Case Study on Profitability Assignment Example | Topics and Well Written Essays - 1500 words

Case Study on Profitability - Assignment Example Thus the decrease in operating profit margin indicates that operating expenses of Deutsche Brauerei rise faster than its sales, which can be clearly seen from exhibit 1: 48.4% increase in sales against 49.5% increase in operating expenses. In turn this means Deutsche Brauerei now has less flexibility in determining prices, and therefore less safety in tough economic times. The ratio of income taxes to earnings before taxes has also increased to 39.5% in 1999 and 39% in 2000 from 33.8% in 1997 and 34.5% in 1998. From exhibit 1 we can see that taxable income increase steadily over years (which can be explained by unstable economic situation in Ukraine), while earnings before taxes grow slower. Consequently return on sales, which shows the operational efficiency of the company dividing earnings before tax by total sales, has decreased from 4% in 1998 (before default) to 2.8% in 1999 leveling the breakdown to 3.2% in 2000. Still shareholders' equity continues to increase shifting the return on equity ratio up to 10.3% in 2000 - the highest measure for four years; the business looks good from this perspective. Return on net assets which is equal to net income divided by fixed assets and net working capital also shows signs of healthy performance increasing to 8.4% in 2000 6.9% in previous year. The return on assets ratio have returned to its value in 1998 - 4.7% - indicating that a company puts its assets to good use when restoring profitability after economic breakdown in former USSR region. As can be seen from the exhibit 1, sales in Germany have been increasing slowly over the last four years, while the main stake was made on the Ukrainian market. Therefore changes in profitability of DB are greatly affected by local economic climate, which was very unstable these years. Although experiencing difficulties in generating profit, DB has made a successful recover from economic difficulties of the year 1998. Leverage Leverage ratios determine the company's long-term solvency. "Financial leverage is the name given to the impact on returns of a change in the extent to which the firm's assets are financed with borrowed money." (Scott, 1998) For instance debt/equity ratio shows how much money the company can safely borrow over long-terms and it is measured with dividing the total debt with total equity. The debt/equity ratio for DB has fallen from 72.3% in 1997 to 66% in 2000. The company has borrowed funds in 1997 making investments into Ukrainian market, which is the reason of such high debt/equity ratio in 1997. It is decreasing along with debt/total capital ratio (long-term debt/ long term-debt + shareholder's equity), which was 39.8% in 2000 comparing to 41.9% in 1997. This is a good sign of increasing long-term solvency. EBIT/interest ratio, which shows how many times the company can cover its obligations was rather stable during the last three years (4.7 in 1999, 2000, 4.8 in 1998) increasing significantly from 3.8 in 1997. The company has significantly decreased its debt in 1998, which was reflected in the increased solvency in the last three years. Asset Utilization The efficiency of the business is measured by asset usage ratios. Asset utilization ratios are especially important for internal monitoring concerning performance over multiple periods, serving as warning signals or benchmarks from which meaningful conclusions may be reached on operational issues (Blok and Hirt, 2005). Asset turnover is one of the most important

Abolition of the Death Penalty Essay Example | Topics and Well Written Essays - 1000 words

Abolition of the Death Penalty - Essay Example Means of capital punishment include but not limited to; hanging, crucifixion, electrocution, stoning etc. Van Den Haag gives five reasons justifying the constitutionality of the death penalty by concluding that the constitution allows for death penalty which is not the case (van den hag 128).The constitution states that â€Å"if life was to be taken away as form of punishment, then it must be in accordance with the due process of the law†, this proposition is conditional and accords the government a choice to either abolish it or effect it in light of the due process of the law. For this reason I wish to put forth arguments that would lead to the abolition of death penalty. Dissenting Van den hag argues that the death penalty acts as deterrence for future murders. Death being the most severe form of punishment is most feared and a murder would think before carrying out his intention. Previous studies have shown that quiet a number of murders were deterred since the introductio n of death sentence. However, the death sentence takes quiet a long time before it is administered and the use of alternative equally feared forms of punishments could be used instead as a form of deterrence. Deterrence has its limitations as someone already imprisoned and sentenced for death would not be afraid to kill their inmates as well as the prison guards. Death sentence can only be effective in deterring murders if it is carried out fast enough which is usually not the case. Retributive justice comes into play when an imbalance occurs in society due to a loss of life from the hands of a criminal. That balance must be restored by taking away the murderers life. Concurring In rebuttal to deterrence, the death sentence has not been proven to deter future murders. The difference between life imprisonment and death sentence is negligible. Death sentence can have the effect of brutalizing the society, which then makes it a less effective tool for deterring murder as this increases the possibility of more murder (Anckar, 2004, 189). Most murders are committed by people in altered states of mind. It might be that a person acted in moments of immense emotional imbalance due to anger or substance abuse. Also, the person committing murder does not expect to be found out. It would be suffice to say that the death sentence cannot deter such persons or drug abusing criminals from committing murder as they are not in a position to evaluate the possibility of life imprisonment or the death penalty itself. The death penalty has not been proven to deter more murders than life imprisonment, as most prisoners serving life imprisonment are involved in routine works and like any other prisoner, they are unlikely to commit any crime. People’s security can be guaranteed by offering life sentence without parole without having to use the death penalty (Bae,2007, 235). Long-term imprisonment being a severe punishment can deter any rational human being from committing murd er; however this is not possible as most premeditated murders involve a criminal who is planning on not getting caught or people who murdered out of sheer emotion.. Police in states with the death penalty are not safe compared to police officers in abolitionist states. Also, prison personnel and prisoners are not safe in states with the death penalty than those without. (Wolftson, 1982, 167) In rebuttal to retribution, Sanctity of life should not be compromised to death penalty. Retribution being akin to revenge should not be exercised by a civilized society. Capital punishment has so many problems and risks associated with it and the need for vengeance should not justify its existence. Sanctioning killing for revenge motives lowers the dignity of a mature society which is