Developing Financial Projections

PUBLIC COMPANY MANAGEMENT SERVICES WHITE PAPER Developing Financial Projections for NonFinance People This White Paper gives you the tools to answer the two most important questions any business must ask: â€Å"Are you financially prepared to begin? Are we able to sustain ourselves? † You’ll learn: †¢ What’s on financial statements and how they get there †¢ How to develop and understand income statements †¢ How to set up and read balance sheets †¢ How to use common formulas to evaluate cash flow †¢ How to create a budget using standard guidelines †¢ How to read and evaluate income projections †¢How to develop your own financial projections through a â€Å"fill in the blanks† approach† †¢ How to accurately determine the value of your idea or business This memorandum is provided by Public Company Management Services for educational purposes only and is not intended and should not be construed as legal advice. 200 4  © Public Company Management Services 5770 El Camino Road. Las Vegas, NV 89118 Phone: (702) 222-9076 http://www. pubcowhitepapers. com http://www. pcms-team. com http://www. foreigncompanylisting. com http://www. gopublictoday. com A Budget and Financial Worksheet OverviewManagers must ask, ‘is the business financially prepared to begin/continue’? Understanding basic budgeting guidelines, income projection statements, balance sheets and common formulas to evaluate cash flow help ensure successful operations. This financial knowledge significantly impacts a company’s short term and long term success. START-UP BUDGET †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ personnel (costs prior to opening) legal/professional fees occupancy licenses/permits equipment insurance supplies advertising/promotions salaries/wages accounting income utilities payroll expensesAn operating budget is prepared when you are actu ally ready to open for business. The operating budget will reflect your priorities in terms of how you spend your money, the expenses you will incur and how you will meet those expenses (income). Your operating budget also should include money to cover the first three to six months of operation. It should allow for the following expenses. OPERATING BUDGET †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ personnel insurance rent depreciation loan payments advertising/promotions legal/accounting miscellaneous expenses supplies payroll expenses Developing Projections www. publiccompanywhitepapers. om 14001 May 20,2003 †¢ †¢ †¢ †¢ †¢ salaries/wages utilities dues/subscriptions/fees taxes repairs/maintenance Other questions that you will need to consider are: †¢ What type of accounting system will your use? Is it a single entry or dual entry system? †¢ What are your sales and profit goals for the coming year? If a franchis e, will the franchisor set your sales and profit goals? Or, will he or she expect you to reach and retain a certain sales level and profit margin? †¢ What financial projections will you need to include in your business plan? †¢ What kind of inventory control system will you use?Sample balance sheets, income projections (profit and loss statements) and cash flow statements are included below along with detailed instructions for completing same. INCOME PROJECTION STATEMENT †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Total net sales (revenues) Costs of sales Gross profit Gross profit margin Controllable expenses Salaries/wages Payroll expenses Legal/accounting Advertising Automobile Office supplies Dues/Subscriptions Utilities Miscellaneous Total controllable expenses Fixed expenses Rent Depreciation Utilities Insurance License/pe rmits Loan payments Miscellaneous †¢ Total fixed expenses Total expenses Net profit (loss) before taxes Taxes †¢ Net profit (loss) after taxes INSTRUCTIONS FOR INCOME PROJECTIONS STATEMENT The income projections (profit and loss) statement is valuable as both a planning tool and a key management tool to help control business operations. It enables you to develop a preview of the amount of income generated each month and for the business year, based on reasonable predictions of monthly levels of sales, costs and expenses. As monthly or quarterly projections are developed and entered into the income projections statement, they can serve as definite goals for controlling the business operation.As actual operating results become known each month, they should be recorded for comparison with the monthly projections. A completed income statement allows you to compare actual figures with projections and to take steps to correct any problems. Industry Percentage In the industry per centage column, enter the percentages of total sales (revenues) that are standard for your industry, which are derived by dividing Costs/expenses items x 100% These percentages can be obtained from various sources, such as trade associations, accountants or banks.Industry figures serve as a useful bench mark against which to compare cost and expense estimates that you develop for your firm. Compare the figures in the industry percentage column to those in the annual percentage column. Total Net Sales (Revenues) Determine the total number of units of consulting service you realistically expect to sell each period (per month or quarter) in each area of your business at the prices you expect to get. Use this step to create the projections to review your pricing practices. †¢ Exclude any revenue that is not strictly related to the business. Cost of SalesThe key to calculating your cost of sales is that you do not overlook any costs that you have incurred. Calculate cost of sales of all services used to determine total net sales. Do not overlook transportation or travel costs if you’re working at a distance. Also include all direct labor. Gross Profit Subtract the total cost of sales from the total net sales to obtain gross profit. Gross Profit Margin The gross profit is expressed as a percentage of total sales (revenues). It is calculated by dividing gross profits by total net sales Controllable (also known as Variable) Expenses †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Salary expenses-Base pay plus overtime.Payroll expenses-Include paid vacations, sick leave, health insurance, unemployment insurance and social security taxes – may or may not be applicable. Outside services-Include costs of subcontracts, overflow work and special or one-time services. Supplies-Services and items purchased for use in the business. Repair and maintenance-Regular maintenance and repair. Advertising-Include desired sales volume and classified d irectory advertising expenses. Car delivery and travel-Include charges if personal car is used in business, including parking, tools, buying trips, etc. Accounting and legal-Outside professional services.Fixed Expenses †¢ †¢ †¢ †¢ †¢ †¢ †¢ Rent-List only real estate used in business. Depreciation-Amortization of capital assets like computers. Utilities-Water, heat, light, etc. Insurance-Fire or liability on property or products. Include workers' compensation. Loan repayments-Interest on outstanding loans. Miscellaneous-Unspecified; small expenditures without separate accounts. Net Profit (loss) (before taxes) †¢ Subtract total expenses from gross profit. †¢ Taxes – Include inventory and sales tax, excise tax, real estate tax, etc. Net Profit (loss) (after taxes) †¢ Subtract taxes from net profit (before taxes) Annual Total – For each of the sales and expense items in your income projection statement, add all the monthly or quarterly figures across the table and put the result in the annual total column. Annual Percentage †¢ Calculate the annual percentage by dividing Annual total x 100% Sample BALANCE SHEET Assets Current assets Cash $_______ Petty cash $_______ Accounts receivable $_______ Inventory $_______ Short-term investment $_______ Prepaid expenses $_______ Long-term investment $_______ Fixed assets Land $_______ Buildings $_______ Improvements $_______ Equipment $_______ Furniture $_______ Automobile/vehicles $_______Other assets †¢ †¢ †¢ †¢ 1. $_______ 2. $_______ 3. $_______ 4. $_______ †¢ Total assets $______ Liabilities Current Liabilities Accounts payable $______ Notes payable $______ Interest payable $______ Taxes payable Federal income tax $______ State income tax $______ Self-employment tax $______ Sales tax (SBE) $______ Property tax $______ Payroll accrual $______ Long-term liabilities Notes payable $______ Total liabilities $______ Net worth (owner equity) $______ Proprietorship or Partnership (name's) equity $_____ (name's) equity $_____ or †¢ Corporation Capital stock $_____ Surplus paid in $_____ Retained earnings $_____Total net worth $_____ †¢ Total liabilities and †¢ total net worth $_____ (Total assets will always equal total liabilities and total net worth) _______________________________________________ INSTRUCTIONS FOR BALANCE SHEET Figures used to compile the balance sheet are taken from the previous and current balance sheet as well as the current income statement. The income statement is usually attached to the balance sheet. The following text covers the essential elements of the balance sheet. At the top of the page fill in the legal name of the business, the type of statement and the day, month and year. AssetsList anything of value that is owned or legally due the business. Total assets include all net values. These are the amounts derived when you subtract depreciation and amortization from th e original costs of acquiring the assets. Current Assets †¢ †¢ †¢ †¢ †¢ †¢ Cash-List cash and resources that can be converted into cash within 12 months of the date of the balance sheet (or during one established cycle of operation). Include money on hand and demand deposits in the bank, e. g. , checking accounts and regular savings accounts. Petty cash-If your business has a fund for small miscellaneous expenditures, include the total here.Accounts receivable-The amounts due from customers in payment for merchandise or services. Inventory-Includes raw materials on hand, work in progress and all finished goods, either manufactured or purchased for resale. Short-term investments-Also called temporary investments or marketable securities, these include interest- or dividend-yielding holdings expected to be converted into cash within a year. List stocks and bonds, certificates of deposit and time-deposit savings accounts at either their cost or market valu e, whichever is less. Prepaid expenses-Goods, benefits or services a business buys or rents in advance.Examples are office supplies, insurance protection and floor space. Long-term Investments Also called long-term assets, these are holdings the business intends to keep for at least a year and that typically yield interest or dividends. Included are stocks, bonds and savings accounts earmarked for special purposes. Fixed Assets Also called plant and equipment. Includes all resources a business owns or acquires for use in operations and not intended for resale. Fixed assets may be leased. Depending on the leasing arrangements, both the value and the liability of the leased property may need to be listed on the balance sheet. Land-List original purchase price without allowances for market value. †¢ Buildings †¢ Improvements †¢ Equipment †¢ Furniture an Computers †¢ Automobile/vehicles Liabilities Current Liabilities List all debts, monetary obligations and cla ims payable within 12 months or within one cycle of operation. Typically they include the following: †¢ Accounts payable-Amounts owed to suppliers for goods and services purchased in connection with business operations. †¢ Notes payable-The balance of principal due to pay off short-term debt for borrowed funds. Also includes the current amount due of total balance on notes whose terms exceed 12 months. Interest payable-Any accrued fees due for use of both short- and long-term borrowed capital and credit extended to the business. †¢ Taxes payable-Amounts estimated by an accountant to have been incurred during the accounting period. †¢ Payroll accrual-Salaries and wages currently owed. Long-term Liabilities Notes payable-List notes, contract payments or mortgage payments due over a period exceeding 12 months or