The Asia Turmoil Essay Example For Students

The Asia Turmoil Essay The Asia turmoil begun in the middle of summer of 1997. The problem started in Thailand when Bath(known as Thaiscurencey) was geting weaker and weaker against US dollars. At that point, the rest of the world started to see that Thaiseconomy was starting to fall apart. Some pople predicted that the problem would not stay longer than a few months. However,it was wrong. As manner of fact, the problem spread amongs some of Asian Countries. Even the mighty Japan was effected bythis problem. United stated of America was also effected by this problem. That was a time that the US stock market was goingdown due to the fact that Many American cooporation invested in this some of Aisan countries. We will write a custom essay on The Asia Turmoil specifically for you for only $16.38 $13.9/page Order now Even today, the problem has not been fully recovered and who knows when. CauseThe main problem of the turmoil is the lack of management. Each countries has all similar problem. As we found out in ourresearch, we noticed that banking holds the main role and the key player to the turmoil. Many privates and Governmentbanking loaned too many credit for a big and similar project at the same time without checking the creditors solvency. Ofcourse among the creditor also, the money supposedly . And this is, of course, the second problem of the cause of the turmoil. Third, many creditors believe that their project will become successful without a proper preparation and planing. SolutionMalaysias National Economic Recovery Plan Causes of the Turmoil in the RegionIn todays world, large sums of money move across borders and provide more countries with access to international finance. The daily currency turnover in the foreign exchange market in 1995 is about US$1.2 trillion, compared with an average ofUS$190 billion a decade ago. The early 1990s saw the dramatic increase in the flows of private capital from the industrialcountries to the emerging countries. This was partly contributed by pension funds from the United States and Europe in searchfor higher returns overseas. The amount of private capital flowing into emerging markets was US$50 billion in 1990; the figurewas US$336 billion in 1996. With greater international capital flows, financial markets become more volatile as money movesacross borders with a mere keystroke of a computer. The unusual successful economic performance in the region attractedlarge inflows of foreign portfolio funds into the Asia Pacific region, which became a root cause for the currency crisis. Duringthe early to mid-1990s, China recorded growth rates between 9-14 per cent per annum, while Indonesia, Malaysia, andThailand experienced high annual growth rates that ranged between 7-12 per cent. Rapid growth rates were also recorded inSingapore, South Korea, and Taiwan. While there were sizeable current account deficits for some countries, especially for Malaysia and Thailand, these were theoutcome of the shortfalls of private savings to match private investment, not public sector dissaving. Foreign capital inflowsmade up for the shortfall in national savings to meet the very high national investment. While the net private inflows for Chinaand Vietnam were foreign, direct investment (FDI) dominated, short-term inflows were substantial for Indonesia, South Korea,Malaysia, and the Philippines. Thailand had a high level of short-term inflows of around 7-10 per cent of GDP. During1995-96, Malaysias short-term capital was 4-4.5 per cent of GDP, while its FDI was at 5 per cent of GDP. The decline in asset yields in the industrial economies prompted fund managers to invest into the Asian emerging assets, whichgave higher returns. The ASEAN countries suffered losses in competitiveness when the U.S. dollar, against which theircurrencies were closely linked, appreciated against the yen beginning in mid-1995. The rapid economic growth of theSoutheast Asian economies was accompanied by rapid credit growth to the private sector and asset price inflation, including inreal estate markets and in equity markets, rising the concern that their exchange rates were not sustainable. .ue38d529e8e96c85b2c57cbc10f361ecd , .ue38d529e8e96c85b2c57cbc10f361ecd .postImageUrl , .ue38d529e8e96c85b2c57cbc10f361ecd .centered-text-area { min-height: 80px; position: relative; } .ue38d529e8e96c85b2c57cbc10f361ecd , .ue38d529e8e96c85b2c57cbc10f361ecd:hover , .ue38d529e8e96c85b2c57cbc10f361ecd:visited , .ue38d529e8e96c85b2c57cbc10f361ecd:active { border:0!important; } .ue38d529e8e96c85b2c57cbc10f361ecd .clearfix:after { content: ""; display: table; clear: both; } .ue38d529e8e96c85b2c57cbc10f361ecd { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .ue38d529e8e96c85b2c57cbc10f361ecd:active , .ue38d529e8e96c85b2c57cbc10f361ecd:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .ue38d529e8e96c85b2c57cbc10f361ecd .centered-text-area { width: 100%; position: relative ; } .ue38d529e8e96c85b2c57cbc10f361ecd .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .ue38d529e8e96c85b2c57cbc10f361ecd .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .ue38d529e8e96c85b2c57cbc10f361ecd .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .ue38d529e8e96c85b2c57cbc10f361ecd:hover .ctaButton { background-color: #34495E!important; } .ue38d529e8e96c85b2c57cbc10f361ecd .