Concepts and Operations management principles in Mcdonalds Essay

Concepts and Operations management principles in Mcdonalds - Essay Example For instance, as noted Preliminary results statement, 2006, it offers a range of quality menu choices along with our convenience and brand affordability. Its performance reflects its continued commitment to leverage its operations and process engineering through adoption of the current technology in its systems and procedures. For instance, there is a close monitoring of its chain of operations through advanced techniques to ensure that there is timely delivery of products to customers’ complaints, queries. As the CEO , Jim Skinner noted in the Financial highlights of the year 2011, ‘During 2011, McDonalds continued momentum drove higher profitability and market share gains as we fortified our leadership position around the world. The ongoing strength of McDonalds results is rooted in our Plan to Win with a relentless focus on what matters most to our customers. We are enhancing the customer experience – from our menu and service to our value and convenience – while giving more people more reasons to visit McDonalds more often’. Said McDonalds Chief Executive Officer,. This implies that the chain store constantly pursue customer excellence strategy. The Financial highlights 2011, notes that its success is a result of a diversification to ensure that customers have a variety of food variety to satisfy their needs are satisfied. The recent growing competition from its rivals has necessitated the need to differentiate its products, offer excellent quality customer services, have wider, and more distributed chain stores with uniformity of services across the globe. A wide coverage and presence of several chain stores in region reaches out to more customers than its main rivals do. An examination of some of product offering includes cheers, salads and other breakfast options. Through continued efforts to innovate, it has created a

Business Code of Ethics Research Paper Example | Topics and Well Written Essays - 750 words

Business Code of Ethics - Research Paper Example On the other hand, ethics is more social and more specific than morality and the practical counterpart of it (Stewart, 2011, p. 7). It serves as the guide for the actions and behaviors especially in professions and organizations. In business, it is also very important especially in companies where complex system works together with many people involve. Some actions are not tolerated as those may become detrimental to the individual and to the whole organization. Misbehaviors may destroy the reputation of the business and may affect its sales (Boone and Kurtz, 2011, p. 197). Later on, profits may also decline as a result of losing sales that may lead to more undesirable conditions of the organization. It may not be able to sustain its operations and the management may decide to have massive lay-off to save the company. If it comes to the worst case scenario, the company will close due to bankruptcy. The illustrated possibilities that may happen to the company due to misbehavior only s how how ethics is important to guide each person in his course of actions in his daily life especially during the times he spend in working for the company. It shows how it is important for the management to place some ways of control over the working system of the company to ensure that ethics is followed by the members of the organization and prevent the occurrence of undesirable conditions. Rules and regulations are then presented to the employees as they must know the allowable actions and disallowable actions that are subjected to sanctions. Good performance leads to rewards while misconduct leads to punishment. Standards are also held in place to provide a guide for the employees to follow regarding the level of productivity and performance that they must render. Standards and the rules and regulations are affected by the code of ethics. Since conducting a business is also a profession, it requires a list of norms that people must follow. To make the concept of code of ethics clearer, a specific definition must be given. As said in the preceding sentences, code of ethics is established for certain particular professions to ensure quality services and meet the needs of the clients. The code contains a list of norms that professionals must follow throughout their careers (Marquis and Huston, 2009, p. 77). Therefore, the code defines the identity of the certain profession being practiced while ensuring the values to reflect on the performance. Sometimes code of ethics is called code of conduct as it pertains to the correct or wrong actions and behaviors. In business, it is installed in the company to ensure the top-of-the-line services and products are delivered to the clients as they are important to the profits that drive the operations of the company (Ferrell et. al., 2011, p. 347). Without profits, company will not be sustainable and may eventually close. In making a code of ethics, it requires to have a basis. The basis then for the code of ethics to s ubstantiate is to identify the underlying values. Values are then important not only in adding ease to the lives of people but also bringing a progressive uplift to the society as a whole. It also leads to the enhancement of the quality of lives around the world (Shaikh, 2010, p. 480). Therefore, the code then must consider not only the values and service quality but also the prevailing culture and beliefs in the locality where it operates

Short term and long term environmental factors

Short term and long term environmental factors One of the important environment factor that effect the organization on short term and long term basis. It includes changes in government policies, changes made in law and legislation, war and conflict, government pressure in form of rise in tax, changes in government and new government wants to wave out all old plans. Economical Another factor that effect the environment is itself economy of the country which could affect on shorter term or longer term but most likely the economical effect most effect on longer period. It includes adverse movement in exchange rates, increase in taxation, lower interest rate, international economy effect, monetary issues, customer buying power, change in trend and life style of people due to poor economic conditions, like possibility of business would not generate as much as they were before this which ultimately result in reduction in human power which directly effect there buying power. Technological Technology is normally has short term effect excluding some mighty machinery which take years to build and changes take place. Technological factor includes change in technology as this is one of the major factor as we have seen in now a day communication and computer technology change rapidly as compare to others, once a new model enter in the market will definitely absolute the previous one. Other factors include changes in technological legislation, licensing and patents, intellectual property issue and global communication. Social Social is another environment factor that can affect both in short and long term to organization. Social factor include change in trends, fashion, style, organizational brand, people purchasing power, religious and ethical