one cycle of operation. They are listed by outstanding balance less the current position due. Net worth Also called owner's equity, net worth is the claim o f the owner(s) on the assets of the business.In a proprietorship or partnership, equity is each owner's original investment plus any earnings after withdrawals. Total Liabilities and Net Worth The sum of these two amounts must always match that for total assets. __________________________________________________ MONTHLY CASH FLOW PROJECTION 1. Cash on hand (beginning month) 2. Cash receipts †¢ †¢ †¢ †¢ †¢ (a) Cash sales (b) Collections from credit accounts (c) Loan or other cash injections (specify) 3. Total cash receipts (2a+2b+2c=3) 4. Total cash available (Before cash out) (1+3) 5. Cash paid out †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ a) purchases (merchandise) (b) Gross wages (excludes withdrawals) (c) Payroll expenses (taxes, etc. ) (d) Outside services (e) Supplies (office and operating) (f) Repairs and maintenance (g) Advertising (h) Car, delivery and travel (i) Accounting and legal (j) Rent (k) Telephone (l) Utilities (m) Insurance (n) Taxes (real estate, etc. ) (o) Interest (p) Other expenses (specify each) (q) Miscellaneous (unspecified) (r) Subtotal (s) Loan principal payment †¢ †¢ †¢ †¢ †¢ †¢ (t) Capital purchases (specify) (u) Other start-up costs (v) Reserve and/or escrow (specify) (w) Owner's withdrawal 6. Total cash paid out (5a through 5w) . Cash position (end of month) (4 minus 6) †¢ †¢ Essential operating data (non-cash flow information) †¢ A. Sales volume (dollars) †¢ B. Accounts receivable †¢ (end on month) †¢ C. Bad debt (end of †¢ month) †¢ D. Inventory on hand (end †¢ of month) †¢ E. Accounts payable (end †¢ of month) INSTRUCTIONS FOR MONTHLY CASH FLOW PROJECTION †¢ †¢ †¢ †¢ †¢ †¢ 1. Cash on hand (beginning of month) — Cash on hand same as (7), Cash position, pervious month 2. Cash receipts†¢ (a) Cash sales-All cash sales. Omit credit sales unless cash is actually received †¢ (b) Gross wages (including withdrawals)-Amount to be expected from all accounts. (c) Loan or other cash injection-Indicate here all cash injections not shown in 2(a) or 2(b) above. 3. Total cash receipts (2a+2b+2c=3) 4. Total cash available (before cash out)(1+3) 5. Cash paid out †¢ (a) Purchases (merchandise)–Merchandise for resale or for use in product (paid for in current month). †¢ (b) Gross wages (including withdrawals)-Base pay plus overtime (if any) †¢ (c) Payroll expenses (taxes, etc. )– Include paid vacations, paid sick leave, health insurance, unemployment insurance, (this might be 10 to 45% of 5(b)) †¢ (d) Outside services-This could include outside labor and/or material for pecialized or overflow work, including subcontracting †¢ (e) Supplies (office and operating)–Items purchased for use in the bu siness (not for resale) †¢ (f) Repairs and maintenance-Include periodic large expenditures such as painting or decorating †¢ (g) Advertising-This amount should be adequate to maintain sales volume †¢ (h) Car, delivery and travel-If personal car is used, charge in this column, include parking †¢ (i) Accounting and legal-Outside services, including, for example, bookkeeping †¢ (j) Rent-Real estate only (See 5(p) for other rentals) †¢ (k) Telephone †¢ (l) Utilities-Water, heat, light and/or power (m) Insurance-Coverage on business property and products (fire, liability); also worker's compensation, fidelity, etc. Exclude executive life (include in 5(w)) †¢ (n) Taxes (real estate, etc. )– Plus inventory tax, sales tax, excise tax, if applicable †¢ (o) Interest-Remember to add interest on loan as it is injected (See 2 © above) †¢ (p) Other expenses (specify each) _________________________________________ _________________________ ____________ Unexpected expenditures may be included here as a safety factor________________________________________ Equipment expenses during the month should be included ere (non-capital equipment)__________________________ When equipment is rented or leased, record payments here †¢ (q) Miscellaneous (unspecified)–Small expenditures for which separate accounts would be practical †¢ (r) Subtotal-This subtotal indicates cash out for op †¢ (s) Loan principal payment-Include payment on all loans, including vehicle and equipment purchases on time payment †¢ (t) Capital purchases (specify)–Nonexpensed (depreciable) expenditures such as equipment, building purchases on time payment †¢ (u) Other start-up costs-Expenses incurred prior to first month projection and paid for after startup (v) Reserve and/or escrow (specify)– Example: insurance, tax or equipment escrow to reduce impact of large periodic payments †¢ (w) Owner's withdrawals-Sho uld include payment for such things as owner's income tax, social security, health insurance, executive life insurance premiums, etc. †¢ 6. Total cash paid out (5a through 5w) †¢ 7. Cash position (end on month) (4 minus 6)-Enter this amount in (1) Cash on hand following monthEssential operating data (non-cash flow information)-This is basic information necessary for proper planning and for proper cash flow projection.Also with this data, the cash flow can be evolved and shown in the above form. †¢ A. Sales volume (dollars)–This is a very important figure and should be estimated carefully, taking into account size of facility and employee output as well as realistic †¢ †¢ †¢ †¢ †¢ anticipated sales (actual sales, not orders received). B. Accounts receivable (end of month)-Previous unpaid credit sales plus current month's credit sales, less amounts received current month (deduct â€Å"C† below) C.Bad debt (end on month)– Bad debts should be subtracted from (B) in the month anticipated D. Inventory on hand (end on month)– Last month's inventory plus merchandise received and/or manufactured current month minus amount sold current month E. Accounts payable (end of month) Previous month's payable plus current month's payable minus amount paid during month. F. Depreciation-Established by your accountant, or value of all your equipment divided by useful life (in months) as allowed by Internal Revenue Service Developing Financial Projections PUBLIC COMPANY MANAGEMENT SERVICES WHITE PAPER Developing Financial Projections for NonFinance People This White Paper gives you the tools to answer the two most important questions any business must ask: â€Å"Are you financially prepared to begin? Are we able to sustain ourselves? † You’ll learn: †¢ What’s on financial statements and how they get there †¢ How to develop and understand income statements †¢ How to set up and read balance sheets †¢ How to use common formulas to evaluate cash flow †¢ How to create a budget using standard guidelines †¢ How to read and evaluate income projections †¢How to develop your own financial projections through a â€Å"fill in the blanks† approach† †¢ How to accurately determine the value of your idea or business This memorandum is provided by Public Company Management Services for educational purposes only and is not intended and should not be construed as legal advice. 200 4  © Public Company Management Services 5770 El Camino Road. Las Vegas, NV 89118 Phone: (702) 222-9076 http://www. pubcowhitepapers. com http://www. pcms-team. com http://www. foreigncompanylisting. com http://www. gopublictoday. com A Budget and Financial Worksheet OverviewManagers must ask, ‘is the business financially prepared to begin/continue’? Understanding basic budgeting guidelines, income projection statements, balance sheets and common formulas to evaluate cash flow help ensure successful operations. This financial knowledge significantly impacts a company’s short term and long term success. START-UP BUDGET †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ personnel (costs prior to opening) legal/professional fees occupancy licenses/permits equipment insurance supplies advertising/promotions salaries/wages accounting income utilities payroll expensesAn operating budget is prepared when you are actu ally ready to open for business. The operating budget will reflect your priorities in terms of how you spend your money, the expenses you will incur and how you will meet those expenses (income). Your operating budget also should include money to cover the first three to six months of operation. It should allow for the following expenses. OPERATING BUDGET †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ personnel insurance rent depreciation loan payments advertising/promotions legal/accounting miscellaneous expenses supplies payroll expenses Developing Projections www. publiccompanywhitepapers. om 14001 May 20,2003 †¢ †¢ †¢ †¢ †¢ salaries/wages utilities dues/subscriptions/fees taxes repairs/maintenance Other questions that you will need to consider are: †¢ What type of accounting system will your use? Is it a single entry or dual entry system? †¢ What are your sales and profit goals for the coming year? If a franchis e, will the franchisor set your sales and profit goals? Or, will he or she expect you to reach and retain a certain sales level and profit margin? †¢ What financial projections will you need to include in your business plan? †¢ What kind of inventory control system will you use?Sample balance sheets, income projections (profit and loss statements) and cash flow statements are included below along with detailed instructions for completing same. INCOME PROJECTION STATEMENT †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Total net sales (revenues) Costs of sales Gross profit Gross profit margin Controllable expenses Salaries/wages Payroll expenses Legal/accounting Advertising Automobile Office supplies Dues/Subscriptions Utilities Miscellaneous Total controllable expenses Fixed expenses Rent Depreciation Utilities Insurance License/pe rmits Loan payments Miscellaneous †¢ Total fixed expenses Total expenses Net profit (loss) before taxes Taxes †¢ Net profit (loss) after taxes INSTRUCTIONS FOR INCOME PROJECTIONS STATEMENT The income projections (profit and loss) statement is valuable as both a planning tool and a key management tool to help control business operations. It enables you to develop a preview of the amount of income generated each month and for the business year, based on reasonable predictions of monthly levels of sales, costs and expenses. As monthly or quarterly projections are developed and entered into the income projections statement, they can serve as definite goals for controlling the business operation.As actual operating results become known each month, they should be recorded for comparison with the monthly projections. A completed income statement allows you to compare actual figures with projections and to take steps to correct any problems. Industry Percentage In the industry per centage column, enter the percentages of total sales (revenues) that are standard for your industry, which are derived by dividing Costs/expenses items x 100% These percentages can be obtained from various sources, such as trade associations, accountants or banks.Industry figures serve as a useful bench mark against which to compare cost and expense estimates that you develop for your firm. Compare the figures in the industry percentage column to those in the annual percentage column. Total Net Sales (Revenues) Determine the total number of units of consulting service you realistically expect to sell each period (per month or quarter) in each area of your business at the prices you expect to get. Use this step to create the projections to review your pricing practices. †¢ Exclude any revenue that is not strictly related to the business. Cost of SalesThe key to calculating your cost of sales is that you do not overlook any costs that you have incurred. Calculate cost of sales of all services used to determine total net sales. Do not overlook transportation or travel costs if you’re working at a distance. Also include all direct labor. Gross Profit Subtract the total cost of sales from the total net sales to obtain gross profit. Gross Profit Margin The gross profit is expressed as a percentage of total sales (revenues). It is calculated by dividing gross profits by total net sales Controllable (also known as Variable) Expenses †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Salary expenses-Base pay plus overtime.Payroll expenses-Include paid vacations, sick leave, health insurance, unemployment insurance and social security taxes – may or may not be applicable. Outside services-Include costs of subcontracts, overflow work and special or one-time services. Supplies-Services and items purchased for use in the business. Repair and maintenance-Regular maintenance and repair. Advertising-Include desired sales volume and classified d irectory advertising expenses. Car delivery and travel-Include charges if personal car is used in business, including parking, tools, buying trips, etc. Accounting and legal-Outside professional services.Fixed Expenses †¢ †¢ †¢ †¢ †¢ †¢ †¢ Rent-List only real estate used in business. Depreciation-Amortization of capital assets like computers. Utilities-Water, heat, light, etc. Insurance-Fire or liability on property or products. Include workers' compensation. Loan repayments-Interest on outstanding loans. Miscellaneous-Unspecified; small expenditures without separate accounts. Net Profit (loss) (before taxes) †¢ Subtract total expenses from gross profit. †¢ Taxes – Include inventory and sales tax, excise tax, real estate tax, etc. Net Profit (loss) (after taxes) †¢ Subtract taxes from net profit (before taxes) Annual Total – For each of the sales and expense items in your income projection statement, add all the monthly or quarterly figures across the table and put the result in the annual total column. Annual Percentage †¢ Calculate the annual percentage by dividing Annual total x 100% Sample BALANCE SHEET Assets Current assets Cash $_______ Petty cash $_______ Accounts receivable $_______ Inventory $_______ Short-term investment $_______ Prepaid expenses $_______ Long-term investment $_______ Fixed assets Land $_______ Buildings $_______ Improvements $_______ Equipment $_______ Furniture $_______ Automobile/vehicles $_______Other assets †¢ †¢ †¢ †¢ 1. $_______ 2. $_______ 3. $_______ 4. $_______ †¢ Total assets $______ Liabilities Current Liabilities Accounts payable $______ Notes payable $______ Interest payable $______ Taxes payable Federal income tax $______ State income tax $______ Self-employment tax $______ Sales tax (SBE) $______ Property tax $______ Payroll accrual $______ Long-term liabilities Notes payable $______ Total liabilities $______ Net worth (owner equity) $______ Proprietorship or Partnership (name's) equity $_____ (name's) equity $_____ or †¢ Corporation Capital stock $_____ Surplus paid in $_____ Retained earnings $_____Total net worth $_____ †¢ Total liabilities and †¢ total net worth $_____ (Total assets will always equal total liabilities and total net worth) _______________________________________________ INSTRUCTIONS FOR BALANCE SHEET Figures used to compile the balance sheet are taken from the previous and current balance sheet as well as the current income statement. The income statement is usually attached to the balance sheet. The following text covers the essential elements of the balance sheet. At the top of the page fill in the legal name of the business, the type of statement and the day, month and year. AssetsList anything of value that is owned or legally due the business. Total assets include all net values. These are the amounts derived when you subtract depreciation and amortization from th e original costs of acquiring the assets. Current Assets †¢ †¢ †¢ †¢ †¢ †¢ Cash-List cash and resources that can be converted into cash within 12 months of the date of the balance sheet (or during one established cycle of operation). Include money on hand and demand deposits in the bank, e. g. , checking accounts and regular savings accounts. Petty cash-If your business has a fund for small miscellaneous expenditures, include the total here.Accounts receivable-The amounts due from customers in payment for merchandise or services. Inventory-Includes raw materials on hand, work in progress and all finished goods, either manufactured or purchased for resale. Short-term investments-Also called temporary investments or marketable securities, these include interest- or dividend-yielding holdings expected to be converted into cash within a year. List stocks and bonds, certificates of deposit and time-deposit savings accounts at either their cost or market valu e, whichever is less. Prepaid expenses-Goods, benefits or services a business buys or rents in advance.Examples are office supplies, insurance protection and floor space. Long-term Investments Also called long-term assets, these are holdings the business intends to keep for at least a year and that typically yield interest or dividends. Included are stocks, bonds and savings accounts earmarked for special purposes. Fixed Assets Also called plant and equipment. Includes all resources a business owns or acquires for use in operations and not intended for resale. Fixed assets may be leased. Depending on the leasing arrangements, both the value and the liability of the leased property may need to be listed on the balance sheet. Land-List original purchase price without allowances for market value. †¢ Buildings †¢ Improvements †¢ Equipment †¢ Furniture an Computers †¢ Automobile/vehicles Liabilities Current Liabilities List all debts, monetary obligations and cla ims payable within 12 months or within one cycle of operation. Typically they include the following: †¢ Accounts payable-Amounts owed to suppliers for goods and services purchased in connection with business operations. †¢ Notes payable-The balance of principal due to pay off short-term debt for borrowed funds. Also includes the current amount due of total balance on notes whose terms exceed 12 months. Interest payable-Any accrued fees due for use of both short- and long-term borrowed capital and credit extended to the business. †¢ Taxes payable-Amounts estimated by an accountant to have been incurred during the accounting period. †¢ Payroll accrual-Salaries and wages currently owed. Long-term Liabilities Notes payable-List notes, contract payments or mortgage payments due over a period exceeding 12 months or one cycle of operation. They are listed by outstanding balance less the current position due. Net worth Also called owner's equity, net worth is the claim o f the owner(s) on the assets of the business.In a proprietorship or partnership, equity is each owner's original investment plus any earnings after withdrawals. Total Liabilities and Net Worth The sum of these two amounts must always match that for total assets. __________________________________________________ MONTHLY CASH FLOW PROJECTION 1. Cash on hand (beginning month) 2. Cash receipts †¢ †¢ †¢ †¢ †¢ (a) Cash sales (b) Collections from credit accounts (c) Loan or other cash injections (specify) 3. Total cash receipts (2a+2b+2c=3) 4. Total cash available (Before cash out) (1+3) 5. Cash paid out †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ a) purchases (merchandise) (b) Gross wages (excludes withdrawals) (c) Payroll expenses (taxes, etc. ) (d) Outside services (e) Supplies (office and operating) (f) Repairs and maintenance (g) Advertising (h) Car, delivery and travel (i) Accounting and legal (j) Rent (k) Telephone (l) Utilities (m) Insurance (n) Taxes (real estate, etc. ) (o) Interest (p) Other expenses (specify each) (q) Miscellaneous (unspecified) (r) Subtotal (s) Loan principal payment †¢ †¢ †¢ †¢ †¢ †¢ (t) Capital purchases (specify) (u) Other start-up costs (v) Reserve and/or escrow (specify) (w) Owner's withdrawal 6. Total cash paid out (5a through 5w) . Cash position (end of month) (4 minus 6) †¢ †¢ Essential operating data (non-cash flow information) †¢ A. Sales volume (dollars) †¢ B. Accounts receivable †¢ (end on month) †¢ C. Bad debt (end of †¢ month) †¢ D. Inventory on hand (end †¢ of month) †¢ E. Accounts payable (end †¢ of month) INSTRUCTIONS FOR MONTHLY CASH FLOW PROJECTION †¢ †¢ †¢ †¢ †¢ †¢ 1. Cash on hand (beginning of month) — Cash on hand same as (7), Cash position, pervious month 2. Cash receipts†¢ (a) Cash sales-All cash sales. Omit credit sales unless cash is actually received †¢ (b) Gross wages (including withdrawals)-Amount to be expected from all accounts. (c) Loan or other cash injection-Indicate here all cash injections not shown in 2(a) or 2(b) above. 3. Total cash receipts (2a+2b+2c=3) 4. Total cash available (before cash out)(1+3) 5. Cash paid out †¢ (a) Purchases (merchandise)–Merchandise for resale or for use in product (paid for in current month). †¢ (b) Gross wages (including withdrawals)-Base pay plus overtime (if any) †¢ (c) Payroll expenses (taxes, etc. )– Include paid vacations, paid sick leave, health insurance, unemployment insurance, (this might be 10 to 45% of 5(b)) †¢ (d) Outside services-This could include outside labor and/or material for pecialized or overflow work, including subcontracting †¢ (e) Supplies (office and operating)–Items purchased for use in the bu siness (not for resale) †¢ (f) Repairs and maintenance-Include periodic large expenditures such as painting or decorating †¢ (g) Advertising-This amount should be adequate to maintain sales volume †¢ (h) Car, delivery and travel-If personal car is used, charge in this column, include parking †¢ (i) Accounting and legal-Outside services, including, for example, bookkeeping †¢ (j) Rent-Real estate only (See 5(p) for other rentals) †¢ (k) Telephone †¢ (l) Utilities-Water, heat, light and/or power (m) Insurance-Coverage on business property and products (fire, liability); also worker's compensation, fidelity, etc. Exclude executive life (include in 5(w)) †¢ (n) Taxes (real estate, etc. )– Plus inventory tax, sales tax, excise tax, if applicable †¢ (o) Interest-Remember to add interest on loan as it is injected (See 2 © above) †¢ (p) Other expenses (specify each) _________________________________________ _________________________ ____________ Unexpected expenditures may be included here as a safety factor________________________________________ Equipment expenses during the month should be included ere (non-capital equipment)__________________________ When equipment is rented or leased, record payments here †¢ (q) Miscellaneous (unspecified)–Small expenditures for which separate accounts would be practical †¢ (r) Subtotal-This subtotal indicates cash out for op †¢ (s) Loan principal payment-Include payment on all loans, including vehicle and equipment purchases on time payment †¢ (t) Capital purchases (specify)–Nonexpensed (depreciable) expenditures such as equipment, building purchases on time payment †¢ (u) Other start-up costs-Expenses incurred prior to first month projection and paid for after startup (v) Reserve and/or escrow (specify)– Example: insurance, tax or equipment escrow to reduce impact of large periodic payments †¢ (w) Owner's withdrawals-Sho uld include payment for such things as owner's income tax, social security, health insurance, executive life insurance premiums, etc. †¢ 6. Total cash paid out (5a through 5w) †¢ 7. Cash position (end on month) (4 minus 6)-Enter this amount in (1) Cash on hand following monthEssential operating data (non-cash flow information)-This is basic information necessary for proper planning and for proper cash flow projection.Also with this data, the cash flow can be evolved and shown in the above form. †¢ A. Sales volume (dollars)–This is a very important figure and should be estimated carefully, taking into account size of facility and employee output as well as realistic †¢ †¢ †¢ †¢ †¢ anticipated sales (actual sales, not orders received). B. Accounts receivable (end of month)-Previous unpaid credit sales plus current month's credit sales, less amounts received current month (deduct â€Å"C† below) C.Bad debt (end on month)– Bad debts should be subtracted from (B) in the month anticipated D. Inventory on hand (end on month)– Last month's inventory plus merchandise received and/or manufactured current month minus amount sold current month E. Accounts payable (end of month) Previous month's payable plus current month's payable minus amount paid during month. F. Depreciation-Established by your accountant, or value of all your equipment divided by useful life (in months) as allowed by Internal Revenue Service

