. 2835**0. 23450. 04750. 6245*0. 34311. 000 RTO-0. 2999**0. 1663-0. 0413-0. 0230-0. 0298-0. 19220. 6846*0. 16561. 000 ROA0. 0535-0. 1600-0. 4080*0. 16850. 17500. 6342*0. 6703*0. 6392*0. 3761*1. 000 ROE0. 1264-0. 1178-0. 01580. 21150. 10610. 11030. 8970. 2610**0. 18200. 3693*1. 000 * Significant at the 1% level ** Significant at the 5% level Table (3) & (4) show the multiple and step-wise regressions of the relationship between explanatory variables (financial ratios) and stock returns utilizing buy-and-hold return (BHR) method. The relationship between stock returns and common financial ratios is es timated using the following equation: Where is the annual stock return of firm i at time t. BHR is calculated as follows: Where is buy- and- hold return for security i, in period T, T is the trading month number 12, and indicates the first event month of calculating the return. s the dependent variable in the regression equation. Table (3) Multiple Regressions of the Relationship between Financial Ratios and Stock Returns Independent variables BetaT testSig. T 1- Current ratio (CTR)0. 7821993. 0940. 0055* 2- Interest coverage ratio (IC)0. 6895873. 0850. 0056* 3 Profit margin ratio (PM)0. 6434102. 5740. 0177** 4- Earnings per share (EPS)0. 3790681. 1190. 2757 5- Operating cash flow ratio (OCF)0. 2002970. 5430. 5931 6- Assets turnover (ATO)0. 1150700. 4550. 6537 7- Return on Equity (ROE)0. 0966730. 5010. 6215 8- Debt to equity ratio (DER)0. 0622020. 3040. 7640 – Receivables turnover (RTO)-0. 165573-0. 4660. 6457 10- Return on Assets (ROA)-0. 121268-0. 3320. 7433 Multiple R = 0. 68529F = 6. 76472 R square = 0. 46962Significant F = 0. 0031 * Significant at the 1% level ** Significant at the 5% level The results from table (3) show that the F test used to test the overall utility of the model indicates that the model is significant at the 99% level. However, the R square is 46. 96% indicating that the ten independent variables together explained approximately half of the variance in the yearly return of pharmaceutical sector as a dependent variable. Also, T test of the individual Betas (financial ratios) indicates that the most active ratios in determining stock returns are Current Ratio (CTR), Interest Coverage Ratio (IC) and Profit Margin Ratio (PM) with a significant level of 99%, 99% and 95% respectively. To check on the signs of the beta coefficient, the dependent variable (stock return) was regressed on each of the independent variables (financial ratios) and the signs of the resulting betas were checked against that of the original equation. There are three ratios which are Current Ratio, Receivable Turnover and Return on Assets that had different signs from the original regression equation The positive coefficient estimated for Current Ratio with stock returns is not expected because conservative policies that tend to keep current asset higher than current liability have lower risk and also have lower expected return than the aggressive policies. So we conclude that rational investors put more confidence in low risky stocks and look forward for stable stocks more than the temporary profitable stocks. On the other hand, Receivable Turnover ratio and Return on Assets ratio are completely insignificant as show in table (3), so there is nothing important to explain their different signs from the original prediction. Table (4) Step-wise Regression of the Relationship between Financial Ratios and Stock Returns Independent variables R? BetaT testSig. T ChangeAccumulation 1- Current ratio 0. 194050. 194050. 7302745. 2990. 0000* 2- Interest coverage ratio 0. 121330. 315380. 7161115. 2420. 0000* 3 Profit margin ratio 0. 072850. 388230. 4597934. 1170. 0001* Multiple R = 0. 62308F= 12. 69213 R square = 0. 38823 * Significant at the 1% level ** Significant at the 5% level In the next step, we utilize the step-wise regression to reach the final model that contains the significant explanatory variables and give better explanation for the relationship. Consistent with the general regression models, the step-wise results confirm the above mentioned findings as Current Ratio (CRT) is the most significant variable at the 99% and explained about 19% of the variance in the yearly return of pharmaceutical sector with R square about 19%, while R square for the model is about 39%. Interest coverage ratio has also explained about 12% of the variance in the yearly return of pharmaceutical sector. Interest coverage ratio is regarded as a measure of a company’s creditworthiness because it shows how much income there is to cover interest payments on outstanding debt. Profit margin ratio explained about 7% of the variance in the yearly return of pharmaceutical sector with R square 7%. From results we conclude that rational investors and stockholders are looking for strength and stability first then profitability when evaluating a pharmaceutical stock company. Table (5) Stepwise Multiple regression analysis for the good predictors Company R? BetaT testSig. T ChangeAccumulation 1- Memphis0. 466240. 466240. 73001412. 4530. 0000* 2- Cairo0. 213940. 680180. 6092937. 6880. 0000* 3- Alexandria0. 094360. 77454-0. 521862-4. 6470. 0001* Multiple R = 0. 88006F= 23. 73573 R square = 0. 77454 * Significant at the 1% level ** Significant at the 5% level Stepwise multiple regression model yielded a reduced equation containing only three companies (independent variables) explaining about 77% of the variance in the yearly return of pharmaceutical sector as a dependent variable: the analysis yielded three good predictors as demonstrated at table (5), the results proved that Beta value of Memphis Pharmaceutical and Chemical Industries was 0. 