Violence on Television Increases Violence in Children Essay

Violence on Television Increases Violence in Children - Essay Example All these shootings and other violence by children and teenagers have opened a public debate concerning various issues. Some blamed the easy availability of weapons for the shootings while some focused on the problems of bullying and peer abuse in American High schools as the reason behind this violence. However, there were some researchers who looked beyond the obvious and pinpointed the media behind the increase in violence. In this paper, we shall debate on the controversial issue that violence on television increases the violence in children and teenagers and stand by it. According to a research, children in America watch four hours of television daily on an average which implies that television has a powerful influence in developing value systems and shaping behavior. But sadly, most of the programs broadcasted on television are violent nowadays. From the daytime talk shows, most of which are portrayed by unashamed emotional, psychosomatic, and corporeal exploitation by jury gue sts towards each other, to the prime time shows and the WCW (World Champion Wrestling), all these programs proliferate excessive violence and aggressiveness. Most of these programs are watched by a growing number of young children and adolescents who view them along with their parents. As the matter of fact, violence forms the key constituent of the Network news too, as most of it is plagued with explicit renderings of murders, traffic mishaps, kidnappings, international war scenes, and the like. The story is the same everywhere; the good people slaughter the bad people, most often with an arsenal of weapons that has become a humdrum possession for today's T.V. characters (American Academy of Child and Adolescent Psychiatry [AACAP] n.pag.). This starts the debate that whether these television programs really affect our children or not. Various studies done to evaluate the impact of T.V. violence on children and teenagers have revealed that children are affected in different ways by these shows. They may become immune or dumb to the horror of violence, or gradually accept violence as the means to sort out problems, or try to imitate the violence shown on television, and identify with certain characters, victims and/or victimizers. Children who become violent watching such T.V. programs will show a range of behaviors including explosive temper tantrums, threats, bullying, aggressiveness, armed assault, and harm to animals and peer groups. In fact, a research done by psychologists L. Rowell Huesmann, Leonard Eron and others also revealed those children who watch long hours of brutal programs during elementary school level tend to show higher level of aggressive behavior when they become teens. They further found that eight years old children, who watch too much of television, are mostly the ones who get prosecuted for criminal behavior as adults (American Psychological Association [APA] n.pag.). Additionally, many children who are overexposed to violence, and spe cially, to pragmatic violence start judging the society as one which is, by and large, hazardous and perilous. This misjudgment makes them fearful towards life as they start considering themselves future victims of violence (AACAP n.pag.). However, researcher David Buckingham stated that â€Å"one may well discover that children who are violent watch a lot of television violence, but this does not prove that violent television causes real-life violence†

History of the concept of creativity

History of the concept of creativity History of the concept of creativity In spite of its current popularity, the concept of creativity, i.e. its name, is a recent notion that, nevertheless, went through a number of development stages and metamorphoses caused by the changes in the way the concept of creativity was perceived by societies at various stages of development. The process is not finished yet. Sometime in the future the general concept of creativity will hopefully be converted into a specialized concept, i. e. its regularities will be enumerated while its particularities linking it currently to a culture or a subculture will be eliminated. In the following text, the evolution of the concept of creativity throughout history is reviewed briefly, with the focus on important milestones and personalities. The milestones are arranged in a temporal sequence, whereas outstanding personalities are quoted where necessary, rather than presented in a strict temporal sequence. It is intuitively easy to accept the thesis that creative acts have been around as long as the homo sapiens, the humanoids and, indeed, living organisms. The concept of creativity appeared much later, and came forth very gradually. On the long way to establishing it, many intermediate new terms were generated, some of which have been used for centuries, in exceptional cases until our time. They help us understand more easily what creativity is and how it interacts with other operations in the intellectual sphere. Theoretical views of creativity follow the development of human culture and thought. Therefore, the concept of creativity is a component of the history of the human thought to the same extent as any other intellectual manifestation (Briffault, 1928). Much of the historical developments as accounted for in the following review are based on Tatarkiewiczs book (1980), Dictionnaire philosophique, and the following references: Verma (1969), Lindberg (1976), Abdus Salam (1984), Agar (2001), Ahmad (2002), Steffens (2006), Covington (2007), Roshdi (2007), and Medieval Classic civilization; An Encyclopaedia. Prehistoric times Remarkable and very advanced objects testifying to human creative genius are known from the art history. They originate from many parts of the world and from many different cultures and epochs. Perhaps the foremost examples of the earliest manifestations of creativity are various objects produced by the Australian Aborigines. The Aborigines are presumed to have moved to Australia from India some 50 000 years ago. Their most puzzling creative product is the boomerang for them hunting tool, for us an enigmatic object of scientific studies. Other important manifestation of human creative act and thought originates from Egypt and Mexico. These countries distinguish themselves not only by very advanced ability to produce objects, but also by the scientific (most often astronomic) knowledge embedded in these products. The pyramids of Egypt and those of Mexico, Guatemala, or Belize, the Mayan calendar, and the way of using mathematics in Egypt and in Mexico, are absolutely amazing even today. The Mayan astronomers had developed a spatial geometry parting from astronomy. The mathematics they used is still more accurate than the computational algorithms that make the flow of data in modern information networks possible (Ferrera-Balanquet, 2009). Another cultural area of great importance extends in Asia, particularly in the area comprising the present day Iraq, Iran, India, Sri Lanka and Cambodia. Buildings, materials and various concepts of physics embedded in the buildings testify to the high level of knowledge these peoples possessed thousands of years ago. In China and Japan, too, creativity enhanced knowledge in a manner that after thousands of years is still admired. India stands, as usual, apart in that it knew creativity as â€Å"insight† since times immemorial. For instance, in the extinct Pali language the word vipassanÄ  consists of the Sanskrit prefix â€Å"vi-â€Å" and the verbal root à ¢Ã‹â€ Ã… ¡paņº. It is often translated as †insight† or â€Å"clear-seeing,† One should not be misled by the â€Å"in-â€Å" prefix in â€Å"insight†.. â€Å"Vi† in ancient Aryan languages is equivalent to the Latin â€Å"dis-†. It is reasonable to conclude that in the word vipassanÄ  the prefix â€Å"vi-† generates the meaning â€Å"to see apart†, or