issues. Media play vital role these days as a mean of spreading awareness among people which can be in any sector. Major events has a short term environment affects. Importance of Environmental Factor Affecting Organization: It is obvious that any change in the environment factor can directly or in directly affects the organization operations in that particular environment. Politically if the is change in government policy or legislation that has direct effect on all organization and sectors all business have to adopt the changes take place. Technological if there has been change in technology as latest version of machinery launched every business which directly use such machinery to run there business need to update accordingly in order to survive in the competitor market otherwise competitor, take lead in business operations. Social and economy factors also has important influence on organization activities suppose, if organization is doing trade with international business partners in case of war both countries government impose restriction on the trade which affect both businesses on the other hand if economy is on downfall trend, in fact all businesses faces decline in the profit percentage as custo mers buying power has fall as a result of poor economic conditions. Expectation of Stake holders A stakeholder is any person or organization, who can be positively or negatively impacted by, or cause an impact on the actions of a company, government, or organization. Following are the stake holders of almost every business: Customers Employees Trade creditors Bank Government Shareholders Investors Local community Environment Every stakeholder has it on expectations from the company or business. Customers demand high quality but cheap price products and services. Employees has there own expectations like secure future, attractive salary plus bonuses. Trade creditors demand long credit period. Bank is interested in it financial performance and business is able pay the interest rates. Government is interested in business paying tax on time. Shareholders are interested in increase in wealth which result in business generates profits. Investors interested on return on there investment. Local community expects employment opportunities from business. Business would run its operations under environment friendly atmosphere. Changes that affect the strategy Factors that currently affect the TM Mobile house is technology change like upgraded version of computer mobile model therefore TM should have to buy new software that are currently used in mobiles and computers. Second environment factor that mostly affect TM is economic downfall which dramatically reduce the sale of TM. So under tight conditions TM has to change its strategy in order to survive under such condition. Due to poor economic condition customers are unable to pay more for the goods they bought infect they demand cheap product but good quality which result in to reduction in profit margin ratio. Government demand regular tax and council tax payment regardless business is earning profit or not. Bank demand there money back, employees feel unsecure future in TM employees are not happy as they would not receive bonus for the one and a half year. Investors consider it risky to invest in such economic condition due to fear of there investment being drowned. Task2 Business Strategies, Policies and Plans Strategic Objectives The company strategic objectives are how the company corporate objective is going to be achieved. These objectives usually split between: The strategic commercial objective The strategic financial objective The commercial objectives are in non financial term to achieve company desired targets. The strategic financial objectives are to maximize the profit of the organization, in modern terms maximization of shareholder wealth. Effectiveness Is a measure of the degree to which business achieve its goals. The strategy is effective if it achieve it objective. Business Plan A business plan is an official statement contains business goals, the reasons why they are going to be achievable, and the plan for reaching those goals. It also holds information about the organization or team attempting to reach those goals. Business policy Business Policy defines the scope inside which decisions can be taken by the subordinate in an organization. It permits the lower level management to deal with the harms and issue without consult top level management each time for decision. Business policy in guidelines issued by the organization to achieve there targets. Effect of Current Business Plan TM business plan is to maximize the profit, growth in sale at constant rate in future. TM goals are to grow and create monopoly in area which it operates and how to achieve the goals TM together its employee as a force to achieve its targets. Owner of the business make daily progress reports form them, and any changes in plan will properly convey to them through proper mean of communication tool like direct meetings, update the notice board regarding current changes and process of achieving those targets and goals. It targets also includes increasing customer confidence in there services. TM give guarantee for its services if there is any complain in it they can get it repaired with out charge, no one else in the market are offering such guarantees. For the time being TM is moving slowly towards maximizing profit as due the economic recession it been difficult for TM to achieve its targets. Employees are working well as they are working before the economic recession but due to slow p rogress in work that is why plan are not working and planed. TM is now 2nd operating in this area offering the same kind of services, but due to size of the business TM were in lead. Two more business was closed down due to unfeasible economic conditions. Now its time for TM to improve its services likely to make amendments in the plan as customers are switching back towards TM. Which is positive sign for TM as sale will grow as planed in future because of reduction in competition. TM is now increase the volume of finished good stock for resale purposes as he is expecting increase in the sale as well as profit. TM has following competitive strength and weaknesses, of its current strategies. Strength It has large space in shop so more customers can sit at a time. Its location is comparatively better than its competitor. However its competitor is in less busy area. Workforce, as TM has two staff who can serve the customers. Its competitor is hiring only on staff difficult for him to deal during busy time to handle each clients effectively. Range of services like computer, mobile, Money transfers and property. But its competitor has limited services like mobile and computer. Weaknesses Strategically TM is retrieving high profit margin form it sales on the other hand its competitor has edge on this. TM is not buying accessories of latest mobile phone, lack of training in employees, participation in saving schemes. Its competitor has edge on above mentioned weakness. Task 3 Options for Strategic Planning Strategic planning is creating a vision of the future and managing toward that expectancy. Its operating under a mission statement umbrella that focuses the organizations effort. Its an effective process for aligning your short-term decisions