Literary Criticism to: Little Red Riding Hood

All childhood stories have some origin and most have lost their way. Catherine Orenstein has discovered the original plot of Little Red Riding Hood. This original version teaches the reader lessons about life. Using the formalist approach I intend to show the reader how this old time fable can be informative to the reader and inspirational when making a decision that you only get one chance to make. The author starts out by capturing the reader’s attention he opens with, â€Å"Once upon a time there lived in a certain village a little country girl, the prettiest creature who was ever seen. Her mother was excessively fond of her; and her grandmother doted on her still more. This good woman had a little red riding hood made for her. It suited the girl so extremely well that everybody called her Little Red Riding Hood.†(Orenstein, 2004) during the initial paragraph the author allows the reader to make up a beautiful girl in their mind to focus the story around. The plot of this story was intriguing because you have a beautiful girl walking through the forest all alone on a mission to visit her sick grandmother. The surprise of the story was she was approached by a wolf. This wolf presented his self as a curious traveler who seemed to be friendly making conversation. This simple conversation that she carried out with the wolf would prove to be the most important lesson in the story. All parents always tell their children not to talk to strangers and never give personal information out. The wolf inquired several times information little red riding hood should not have afforded him for example, He asked her where she was going. The poor child, who did not know that it was dangerous to stay and talk to a wolf, said to him, â€Å"I am going to see my grandmother and carry her a cake and a little pot of butter from my mother.† â€Å"Does she live far off?† said the wolf. â€Å"Oh I say,† answered Little Red Riding Hood; â€Å"it is beyond that mill you see there, at the first house in the village.† (Orenstein, 2004) The author gives the wolf personification; he describes the wolf as a mysterious, dangerous character. He was presented as a clever hunter, who should be feared. He allows the wolf to actually mock being a human to hunt. This is shown in line 16 â€Å"The wolf cried out to her, softening his voice as much as he could, â€Å"Pull the bobbin, and the latch will go up.†Ã¢â‚¬  (Orenstein, 2004). He had gotten into the bed and was pretending to be her grandmother. Little Red Riding Hood was described as a beautiful, sweet, naà ¯ve young girl. The writer presents her as a gullible child with no teaching of stranger danger. This story is written in third person it gives the reader insight of all things going on. It’s going into details about the mother of the young girl, her sick grandmother, the environment with the wood choppers, and the deceitful hunting wolf. The most fascinating detail about this old time fable is knowing that this story referenced a young girl losing her virginity. The text states that the original story meaning was â€Å"According to the plot, she has just stripped out of her clothes, and a moment later the tale will end with her death in the beast's jaws—no salvation, no redemption. Any reader of the day would have immediately understood the message: In the French slang, when a girl lost her virginity it was said that elle [a] và » le loup—she'd seen the wolf.†(Clugston, 2010). There was some use of ambiguity; it could be perceived that little red riding hood lost her virginity to a pedophile. The wolf inquired about her destination, arrived there and staged waiting for her and then took her. In addition the grandmother was eaten to which can be perceived as her losing her virginity late. Not many people know the original origin of the old story Little Red Riding Hood. Knowing that there was a serious message behind this story allows your mind to think a little more in-depth about other popular folktales you grow up reading and loving as well. Catherine Orenstein made an old tale make a little more sense.