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .ue38d529e8e96c85b2c57cbc10f361ecd .ue38d529e8e96c85b2c57cbc10f361ecd-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .ue38d529e8e96c85b2c57cbc10f361ecd:after { content: ""; display: block; clear: both; } READ: The Arts Journal Critical Perspectives on Contemporary EssayWeakness in the financial sector compounded the problem. The financial institutions in Thailand, Indonesia, and South Koreawere weakened by large-scale exposure to the property sector, high non-performing loans, and short-term loans that wereunhedged against currency movements. Inadequate disclosure of information and data deficiencies increased uncertainty andadversely affected confidence. There was also the lack of transparency in policy implementation. A brief explanation about IMFIMF is not a charitable institution, nor does it carry out its operations at taxpayers expense. It operates

Harriet Essays - Interpersonal Relationships, Intimate Relationship

Harriet Essays - Interpersonal Relationships, Intimate Relationship Harriet DEAR READER: Opposites do attract. Differences can draw us like a magnet to the other person. These same differences, however, may repel us later on. What initially attracts us and what later becomes the problem are usually one and the same. How does this work? If John feels a bit allergic to the high degree of togetherness and emotionality in his Italian-American family, he may be especially drawn to a woman like you, who models a position of emotional detachment and separateness. If you, for your part, are a bit allergic to the distance and reserve in your WASP family, you may be attracted to John's emotional and expressive style. But five years from now, he may complain that you're too cool and distant, and you may complain that he's too involved with his demanding family. Am I predicting a gloomy future for your marriage? Of course not. Dealing with differences is the central challenge in any intimate relationship. Some differences are bound to make us feel angry, isolated, or anxious at times; but it's important to keep in mind that differences are the only way we learn. If our intimate relationships were composed only of people identical to ourselves, our personal growth would come to an abrupt halt. What matters is that you and John love and respect each other. Along with your differences, I trust that you share important commonalties. Marriage works best when partners share deeply held beliefs and core values. But in any close relationship, differences will inevitably emergedifferences in our values, beliefs, priorities, and habits, as well as in how we manage anxiety and navigate family relationships. Talk openly with John about how your different ethnic backgrounds may shape your marriage. Relationships get into trouble whenever we deny differences (or exaggerate them, for that matter) or whenever we assume that our view of realityor our way of being in the worldis the only correct one. Respecting differences is the greatest and most difficult of all human challenges DEAR HARRIET: My sexist husband and I have different views about rearing our son, who is 4 years old. I want my son to be able to cry and express his feminine Bibliography Italian-American family

An Ethical Approach towards Developing the Student Workload Project Essay

An Ethical Approach towards Developing the Student Workload Project - Essay Example As the paper outlines, the ethical issues may also involve the role of the developer of the system concerning the objective of the information technology system. The following analysis aims to identify the ethical issues surrounding a class project concerning intellectual property and reliability of the project. The case study for the analysis is based on the student workload tracker project. The student Workload tracker project was developed under the oversight of two administrator and nine project members who contributed towards the development of the project. The student workload tracker project was aimed at developing a computer system that would enhance the scheduling process of student’s assignments in school. In an ordinary learning environment students attempt to struggle balancing assignments, academic studies and social life. Subsequently, this makes the students to be overwhelmed since especially when they lack proper time management skills. Therefore, the student w orkload tracker project was aimed at developing a time management schedule based on the analysis of students’ routine activities and the normal time spent on completing a specific activity. Consequently, the system would use the data to present a trend based on various analytical tools such as graphs and charts. In addition a user interface would be used to enhance the appearance of the data in order to provide a clear view of the students’ task performance trends. Therefore based on the portrayed trend by the system, the students would be in a position to create a reliable schedule based on sequence of assignments and the anticipated time for completing relevant tasks. The implementation of the Student Workload tracker system was assessed on the basis of functionality and achievement of the deliverables by the group members.

