Wednesday, October 30, 2019
Macroeconomic Performance and Strategic Decisions Essay - 1
Macroeconomic Performance and Strategic Decisions - Essay Example Kazakhstan is an emerging economy in Central Asia and is one of the former Soviet republics. Each of these countries would be analysed on four main areas. The analysis would outline the four parts of this paper. Part one is a summary of the macroeconomic performance of each country over the last three years (2004-2006). Part two is a critical evaluation of the economy as a target market for exports. Part three is a critical examination of advantages and disadvantages of the economy as a potential source of inputs into a manufacturing company. Part four is an analysis of the strengths and weaknesses of the economy as a location for foreign direct investment or FDI. Table 1 summarises key economic indicators for these countries. The researcher acknowledges the sources in the Bibliography. The UK, with a total GDP of $1.8 trillion growing 3.1% annually is the world's fourth largest economy and has a population of 59 million with high disposable incomes, making it one of the best gateways to penetrate European markets with a per capita income of $30,447 at purchasing power parity. This former world superpower is the world's 6th freest (of 155) economy (Heritage, 2007, p. 381), the 10th (of 125 countries) most competitive nation on earth (World Economic Forum, 2006, p. xvii), and the world's 21st most competitive economy, which includes sub-economies that are not states or countries like Catalonia in Spain (IMD, 2006, p. 7). The Monetary Policy Committee (MPC) of the Bank of England (BOE) keeps a close look at the inflation rate that is only slightly rising between 2 and 3% annually by monitoring interest rates (BOE, 2007). The U.K. uses two inflation measures: the Retail Price Index (RPI) and the Consumer Price Index (CPI). Both are similar but with minor differences in composition, coverage, and weighting of prices in the index. Since December 2003, the CPI has been used for monetary policy with a target of 2.0% on average over time (BOE, 2007). The sterling exchange rate remains strong against the U.S. dollar and stayed within the range of 0.58 to 0.53 by end-2006. The sterling weakened against the Euro as expected from 0.69 to 0.72 by end-2006, a trend expected to last until end-2007 depending on Eurozone interest rates changes. These currency movements were affected by the weakening of the U.S. economy and a strengthening Eurozone with respect to the UK, signifying low currency volatility due to sterling's lack of attractiveness as a medium for short-term capital flows in currency markets caused by the UK's flat interest rate curve (BOE, 2007, p. 2). The UK stock market continued to rise, returning 22.0% up to December 2006, continuing a two-year trend, with the FTSE 100 index closing higher by end-2006. The UK equities market is expected to follow its upward trajectory in 2007 on the back of stable prices and renewed business and consumer confidence. Hong Kong Special Administrative Region (HK SAR) The HKSAR celebrated last July 1, 2007 its tenth anniversary since its handover by the UK to the People's Republic of China. HKSAR retains its unique status as a Special Administrative Region until 2047 and hopes to remain as the world's most liberal capitalist economy whilst at the same time being a part of the largest and most progressive Communist nation with
Monday, October 28, 2019
Islam Definition Essay Example for Free
Islam Definition Essay For the past few months I have been overseas working in the wonderful country of India. I’ve observed many different things; many unusual things about this country. India has a wide variety of cultures and religions. The holiday I have learned about is called Hajj. Hajj means ‘to set out for a place’. Hajj is the pilgrimage that Muslims make to Makkah or also called Mecca , Saudi Arabia, and is one of the five basic requirements of Islam. It is a religious high point of a Muslim’s life and is an event that every Muslim dreams of being part of. Hajj is a religious obligation to be fulfilled at least once in the course of the life of each Muslim law grants, and is a series of detailed rituals. It is a Muslims obligation to be mindful of their friends and family and to all humans whatsoever. Islamic followers believe that every nation should have a unity so they can all worship God. They believe that through culture people will come together as a whole to praise God, and learn each other’s difficulties. All official duties are suppose to be completed between the ninth and thirteenth day of Hajj. There are three main pillars that are to be performed during Hajj. The first pillar is to get into a state of â€Å"Ihram†and intend to perform the pilgrimage. The second pillar is to stay at the field of â€Å"Arafat†on the ninth day of Hajj. If the person cannot complete the pilgrimage then he/she will have to try to complete it the following year. The third pillar is additional circling of the â€Å"Ka’ba†which is done after the first pillar and is performed from the tenth day of Hajj till the end of the month. These past couple months in India have been a great experience. I’ve learned a lot of new things, which has been something different for me. I would love to come back and visit all of the people that I have met, because everyone was so nice. Learning about the Hajj was very interesting to me, and I will go back and share all of my experiences with everyone back home.
Saturday, October 26, 2019
Effects of Divorce on Children :: Papers
Effects of Divorce on Children Divorce has become an unquestionable remedy for the miserably married. Currently, the United States has the highest divorce rate in the world. Every year in the US approximately one million children experience divorce which, is about one in every three children (Amato 21). The effects of divorce can be tremendously painful for both children and adults. Children of divorce are more likely to suffer from behavioral, social, academic, and psychological problems than children raised in two-parent families. The actual separation of the family will be the initial crisis that a child must deal with but many issues such as economic hardship, moving, and other major issues may follow. Sarah McLanahan, a leading divorce researcher at Princeton University, has identified moving as one of the most damaging effects of divorce for children. That is because the children lose invaluable ties to friends that may be able to help them cope with the new stress they are faced with. McLanahan and Gary Sandefur conclude that up to 40% of the increased risk of being a high school drop out is attributed to moving as a result of divorce (Chira 01E). The short term effects or divorce vary depending on the age and sex of most children. Boys and girls handle the break-ups with different emotions for example, some get angry, some feel sad, and some may experience feelings of rejection. Preschool age children, ages three to five, many times react with feelings of anger and sadness. Many of the preschool age children will regress after the initial shock of the separation. Signs of regression could be once again asking for a security blanket, bedwetting, returning to thumb sucking, needing help feeding themselves, or hitting their siblings. The children in this age group are more anxious and insecure than a child growing up in a two-parent home (Teyber 11). The majority of the children in the preschool age-group have abandonment issues and fear that since one parent has left the home that the other may move out as well. As the children get older the effects the divorce has on them is different but no less traumatizing. School aged children between the ages of six to eight seem to have an especially difficult time dealing with their parents splitting up. Generally, the boys in this age group tend to be more bothered than the girls.
Thursday, October 24, 2019
Managing Working Capital
MANAGING WORKING CAPITAL Cash Budgets and Current Assets Learning Objectives Upon reading this chapter, students should: †¢Ã‚       Be able to compare and contrast working and fixed capital †¢Ã‚       Understand the impact of the operating cycle on the size of investment in accounts receivable and inventories †¢Ã‚       Know the differences between the three motives †¢Ã‚       Be able to differentiate between float, collection float, and disbursement float †¢Ã‚       Know how to appraise a firm’s credit worthiness †¢Ã‚       Be able to appraise the effectiveness of a firm’s inventory management policiesChapter Summary A firm can invest in both working capital and fixed capital. Working capital is a firm’s current assets and includes cash, marketable securities, inventory, and accounts receivable. Fixed capital is a firm’s fixed assets and includes plant, equipment and property. Firms that cannot obtain short-term financing become candidates for bankruptcy. Management of working capital is particularly important to the entrepreneurial or venture firm because there is such a pull on resources.Two important concepts in managing working capital are the operating cycle and the cash conversion cycle: †¢Ã‚       The operating cycle measures the time between receiving raw materials and collecting the cash from credit sales posted to accounts receivable †¢Ã‚       The cash conversion cycle measures the time it takes to collect money from the company’s customers and use those funds to pay its suppliers Calculating three ratios will reveal the average length of these cycles: 1. Inventory days            = 365 / (Cost of goods sold / Inventories) 2.Accounts receivable period (average collection period ) = Accounts receivable / (Net sales / 365) 3. Average payment period = Accounts payable / (Cost of goods sold / 365) The operating cycle is the inventory conversion period plus the average collection period. The cash conversion cycle is the operating cycle minus the average payment period. In order to determine average investment in accounts receivable, multiply net sales per day by the average collection period. With this number, a manager can now estimate what the investment in accounts receivable will be fore ht following year given sales increases and average collection period.In order to determine investment required in inventories, multiply average cost of goods sold per day by inventory conversion period. The required amount of accounts payable can be found by multiplying the cost of goods sold per day by average payment period. Armed with these numbers, a manager can tweak the business practices and use these numbers as metrics for improvement. If savings can be wrung out of the operating cycle and conversion cycle, this means less money will have to be raised in financing. A cash budget details the cash inflows and outflows of a firm over a specific time frame.Small firms may prepare annual or monthly cash budgets while larger firms will forecast cash flows weekly or daily. Most firms have a minimum desired cash balance that depends on the firm’s ability to acquire financing on short notice, management preferences, and the predictability of cash inflows and outflows. Estimates of cash inflows are driven by two main factors: 1. Sales forecast (may exhibit seasonality) 2. Customer payment patterns Cash outflows will go to