C. Inflation Factor Essay Example for Free

C. Inflation Factor Essay Global growth remains noticeably above the historical trend, while inflation and long-run interest rates are unusually low. Global headline inflation has picked up in response to higher oil prices, but core inflation has been little affected and inflationary expectations remain well grounded. This has raised questions as to whether low inflation reflects deflationary. pressures from other sources, notably globalization, or whether there is a danger that the inflationary impact has simply been postponed. The global inflation rate has declined from an annual average of close to 15 per cent in 1980-84 to 3. 8 per cent in 2005. The average inflation rate in the industrial economies fell from almost 9. 5 per cent between 1975 and 1979, and nearly 9 per cent in the early 1980s, to 2. 3 per cent in 2005 and is projected to decline further. In developing countries, the decline has been even steeper and more rapid. In the early 1990s, the average inflation rate in developing countries was around 80 per cent; that had declined to 5. 4 per cent by 2005. The IMF forecasts currently project a further drop, to below 5 percent by 2007 (Kruegar). Over the past two years, inflation in advanced and many emerging market economies has remained remarkably subdued despite a significant rise in commodity prices, strong growth, and a broadly accommodating monetary policy stance in the major currency areas. Some analysts have argued that low and stable inflation reflects more intense global competition, which prevents firms from raising prices and puts downward pressures on wages in many sectors. If so, and given that lower-cost producers in emerging markets and developing countries will continue to integrate into the global trading system, these forces are likely to ensure low inflation in the foreseeable future (World Economic Outlook, â€Å"inflation† 97). This dramatic fall in inflation rates in the recent years owes a great deal to significantly improved macroeconomic management. Monetary policy has become much more effective, helped by the spread of central bank independence and, in many cases, by inflation targeting. And as inflation has declined, and more countries have adopted fiscally prudent policies, growth has become more rapid and, equally important, more durable. In addition, the rapidly expanding role of Asia and, to a lesser extent, the countries of the former Soviet bloc as low-cost manufacturing centers have served to dampen price inflation in high-income countries, where many of these products are consumed (World Bank).

Hobbes View of Human Nature and his Vision of Government :: Philosophy essays

Hobbes' View of Human Nature and his Vision of Government    In The Leviathan, Thomas Hobbes talks about his views of human nature and describes his vision of the ideal government which is best suited to his views.      Hobbes believed that human beings naturally desire the power to live well and that they will never be satisfied with the power they have without acquiring more power.   After this, he believes, there usually succeeds a new desire such as fame and glory, ease and sensual pleasure or admiration from others.   He also believed that all people are created equally.   That everyone is equally capable of killing each other because although one man may be stronger than another, the weaker may be compensated for by his intellect or some other individual aspect. Hobbes believed that the nature of humanity leads people to seek power.   He said that when two or more people want the same thing, they become enemies and attempt to destroy each other.   He called this time when men oppose each other war.   He said that there were three basic causes for war, competition, distrust and glory.   In each of these cases, men use violence to invade their enemies territory either for their per sonal gain, their safety or for glory.   He said that without a common power to unite the people, they would be in a war of every man against every man as long as the will to fight is known.   He believed that this state of war was the natural state of human beings and that harmony among human beings is artificial because it is based on an agreement.   If a group of people had something in common such as a common interest or a common goal, they would not be at war and united they would be more powerful against those who would seek to destroy them.   One thing he noted that was consistent in all men was their interest in self-preservation.    Hobbes view of human nature lead him to develop his vision of an ideal government.   He believed that a common power was required to keep men united.   This power would work to maintain the artificial harmony among the people as well as protect them from foreign enemies.