discern. Alternatively, the â€Å"vi† can function as an intensifier. In that case vipassanÄ  may mean â€Å"seeing deeply†. A pali synonym for â€Å"VipassanÄ Ã¢â‚¬  is paccakkha, menaing â€Å"before the eyes,† which refers to direct experiential perception. Thus, the type of seeing denoted by â€Å"vipassanÄ Ã¢â‚¬  is that of direct perception and experience, as opposed to knowledge derived from reasoning or argument. It has also been adopted as the name of a kind of Buddhist meditation. Ancient Greece The people of Ancient Greece had no terms corresponding to â€Å"creativity† or â€Å"creator†. Yet, the poet was considered to be one who creates. Whatever was â€Å"creative† in the present sense of the word, was called art. The concept of art (in Greek  Ã…  Ã‚ Ã‹Å" Ã‚ Ã¢â€š ¬Ã‚ ¼Ã¢â€š ¬Ã‚ °, from which technique and technology evolved), implied subjection to rules. Poetry (from  Ã¢â‚¬Å¡Ã‚ Ã¢â€š ¬Ã¢â€š ¬Ã‚ ´Ã‚ Ã¢â€š ¬Ã¢â€š ¬Ã‚ ´Ã‚ Ã†â€™Ã…  Ã¢â€š ¬Ã‚ ¼ to make) was an exception, although it was limited only to  Ã¢â‚¬Å¡Ã‚ Ã¢â€š ¬Ã†â€™Ã…  Ã¢â€š ¬Ã‚ °Ã‚ Ã¢â‚¬  Ã¢â€š ¬Ã‚ ´Ã‚ Ã‹â€  (poetry) and to the  Ã¢â‚¬Å¡Ã‚ Ã¢â€š ¬Ã¢â€š ¬Ã‚ ´Ã¢â€š ¬Ã‚ °Ã‚ Ã…  Ã‚ Ã… ¡Ã‚ Ã‹â€  (poet, or maker) who made it, rather than to art in general. The reason was that art was considered an imitation of what already exists, â€Å"the making of things, according to rules†, hence subjection to laws and rules. In painting, music, or literature, there was no freedom. They were governed by what was known as ÃŽÂ ½ÃƒÅ½Ã‚ ¿ÃƒÅ½Ã‚ ¼ÃƒÅ½Ã‚ ¿ÃƒÅ½Ã‚ ¹ (the laws). This conservative attitude and need for subjection prevailed in the works of Plato who claimed, mainly in Timaeus, Dialogue of Ion, and in The Republic, that a good work is contingent on observing an eternal model as suggested by Nature, and never deviate from that model. The eternal models were within reach, in the surrounding world, of which artists were the imitators. They thus had to abide by certain rules. In the visual arts, freedom was curtailed by the proportions that Polyclitus had established for the human frame. He called them â€Å"the canon† (meaning, measure). Likewise, in music, no freedom was necessary because melodies for ceremonies and entertainme nt were known. They were prescribed as nomoi. Making of things according to rules, or à Ã¢â‚¬Å¾ÃƒÅ½Ã‚ µÃƒ Ã¢â‚¬ ¡Ãƒ Ã¢â‚¬ ¦ÃƒÅ½Ã‚ ·, was not considered to contain any creativity at all. In fact, if they had contained creativity, the state of affairs would be considered bad by the Greek standards of that time: Something similar to the negative perception of creative accounting nowadays [Tatarkiewicz, 1980, p. 244]. Man ought to discover the laws of Nature and abide by them. Seeking freedom of action unnecessarily distracts him from seeking the optimum way. In Ancient Greece the artist was not an inventor, he was a discoverer [Tatarkiewicz, 1980, p. 245]. It means that he had to study the laws of Nature, discover and see how related entities interact, and use them as a model. This world-view had its own justification. Nature is both perfect and subject to laws. The artists ambition must be to discover these laws and submit to them, rather than seek the distracting freedom from these laws, a freedom that would deflect him from attaining the optimal state. Poetry stood outside these limitations. The poet invented a whole new world and gave it life. The poet differed from the artist, the imitator, in that laws did not bind him. In spite of the absence of the term for creativity, creation, or the creator, the poet, and only the poet, was understood to be a creator.According to the Greek view, the poet was an inventor, i. e. he put together unrelated entities and let them interact in an arbitrary manner. This is what made poetry the only exception from the rules applying to art. In terms of truthfulness of this world-view, Aristotle, who established the term truth, was not sure whether poetry required adherence to truth, i. e. whether it imitated Nature. He thought that poetry was in the realm that was neither true nor false [Tatarkiewicz, 1980, p. 245-6]. The concepts of imagination and inspiration, too, were restricted to poetry only. Poets were seen differently and they saw things differently. But not everybody was reconciled with this restriction. An example can be found in the Odyssey, where a question is posed why the singer should be forbidden to entertain his listeners with singing as he himself will. Yet, even in this rigid environment of dogmas, some progress took place. Thus, in the 3rd century, Porphyry of Tyros graphically visualized the concept categories of Aristotle. In the 4thcentury of the Christian era, Pappus of Alexandria searched for a science of invention. He named his techniques â€Å"heuristics†. Antique Rome The Roman civilization developed from the Greek civilization. It was younger, thus more progressive and more exploratory than was the civilization of Greece. Therefore, things were seen in a different light in Rome, and the Greek concepts were viewed as partially outdated. To begin with, the vocabulary was enriched with new concepts, which shook up the foundations of the Greek thought. This effort happened to follow two counter-directions. on the one hand, Cicero wrote that art embraces those things â€Å"which are known† (â€Å"quae sciuntur†) [Tatarkiewicz, 1980, p. 245]. Horace, on the other hand, elevated painters to the level of poets in giving them the privilege of daring whatever they pleased (â€Å"quod libet audendi†), instead of following the â€Å"eternal model†. Moreover, in the declining period of antiquity, Lucius Flavius Philostratus discovered a similarity between poetry and art, and found that art and poetry have imagination in common. Cal listratos expanded these ideas by stating that as much as the art of the poets and writers of prosaic literature is inspired, so are the hands of sculptors. They, too, are gifted with the blessing of divine inspiration. The novelty of these postulates follows from the fact that Greeks had applied the concepts of imagination and inspiration to poetry only, but not to the visual arts. The Greek language had no word for creating, whereas Latin had. Creare and facere were two Latin words corresponding to the Greek à Ã¢â€š ¬ÃƒÅ½Ã‚ ¿ÃƒÅ½Ã‚ µÃƒÅ½Ã‚ ¹Ãƒ Ã¢â‚¬ ¦. Yet, initially the two Latin terms had almost the same meaning (Tatarkiewicz, 1980, p. 246), and were thus interchangeable. Christianity Under medieval Christianity, the Latin â€Å"creatio† came to designate Gods act of â€Å"creatio ex nihilo† (i.e. creation from nothing). â€Å"Creatio† thus no longer could apply to human activities. Its meaning differed from the meaning of â€Å"facere† (to make). Applied to human activities, facere was the only word to be used. Cassiodorus, the important statesman and writer of the 6th century, explained that things made and created differ, because we can make but cannot create. His important works on this topic, written after his retirement, include De anima (published 540), Institutiones Divinarum et Saecularium Litterarum (published probably 543-555), and De Artibus ac Disciplinis Liberalium Litterarum [Tatarkiewicz 1980, p. 247]. This more or less â€Å"secular† interpretation of creativity collided with the archaic views of some Christian writers. To begin with, they believed that art did not belong to the realm of creativity. In this respect they had the same belief as the Greeks. Medieval Christian writers granted no exception to poetry. They claimed that poetry had to follow its rules. Therefore it was an art, i. e. a craft rather than a creative activity. The dominant figure among these writers was St. Augustine, a personality whose works are of interest even today. He is claimed to have used the word imagination as a precursor to creativity. Imagination, according to St. Augustine comprised disposition, multiplication, reduction, extension, ordering, any kind of re-composition of images, etc. (Rodari, 1983). These very same components of