suppliers, payroll, taxes, operating expenses, and purchases of plant and equipment.In order to construct the cash budget, list all expected cash inflows and then all expected cash outflows for the particular period, generating a net cash flow amount. As a general rule of thumb, the average firm has 1/3 or more of i ts assets in the form of current assets (cash, accounts receivable and inventory). Seasonal production and forecasting can lead to idle plant capacity and laid-off workers during the off-season. Under a level production plan, the same amount of raw material is purchased and the same amount of finished product is manufactured every month.There are three types of motives for holding cash: 1. The transactions motives are demands for holding cash – cash is needed to conduct day-to-day operations 2. Precautionary motives are demands that may be caused by unpredictable events, such as delays in production or in the collection of receivables; marketable securities are held in such a contingency 3. Speculative motives are demands for funds to take advantage of unusual cash discounts for needed materials Cash and marketable securities include: †¢Ã‚       Cash itself †¢Ã‚       U. S. Treasury bills        Commercia l paper – short-term, unsecured notes of well-known business firms †¢Ã‚       Negotiable certificates of deposit – a receipt issued by a bank in exchange for a deposit of funds †¢Ã‚       Bankers’ acceptances – primarily used to finance exports and imports †¢Ã‚       Eurodollars – deposits placed in foreign banks that remain denominated in U. S. dollars There are several reasons why U. S. banks have entered the Eurodollar market through overseas branches: 1. To finance business activity abroad 2. To switch Eurodollars into other currencies 3. To lend to other Eurodollar banksIn general, managers try to speed up cash collections while slowing down the payment process. The float is the time between sending out payments and having them actually be charged to the bank account. The collection float is the time between when a payer sends payment and funds are credited to the payee ’s bank account. The disbursement float is the time between when a payer sends payment and when the funds are deducted from the payer’s bank account. Float has three components: 1. Delivery or transmission float – the delay in transferring the means of payment from the payer (customer) to the payee (provider of goods/services) 2.Processing float – once payment reaches the destination, it needs to be entered and processed 3. Clearing float – delay in transferring funds because of the banking system itself In order to speed up the process: †¢Ã‚       Preauthorized checks are regular (typically monthly) deductions by a vendor from a customer’s checking account. †¢Ã‚       Under the Check 21 law, enacted in 2004, payee banks can present electronic or digital images of checks to payer banks rather than having to physically deliver the paper checks for payment.In order to facilitate sales, firms of ten offer the customers credit for purchases; this process calls in credit analysis. The five Cs of credit analysis are: 1. Character – ethical quality of the applicant and the history of paying bills on time (credit checks) 2. Capacity – the ability to pay bills (liquidity ratios) 3. Capital – adequacy of owners’ equity relative to existing liabilities 4. Collateral – whether assets are available to provide security 5. Conditions – current economic climate and state of the business cycleCredit bureaus obtain credit information about business firms and individuals; two such organizations are Experian and Equifax. Dun & Bradstreet reports contain information assembled through many channels and is one of the best sources of information on privately-held companies; reports are typically divided into five sections: (1) rating and summary; (2) trade payments; (3) financial information; (4) operation and location; and (5) history. Trade credit is extended on purchases to a firm’s customers. Sometimes, customers are given a discount if they pay early.The financial manager must be careful not to impose onerous credit terms that will alienate customers and lower sales. With respect to global credit, the concern is forex. There are two ways to handle the issue: 1. Invoice customers in the firm’s home currency 2. Hedge the forex risk Inventory management: †¢Ã‚       The just-in-time (JIT) inventory control system is a system where there are enough materials in inventory to cover needs for a short time, but not more inventory than is needed for short-term needs.Vendor and manufacturer work together to reduce lead time, setup time, and production time so that inventory shows up â€Å"just in time† †¢Ã‚       JIT II further integrates the activity of vendor and purchaser, wherein the position of buyer’s purchasers or materials planners is eliminate d and replaced by a representative of the supplier †¢Ã‚       Tracking inventory also allows firms to reduce the inventory conversion period and the cash conversion cycle. RFID (radio frequency identification) tags send out a radio signal to electronic readers that allow companies to know the location of inventory at any timeInventory management can result in reduced cost of warehousing and handling inventory. Cost savings and smaller asset bases should lead to higher return on assets and increasing shareholder wealth. Technology is improving asset management by making information available with which managers make business decisions in a real-time setting. Technology may be the key to reducing procurement and supply chain costs. Portals are specialized and secure Web sites through which clients can access order and account information. Key TermsCapacity                                The ability to pay bills and often involves an examination of liquidity ratios. Capital                                   The adequacy of owners’ equity relative to existing liabilities as the underlying support for creditworthiness. Cash budget                          The cash inflows and cash outflows of a firm over a specific time frame. Cash conversion cycle          The time it takes to collect money from the company’s customers and use those funds to pay its suppliers.Character                              The ethical quality of the applicant and his/her willingness to pay bills on time and is best judged by reviewing the past credit hist ory for the company or person. Collateral                               Assets that secure credit. Collection float                      The time between when a payer sends payment and the            funds are credited to the payee’s bank account. Conditions                             The current economic climate and state of the business cycle.They are an important consideration in assessing whether the applicant can meet credit obligations. Credit bureaus                      Firms that obtain credit information about         business firms and individuals. Disbursement float               The time between when a payer sends payment and when the funds are deducted from the payer’s bank account. Fixed capital                          A firm’s fixed assets, which include plant, equipment, and property. Float                                       The time between sending out payments and having them actually be charged to the bank account.Level production plan           Schedule where the same amount of raw material is purchased and the same amount of finished product is manufactured every month. Operating cycle                     The time between receiving raw materials and collecting the cash from credit sales posted to accounts recei vables. Portals                                   Specialized and secure web sites through which clients can access order and account information. Pre-authorized checks          Regular (typically monthly) deductions by a vendor from a customer’s checking account.Precautionary motives          Demands for funds that may be caused by unpredictable events, such as delays in production or in the collection of receivables. Speculative motives              Demands for funds to take advantage of unusual cash discounts for needed materials. Trade credit                           Credit that is extended on purchases to a firm’s customers. Transactions motives            Demands for holding cash is that cash is needed to conduct day-to-day operations.Working capital                     A firm’s current assets as shown on the balance sheet and includes cash in the bank accounts, marketable securities, inventory, and accounts receivable. Suggestions for Additional Resources 1. http://en. wikipedia. org/wiki/Just_In_Time_%28business%29 2. http://www. lean. org/ 3. http://www. equifax. com/ 4. http://www. experian. com/ 5. http://www. investopedia. com/terms/c/creditbureau. asp 6. http://en. wikipedia. org/wiki/Credit_bureau 7. http://www. investopedia. com/terms/w/workingcapital. asp 8. http://en. wikipedia. org/wiki/Working_capitalAnswers to Summary Questions 2. Fixed capital would be defined as the firm’s fixed assets, which include plant, equipment and property. True or false? True. . 3. The operating cycle measures the time it takes between o rdering materials and collecting cash from receivables. True or false? True. . 4. If a firm has $50,000 in profit and pays out about one half to the owners of the company, the amount of profit retained in the firm would show up as: (a) an increase in owners’ equity (b) a decrease in owners’ equity (c) a decrease in retained earnings (d) a decrease in long-term debt . 5.The accounts payable period is the time between a firm’s paying its suppliers for inventory and collecting cash from inventories. True or false? False. . 6. Increases in the cash conversion cycle will lower the firm’s short-term financing needs. True or false? False. . 7. The inventory conversion period is calculated by inventory divided by costs of goods sold. True or false? False. . 8. Activities that decrease the cash conversion cycle will increase the firm’s need to obtain financing. True or false? False. . 9. More efficient management of working capital a ssets will lessen the firm’s needs for financing.True or false? True. . 10. A cash budget is a tool the treasurer uses to forecast future cash flows and estimate future short-term borrowing needs. True or false? True. . 11. To construct a cash budget, two sets of information are needed: estimated cash inflows and estimated cash outflows. True or false? True. . 12. The estimated cash inflows are affected by the sales forecast and customer payment patterns. True or false? True. . 13. Assume a firm’s production process requires an average of 80 days to go from raw materials to finished products and another 40 days before the finished goods are sold.If the accounts receivable cycle is 70 days and the accounts payable cycle is 80 days, what would the short-term operating cycle be? (a) 110 days (b) 130 days (c) 190 days (d) 270 days . 14. If a firm has net sales of $400,000, annual cost of goods sold of $315,000, an inventory turnover of 4. 5 times a year, and an accounts re ceivable turnover of five times a year, the combined investment in inventories and accounts receivable would be: (a) $64,500 (b) $92,000 (c) $122,500 (d) $150,000 . 15. Calculation of a firm’s average collection period is the same as calculating the: (a) accounts receivable cycle (b) inventory cycle c) accounts payable cycle (d) short-term operating cycle . 