Program capstone IP1 Essay Example | Topics and Well Written Essays - 500 words

Program capstone IP1 - Essay Example Planning as practice of theory of managements, used by many organizations like Microsoft Corporation, involves selecting missions and objectives and the actions to achieve them. It requires decision-making like choosing future courses of action from among alternatives. The plans range from overall purposes and objectives to the most detailed arrangements to be taken. No real plan exists until a decision a commitment of human and material resources needs to be made. In other words, before a decision is made, all that exists is study of planning, analysis, or a proposal; there is no real plan. Use of organization as the second theory of management, Microsoft Corporation management team and the whole staff usually works together to achieve some goal must have duties to take care of. Generally, these roles have to be defined and structured by someone who wants to make sure that people contribute in a specific way to efforts of group. Organizing, therefore, is that part of management that involves establishing an intentional structure of roles for people to fill in a company. Intentional in that all tasks necessary to accomplish goals are assigned and assigned to people who can perform to their best. Indeed, the purpose of an organizational structure is to help in creating an environment for human performance. However, designing an organizational structure is not an easy managerial task because many problems are encountered in making structures fitting situations, together with both defining the kind of jobs that must be done and finding the people to do them. For Leading as the third theory of management, it means influencing of employees so that they will contribute to organization and group goals is widely used in Microsoft Corporation to mention; it has to do predominantly with the interpersonal feature of management. Most important problems to managers arise from people their desires plus defiance, their behavior as groups and individuals. Hence, effective

Concept of Applied Geology

Concept of Applied Geology Introduction The concept of Applied Geology to investigation of the ground for construction, hydrogeology, environmental geology and mining, is fundamental and it is a prerequisite for a durable result in any geological and engineering scheme. The timeline and strength with cost effectiveness and the knowledge of the geology of a terrain in any engineering, mining and geological schemes; roads, borehole drills, bridges, seismic operation, building of factories etc, are fundamentals that a contractor or an organisation embarking on either geological or engineering projects should be equipped with . The need for an established scrutiny and evaluation of geological features in any project sites hold the key for efficacious results in terms of its durability and efficiency. The main criterion for ground investigation varies with the magnitude and scope of a proposed engineering project; the appropriateness of the site, the site conditions, ground properties, and ground data for analysis aims. Ground investigation is the more restrictive phase of specialist intrusive investigation on a site with the associated monitory test and reporting designed to obtain data from three different aspects of the ground conditions, which are drift and soil condition, with laboratory test and application of soil mechanics technique, rock head, whose depth is commonly significant to excavation and foundations; bedrocks, strength and structural variation. The Concept of Ground Investigation (GI) Ground investigation is the concept of providing geotechnical data which are representative of the ground conditions and relevant to the scheme considered. This includes surface and subsurface investigation, laboratory work and factual reporting. When embarking on ground investigations these are some of the ground conditions needed: Fracture conditions of the rocks, with respect to the rock mass strength it determines. Geological history, and stress conditions in the ground, critical to underground engineering, such as mining and tunnels. Ground conditions and slope stability, with regards to pore and joint water pressure. Quaternary evolution, mainly rock weathering and deterioration by erosion. Man made impacts on the ground, which includes contamination of Brownfield sites. Nature and strength of rocks and soil, and the difficulties that these may pose in construction. In attaining the right data for an engineering or geological project, Ground investigation must surpass all the ground conditions for proper established analysis and the geological principles mentioned should be incorporated properly regardless of any unseen circumstances that may arise. Carrying out field assessments through ground investigation at an early stage in a project is very relevant in order to attain a preferred means of accessing the choice of techniques that can be used in preliminary ground investigation. The topography of a terrain is an essential factor for determining a preferential route, which in some cases may need to be modified depending on the nature of the terrain. Access route with low ground and shallow depth to water table which may be subjected to flood with thick organic deposits, such as peat, unstable ground and areas exposed to severe weathering conditions are one of the features in the topography of an area. Nature is the most complex barrier in grou nd investigation with defining features like deep valley, steep hill side, rivers, and huge rock outcrop, such as batholite. However, ground investigation outlines areas where the ground has adequate capacity in strength to sustain weight; most rocks or soil usually take the form of pad especially for construction purposes and mining. One of the major factors in the geological approach is the need to formulate ways of addressing issues that are of great concern in a topographic terrain. Concept for Construction The geological model in ground investigation has been formulated so as present a clearer picture of ground conditions. The concept of these views is presented in 3-D of geological features which are integrated into independent components of ground conditions. These are; Tectonic that outline the background data Geological to provide the broad ground picture Geomorphologic with the near/surface details In order to expose deficiencies of ground condition on site, and focus attention on potential engineering issues the model drawing must be well detailed with required artistic ability. The concept of a geotechnical investigation model is prefer construction model through ground investigation that will provide useful information and detailed design and layout for project managers and some contractors who do not posses geological or geotechnical know how. It has also gone a long way in identifying areas of difficulties, and the scale of potential geo-hazards that may occur and preferred solutions on them. These are the geological model reports that are carried out during ground investigations; Factual data with geological records Interpretation of the ground properties and conditions