â€Å"imagination† are used even today [Tatarkiewicz, 1980, p. 247]. Further changes were recorded in the Middle Ages: poetrys exceptional status was gradually revoked, because poetry had its rules. It was thus regarded as an art, i. e. a craft, rather than creativity. The new, religious interpretation of the expression notwithstanding, the opinion that art is not related to creativity persisted. The works of two influential early Christian writers, Pseudo-Dionysius and St. Augustine, prove it. The same can be said the works of Hraban the Moor and Robert Grosseteste, in the 13th century. Renaissance There are two periods in European history, called the Renaissance. The first one is the 12th century Renaissance. It was a period of many innovative and creative cahnges during the High Middle Ages, such as social, political and economic transformations. Parallel developments in philosophy and science resulted in an intellectual revitalization of Europe. The second renaissance is the Italian Renaissance in the 15th century. Some historians claim that the changes having taken place in the Middle Ages paved the way to the Italian Renaissance, as well as to the scientific developments of the 17th century. The French historian Jacques le Goff, an agnostic, argues that the Middle Ages formed an entirely new civilization, distinct from both the Greco-Roman antiquity, and from the modern world. The medieval achievements of the human mind and the human hands can only be related briefly. The First Rrenaissance . The most creative political acts of the 12th century were the founding of the Hansa in Northern Europe (along the southern shore of the North Sea and the Baltic Sea, with a few excursions deeper into Central Europe), the Crusades, the rise of towns, and the rise of the early bureaucratic states. In the cultural sphere the vernaculars began to replace Latin increasingly, higher education became more prominent, with universities sprouting all around the European continent between the Atlantic and the Theisse river, the Romanesque art was gradually replaced by the Gothic art, the liturgical drama, and a European system of law was established. These changes are true milestones. In the arts, more emphasis was put on architecture and sculpture, while in parallel there was a revival of interest in Latin poetry and Latin classics. An outer expansion began in the late 13th century, when the Venetian explorer Marco Polo set out to follow the Silk Road to China. His doc umentary Il Milone made Europeans more aware of the Far East, which inspired many missionaries (Giovanni da Pian del Carpini, Giovanni de Marignolli, Giovanni di Monte Corvino, and others) to go east and spread Christianity. The greatest leaps of human knowledge were, however, recorded in science and technology. Since Ibn al-Haytham (also known as Alhazen, 965-1039) laid down the foundations of the scientific method, the emphasis was put on seeking truth. Science thus became a formal discipline, different from philosophy. In early Middle Ages, the Byzantine Empire, the most advanced culture of antiquity, suffered losses and a decline in its scientific capacity. Likewise, Western Europe, after the fall of the Western Roman Empire, suffered a catastrophic loss of knowledge. This was partially offset by the efforts of Church scholars, like Aquinas and Buridan, who preserved elements of scientific inquiry. In that manner, by translating and imitating the works of Islamic scholars Europe could begin catching up with the scientific discoveries of the Islamic world, the Mediterranean basin, India, and China. The most important steps to Europes scientific recovery at that time comprise the following events: Development of the scientific method (Alhazen, Biruni, Bacon, and Grosseteste); Arithmetic and Algebra (Al-Khwarizmi); Differential calculus (Bhaskara); Mechanics (Avicenna, with a later contribution by Ibn Bajjah, also known as Avempace, Buridan, Galileo, Descartes and Newton); Optics(Aristotle, Plato, Galen, Euclid, Hero of Alexandria, Ptolemaeus. In the 10th century, Alhazen proved empirically that light propagates linearly;Robert Grosseteste developed a theory of optics based on the works of al-Kindi and Ptolemaeus. Roger Bacon expanded on Grossetestess theory and integrated Alhazens optics into it. Finally, Kepler was able to use the foregoing findings to develop the modern theory of optics); Surgery(Abulcasis or Abu al-Qasim Khalaf ibn al-Abbas Al-Zahrawi developed procedures and instruments of modern surgery, such as the scalpel, syringe, vaginal speculum, etc.). In 1266, Theodo ric Borgogni published his Chirurgia, in which he advocates antiseptic surgery); Alchemy and Chemistry (The Jaberian Corpus, written in the 10th century by the Brotherhood of Purity (Ismaylia), the Summa Perfectionis, by Paulus de Tarento, the Secret of Secrets by al-Razi (Abu Bakr Muhammad ibn Zakariya Razi);Trigonometry (al-Tusi, Regiomontanus and Puerbach made these methods wider known in the 15th century); Navigation (the astrolabe and the portable compass, Peter de Maricourt); Accurate lunar models(Ibn al-Shatir; Copernicus is believed to have relied on al-Shatirs model); Incendiary weapons and bombs (flame-throwers, land- and sea-mines, and rockets). Among important technological accomplishments and developments, the following can be listed: The windmill, first mentioned in 1185 (England); Paper manufacture began around 1270 (Italy); The spinning wheel (13th century); The magnetic compass for navigation, and the astrolabe (toward the end of the 13th century); Eyeglasses, in the late 13th century (Italy); The Hindu-Arabic numerals introduced to Europe in 1202 with the book Liber Abaci by Leonardo of Pisa; The stern-mounted rudder, which can be found on church carvings. The philosophy developed in the Middle Ages was the Scholasticism. It is founded on a reinterpretation of the works of Aristotle, with further refinements by scholars like Avicenna, Averroes, Albertus Magnus, Bonaventure, and Abà ©lard. Scholasticism believes in empirical studies, and its practitioners supported the Catholic Church. Perhaps the most famous practitioner of Scholasticism was Thomas of Aquinas. His Philosophy of mind teaches that the mind of a newborn baby is a tabula rasa that was given the ability to think, and to recognize forms, patterns, or ideas through a divine spark. In the late Middle Ages, the rate of scientific progress declined significantly due to the decline of the Muslim empires and the Byzantine Empire. This situation lasted until after the Renaissance. The Italian Reanaissance. The Italian Reanaissance brought further changes into the mode of thinking and lifestyle of people. The Renaissance philosophy is that of Humanism, which perhaps is more a method of learning than a philosophy per se. An approximate, but generally accepted definition of Humanism is â€Å"the movement to recover, interpret, and assimilate the language, literature, learning and values of ancient Greece and Rome†. Unlike the medieval scholars, humanists would apply a combination of reasoning and empirical evidence in reading and appraising ancient texts in the original. Humanist education focused on the study of five humanities: poetry, grammar, history, rhetoric, and moral philosophy. Above all, humanists asserted mans genius and the ability of the human mind, which is unique and extraordinary. Humanism is more secular in some aspects, but it unquestionably developed against a Christian backdrop, particularly in the Northern Renaissance. That period gave mankind some outstanding theologians, all of them followers of the humanist method. They include Zwingli, Calvin, Thomas More, Erasmus, and Martin Luther. In particular, Dr Martin Luther must be viewed as the liberator of the human soul, with whatever effect it had on subsequent cataclysmic developments in society, science, business, and trade. Although the people of the Renaissance were well aware of their freedom and