17. A level production plan has problems, such as idle plant and laid-off workers during slow sales months and production bottlenecks during busy times. True or false? False. . 18. The account receivable period may be calculated as accounts receivable divided by sales. True or false? False. . 19. The account receivable period may be calculated as accounts receivable divided by daily sales. True or false? True. . 20. The transactions motive is the demand for holding cash. True or false? True. . 22. The federal funds rate is normally several points lower than the Treasury Bill rate.True or false? False. . 23. The five C†™s of credit analysis is a popular concept used by inventory managers. True or false? False. . 24. A mercantile credit bureau serves primarily as a (n): (a) collection agency for delinquent accounts (b) common meeting place where credit managers may exchange information (c) organization through which accounts receivable may be sold to other businesses (d) central record-keeping organization for credit information on business firms . 25. The objective of just-in-time (JIT) inventory control is to carry a minimum level of inventories.True or false? True. . 26. The delivery or transmission float is the delay in transferring the means of payment from the payer (customer) to the payee (the provider of goods or services). True or false? True. . 27. The disbursement float is the delay in transferring the means of payment from the payer (customer) to the payee (the provider of goods or services). True or false? False. Answers to â€Å"Review Questions†. 1. What is meant by wor king capital? Net working capital is defined as current assets minus current liabilities. . 2. Briefly describe a manufacturing firm’s operating cycle.The operating cycle measures the time between receiving materials and collecting cash from receivables. Raw materials are purchased and products are manufactured from them to become finished goods. Effort then is made to sell the finished goods. If the goods are sold on credit, then the receivables must be collected. . 3. Explain how the cash conversion cycle differs from the operating cycle. The cash conversion cycle typically is shorter than the operating cycle. The cash conversion cycle measures the time between when a firm pays for its supplies or raw materials and when it collects cash from receivables.  4. Describe how the length of the cash conversion cycle is determined. It is equal to the operating cycle (inventory period minus the accounts receivable period) minus the payables period. . 5. Explain how the length of the operating cycle affects the amount of funds invested in accounts receivable and inventories. All else being equal, a longer (shorter) inventory period and receivables period will increase (decrease) the amount of inventory and accounts receivable carried by the firm. . 6. What affects the amount of financing provided by accounts payable as viewed in terms of the cash conversion cycle?The level of the firm’s cost of goods sold and the average payment period affect the amount of financing provided by accounts payable. . 7. What is a cash budget? How does the treasurer use forecasts of cash surpluses and cash deficits? A cash budget lists, period by period, expected cash inflows and outflows. The treasurer can plan ahead to find suitable marketable securities in which to invest excess cash. If cash deficits are forecast, the treasurer can arrange for short-term financing sources. . 8. Three sets of information are needed to construct a cash budget.E xplain what they are. The firm’s minimum desired cash balance, forecasted cash inflows, and forecasted cash outflows are needed to construct a cash budget. . 9. Why might firms want to maintain minimum desired cash balances? Firms want to maintain minimum desired cash balance to ensure they can pay bills on time (transactions motive) and to have a cushion, as forecasts of cash flows may differ from actual future cash flows. . 10. What are the sources of cash inflows to a firm over any time frame? The main sources of cash inflows are cash sales and customer payments on credit sales. . 11.What are the sources of cash outflows from a firm over any time frame? The main sources of cash outflows are payments for raw materials, labor and overhead expenses, rent/lease payments, plant and equipment purchases, interest and principal payments, dividend payments, and taxes. . 12. How does the choice of level or seasonal production affect a firm’s cash over the course of a year ? Under level production, inventory becomes large before the peak selling season; whatever cash the firm has will probably be borrowed funds as cash is used to pay workers and suppliers over the course of the year as inventories are building.Under seasonal production, there is still a build-up of inventories prior to the selling season but probably less than under level production, as inventory can be sold shortly after it is made. Cash is conserved for much of the year; materials and labor expenses are less during the off-peak times when production is low. . 13. Describe what happens to a firm’s current asset accounts if the firm has seasonal sales and they use (a) level production; (b) seasonal production. a. Under a level production plan, the same amount of raw materials are purchased and the same amount of finished product is manufactured every month.Inventory builds up in anticipation of higher seasonal sales while cash and accounts receivable are quite low. When the sel ling season begins, inventories fall and receivables rise. After a time, inventories are nearly exhausted, and the firm is collecting cash from its customers. The changing composition of current assets for a firm with a seasonal sales pattern is illustrated in Figure 15. 4. b. Under seasonal production, raw material purchases will rise or fall in anticipation of higher or lower sales.Such a strategy can help minimize the effect of seasonal sales on inventory; goods are manufactured shortly before sale. Receivables will rise during the peak selling season but will fall thereafter as cash is collected. . 14. Describe the three motives or reasons for holding cash. a. need for day-to-day bill-paying? Transactions motive: b. hold funds to meet unexpected needsâ€â€a safety level of? Precautionary motive: cash hold funds? c. Speculative motive: to take advantage of attractive input prices or discounts 15. What characteristics should an investment have to qualify as an acceptable market able security?Marketable securities must be highly liquid (easily converted into cash at a price close to fair market value) with little chance of price risk or default risk. . 16. Identify and briefly describe several financial instruments used as marketable securities. Marketable securities that can be used as a means to â€Å"park†the firm’s excess cash include a. short-term securities issued and backed by the U. S.? U. S. Treasury Bills: government b. a bank’s temporary excess reserves that are lent to other banks? Federal Funds: on a day-to-day basis c. short-term unsecured notes of large financially stable? Commercial Paper: firms . large dollar CDs ($100,000 or more) for? Negotiable Certificates of Deposit: which a secondary market has evolved e. business paper used to finance international trade, backed? Bankers’ Acceptances: (accepted) by a bank with a high quality rating f. deposits placed in foreign banks that remain denominated in U. S.? Euro dollars: dollars (so there is no currency risk) . 17. What is float? Why is it important to cash management? Float is the delay between when funds are sent by a payer to a payee. Collection float is the time between when a payer sends payment and the funds are credited to the payee’s bank account.Disbursement float is the time lag between when a payer sends payment and when the funds are deducted from the payer’s bank account. It is important to cash management as the firm will have larger cash balances to invest and to reduce its own financing needs, all else being equal, the shorter the collection float and the larger the disbursement float. . 18. What are the three components of float? Which are under the control of the firm seeking to reduce collection float? The three components of float are delivery (or transmission) float, processing float, and clearing float.Delivery float and processing float are most directly under the control of the firm. Clearing float is c ontrolled mainly by the banking system’s check-clearing process but the firm can try to reduce it (and delivery float) by using lockboxes that are geographically closer to customers then the firm’s main office. . 19. What are some strategies a firm can use to speed up its collections by reducing float? Using a lockbox, incoming receipts are placed in a Post Office box which can be emptied several times a day by bank personnel, who process the payments and deposit the incoming funds into the firm’s accounts.This reduces mail delivery delay and processing delay, as the bank processes the payments rather than the firm. A second popular method, best used for regular payments such as utility, cable bills, or insurance premiums, is the use of preauthorized checks that allow the firm to deduct funds from the payer’s bank account. . 20 How can processing float be reduced? Vendors reduce processing float by improving the process of receiving payments and depositin g them. Large incoming payments (say, over $1 million) are automatically flagged and deposited expeditiously.Electronic check images and electronic payments (rather than the use of paper checks) remove the human component and thus can reduce processing delays. Lockboxes and preauthorized checks reduce processing delays, as processing is handled by banks, speeding deposit of incoming receipts. .. 21. How can a firm use float to slow down its disbursements? A firm can increase mail float by mailing payments from out-of-the-way locations, but that may hurt its reputation with suppliers who can direct the firm to send payments to another, closer, lockbox location.Another means are to use disbursement banks that are located around the country to increase disbursement float via the check-clearing process. So excess (and noninterest bearing) funds are not kept in a disbursement account, a firm can arrange to use a zero balance account for its disbursements. A bank will transfer sufficient funds every day into the ZBA to cover the day’s presented checks; other funds can remain invested in marketable securities. . 22. Why can’t a firm that wants to increase disbursement float simply make payments after the stated due date?There is an ethical issue with paying invoices late. If a vendor has provided needed goods and services the customer should pay for them in a timely and appropriate manner. Paying late can lead to negative notations on credit reports. Credit availability to late payers can be discontinued if the vendor’s credit standards are tightened. . 23. What is credit analysis? Identify the five C’s of credit analysis. Credit analysis involves appraising the creditworthiness or quality of a potential credit customer. Credit analysis includes examining the 5 C’s of credit. a. illingness to repay debts? Character: b. ability to repay debts (liquidity)? Capacity: c. equity cushion? Capital: d. what assets can provide security for t he credit? Collateral: e. the state of the business cycle and its expected movement during the? Conditions: credit period . 