Breathing Rate

Breathing into a wrapping tube that’s quite long will most likely have the same effect as when breathing through a paper bag, a practice most commonly associated with trying to relieve hyperventilation. Although the wrapping tube is open at the other end and will not totally hamper breathing, it seems long enough to contain the carbon dioxide that the child exhales so that when the child inhales again he will probably breathe in a considerable portion of the carbon dioxide that he breathed out earlier. Naturally, this would lead to an increased amount of this gas in the lungs and in the blood.Although what our body utilizes in the production of energy is oxygen, it is the carbon dioxide levels which the brain monitors, so that when it falls below or rises above its normal level, the brain sends signals to the body to regulate breathing correspondingly. This is irregardless of the oxygen levels, i. e. the amount of oxygen in the blood might stay at normal levels but if the amou nt of carbon dioxide fluctuates, the body will alter the breathing or respiration rate accordingly (Science Museum of Minnesota).As the child breathes repeatedly into the wrapping tube, an increase in carbon dioxide levels in the blood will tell his brain that his body needs to take in more oxygen so that the normal carbon dioxide-oxygen balance is restored. This will therefore lead to an increase in the respiration rate so that more oxygen can be taken in. However, if the child goes on breathing through the tube, then he will continuously inhale air which has more carbon dioxide and he will be at risk for more serious physiological effects (e. g. headaches, dizziness) as the carbon dioxide levels in his blood continues to rise (Smith).This is the reason why there are arguments against the use of the â€Å"paper bag technique† to alleviate hyperventilation. For mild cases, breathing into a paper bag may help counter hyperventilation since doing so will increase the carbon dio xide levels just enough to induce the appropriate breathing rate that will restore the carbon dioxide-oxygen balance in the body. However, it is not advisable to breathe continuously into a paper bag (Youngerman-Cole) since, as with the case of prolonged breathing into a wrapping tube, the inhaled carbon dioxide levels may reach levels that are high enough to cause serious physiological effects.Works Cited: Science Museum of Minnesota. Habits of the Heart : Ins and Outs of Respiration. 2000. 5 Mar. 2008 . Smith, Garry K. Nucleo De Espeleologia De Condeixa: CARBON DIOXIDE, CAVES and YOU. 1997. 5 Mar. 2008 . Youngerman-Cole, Sydney . CIGNA : Hyperventilation. 21 Nov. 2006. 6 Mar. 2008 .

Power Politics Essay

â€Å"†¦what is happening to India today is not a problem†¦the issues †¦are not canses. They are huge political and social upheaval that are convulsing the nation. †   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Those are the exact words that Roy (24) had used to describe what is happening to the world that is beyond the realm of common human understanding: globalization led on and operated by â€Å"experts†.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   And just how will a common human understand when every time they try to, at the end of the day, they are relegated to being â€Å"just a citizen† who are, to experts, are â€Å"too emotional† and just lack the ability to eventually understand when explained to (if the experts even try to do the explaining part).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   It is the phenomenon characterized by experts who have acquired technical knowledge on certain matters take the matter into their own hands—not wanting to be questioned or contradicted and seemingly not encouraged to do their tasks with sympathy. They believe that they have all it takes to do it all, and be all, for all. The usual behavior of an arrogant little child who thinks he knows all he needs to know and thus scoffs at any questioning remarks on how he does his tasks, sneers at any suggestion or idea unlike his own, or flares up at any tap on his shoulder that gently reminds him that he is not of possession of every knowledge yet; a kind of behavior that is often times not tolerated.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   And that is what needed to be done. This arrogance should be broken down. And this could not be accomplished by mere taps on the shoulder anymore. A sterner reminder is needed; a reminder that even the too emotional and comprehension-challenged common citizen still has a say on how he lives his life—or at the very least, has the natural right to be made to understand.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Therefore, the author urges the humanity to speak, and speak loud, now or forever be made to hold their peace. Works Cited Roy, Arundhati. Power Politics (year of publication). 24-33.

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

Memorandum - Essay Example Concretes are supposed to be attached to the steel. The concretes are made of Portland cement and sand (Proulx 189). The two materials are used because of their ability to set quickly even when under water. When combined, the materials become waterproof, a desirable and required nature of most materials used for constructing bridges. The concretes are placed on top of the steel 10-20 m above the water surface. This is because steel is a strong metal and easily withstands the weight of the concrete above it. The height is meant to prevent excess water from reaching the bridge when there is high rainfall leading to excess water in the river. The concretes and slabs are arranged in a way that leaves some spaces in between them to allow for expansion and contraction when their temperatures arise and drop respectively. The same applies to the steel; they are fit to each other leaving some space for contraction to avoid possible breakages due to expansion and contraction forces (steel girds) (Proulx 186). The width of the bridge was made large to ensure a large and easy pass-way for large vehicles. The structure was left to dry first before drivers are allowed to drive through

COMPETITIVE DIALOGUE AND THE NEGOTIATED PROCEDURES Essay

COMPETITIVE DIALOGUE AND THE NEGOTIATED PROCEDURES - Essay Example Such goods may include some IT application gadgets as well as some security and military equipments. In the latter category, the procurer customizes and specifies the characteristics required and the manufacturer produces the goods in the customized traits. This provision entitles the procurer to identifying probable suppliers, who with the specifications of the procurer, manufactures and supplies the required products. This has led to devising of the tendering mechanisms such as the competitive tendering and the negotiated procedures of procurement by both the private as well as the public domain besides the open and the closed tendering procedures. The competitive dialogue involves customized discussions that involves many bidders and, applied in complex procurement procedures. The competitive dialogue method is characterized of two basic stages where the contracting authority starts by advertising the opportunities. Interested participants apply and gives the information through w hich the contracting authority to determine the competitiveness of the applicants for the contracts and thus few of the qualified applicants are shortlisted for the second phase which is the actual competitive dialogue. The dialogue entails thorough discussions with the shortlisted participants and the contracting authority stops to engage when it is assured of proposals that will meet her requirements. After the dialogue, the authority then invites tenders for the contract and the evaluation of the tenders stick to the formula of most economically advantageous. On the other hand, negotiated procedures involve the negotiation of procurement by procurer (contracting authority) and the potential bidders where the most cost effective bidders get the contract award1. The competitive dialogue pass through the two stages as with the prior procedure with the difference notable in that within the negotiated procedures the contracting authority requires proposals from the shortlisted partici pants before engaging in negotiations. In the analysis of procurement through competitive dialogue as well as the negotiation procedures, the most outstanding thing is that both the procurer and the supplier has information that the other has not and is important for the tendering process to be efficient as well as successful. The success of the negotiated as well as the competitive dialogue procurement procedures rest on the ability for the parties involved to use the information at hand convincingly to win the contract award. The two procedures therefore run hand in hand and are thus reviewed together. In the event that competitive dialogue becomes strenuous, then procurer would source for a probable supplier within the market and thus negotiate the procurement procedures. Competitive Dialogue According to the directive 2004-18-ec, the member states have the provision of choosing what kind of contracting that the authorities would be permitted to use either through central purchas ing bodies, auctions by electronic means, dynamic purchasing systems as well as through competitive dialogue procedure2. Competitive dialogue is a mechanism or a procedure through which institutions achieve bidding mechanisms for the purpose of procurement by discussions. It is a provision through which all economic operators are allowed to request to participate in the competitive dialogue leading to assignment of a contract. A newly devised procedure, Competitive dialogue is most applied in public procurement and bidding practices. It was designed to be used in contract procedures, which the open or closed procurement proce