creativity, the term creativity was not established yet. It was not until the 17th-century that the word â€Å"creativity† was applied for the first time. The man behind it was Polish poet Maciej Kazimierz Sarbiewski (1595-1640), also known as â€Å"the last Latin poet†. Sarbiewaski applied the term only to poetry. In his treatise, De perfecta poesi, he wrote that a poet â€Å"invents,† and creates anew (â€Å"de novo creat†) in the manner of God (â€Å"instar Dei†) (Tatarkiewicz, 1980, p. 248). Other arts, in Sarbiewskis opinion, do not create. They merely imitate and copy. Why Sarbiewski regarded creativity as something that only poetry could be associated with, thus excluding visual arts, follows from his opinion that arts (other than poetry) imitate and copy, rather than create, in that they assume the material from which they create is already available, and so is the subject. At the end of the 17th century Andrà © Fà ©libien (1619-75) called the painter â€Å"a creator†. Spanish Jesuit Baltasà ¡r Gracià ¡n (1601-58) saw art as the second Creator that complements nature. This formulation is reminiscent of Sarbiewskis formulations (Tatarkiewicz, 1980, p. 248). In the 18th century, the occurrence of the concept of creativity in art theory kept increasing. It was complemented with the concept of imagination. In Joseph Addisons opinion imagination â€Å"has something in it like creation†. A similar opinion was held by Voltaire (1740). These authors, however, equated only poet with creator (Tatarkiewicz, 1980, p. 248-9). Contrary views proliferated, too, particularly in France. Diderot worked with imagination, which he viewed merely as â€Å"the memory of forms and contents†, which â€Å"creates nothing†. It only combines, magnifies or diminishes. â€Å"The human mind cannot create†, wrote Charles Batteux. He, too, saw its products as displaying the stigmata of the model used. Étienne Bonnot de Condillac (1715-80) and Luc de Clapiers, known as marquis de Vauvenargues (1715-47), proposed similar ideas (Tatarkiewicz, 1980, p. 249). There were three reasons why they rejected the idea of human creativity: Creation was at that time reserved for creation ex nihilo. The latter was beyond mans abilities. Creation is a mysterious act. Enlightenment psychology, however, had no room for mysteries. Artists of that time age observed their rules. Creativity, however, seemed irreconcilable with rules. The third objection was, however, weak. Houdar de la Motte (1715) was one of the thinkers who suggested that rules, too, â€Å"are a human invention† (Tatarkiewicz, 1980, p. 249). The philosopher Marsilio Ficino wrote that the artists work is the result of thinking it up (â€Å"excogitatio†). Leon Battista Alberti, the theoretician of architecture and painting, claimed that he preordains (â€Å"preordinazione†), and Raphael claimed that his ideas shape his painting. Universal genius Leonardo da Vinci claimed that it was his idea that determined how his painting was shaped, using shapes that do not exist in nature. Another painter, Raphael Santi, too, claimed that he painted according to his ideas. Giorgio Vasari claimed that nature is conquered by art. Paolo Pino, the art theoretician from Venice claimed that painting is â€Å"inventing what is not†. Likewise, Paolo Veronese declared that painters take the same liberties as they were poets and madmen. â€Å"A new world, new paradises†was what an artist shapes, maintained Federico Zuccari. Cesare Cesariano extended this to architects whom he considered â€Å"demi-gods.† In the realm of music, according to the Dutch composer and musicologist Jan Tinctoris, a composer was â€Å"one who produces new songs†. He thus associated novelty with a composers work. Writers on poetry were even more consequent. Capriano claimed that poetic inventions spring â€Å"from nothing†. Francesco Patrizi held that poetry was a â€Å"fiction†, â€Å"shaping†, and â€Å"transformation† (Tatarkiewicz, 1980, p. 248). The developments in the Renaissance science were as dynamic as in the arts. Science and the arts were intermingled, which manifests best in the works of Leonardo da Vinci. He made observational drawings of nature and anatomy, set up and conducted controlled experiments in water-flow and aerodynamics, systematic study of motion, and medical dissection. Leonardo devised principles of scientific research method in the spirit of holistic, non-mechanistic and non-reductive approach popular today. Leonardo deserves the epithet â€Å"the father of modern science†. The focus on the process for discovery, the scientific method, corroborated by influential proponents such as Copernicus and Galileo, is perhaps the most significant development of that time. This revolutionary way of learning about the world stressed the importance of empirical evidence, as well as the importance of mathematics, rather than highlighting a given discovery. Age of Reason In the 18th century, the Age of Reason and Change, the concept of creativity appeared more frequently in art theory. Once again, famous personalities needed an ancillary concept to explain and justify creativity. One such concept was that of imagination. It was first used in 1712 by the English essayist, poet and publisher Joseph Addison. He published 11 essays on imagination in The Spectator. In one essay he claims that only the sense of sight supplies ideas to the imagination. He speculated about a congruence between imagiantion and creativity. By the same time, the famous French author and philosopher Franà §ois-Marie Arouet de Voltaire distinguished between passive and active imagination. On the latter he wrote in his Dictionnaire philosophique that â€Å"Active imagination is that which joins combination and reflection to memory. It brings near to us many objects at a distance; it separates those mixed together, compounds them, and changes them; it seems to create, while in fa ct it merely arranges; for it has not been given to man to make ideas-he is only able to modify them†. Voltaire continued: â€Å"This gift of nature is an imagination inventive in the arts in the disposition of a picture, in the structure of a poem.† Both authors thus indicate that poets are creative, and they equate poet with creator. Modern times The resistance against recognizing art as creativity, seen in the preceding centuries, crumbled totally in the 19thcentury. Now art gained recognition as creativity and, moreover, art alone was regarded as creativity. At the turn of the 20th century discussion of creativity in the art as well as in the sciences, e.g. by Jan Ã…Â ukasiewicz (Sinisi, 2004), and in nature (cf. Bergson, 1907) began. At this point concepts proper to art were applied to the sciences and to nature [Tatarkiewicz, 1980, p. 249]. There was, however, a long waiting time to the scientific study of creativity. The thinking of some modern time scholars will be expounded in the subsequent chapter. The beginning of scientific study of creativity is generally taken to be J. P. Guilfords address to the American Psychological Association in 1950. Many scholars joined in the effort to explore creativity in the years to come. They took a more pragmatic approach to this esoteric subject. As creativity became established as a discipline, scholars realized that creativity depends on being practiced. Creativity reveals itself in accomplishments and deeds, rather than in words. While a sound theoretical approach still was important, more and more emphasis was put on developing practical creativity techniques. Important personalities illustrating this approach include Alex Osborn, who in the 1950s invented brainstorming. In the same decade, Genrikh Altov, later calling himself Altshuller, came up with his â€Å"Theory of Inventive Problem Solving†, better known as TRIZ. In the 1960, Edward de Bono became famous after having developed his influential theory of â€Å"Lateral thinkin g.† These and other theories and techniques are expounded in more detail in subsequent chapters.