24. Describe various credit-reporting agencies that provide information on business credit applicants. Credit bureaus provide firms with information about a firm’s financial condition and its record on paying its past debts. Local credit bureaus service community credit information needs.The National Credit Interchange System facilitates exchange of information between bureaus. The National Association of Credit Management established the Foreign Credit Interchange Bureau to service firms with overseas customers. Dun & Bradstreet is perhaps the best-known private firm supplying credit information. . 25. How can a firm control the risk of changing exchange rates when billing an overseas customer? First, a firm can invoice the overseas customer in the firm’s home currency; this transfers the risk of changing exchange rates to the customer.Second, if the customer may pay in their own currency, the supplier can use currency futures or options contracts to hedge or reduce the risk of changing exchange rates. . 26. What risks arise when a firm lowers its credit standards to try to increase sales volume? Marginal and poor-risk customers may purchase the firm’s goods/services on credit. If they are unable to make payment, the firm must revise its sales figures and faces the added expense of trying to recover the goods and whatever funds it can from the delinquent customer. . 27. How do credit terms and collection efforts affect the investment in accounts receivable?All else being equal, lax credit terms increase the investment in accounts receivable and increase the chance for larger bad debts. Stricter credit terms will likely reduce receivables balances, but at the cost of possibly losing sales to competitors with easier standards. Collection efforts are aimed at having customers with overdue accounts pay their bills. Thus, successful collection efforts can reduce receivable balances and bad debt expense. On the other hand, collection efforts that offend customers can lead to lost future business. 28. How is the financial manager involved in the management of inventories? Inventory management concerns the financial manager because inventory, like all other assets, must be financed. Overly large inventories use warehouse space and have larger financing costs and insurance costs. Smaller inventories run the risk of selling out and causing customer dissatisfaction. Answers to â€Å"Applying this Chapter†Questions 2. The Robinson Company has the following current assets and current liabilities for these two years: 2004            2005 Cash and marketable securities |$50,000 |$50,000 | |Accounts receivable |300,000 |350,000 | |Inventories |350,000 |500,000 | |Total current assets |$700,000 |$900,000 | |Accounts payable |$200,000 |$250,000 | |Bank loan |0 |150,000 | |Accruals |150,000 |200,000 | |Total current liabilities |$350,000 |$600,000 | | | | | If sales in 2004 were $1. 2 million and sales in 2005 were $1. 3 million, and cost of goods sold was 70 percent of sales, how long were Robinson’s operating cycles and cash conversion cycles in each of these years? What caused them to change during this time?AR period = $350,000/($1,300,000/365) = 98. 27 days (2005)                  = $300,000/($1,200,000/365) = 91. 25 days (2004) Inventory period           = $500,000/($910,000/365) = 200. 55 days (2005)                            = $350,000/($840,000/365) = 152. 08 days (2004) AP period = $250,000/($910,000/365 ) = 100. 27 days (2005)                  = $200,000/($840,000/365) = 86. 90 days (2004) Operating cycle = AR period + Inventory period = 98. 27 + 200. 55 = 298. 82 days (2005)                           = 91. 25 + 152. 08 = 243. 33 days (2004) Cash conversion cycle = Operating cycle – AP period = 298. 82 – 100. 27 = 198. 5 days (2005)                                      = 243. 33 – 86. 90 = 156. 43 days (2004) Both the OC and CCC rose in 2005, primarily because of a large rise (almost 48 days) in the inventory period. 5. The Robinson Company from Problem 2 had net sales of $1,200,000 in 2004 and $1,300,000 in 2005. (a)      Determine the receivables turnover in each year. AR turnover      = Sales/AR = $1,300,000/$350,000 = 3. 71 (2005)                            = $1,200,000/$300,000 = 4. 00 (2004) (b)      Calculate the average collection period for each year. Average collection period       = AR/(Sales/365)                                                  = $350,000/($1,300,000/365) = 98. 7 days (2005)                                                  = $300,000/($1,200,000/365) = 91. 25 days (2004) (c)      Based on the receivables turnover for 2004, estimate the investment in receivables if net sales were $1,300,000 in 2005. How much of a change in the 2005 receivables occurred? Receivables investment     = Sales per day ? Average collection period Â Â à ‚                                           = ($1,300,000/365) ? 91. 25 days = $325,000 6. Suppose the Robinson Company had a cost of goods sold of $1,000,000 in 2004 and $1,200,000 in 2005. (a)      Calculate the inventory turnover for each year. Comment on your findings.Inventory turnover      = COGS/Inventory = $1,200,000/$500,000 = 2. 40 (2005)                                      = $1,000,000/$350,000 = 2. 86 (2004) Inventory turnover fell in 2005; inventory rose more quickly than cost of goods sold. (b)      What would have been the amount of inventories in 2005 if the 2004 turnover ratio had been maintained? Inventories investment     = COGS per day ? Inventory period                                            = $1,200,000/365 ? (365/2. 86) = $419,580. 42 7. Given Robinson’s 2004 and 2005 financial information presented in problems 2 and 4,     (a)      Compute its operating and cash conversion cycle in each year. Robinson Company | | | | | | |2004 | |2005 | | |Sales |$1,200,000 | |$1,300,000 | | |Cost of Goods sold |$1,000,000 | |$1,200,000 | | |profit margin |5. 0% | |5. 0% | | | | | | | | |Accounts Receivable |$300,000 | |$350,000 | | |Inventory |$350,000 | $500,000 | | |Accounts Payable |$200,000 | |$250,000 | | | | | | | | |Sales/ day = |$3,287. 67 | |$3,561. 64 |= $1,300,000/365 | |COGS/day= |$2,739. 73 | |$3,287. 67 |= $1,200,000/366 | | | | |à ‚ | | |Inventory conversion period = Inventory/COGS per day | | |127. 75 |days |152. 8 |days | | | | | | | |Average collection period = AR/sales per day | | | |91. 25 |days |98. 27 |days | | | | | | | |Average payment period = AP/COGS per day | | | |73. 0 |days |76. 4 |days | | | | | | | |Operating cycle = Inventory conversion + collection periods | | |219. 00 |days |250. 35 |days | | | | | | | |Cash cycle = Inventory conversion + collection period – payment period | | |146. 00 |days |174. 31 |days | (b)      What was Robinson’s net investment in working capital each year? |Net investment in working capital = AR + Inventory – AP (as used in his chapter) | | |2004 | |2005 | | | |=$300,000+$350,000-$200,000 |=$350,000+$500,000-$250,000 | | |=$450,000 | |=$600,000 | | 8. Robinson expects its 2006 sales and cost of goods sold to grow by 5 percent over their 2005 levels. (a)      What will be the affect on its levels of receivables, inventories, and payments if the components of its cash conversion cycle remain at their 2005 levels? What will be its net investment in working capital? If the ratios remain the same, a | | | |5 |percent increase in sales and COGS will increase AR, | |inventory, and AP proportionately in 2006 | | | |AR: $350,000 + 5%= |$367,500 | | | |Inv: $500,000 + 5%= |$525,000 | | | |AP: $250,000 + 5%= |$262,500 | | | |Net investment in working capital = AR + Inventory – AP | | |=$367,500 + $525,000 – $262,500 = |$630,000 | | | | | | | |The new sales will be |$1,300,000 + 5% = |$1,365,000 | | |Sales/day = | |$3,739. 3 | | |The new COGS will be |$1,200,000 + 5% = |$1,260,000 | | |COGS/day = | |$3,452. 05 | | (b)      What will b e the impact on its net investment in working capital in 2006 if Robinson is able to reduce its collection period by five days, its inventory period by six days, and increase its payment period by two days? |The new sales will be |$1,300,000 + 5% = |$1,365,000 | |Sales/day = | |$3,739. 3 | |The new COGS will be |$1,200,000 + 5% = |$1,260,000 | |COGS/day = | |$3,452. 05 | |Estimated AR if collection period reduced by |5 |days: | |New AR = sales/day x collection period | | | |Sales/ day = |$3,739. 73 | | | |Old collection period |98. 27 | | | |New collection period |93. 27 | | | |New AR estimate= |$348,801. 7 | | | | | | | | |Estimated inventory if conversion period reduced by |6 |days: | |New Inv = COGS/day x conversion period | | | |COGS/day |$3,452. 05 | | | |Old conversion period |152. 08 | | | |New conversion period |146. 08 | | | |New Inv estimate= |$504,287. 7 | | | | | | | | |Estimated AP if payment period increased by |2 |days: | |New AP = sales/day x payment period | | | |COGS/day |$3,452. 05 | | | |Old payment period |76. 04 | | | |New payment period |78. 04 | | | |New AP estimate= |$269,404. 1 | | | | | | | | |2006 working capital = AR + Inventory – AP | | | |=$360,020. 55 + $514,643. 84 – $259,047. 95 | | | |=$583,684. 93 | | | | |which is a reduction of |$46,315. 07 |from part a) | 9. Robinson expects its 2006 sales and cost of goods sold to grow by 20 percent over their 2005 levels. (a)      What will be the affect on its levels of receivables, inventories, and payments if the components of its cash conversion cycle remain at their 2005 levels? What will be its net investment in working capital? If the ratios remain the same, a | | | |20 percent increase in sales and COGS will increase AR, | |inventory, and AP proportionately in 2006 | | | |AR: $350,000 + 5%= |$420,000 | | | |Inv: $500,000 + 5%= |$600,000 | | | |AP: $250,000 + 5%= |$300,000 | | | |Net investment in working capital = AR + Inventory – AP | | |=$367,500 + $525,000 – $262,500 = |$720,000 | | | | | | | |The new sales will be |$1,300,000 + 20% = |$1,560,000 | | |Sales/day = | |$4,273. 97 | | |The new COGS will be |$1,200,000 + 20% = |$1,440,000 | | |COGS/day = | |$3,945. 21 | | b)      What will be the impact on its net investment in working capital in 2006 if Robinson is able to reduce its inventory period by ten days? |Estimated AR if collection period reduced by 0 days: | |New AR = sales/day x collection period | | | |Sales/ day = |$4,273. 97 | | | |Old collection period |98. 27 | | | |New collection period |98. 27 | | | |New AR estimate= |$420,000. 0 | | | | | | | | |Estimated inventory if conversion period reduced by 10 days: | |New Inv = COGS/day x conversion period | | | |COGS/day |$3,945. 21 | | | |Old conversion period |152. 08 | | | |New conversion period |142. 08 | | | |New Inv estimate= |$560,547. 5 | | | | | | | | |Estimated AP if payment period increased by 0 days: | |New AP = sales/day x payment period | | | |COGS/day |$3,945. 21 | | | |Old payment period |76. 04 | | | |New payment period |76. 04 | | | |New AP estimate= |$300,000. 0 | | | | | | | | |2006 working capital = AR + Inventory – AP | | | |=$360,020. 55 + $514,643. 84 – $259,047. 95 | | | |$680,547. 95 | | | | |which is a reduction of |$39,452. 