with your long-term goals. Strategic planning answers the three big questions: Where are we today? Where do we want to be in the future? What should we be focused on today, in order to make it more likely we will be where we want to be in the future? The basic strategic planning model involved four steps explained below. SWOT analysis can also be used for strategic planning. Strength and weakness can show business internal position where it can stand and opportunity and threats shows external factors that will affect the business directly or indirectly. Strength Have you got sufficient financial resources to fund any changes you would like to make? Is your product unique or market leading? Does business have superior industry knowledge? Are you involved with industry associations? Your reputation are you considered a market leader? Or an expert in you is filed? Does business have good relationship with your customer? Does business have strong relationships with your suppliers? Does business have a positive relationship with your employee? Is your business Innovative? Weakness Is your plant and equipment old or outdated? Is your product line too narrow? Have you got insufficient financial resources to fund any changes you would like to make? Does business lack industry knowledge? Does business lack innovative skills? Does business have a poor or impersonal relationship with your customers? Does business have a poor relationship with your suppliers? Does business have a poor relationship with your employees? Does business have low volume and are restricted in your ability to scale up? Opportunities Changes to legislation Changes to import/export constraints Good economic outlook Expand your product line Diversify your business interests Expand into your customers field Expand into your suppliers field Expand your customer base (Geographically or through new products) Does business has peaceful competitor? Are there any export opportunities? Will your market grow? Threats Changes in demographics Increasing regulation Do consumers have a choice to use a substitute product? Are substitute product sales increasing? Is your market in slow growth or in decline? Growing power of customers or suppliers to set price Changing needs of buyers Porters five forces Model Michael Porter developed a framework, which identified 5 forces that act to either increase or reduce the competitive forces within an industry. These five forces are à ¢Ã¢â€š ¬Ã‚ ¢The Bargaining Power of Your Customers à ¢Ã¢â€š ¬Ã‚ ¢The Threat of New Entrants into your Industry à ¢Ã¢â€š ¬Ã‚ ¢The Bargaining Power of Suppliers à ¢Ã¢â€š ¬Ã‚ ¢Threat of Substitute Products or Services à ¢Ã¢â€š ¬Ã‚ ¢Rivalry amongst Existing Firms Graphically presented as: Rivalry amongst Existing Firms Industry growth rates High fixed costs Intermittent over capacity Product differences Brand identity Switching costs Informational complexity Concentration balance Diversity of competitors Corporate stakes Exit barriers The Bargaining Power of Your Customers Differentiation of outputs Switching costs Presence of substitutes Industry concentration relative to buyer concentration Importance of volume to buyers Cost relative to total buyer purchases Impact of outputs on the cost of differentiation Buyer information about supplier products Buyer profitability Decision makers incentives Threat of backward integration The Bargaining Power of Suppliers Differentiation of inputs Switching costs Presence of substitute products Supplier concentration relative to industry concentration Importance of volume to suppliers Cost relative to total purchases in the industry Impact of inputs on cost or differentiation Information about suppliers products Supplier profitability Decision makers incentives Threat of forward integration The Threat of New Entrants into your Industry Economies of scale Proprietary product differences Brand identity Switching costs Capital requirements Access to distribution Absolute cost advantage Government policy Expected retaliation Threat of Substitute Products or Services Relative price performance of substitutes Switching costs Buyer propensity to substitute Comparative understanding of activity from organization If we take in to account the competitor of TM mobile house in some area that business is in good position, as no business is perfect in every aspect. If we take few things into consideration like JD has lower profit margin. JD offer limited services if we compare it with TM, but with extreme quality. Employ turn over in JD is too low as compare to TM. JD business is too innovative its owner keep the displayed products in the shop with latest models including there accessories. JD has good financial condition JD have sufficient working capital to support day to day activities. JD had obtained large credit from the supplier. It keeps his employee up to date regarding any changes in the technology. JD makes good relations with its existing customer and new one. How ever in some areas TM as a competitive advantage over JD. Feasible options for the future strategic planning It is better for TM to incorporate following option before making strategic plans, it includes product threat that is take in to consideration that if there are some new product entering the market there cost and also opportunity cost of not take it now in to consideration. What is the capital requirement to meet its day to day expenses as well as if want to introduce need products like latest models of mobile and if to upgrade the existing computers using as internet cafà ©, do TM has sufficient fund available if it has how efficiently use it. What ever services TM going to provide should be meet economies of scale criteria. Must take in to consideration the bargain power of the customers, whats there buying power what there expectation from TM and which product they normally demand for there normal consumptions. Most importantly take in to account the competitor position need to adopt those method in order to gain competitive edge, carefully identify those areas that need special attention. Identify those brands which has same quality but cheaper that meet the customers buying power. Changes in the legislation must take in to account how they affect our business. Need to improve the accessories in the shop but focus must be to identify if they were saleable or which has extensive demand. Focus on existing product present in stock that is out dated should be sold out on discount to retrieve money from it otherwise bear total loss from it. TM must keep there and its employee knowledge up to date, towards industry in which they are operating suppose TM is doing money transfers it should be aware of any changes took place in money transferring roles that need to be adopted. Improve the interpersonal skill with staff and with the customers always build working relations with the customers in order to retain business from them. All above mentioned issued need to take under careful consideration in order to make future strategy plan and setting targets to be achiev ed. Conclusion We discuss short and long term environmental factors affecting the organization, together with what are strategies, policies and plan and at the end take in to consideration strategy development models and which important areas are vital in making future strategies.