Financial Analysis of Hershey and Tootsie Roll Essay

Introduction Tootsie Roll and Hershey are two similar companies with a similar product offering, but they operate on entirely different scales. In an effort to determine the better investment of the two companies we will utilize multiple financial analysis ratios to gauge the health of the respective companies in terms of liquidity (the ability to pay short-term liabilities and respond to opportunities), solvency (the long-term viability of the company) and profitability (the efficiency at which the can turn it’s resources into profits). However, the snapshot picture of health that a single years worth of financial statements provide is not enough. Below we have offered a horizontal analysis of the respective companies to show the change in their health from 2012 to 2013 and analyzed the two companies against each other to show why we recommend Hershey as the better investment. Liquidity and Solvency Current Ratio The current ratio is defined as the current assets divided by the current liabilities for a given period. This ratio is important because it helps measure a company’s ability to pay their current liabilities with their current assets. This shows helps determine the liquidity of the companies and their ability to respond to market opportunities. Tootsie Roll has a current ratio of 3.25 in 2012 and 3.99 in 2013(an 18.5 percent increase). Hershey, on the other hand, has a current ratio of 1.44 and 1.77 (also an 18.5 percent increase) respectively. Both companies have increased year over year. As the current ratio shows, the Tootsie maintains a healthier ratio, but both have improved at the same rate. Debt to Asset Ratio This is a comparison of the debt-to-total asset ratio; also known as the leverage ratio, of both companies. This ratio is a good measure of solvency as it shows the percentage of assets that are financed with debt. Tootsie Roll has a ratio of 23 percent for both years while Hershey has a ratio of 78 percent and 70 percent respective to 2012 and 2013. Generally, this number should not be too high. While Hershey’s numbers are higher than Tootsie Roll’s, Hershey’s numbers have improved over the year. Furthermore, we believe Tootsie Roll may actually be under-leveraged since, â€Å"Having a healthy amount of debt can actually enhance a company’s profitability, in terms of the shareholders’ investment† (Harrison, Horngren, Thomas, 2013). As will be seen from the following ratios on profitability, Hershey is more efficiently turning their assets into profits, suggesting a better use of the healthy leverage shown in the debt to asset ratio. Profitability Gross Profit Rate A major factor for investors will always be the profitability of a company. One of the fundamental ratios to utilize when measuring the ability of a company to create a profit is the gross profit ratio, which is important for internal use as well as external use. For example: â€Å"Gross profit percentage is markup stated as a percentage of sales†. (Harrison Jr., Horngen, Tomas, 2013) This ratio will identify how much gross profit is being generated by every dollar the company generates though sales. Investors will always want to carefully keep track of the gross profit ratio in order to identify a downturn or an upturn in profits. Furthermore, The Hershey Company had a higher increase in gross profit ratio than Tootsie Roll Industries. The Hershey Company managed to increase the profit ratio from 43 percent in the year 2012 to 48 percent in the year 2013. This shows that The Hershey Company managed to increase their profit ratio by 11.5 percent from previous year. Tootsie Roll, on the other hand, also improved year over year, but only by 5.5 percent to reach a gross profit rate of 35 percent in 2013. It is important to note that the minimum increase in gross profit for every dollar of sales can make a huge difference in profits. For example: â€Å"an upturn by a small percentage can mean millions of dollars in additional profits†. (Harrison Jr., Horngen, Tomas, 2013) Even though the cost of goods sold consumes $0.52 of each sale, The Hershey Company managed to generate a  profit of $0.48 for each dollar of sales. Profit Margin Ratio The profit margin ratio demonstrates the ability of a company to increase the percentage of net income earned for every dollar of sales. For example: â€Å"this ratio shows the percentage of each sales dollar earned as net income†. (Harrison Jr., Horngen, Tomas, 2013) The Hershey Company was able to increase the profit margin ratio from 10 percent in 2012 to 11 percent in 2013. The increase in profit margin from the previous year 2012 shows that the performance of the company is increasing which means that revenue is increasing or expenses are decreasing. Furthermore, The Hershey Company is managing their performance efficiently and this is directly reflected in profit margin ratio. Return on Assets The return on assets (ROA) ratio helps measure how profitable a company is in relation to its total assets. In the case of Tootsie Roll, the company had an ROA of .06 in 2012 and an ROA of .07 in 2013. This is an increase of close to 16.7 percent year over year. Hershey, on the other hand had an ROA of .14 in 2012 and .16 in 2013. Hershey’s rising ROA is comparable at 14.3 percent. With change 16.7 percent and 14.3 percent being so similar, we favor Hershey’s ROA at the higher rate of .16 in 2013 as opposed to Tootsie Roll’s relatively meager .07 ROA. Payout Ratio The payout ratio will help make the final case of Hershey as the better investment of the comparable companies. The payout ratio measures the proportion of earnings that are paid to investors and shareholders. Because dividends are so important to the investment opportunity, this is an important ratio when looking at a company for investment income. In 2012 Tootsie Roll had a high payout ratio of 1.01 percent where Hershey’s was 52 percent in comparison. However, in 2013 Tootsie Roll’s payout ratio dropped a huge, 77 percent to 23 a percent ratio. Hershey’s payout ratio also dropped, but only 7.6 percent to 48 a percent ratio. Not only is 48 percent a better current number than Tootsie Roll’s .23, but as a long-term investment Hershey shows much more stability. Therefore Hershey continues to stand out as the stronger investment opportunity. Conclusion Determining the better of two companies to invest in is risky business and involves many factors outside of the numbers provided on financial statements. However, we have seen that by looking at the liquidity, solvency and profitability of the companies against each other an over time, we can gain valuable insights as to how well the respective companies are performing in the current environment and how well they are positioned to take advantage of rising opportunities and threats. Our analysis of Tootsie Roll and Hershey show that while Tootsie Roll has safer numbers in respect to liquidity and solvency, Hershey is clearly more efficiently using both it’s assets and liabilities to turn higher profits and pass that money on to it’s investors. Therefore, The Hershey Company is the clear choice to invest with. Bibliography Harrison, W. T. (2013). Financial Accounting, VitalSource for DeVry University, (9th ed.). Pearson Learning Solutions. Hershey. (2013). SEC Annual Report. SEC. Hershey: The Hershey Company. Tootsie Roll Industries. (2013). SEC Filing 10-K 2013. Chicago: Tootsie Roll.