05 |from part a) | | 10. Following are financial statements for the Genatron Manufacturing Corporation for the years 2004 and 2005: Selected Balance Sheet Information 2004            2005 Cash | $ 50,000 |$ 40,000 | |Accounts receivable |200,000 |260,000 | |Inventory |450,000 |500,000 | |Total current assets |$700,000 |$800,000 | |Bank loan, 10% |$ 90,000 |$ 90,000 | |Accounts payable |130,000 |170,000 | |Accruals |50,000 |70,000 | |Total current liabilities |$270,000 |$330,000 | |Long-term debt, 12% |300,000 |400,000 | Selected Income Statement Information 2004            2005 |Net sales |$1,300,000 |$1,500,000 | |Cost of goods sold |780,000 |900,000 | |Gross profit |$ 520,000 |$ 600,000 | |Net income |$93,000 |$ 114,000 |Calculate Genatron’s operating cycle and cash conversion cycle for 2004 and 2005. Why did they change between these years? Inventory period           = Inventory/(COGS/365)                            = $500,000/($900,000/ 365) = 202. 78 days (2005)                            = $450,000/($780,000/365) = 210. 58 days (2004) AR period = AR/(Sales/365) = $260,000/($1,500,000/365) = 63. 27 days (2005)                  = $200,000/($1,300,000/365) = 56. 15 days (2004) AP period = AP/(COGS/365) = $170,000/($900,000/365) = 68. 94 days (2005)                  = $130,000/($780,000/365) = 60. 83 days (2004) Operating cycle = Inventory period + AR period 202. 78 days + 63. 27 days = 266. 05 days (2005)                            = 210. 58 days + 56. 15 days = 266. 73 days (2004) Cash conversion cycle = Operating cycle – Average payment period                                      = 266. 05 days – 68. 94 days = 197. 11 days (2005)                                      = 266. 73 days – 60. 83 days = 205. 90 days (2004) The operating cycle remained constant in 2004 and 2005 as a reduction in the inventory period was balanced by an increase in the average collection period. The cash conversion cycle sell for 2005 was longer. Genatron took, on average, longer to pay its suppliers. 11.Genatron Manufacturing expects its sales to increase by 10 percent in 2006. Estimate the firm’s investment in accounts receivable, inventory, and accounts payable in 2006. If the inventory, collection, and payment periods remain constant, each account should rise by 10 percent. $260,000 (1. 10) =? Accounts receivable: $286,000 $500,000 (1. 10) = $550,000? Inventory: $170,000 (1. 10) = $187,000? Accou nts payable: 12 . With concerns of increased competition, Genatron is planning in case its 2006 sales fall by 5 percent from their 2005 levels. If cost of goods sold and the current asset and liability accounts decrease proportionately, (a) Calculate the 2006 cash conversion cycle.  | | | | |5% decline | | |2004 | |2005 | |2006 | |Sales |$1,300,000 | |$1,500,000 | |$1,425,000 | |Cost of Goods sold |$780,000 | |$900,000 | |$855,000 | |profit margin |7. 2% | |7. 6% | | | |Net income |$93,000 | |$114,000 | | | |Accounts Receivable |$200,000 | |$260,000 | |$247,000 | Inventory |$450,000 | |$500,000 | |$475,000 | |Accounts Payable |$130,000 | |$170,000 | |$161,500 | | | | | | | | |Sales/ day = |$3,561. 64 | |$4,109. 59 |= $1,500,000/365 |$3,904. 11 | |COGS/day= |$2,136. 99 | |$2,465. 75 |= $900,000/366 |$2,342. 47 | | | | | | | | |Inv entory conversion period = Inventory/COGS per day | | | |210. 58 |days |202. 78 | |202. 8 | | | | | | | | |Average collection period = AR/sales per day | | | |56. 15 |days |63. 27 | |63. 27 | | | | | | | | |Average payment period = AP/COGS per day | | | |60. 8 |days |68. 94 | |68. 4 | | | | | | | | |Operating cycle = Inventory conversion + collection periods | | | |266. 73 |days |266. 04 | |266. 04 | | | | | | | | |Cash cycle = Inventory conversion + collection period – payment period | | | |205. 90 |days |197. 10 | |197. 10 | (b) Calculate the 2006 net investment in working capital. Net investment in working capital = AR + Inventory – AP (as used in this chapter) | |2004 |2005 |2006 | | | | | |=$247,000+$475,000-$161,500 | |$520,000 |$590,000 |=$560,500 | | | 13. .In problem 10 we assumed t he current asset and liability accounts decrease proportionately with Genatron’s sales. This is probably unrealistic following a decline in sales.What will be the impact on the working capital accounts if its collection period lengthens by five days, its inventory period lengthens by seven days, and its payment period lengthens by three days if Genatron’s sales and COGS fall 5 percent from their 2005 levels? |The new sales will be |$1,500,000 – 5% = |$1,425,000 | | | |Sales/day = |$3,904. 11 | | |The new COGS will be |$900,000 – 5% = |$855,000 | | | |COGS/day = |$2,342. 7 | | | | | | | |Estimated AR if collection period lengthens by |5 |days: | |New AR = sales/day x collection period | | | |Sales/ day = |$3,904. 11 | | | |Old collection period |63. 27 |(from problem 10) | | |New collection period |68. 27 | | | |New AR estimate= |$266,520. 5 | | | | | | | | |Estim ated inventory if conversion period lengthens by |7 |days: | |New Inv = COGS/day x conversion period | | | |COGS/day |$2,342. 47 | | | |Old conversion period |202. 78 | | | |New conversion period |209. 8 | | | |New Inv estimate= |$491,397. 26 | | | | | | | | |Estimated AP if payment period increased by |3 |day: | |New AP = sales/day x payment period | | | |COGS/day |$2,342. 47 | | | |Old payment period |68. 4 | | | |New payment period |71. 94 | | | |New AP estimate= |$168,527. 40 | | | | | | | | |2006 working capital = AR + Inventory – AP | | | |=$266,520. 55 + $491,397. 26 – $168,527. 40 | | | |=$589,390. 1 | | | | |which is an increase of |$28,890. 41 |from problem 10. | | 14. .Suppose Global Manufacturing is planning to change its credit policies next year. It anticipates that 10 percent of each month’s sales wil l be for cash; two thirds of each month’s receivables will be collected in the following month, and one-third will be collected two months following their sale. Assuming the Global’s sales forecast in Table 10. 5 remains the same and the expected cash outflows in Table 10. 6 remain the same, determine Global’s revised cash budget. Nov. Dec. Jan. Feb. Mar. Apr.Sales                            $80,000  $100,000    $ 30,000  $ 40,000    $ 50,000    $ 60,000       Cash (10%)                                                         3,000        4,000        5,000        6,000       1 Month Later (2/3)                                          60,000      18,000      24,000      30,000 [pic][pic][pic][pic]      2 Months Later (1/3)                                        24,000      30,000        9,000      12,000       Total Cash Receipts                                       $ 87,000  $ 52,000    $ 38,000    $ 48,000 [pic][pic][pic][pic]      Less: Total Cash Payments                             60,000    127,000      44,000      40,000       Net Cash Flow                                                 $ 27,000  $ –75,000    $ –6,000    $ 8,000 [pic][pic][pic][pic]      Beginning Cash Balance                                  25,000      52,000      25,000      25,000       Cumulative Cash BalanceÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â à ‚      $ 52,000  $ –23,000    $ 19,000    $ 33,000Monthly Loan                                                        (or repayment) 0      48,000        6,000      –8,000       Cumulative Loan Balance                                        0      48,000      54,000     46,000       Ending Cash Balance       Â
Wednesday, October 23, 2019
Impact of Grey Marketing on Indian Economy Essay
â€Å"An unofficial market in which goods are bought and sold at prices lower than the official price set by a regulatory agency Grey marketing (also sometimes known as â€Å"gray market†) involves the trade of legal goods through unauthorized, unofficial, and unintended channels of distribution. Hence, trademarked products are often exported from one country to another and sold by unauthorized individuals or firms. This practice is also often known as parallel importing, product diverting, and even arbitrage, and typically flourishes when a product is in short supply, when manufacturers resort to skimming strategies in specific markets. A good example is the trading of crude oil by an individual. The grey market includes services that are typically unregistered to evade taxes. Perfectly legitimate occupations, such as domestic help, babysitters, part time beauticians and freelancers, may not be registered. Not only is it difficult to detect such defaulters, the punishment is usually mild. For example, even as Apple, Inc., rolled out its latest third-generation iPhone on July 11, 2008, several retail stores throughout the world, including those in China and Thailand, continued to take orders even though this product was not being sold in those markets. Their computer codes were unlocked, so that the phones could be used with different mobile service providers. Even in India, one of the fastest-growing markets for cell phones, Apple delayed the release of the original iPhone until mid-2008, a year after the release in the United States and six months after its release in Europe, because of the fear of grey market sales. A wide range of goods and services have been sold through grey markets, including automobiles, broadcasting delivery, college textbooks, pharmaceuticals, photographic equipment, video games, and even wines. Research has demonstrated that every one of the world’s eight major export regions has experienced grey marketing activity damaging to their operations. Parallel market is further encouraged by periods of war or any other crisis. During harsh political conditions or natural disasters, scarce goods are rationed by the government. People have the tendency to violate restrictions or rationing laws to secure the products they desire. In the United States, grey market goods are prohibited according to Section 526 of the Tariff Act of 1930, which expressly forbids importation of goods of foreign manufacture without permission of the trademark owner. However, the implementation of regulation by the U.S. Customs Service and the courts’ interpretation of the law have not been in line with each other. In a recent study, about 13 percent of the firms in North America have reported some form of grey marketing. A positive outcome of grey markets is that they provide brand-name goods at lower prices to the customer. They can create incremental sales in markets not in direct competition with sanctioned dealers, and sometimes help companies overcome distribution bottlenecks because of local government regulations. Occasionally, it is less expensive to tolerate grey marketing than to shut down the operations completely because of the time and resources required to monitor the violations. Finally, eradicating grey marketing activities can provide a firm with sound marketing intelligence regarding customers in these markets and their buying behavior. On the other hand, the phenomenon obviously also has several drawbacks for companies. It simultaneously undermines the manufacturer’s distribution arrangements and their ability to control quality it creates the dilution of exclusivity and damages existing channel relationships. Official dealers may not choose to offer significant services in order to compete with the grey market price for the product. There is likely to be an erosion of the brand’s global image, and the firm is unlikely to have the ability to use traditional pricing strategies, thus having less control over their overall marketing strategies. 