Sustainable Drainage Systems and Piles Essay Example | Topics and Well Written Essays - 2000 words

Sustainable Drainage Systems and Piles - Essay Example Firstly it would be Infiltration trenches and the second will be Detention Basins. Infiltration trenches This is a system in which a trench is made and filled with artificial layers of granular material/aggregates which are clean and dry and then this is used in combination with geotextile. These granular materials have voids which are used to trap water and retain it for some time. Where as geotextile material prevents from clogging and durability. The Granular material should be 50 mm clear stones. Then the materials are layered in the manner shown below. There are some conditions for its construction. Almost of the trench is underground and hence its maintenance will be expensive. The trenches are constructed at least 1.5m above the maximum groundwater level and it should be at least 5 m away from the foundations or buildings lines. It is used in areas where the silt/clay content is not more than 40 %.It is made in areas with type A and Type B soils. It should not be constructed n ear septic tanks or water supply line and the areas near it should have good house keeping, if it is not done it will result into choking of the voids that retains waters. Then to improve the life and decrease the maintenance of the trenches it should be provided with Leaf screens, Vegetated filter strips or grass swales and similar devices such as grit separators, goss separator etc. Then these trenches are designed with an impervious drainage area to treatment facility area ratio of between 5:1 and 20:1. Therefore its is clear that the land take is very less and this option will be suitable where areas is less such as commercial areas. Where as the maintenance of the trenches are done by cleaning out leaves, debris and accumulated sediment caught in pretreatment devices, inlets and outlets annually or as needed. If this is not done on regular basis then the trenches will choke and then a complete overhaul needs to be done which is costly. Normally the trenches’ material is replaced in 5 years. Although the cost of construction is low but the maintenance cost is high and needs to be repeated. Then in this type of system when the water passes through the layers of the trenches the solid particles are filtered and the geotextile improves the process. Eventually the quality of the water is improved but the water does not provide microbiological purification. Concluding the merit of the system are that they require less space, the improve water quality, have less construction cost, reduce the runoff during rainy season and reduce the erosion that might occur by heavy rainfall and its runoff. Where as the demerits are that the maintenance of the system is high and repetitive, the system doesnot purify biologically. It cannot be made in areas where underground services are present. These systems are not used in high slope areas. It is ineffective in areas where soil is contaminated and polluted. It looks the worst when the system is choked as the water stays and do not drain. Detention Basins As the name indicates this system impound water in an excavated area or basin. Primarily this is used in areas where there is heavy rainfall and frequent flooding. These basins are used in reducing peak storm water discharges, controlling floods and preventing downstream channel scouring. There are two type of detention basins dry detention basin (storage is for specified short time) and the other is extended detention basin (used for retention for

Prerogative Powers in The Context of The UK Constitution Essay

Prerogative Powers in The Context of The UK Constitution - Essay Example The British constitution (comprising of a set of guiding principles and laws) is derived from a large number of sources that include: Royal prerogative powers Conventions Statute EU Treaties Common law Authoritative statements made in print, as in law books. Royal prerogative laws existed prior to the current form of the UK parliament. Officially, the right to exercise prerogative laws are retained by the Queen. However, in actual practice Ministers of the Crown, which comprise of the British Cabinet, exercise majority of these laws. The powers, as vested by the royal prerogative laws, are termed as Royal prerogative powers. On the other hand, statutes are laws that are passed by the UK Parliament; hence, they refer to laws  that are considered as the highest form of law for all governmental activities. This essay briefly examines differences that exist between Royal prerogative powers and statutory powers, while analysing and deriving that prerogative powers in their current form are not compatible as regards executive accountability, and needs modification to ensure better governance. Discussion Prerogative powers and statutory powers: The  royal prerogative  is a set of established privileges, immunities and authority, acknowledged in the  UK  as the sole right of the Sovereign. A majority of the  executive  powers, vested in the queen and exercised by the UK cabinet, have been accorded under the royal prerogative laws. Historically during middle ages in the UK, the king used royal prerogative powers to enforce his will during the process of decision-making, which purportedly aimed at public good. However, from 19th century, various reforms took place and by convention, it became compulsory to take into account the  advice given by Ministers of the Crown or the Prime Minister, who in turn are accountable to the UK Parliament for their decision while exercising prerogative powers.2 Under the constitution, the queen retains his or her powers to exercise Royal Prerogative laws against the advice of the UK Cabinet or the Prime Minister, however in actual practice the queen can only act as such during emergencies or where there are no precedent cases that can be applied suitably to that specific situation. Currently, the royal prerogative laws encompass various areas that are significant and critical to the United Kingdom, including country’s security, defence, and foreign affairs. While the queen’s name is officially present in all the aforementioned areas, in reality she exercises very little power, because currently royal prerogative power is vested mainly in the hands of the Cabinet ministers and the prime minister. While delineating prerogative powers, there have been difficulties in giving it a clear definition. As the Select Committee on Public Administration  Fourth Report  framed it in their review, â€Å"The royal prerogative itself is a notoriously difficult concept to define adequately.

Animal Testing Essay Example | Topics and Well Written Essays - 250 words

Animal Testing - Essay Example Animal testing has also contributed to understanding how to treat malaria, Leukemia, and other major diseases that eliminated a very high number of human populations in the past. The animal is the best research subjects because they share similar characteristics with human beings. For instance, Chimpanzees has 99% DNA similarity with humans (Hayhurst, 2000). In addition, mice are almost genetically similar to human beings. Due to these similarities, they are susceptible to the same diseases that affect human beings. There are very many ethical considerations that might be observed when using human subjects. This is mainly when testing medicines that are of high toxin levels. In such cases, the lives of human beings should not be put in any form of danger (Watson, 2009). Therefore, the test of human beings should be preceded by that of human beings.Animals have also benefited immensely in the testing. Many deadly diseases such as rabies, tetanus, anthrax, etc could not have been contr olled if animal testing was not conducted. Moreover, more animals could have been swept off by the diseases and become extinct. As a result, the testing has major benefits on animal species (Watson, 2009). Animals used for testing have a shorter lifespan than human beings. For instance, a mouse has a lifespan of two to three years (Hayhurst, 2000). Therefore, while testing a medicine that affects a whole lifespan of a human being, it’s easier to get quick results when using animals rather than human beings.