related to the construction projects, potential problems and the limitations of data. Furthermore, trial pits including headings (horizontal or with slight inclination) and shaft (vertical or with steeps inclination) drill and so called small-scale drill are direct investigation methods which allows an inspection of soil and rock, their sampling and their performance evaluation in the field gives an overview of the suitability of some direct investigation methods for soil and rocks in construction processes. The Concept for Hydrogeology Geology and hydrogeology are used to investigate lithological structures in determining the homogeneity of rocks in locating fractures and understanding the permeability of a rock with regards to water, gas and various contaminants underground in order to assess the mechanical stability and gather data from the groundwater system. In ground investigations, groundwater transport flow can be highlighted in such a manner that aquifers can be estimated and potential contamination analysed. The purpose of geological and hydrogeological surveys is to gain direct information by outcrop examination; digging trenches, boreholes drilling, conducting hydraulic test, such as (pumping test analysis and tracer tests) in wells to determine the situ hydraulic properties of that well. This process has been accomplished by field mapping, drill cores examination, construction and expansion of a network of groundwater observation wells. Sampling of rocks, soil and groundwater are taken, in order to dete rmine the physical, chemical, petrographic and mineralogical parameters in laboratory to analyse the texture of the rock and soil sample. The Concept for Environmental Geology Modern landfill disposal facilities require detailed investigations, in order to ensure that appropriate designs and safety precautions are put in place. Legislations generally require that those responsible for waste disposal facilities to guarantee that the sites are suitably contained as to prevent harming the environment and this can only be carried out by the assistance of the geologists to conducting detailed site investigation. In some cases, this may require that investigations may continue during and after construction of a landfill site, depending on the geological parameters of the environment and the construction mechanism, which may require adequate attention from time to time. Selection of a landfill site for a particular waste or a mixture of wastes involves a consideration of economic and social factors, as well as geological and hydrogeological conditions. A geophysical method was introduced to develop a model to detect and analyse abandoned landfill and contaminated plume in the environment. It is also use in locating fractured zones and obtaining other vital lithologic information from the ground. There are other Valuable ways for a meaningful use of the geophysical methods, such as electrical resistivity method, magnetic, seismic and gravity method; depending on the physical parameters in ground investigation. Geophysical methods supplement each other because they are sensitive for various physical parameters. Ground penetration radar is used in places with low and dry conductivity rock and also to check for contaminants from these landfill areas penetrating through a rock fault to the ground water. Seismic methods are used to investigate structures and lithology. Magnetic and electromagnetic surveys are very helpful in locating concealed landfill sites. These methods are easy and fast to conduct and can cove vast area in a short ti me. Electromagnetic, seismic, gravity and resistivity methods are used for ground water geophysical investigation on a regional scale. Geophysical surveys helps to obtain subsurface data on the possible location of groundwater aquifer and the area where a drill borehole can be located. The Concept for Mining In mining, geologist monitors the rock mass behaviour in ground excavations and tunnels. This rock mass behaviour forms the basis for determining the excavations and its support methods as well as assisting in evaluating and monitoring data during the overall processes. Ground investigation for an underground structure is a difficult task which in many cases does not get a proper analysis. The basic aspect of ground investigation is to develop a consistent ground modelling which includes all the geotechnical and hydraulic aspect necessary for the underground structures as the major concept of the construction contract. Rock geometry modelling and mechanical behaviour of rock masses depends on the understanding of the geological processes and their complex interactions such as deformation, weathering and metamorphosis (Steidl 2003). The correct transfer of the geological to geotechnical rock mass model and its implications into a proper design is one of the most challenging tasks in underground design project. The purpose of a comprehensive mining investigation as a sound geological modelling is for careful selection of rock mass parameters beneath the earth; geologic singularity of rock mass model such as lithological boundaries, faults and aquifers which have significant effects on underground mining, such as tunnel. Singularity data in underground mining or tunnel appear in procedures which can be either measured in boreholes, outcrops, aerial and satellite image in a statistical distributions, sometimes roughly estimated. The rock mass behaviour is as a result of a failure of the rock mass surrounding the underground wall. Each failure mechanism can be computed with appropriate analytical model and classified into defined Behaviour Types (Goricki 2003). Different failure mechanisms can be classified into gravity controlled failure of highly fractured rocks mass, stressed induced failure such as shear failure, key blocks, rock burst, buckling, spalling and plastification and some other failure geologic models. Conclusion Ground investigation, topographical surveys are essential part of the design process for any major infrastructure development. They reveal information about the ground conditions in any given area and even indicate whether the location can support any major structures. Their findings of these surveys not only inform the alignment of the scheme but also construction technics. During ground investigation issues like complex conditions on the ground may arise within a project area. The findings or results after the ground investigation has been finalised will gives a possible means of addressing its causes and prefer ways to minimize its effects by indicating the no go zones. The most common ground condition issues are: Flowing groundwater or methane gas Natural or artificial cavities within bedrock Soil and variable drift materials Weathered, weak or fractured bedrock Active or potential failure and landslide Compressive landfill, with or without soft spots In ground investigation the equivalence of ground features with geological maps are very essential for proper geological details and soil profile. The ground investigation team are primarily made up of geotechnical engineers, geologist and grillers who are accompanied by an archaeologist and ecologist during survey works.