Cloud Computing and the Computer Scare Essay -- Information Technology

Once you login to your computer you are bound to use an application that is related to the cloud computing infrastructure. For example, when any service needs an internet connection it immediately uses what is known as a â€Å"cloud† network, which is a broad term for the use of a device or application that is not physically present. The computer user is then accessing a network in the cloud, which stores personal information and allows for multiple tasks to be completed in an efficient manner rather than just using a single personal computer. Computer Scientists do find an importance for expanding the cloud network since it not only helps them create projects using multiple computers linked on the cloud but it also helps deliver applications to any computer user. Unfortunately, there are some deficiencies that computer science majors should be aware of; the biggest default the risk of cloud security issues constantly. These issues include vulnerability to data loss and hacke rs overtaking the system; computer scientists should be aware of the structure’s defaults and be able to use cloud services efficiently. Cloud computing is a highly useful and quickly growing aspect of technology, and although the security issues are a risk, it is a useful service that should be used with the proper prior knowledge. Before delving into the exact security issues, it is important to understand the basic structure of the cloud system. To begin, the cloud computing structure has three major branches: 1) Infrastructure as a Service, 2) Platform as a Service, and 3) Software as a Service (Dorey 6). The most common service to general computer users is the Software as a Service branch because it provides the structure of the system and is notably appr... ...e. Web. 16 Apr. 2012. Fox, Armando. "Cloud Computing-What's in It for Me as a Scientist?" ScienceMagazine.org. AAAS.org, 28 Jan. 2011. Web. 23 May 2012. . Jamil, Danish, and Hassan Zaki. "Cloud Computing Security." International Journal of Computer Science and Engineering 3.4 (2011): 3478-482. Academic Search Complete. Web. 16 Apr. 2012. Jamil, Danish, and Hassan Zaki. "Security Issues in Cloud Computing and Countermeasures." International Journal of Computer Science and Engineering 3.4 (2011): 2672-676. Academic Search Complete. Web. 16 Apr. 2012. Segal, Naresh K., Sohum Sohoni, Ying Xiong, David Fritz, Wira Mulia, and John M. Acken. "A Cross Section of the Issues and Research Activities Related to Both Information Security and Cloud Computing." Academic Search Complete. Web. 16 Apr. 2012.

Brilliant piece of artwork Essay

This artwork, Moonrise Hernandez, will be critiqued based on the elements and principles of art to determine its meaning. The author, Ansel Adams, created this piece in 1941 in southern Mexico. Here, Adams used black and white film to make an original gelatin silver 16 by 20 photograph. The artwork consists of a moonlit dark sky above a small camp with mountains in the background. The sky appears stormy because the clouds stand out, while the half moon shines well above. The town looks really boring and poor. Plus, the mountains in the background are very tall and appear to be touching the sky. All of these factors contribute to a wonderful photograph. In this piece both elements and principles of art are prominent. The color of the sky is pitch black, which creates emphasis on the clouds, which are bright white. Also, the sky takes up a lot of space in the photograph and it towers over everything. This creates an uneven proportion throughout the piece. Finally, the texture of the clouds appears smooth, while the foreground is very rough. This creates variety throughout the photo. In all, this piece portrays many of the elements and principles of art. The mood in this photograph is depressing because almost half of this picture is black. See above paragraph. The moon against the dark sky in the picture is a symbol of the constant battle against evil that all of us face. The story it tells is that there will be bad times for the town because they’re about to get rained on. In conclusion, this artwork employs mostly emotionalism. This is because it makes the viewer feel sad and lonely. In all, I think this is a brilliant piece of artwork.

Financial Analysis of I.T Ltd.