A Martyrs Victory In A Spiritual Sense :: essays research papers fc

A Martyr's Victory in a Spiritual Sense Bishop Francis X. Ford was a well educated, enormously gentle man, that was kicked, beaten, insulted, and surrounded by hatred. All this because of one mans beliefs. He was born in Brooklyn in 1892. He was the founder of the Maryknoll Missionaries and was the first bishop of Kwantung, China. He was killed in the late 1950's in China, he was charged with anti-Communist, counterrevolutionary, and espionage activities, his real "crime" was for being a Christian and a foreigner. During his life Bishop Ford illustrated the cardinal virtue of fortitude, which is the ability to overcome fear in order to pursue good; "it is an active sake to overcome evil for the sake of gods kingdom" said Huggard. When he took office in China, the country was already feeling the effects of the massive Japanese advance across Asia. In a short time millions lost there lives and were driven from there homes. Bishop ford refused to leave the war-torn country, even after the Japanese attack on Pearl Harbor brought the United States into the war. During this time he distinguished himself by the way he cared for war refugees. Chinese paid a terrible price during this war with Japan, but even more costly was a civil war that followed. Bishop Ford exemplified the virtue of fortitude, by not leaving the war-torn country and staying to try to pursue good. During this time of war, many would wonder what was the reason for him to stay in China, and what was his why to live? In the Novel A Mans Search For Meaning, Nietzsche says "he who has a why to live can bear with almost any how". If Ford had left the country during the time of war, there would have probably been no hope for the war refugees that didn't have the option to stay or go. His why to live was not to save himself, but to save others. In the Novel Frankl describes the human person as a meaning maker, who has the last human freedom namely to choose one attitude in a given set of circumstances. In 1950, he moved from his Diocese in Kaying China, to a political prison in Canton 200, miles away. At every stop along the way he was put on public display and humiliated. His attitude during these stops was not to give and let the humiliation make get to him, but to use it as a stepping stone to fight harder, he did the inevitable he used the humiliation to make him better.

Phobias and Addiction Paper Essay

A phobia is a learned bodily response in reference to a difficult life event. Centered in the amygdala portion of the brain which regulates the â€Å"fight or flight† response, a somatic sensation of anxiety occurs in the presence of specific stimuli. The precipitating factor may have been experienced by the person themselves-or may have been experienced â€Å"secondhand† through misfortune that may have occurred to a friend or loved on. In some cases, a phobia may have no discernible cause or may appear â€Å"irrational†-to everyone but the person experiencing it! Phobic reactions or symptoms of anxiety can include: a racing heart, sweaty palms, an upset stomach and a general feeling of unease. Classical conditioning is a response that is triggered by an outside stimulus-or the thought of such stimulus. The perfect example is the Pavlovian response-in which Pavlov would ring a bell before dinnertime and his dogs would salivate. Over time, he extinguished the presence of the food yet kept the ringing of the bell. The dogs still salivated-at the idea of food coming, a basic bodily response to the suggestion of a specific stimulus. This is commonly referred to as a â€Å"Pavlovian response. † Classical conditioning has two components to it-the acquisition stage and the extinction phase. In the acquisition stage, the initial learned response is obtained. For example, in the case of a phobia-a person may break out in a cold sweat presence of crossing a bridge as he drives. In the extinction phase, the bridge may not be present but the memory of it may be present-enough to still cause the phobic reaction. Thus, merely thinking about a stimulus, even when it is extinct, can still bring on the same phobic response. The phobic response, therefore, is strengthened each time it is felt. The stimulus-present or not-extinct or not-become fused together in the person’s mind. The phobia sufferer then will go to great lengths to avoid the stimulus at any cost. The phobia then worsens as he avoids facing his fears head on. This is how classical conditioning can increase the intensity of a phobia. Addictions are defined as a persistent behavioral pattern that is marked by physical and/or psychological dependency on someone or something. Addictions became â€Å"an issue† in the treatment milieu when they significantly disrupt the life of the addicted individual. Terminology has become quite complicated. Those individuals from a medical background define addiction from a physiological basis. For example-opiates, benzodiazepines, barbiturates, alcohol and nicotine are classical examples of those substances, which cause a physical dependence. On a lesser scale, there are those items that can cause a physiological dependence, as evidenced by changes in the neurotransmitters in the brain-some examples would be over the counter nasal sprays or laxatives. Psychological addictions can be defined within the context of a â€Å"slippery slope†- there are as many â€Å"addictions† as there are specialists to treat them. (Evidence the most recent news of the plethora of celebrities being treated for sex addiction. ) Some examples of area in which psychological addiction may occur include the following-shopping, pornography, eating, exercise and self injury. There is a physiologic reward, however, as the object of the addictive person’s attention -aka†the reward† activates the â€Å"pleasure enter† of the brain-emitting dopamine. Therefore, the addictive