The Phenomenal Growth of IKEA Essay Example | Topics and Well Written Essays - 6750 words

The Phenomenal Growth of IKEA - Essay Example IKEA sales have topped $17.9 billion in the same year through international furniture chain of 226 stores in Europe, Africa, Asia, and the US. Despite its popularity and uniqueness IKEA has a low penetration in its markets and commands only a 10% share in the markets that it operates in. It has also been facing management problems as well as some consumer dissatisfaction issues arising out of employee indifference. â€Å"Strategic management is an ongoing process that assesses the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors, and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needed replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.† (Lamb, 1984:ix)1 New Management Strategies need to be adapted to meet these challenges in order to convert opportunities into profitable business. In order to make these assessments, the following analytical modes will assist in formulating guidelines for the management. There are several issues that demonstrate that IKEA, despite its phenomenal growth, has failed to lay down any policy for strategically communicating with the market in general and its clients in particular. A. The ownership of has remained in one hand and this has denied the management of infusing alternative views other than that of the owner. Although the owner’s views and beliefs are laudable, yet they offer only broad directions on ethical values to its employees. They do not lay down policies and it does not get translated into measurable action.

Strategic management Essay Example | Topics and Well Written Essays - 1250 words

Strategic management - Essay Example By using the SWOT analysis (Yelken, et al., 2012, p.267) that was carried out by the Global Data company over the company, we are able to understand the company’s strengths, opportunities, weaknesses as well as threats. The analysis reveals its strengths as extensive operating network and branding offerings. The company however has the major pull back to her operations being the enormous losses it has continuously suffered though it has opportunities to expand in her operations and increase the market share. Moreover, it has other threats, which include high competitive pressures as well as over-stringent regulations. However, there is the need to evaluate the strategic plans that the company has in place in regulating and propelling its operations (Global Data company, 2013, para 1). The company has a well-written strategy concerning the way of developing and exploiting a further competitive front within its pub as well as brewing sector. This strategic vision is based on the already existing positions in the market, its employee’s capabilities as well as skills together with its traditionally designed model of business, which is vertically integrated. Moreover, the company has a business target drive to continuously outperform other players within the market in the different segments of her operations. The company has a well established investment program, which champions its way in selecting business sites, and thus developing newer restaurants. The company claims to undertake thorough analysis before establishing new pub buildings which are modern and appropriate in terms of trading and which offer the customers convenience and value for the services. The company establishes fair, long-lasting and transparent kind of agreements with its licensees which rent their leased and tenanted pubs. It also enjoys long life expertise and experience in operating leases premises. Moreover, this company offers provisions for long-term lease agreements to th e licensees and offers pricing mechanisms on free trade as well as free-of-tie options. In order to underpin the operational development within her managed facilities, Marston company operates under a plan called the ‘F-plan’, which refers to food, females, forty/fifty some things and families. The plan was developed and adopted back in 2006, and was meant to have long-term effects. The company also enjoys designing differentiated brew brands purely designed to increase the consumers demand as well as providing greater range of choices to consumers. The company has exploited the niche in the country through well-organized distribution of her products across the entire country from the running five breweries. In financial terms, the company has huge debts, which comprises 90% long-term debts which are secured through its wide distribution of free hold assets in terms of pubs and which fetches low interest rates. However, the current strategy and target is to reduce the n et debt by a ratio stipulated by EBITDA to see off at least a five times reduction capacity is realized within three years. This is postulated to be aided by raising return to capital across the entire group’s operations (Marston’s, nd, para 1-5) Strategic management refers to the analysis of major initiatives and programs undertaken by the management of a company on behalf of the entrepreneurs revolving the effective use of resources as well as general performance