Organization for Efficient Management Essay

â€Å"Sound organization structure is an essential prerequisite of efficient management† – Discuss this statement and point out the various principles which should be followed in developing organization structure Introduction Organization is the backbone of management. Without efficient organization, no management can perform its functions smoothly. Sound organization contributes greatly to the continuity and success of the enterprise. Once A. Carnegie, an American industrialist, said, â€Å"Take away our factories, take away our trade, our avenues of transportation, and our money. Leave nothing but our organization, and in four years we shall have re-established ourselves†. That shows the significance of managerial skills and organization. However, good organization structure does not by itself produce good performance – just as a good constitution does not guarantee great presidents or good laws a moral society. But a poor organization structure makes good performance impossible, no matter how good the individuals may be. The right organizational structure is the necessary foundation; without it the best performance in all other areas of management will be ineffectual and frustrated. CONCEPT OF ORGANISATION STRUCTURE Organisation structure may be defined as the established pattern of relationships among the components of the organisation. Organisation structure in this sense refers to the network of relationships among individuals and positions in an organisation. Jennifer and Gareth have defined organisation structure as the formal system of task and reporting relationships that controls, coordinates and motivates employees so that they cooperate and work together to achieve an organisation’s goals. In fact organisation structure describes the organisation framework. Just as human beings have skeletons that define their parameters, organisations have structures that define-theirs. It is like the architectural plan of a building. Just as the architect considers various factors like cost, space, special features needed etc. while designing a good structure, the managers too must look into factors like benefits of specialisation, communication problems, problems in creating authority levels etc., before designing the organisation structure. The manager determines the work activities to get the job done, writes job descriptions, and organises people into groups and assigns them to superiors. He fixes goals and deadlines and establishes standards of performance. Operations are controlled through a reporting system. The whole structure takes the shape of a pyramid. The structural organisation implies the following things :  · The formal relationships with well-defined duties and responsibilities;  · The hierarchical relationships between superior and subordinates within the organisation;  · The tasks or activities assigned to different persons and the departments;  · Coordination of the various tasks and activities;  · A set of policies, procedures, standards and methods of evaluation of performance which are formulated to guide the people and their activities. The arrangement which is deliberately planned is the formal structure of organisation. But the actual operations and behaviour of people are not always governed by the formal structure of relations. Thus, the formal arrangement is often modified by social and psychological forces and the operating structure provides the basis of the organisation. Sound organization is an essential prerequisite of efficient management. It helps an organization in the following ways: 1. Enlarges abilities: It helps individuals to enlarge their capabilities. Division of work enables an individual to specialize in the job in which he is proficient, leading to better utilization of resources and talents. 2. Facilitates administration: It facilitates administration by avoiding waste motions, overlapping work and duplication of effort. Departmentation enables proper planning of work. Confusion and misunderstanding, over who is to perform what work, is avoided by specifying the role of managers clearly. Proportionate and balanced emphasis is put on various activities. 3. Facilitates growth and diversification:Sound organization helps in keeping activities under constant vigil and control. The organization can undertake more activities without dislocation. Talents and resources are put to good use. Opportunities are seized quickly and exploited fully, which ultimately pave way for growth and diversification. 4. Permits optimum use of resources: Human, technical and material resources are put to good use. Right persons are given right jobs. There is proper allocation of work. People know that they are supposed to do, well in advance. Necessary functions are determined and assigned, so that personnel and physical facilities are utilized effectively. 5. Stimulates creativity. It offers stimulating opportunities to people at all levels, to use their skills on jobs best suited to their nature. Delegation helps people at lower levels to do more challenging work. The higher ups, in turn, can concentrate on strategic issues putting their creative abilities to good use. 6. Facilitates coordination: Organization is an important way of achieving coordination among different departments of an enterprise. Clear authority relationships and proper assignment of work facilitates the task of achieving coordination at all levels. Poor organization leads to improper arrangement of duties and responsibilities. As a result, unimportant and trivial issues are given top priority. Activities that should be integrated or centralized are spread out and put to improper supervision. Incompetent individuals are overused while talented people are under utilized. Delays, duplications and waste motions occur with frustrating regularity. Expenses mount up. These would create utter confusion, chaos and conflict. Poor organization may mean improper arrangement of facilities and failure to achieve goals of objectives, management thinkers have laid down certain statements from time to time, from certain generally accepted understandings, which may be called the principles of organization. The principles are guidelines for planning an efficient organization structure. Therefore, a thorough understanding of the principles of organization is essential for good organization. The important principles of organization 1. Consideration of Objectives. An enterprise strives to accomplish certain objectives. Organization serves as a tool to attain these objectives. The objectives must be stated in clear terms as they play an important role in determining the type of structure, which should be developed. The principle of consideration of objectives states that only after the objectives have been stated, an organization structure should be developed to achieve them. 2. Division of Work and Specialization. The entire work in the organization should be divided into various parts so that every individual is confined to the performance of a single job, as far as possible, according to his ability and aptitudes. This is also called the principle of specialization. More a person continues on a particular job, the better will be his performance. 3. Definition of Jobs. Every position in the organization should be clearly defined in relation to other positions in the organization. The duties and responsibilities assigned to every position and its relationship with other positions should be clearly defined so that there may not be any overlapping of functions. 4. Separation of Line and Staff Functions. Whenever possible, line functions should be separated from staff activities. Line functions are those, which accomplish the main objectives of the company. In many manufacturing companies, the manufacturing and marketing departments are considered to be accomplishing the main objectives of the business and so are called the line functions and other functions like personnel, plant maintenance, financing and legal are considered as staff functions. 5. Chain of Command. There must be clear lines of authority running from the top to the bottom of the organization. Authority is the right to decide, direct and coordinate. The organization structure should facilitate delegation of authority. Clarity is achieved through delegation by steps or levels from the top position to the operating level. From the chief executive, a line of authority may proceed to departmental managers, to supervisors or foremen and finally to workers. This chain of command is also known as scalar principle of organization. 6. Parity of Authority and Responsibility. Responsibility should always be coupled with corresponding authority. Each subordinate must have sufficient authority to discharge the responsibility entrusted to him. This principle suggests that if a plant manager in a multi-plant organization is held accountable for all activities in his plant, he should not be subject to orders from company headquarters specifying the quantity of raw materials he should buy or from whom he should purchase raw materials. If a supervisor is responsible for the quality of work of his department, he should not be asked to accept as a member of his workforce an employee who has been hired without consulting him. 7. Unity of Command. No one in the organization should report to more than one supervisor. Everyone in the organization should know to whom he reports and who reports to him. Stated simply, everyone should have only one boss. Receiving directions from several supervisors may result in confusion, chaos, conflicts and lack of action. So each member of the organization should receive directions from and report to one superior only. This will avoid conflict of command and help in fixing responsibilities. 8. Exceptional Matters. This principle requires that organization structure should be so designed that managers are required to go through the exceptional matters only. The subordinates should take all the routine decisions, whereas problems involving unusual matters and policy decisions should be referred to higher levels. 9. Span of Supervision. The span of supervision means the number of persons a manager or a supervisor can direct. If too less number of employees are reporting to a supervisor, his time will not be utilized properly. But, on the other hand, there is a limit to the number of subordinates that can be efficiently supervised by an executive. Both these points should be kept in mind while grouping and allocating the activities to various departments. It is difficult to give a definite number of persons a manager can direct. It will depend upon the nature of the work and a number of other factors. 10. Balance of Various Factors. There should be proper balance in the formal structure of the organization in regard to factors having conflicting claims, e.g., between centralization and decentralization, span of supervision and lines of communication and authority allocated to departments and personnel at various levels. 11. Communication. A good communication network is essential to achieve the objectives of an organization. No doubt the line of authority provides readymade channels of communication downward and upward, still some blocks in communication occur in many organizations. The confidence of the superior in his subordinates and two-way communication are the factors that unite an organization into an effectively operating system. 12. Flexibility. The organization structure should be flexible so that it can be easily and economically adapted to the changes in the nature of business as well as technical innovations. Flexibility of organization structure ensures the ability to change with the environment before something serious may occur. So the organization structure should be such that it permits expansion and contraction without disrupting the basic activities. 13. Continuity. Change is the law of nature. Many changes take place outside the organization. These changes must be reflected in the organization. For this, the form of organization structure must be able to serve the enterprise and to attain its objectives for a long period of time. Types of Organizational Structure in Management Small companies can use a variety of organizational structures. However, a small company’s organization structure must be designed to effectively meet its goals and objectives, according to the Lamar University article titled â€Å"Organizational Structure† on its website. Types of organizational structure in management can include flat structures as well as functional, product and geographical-structured organizations. Flat Organizational Structure Many small companies use a flat organizational structure, where very few levels of management separate executives from analysts, secretaries and lower-level employees. Flat organizations work best when a company has less than 20 employees, especially if the company employs one or two employees per department. One advantage of using a flat organizational structure for management is that decisions can be made relatively quickly. The flat organizational lacks the typical bureaucracy of taller organizational structures–those with many levels of management. Functional Organizational Structure A functional organizational structure is centered on job functions, such as marketing, research and development and finance. Small companies should use a functional organization when they want to arrange their organizational structure by department. For example, a small company may have a director, two managers and two analysts in the marketing department. The director would likely report to the Chief Executive Officer, or CEO, and both managers would report to the director. In addition, each manager may have an analyst reporting to them. A functional organizational structure works well when small companies are heavily project-focused. Directors can assign certain projects to managers, who can then divvy up tasks with their analysts. The department can then more effectively meet their project deadlines. Product Organzational Structure A product organizational structure has managers reporting to the president or head of the company by product type. Product organizational structures are primarily used by retail companies that have stores in various cities. However, stores in each city may still need a local human resources or marketing department to carry out functions locally. For example, a small department store company may have a vice president of sporting goods, housewares and general merchandise at the corporate office. One manager may report to each vice president. However, each manager may oversee the work of one or more field marketing employees who travel and handle local marketing stores in several states. These field marketing employees may work for the sporting goods manager one week in League City, Texas, then do merchandising for the housewares manager another week in the Sugarland, Texas, market. Geographical Organizational Structure The Small Business Administration is responsible for defining small businesses in different industries. For example, in manufacturing, the SBA usually considers a company with 500 or fewer employees a small business. Point is, small businesses are still large enough to use a geographical organizational structure. A geographical organizational structure is when companies decentralize the functional areas. For example, unlike the product organizational structure, there may be a local marketing, finance, accounting and research development person based in each region. For example, a small consumer products food company may be large enough to place a marketing research manager and analyst in each of six different regions. This can be important because consumers in various areas have different tastes. Hence, a geographical structure will enable the company to better serve the local market. ORGANISATIONAL EFFECTIVENESS The study of organisational structure is necessary to understand organisational effectiveness. In simple terms better the structure of an organisation more effective would be the organisation and vice versa. You must be aware that some organisations perform better and grow more rapidly than other. On the extreme side some organisations perform badly and within a short period of time go out of business. Determinants of Organisational Effectiveness Several factors influence the organisational effectiveness Managerial Policies and Practices Managerial policies and practices integrate the entire organisation, maintain balance among the interest groups in the organisation, and accommodate them with the external environment. Managerial policies and practices have a direct bearing on the Organisational effectiveness. The major managerial policies and practices are as follow : Strategy: A strategy is a plan for interacting with the competitive environment to achieve organizational goals. Goals define where does the organisation want to go and strategies define how will the organization reach there. In other words, strategy is the determination of basic long term goals of the organisation, the adoption of the courses of action and the allocation of resources necessary to achieve them. The strategy is the most important factor of an organisation which decides the future course of action for the organisation. New strategy is often selected based upon environmental needs, and then the top management attempts to redesign the orga nisation to achieve those ends. Strategy: A strategy is a plan for interacting with the competitive environment to achieve organizational goals. Goals define where does the organisation want to go and strategies define how will the organization reach there. In other words, strategy is the determination of basic long term goals of the organisation, the adoption of the courses of action and the allocation of resources necessary to achieve them. The strategy is the most important factor of an organisation which decides the future course of action for the organisation. New strategy is often selected based upon environmental needs, and then the top management attempts to redesign the organisation to achieve those ends. Decision-making: Decision-making is choosing among alternatives. It has close relationship with all traditional management functions. The decision that management makes has a profound impact on the success of an organisation. Rewards: Organisational success to a large extent depends on how is management able to gain support of its team by way of compensating them for the efforts they are making for the achievement of organizational goals. It is primarily meant to sustain employee morale and improve or maintain productivity. Communication: It is the linkages among members of the organisation whereby they exchange information. The organisational structure has to provide for a perfect communication among different members of the organisation. Organisational communication is the grease that enables any organisational change. Environmental Characteristics Organisational effectiveness is influenced to a great degree by the external environmental characteristics. It is dependent on how is the external environment predictable, complex and hostile to the organisation and its activity. The major characteristics are as follow : Predictability: Predictability refers to how certain or uncertain an organisation may be towards supply of various resources; human, raw material etc. It is an element of external environment. Complexity: Environment complexity refers to the heterogeneity and range of activities which are relevant to an organisation’s operations. How many diverse groups from external environment the organisations have to deal with. Hostility: A hostile environment is one in which the underpinning of the organisation is threatened. How is an organisation viewed by the people at large. You may recall the case of Union Carbide after the Bhopal gas leakage about the hostility of environment Employee characteristics The characteristics of the human resource could make or break an organisation. It is employee characteristics, which is reflected in the success or failure of an organisation. The major characteristics are as follow : Goals: Goals define where the organisation wants to go. Goals are intentions that an individual or an organisation would like to achieve in the course of their working. Goals provide a directional nature to people’s behaviour and guide their thoughts and actions. Skills: Skill is the ability to engage in a set of behaviour that are functionally related to one another and that lead to a desired performance in a given area. The skill can be technical, managerial, behavioural etc. Motives: A motive is an inner state of a person that energizes activates, or moves and directs towards the achievement of a pre defined goal. The motivated employees have high motives to perform better and achieve the targets. Attitudes: Attitudes are evaluative statements- either favourable or unfavourable concerning objects, events, or people. Attitudes influence job behaviour and hence organisational effectiveness. Values: Values represent basic convictions or a specific mode of conduct. It generally influences an individual’s attitude and behaviour. The value that a person holds influences his or her motivation and subsequently behaviour. Organisational Characteristics Organisational characteristics refer to the general conditions that exist within an organisation. Various organisational characteristics influence organisational effectiveness. The major characteristics are as follow: Structure: An organisational structure defines how are job tasks formally divided, grouped and coordinated. For organisational effectiveness, six elements need to be addressed while designing organisational structure. These are: work specialisation, departmentation, chain of command, span of control, centralisation and decentralisation, and formalization. Technology: The term technology refers to how does an organisation transfer its inputs into outputs. Every organisation has at least one technology for converting financial, human and physical resources into products or services. The choice of technology and its use influences organisational effectiveness. Size: In a narrow sense organisational size refers to the number of people in an organisation. But, if we take a broader view, size refers to the physical capacity of the organisation, the personnel available to the organisation, the organisational inputs or outputs and the discretionary resources available to an organisation. It is the size which influences the structure which in turn influences organisational effectiveness. Benefits of organisational effectiveness:  · Structures and behaviours are aligned with business needs.  · Disruption to business is minimised which reduces operational risk.  · Employee morale is sustained which maintains productivity.  · The right employees and talent are retained.  · Employees objectives and rewards are aligned to business goals. CONCLUSION Organisation structure refers to the grouping of activities and establishing pattern of relationship among the various parts of the organisation. It involves the assignment of tasks, establishment of hierarchical relationship, creation of policies, procedures, coordination and control of all activities in the organisation. The Organisational designs are dependent on a wide variety of factors; namely the management philosophy, the size of the organisation, the type of technology, and the external environmental factors. Therefore, there cannot be tailor-made solutions for all organisations. The ultimate aim for the organisation is to be effective and organisational structure is a tool in the attainment of organisational objectives. The components of organisational effectiveness are managerial policies and practices, employee characteristics, organizational characteristics and the environmental characteristics. Organizational structure is what ensures that your organization will function smoothly and as you intended. You should think about structure early in the development of your organization, but be aware that the type that fits best may change as your organization grows.