2.According To World Health Organization: 2.1.Parallel Imports: Parallel imports are imports of a patented or trademarked product from a country where it is already marketed. For example, in Mozambique 100 units of Bayer’s ciprofloxacin (500mg) costs US$740, but in India Bayer sells the same drug for US$15 (owing to local generic competition). Mozambique can import the product from India without Bayer’s consent. According to the theory of exhaustion of intellectual property rights, the exclusive right of the patent holder to import the protected product is exhausted, and thus ends, when the product is first launched on the market. When a state or group of states applies this principle of exhaustion of intellectual property rights in a given territory, parallel importation is authorized to all residents in the state in question. In a state that does not recognize this principle, however, only the patent holder who has been registered has the right to import the protected product. Sometimes referred to as â€Å"grey market†imports, parallel imports often takes place when there is differential pricing of the same product – either brand-name or generic drugs – in different markets (usually owing to local manufacturing costs or market conditions). The Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement explicitly states that this practice cannot be challenged under the World Trade Organization (WTO) dispute settlement system and so is effectively a matter of national discretion. Parallel imports can reduce the price of health products and pharmaceuticals by introducing competition. However, they can also affect the negotiation of tiered pricing regimes with pharmaceutical companies. If a private pharmaceutical company agrees to sell a product at a lower price in poor countries, it will need some assurance that the cheaper product will not be imported back into its rich country markets, undercutting its profits (product di version). 3.Grey Marketing by Industry: 3.1. IPO Grey Marketing in India: Cities like Ahmedabad, Kolkata and Rajkot are the most active centers for the IPO (initial public offerings) grey market. Trades done in the grey market are settled on the day of listing. Once the deal is done at a stipulated price, the seller must deliver the shares after he has been allotted the shares by the company. If the seller falls short in receiving the exact number of shares that he has sold in anticipation, then he must buy the shares on the market (once the share is listed) to honor his commitment. Most of the recently-concluded initial public offerings are quoting at a significant premium in the grey market, compared to their issue prices; this means that the issues are perceived to have been underpriced. Many traders short sell in the grey market if they feel that the premium on offer is unwarranted and that the stock may list at a price lower than what most market players expect it to. Though grey-market operators say that there is a constant change in the grey-market premium, it largely depends on the subscription on the last day and the market conditions, post issue closing. 3.1.1. In the stock market, what is the concept of grey marketing? Grey marketing is a trade of something legal but through unofficial and unauthorized distribution channels. In contrast, black marketing is a trade of illegal goods or services through illegal channels. The grey market of goods is to import and sell products through market channels which are not authorized by the manufacturers. It occurs when the prices of a product differ significantly in different countries. The grey market of securities markets and IPO (Initial Public Offer) is to buy and sell the shares to be allotted in the future. Once the trading is done in the grey market at a stipulated price, the seller must deliver the sold number of shares to the buyer on the day of listing to honor the commitment. 3.1.2.Effect of Grey Market Trading on Indian Economy 3.1.2.1Grey Market: Rs. 1L in Reliance Power IPO will earn 9% in 20 days [pic] AHMEDABAD: Reliance Power (REPL) seems to have electrified grey market operations in Ahmedabad with operators willing to shell out as much as Rs. 9,000 for every application of Rs. 1 lakh. In the bustling grey market in Gujarat, such high rates are unheard of. The last benchmark for hectic activity was the Mundra Port and SEZ IPO in November when the grey market started buying applications for Rs. 7,500 in the last stages of the issue. With the REPL offer ready to hit the market on January 15, the grey market is trading the shares and the applications. It basically means that if you have Rs. 1 lakh to invest when the IPO opens, you have a secured 9% return within 20 days of closing of the issue when the stock would be listed. After SEBI cleared REPL’s IPO, grey markets had resumed trading in the stock with premium saudas (trades) at Rs. 340-350 and application buying rate at Rs. 7,500. While the premium has zoomed to Rs. 390-400, the applications rate touched Rs. 9,000 and could break the Rs. 10,000 mark by the time the IPO hits the market, sources said. The excitement on the counter in the grey market has come on the heels of news that REPL will offer 5% discount to retail investors, who will also get an option to pay only 25% of IPO amount at the time of application. 3.1.2.2.Reliance Power IPO: Grey market sees Rs. 2000 crore loss: [pic] AHMEDABAD: The dismal debut of Reliance Power on the bourses may result in losses to the tune of Rs. 2,000 crore in the grey market. Operators also fear a payment crisis as many investors are threatening to hold back payments. Grey market players  both operators and investors  who were expecting the stock to list in the range of Rs. 550-Rs 600 per share, were in shock as Reliance Power opened at Rs. 430 and closed at Rs. 372.50 on its first day on the exchanges. This could also adversely impact the premium transactions in forthcoming IPOs (initial public offers). Ever since the grey market began trading in this IPO, the premium on Reliance Power shares had peaked at Rs. 450 over and above IPO price of Rs. 450 per share. Majority of trading in R-Power IPO in the grey market was done at an average premium of Rs. 300 per share. As the issue closed at Rs. 372.50, most market operators, who had taken huge exposures, have lost Rs. 377 per share. It is estimated the grey market has already taken an exposure of five crore equity shares, leading to losses worth Rs. 1,900 crore. It is also learnt that many investors in Jaipur have refused to honor their payment commitment to grey market operators in Ahmedabad, as the IPO plunged after listing. This could well result in operators losing out on large sums of money and have a cascading effect in the market. 3.1.2.3.Grey market bets big time on DLF IPO: [pic] AHMEDABAD: Only time can tell whether you could get the elusive pit of gold at the end of the DLF IPO rainbow. But, street savvy investors in Gujarat have already started earning a secured 4% return on their investment in the initial public offer of the country’s biggest realty developers, much before the offer hits the market on June 11. Large numbers of investors, who want to earn secured interest earning up to 4%, are selling their IPO applications to grey market operators in Ahmedabad. Although the DLF IPO is opening from May 11, IPO applications are being sold anywhere between Rs. 3,800 and Rs 4,000 for a single application worth Rs. 1 lakh. Activities in the Ahmedabad’s grey market, popularly known as Sakar Bazar, has gradually been heightening as the market enters the final week before a deluge of public offering hit the primary markets. Led by DLF IPO, the next two months could see close to Rs. 50,000 crore being raised from the market. On one hand, the grey market is witnessing huge trading in IPOs, which are yet to be listed on the bourse. On another hand, people are selling their IPO applications to the grey market operators for a secured interest. Even as DLF shares are yet to be listed on the bourse, operators in Ahmedabad’s grey market are trading DLF shares at a premium of Rs 37 to Rs 38 on its issue price of Rs 500-Rs 550. Similarly, Meghmani Organic is fetching a premium of Rs 5 over its issue price. And, it’s not only in the case of these two IPOs. All IPOs are traded in the Ahmedabad grey market, which seems to have a handle on the pricing of IPO listings. It has been found by most market participant of the capital market that majority of the IPOs’ listing prices are normally close to the last trading price of the IPO in the Ahmedabad’s grey market. 4.WINE: The grey market in wine flourishes, particularly in the case of champagne. Many large champagne producers do their own importing, and desire to maintain independent price points in different markets. Thus a bottle of Champagne might cost US$35 in the United States while the same bottle might be only 15 Euros in France. It is often profitable to buy the wine in Europe from an authorized distributor, and resell it in the US. In the case of enormous pricing disparity, it is not uncommon to find a grey-marketed wine selling for less at retail than the wholesale price of the authorized distributor. In the case of a large availability disparity between the US and Europe, the grey market price may be the same or higher than the authorized price. Typically the importer of a wine is the one most concerned about grey market sources. The winemaker may or may not care what happens to the wine after it is sold, although he or she might complain to appease an importer. 4.1.India imports 72,000 cases of wine a year PUNE: The Indian wine market is growing at 30-40% annually and this rate will continue for the next 5-6 years in keeping with global trends. However, the current per person per year consumption of wine in the country is as low as 9-10 ml. The Maharashtra Industrial Development Corporation has mentioned this in its note on the grape wine industry of Maharashtra, based on a report prepared by Rabo International Bank. The highest wine consuming countries such as France and Italy has per person wine consumption as high as 60 to 70 liters annually. Those in China consume four liters, the report stated. Domestically, 80 % of wine consumption is confined to major cities like Mumbai (39 %), Delhi (23 %), Bangalore (9 %) and Goa (9 %) whereas rest of India has only 20 % consumption. The MIDC report further stated that India currently imports 72,000 wine cases (nine liters to a case) a year. About 32,000 of this are bottled at origin and the other 40,000 cases are imported in bulk flexi bags, which are subsequently bottled by Indian wineries. Besides this, about 12,000-15,000 wine cases are sold through the grey market. In 2009-2010, some seven lakh liters of wine worth Rs. 5.92 crore was exported to France, Italy, Germany, US, UK, Singapore and Belgium from Maharashtra. The state had announced its `Maharashtra Grape Processing Industrial Policy 2001†² on September 19, 2001 with wine as an important part of it. According to a report by MIDC, four components are required to make good wine. Those are soil, climate, vines and human factor – that is the people who brew wine. A lot depends on finding the ideal balance between the characteristic of soil, the microclimate and the grape varieties. At present wine grapes are grown on a 7,000 acre area in the state. In 2010 there were a total of 74 wines making units (36 in Nashik, 13 in Sangli, 12 in Pune, 5 in Solapur, 4 in Osmanabad, 3 in Buldana and 1 in Latur district) that had started production in the state. At present, total production of wine in the country is 1.45 crore litres from 90 wineries in the country. Of that, 1.32 crore litres wine is produced by 75 wineries in Maharashtra. The total investment in wineries was Rs 431.71 crore in 2009 which rose to Rs 452.10 crore in 2012. France, Italy, Spain, Germany are the main grape wine producing countries in the world. Nearly 32,000 million litres wine is produced per annum. 