Nissan Corp Swot Essay Example for Free

Nissan Corp Swot Essay Global interdependence: possible new marketsGovernment regulations: abroad in other countries as well as US and the US; global warming, CAFE standards, safety issues Growth of existing market: widen market New entrants: threat of potential inclusive of generation X,Y and baby boomersnew competitors Strong economy: economy not faltering;Changing market tastes: need for consumers still buyingcontinuous innovation to appeal to ifferent segments Nissan’s reputation: leads the industryShortage of resources: workforce in reliability, performance, and design dissatisfaction, hiring good talent Emerging technologies: innovative through the development of technologies for improving fuel economy and reducing fuel emissions Introduction This Case Paper will examine accessible information about Nissan Corporation and determine its position in the world market through a business SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). Through this analysis, we hope to see where the Nissan has been and make suggestions as to where the corporation should go to improve their bottom line, increase market share, and plan for future products to ensure their viability in the world automobile marketplace. Market Analysis Nissan’s focus in establishing a multi-cultural company begins with regaining global market share. The company has learned from past mistakes and is determined to succeed, developing a common vision and a global ompany culture that will need to be a main driver for continued strength (Associated Press, pgs. 1-8). For instance, establishing a brand name and personality that is sensitive to nationalistic cultures. Strategic alliances and joint ventures are growing in importance in the automobile industry and Nissan is no stranger to the competition. Nissan’s mission statement delivered by Mr. Ghosn in the Automotive News World Congress in 2001, is evidenced in how the company exploits synergie s to create positive alliances with other manufacturers (Ibid). For example, Nissan’s announcement to venture with Ashok Leyland to build small trucks and other light commercial vehicles in India gives them an opportunity to enter a market that in recent years has been dominated by its competitors, Toyota and Honda. This venture will produce at least 100,000 vehicles annually for sale in India and for export, as it will facilitate the construction of a plant near the southern Indian city of Chennai to manufacture and export compact cars to Europe. The deal with Ashok Leyland will broaden Nissan coverage in the Indian market in addition to providing new LCV (lightweight commercial vehicle) products for emerging markets which will sell for around $3,000. 00. Ashok Leyland’s strengths in large and mid-sized trucks combined with Nissan’s strength in smaller vehicles creates a positive synergy (Ibid). According to Mr. Ghosn, partnering globally is an opportunity and the Chinese market is no exception. China is Nissan’s third largest single market, after North America and Japan. Vehicle production has grown over the past ten years. However, the major source of growth has been the production of passenger cars (The Business Review, pg. 7). Passenger car production has doubled in the past ten years. This shift is in response to a change in market conditions and in a desire for Chinese manufacturers to enter the global auto passenger car market. Consumer demand is also increasing and in order to satisfy this demand, auto production has been increasing. The demand for autos is expected to continue (Ibid). According to the Wall Street Journal, the car craze in China has just begun. There are two factors that create possible opportunities for Nissan: 1) the country has the world’s largest population and as incomes rise, so will the hopes of buying an auto some day. 2) the market may grow to 8 million vehicle sales annually by 2010. Nissan’s new line of cars in China will be designed and engineered in Japan, based on a common â€Å"B† platform shared with Renault that centers on smaller engines. Annual sales of the entire family of cars are expected to reach 200,000 units globally and will be launched in other markets over the next couple of years (Financial Times, pg. ). However, the threat of inadequate roads and the government’s changes in regulating how autos are purchased will make the costs unpredictable. On a financial scale, the banks are under pressure to control credit, so auto loans may not be easy to acquire. North America accounts for nearly 40% of Nissan’s global sales, and in each of the past years sales have exce eded those in Japan, with the gap widening each year. Nissan is spending several billion dollars on new models, and the U. S. assembly plant in Canton, MS is aimed at maintaining momentum (Ward’s Auto World, pg. 1). The most significant automotive development in North America is continuing growth in the luxury segment and the increasing popularity of cross/utility vehicles. Nissan is on track to rebuild its image and regain brand value. In the past, customer satisfaction was good, but the model lineup was limited. Now, with the Q45, M45, G35 sedan and coupe and the FX models, the market has begun to recognize that Infiniti provides a range of real luxury models (Ibid). According to Bloomberg, Honda Motor Co. and Nissan Motor Co. led Asian automakers’ U. S. sales gains in September as Toyota Motor Corp. posted a third straight decline. Accord helped boost sales by 9. 4 percent. Toyota’s 4. 4 percent drop marked the first time since 1995 that Japan’s largest automaker logged three consecutive months of lower U. S. sales. Sales of the five year-old Corolla model, Toyota’s second-most popular in the U. S. , dropped 8. 5 percent and demand for the company’s light trucks declined amid rising gasoline prices. Industrywide U. S. sales fell for a fourth consecutive month, by 2. 9 percent to 1. 31 million light vehicles (Bloomberg. com, pgs. 1-3). Toyota’s old models like the Corolla are dragging down while Honda and Nissan have brand-new models. Nissan reported a 6. 7 percent increase in sales (Ibid). Nissan, sixth in the U. S. , sold 94,269 vehicles, helped by higher demand for midsize Altima and Versa compact cars. Nissan’s market share edged up 0. 7 percentage point to 7. 2 percent. The Japanese are becoming more aggressive in terms of incentives and pricing, which makes them more competitive against South Korea’s largest automaker. The company faces tough competition from Japanese and Korean auto makers like Toyota, Honda and Mitsubishi, which are rapidly gaining ground in the European markets. Asian manufacturers are continuing to fortify their position in the crucial North American and European market. It can also expect stiff competition from Toyota and BMW (Ibid). Nissan believes that growing the business means introducing new products and has created the Nissan Revival Plan to realign their cost structure. Significant amounts of money are funneled back into product development, mostly going towards the North American market. This means there are opportunities for new innovations that will bring the company in line with a mix of vehicles that are currently on the road. Its RD costs in FY 2006/2007 stood at JFY 464,839 million, an increase of 3. 9% when compared to JFY 447,582 million in FY 2005/2006. The company increased its investment on RD activities to launch a host of new products throughout the year (Ibid). In 2007, Nissan launched a new version of its minicar, namely, Pino E, which is a 2WD model and equipped with a three-speed automotive transmission. It is claimed to offer a fuel economy of 21. 