73 and it is significant at 99% level. Additionally, Memphis Company alone explained about 47% of the variance in the yearly return of the pharmaceutical sector. The second good predictor is Cairo Pharmaceutical and Chemical Industries while its Beta value was 0. 60 and it is significant at 99% level. Cairo Company alone explained about 21% and together with Memphis Company explained about 68% of the variance in the yearly return of the pharmaceutical sector. The third and last predictor is Alexandria Pharmaceutical and Chemical Industries with a Beta value of -0. 52 and significant at 99% level. Alexandria Company explained alone about 9% of the variance in the yearly return. 5. 2 Summary and Conclusion The relationship between financial ratios and stock returns has been a popular issue in the area of accounting and finance for a long time, so we found that it is a good issue to discuss on the Egyptian stock market. Here, an analysis is undertaken to show the value relevance of the financial ratios and their usefulness in security valuation in the Egyptian pharmaceutical sector. In our research, we use step-wise multiple regressions between financial ratios and stock returns, also between pharmaceutical companies’ returns and pharmaceutical sector returns. The results from using step-wise and multi regression indicate that Current Ratio (CTR), Interest Coverage Ratio (IC) and Profit Margin Ratio (PM) respectively, are the most relevant ratios in determining stock returns. Additionally, Memphis Pharmaceutical and Chemical Industries is the most relevant company in explaining the variance of the pharmaceutical sector return as a whole. Finally, it seems that Current Ratio (CTR), Interest Coverage Ratio (IC) and Profit Margin Ratio (PM) play a significant role in formulating investment decisions in the Egyptian stock market (specifically, Pharmaceutical sector). Egyptian rational investors put more confidence in low risky stocks and look forward for stable stocks more than the temporary profitable stocks. 5. 3 Further Research The study was conducted on Egyptian pharmaceutical sector and taken all pharmaceutical companies (11 companies) that have been quoted in Egyptian stock exchange, covered the period from 1996 to 2001. Replicating the study on other sectors in Egypt such as (Agriculture, Food & Beverages, Construction, Banks†¦) at different times could be very useful. The study could be also replicated on the valuable Egyptian market indices such as (Case 30, IFCG, MSCI, EFG Hermes). These studies could help in determining more clearly the relationship between financial ratios as independent variables and stock returns as dependent variable. CHAPTER VI REFRENCES Barber, B. , Lyon, J. , and Tsai, C. , (1999), â€Å"Improved Methods for Tests of Long-Run Abnormal Stock Returnsâ€Å", Journal of Finance, 54 (1), 165-201. Baraber, B. , and Lyon, J. , (1997), â€Å"Detecting Long-Run Abnormal Stock Returns: The Empirical Power and Specification of Test Statisticsâ€Å", Journal of Financial Economics, 43 (3), 41-72. Brav, A. , and Gompers, P. , (1997), â€Å"Myth or Reality? 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(2001), â€Å"The Economics of money, banking, and financial markets†, Sixth Edition, Adison Wisel y, Boston. MohieEldin, M. and Sourial, M. S. , Institutional Aspects, Distributional Characteristics and Efficiency of Egyptian Securities Market, in Arab Stock Markets: Recent Trends and Performance, edited by Riad Dahel, (Cairo: AUC Press, 2000), 1-44. Ou, J. , Penman, S. 1989. â€Å"Financial statement analysis and the prediction of stock returns,† Journal of Accounting and Economics, Vol. 11, p. 295-330. Peter S. R. , (1999), â€Å"Commercial bank management†, fourth edition, McGraw-Hill Companies, NY: Avenue of the Americas. Riahi-Belkaoui, A. (1997). â€Å"Value relevance of popular financial ratios,† Advances in Quantitative Analysis of Finance and Accounting, Vol. 5, pp. 193-201. Ross, Westerfield, and Jaffe, (2002) â€Å"Corporate Finance†, Sixth edition, McGraw-Hill Companies, NY: Avenue of the Americas. The Capital Market Authority, (2002), â€Å"CMA Public Information Center†, (CMA. ov. eg), Available: http://www. cma. gov. eg/En-nf/index5. html (Accessed: 2003, January 20). The Drug Policy and Planning Center, (2002), Pharmaceutical Industry Statistics, (DPPC. gov. eg), (Accessed: 2003, February 10) The Egyptian Ministry of Public Enterprise Sector, (2001), Privatization Program perform ance from the start to February 2001, (Cairo: MPES), http://www. mpe-egypt. gov. eg/privatize. asp#methods. (Accessed: 2003, February 16) The Law No. 82 for year (2002), â€Å"Trade-Related Aspects of Intellectual Property Rights (TRIPS)†, Pharmacy and Medicine, March 2003, Vol. 24, p. 44-55 Timo S. , Ilkka V. , Paavo Y. O. (1990), â€Å"On the Classification of Financial Ratios†, published on the Word Wide Web as http://www. uwasa. fi/~ts/sera/sera. html Walsh, F. J. (1986), â€Å"The Relative Information Content of Accruals and Cash Flows: Combined Evidence at the Earnings Announcement and Annual Report Release Date† Journal of Accounting Research, p. 165-200 CHAPTER VII APPENDIX (A) Financial Ratios Financial ratios are very important for new investors who would like to invest in the firm and also for stockholders who are the investors of the firm because financial ratios give them several indicators which they can evaluate the firm with. 1) Profitability Ratios The main goal of these ratios is to help us to judge how good the firm's profit performance. Profitability ratios refer to the ability of a firm to generate revenues in excess of expenses. 