Why is money supply not under the tight control of central banks Essay - 2

Why is money supply not under the tight control of central banks - Essay Example spite this clear relationship between money supply and banks, there are other factors that influence the control of national and international money supply and take away the full control of banks; these include personal account holders, foreign investors and various businesses and corporations. Ancient Babylonian records dating from the 18th century BC show that a rudimentary form of banking was established at that time (Leick 161). Although these early storehouses could not necessarily equate with modern banks, they did serve the purpose of storage of wealth in the form of grain, gold and other valuables. From these immense storehouses, people chose to lend and borrow based on agreements made on a person-to-person basis. Financial relationships such as these expanded in the following centuries and we can see evidence of basic banking centres from the Greeks, the Egyptians and Romans. As banking progressed, the idea of storing wealth became more complicated as people tried to decide of fair ways of paying back loans on various items (Smith 4). Seeds, which could reproduce and therefore become worth more in the end, would require an equal repayment that included interest; this was an idea that quickly took hold and has helped to define modern banking (Heichelheim 56). After the Roman Empire lost its power, banking actually became a derelict practise in most of Europe until centuries later. When it was revived in later years, banking gained the addition of one factor that would revolutionise it: hard currency (Butler et al 27). Currency became redeemable for actual products when prior to its advent, financial exchanges were completed with the end product already in hand (for example, gold exchanged for a certain amount of grain, or grain for eggs). Currency became the primary source of finance instead of a mere representation of ‘true’ finance; based on currency, interest rates and the need for people to store their wealth away safely, banks were

Communication and Personality Paper Essay Example | Topics and Well Written Essays - 1000 words

Communication and Personality Paper - Essay Example Till this day, I have not been able to understand the psyche of the two of them. It happened when I advertised my house for sale. Mr. X approached me with Mr. Y. I welcomed the two and offered them to come into my drawing room. I was wearing a grin on my face and was treating them with utmost respect. I pulled chairs for them, turned on the AC as they had been in the sweltering heat of the sun for quite some time and needed refreshment. Both of my guests were in very pleasant mood. They had dressed up a bit too formally for the level of formality the occasion required. I was in casual dress in my home, wearing a T shirt over the pajamas. It was Sunday and people in general would normally be in bed that early in the morning. I had just been out of the bed. The two of them had approached me too early in the morning, though I did not mind at all. I asked them what would they take – tea or coffee. They asked for coffee. I went inside and asked my wife, Martha to make three cups of coffee. I needed to give them company both in person and in coffee, so I went back towards the drawing room. As I approached them and we were settled. Mr. X began the conversation. Mr. X: So Mr. A, we are interested in purchasing your home that you have recently advertised. Me: Sure. (Mr. Y remained silent all this while and for most part of the communication till the end). Mr. X: Your home is good but its price is too high. We need to bargain. Me: Maybe. What do you want to pay? (Meanwhile the coffee with muffins appeared on the table. I helped them to the coffee and muffins.) Mr. X: I want to buy this house for $50,000. Me: Sorry, that is not even half the demanded price. (Mr. X and Mr. Y exchanged looks. By the time, they had finished their cups of coffee and muffins). Mr. X: But look at your house! It is the cheapest in the whole town. (I was shocked by this sudden change of attitude. My house was certainly not the cheapest one around, and that guy was trying to disdain me and my property unnecessarily.) Me: I am extremely sorry but unfortunately, the price can not be bargained upon. This is the amount I require, and will keep the property with me unless this amount has been paid by a party. I respect your concerns for this house but I have no option to think otherwise. (That was the first time Mr. Y spoke). Mr. Y: If you do not agree to sell your house to us at our desired price, we shall spread the rumor that your house’s foundations are shaken and that it can fall into pieces anytime. (My suspicion was confirmed. They were two blackmailers. Otherwise, there was no point dressing up like that or coming over to my house that early in the morning, or saying things they did regarding my house if they were sincere and really wanting to buy it.). I told the two to leave before immediately and do whatever they think they can. In any communication, visual appearance of the participants casts an important impression upon others. â€Å"Reduced to its ess ence, negotiation is a form of interpersonal communication. Communication processes, both verbal and nonverbal, are critical to achieving negotiation goals and to resolving conflicts† (Barry, Lewicki, Saunders, 2006). Mr. X and Mr. Y were wearing dress pant and coat in the sweltering heat of May and that too very early in the morning. Perhaps, with the sober expression and formal dressing, they wanted to convey that they were to be taken seriously. However, â€Å"It’

Racial and Ethnic Relations Assignment Example | Topics and Well Written Essays - 500 words - 3

Racial and Ethnic Relations - Assignment Example The Nazis and Serbs that did not get caught to be tried fled to other countries or went into hiding. These people are still being caught. The victims that survived continue to survive and tell their accounts so the world will not forget. The similarity of propaganda before the violence is present in both the Nazi and Serbian campaign of ethnic genocide. The Nazis used propaganda to insist the Jews caused the World War I, the economic woes of the German people, and all of Germany’s problems. The Serbs used propaganda to assert the Bosnians were causing economic woes, suppressing the Serbs right to their ancestral land, and religious persecution. Bosnia’s Serbs wanted to join Milosevic’s Serbia, but the ethnic Bosnians wanted to create their own country. As a result, the Serbs started a propaganda campaign against the Bosnians before actual warfare broke out. The Nazis and the Serbs used the cover of war to commit genocide. These ethnic cleansings did not begin dur ing peace times. Under the confusion of war and combat the major actions against citizens took place. Incidents occurred before, but not to the extent the rest of the world would be concerned. It began gradually and then snowballed into the ethnic cleansing. The manner in which the Jews and Bosnians were executed was different. The Nazis were more systematic.