0 km/1. Furthermore, the model is considered safe and environmentally friendly, as it features anti-lock braking system (ABS), brake assist (BA) and electronic braking force distribution (EBD) systems. It is low emitting, complying with the 2005 emissions regulations in Japan. In March 2007, the company also developed a new engine technology that helps balance between responsiveness and fuel efficiency, high power and low emissions (Ibid). Today, Nissan stands behind its offerings; that fundamentals of the business are strong, products are attractive to customers, and the company is poised for sustained, profitable growth. Environmental Concerns In researching the issues of automakers in regards to the environment, many nations as stated in The Wall Street Journal, are concerned about climate change and energy security. One of the most important issues all automakers are faced with on a global scale is the reduction of emissions, more specifically carbon dioxide or CO2. Concerns for the future in the minds of the majority are setting new goals for automakers of vehicles with internal combustion engines to become more efficient if they are to remain profitable or even in existence, which is further backed by a global treaty known as the Kyoto protocol (Wall Street Journal). In the protocol’s drafting of new rules they are intended to cap emissions of CO2, the gas widely blamed for global warming can potentially pose a major threat. According to scientists, it is reported that the rise in the earth’s average atmospheric temperature is largely due to this major contributor CO2 which will bring changes to the global environment, and therefore affect our daily lives (Ibid). According to the Wall Street Journal, a debate is raging in the US over how much time automakers actually need to boost fuel economy, and whether setting stringent targets will compromise safety by encouraging car makers to use lighter materials. Additionally, the US has not adopted the Kyota protocol and is under less pressure to reduce CO2 emissions as they are in Europe. Therefore, Nissan’s global prominence puts the auto manufacturer in an â€Å"opportunity† position by making concentrated efforts in advanced technology to reduce carbon dioxide emissions at every stage of the vehicles life cycle and their corporate activities, from manufacturing and transportation to use of Nissan’s vehicles by its consumers. Nissan, currently the third largest automaker out of Japan has opportunity to grow stronger from the threats of one and two automakers Toyota and Honda respectively, who lead the market in alternative fuel development (Wall Street Journal). According to Nissan’s Green Program, it is Nissan’s view that internal combustion engines will continue to be the main power source of vehicles globally in the years ahead. Therefore, Nissan therefore takes a stance of reducing CO2 emissions through the development and widespread adoption of advanced technologies for improving the fuel economy of gasoline engine vehicles. Currently in the works for Nissan is the development of cleaner diesel engine vehicles that run on biofuels made from plants and other reusable sources (Ibid). Nissan estimates that over half of the vehicles they sell by 2050 will need to be electrically powered if they are to reach their long term goal of reducing CO2 emissions. Nissan’s threat has been its major competitors in developing hybrid electric vehicles, fuel cell vehicles and electrical vehicles. Other companies such as Toyota are setting the bar in alternative fuel sources which makes them a profitable industry leader with the obvious threats of gas prices that change virtually on a daily basis (Ibid). Nissan History and Innovation Nissan Motors’ history dates back to the 1930s when Jidosha Seizo Co Ltd was established in 1933 in Yokohoma City, Japan. Its beginnings as a munitions company was short lived when the company was renamed to Nissan Heavy Industry Co Ltd and introduced the first Datsun, manufactured after World War II. After the company began exporting the cars to the US in 1958, it gained popularity due to its small size and high fuel efficiency. Subsequently, in 1980, Nissan Motor established Nissan Motor Manufacturing Corp. USA to strengthen its market potential in North America (ABI/INFORM Global pg. 1). Today, Nissan supplies a widespread customer base classified across regions, namely, Japan, the US, Asia, Europe and General Overseas Market, which includes Mexico and Canada. This market includes 150 dealers and 2,500 outlets worldwide (Ibid). This is the age of globalization and the worldwide interdependence of resource supplies, product markets, and business competition. Nissan has succeeded in meeting its challenges due to its focus in valuing diversity both in its workforce and through understanding customer needs. This is evident in how the company plans ahead and is always looking for new ways to improve current performance. For instance, the company learned from past mistakes; failure to recognize changing customer focus in non-growth sectors, and being competitively focused rather than market focused. Also, finding the right people and the right plan to maximize growth is key (Nissan News, pg. 8). Shiro Nakamura Nissan’s automotive designer is known as â€Å"The man behind the Nisan Look† and has developed some up-to-date, eye-catching designs that have no resemblance to the old models, and the company is optimistic that sales will increase once the current plan to launch 28 new cars during fiscal year 2008. Most of the changes are defined to the upper body and adjusted to make it more like the Altima (Business Week, pg. 1). Nissan’s innovations stem from producing a product that their customers want. Their philosophy is that investing in a product that will bring value and satisfaction to its customers will build loyalty as well as expand that market base. Nissan’s models include Maxima and Sentra cars, Altima and upscale sedans, Frontier pickups, the 350Z sports car, and Xterra and Pathfinder SUVs. In 1999 French automaker Renault took a 37% stake in Nissan, and installed president and CEO Carlos Ghosn (nicknamed â€Å"Le Cost Killer† based on his talent for turning red ink black) who has since returned the company to profitability. Renault now owns almost 45% of Nissan. According to Hoovers, Nissan fiscal year end sales in March were in millions, $80,583. 7. Net income in millions was $4,427. 8, and 1 year net income growth was 7. 0%. Their top competitors were General Motors, Honda, and Toyota (Hoovers. com, pg. -2) Generation â€Å"X† consumers can identify with the sports world, ESPN’s X Games. Games showcase the world’s most dangerous events. The â€Å"X† generation is also playing a big role in the fashion world, thus the automotive industry has been one of the leaders driving the â€Å"X† growing trend. Jaguar’s Web site prominently features a glowing X to promote the new â€Å"Jaguar X-Type: a car for a new generationâ⠂¬ . And Nissan has scored big with the model Nissan Xterra. This trend is enabling Nissan to tap into a pool of younger car buyers. The vehicle has attracted many new buyers, some of which have never purchased a Nissan before. The Xterra is aimed to attract 25 to 35 year old drivers. Marketing tactics fill viewers with scenes of athletes doing extreme outdoor exercise, and pushing their SUVs to the extreme. Polls cited that men were most affected with the advertisement than women. 13% to 9%. According to the Gallop polls, the ads scored highest among those 30 to 39 years old, which is right where the company was trying to segment. The 25 to 35 year old target market (USA Today, pg. 2-3). Baby Boomers on the other hand are most attracted to the Nissan Murano, or Nissan Bevel. Nissan’s long term vision for 2015 is that future vehicles will save lives by installing a series of sensors that can detect sobriety of a driver and can immobilize the car. Other features include detecting operational changes, such as drifting out of a lane, at which time the system navigation system alerts the driver with voice message alerts and the seat belt is tightened. Nissan is currently testing an on-board breathalyzer and road sensors to help reduce accidents. Other plans to develop an Intelligent Transport System Project and road sensors will help reduce accidents (Nissan. com, pg. 1-2) The company understands the importance of agility in a dynamic 21st century market and is continuously reinventing itself to stay ahead of the competition. Sometimes, this means taking risks. Most recently, the company made an announcement that it was moving its headquarters from California to Tennessee. The new facility will accommodate 1300 plus employees and favorable for business, not to mention contributing to the infrastructure and supporting the community with more jobs. It’s inevitable that there could be some unforeseeable threats perhaps with current labor force. Some issues could be that they are not in agreement with the transfer and choose to leave the company, thus the need for new hires. Other potential threats are the risk of new competitors in the area, and developing a new sense for the new market. The California population may not have the same tastes and likes as the Tennessee population, thus Nissan