Company background I. T Limited (0999. HK) is an investment holding company based in Hong Kong. It was listed on the main board of The Hong Kong Stock Exchange on 4-March-2005. The company offers a wide range of apparel products. It sells its products as well as offers a variety of national and international brands through its network of retail stores. As of February 28, 2011, it operated 392 stores in Hong Kong and Mainland China. Objective To undertake a comprehensive analysis on the financial performance of I. T. Limited. Detailed financial ratio analysis will be performed.An estimation of the firm’s cost of equity capital and weighted average cost of capital will also be provided. Horizon of analysis We will focus on its performance in the latest 5 fiscal years. A) Detail financial analysis The financial analysis will be conducted in two ways. First, the major accounts on financial statements will be inspected in order to derive a general picture on the healthiness of the business. Second, PERL (Performance, Efficiency, Risk, Liquidity) framework will be used to further analyze the financial performance of the company. I.Going through the financial statements We can get a glimpse of the healthiness of the business by looking into the trend of accounting items in income statement, balance sheet and cash flow statement respectively. Consolidated income statement (Referring to appendix A – table 1 and 2) 2008/09 was a special year, financial tsunami happened. Therefore there was a huge profitability impact in that year, resulting in a large decrease in operating profit. And since the market recovered in 2009/2010, the profitability suddenly increased a lot in that fiscal year. Other than these wo special years, the overall growth trend in sales turnover, costs, and profit is healthy. (Referring to appendix A – table 3) Standardizing the income statement can extract extra information. All the accounts are expressed as a percentage of turnov er. The company has done a good job in cost controlling, since the cost of sales as a percentage of turnover is in a decreasing trend, hence the gross profit margin is in an increasing trend. On the other hand operating expenses fluctuates at about 50-51% of turnover, but since cost of sales has a greater decrease, the net effect is operating profit is in an increasing trend.Consolidated balance sheet (Referring to appendix A – table 4) In general, total assets experience an increasing trend. This is reasonable since the business is at a growing stage. One notable point is the growth of non-current assets look greater than current assets, especially property, furniture and equipment has a very significant increase in 2010/11, this is probably due to the rapid expansion of retails stores in Hong Kong and China. And as a result, there is a significant increase in inventories in 2010/11 too. (Referring to appendix A – table 5)Similar conclusions can be drawn by viewing th e same accounts in a standardized balance sheet (all items are standardized by total asset value in the fiscal year). Property, furniture and equipment, and inventories make up most of the total assets. (Referring to appendix A – table 6) Liabilities also grow a lot with total assets as the business expands. Notably there is a significant increase in both short-term and long term bank borrowings. In addition the payable accounts also increased more than 100%, meaning that the company bought stocks or services from suppliers on credit more than before.This growth of liabilities is fine as long as the company can generate consistent operating cash flows, as we will see in the next section. (Referring to appendix A – table 7) Similar conclusions can be drawn at standardized balance sheet, bank borrowings and payables increased significantly, especially for longer term bank borrowings. (Referring to appendix A – table 8) The growth of the business was mainly funded by growing liabilities, as we can see that the growth of equity is not so significant, the company has not issued new shares to get funding. The company has simply retained some of the profit in each year into reserves.Consolidated cash flow statement (Referring to appendix A – table 9) The company has improved its cash flow generation as its business grew. The profitability of the company increased, and so as the cash generated from operation. And since the company has increased in size, it has increased its ability to finance from banks, therefore it also increased its cash generated from financing activities. Although the company has increased investment in fixed assets and hence the cash outflow from investment, this is offset by the increase in cash flow from operation and financing.II. PERL (Performance, Efficiency, Risk, Liquidity) analysis (Referring to appendix B and C) 1) Performance Profit margins (Gross, operating, net) Gross profit margin keeps increasing. The la test figure is 63. 35%, which is a very high margin. This is probably due to the increased brand image of the company, hence the company can increase the selling price of the products. Also, the company shifted the focus on selling products of its own brands more than imported brands, this also increased the gross profit margin.Both operating and net profit margin are also in an increasing trend (despite year 2008/09, a special year which financial crisis happened). But it is worth noting that the current margins are 12. 08% and 10. 12% respectively, which show a great difference from gross profit margin. This indicate the operating expenses are very high, eating up more than 50% of profit margin. The company should think ways to further reduce operating costs. Return on Equity (ROE) The company has increased its ROE along the years despite the special year 2008/09. The latest ROE is actually a high return, 21. 6%. So what are the main drivers of such high return? By utilizing DuPon t analysis, the reason for return growth can be found: ROE = Net Profit Margin x Asset Turnover x Financial Leverage The net profit margin is increasing throughout the years. At the same time, since the financing ability of the company has increased, the financial leverage also increased. These two factors drove the ROE up, offsetting the diminishing effect on ROE by asset turnover. The asset turnover actually decreased in last two fiscal years, indicating the efficiency of turning asset to revenue decreased.It is a bit worry to see the ratio decreased from 1. 6 to 1. 17 in these 2 years. It may indicate that the asset size of the firm is too large, further expansion may not bring further increase in revenue. This may be an indicator of the firm has passed its optimum point and management must take extra care in evaluating whether the company should invest in expanding more retail stores or not. Extended DuPont analysis breaks down net profit margin into tax burden, interest burden, and EBIT margin. Tax burden of the company is actually increasing, i. e. it has to pay more effective tax hence impacting the net profit margin.But it’s still fine as the effective tax rate is still at about 20%, which should be quite low when compared to effective tax rate outside Hong Kong and China. Interest burden also experiences an increasing trend. This is reasonable since the company has increased financing ability and financed through more bank loans. EBIT margin is increasing, offsetting the negative effect of tax burden and interest burden. 2) Efficiency Fixed asset Fixed asset turnover is in a decreasing trend (from 16. 08 to 7. 98 in last five years). This indicates the efficiency of generating sales revenue from fixed assets investment is lowering.This confirms with the decreasing asset turnover ratio mentioned above. However the ratio is still at a high level, the management should still invest in fixed asset and expand the business, but extra care should be t aken to determine the amount and scale to be invested. Inventory Inventory turnover is decreasing (from 3. 