Capitec Strategy to success Essay

Introduction History shows that the South African banking sector has predominately focused on middle to upper class income groups in the market, whilst neglecting the needs and demands of low income groups (Manson, 2012). Capitec Bank on the other hand, focused on the needs of these low income groups, creating a business model that was specifically tailored to their needs. Capitec was introduced in the banking industry during a time of crisis, Saambou Bank, which focused in micro lending had collapsed (McNulty, 2009). However Capitec has managed to endure this predicament and since its inception, has emerged as a force to be reckoned with, in a relatively short period of time. The bank has managed to penetrate the South African banking sector with progression in a matter of a few years due to its implementation of the inventive Bottom of the Pyramid (BoP) strategy aimed at targeting the lower end consumers (van Themaat et al, 2013). It is therefore essential to evaluate the BoP strategy, along wi th all of its aspects. For this reason, this essay will examine the history of Capitec Bank and in particular outline the successful adaption of the BoP strategy as well as its growth and current position in the banking sector. However, the main objective that will be discussed in detail will be on the aspects of Capitec’s strategy crucial for leverage in its position in the South African banking sector. History Capitec Bank was founded on the 1st of March 2001 and built back on its micro credit business, keeping in mind its intention to establish a proper bank in the microfinancing platform (Manson, 2012). Microfinance is a term used to describe the provision of financial services in addition to microcredit to small businesses and the bottom of the pyramid (BoP) population (van Themaat et al, 2013). Initially, Capitec started as a 300-branch micro-loan business with the sole product being 30 day loans with a 30% monthly interest. Imperatively, this business of micro-loans supported the strategic aim and complementary cost of building out an underlying foundation  necessary for a transactional bank (Ashton, 2012). Based on statistics it is found that BoP is more than two thirds of the population that survive on bare minimum income (van Themaat et al, 2013). Furthermore Finscope 2003 estimated that 35 percent of the total population in SA have never banked or used any financial service to m anage their finances. With relation to the above, it is recognized that other financial institutions overlook serving the BoP as they are perceived as non-profitable (Coetzee, 2003). However on the other hand, Capitec recognised this market as a window of opportunity as the majority of this population remained unbanked due to the many constraints that prevented them from obtaining financial services (van Themaat et al, 2013, Robin et al, 2005). The bank implemented its profit-driven strategy by customising its services and products to the needs of the BoP to achieve the following: Acceptability, Availability, Affordability and Awareness, thereby overcoming the constraints that existed. (Coetzee, 2003, van Themaat et al, 2013, Robin et al, 2005) This approach deemed successful which has resulted in an increase of market share with 51.23 percent compound interest over the last five years which is in line with its goal of being a profit-driven microfinancing institution (van Themaat et al, 2013). These aspects used by Capitec Bank to penetrate the banking sector will be discussed in this paper. Acceptability As mentioned previously in the history, Capitec overcame many constraints that had previously left the BoP sector unbanked. The founders of Capitec critically evaluated the BoP and found that many are embarrassed by their lack of education, skills, literacy, are unable to afford basic financial services and that their perceptions of banking is that it is complicated, expensive, difficult and time consuming (van Themaat et al, 2013). Capitec offers a simplistic and acceptable approach to banking which has changed these perceptions taking into consideration that the Bop are first time users. Capitec Bank (2014) displays Capitec’s product offering which is a Global One account that incorporates a savings, deposits and a credit facility which makes for simpler banking offering exceptional utility and value. Capitec’s interaction with clients are face-to-face, paper-less, cash-less and card-based (Haladjian, 2006). Overcoming the lack of confidence and literacy skills in first time BoP clients was achieved by the paperless IT and management information system (van Themaat et al, 2013). This also incorporated biometric identification using fingerprint technology and cameras to identify their clients which creates ease of use and quicker response time (van Themaat et al, 2013). Overcoming the language barrier was achieved by employing staff from the local communities. (Robin et al, 2005). Capitec’s investment into human resource training has made for efficient interaction with clients strengthening customer-to-bank relations and by eliminating a bulletproof glass barricade, clients receive a personal service and are treated importantly, which makes transacting a more approachable service. (Coetzee, 2003) By treating their customers with respect, this increases the emotional a ppeal to the BoP population. As compared to service in a big four branch, the Bop customer is treated as inferior and unvalued, therefore Capitec defines it focus by customer and not by income (van Themaat et al, 2013). The customer interface systems at ATM’s have been adjusted to the needs and preferences of the BoP catering for illiterate clients. (Coetzee, 2003) The management IT system is centrally controlled, increases simplicity and customer value by reducing administration costs, paper work, prevents fraud and keeps track of transactions using fingerprint biometrics. (Coetzee, 2003, van Themaat et al, 2013) It also creates a