could expend additional resources to substitute products and services (Tennessean. om, pg. 1-4). A strategy for the future that Nissan could consider would be to offer a motorcycle product. Exploring and pursuing this opportunity would allow them to remain competitive and also to offer products to meet different needs. Honda, BMW, and Suzuki, all of whom offer cars, trucks, and sport utility vehicles, Nissan too should visit the idea of offering a motorcycle. Over the years Nissan has developed quality products that are dependable, hi ghly functional and desirable; this being an advantage for Nissan. Along with remaining competitive, the high price of fuel recently would make a Nissan motorcycle more appealing. The motorcycle would alleviate fuel expenses and consumption. The Nissan motorcycle would also be appealing in geographic locations such as Japan, China and major cities in the United States that do not have the space on roads for larger vehicles. Nissan plans to offer a concept vehicle that resembles a car and a motorcycle. This vehicle is called â€Å"Urge† and offers state of the art gaming systems that allow the driver to use the gas and brake pedals to play. When considering the pricing of a Nissan motorcycle and remaining competitive, Nissan should consider that Honda and Suzuki offer motorcycles at reasonably affordable prices. Suzuki offers several types of motorcycles to include cruisers, motocross, and sport bikes all at reasonable prices ranging from $6,000. 00 to under $10,000. Honda also offers cruisers, motocross, and sport bikes. Honda motorcycles range from $3,000 to $13,000. In order to lure prospective buyers into purchasing a Nissan motorcycle, Nissan should strive to offer its motorcycles at reasonable prices, similar to Suzuki and Honda. The price range for motorcycles made by BMW is slightly higher starting at $8,000 to $15,000. BMW has offered a motorcycle since 1923. Its tenure along with the fact that consumers have learned to trust the German made motorcycle are what keep BMW competitive. Offering reasonably priced and desirable styles similar to BMW, Honda and Suzuki is a great opportunity that has not been approached by Nissan. The cruiser styles offered by Honda, Suzuki and BMW resemble that of a Harley –Davidson motorcycle without the high cost. The market for Nissan motorcycles is positive with the increasing cost of fuel and the ages of future drivers. Most of the baby boomer generation have become accustomed to the quality of Nissan vehicles and would be approaching retirement age in the next few years. Nissan’s release of motorcycles would segment the soon retired baby boomers as a fun and recreational of transportation. The Nissan motorcycle would also segment the new drivers of today which in a few years will be the young generation to market to. Nissan would have to be conscious of expenses in marketing and production of the motorcycle, a product never offered and could use the business model already established by its competitors offering both motorcycles and automobiles in the industry. According to Analysts, the economy is not faltering and people are still hopeful for the future. It is a race to the finish line, and who ever gets there first wins. It will be interesting to see how automobile manufacturers will implement new strategies (Economy Today, pg. 1) Nissan Technologies –Past and Future New technologies were as important to Nissan’s past as they are to Nissan’s future. Nissan has always addressed environmental issues, including the development of clean power sources for vehicles and recycling of natural resources. Nissan has been able to release one new model after another with fuel-efficient direct-injection gasoline engines and direct-injection diesel engines since 1997. This has led to the expanding application of the Hyper CVT (continuously variable transmission) , the Extroid CVT, the Tino Hybrid and the two-seater Hypermini electric vehicle in the early part of 2000 for efficient fuel economy (Nissan global. om). Nissans history goes back to an automobile factory started by Masujiro Hashimoto in 1911 called the Kwaishinsha Co. In 1914, a box-type small passenger car was completed and in the following year the car made its debut on the market under the name of Dat Car. Another predecessor of Nissan was Jitsuyo Jidosha Co. , Ltd. , which imported m achine tools and components from the U. S. , and was one of the most modern automobile factories of its time. Kwaishinsha Co. and Jitsuyo Jidohsa Co. merged in 1926 to form Dat Jidosha Seizo Co. , and two years later to the establishment of Nissan Motor Co. Ibid). In preparation for post war capital investment in Japan, Nissan developed two state-of-the-art manufacturing facilities leading to the advancement of motorization and increased traffic accidents; and contributed to the problem of air pollution. Nissan developed its first Experimental Safety Vehicle (ESV) in 1971 and over the years created a reputation for excellence in engineering and advanced technology. Nissan has developed weight-reducing materials, engine management systems for controlling combustion, and using CAD/CAM systems and industrial robots (Ibid). Recently, Nissan has also been localizing R;D operations, which has now advanced decision-making through the regional headquarters in North America and Europe. Nissans local operations in their respective regions oversee product development, manufacturing, procurement, fund-raising and mutual complementation of parts between companies (Ibid). Nissan’s Vision Nissan is developing corporate activities centered on automobile manufacturing based on their vision of â€Å"enriching people’s lives. In order for cars, which provide mobility, to truly become reliable partners for our customers, a number of issues including global environmental issues, traffic accidents and congestion problems must be tackled as part of a long-term vision (Nissan global. com). The global automotive industry is entering an era that will change almost every facet of the car in the future to come. Nissan’s global vision includes the pursuit of environmentally sustainable technologies creatin g one of the greatest engineering competitions in history that has the potential to deliver significant benefits to humanity (Ibid). To realize our vision, Nissan is developing technologies based on a framework called the â€Å"Orchard† concept. † This concept allows Nissan to embrace technologies in a comprehensive manner (Nissan global. com). In order to create a distinct value in order for customers to choose their cars, Nissan is likening its approach to the management of a fruit orchard in which â€Å"fruit† is planted and raised. The process has three phases, one the Harvest Plan, two Seeding and Growth and three – Soil Enrichment. The Harvest Plan takes into account social needs and market demands for the commercialization of technologies and the timing of releases. Seeding and Growth will implement strategies for the realization of the Harvest Plan and to formulate development of schemes. Lastly, Soil Enrichment will create value for the long term by researching reliability improvement and analysis technologies (Ibid). Some of the proposed solutions are more efficient fuel-cells for electric cars, bio-fuels, advanced diesel fuels or combinations of these solutions. However, the most effective solutions will not be decided by engineers. It will be decided by consumer demand, which is the most powerful force for global environmental progress. Every new car buyer in every country gets a vote by exercising their right to choose, thereby dictating both the pace of future change and its direction (Ibid). Nissan’s vision is to invest massively in RD in pursuit of new technologies. This has not always been the case. Due to perilous financial decisions, in 1999 Nissan could not afford to invest in the core of its brand identity technological innovation. Today, Nissan’s RD budget is much healthier than the level of 1999 due to significantly increased efficiency of their RD activities. This has led to an environmental blueprint known as Nissan’s â€Å"Green Program 2010†. Also taking advantage of the alliance with it’s parent company, Renault, Nissan is able to focus on specific promising technologies – such as advanced lithium-ion batteries and other areas, such as clean diesels. Nissan’s vision includes the determination to be the leader in environmental progress. It is Nissan’s belief