Brewing Beer at the White House - First Homebrewer President

Lots of American presidents enjoyed their booze, and many brewed their own beer. George Washington was well known as a  home brewer and made  his own porter and whiskey at Mount Vernon. Thomas Jefferson did the same thing at  Monticello. But  the first American president known to have brewed his own beer on the grounds of the White House in  Washington, D.C. was Barack Obama, who made porter and ale beginning in his first term. As far as we know the White House Honey Brown Ale is the first alcohol brewed or distilled on the White House grounds, wrote  Sam Kass, the White House senior policy adviser on  nutrition  policy, in September 2012. George Washington brewed beer and distilled whiskey at Mount Vernon and Thomas Jefferson made wine but theres no evidence that any beer has been brewed in the White House. Obama as Home Brewer Obama began brewing beer in 2011 after the president bought his first home-brewing kit. He started brewing beer because he was in search of a hobby, according  to  published reports. Shortly after his home-brewing activities were made public, the  American Homebrewers Association made Obama a lifetime member. Though beer has long been part of the country’s history and traditions, Obama made history when, as president, he purchased a homebrewing kit and then — alongside chef Kass — spearheaded the effort to brew White House Honey Ale, the first beer known to have been brewed in the White House, the association wrote. About the Obama White House Beer The Obama staff made at least three difference styles of beer: a brown ale, a porter, and a blonde ale. All three were brewed with honey that was drawn from a beehive on the South Lawn of the White House. The honey gives the beer a rich aroma and a nice finish but it doesnt sweeten it, the White House said of the ingredient. The names of the  Obama White House beers were: White House Honey Brown AleWhite House Honey PorterWhite House Honey Blonde When Obama ran for a second term in  the 2012 presidential election, he  stocked his campaign buses with the White House brews. While  the White House brewed  the beer, it did not market or sell the beer publicly. It did,  however, publish the recipes for likeminded home brewers to try. Both the brown ale and honey porter were given good marks by fellow home brewers. Remarked Ray Daniels, in an interview with Bloomberg Businessweek:  Ã¢â‚¬Å"They are both pretty malty and on the sweeter side of the scale in overall balance. That will certainly make them crowd pleasers or at least unobjectionable to a broad range of people.† Wrote critic Gary Dzen in The Boston Globe: The White House knew what they were doing when they brewed this beer. Its approachable enough to serve to casual beer enthusiasts but flavorful enough to be interesting to those of us who know what we want our beer to taste like. Why Beer for Obama Obama is a beer drinker who was known to invite members of Congress and other important figures in American politics to the White House to talk and quaff a brew or two. In 2009, for example, Obama called what came to be known as a beer summit between himself,  Vice President Joe Biden, Harvard professor Henry Louis Gates Jr., and Cambridge, Mass. police Sergeant James Crowley.  Obama invited the men to the White House to talk over beers after police in Crowleys force arrested  Gates at his home.