behavior is rewarded with a rush of dopamine to the person engaging in the behavior. Operant conditioning is the use of consequences to form or shape a behavior. There are three main components relevant to operant conditioning. First, there is the aspect of reinforcement-this basically applies to a consequence that causes the â€Å"addictive† behavior to occur with greater frequency. An example of this would be as follows- An individual is consumed with shopping. They scour the news every day to find out where the sales will be taking place; they belong to a network of people that trade shopping information relevant to their area of interest. Then the day comes and they make the purchase. This act reinforces their addiction with a momentary high (that is usually short lived. ) Second, the aspect of punishment-a consequence that makes an action occur, less frequently-comes into play. When an addictive urge is felt, and the desired object is taken away (i. e. the punishment†) the urge to obtain the desired â€Å"rush† still exists-albeit even stronger. The person then works harder to obtain the drug, the act, and the food-whatever the addiction is. In this way, the operant conditioning aspect of punishment reinforces and addiction. Third, there is the element of extinction. Extinction occurs when there is a lack of consequence following a behavior-good or bad. An individual who is wantonly exhibiting a sexual addiction while in a s erious relationship-let’s take that as an example. Without being â€Å"caught†, there is no consequence. The addictive behavior continues unchecked. It is reinforced. I have exemplified the ways in which operant conditioning can develop and maintain addictive behavior. The difference between classical and operant conditioning is as follows: very succinctly put, classical conditioning forms a relationship between two stimuli-for example, one thinks of/or sees a chocolate cake, the salivary glands begin to work! Operant conditioning forms a relationship between a stimuli and a consequence. You touch the stove while it’s on, you get burnt. Bet you won’t do that again-a relationship is formed on the basis of a negative consequence. Conversely, the consequence can also be positive. Example-you do your homework on time and as assigned, you get a good grade, a positive consequence has occurred, which will (hopefully) shape future behaviors. Extinction is achieved through the gradual phasing out of â€Å"reward† in operant conditioning, while hoping to still achieve the same behavior. Example, one has been rewarded with a good driver award after years of possessing a great driving record. With the extinction of this positive consequence (i. e. no reward)-one would hope that the good driving habits would continue. In classical conditioning, I will present an example-if we ring a bell and cause a dog we have a conditioned stimulus-however if we keep ringing that bell without giving the dog any food (an unconditioned stimulus) eventually the dog will unlearn his conditioned response. Extinction has then occurred. In summation, extinction is operant conditioning relates to the phasing out of consequence – in classical conditioning it is the phasing out of response.

Fpi Assignment

Executive Summary The report is regarding to the knowledge of analyzing the accounting data of a listed company, using the various accounting information that provided to identify and examine the competitiveness and efficiency of the listed company. Besides, in order to examine the reliability of the data provided, analysis of the balance sheet and income statement is required. The financial information can be obtained from the annual reports of Harbour-Link Group Berhad.In addition, the report is required to include the top-down approach which consists of Economic analysis, Industry analysis and Fundamental analysis to analyze the listed company in the point of view for investors. Table of Content 1. Introduction 1. Objectives 2. Analysis of the statement of financial position, the statement of financial performance and cash flow statement. 1. Financial Analysis ratio: Asset efficiency ratio Capital Structure ratio Liquidity Ratio Profitability Ratio Share Price 3. Economic Analysis 4. Industry Analysis . Conclusion 6. Findings 7. References Introduction In this report, Harbour-Link Group Berhad is chosen among the listed companies. Harbour-Link Group Berhad is an investment holding company which provides shipping, forwarding and transportation, plant and machinery hiring, and engineering contract services primarily in Malaysia and Singapore. Harbour-Link Group Berhad was founded in the year of 1975 and it is based in Bintulu, Sarawak, Malaysia. It was officially listed on Bursa Malaysia Securities Berhad in the year of 2004.Today, Harbour-Link Group’s success lies in its strong foundation of expertise in the industry and its ability to established the company as a reputable brand-name within the shipping, sea freight forwarding and transportation industries. Objectives 1. To identify the sources of funds, Balance Sheet and profit or loss of the Harbour-Link Group Berhad. 2. To analyze accounting data of Harbour-Link Group Berhad to examine its financia l performance using Financial Performance Indicators (ratio analysis) 3.To analyze the economy status, competitors within the same industries and evaluate the operating efficiencies of the listed company. 4. To examine the competitiveness and efficiency of the listed company by using the various accounting information provided. Financial Analysis Financial analysis ratios are used to examine the financial performance of a company in which it will be reflected in the ratios calculated. (Giles et al, 1994, p. 371) Asset efficiency Ratios Asset turnover ratio From the data calculated, the asset turnover ratio for the financial year of 2008, 2009 and 2010 are 109. 9%, 92. 12% and 79. 