1. 1 Earnings per Share The portion of a company’s profit allocated to each outstanding share of a company’s common stock. E arnings per share is simply a fundamental measure of profitability that shows how much profit was generated on a per-share-of-stock basis. EPS doesn’t reveal a great deal. Its true value lies in comparing EPS figures across several quarters, or years, to judge the growth of a company’s earnings on a per-share basis. David Irwin (2001) Therefore, studying refers to a positive relationship between EPS and stock market return. To calculate EPS, start with net income (earnings) for the period in question, subtract the total value of any preferred stock dividends and then divide the resulting figure by the number of shares outstanding during that period. Or: Net income / Number of shares outstanding 1. 2 Return on Equity ROE is a fundamental indication of a company’s ability to increase its earnings per share and thus the quality of its stock, because it reveals how well a company is using its money to generate additional earnings. ROE allows investors to compare a company’s use of their equity with other investments, and to compare the performance of companies in the same industry. ROE can also help to evaluate trends in a business. Businesses that generate high returns on equity are businesses that pay off their shareholders handsomely and create substantial assets for each dollar invested as mentioned by Peter S. 1999). To calculate ROE, divide the net income shown on the income statement by shareholders’ equity, which appears on the balance sheet: Net income / owners’ equity 1. 3 Return on Assets A Company’s profitability expressed as a percentage of its total assets. Return on assets measures how effectively a company has used the total assets at its disposal t o generate earnings. Because the ROA formula reflects total revenue, total cost, and assets deployed, the ratio itself reflects a management’s ability to generate income during the course of a given period, usually a year. Ross (2002) Naturally, the higher the return the better the profit performance. ROA is a convenient way of comparing a company’s performance with that of its competitors. ROA should have a positive relationship with the stock market return. To calculate ROA, divide a company’s net income by its total assets, then multiply by 100 to express the figure as a percentage: Net income / total assets 1. 4 Profit Margin Profit Margin is a company’s net profit or loss as a percentage of total sales for a given period, typically a year. This ratio shows how efficiently management uses the sales revenue, thus reflecting its ability to manage costs and overhead and operate efficiently. It also indicates a firm’s ability to withstand adverse conditions such as falling prices, rising costs, or declining sales. Ross (2002) The higher the figure, the better a company is able to endure price wars and falling prices. Investors tend to prefer a higher percentage of profit margins, which considered being an indication of a positive relationship between profit margin and stock market return. The calculation is very basic: Net profit / total sales (2) Liquidity Ratios These are ratios that measure the liquidity of the firm. Firms have to ensure that they have the liquidity required to meet all their commitments. To the extent a firm has sufficient cash flow; it will be able to avoid defaulting on its financial obligations and, thus avoid experiencing financial distress. 2. 1 Current Ratio Current ratio is the company’s liquidity and its ability to meet its short-term debt obligations. By comparing a company’s current assets with its current liabilities, the current ratio reflects its ability to pay its upcoming bills in the unlikely event of all creditors demanding payment at once. Current liabilities are debts that are due within one year from the date of the balance sheet as mentioned by Charles P. (2002). The basic source from which to pay these debts is a current asset. As long as firms are searching for no risks by increasing current assets, profitability will be getting shrunk. So that current ratio should have a negative relationship with stock market return. Working capital is also called net current assets or current capital, and is expressed as: Current assets / Current liabilities 2. 2 Quick Ratio How quickly a company’s assets can be turned into cash, which is why assessment of a company’s liquidity also is known as the quick ratio, or simply the acid ratio. Regardless of how this ratio is labeled, it is considered a highly reliable indicator of a company’s financial strength and its ability to meet its short-term obligations. Because inventory can sometimes be difficult to liquidate, the quick-test ratio deducts inventory from current assets before they are compared with current liabilities-which is what distinguishes it from the current ratio. Potential creditors like to use the quick-test ratio because it reveals how a company would fare if it had to pay off its bills under the worst possible conditions. Indeed, the assumption behind the quick-test ratio is that creditors are howling at the door demanding immediate payment, and that an enterprise has no time to sell off its inventory, or any of its stock. This ratio should have also negative relationship like the current ratio with stock market return. The quick-test is computed by subtracting inventories from current assets and dividing the difference by current liabilities: (Current assets – Inventory) / Current liabilities . 