safer environment as cash is not kept at branches and withdrawals are available at ATM’s and selected retail stores considering that many unbanked sectors exist in areas experiencing high crime and this positively contributes to driving down financial service costs (Coetzee, 2003, Haladjian, 2006). Opening an account takes ten minutes. After credit evaluation and approval, the loan application process is as follows: scan ID document and verify using barcode, scan payslip, take a photo of the client, capture other data, open account, print loan agreement, all ow client to sign, then scan and return the original, create an ATM card and give card to the client (Coetzee, 2003). Coetzee 2003 highlights that this previously unbanked population deemed as  undesirable and unprofitable are being served by Capitec Bank in large volumes since its inception. This further proves that the strategy of simplifying its service implemented by Capitec appeals to the Bop population allowing Capitec to penetrate the banking sector. Availability Capitec makes their services more available to customers by having longer business hours, increasing the number of branches, allowing withdrawals at retail outlets, using ATM’s, internet banking and applying for credit online. According to Planting (2006) Capitec Bank has extended their business banking hours. On weekdays branches are open from 8am to 5pm (Manson, 2012). Most of the branches of the big four banks: Absa, Nedbank, FNB and Standard bank close at about 3:30pm or 4pm. Capitec considers that most customers are working and can only access branches after working hours which is around 4pm. In some cases branches are open till later where it suits customers and branches are also capable of going to the workplace of customers to offer their services (Coetzee, 2003). On Saturdays branches are open between 8am to 1pm and on Sundays branches in large shopping centres are open between 10am to 2pm (Manson, 2012). Most of the big four banks branches close on Saturday at about 11am and on Sunday most branches are not open. These times considers that customers may not be able to do their banking during the week because of long and tiring working hours. They understand the needs of customers by offering longer business banking hours. Capitec knows that their customers need to reach their branches easily. This is done by reducing the size of branches and increasing the quantity of branches (Manson, 2012). They would rather have more branches in one area than have one big branch. Many people do not save because they do not have access to banking services (Finscope, 2003). Increasing the number of branches increases accessibility and savings will be encouraged. Using this approach makes their services accessible and convenient for customers. Initially Capitec’s main target focus was the BoP. Branches are located at taxi ranks, train stations and townships where their services are easily available to the low income group. They have expanded over the years, making their services available to the other income groups by locating branches near rural areas and in shopping malls. Capitec uses existing  infrastructure to improve banking service accessibility. They have partnered with retail outlets such as Checkers, Pick ‘n Pay, Shoprite and Pep. Customers can withdraw cash at these retail outlets. Most of the retailers allow cash to be withdrawn when purchasing items at the stor es except at Pick ‘n Pay no purchase is required to make a withdrawal. They have increased their network location by allowing withdrawals at retailers without having to invest in any large infrastructure (Kim & Mauborgne, 2005). This allows easy access to money and convenience for customers. Capitec ATM’s are located across SA making them easily accessible. If customers cannot access an ATM to withdraw cash, they can always go to retail outlets making their services more accessible and unique compared to the major banks. The ATM’s can be used to check balances, withdraw cash and multi-loan, transfer money to savings plans and change a pin. The availability of services offered by Capitec is improved by partnering with MasterCard. Cards are developed to allow customers usage even in remote places (Lee, 2010). Mobile banking is also used by Capitec; customers can use their cell phone to access multi-loan, savings plans and savings account. It can be used to purchase airtime and electricity, check account balances and previous electricity tokens purchased, withdraw multi-loan and make payments to clients who bank with Capitec, transfer money between your accounts and register for SMS update for security purposes. Capitec offers internet banking that is simple, safe and saves the customer money. Money can be managed whenever it suits the customer. Internet banking allows customers to transfer money between their accounts, create stop orders, check their statements, tax interest certificate, payment history and register for SMS update system. Customers first need to access their nearest branch to register for mobile or internet banking and to find out how it works. After registration customers can easily access their services when it suits them. They also allow customers to apply for credit online which increases availability of their services. A credit application must be completed online and they will contact the customer to discuss it with them, making credit application easily accessible. The use of EMP technology and cards linked to maestro allows customers use of their cards offline, offering services in areas of limited access such as rural communities (Haladjian, 2006). Using these strategies  Capitec has made their services more available and convenient for custome rs, thus improving the banking sector. These strategies used have increased their client base and resulted in the growth of bank. Businesstech (2014) reveals that Capitec has overtaken Nedbank and is now the fourth largest bank with approximately 10.8 per cent market