65%. This indicates that the Harbour-Link Group Berhad is not doing well in the sales of the products or services because the asset turnover ratio is decreasing from year to year. Debtor turnover (in days) Debtor turnover is the debtor collection period of a company. Harbour-Link Group Berhad had a debtor t urnover of 73 days in the year of 2008. In the year of 2009, the debtor turnover is 77 days. However, its debtor turnover is decreased to 71 days. This reflects that the possibility of default risk for the debtors is decreasing.In fact, this is a good thing in a company. Inventory Turnover Inventory turnover measures how many times the company can sell through its inventory for each year. In the year of 2008, Harbour-Link Group has an inventory turnover of 163 times. The turnover increased to 212 times in the financial year of 2009 but the inventory turnover decreased to 127 times in the year of 2010. This reflects that the company can sell better in the year of 2009 but it dropped tremendously in the year of 2010. Capital structure Ratio Debt to equity ratioThe debt to equity ratio of Harbour-link Group Berhad is decreasing from the year of 2008 to 2010 by 2%. This is caused by the reducing of total liabilities and the increasing of the total equity. Time interest earned The times- interest-earned ratio allows a lender to evaluate the company’s ability to meet its debt obligation. It is a ratio of the earning before interest and tax over the interest expenses. The time interest earned has a slightly increased from the year of 2008 to year 2009 but it has a greater decrease in ratio amount from the year of 2009 to year 2010.This means that in the year of 2010, Harbour-Link Group Berhad have lesser earnings are available to meet the interest payments and this makes the company to be more vulnerable to the increases in the interest rates. Liquidity Ratios Liquidity ratio is the ratio that is used to examine the liquidity of a company. It includes: Current Ratio Current ratio is the ratio of current assets to current liabilities. Harbour-link Group Berhad has it current ratio decreasing from the year of 2008 to 2010. Its current ratios are 1. 90, 1. 76 and 1. 57 respectively. The ratio is decreased by 14% and 19%.The data is calculated as shown in the findi ngs. Liquid Ratio Liquid ratio is the ratio of (current assets-inventory) to (current liabilities-bank overdraft). Harbour-Link Group Berhad has borrowings so there is bank overdraft existed and that’s why it is classifies as a debt financing organization. The company has a higher liquid ratio of 2. 34 in the year of 2010 compared to the year of 2008 and 2009 which is 1. 88 and 1. 75 respectively. The liquid ratio of the 3 financial years exceeded 1 and this indicates that the current assets are greater than the current liabilities.Higher liquid ratio reflects better performance of the company. Net working Capital Net working capital is the difference between current assets and the current liabilities. In the three financial years, Harbour-Link Group Berhad has the highest net working capital of RM 51. 4 million in the year of 2008. The figure of net working capital for Harbour-link Group Berhad decreased in the year of 2009 and 2010 by 0. 43% and 12. 32% respectively. This s hows that there is a drastic drop in the net working capital of year 2010. Profitability Ratios EBIT to total funds ratioEBIT to total funds ratio of Harbour-Link Group Berhad is decreasing in the range of 22% from the financial year of 2008 to 2009 and 21. 4% from the financial year of 2009 to 2010. The total funds consist of shareholders’ funds and borrowings. According to the annual report, Harbour-Link Group Berhad is practicing debt-financing to raise funds because there is borrowing existed. Return on Equity (ROE) Harbour-link Group shows a decrease in net income from year 2008 to 2010. This situation leads to the decrease in the return on equity (ROE) of 5%.In the financial year of 2010, it has the ROE of 0. 08 which indicates that for every RM1 of the capital that the shareholder invested into, they will get 8% of return. Return on Assets The return on assets measures the productivity of assets in terms of the level of profits each dollar of assets generates. (Karen D . H, 2004, p. 131) The return on assets of the Harbour-Link Group Berhad is decreasing from the financial year of 2008 to 2010. It decreased from 8% of year 2008 to 7% in the year of 2009 and then 5% in the year of 2010.This implies that the productivity of the company’s assets is not doing well in terms of profits that the assets generated. Net Profit Margin The net profit margin is the ratio of net profit after tax to the total revenues. In the financial year of 2008 and 2009, Harbour-Link Group Berhad has the net profit margin figure of 8%. It indicates that the company has a net income of RM0. 08 for each RM1 of sales. However, the net profit margin for the year of 2010 decreased by 2% which is only 6% in the financial year. This shows that for every RM1 of sales made by the company in year 2010, the net income is only RM0. 6 which is RM0. 02 lower than the previous year. Share Price Price to Earnings Ratio (P/E) Price to Earning ratio is calculated by using the share pri ce of the year 2010 over the earnings per share. The market price of Harbour-Link Group Berhad was amounted to RM 0. 72 in the year of 2010. From the annual report of the financial year of 2010, the earning per share is RM 0. 11. By using the formulae, the price to earning per share of 2010 is calculated as shown in the table with a figure of RM 6. 