that motoring can be both green and fun allowing consumers to expect new technologies that will enhance dynamic performance (Ibid). Some of the latest technologies being embraced by Nissan are the X-Trail Fuel Cell Vehicle, Ultra-low Friction Diamond-like Carbon (DLC), the Super Motor, and the Compact Lithium-ion Battery. Nissan continues to raise the practicality of FCVs, which are being developed as the most eco-friendly vehicles. The X-Trail FCV provides increased cruising range. (Nissan global. com). The FCV also provides improved acceleration. The new model features a Nissan-developed fuel cell stack that is more efficient than the previous stack resulting in maximum power of 90 kw compared with 63 kw in the 2003 model. Ultra-low Friction Diamond-like Carbon (DLC) is Nano-technology based on ultra-low friction technology. Nissan has substantially reduced friction between engine parts by developing the first technology in the world to combine a hydrogen-free diamond-like carbon (DLC) coating with special oil. Energy is lost due to friction that arises between the hundreds of parts that comprise an engine. This ultra-low friction technology uses nanotechnology in order to reduce friction by approximately 40% compared to conventional engines. The DLC works by use of a hydrogen-free DLC coating, improves binding with the engine oil, and results in the formation of a firm ultra-low friction film when special oil additives are added. It is now possible to reduce overall engine friction by 25% (Ibid). The Super Motor and Compact Batteries Nissan has independently developed the Super Motor based on an all-new concept. One motor provides output through two shafts, enabling it to function as both a motor and a generator. This innovative technology has a wide range of potential applications (Nissan global. com). The Super Motor can dramatically reduce the size and improve the efficiency of the drive unit compared with the use of two conventional motors. Independent control of the power obtained from the two shafts. The Super Motor has rotors positioned on both the inside and outside of one stator, enabling power to be delivered through two shafts by use of a new technology to apply compound current to the Stator coils (Nissan global. com). Nissan has succeeded in independently developing a laminated lithium-ion cell that displays an exceptionally high output characteristic. This cell is the result of many years of lithium-ion battery research that began in 1992. The laminated cell is featured from the 2003 model X-TRAIL FCV (Nissan global. com). The laminated cell design and high-power electrode technology improve power output by 1. 5 times and reduce the volume by more than half compared with the conventional cylindrical cell. The thin cell construction also enables a thin module design for a substantial improvement in battery ooling efficiency. Locating the battery under the floor achieves compact and highly efficient vehicle packaging, including a low, flat floor, among other advantages. Compared with the cylindrical cell, the laminated cell has fewer components and is extremely compact and lightweight. Moreover, Nissan has succeeded in achieving higher power output through material improvements made to the lithium manganate positive electrode and the carbon negative electrode (Nissan global. com). Executive Summary Like any other automobile manufacturer, to stay competitive in today’s world markets, one must consistently innovate and stay one step ahead of the competition. In the past, automobile manufacturers have been first in presenting more fuel efficient vehicles, increased gasoline mileage rating through body redesign, and have introduced new safety features for the yearning public marketplace. Nissan current project in India is to try to regain market share from its competitors Toyota and Honda by creating Light Commercial Vehicles (LCV’s) which are small cars that can be sold for around $3,000. 00. This innovative idea can create a brand new market segment of customers who could not, up until this point, afford to purchase and operate a vehicle. Along with being fuel efficient and maintaining competitive, Nissan’s offering a motorcycle would be an added strategy to pursue. Dealing with the myriad of different cultures across the globe is also a major focus of Nissan’s Chief Operating Office Carlos Ghosn who realizes that the creation of multi-cultural company can flourish and grow through exploiting it synergies, believes that feeding off each other’s strengths, and minimizing its weaknesses are key. Automobile manufacturers like Nissan can never be â€Å"one size fits all†, but they can certainly try to understand and adapt to different cultures to maximize desired commonalities and maximize profits. These days, partnering globally cannot be realized without including China. China is Nissan’s third largest single market (only after North America and Japan). Although vehicle production has significantly increased over the last ten years, passenger car production has actually doubled in the last ten years due to market conditions and Chinese automobile manufacturers ntering the car market. China has a great position in the future manufacturing of automobiles because of increased income and an already over-inflated population. However, threats of inadequate roadways, governmental regulations on how automobiles are purchased, and pressure on Chinese banks to â€Å"control credit† may temporarily slow the process. North America has captured 40% of Nissan’s global sales and has caused an ever-widening gap with Japanese sales which has been increasing each year. Nissan has recently spent several billion dollars on new models and a new U. S. ssembly plant in Mississippi to ensure that this momentum continues. Nissan believes that growing this business means introducing new products while realigning cost structures. Large sums of money are being placed back into product development – most geared towards the North America market. Although the United States never signed onto the popular Kyoto protocol which planned to significantly reduce the amount of carbon emissions in the world, many other nations did because of the ever growing concerns of climate change on a global scale which many believe poses a worldwide threat. Nissan, however, has proactively realized this concern and has taken advantage of this opportunity by making concentrated efforts in advancing technology that reduces carbon dioxide emissions â€Å"at every stage† of the vehicle’s life cycle. Nissan is vigorously working on the creation of cleaner diesel engines that run on biofuels made from plants and other renewable sources. The threat to Nissan has been its competitors who are developing hybrid electric vehicles and fuel cell vehicles. Toyota has lead this aspect of the automobile industry, and has been setting the bar in alternative fuel sources making them the very green and very profitable company that envisions change in the industry. Nissan began exporting cars to the U. S in 1958 and gained popularity because of its small size and great fuel efficiency. Today, Nissan has developed new eye-catching designs that do not resemble older models. Nissan is very optimistic that sales will increase significant once these 28 new models are launched during the 2008 year. But the look of new models alone isn’t all Nissan is after. Safety features such as installing a series of sensors that can detect alcohol levels in the driver will alert the car to slow and/or become immobilized. Corporate agility is also a key factor as is shown when Nissan moved its headquarters from California to Tennessee, which accommodates over 1300 employees, supporting the community with more jobs, and reducing significant overhead. New technologies developed at Nissan have addressed environmental issues including clean power sources for its vehicles and recycling of natural resources. Nissan has envisioned that the future of their company will greater enrich peoples lives through global environment issues, and reducing traffic accident and congestion problems. Some of Nissan’s proposals include more efficient fuel-cells for electric vehicles, bio-fuels, and advanced diesel fuels. The most important facet that Nissan realizes is that effective solutions will be decided by consumer demand, not engineers. Nissan has constructed a â€Å"Green Program 2010† which has become their environmental blueprint for success in the industry.