5.AUTOMOBILES: Automobile manufacturers segment world markets by territory and price, thus creating a demand for grey import vehicles. In the United Kingdom the term applies to vehicles imported either new from cheaper European countries or from Japanese domestic models imported secondhand from Japan or Singapore, which both have strict laws against older cars. This importation of secondhand models from Japan/Singapore tends to involve sports models that were never released in the UK or models that fetch a high price in the UK due to their performance or status. Although some grey imports are a bargain, some buyers have discovered that their vehicles do not meet British regulations or that parts and service are hard to come by because these cars are different from the versions sold new in the UK. In New Zealand, grey market vehicles comprise a majority of cars in the national fleet. These secondhand imports have achieved ‘normal’ status and are used and serviced without comment throughout society. A huge industry servicing and supplying parts for these vehicles has developed. After years of trying to stop grey imports the car companies themselves have become involved, importing in competition with their own new models. 6.MOBILE HANDSET: iphone Launch gets hit by Grey Marketing: 6.1.Low-cost handsets to get impacted, says industry: Nearly 75 per cent of the currently available mobile handset models in the market could get defunct or redesigned with the Government deciding to bring in new radiation norms for the telecom sector. The Department of Telecom has accepted a proposal by an inter-ministerial committee to lower the permitted radiation in mobile phones by 50 per cent. The move will impact almost all the handset makers, especially those who operate in the low-end segment. 6.2.Handset price: According to the Indian Cellular Association, the new radiation norm will jack up handset price by 5-30 per cent as handset makers will have to make additional investments to meet the new rules. According to the new guidelines, handsets should not have Specific Absorption Rate (SAR) of more than 1.6 watt/kg taken over a volume containing as mass of 1 gram of human issue. This is the same levels allowed in the US. India till now followed the European standards wherein handset makers are allowed to have SAR levels of 2 watt/kg on a 10 gram human issue. Globally, about 1,500 million mobile phones are sold per year out of which more than 80 per cent is sold in countries where European guidelines are followed. In India, there about 10 global brands, another 15-20 Indian brands and more than 4,000 importers who trade in unbranded Chinese phones. â€Å"Most of the handsets under Rs 11,999 which are approximately 645 or so would have to be redesigned. Effectively, this would disrupt the entire operation of more than 88 per cent of the legal handsets sold in the market (the legal market is approximately 70-75 per cent of India’s total volume market). All global brands and domestic brands will get seriously impacted by this,†Mr. Pankaj Mohindroo, President, Indian Cellular Association. 6.3.Chinese handsets: The industry is worried that the new guidelines will have no impact on the Chinese unbranded grey market phones, which is handled by over 4,000 importers with volumes between 3 and 4 million a month. The handset makers fear that the grey market will get a window of opportunity of approximately 6-9 months to rapidly expand their volumes before the branded companies start bringing redesigned phones. â€Å"If the Government is bringing new laws to address concerns of health and security then it should also set up good monitoring. While the branded phones will have to bear the costs to redesign phones, grey market devices will continue to be available without any check,†said Mr. S.N. Rai, Co-founder & Director, Lava International – one of the Indian handset Company. According to ICA, the industry would be able to redesign approximately 100 models in about 6-9 months and 200 in 24 months. There are about 850 handset models available in the market at present. â€Å"The legal industry will never be able to redesign all the models and the availability would constrict to at best 150- 200 models within 18-24 months of implementation of such norms,†Mr. Mohindroo said 6.4.Ultra low-cast models: ICA said that in the case of ultra low-cost handsets, it may not be possible to redesign these handsets and all the models in the ultra low-cost handsets less than Rs 1,500 could get knocked out of the market. Apart from lowering the permitted radiation levels, the new guidelines also make it mandatory for handset makers to display the SAR level on the handset. The DoT is expected to notify the new norms shortly. Keywords: mobile radiation norms, low-cost handsets to get impacted, Specific Absorption Rate (SAR) 6.5.Dark days for mobile grey market: The import duty on mobile phones has been reduced from about 16 per cent to around 4 per cent.Industry participants also believe that the shift from grey market to the legal market is by and large on the account of growing number of mobile retail stores. â€Å"The mobile stores provide accessibility to the consumers. Our mobile stores are at all the visible locations, so consumers can walk in anywhere and get the best deals possible,†said Subhiksha marketing vice-president Mohit Khattar. Industry analysts say that a huge grey market exists because of the differential of around 10 per cent to 25 per cent between legal and grey handset prices.With growing competition in the organized mobile retail market, players are offering products at lower prices. This, in turn, helps counter the grey market and bolsters footfalls in these stores. â€Å"Consumers can buy high-end, genuine branded handsets with guarantee of replacement or repair through the mobile retail stores. Trust is the predominant factor that consumers are turning towards the branded retail stores,†said HotSpot CEO Sanjeev Mahajan. Consumers are opting for accessibility and do not mind paying extra for it. The grey markets operate from a few areas in a city. On the other hand, mobile stores are more easily accessible as they are located in all prominent markets. The growing brand consciousness among the people, analysts say is also propelling the consumers to approach branded mobile retail stores. Mobile phone retail chains like Mobile Store, Mobi Retail, RPG Cellucom, currently account for just 7 percent of the overall mobile handset market, which has a market share of Rs 15,000 crore. â€Å"Currently, the impact of mobile retail stores on the grey market is minimal. However, considering the rapid growth rate of organized mobile retail, its contribution is set to increase in the next 3-4 years,†said retail consultancy Technopak Advisors chairman Arvind Singhal. Though the grey market in mobile phones has reduced, a large (75%) grey market still exists in mobile phone accessories such as batteries and chargers, which are often available at one-tenth the price of company branded accessories . Last year, the mobile phone makers asked finance ministry to reduce 34% duty on imported accessories, but nothing concrete has happened as yet. 7.PHOTOGRAPHIC EQUIPTMENT: Generally regarded as legal in most countries, parallel imports make expensive photographic equipment attractive to savvy users. The grey market in photographic equipment is thriving in highly developed and heavily taxed states like Singapore, with dealers importing directly from lower taxed states and selling at a lower price, creating competition against a local authorised distributor. Grey sets, as colloquially called, are often comparable to authorised imports. Lenses or flash units of parallel imports often only differ by the warranty provided, and since the grey sets were manufactured for another state, photographic equipment manufacturers often offer local warranty, instead of international warranty, which will render grey sets ineligible for warranty claims with the manufacturer. Due to the nature of local warranty, importers of grey sets usually mask the flaw in warranty with their own warranty schemes. These are often warranties with reduced benefits or lasting a shorter period of time. Grey sets do not differ particularly from an authorised import. They look and function identically, apart from the manufacturer’s warranties having been voided. 7.1.Grey market for digital cameras may bite the dust soon: KOLKATA: Grey markets for digital cameras may soon become a thing of past, feel the imaging majors in India. â€Å"It is certainly the year of demise for grey market in compact category, and the sun will set soon in DSLR (Digital Single Lens Reflex) segment,†said Alok Bharadwaj, senior V-P, Canon India. Though being an unorganized sector, it is spread in many metro cities, like in Kolkata, at Metro Galli, Kidderpore, and in Delhi, at Pallika Bazar. â€Å"Earlier, Nikon’s competition was Nikon grey but now the scenario has changed and grey market has shrunk a lot. Its no more a cause for concern,†said Sajjan Kumar, GM, imaging, Nikon India. According to Bharadwaj, the grey market in the country is mostly activated in DSLR segment and it’s roughly around Rs. 250 crore, but since India is the main focus for all the global camera majors and as a consequence of that, the market is also increasing rapidly, which is ultimately causing the death of grey market. â€Å"The general trend amongst consumers is to buy expensive lenses and camera bodies from the grey market at a cheaper rate, but now with most of the players providing the product at a place nearby them, with an extended guarantee period and free memory cards, people are ready to buy it from us officially,†said Kumar. â€Å"More awareness among the consumers and round-the-clock marketing have also stepped up the chances to diminish the grey market,†said Hiroshi Takashina, MD, Nikon India. It may be noted that Nikon India has recently doubled its marketing expenditure to Rs. 120 crore from last year’s Rs 60 crore. Another common feeling amongst the leading camera players is, if government reduces tax on the DSLR bodies, lens, accessories, then the process of erasing grey market will be rapid. â€Å"Currently, the basic duty on lenses and accessories is still at 10%, which makes it a little difficult for us to bring DSLR prices further down, despite a phenomenal growth in the sector,†said a top official of Olympus India. Currently only 1% of Olympus India’s sales is affected by grey market. â€Å"The Comprehensive Economic Partnership Agreement (CEPA) will benefit us surely to cut the excessive costing,†feels Bharadwaj. It may be noted that India and Japan have signed the CEPA Act, under which both the countries will enjoy some trade benefits during the bilateral trade. According to Takashina, India is a price conscious market where 75% of the sales are in the category of cameras priced below Rs.10,000, so with more shopping shop concept and 24 hour customer care backup, it is now more sensible for a customer to buy the gear from official dealers than to go and buy it from the grey market. 