The Last Lecture (Youtube video) Essay Example | Topics and Well Written Essays - 500 words

The Last Lecture (Youtube video) - Essay Example True to his assertion he lost the battle to his disease in July 25, 2008. The lecture of this invincible man created history. In the lecture he mentioned about his childhood dreams, the process through which he achieved them and how he guided others to achieve the same. He detailed the outstanding moments of his life, the eminent t people with whom he interacted and explained how he had learnt much from others. He dedicated the last lecture to his 3 children Dylan, Logan, and Chloe aged 5, 3 and 1.At the very beginning, Dr. Pausch made reference in gratitude to his dad. He mentioned about the 10 tumors in his liver and informed the audience that he had about 3-6 month’s lifespan to his credit, though he was lucky enough to avail treatment from the best doctors in the world. He had realization that the game was going to be up soon, but he put the poser to the audience why worry about that today? During the course of the lecture, he was in excellent spirits; his responses were sterling, though he knew what was going on within his body. He mentioned about his love for the family and the reason why he bought a lovely house in Virginia, a better place he thought for the family, down the road. He recounted his childhood dreams his Football fantasies, his achievement as an author in the World Book Encyclopedia, working for Disney etc. He expected that the children should be part of the Football Team and play it, not from the physical fitness point of view, not only because it was a game, but it was the learning center of qualities that mold a youth into a good human being. The lessons in teamwork, perseverance, sportsmanship and other positive qualities were important. He gave lots of importance to the process of indirect learning. He paid handsome tributes to his parents who built him and enabled him to achieve his dreams. His mother was always a source of encouragement for him and whenever he was in dire straits, she came to his

Via Dolorosa Research Paper Example | Topics and Well Written Essays - 1500 words

Via Dolorosa - Research Paper Example The physicality of this particular path and the unidirectional focus that Christ’s ministry had with regards to the very moment of undergoing the hardships leading up to and including crucifixion can be literally understood by journeying this physical path towards the atonement for sin. As such, it comes as little wonder why the Via Dolorosa has come to occupy such an important place in the hearts and minds of so many of the faithful around the globe. Firstly, though it might be tempting, the fact of the matter is that the Via Dolorosa did not exist in its current form until around the 18th century (Russell et al 784). What is meant by this is the fact that the path that Christ supposedly tread prior to crucifixion on Pottery was one that has been up for debate I scholars and theologians for many years. Perhaps more importantly to those within the Roman Catholic, Episcopal, or Anglican faiths are what are known as the â€Å"stations of the cross† (Denomme 37). ... 3 – Jesus falls for the first time, station 4 – Jesus meets his other, station 5 – Simon of Cyrene helps Jesus to carry the cross, station 6 – Veronica wipes the face of Jesus, station 7 – Jesus falls the second time, station 8 – Jesus meets the women of Jerusalem, station 9 – Jesus falls the third time, station 10 – Jesus’ clothes are taken away, station 11 – Jesus is nailed to the cross, station 12 – Jesus dies on the cross, station 13 – Jesus is taken down from the cross, station 14 – Jesus is laid in the tomb. As with any form of research, whether Biblical or scientific, the Via Dolorosa has come to be more completely and effectively understood over the past several hundred years. As continued scientific and archeological discovery took place in the Holy Land, the centuries of changes that had affected the landscape and impacted upon the existence of certain types and directions of roads th rough the city of Jerusalem came to be understood in a more complete manner. As such, the mere existence of changes to the route of the Via Dolorosa does not in and of itself denote that the path itself is somehow contrived. Rather, it has merely come to be understood in a more effective and complete manner as a result of the subsequent understanding of what roads and paths existed in what times (Kline 49). Moreover, due to the fact that Jerusalem has exhibited nearly continual residency by some people group or another over the nearly 3000+ years of its existence, it is not a precise or exact science to specify to any level of absolute certainty what existing and non-existing roads or paths can or should be included in the modern day interpretation of the Via Dolorosa. However, that being said, the actual path itself, barring some almost certain

E cigarettes Research Paper Example | Topics and Well Written Essays - 1500 words

E cigarettes - Research Paper Example This paper will look into the similarities in the physical description of the e cigarette and the cigarette. I shall discuss the chemical components that make up the e cigarette and whether smokers prefer one product over the other and why. Then I shall conclude as to whether the cigarette or e cigarette is the better, healthier alternative to a quick nicotine fix. The similarities between the cigarette and e cigarette mainly lies in the fact that they both look like regular cigarettes. But while one has to be lit and puffed on in order to draw out the nicotine, thus burning away the paper and tobacco base of the product, the e cigarette is electronic based and relies on an electronic delivery system to deliver liquid tar into the system of the user. The use of the e cigarette is described as: Electronic cigarettes typically use a rechargeable battery-operated heating element to vaporize the nicotine in a replaceable cartridge. Nicotine is usually dissolved in propylene glycol, a clear and colorless liquid that is commonly found in inhalers, cough medicines and other products. The only commonality between the regular cigarette and the e cigarette is the fact that they are both meant to produce a particular type of smoke flavor that smokers can easily recognize. However, the flavor is produced in regular cigarettes by burning tobacco rolled in paper while the electronic cigarette creates the flavor using an atomized liquid. (â€Å"Comparing Regular Cigarettes with Regular Cigarettes†). In fact, both types of cigarettes are known to produce certain types of illnesses in their users that shall be discussed in later parts of this paper. Cigarettes evolved from the pipe that our forebears used to stuff with tobacco leaves and then burn while being sucked from one end of the pipe. To make it more convenient to use and carry, the paper burn based version was created. The smoker creates an unhealthy vapor and tar by-product each time that he smokes a cigarette. The e cigarette on the other hand creates a harmless vapor that looks like a harmless mist when exhaled. This particular type of cigarette does not produce 2nd hand smoke problems or get its smell into clothing, hair, or upholstery (â€Å"Are e-Cigarettes Safer than Real Cigarettes?†). Having said that, those who have made the switch from regular cigarettes to e cigarettes claim the aforementioned reason as the main basis for their switch from the real thing to the electronic version. The e cigarette is actually allowed in non-smoking places and other places where cigarettes would normally be banned. Although Hon Lik, the Chinese pharmacist who invented the e cigarette in 2003 had high hopes for the health benefits of his product when it was first introduced, the reality of the situation is that the product was released with very little product study and scientific observation. Very little is currently known about the e cigarette in terms of effects on the human body and whether it mimics the after effects of long term cigarette smoking as well. Although there is existi ng information regarding the effects of tobacco and nicotine absorption and inhalation by people, there is very little to no information available pertaining to the effects of nicotine in liquid form. What would happen if the nicotine vial in the e cigarette were to come into direct contact with the skin? Are there any health hazards related to the prolong use of propylene glycol? These are some of the reasons that the American Food and Drug

Children and the Internet Essay Example | Topics and Well Written Essays - 2250 words

Children and the Internet - Essay Example The aim of this paper is to explore the reasons why parents should monitor the time their children spend on the internet, and show the serious dangers that children come across when their internet time is not being supervised. It is very strange that some parents, who are normally very protective of their children, supervise their behavior in public spaces and warn them against the dangers of the strangers with candy; are not aware that internet is also a public sphere full with dangerous people. The biggest danger of the internet is that it is a virtual space. Hence, when parents think that their children are safe at home in the privacy their rooms, they are neither safe nor private if they have an unsupervised internet connection in their rooms. Thus, the internet creates an illusion of safety and privacy, while the children engage in various activities in the social networking sites. While some parents, whose children are probably better at using technology, are unaware the danger s of the internet; some people, including the educators, know its dangers but still advocate unmonitored internet usage in the name of â€Å"teen privacy†. ... Hence, monitoring internet activities of the children has nothing to do with their privacy, since they engage in social activities on the internet. Frances Jacobson Harris is one of the people, who underestimate the threats of the internet posed to the children. In her article â€Å"Teens and Privacy: Myths and Realities†, she called the parental concern with regard to the dangers of the internet as â€Å"technopanic†. Indeed, she seems very naive in a sense that she resorts to the testimonies of her students as evidence of her rather weak arguments. She simply believes that children would automatically block the sexual predators and she supports her naive â€Å"belief† with her students’ responses like this: â€Å"This guy wouldn't give up asking to meet me in real life (through a game site) so I blocked him.† And this is â€Å"end of story† for her (76). However, students’ responses to the casual questions of their teacher are far fr om being credible sources for an article; thus, her argument is not convincing. Plus, her students’ responses would not change the fact that many children still fell victim to the sexual predators. Indeed, Prevent Child Abuse Kentucky warns families and asks them not to be naive and think â€Å"my child knows better† (3). In â€Å"Internet Safety Toolkit†, they point out the fact that â€Å"predators are skilled at using manipulation. They portray themselves to be a friend, boyfriend, girlfriend, mentor or confidant to a child and even sometimes to the child’s parents or caregivers as well. They sometimes make themselves out to be helpful, interested and wanting to improve the life of their potential victim in some way† (3). Hence, children may not automatically block the masters of sexual manipulation as Harris

Equilibrium Essay Example | Topics and Well Written Essays - 250 words

Equilibrium - Essay Example r cover all its costs; it may only need to cover the total variable costs incurred thus the rising cost of milking equipment will not have any effect on the firms in the industry in the short run. Consequently, with marginal revenue being equal to marginal cost, super-normal profits will be realized. In the long run, due to freedom of entry and exit from the industry, the surplus profits inform of the supernormal profits realized by the firms in the industry will attract new firms into the industry thus increasing the supply of the product (Chiappori and Ekeland 2006). Increase in supply results to fall prices as explained by the law of supply. The fall in prices results to the individual firms facing a falling perfectly elastic demand curve consequently resulting to a reduction of the surplus profits. This will continue to the point where the firms will no longer be making surplus profits, realized when the firm is just covering its production costs as a result of the increase in the cost of milking equipments. During this time, no more firms will be attracted to the industry when the price is equal to the average cost while the demand curve is a tangent to the average cost curve at the minimum point, a point when the firm is making normal