share. Affordability A substantial component behind Capitec Bank’s successful business model was its development of a strategy aimed at understanding the needs of its customers which were the â€Å"bottom of the pyramid† population (van Themaat et al, 2013). This prompted the bank to offer affordable banking products and services that were specifically designed in accordance to its customers’ needs. Capitec centred on having simple banking products and services and sought out to have the lowest fees, hence arguably making it the most affordable bank to bank with amongst many of its competitors in the banking sector (Manson, 2012). In order to understand this strategy, it is imperative to highlight the banking products and services Capitec offered which allowed it to penetrate the banking sector in South Africa as well as making a comparative analysis with the products and services of some of the major banks in South Africa. The fundamental factor of Capitec’s success is its Capitec’s Global One account which comprises of three distinct features: it allows an individual to have the ability to transact, save and access credit, all with one account (Capitec Bank, 2014). The efficiency of this account ensures that customers do not have to open three separate accounts which cuts down on administrative costs. The monthly administration cost for the Global One account inclusive of all its aspects as of 01 March 2014 amounts to R5.00 (Capitec Bank, 2014). Furthermore there is free access to card, mobile as well as internet banking and in so doing makes it more appealing to Capitec’s target market (Manson, 2012). Comparing Capitec’s Global One account with that of its counterparts from the big four banks in the table below, it can be seen that this account is more superior in terms of its features and much more cost efficient than the rival accounts of other banks. Bank Transactional Account Savings Account Access Credit Capitec- â€Å"Global One Account† YES YES YES FNB- â€Å"Easy Account† YES YES NO Absa- â€Å"Flexi Account† YES YES NO Nedbank- â€Å"Ke Yona Account† YES NO NO Standard Bank- â€Å"PlusPlan Account† YES YES NO The Global One transaction feature allows you to transfer, deposit or withdraw money as well as to make purchases and payments (Capitec Bank, 2014). The fees that Capitec charges relating to the transaction aspect on this account is by far the cheapest in comparison to the transaction accounts of the big four banks. Fees relating to all card purchases are free whether you purchase at card machines, shop online, order by telephone or through mail. Money transfers to own accounts are also free and to other accounts is charged at a fee of R1.05. Balance enquiries through all channels are also free. (Capitec Bank, 2014) The savings component on the Global One account allows an individual to have four different savings plan which has the ability to earn interest ranging from 4.40 to 9% depending on  their plans. These plans can also be flexible or fixed according to one’s preference. With flexible savings, people can earn from 4.40% interest on their daily balances as well as cho ose the amount they want to deposit and the frequency of their deposits (Capitec, 2014). Another advantage to these plans is that there is no monthly admin fee that has to be paid to each account as well as no minimum balance required in order to start saving. Fixed-term savings gives one the ability to choose from two deposit options. The first is a â€Å"single deposit† which can run from a period of 6 to 60 months with a minimum balance of R10 000 and a maximum investment of R5 million (Capitec Bank, 2014). The second option is â€Å"multiple deposits† which can run from a period of 6 to 24 months with a maximum investment amount of R1 million. The interest rate is fixed for the full term and interest gained from this option can either be reinvested or transferred to back to one’s transaction or savings account (Capitec Bank, 2014). Having a look at the competing accounts of the other major banks which can be seen in the table below, most offer interest rates that are less than 1%. Capitec on the other hand offers highly competitive interest rates which make it more lucrative for people to bank with them as they are able to earn more on their savings. Bank Capitec- â€Å"Global One Account FNB- â€Å"Easy Account Absa- â€Å"Flexi Account Nedbank- â€Å"Ke Yona Account Standard Bank- â€Å"PlusPlan Account† Interest Rates 4.40 to 9% 0%

Assessing a Company’s Financial Future Essay

It is detrimental for higher-level management in a company to assess the long-term financial health of the institution. Throughout history there have been depictions of several corporations taking on lucrative and highly ambitious initiatives to increase the wealth of the company. These companies come to find out their programs could not be funded as anticipated. This paper will show how proper strategy and a step –by-step process will successfully be able to assess a company’s financial future. In this case we will be looking at performance measures based upon the income statements and balance sheets of SciTronics (A medical device company). It is imperative that the measures are grouped into three types: (1) profitability measures (sales), (2) activity (asset management) measures, and (3) leverage and liquidity measures. (Piper, 1-6) Page 6: 1-3 1. By assessing the performance of SciTronics during the 2005-2008 periods we see that it’s profitability ratio increased. The company is heading in the right direction. In terms of sales we can see in the below table that the company has increased it’s net income. 2. SciTronics financial strength and its access to external sources have improved. This is evident from the financial ratios of profitability and leverage. 