3 Operating Cash Flow Ratio Traditional working capital ratios indicate how much cash the company had available on a single date in the past. Cash flow ratio, on the other hand, tests how much cash was generated over a period of time and compare that to near-term obligations as published by John R. and Jeanne H. (1998). This ratio should str engthen the investors’ confidence toward the firm, therefore it should be positively related with stock market return. The numerator of the OCF ratio consists of net cash provided by operating activities. This is the net figure provided by the cash flow statement after taking into consideration adjustments for non-cash items and changes in working capital. The denominator is all current liabilities, taken from the balance sheet: Cash flow from operations / Current liabilities (3) Leverage Ratios 3. 1 Debt-to-Equity Ratio How much money a company owes compared with how much money it has invested in it by principal owners and shareholders. The debt-to-equity ratio reveals the proportion of debt and equity a company using to finance its business. It also measures a company’s borrowing capacity. The higher the ratio, the greater the proportion of debt but also the greater the risk. Mishkin (2001) describes the debt-to-equity ratio as â€Å"a great financial test† of long-term corporate health, because debt establishes a commitment to repay money throughout a period of time, even though there is no assurance that sufficient cash will be generated to meet that commitment. Creditors and lenders, understandably, rely heavily on the ratio to evaluate borrowers. As long as this ratio is considered to be low, investors’ confidence will be increased which negatively related with the stock performance. The debt-to-equity ratio is calculated by dividing debt by owners’ equity, where equity is, typically, the figure stated for the preceding calendar or fiscal year. Debt, however, can be defined either as long-term debt only, or as total liabilities, which includes both long- and short-term debt. The most common formula for the ratio is: Long term liabilities / owners’ equity (4) Coverage Ratios 4. 1 Interest Coverage The amount of earnings available to make interest payments after all operating and non-operating income and expenses—except interest and income taxes—have been accounted for. Interest coverage is regarded as a measure of a company’s creditworthiness because it shows how much income there is to cover interest payments on outstanding debt. Banks and financial analysts also rely on this ratio as a rule of thumb to gauge the fundamental strength of a business as argued Eugene F. & Joel H. (1998). Investors also rely on this ratio to examine the strength of a firm’s financial statement while this ratio should have a positive relationship with stock market return. Interest coverage is expressed as a ratio, and reflects a company’s ability to pay the interest obligations on its debt. It compares the funds available to pay interest—earnings before interest and taxes, or EBIT—with the interest expense. The basic formula is: EBIT / interest expense (5) Efficiency Ratios Ratios of turnover are constructed to measure how effectively the firm’s assets are being managed. 5. 1 Asset Turnover The amount of sales generated for every pound’s worth of assets over a given period. Asset turnover measures how well a company is leveraging its assets to produce revenue. A well-managed manufacturer, for example, will make its plant and equipment work hard for the business by minimizing idle time for machines. The higher the number the better-within reason. As a rule of thumb, companies with low profit margins tend to have high asset turnover; those with high profit margins have low asset turnover. This ratio can also show how capital intensive a business is. Some businesses-software developers, for example-can generate tremendous sales per dollar of assets because their assets are modest. At the other end of the scale, heavy industry manufacturers need a huge asset base to generate sales as refered by Eugene F. & Joel H. (1998). As long as the plant and equipment work hard and sales are increasing that would be an indication of a good sign. Consequently, this ratio should be a positively related with stock market return. Asset turnover’s basic formula is simply sales divided by assets: Sales revenue / Total assets 5. 2 Accounts Receivable Turnover This ratio explains the number of times in each accounting period, typically a year that a firm converts credit sales into cash. A high turnover figure is desirable, because it indicates that a company collects revenues effectively, and that its customers pay bills promptly. A high figure also suggests that a firm’s credit and collection policies are sound. In addition, the measurement is a reasonably good indicator of cash flow, and of overall operating efficiency as hence by Mishkin (2001). This ratio should have a positive relationship with stock return. The formula for accounts receivable turnover is straightforward. Simply divide the average amount of receivables into annual credit sales: Sales / Account Receivables (B) Statistical Results