72 to 2. 48 in last five years). This indicates that in general, the speed of stocks selling has slowed down as the business expands. When this ratio is converted to days of inventory on hand, the meaning can even be clearer. The days increased from about 98 days to 147 days in these 5 years.Overstocking, importing or producing products which are not popular, or insufficient marketing efforts are all possible reasons to this decreasing efficiency. Receivables Receivables turnover is decreasing. To get a clearer meaning, the ratio is converted to days of sales outstanding, and this ratio is increasing (from 1. 97 to 11. 49). This ratio means on average how many days the company’s customers who buy on credit will pay their bills. This increasing ratio means that it takes more time to collect the bill from customers, meaning that capital has to be tied up for longer period. However the number actually is not large, it’s about 12 days and therefore an acceptable value. Payables Payables turnover decreased from 11. 14 to 5. 51. The ratio can be converted to number of days of payable. This ratio increased from 32. 76 to 66. 23. This ratio is the average amount of time it takes to pay its bills. The time has increased significantly. It showed the advantage of the growth of the company, i. e. when the company went listed and expanded, the ability to pay on credit increased. This increased time to pay bills increases the flexibility to manage working capital and hence benefits the operation of the company.Working capital The effectiveness of the company in using working capital has increased since the working capital turnover increased from 2. 72 to 4. 46 in last five years. This means that more sales revenue is generated for each dollar of working capital which funded the sales. This is probably due to increased size of the company, so that the compa ny can get more funding by short-term bank loans, and increase its payables to different creditors. These increased funding are used to purchase inventories to generate sales revenue. 3) Risk Gearing All debt-to-equity, debt-to-asset and financial leverage ratios are in an increasing trend.As the company grows, more funding is needed. Financing by debt issuance is better than equity issuance since the required return by debt is lower, and there is possible tax advantage on debt payment. These three ratios are still in a healthy range and further increase in the ratio is still possible. Debt-to-common equity ratio is 0. 32 and debt-to-asset ratio is 0. 18, these two numbers are fairly low. This indicates that the company has a considerable capacity in debt financing if needed. Coverage Interest coverage ratio maintains at a high level (159. at 2010/11), although the company has increased financing by bank loans. That means the operating profit is more than enough to cover the interes t expense and indicate that the business is healthy. Cash flow coverage ratio is also at adequate level despite it has fallen a bit (50. 54 at 2010/11). This is also a healthy signal because net cash flow is positive and adequate. 4) Liquidity Cash conversion cycle Cash conversion cycle is the days the company takes to convert its investment in inventories back into cash. The company has an increased cash conversion cycle, due to the increase in days on inventory on hand.This is still an acceptable length (92. 15 days), but the company should try to lower the days in inventory on hand as mentioned above. Current and acid test ratio Both current and acid test ratio are decreasing, but they are still at a healthy level. Current ratio is at 1. 85, meaning the current assets are 1. 85 times of current liabilities, which is sufficient for its short-term obligations. Acid test ratio is 1. 12, meaning the cash-like current assets are 1. 12 times of current liabilities, indicating that it i s sufficient to cover its short-term liabilities by short-term cash.Operating cash flow to maturing obligations This is also a measure of the company’s ability to meet short term liabilities from cash flow. Although the overall cash flow has improved, the current liabilities has also increased considerably, therefore this ratio is not at a high level (0. 44). The major cash outflow is from purchasing fixed assets and repayment of bank loans. Management should control the cash outflow in these two areas in order to improve the overall liquidity. III. Summary The company has a healthy business. It has an increasing net profit and positive cash flow.The ROE and profit margin are at good levels. It utilized bank loans to further expand its business, while the leverage ratios are still in a healthy range. There is no liquidity problem associated with the company as seen in liquidity ratios. However the management should focus on improving the efficiency of the company while expand ing the business. The major concern here is reducing days of inventory on hand, in order to reduce the length of cash conversion cycle. To sum up, this is a company with good financial performance, and therefore it is worth to invest in this company.B) Cost of equity capital Capital Asset Pricing Model (CAPM) is used to determine the cost of equity capital. There are three major inputs in CAPM equation: risk-free rate, beta of the company stock to a benchmark market, and equity risk premium of the benchmark market. Since I. T. Limited is a Hong Kong based company, therefore the input parameters mentioned above should come from Hong Kong. Risk-free rate Hong Kong government do not issue bill or bond (despite the newly launched ibond, but that is a floating rate bond which its purpose is for general public to protect inflation).Therefore risk-free rate should be the yield on Exchange Fund Bills issued by Hong Kong Monetary Authority. Risk-free rate should be the yield on short-term bi ll, therefore the yield on one-month bill is selected, which is 0. 05%. Stock beta Hang Seng Index (HSI) is the benchmark index in Hong Kong. 5 years of monthly return stock of I. T. Limited and HSI were obtained. Stock Beta of I. T. to HSI can be calculated by using Slope function of Excel, or regressing both return series. The estimated beta is 1. 399, meaning that the stock of I. T.Limited is more volatile than the index. R2 coefficient is 0. 2261, meaning that about 22. 61% of the variability of the stock returns can be explained by variability in the index. Equity risk premium According to Zhu & Zhu (2010), the equity risk premium of Hong Kong is 8. 19%. Applying CAPM: Cost of equity capital = (0. 05 + 1. 399*8. 19)% = 11. 51%. C) Weighted average cost of capital (WACC) The company has not issued any debt. The â€Å"debt† of the company is in the form of bank borrowings, so the effective interest rate of borrowing will be treated as cost of debt.In the latest annual repo rt, the effective interest rate is 1. 4% (from notes 23 of annual report). Total bank borrowings is HKD594. 145M, total equity is HKD1846. 961M, therefore: WACC = 594. 145 / (594. 145 + 1846. 961)*1. 4% + 1846. 961 / (594. 145 + 1846. 961)*11. 51% = 9. 049% References: Hong Kong Monetary Authority, Exchange Fund Bills and Notes fixing (http://www. info. gov. hk/hkma/eng/press/index_efbn. htm) Zhu & Zhu (2010) – Estimating the Equity Risk Premium: the Case of Greater China, Jie Zhu, Xiaoneng Zhu (http://citeseerx. ist. psu. edu/viewdoc/download? doi=10. . 1. 175. 