A movie of social relevance - Sigwa Essay Example for Free

A movie of social relevance Sigwa Essay Sigwa began with Dolly (Dawn Zulueta, Megan Young) returning to the Philippines to look for her long lost daughter. She was a Filipino-American journalist sent to the Philippines in the 1970’s to write about the rising social unrest at that time. But later, she found herself being recruited to the revolutionary and underground youth group Kabataang Makabayan. While looking for her daughter, Dolly is also reunited with her fellow comrades, almost 40 years since they last saw each other. They were Rading (Jaime Pebanco, Jay Aquitania) an urban poor out-of-school-youth activist, Oliver (Tirso Cruz III, Marvin Agustin) an arrested student activist who later became a presidential spokesman, Azon (Gina Alajar, Lovi Poe) who grew frail and weak caused by the trauma of the rape when she was arrested, and Cita (Zsa Zsa Padilla, Pauleen Luna), once a student activist now a leader of the New People’s Army. Sigwa was simply amazing. The cast was great as well as their portrayal of their roles. It seemed so real. After watching Sigwa, I have realized that the movie provided more than just a retrospect of Philippine history. It also brought me back to the First Quarter Storm of the year 1970, where I have witnessed Martial Law through the lives led by six young activists. It is more than just a commemorative film: it had relived the tempest of our country’s history and allowed us to reflect about its significance in the present. Sigwa gave us only a glimpse of how the Filipinos in the past have struggled to attain democracy, to relive the history of the Filipinos struggle against Martial Law, and to show our continuing aspiration for democracy, peace and justice. And yet through the movie, I had reflected from the country’s history how we continuously try to reach total democracy today; that the recurring problems about democracy that we are facing today are also the same in the past; watching the movie enlightened me more about the Martial Law and the events that took place during the First Quarter Storm.

Comparison Between Sap And Oracle Information Technology Essay

Comparison Between Sap And Oracle Information Technology Essay In this report we have to discuss about the two ERP packages named SAP and Oracle. We are making this report as we have to purchase and implement an ERP system into our organization. As we have to choose and use any one of these two in our organization. So first we will discuss about what an ERP system is, what its components are and why it is so much of importance now days. Then we will discuss about the two most dominant ERP vendors SAP and Oracle and differentiate between them on the basis of some points like cost, which one is better to use, functions, applications, technology platforms etc and finally we will give conclusion about the comparison done and evaluate that which one is better and which one is to be implemented in the organization. Introduction Of The Report- Enterprise resource planning (ERP) what does this mean, in a short and simple way and by the name we can define it as planning done in an enterprise to manage the resources. ERP is a part of Enterprise management system (EMS). EMS is defined as a system which manages an enterprise by the use of various resources available to run a business. It has various components and ERP is one of the components. In EMS, ERP system plays an important role as the major decisions are taken through it. ERP system deals with the planning and use of resources in the business. The resources are finance, material, manufacturing, capacity and human resources. The ERP provides, the methodology of accessing the resources need for a given business plan to achieve certain business objectives. It also helps to execute the plans, decisions and actions in the time bound manner. The ERP provides a support system in transaction process, updating and reporting various functions. The ERP is the main interface of the organization. The implementation of most of the ERP packages begins with the definition of enterprise structure, authorities, functions, business process and business plans. The ERP solutions are available in unique platform and also in windows NT. The typical ERP package consists of the following modules- (Wailgum, 2011) Sales, marketing and distribution. Manufacturing. Inventory management. Personnel management. Finance management. Purchase. Planning. Control. There are six system which together act as the support systems to the ERP, they are- Communication management system (CMS). Security management system (SMS). Electronic data interchange (EDI). CAD, CAM, CAE. Attendance management system (AMS). Document management system (DMS). Comparison Between SAP and Oracle As already discussed above that currently SAP and Oracle are the two most dominant ERP vendors in the market, so to select any one of them we have to do a detailed study about each of them and compare the two on the basis of some characteristics and finally evaluate that which one is best suited for our organization and implemented in it. We will analyze each of the products on the basis of business functions, technology platforms, cost, and ease of use. General functions and applicability- SAP is doing its business longer than oracle as SAP was started long before and oracle is new in the market in comparison to SAP. In my view, erect industry-specific functionality is where the rubber hits the path as the hope of enterprise applications unfolds. The ability of an ERP package is to know and take the services of the individuals and to build them according to their requirement into an application which is essentially customized according to the customer, for the individual business in the organization of that individual. This states that although a strong service infrastructure is needed, the vendors also need a large range of services with them to accumulate the further the merrier. SAP takes advantage here as it has skill in 28 verticals and has the software functionality to prove. To make available all the functions as usable for future is one of the task of SAP and if it is done than it will built more customers and can have a bright future. On the other side oracle provides functions that are deep vertical and have a partnering strategy, but this functionality is far behind the SAP functionality. So now oracle is trying to fill the blanks by having more partner products but still it is known that what the products will do and what are their applications we can say that SAP is at the advantage of the two. (SAP vs Oracle) Technology- Oracles applications are flexible and also configuration is possible, therefore its technology mound for its applications. Although the best of the solutions were there in the market but still oracle was able to embrace in the middleware market early on as company had strong middleware products. Also the oracle organization was working to simplify and to open its application architecture. Oracle provided a product which was easy to install and maintain for the customer which was its benefit. Also oracle is creating a unified data model. On the other hand SAP has five different data models for the customers to work on. If any organization wants a single source with SAP then it has to build a data ware house. But oracle makes data warehouse optional for its customers which result in faster access to information. Cost- Total cost of ownership (TCO) comprises of technology, extensibility and implementation and ROI. Now the question is which is better, SAP or Oracle? As Oracles applications are extensible and flexible it lightens the want for customization. Due to customization deployments which are coming faster, and also due to lower consulting costs of the internal resources the business operations are becoming quicker. The effect of all these attributes results in a lower cost of ownership which everyone wants. As all these attributes are present in the Oracle technology so its cost is lower than SAP and not only the cost is lower but the average three year total cost of ownership of Oracle is 48% less than SAPs, which is a huge difference in the cost of the two. Ease of use- As we know that the ERP system cant satisfy all the customers, but due to flexibility of the applications of oracle it has attracted many customers and organizations towards it. Oracle also rises and has benefit in several areas like extensibility- web applications, workflow and reporting. The web applications of Oracle are so flexible that the companys IT department can personalize the web application. For an example a web application named iProcurement can be used in such a way that someone logging from any part may get the proper information which is suitable for them. One more example of Oracles web application is iExpense. With the help of this application many organization used it to modernize their business processes related to employee expenditure and reimbursements. Also iExpense is an application which is simpler and easier to work than any SAP application. Evaluation and Conclusion- Here we will discuss that which is the better product of the two, some thinks that SAP is better but on the other hand many support Oracle. Both SAP and Oracle have some positive as well as negative points, so by evaluating the two we will finally conclude our report on the basis of some points- Which vendor to select- According to me Oracle is better than SAP, so one should select Oracle for the organization, as by studying the comparison above we can easily evaluate that oracle out beats SAP in all most all the fields. We discussed many characteristic of the two and finally we can say that Oracle is the better of the two and we should select Oracle to implement in our organization. Why to select Oracle, on what basis- Now as we have concluded that Oracle is better than SAP, so how we reached to this conclusion, what were the reasons. Some of the reasons are that Oracle applications are easy to use and can be deployed successfully in short time frame. As discussed many times its application are highly flexible and configurable. SAP basically is an closed circuit and it is too massive to handle, on the other hand Oracle solution are user friendly and also programmer friendly and also it is open and offers all the interfaces to many application, so it is at benefit in comparison with SAP. Also one of the main reasons is that the total cost of ownership (TCO) of Oracle is less than SAP and also working on Oracle applications is easier than working on SAP applications. The positive point for Oracle is that its implementation has taken less time and also at a lower cost. Oracle was established in 2004 and since 2004 it has occupied over 30 other companies as a part of its strategy. Also when customer re view was taken then also the result was positive for Oracle and customer were satisfied with Oracle then SAP. Also the profit during the past year has increased 33% for SAP which is far less than Oracle which is 47%. So we have seen both and finally we can say that Oracle have a better offering for its customer. (SAP vs. Oracle applications, 2011) Does size or domain influence the decision- No, according to me these factors are not of much importance that they will influence the decision to select the ERP package. Whether it is a small or large organization or it may be manufacturing industry or a service industry their working and aim is almost same. Everyone wants to have more profit, attract more customers, reduce its cost, want to satisfy the customer, and want to have easier work. These are the basic objectives of any firm or organization only they may differ in some extent but not much difference exists between them. SAP and Oracle applications are made in such a way that they are suitable for almost all the industries so size and domain doesnt matter in selecting the ERP package only the concern is taken on quality, cost, ease of use etc. We should choose a full ERP installation or we should pursue customizations from the vendor- According to it, if one has to select an ERP package one should opt for customization from the vendors rather than installation of the full ERP package. The reason for this is that if we go for a full ERP installation then we have to accept what that ERP package gives and offers us. It may have many things which we dont want or it might miss something which is required by us. Also we have to use it according to its manufacturer as he has designed it according to him and keeping the entire set of customers in mind. As the package is not made for an individual but for all the customers who can buy it so it will have the features and applications according to the common use of people and not according to the specific use. But if we opt for customization from the vendors, than we have lots of benefit. As it is made according to the individuals choice, so one can make changes in it. He can add and delete application according to his use. It is made according to his specification and accor ding to the need of the organization. Also its working is set according to what an organization want. So we can easily analyze hare that which one is better and we can say that customization from vendors is better than full ERP installation and the reasons for this we have already given above.