8.BROADCASTING: In television and radio broadcasting, grey markets primarily exist in relation to satellite radio and satellite television delivery. The most common form is companies reselling the equipment and services of a provider not licensed to operate in the market. 8.1Industry body opposes levy on TV sets: [pic] NEW DELHI: Consumer electronics industry said on Monday that sale of television sets would be hit and investment flows affected, if government imposes a license fee on TV sets. Also, share of the grey market would go up if such a proposal is accepted, Anoop Kumar president Consumer Electronics and TV Manufacturers Association (Cetma) said.[pic] Government is planning to impose a license fee of 10-15% on purchase price of each TV set, to provide financial help to Prasar Bharati. If the proposed levy is imposed, the level of taxation on TV sets would rise to 45-50% and the share of the grey market will certainly increase, a Cetma official said. When total incidence of taxes on ACs was about 50%, the grey market was more than 80%. With the reduction of taxes, the grey market for ACs has practically disappeared. The increase in the share of grey market for TV sets will ultimately result in loss of revenue to the government, Cetma added. Cetma said any â€Å"additional burden†would result in a major slowdown of the television industry, already reeling under heavy taxes. 9.VIDEO GAMES: Grey markets can sometimes develop for select video game consoles and titles whose demand temporarily outstrips supply and the local shops run out of stock, this happens especially during the holiday season. Other popular items, such as dolls can also be affected. In such situations the grey market price may be considerably higher than the manufacturer’s suggested retail price. Online auction sites such as eBay have contributed to the emergence of the video game grey market. 10.How to control the web of Grey Marketing? In order to reduce the impact of grey market goods, firms can take the following strategies: Enforcement of intellectual property rights Manufacturers or their licensees often seek to enforce trademark or other intellectual-property rights against the grey market. Such rights may be exercised against the import, sale and/or advertisement of grey imports. However, such rights can be limited. Examples of such limitations include the first-sale doctrine in the United States and the doctrine of the exhaustion of rights in the European Union. When grey-market products are advertised on Google, eBay or other legitimate web sites, it is possible to petition for removal of any advertisements that violate trademark or copyright laws. This can be done directly, without the involvement of legal professionals. eBay, for example, will remove listings of such products even in countries where their purchase and use is not against the law. Refusal to supply Manufacturers may refuse to supply distributors and retailers (and with commercial products, customers) that trade in grey-market goods. They may also more broadly limit supplies in markets where prices are low. Refusal to honor warranties Manufacturers may refuse to honor the warranty of an item purchased from grey-market sources, on the grounds that the higher price on the non-grey market reflects a higher level of service. Alternatively, they may provide the warranty service only from the manufacturer’s subsidiary in the intended country of import, not the diverted third country where the grey goods are ultimately sold by the distributor or retailer. This response to the grey market is especially evident in electronics goods. Reliance on regulation Local laws (or customer demand) concerning distribution and packaging (for example, the language on labels, units of measurement, and nutritional disclosure on foodstuffs) can be brought into play, as can national standards certifications for certain goods. Tracing grey-market goods Manufacturers may give the same item different model numbers in different countries, even though the functions of the item are identical, so that they can identify grey imports. Manufacturers can also use batch codes to enable similar tracing of grey imports. Parallel market importers often de-code the product in order to avoid the identification of the supplier. In the United States, courts have decided that decoding which blemishes the product is a material alteration, rendering the product infringed. Parallel market importers have worked around this limitation by developing new removal techniques.
Tuesday, October 22, 2019
Biography of Phil Knight Essays
Biography of Phil Knight Essays Biography of Phil Knight Paper Biography of Phil Knight Paper Phil Knight is the founder and CEO of the athletic gear company, Nike. He was born in Portland, Oregon, on February 24th, 1938. Knight and Nike helped start a sports business revolution in the 1970s, changing old-fashioned tennis shoes into highly specialized equipment and promoting them as symbols of athletic prowess and success. Nikes success made Knight one of Americas wealthiest men. Celebrity Endorsement Strategy Known as a taskmaster CEO, Knight is also particular when it comes to matters of promotion. Hi, Im Phil Knight and I dont believe in advertising, was the way Nikes ad agency president remembered meeting his new client. Signing up perhaps the greatest basketball player of all time, the former Chicago Bulls superstar Michael Jordan, was only one of the breakthrough strategies that made Nike-wearers the envy of schoolyard pickup games everywhere. The Nike image has been also linked closely with notable bad boys names like McEnroe, Andre Agassi, and Charles Barkley. Redefin ing the Shoe market . High interest in sports gave Knight the impetus to study the way track shoes were being made and marketed in the late 1950s. For assistance he consulted his coach, the University of Oregons famed Bill Bowerman, who himself would become a senior member of the Nike team. Together they determined that American shoes were inferior in style and quality, too heavy, and too easily damaged. The Japanese, on the other hand, were experimenting with new, trimmed-down styles fashioned in lightweight, hardy nylon. Knight wrote his Stanford business-school term paper on the subject, then a few years later got involved personally by visiting Japan and arranging to import new-design running shoes himself. 2. In the early days, anybody with a glue pot and a pair of scissors could get into the shoe business, Knight told Geraldine Willigan in a Harvard Business Review interview. So the way to stay ahead was through product innovation. We were also good at keeping our manufacturing costs down. The big, established players like Puma and Adidas were still manufacturing in high-wage European companies. But we knew that wages were lower in Asia. Phil said. 3. From the start, Knights shoes sported their own look (including the distinctive swoosh logo that still appears today) and their own attitude. An early effort to promote the newly dubbed Nike-pronounced NY-kee and named for the Greek goddess of victory-included a now-classic advertisement set at the 1972 Olympic track trials in Eugene, Oregon. The copy boasted that four of the top seven marathoners wore Nikes. By the mid-1970s Nike was at the cutting edge of workout-shoe technology. For instance, it was Bowerman, the former track coach, who poured some liquid latex into his wifes waffle iron, thereby inventing the famous sole that made the earliest Nikes feel like bedroom slippers. Nike didnt exactly burst from the gate in profit, though. Major sports stars demanded major compensation for wearing Knights brand. A turning point came in the 1980s, when tennis star Jimmy Connors won Wimbledon in a pair of Nikes and John McEnroe hurt his ankle, [and] started wearing an obscure three-quarter [Nike] model that had sold all of 10,000 pairs that year. Slogans Bo Knows, Its Gotta Be the Shoes, Just Do It
Monday, October 21, 2019
Spirits of the Railway is a short story that tel Essays - Chu
Spirits of the Railway is a short story that tel Essays - Chu "Spirits of the Railway" is a short story that tells us of the first Chinese peasants to leave south China for the New World in the nineteenth century. The Chinese immigrants were mostly men who left their family behind in China. In this story, Chu goes to Canada in search of his missing father. Unable to find him, Chu ends up working in a railway construction. Then, the crew and he reach a tunnel that other workers claim is haunted. Finally, he met the "ghost" of his father, who had died while building the railway. His father claims for justice because he cannot rest in peace, his body was thrown into the river, and he did not have a proper burial. introduction: Farmer Chu came to Canada because the floodwater destroyed his home. Farmer Chu's wife fell ill and wanted to meet his husband again. Young Chu crossed the ocean to find his father Rising Action: Young Chu worked with thirty Chinese for money He asked everyone to search his father A group of people told him that maybe his father were dead, but Young Chu didn't believe it. A tunnel workers had to work inside was haunted Young Chu spent a night inside to encourage workers Climax: Young Chu heard his father's voice in the tunnel.His father told him what was happened to them and what shall him do next Falling Action: Young Chu told his friends the story then his friends helped him to make the bundles and sent him out He climbed on a cliff and dug a grave.Then he buried the bundles into the grave. He bowed and knelt to it three times. Resolution: He returned to the camp Spirits never again disturbed them [Setting]: The most important reason for setting is to create a backdrop for the storyit provide the story with a particular time and place. Sometimes, the setting is the conflict of the story. The setting stresses the tension between the main character and the setting, usually nature. Sometimes, the setting can act as a metaphor of the story. Sometimes, the writer describes a particular setting to create an atmosphere or mood. [Share]: Take chopsticks, take straw matting and pour tea is the Chinese daily life. I think Chu's father told him to do this because he didn't want his son to forget the Chinese culture. Even they were working in another country, they still respected their own culture. Actually, his father also told him Chinese had to become strong and had the strength of character. Don't always bullied by others. [Radio]: The Chinese workers were not only built the rail in Canada but also in America. During the 1860's, it's estimated about 1200 Chinese died while building the Transcontinental railroad through the treacherous Sierra Nevadas. This radio show us 2015 will mark the 150th year since the first Chinese was hired to help finish this monumental task. To commemorate this event, Steven Lee is trying to raise $300,000 to have a monument built to honour these workers.
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