825. Current Economic Analysis Roots of Global financial crisisGlobal financial crisis are usually caused by bad regulation of the banking sectors, failure of fiscal and monetary policy implemented and so forth. In the year of 2008, Financial crisis began with the declared of bankruptcy of Lehman Brothers Holdings Inc. which is the fourth largest investment bank in United States. It was a severe ongoing world financial problem that began in U. S in the year of 2008. This recession has entirely hitting on the fragile global economy with the tremendous devastation in countries all around the world. The U.S government was trying to point the finger of the financial crisis to the rating agencies, who knew about the great risk that was coming but kept giving high reliability ratings to companies that did not deserve them and thus investors invested in the wrong companies. The cause of the bankruptcy of Lehman Brothers Holdings Inc was the accumulation of debt and the increasing of loan defaults. Why it evolved into a world crisis The news on bankruptcy of Lehman Brothers Company led to the drastic fall in the share price all over the world.The company had billions of dollars losses incurred in the mortgage market of United States. (BBC NEWS, 16th Sept 2008) In Lehman Brothers’ case and the other investment banks, the problem was provoked by 2 major factors which are the very high level of leverage ratio and the dependence on short-term debt financing. Commercial banks cannot leverage their equity more than 15 to 1 as they are regulated but for Lehman Brothers Company, it had a leverage ratio of more than 30 to 1. According to the table 1, Lehman Brothers had only $3. 30 of equity for every $100 of loans. With this ratio, it makes the company to be insolvent.Conversely, the instability arose from the leverage problem was aggravated by the strong reliance on the short term debt. Based on table 1(Lehman Brothers Liabilities and shareholder’s equity), at the beginning of the crisis, the company financed greater than 50% of the assets. Reliance on short term debt financing is profitable indeed when it comes to a low interest rate market environment. However, when the company faced rumors of the insolvency problem, the short term lenders will start to have doubt on the company’s performance and therefore, they will start to withdraw their funds from the company for self interest protection.This scenario will lead to a shortage of liquidity for the borrower and thus the company tends to default. After the crisis began, Lehman Brothers did try to decrease its leverage and reduce its de pendence on the short term borrowing but it was too late for them to amend the situation and therefore, bankruptcy occurred. The bankruptcy of Lehman’s brother forced the reassessment of risk in the market by looking at the price of the credit default trades. Impact on Malaysia and world economies The crisis started in the year of 2008 had a great hit on Malaysia and world economies.It causes the gas price had a drastic drop, decreasing of the value of real estates, the increasing of unemployment rate, Federal debt crisis and inflation. There is a global explosion in commodities price. The price of crude oil was remaining at high levels for few years till the end of 2008, the crude oil price dropped from the peak in July 2008 of US$145 to US$30. 28 per barrel in December 2008. (Forbes, 2008) According to the findings in table 2, the unemployment rate of Malaysia increased by 3. 13% from the year of 2008 to 2009 and 12. 12% from the year of 2009 to 2010.Malaysian future econom ic At first, Malaysia was aiming to have 9% of average annual Growth Domestic Product (GDP) until 2020. Suddenly, according to the Economic Planning Unit, the government noted that the number is absurd then they changed and told that Malaysia was capable to achieve 5. 4% of Growth Domestic Product (GDP) annually over the next 10 years to achieve the objective of becoming a high income economy by 2020, which is the vision 2020 (East Asia Forum, 2009). These seem that Malaysia’s economic future is uncertainty. It keeps changing.Besides, Malaysia’s government has a close relationship with its private businesses. Because of the relationship with some business groups have ostensibly led to the emergence of political cronies with unlimited access to public resources. Not only the relationship that mention above but also the experience of neighbouring Indonesia shows that it is a dangerous trend that could negatively affect economic development in the future. In this matter, changes in political leadership led to unstable political environment. Although it does not directly effect on Malaysia, it threatens he influx of refugees caused damage regional stability and social stability. Malaysia's maritime economy can be defined as the production and manner of use of the range of goods and services that are linked to the maritime sector (Abdul Aziz Abdul Rahman, 1997). It covers the activities that are resource based, including fisheries, oil and gas, marine biotechnology and those that are service based such as shipping ports, shipbuilding and repair and the myriad range of ancillary maritime services (Maritime Institute of Malaysia,2005).Malaysia's main concern is the future of marine economy of the future of Malaysian trade, because the country's foreign and domestic trade, or even almost totally dependent on sea transport facilities. From this we can know that it will have a very bright prospect in maritime economy. If Malaysia is to achieve the goals of industrialization, productivity-driven growth and enhancing competitiveness will depend on how the maritime sector is managed. The maritime sector has a main role to play in enhancing productivity-driven growth. An important element that will affect efforts to sustain international competitiveness is productivity.But, for longer term, Malaysia will need to maintain its international competitiveness, since there is rising competition from other emerging markets for Foreign Direct Investments (FDIs) and for the transfer of modern technologies. Environmental issues are also important for Malaysia in the longer term as deforestation and global climate change may destabilize the country's agriculture, which