3. a. What will management do to maintain current liabilities that had been increased during the 05-08 period? b. As seen in Table 1 the salary and employee expenses are very high in the company. We can see by looking at Sell, General and Admin that it has decreased which is good. The company doesn’t want to pay out to employees too much. This interpretation varies with different companies. Most companies want their employees income to be anywhere from 12% to 22% of their total sales. By looking at the market average we can see that with pharmaceutical companies it is a little different. It is apparent that selling, general and administrative includes the sum of all indirect and direct selling expenses but a valid question to ask management would be: Why is this number so high in comparison to the market average, and what can we do to lower this number? c. Will SciTronics continue to expand their fixed assets such as property and equipment? This is imperative to know because it will increase the value of the company in turn making it more financially stable. If need be, it could then use these assets as collateral towards loans. If SciTronics came to my bank and asked for a $126,000,000 loan to support their growth in business I would approve the loan because of careful examination of their financial statements including analyzing the profitability, leverage, activity, and liquidity ratios. (1) Profitability Measures Sales growth provides the company with a measure to determine how well their product is doing in the market. * During the four-year period ended December 31, 2008, SciTronics’ sales grew at a 20.69% compound rate. There were no acquisitions or divestitures. * SciTronics’ profit as a percentage of sales in 2008 was 5.74% * This 5.74% represented an increase from 3.40% in 2005. * SciTronics had a total of $159,000,000 of capital at year-end 2008 and earned, before interest but after taxes (EBIAT), $16,00,000. Its return on capital was 10% earned in 2008, which represented an increase from the 4% earned in 2005. * Scitronics has $75,000,000 of owner’s equity and earned $14,000,000 after taxes in 2008. Its ROE was 18.67%, which represented an improvement from the 8.20% earned in 2005. Figure A below: * This figure shows an initial decrease in the profit as a percentage of sales however are followed by a steep increase in 2008. Profitability is quite obviously very important to a company. It allows the company to have access to debt, have a proper valuation of the company’s common stock, the ability to finance its own programs, and the pervasiveness of management to issue stock. This is depicted in Figure A as an indefinite increase from 05-08. Figure A Figure B * Return on equity indicates how profitable SciTronics is utilizing shareholders’ funds. (Piper, 7) To shareholders of a company, this is equally as important as EBIAT. (2) Asset Management Measures A company must use Activity ratios to determine how well it is using its assets. If improper use of assets occurs there is a need for financing for the company. This is turn leads to more interest costs and also brings about lower return on capital. * Total asset turnover for SciTronics in  2008 can be calculated by dividing $244,000(net sales) into $159,000. The turnover deteriorated from 1.58 times in 2005 to 1.53 times in 2008 * SciTronics has $66,000 invested in accounts receivables at year-end 2008. Its average sales per day were $668.49 during 2008 and its average collection period was 98.73 days. This represented an improvement from the average collection period of 104.29 days in 2005. * SciTronics apparently needed $29,000 of inventory at year-end to support its operations during 2008. Its activity during 2008 measured by the COGS was $74,000. It therefore had an inventory turnover of 2.55 times. This represents an improvement from 2.05 times in 2005. * SciTronics had net fixed assets of $18,000 and sales of $244,000 in 2008. Its fixed asset turnover ratio in 2008 was 13.56 times, and deterioration from 16.33 times in 2005. Figure C * As seen in Figure C, there is an improvement in inventory turnover from 2.05 in 2005 to 2.55 in 2008. This is very important because this indicates to the company its effectiveness with which the company uses its inventory. (Piper, 8) (3) Leverage and Liquidity Measures The different types of leverage ratios measure the relationship of funds supplies by creditors to the funds supplies by the owners of the company. Return of equity will improve when the use of borrowed funds from creditors or owners is appropriated correctly. * SciTronic’s ratio of total assets divided by OE increased from 1.52 at year-end to 2.12 at year-end 2008. * At year-end 2008, SciTronic’s total liabilities were 34.41% of its total assets, which compares with 32.41% in 2005. * The market value of SciTronic’s equity was $175,000,000 at Dec 31, 2008. The total debt ratio at market was 32.43%. * SciTronic’s earning before interest and taxes (Operating income) were $26,000,000 in 2008 and its interest charges were $2,000,000. It’s times interest earned been 13 times. This represented an improvement from the 2005 level of 10 times. * SciTronics owed its suppliers $6,000,000 at year-end 2008. This represented 8.11% of COGS and was a decrease from the ratio of 11.63%  year-end 2005. * The financial riskiness of SciTronics decreased between 2005 and 2008. Liquidity ratios measure a company’s ability to meet financial obligations as they become current. (Piper, 10) * SciTronics held $133,000,000 of current assets at year-end 2008 and owed $48,000,000 to creditors, due to be paid within one year. SciTronics’ current ratio was 2.77, a decrease from the ratio of 3.90 at year-end 2005. * The quick ratio for SciTronics at Year-end 2008 was 2.17, a decrease from the ratio of 2.90 at year-end 2005. Figure D * This figure depicts an increasing level of financial leverage. In this figure total assets divide total liabilities. We can see that financial leverage increased throughout the years until 2008. Figure D Work Cited Piper, Thomas. Assessing a Company’s Future Financial Health. 911th ed. Vol. 9. Boston, MA.: Harvard Business Review, 2012. Print. Ser. 412.