7333&rep=rep1&type=pdf) Appendix A – Selected figures from financial statements Table 1 – Excerpt from summarized consolidated income statement 201120102009200820072006 HK$'000HK$'000HK$'000HK$'000HK$'000HK$'000 Turnover3,834,422 2,995,952 2,733,256 2,021,283 1,530,763 1,314,443 Cost of sales(1,405,482)(1,176,707)(1,121,570)(819,423)(640,442)(540,243) Gross profit2,428,940 1,819,245 1,611,686 1,201,860 8 90,321 774,200 Other income – incentive income0 13,200 0 0 Other (loss)/gain(7,544)3,791 (11,123)1,900 (4,395)(273) Impariment of goodwill0 (4,217)(59,569)0Operating expenses(1,958,255)(1,524,760)(1,468,877)(1,002,046)(749,898)(642,553) Operating profit463,141 307,259 72,117 201,714 136,028 131,374 Table 2 – Growth trend of turnover, costs and profit, calculated based on consolidated income statement 20112010200920082007 Increase/Decrease (%) Turnover27. 99%9. 61%35. 22%32. 04%16. 46% Cost of sales19. 44%4. 92%36. 87%27. 95%18. 55% Gross profit33. 51%12. 88%34. 10%34. 99%15. 00% Operating expenses28. 43%3. 80%46. 59%33. 62%16. 71% Operating profit50. 73%326. 06%-64. 25%48. 29%3. 54% Table 3 – Excerpt from summarized and standardized consolidated income statement 01120102009200820072006 Turnover100. 00%100. 00%100. 00%100. 00%100. 00%100. 00% Cost of sales-36. 65%-39. 28%-41. 03%-40. 54%-41. 84%-41. 10% Gross profit63. 35%60. 72%58. 97%59. 46%58. 16%58. 90% Other income – incentive income0. 00%0. 44%0. 00%0. 00%0. 00%0. 00% Other (loss)/gain-0. 20%0. 13%-0. 41%0. 09%-0. 29%-0. 02% Impairment of goodwill0. 00%-0. 14%-2. 18%0. 00%0. 00%0. 00% Operating expenses-51. 07%-50. 89%-53. 74%-49. 57%-48. 99%-48. 88% Operating profit12. 08%10. 26%2. 64%9. 98%8. 89%9. 99% Table 4 – Excerpt from summarized consolidated balance sheet 20112010200920082007HK$'000HK$'000HK$'000HK$'000HK$'000 ASSETS Non-current assets Property, furniture and equipment727,022 233,395 229,124 179,850 93,191 Current assets Inventories736,717 394,520 411,145 323,724 196,299 Table 5 – Excerpt from summarized and standardized consolidated balance sheet 20112010200920082007 ASSETS Non-current assets Property, furniture and equipment22. 13%11. 83%13. 44%11. 59%9. 38% Current assets Inventories22. 42%20. 00%24. 12%20. 85%19. 77% Table 6 – Excerpt from summarized consolidated balance sheet 20112010200920082007 LIABILITIES Current liabilities Bank borrowings (214,911)(47,400)(47,400)(10,000)0Trade and bill payables(360,545)(149,488)(155,993)(121,840)(66,805) Accruals and other payables(349,524)(178,245)(135,677)(140,200)(71,648) Non-current liabilities Bank borrowings(379,234)(35,200)(82,600)0 0 Table 7 – Excerpt from summarized and standardized consolidated balance sheet 20112010200920082007 LIABILITIES Current liabilities Bank borrowings-6. 54%-2. 40%-2. 78%-0. 64%0. 00% Trade and bill payables-10. 97%-7. 58%-9. 15%-7. 85%-6. 73% Accruals and other payables-10. 64%-9. 04%-7. 96%-9. 03%-7. 21% Non-current liabilities Bank borrowings-11. 54%-1. 78%-4. 85%0. 00%0. 00%Table 8 – Excerpt from summarized consolidated balance sheet 20112010200920082007 EQUITY Capital and reserves Share capital119,725 115,504 115,504 115,468 103,950 Reserves1,727,236 1,362,219 1,096,205 1,105,369 722,803 Non-controlling interests(3,749)0 0 0 0 Total equity1,843,212 1,477,723 1,211,709 1,220,837 826,753 Table 9 – Excerpt from summarized con solidated cash flow statements 20112010200920082007 HK$'000HK$'000HK$'000HK$'000HK$'000 Net cash generated from operating activities450,446 366,025 135,589 243,939 91,589 Net cash used in investing activities(508,347)(137,011)(156,242)(110,300)(101,843) Net cash generated from/ used in) financing activities204,453 (47,400)22,668 (76,497)(49,807) Net increase in cash and cash equivalents146,552 181,614 2,015 57,142 (60,061) Appendix B – Ratio formula Performance Profit margins Gross profit margin = Gross Profit / Turnover Operating profit margin = Operating Profit / Turnover Net profit margin = Net Profit for the year / turnover Return ratio Return of equity (ROE) = Net Profit for the year / Averageyear, year-1 (Share capital + Reserves) Decomposition of ROE ROA = Net Profit for the year / Averageyear, year-1 (Total Assets) ROE = ROA x Financial Leverage DuPont Decomposition of ROEAsset turnover = Turnover / Averageyear, year-1 (Total Assets) Financial leverage = Averageyear, year-1 (Total Assets) / Averageyear, year-1 (Share capital + Reserves) ROE = Net profit margin x Asset turnover x Financial leverage Extended DuPont Decomposition of ROE Tax burden = Net profit for the year / Profit before income tax Interest burden = Profit before income tax / (Operating Profit + Share of profit of jointly controlled entities) EBIT margin = (Operating Profit + Share of profit of jointly controlled entities) / Turnover ROE = Tax burden x Interest burden x EBIT margin x Asset turnover x Financial leverageEfficiency Fixed asset turnover = Turnover / Averageyear, year-1 (Property, furniture and equipment) Inventory turnover = Turnover / Averageyear, year-1 (Inventories) Days of inventory on hand = 365 / Inventory turnover Receivables turnover = Turnover / Averageyear, year-1 (Trade and other receivables) Days of sales outstanding = 365 / Receivables turnover Payables turnover = Cost of sales / Averageyear, year-1 (Trade and bill payables) Number of days of payable = 36 5 / Payables turnoverWorking capital turnover = Turnover / Averageyear, year-1 (Net current assets) Risk Debt-to-common equity ratio = (Short term + Long term bank borrowings) / (Share capital + Reserves) Debt-to-asset ratio = (Short term + Long term bank borrowings) / Total assets Financial leverage = Averageyear, year-1 (Total Assets) / Averageyear, year-1 (Share capital + Reserves) Interest coverage ratio = Operating profit / Interest expense Cash flow coverage ratio = Net increase in cash / Interest expense LiquidityCash conversion cycle = Days of sales outstanding + Days of inventory on hand – Number of days of payable Current ratio = Current assets / Current liabilities Acid test ratio = (Current assets – Inventories) / Current liabilities Operating cash flow to maturing obligations = Operating cash flow / Current liabilities Appendix C – Calculated ratios 20112010200920082007 Performance Profit margins Gross profit margin63. 35%60. 72%58. 97%59. 46%58. 16 % Operating profit margin12. 08%10. 26%2. 64%9. 98%8. 89% Net profit margin10. 12%8. 77%1. 56%8. 46%8. 0% Return ratios ROE23. 35%19. 53%3. 50%16. 70%15. 55% Decompsition of ROE ROA14. 76%14. 29%2. 61%13. 43%13. 05% ROA*Financial Leverage = ROE23. 35%19. 53%3. 50%16. 70%15. 55% DuPont decompistion of ROE Asset turnover1. 46 1. 63 1. 68 1. 59 1. 63 Financial Leverage1. 58 1. 37 1. 34 1. 24 1. 19 Net profit margin*Asset turnover*Financial Leverage = ROE23. 35%19. 53%3. 50%16. 70%15. 55% Extended DuPont decomposition of ROE Tax burden80. 65%83. 29%53. 97%81. 23%82. 63% Interest burden100. 46%100. 86%103. 66%106. 90%112. 12% EBIT Margin12. 49%10. 44%2. 8%9. 74%8. 63% Tax burden*Interest burden*EBIT Margin*Asset turnover*Financial Leverage = ROE23. 35%19. 53%3. 50%16. 70%15. 55% Efficiency Fixed asset turnover7. 98 12. 95 13. 37 14. 81 16. 08 Inventory turnover2. 48 2. 92 3. 05 3. 15 3. 72 Days of inventory on hand146. 89 124. 95 119. 58 115. 82 98. 19 Receivables turnover31. 76 31. 98 5 1. 12 81. 59 185. 10 Days of sales outstanding11. 49 11. 41 7. 14 4. 47 1. 97 Payables turnover5. 51 7. 70 8. 07 8. 69 11. 14 Number of days of payable66. 23 47. 38 45. 21 42. 01 32. 76 Working capital turnover4. 6 3. 91 4. 24 3. 39 2. 72 Risk Debt-to-common equity ratio0. 32 0. 06 0. 11 0. 01 0. 00 Debt-to-asset ratio0. 18 0. 04 0. 08 0. 01 0. 00 Financial Leverage1. 58 1. 37 1. 34 1. 24 1. 19 Interest coverage ratio159. 70 119. 70 29. 64 646. 52 45342. 67 Cash flow coverage ratio50. 54 70. 75 0. 83 183. 15 (20020. 33) Liquidity Cash conversion cycle92. 15 88. 99 81. 51 78. 28 67. 40 Current ratio1. 85 3. 00 2. 80 2. 93 4. 66 Acid test ratio1. 12 2. 08 1. 70 1. 91 3. 42 Operating cash flow to maturing obligations0. 44 0. 85 0. 36 0. 77 0. 58