still plays an important role in the national economy. What is the most important is the political will effect a change to system-centred thinking in planning the future of the economy. So, a stable political environment is very important to Malaysia.If the political environment of M alaysia is good, it will have a bright future of economy. Solutions to the Global Financial Crisis or crises in general. Banks and financial institutions can cause a downswing of an economy because of their ignorance of the business cycle. Besides, bankers are greedy with the fat bonuses that they will gain if they get the highest market shares results. When the economy is doing well, they expect that there will be no recession problem is going to occur and therefore they will give loans to their customers without considering their customers’ affordability to repay the loans.Once their customers cannot afford to repay the loans, recession will occurs. To overcome these crisis problems, several steps can be used. Government and bankers often intervene to smooth the peaks and valleys of the economic cycle. There are two objectives that the government and bankers can do to prevent serious downswing of an economy. 1) Speedy intervention to prevent a self-perpetuating downward spi ral, which means protecting depositors at minimal long term cost to the taxpayer.For example, the Federal reserve may restrict the money supply in good times to slow the expansion phase of the economic cycle, or deficit spend and cut interest rates to ease the recessionary phase of an economic cycle. 2) Ensure so far as possible that future booms are less exaggerated. This has implications for the form of any rescue package, and for the system of financial oversight that is put in place. The growth of consumer credits will increase the consumption of the consumer. The increase in the consumption will increase the aggregate demand of the country whereby AD equals to C + I + G + (X-M). Mc Taggart et al, 2007 p. 766). When the AD is increasing, it means that GDP is also increasing. This shows that the consumer credits provided will also be increased and therefore people will keep on borrowing money from the banks for consumption. This situation actually can amplify the business cycle a nd extend the upswing of the economy. Industry analysis The domestic and the world economy were in a downturn in the year of 2009. All the industry was affected and they are making an effort to maintain their previous performance and growth momentum. In the year of 2009, Harbour-Link Group Berhad suffered revenue declined by 5. 9% to RM 327. 6 million. The revenue decreased again by 5. 76% to RM 308. 7 million compare to the previous year due to lower selling prices and softer consumer demand. One of the Company competitors, Swee Joo Berhad was also suffered by achieved a turnover of RM 346. 7 million which is 9. 9% lower than the previous financial period. The lower turnover was also impacted by the recovery state for the economy. Swee Joo Berhad has a reduce in current ratio from 0. 648 to 0. 278 which seems to be lower than that of the Harbour-Link Group Berhad and therefore Harbour-link seems to have a better current ratio.Swee Joo Berhad has a negative figure for its Earnings b efore interest and tax of -11. 32 million and -176. 82 million in the year of 2009 and 2010. This is a huge loss for the company. It shows that Harbour-Link has a better performance than its major competitor, Swee Joo Berhad. Although the economy showed signs of recovery, but most of the economists hold that the sustained global recovery is still vague. This situation greatly influenced the consumers spending behavior. According to the Edge, Harbour-Link Unit obtained the secured contracts of RM75. 2 to supply gantry cranes for the Bintulu Port Sdn Bhd.The contracts were expected to be done in the year of 2012 and it’s also expected to escalate the future revenue and earnings positively for Harbour-Link Group Berhad. (The Edge, 11 April 2011) There are several ways for the companies to perform better during this hard period. However, the suppliers are also important causes which will affect the company performance. Although Harbour-Link Group Berhad suffered lower revenue dur ing the year, however, it obtained quite a number of big projects with a favorable amount of contracts worth which is believed to boost the revenues for the future of the company itself.This scenario will assist Harbour-Link Group Berhad to create a stronger visibility and allow it to be well positioned for the economic recovery. Findings [pic] Table 1 shows Lehman Brothers Liabilities and Shareholders’ Equity Source: Lehman Annual Reports |Year |Unemployment Rate |Percentage Change | |2006 |3. 60 | | |2007 |3. 50 |-2. 78% | |2008 |3. 20 |-8. 7% | |2009 |3. 30 |3. 13% | |2010 |3. 50 |12. 12% | Table 2 shows the unemployment rate in Malaysia Source: CIA World Factbook Conclusion In conclusion, although the Harbour-Link Group Berhad has a downturn in its overall performances in the financial year of 2009 and 2010 as the results shown in the findings, but it has a better performance than its main competitor, Swee Joo Berhad in the shipping industries.The Harbour-Link Group Berha d is overall well organized in its financial statements as shown in the annual reports and it can be categorized as a profitable and successful listed company in Malaysia. On the perspective of investors, Harbour-link is counted as a good investment company and therefore investors are advised to consider Harbour-link Group Berhad as one of their investment company because the company has a good expectation to have a huge increase in its future economic benefits.The future economy of Malaysia is expected to have a good return and therefore this ensure that Harbour-Link Group Berhad is a wise investment for the future benefits. 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