Effects of Changes to International Accounting Standards

Effects of Changes to International Accounting Standards CONTENTS PAGE (Jump to) (1)(a) REQUIRED CHANGES UNDER INTERNATIONAL  ACCOUNTING STANDARDS (1)(b) MERITS AND DEMERITS OF EXTINCTION OF  EXTRAORDINARY ITEMS (1)(c) RECOGNISED GAINS AND LOSSES AND HISTORICAL  COSTS (1)(d) CLASSIFICATION OF PREFERENCE SHARES  AND DIVIDENDS (2)(a) OBJECTIVES OF IAS 7 AND DISTINCTION  BETWEEN IAS 7 FRS (2)(b) PREPARATION OF A CASH FLOW STATEMENT UNDER  A DIRECT METHOD UNDER IAS7 FRS (2)(c) ASSESSMENT OF THE COMPANY’S LIQUIDITY IN  ACCORDANCE WITH THE INFORMATION ON THE CASH FLOW BIBLIOGRAPHY This report relates to the recent changes in the International Accounting Standards. Furthermore, it underlines the primary principles that Sky Corporation must comply with. (1)(a) REQUIRED CHANGES UNDER INTERNATIONAL ACCOUNTING STANDARDS After the introduction of the International Accountant Standards, all public limited companies must comply with these provisions. Sky Corporation must adhere to the IAS 1, effective on all financial statements dating on and from 1st January 2005. In effect the Sky plc will have to prepare its financial statements on a going concern basis unless there is an intension to liquidate the entity, accrual basis of accounting must be used in the preparation of financial statements except for cash flow statements, presentation and classification of items must be obtained from one period to the next, material class of similar items must be presented separately and dissimilar items must be included separately unless they are immaterial, items (individually or collectively) that are likely to influence the economic decision of the user must not be omitted or misstated, assets, liabilities, income and expenses must not be offset unless approved by an IFRS, financial statements must be presented a t least annually, all amounts relating to comparative information must be disclosed in financial statements. Furthermore, Sky must adhere to the disclosure requirements on the face of or in the notes to the balance sheet BS, income statement and statement of changes in equity. Current and non-current assets and liabilities must be present as separate classification on the face of the BS. Additionally, financial statements must include specified disclosure in relation to information, judgements, estimations, uncertainties and accounting policies. At present, Sky’s accountant made a statement indicating that the financial statements in the forthcoming November 2005 accounts will comply with the principles of IAS. In addition, the company’s financial statements included audited reconciliation of the 2005 Income Statement, Balance Sheet and Cash Flow to UK GAAP from IFRS detailing the impact of the Company’s new accounting policies, and unaudited quarterly 2005 Income Statements to provide comparatives for 2006. (1)(b) MERITS AND DEMERITS OF EXTINCTION OF EXTRAORDINARY ITEMS ISA 1 regarding the presentation of financial statements was issued in December 2003 and is applicable for annual periods beginning on or after 1 January 2005. International Accounting Standard (IAS 1) prescribes the grounds for presentation of general-purpose financial statements, to ensure comparability both with entity’s financial statements of previous periods and with financial statements of other entities. ISA 1 does not serve any application to interim financial statements prepared in accordance with the ISA 34. Under the SSAP 6 extraordinary items are material items which are transaction that fall outside the ordinary activities of the company and thus not expected to recur frequently or regularly. By excluding extraordinary items from the PL, this will reflect on the EPS. Exclusion of extraordinary items will benefit the current operating performance. As far as Sky Communications Plc is, concern there appears to be no extraordinary items in their PL account. Additionally, EPS will be greater than expected if extraordinary items were included since the EPS is used by investors to calculate PE ratio. The exclusion of extraordinary items could also lead to an increase in corporation tax. (1)(c) RECOGNISED GAINS AND LOSSES AND HISTORICAL COSTS Under the FRED 22 (revision of FRS3)which aim to reflect the international shift, makes provisions for reporting comprehensive income such as reporting all recognised gains and losses in a sole statement instead of splitting these gains and losses between the performance statement and the STRGL. There is a need for the display of recognised gains and losses as they are part of the company’s operating activities and some are financial in nature. There is a list of recognised gains and losses that should appear in the treasury section of the performance statement. According to Sky’s accounts for 2004 and 2005, there were no recognised gains or losses in either year other than those included within the profit and loss account. Primarily, statement of total recognised gains and losses are financial statements that enable users to consider all recognised gains and losses of a reporting company in assessing the company’s overall performance. Notes of historical costs are necessary as it identifies the resources acquired by the company at their original price. In effect, this identifies how the items are actually measured over a period. Additionally, it assists with the understanding of capital maintenance adjustments. Firstly, assets are recorded at the value of the consideration given to acquire them at the time of acquisition. Liabilities are recorded at the amount of proceeds received in exchange for the obligation. The purpose for this is to measure the process of determining the monetary amounts in which the element of the financial statements are to be recognised and carried in the balance sheet and in the income statement. (1)(d) CLASSIFICATION OF PREFERENCE SHARES AND DIVIDENDS According to the IAS 1 preference shares are reclassified to borrowings and the preference dividends are reclassified to finance costs. However, when preference shares are non-redeemable, the appropriate classification is determined by the rights attached to the preference shares. Classification is dependent upon an assessment of the substance of the contractual arrangements, equity instrument and the definition of financial liability. Furthermore, the classification of preference shares as an equity instrument or a financial liability is unaffected by a history of making distributions and an intention to make distribution in the future. Under IAS 10, a company must not recognise a liability for dividends in respect of dividends declared after the balance sheet date as it is not a current liability at the balance sheets date under IAS 37. In the event that a company purchases its preference shares for cancellation for more than their carrying amount (premium) then this should be treated as preferred dividend in the calculation of EPS. (2)(a) OBJECTIVES OF IAS 7 AND DISTINCTION BETWEEN IAS 7 FRS1 The structure of the IAS 7 had an influence on the revision of FRS 1. The objective of IAS 7 is that a cash flow statement of a company must correspond to the requirements and identifications under IAS1. In addition, the cash flow must identify movement in cash and cash equivalents during the financial period (cash equivalents are short term and highly liquid investments). Furthermore, there must be a provision identifying and classifying the changes in cash and cash equivalents to operating, investing and financing activities. In a number of cases, there are conflicting factors between the framework of the Financial Reporting Standards and the International Accounting Standards. In the event of conflict, the framework of the International Accounting Standards prevails over the Financial Reporting Standards. IAS 7 requires companies to present cash flow statements as part of a company’s financial statement. International Accounting Standards (IAS 7) is a mechanism that provide additional information on the company’s business activities, assess the present liquidity of the business activities, demonstrate substantial cash flow sources, assist with the estimation of future cash flows and finally will identify cash flow accumulated from trading activities rather than sources of finance. (2)(b) PREPARATION OF A CASH FLOW STATEMENT UNDER A DIRECT METHOD UNDER IAS7 FRS1 The following is a cash flow for Sky plc prepared in accordance with the direct method IAS 7: Notes for Guidance (1) Net profit before tax is taken from the extract of the income statement. (2) Depreciation is shown as a note to the income statement. (3) Loss on sale of the non-current asset; proceeds minus (cost less depreciation to date) see note A1 below. (4) Interest expense is shown on income statement. Changes in Working Capital Structure: Inventory, receivables and payables are differences in opening and closing balances shown on the balance sheet. Disposal Account ( £000’s) Non-Current Assets Notes: (A2, A3 and A4) The interest paid is the net interest cost shown on the income statement and is the 10% charge on loan notes shown on the balance sheet for June 2000. The dividend and tax paid in the year are those shown on the 1999 balance sheet extract under the heading Current Liabilities. (A5) Purchase of Non-Current Assets (A6 A7) Proceeds from the issue of shares and loan notes are the increases shown on the difference between the two balance sheet figures for 2004 and 2005. (A8) This is the net effect from operating activities  £7,975, net cash used in investing activities (8,525) and the net cash flow from financing activities 1,550. (A9) This is the bank figure under current assets 2004 balance sheet. (A10) Bank balance on 2005 balance sheet. (2)(c) ASSESSMENT OF THE COMPANY’S LIQUIDITY IN ACCORDANCE WITH THE INFORMATION ON THE CASH FLOW. Having examined the accounts and financial statements of Sky plc, there is clear evidence reflecting on the company’s liquidity level. Firstly, the measurement of the liquidity ratio revealed that the company was in healthy liquid position. Current Ratio= Current Assets / Current Liabilities Current Ratio of Sky = current assets  £1,830m/ current liabilities  £1,481m= 1.24 times The current ratio measures a company’s ability to meets its financial obligations as they fall due. A normal current ratio is two. Sky’s current ratio is relatively stable considering the type of industry of Sky plc. Acid Ratio= Current Assets- stock/current liabilities Acid Ratio of Sky= Current Assets  £1,830m- Stock  £627m/ Current liabilities  £1,482m=0.81 times The acid ratio clearly indicate that Sky has a high levels of stack and this also demonstrates that the current ratio overstated Sky’s ability to meet its financial obligations because of the inclusion of the stock in the numerator. The information provided in the cash flow, demonstrated clear evidence of liquidity in the flowing of cash. For example, there was a dramatic net increase in cash and cash equivalents of  £1,000m over a year. Furthermore, this indicate that the company’s economic activities are performing well in comparison to the previous year. However, amount  £8525m was invested in investing activities, this figure being greater than the company’s net cash flow from operating activities amounting to  £7975m. Nevertheless, the short fall in the financing of investing activity was meet by new issue of shares  £50m and issue of bank loans  £1500m. Inevitably, the bank loan increases company’s debt and the gearing level of the company. Nevertheless, over a year company’s bank balance increased from  £1250 to  £2250m. In conclusion, the accounts of Sky plc indicate substantial development but there are great expenditure resulting from investment in activities. However, there is not a real concern over the liquidity of the company nor any chances of bankruptcy. BIBLIOGRAPHY Cox .D. 1999 â€Å"Business Accounts† 2nd Edt Osborn Business Naylor.J. 1999 â€Å"Management† Financial Times Prentice Hall Pendlebury. M Groves .R . 2000 â€Å" Company Accounts, Analysis, Interpretation and Understanding† 5th Edt Thompson Russell. D et al 2002 â€Å"Cost Accounting an Essential Guide† Financial Times Prentice Hall. Watson . D Head. A. 2001 â€Å"Corporate Finance Principles and Practice† 2nd Edt Financial Times Prentice Hall.