Marks And Spencer Group Plc Share Valuation Finance Essay - Free Essay Example

Sample details Pages: 9 Words: 2687 Downloads: 3 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? Marks and Spencer (MS) PLC is a UK based group which owns a chain of stores globally refer to (Appendix 1:..). It deals in retail goods which include clothing, food and home ware. It caters to all ages and demographic groups (Marks and Spencer 2010). 2. Findings 2.1. Models for share valuation (NAV, DVM and PER) Net Asset Values (REWORD NEED) Net asset value (NAV) is a representation of the per share value of an investment fund. NAV can be calculated as follow: Total value of all cash and securities in a given portfolio (minus liabilities) /by the number of shares outstanding. There are conditions in which asset values is particularly useful such as: Company in financial difficulty The shareholders of company in financial difficulty because liquidation value may or may not be close to NAV. Takeover bids This value is computed at the end of every trading day based on the closing prices of the securities in the portfolio. The buy and sell orders of all mutual funds are processed at the NAV on a given trading day. The investors however get the trade price only on the following day. When discounted income flow techniques are difficult to apply The NAV helps to calculate the price of shares and interests that the fund will issue and redeem. This ensures that the investors receive a fair proportion of the funds and on redemption receive their fair share of the funds value in cash. It is also useful in determining whether the shares in a public company are a cheap or expensive investment. This is done by comparing the companys current market capitalization with its NAV. The current market capitalization is the price at which the market values the company. NAV is also an index used to evaluate real estate investment trusts (REITs). REIT is a security that invests in real estate directly through properties or mortgages. It is similar to how the stock is sold to a major market. REITs, like other private companies will be listed. They can be classified as equity, mortgage or hybrid. Investing in REITs help reduce corporate income taxes. They are required to distribute a large portion of their taxable income into the hands of investors. They offer investors high yields and highly liquid real estate investments; Ezinearticles.com (2010) Don’t waste time! Our writers will create an original "Marks And Spencer Group Plc Share Valuation Finance Essay" essay for you Create order Problems with the Dividend Valuation Models DVMs are built on the idea that: The market value of ordinary shares represents the sum of the expected future dividend flows, to infinity, discounted to present value. Glen, A (2008). The DMVs present the following problems: DVMs to infinity The individual period model can be lengthy to any number of periods. Table 1: Universal Dividend Valuation Model P0 = D1/(1+ke)1 + D2/(1+ke)2 +ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦+ Dn/(1+ke)n + Pn/(1+ke)n If Pn is far in the future, it will not affect P0. Therefore, the model can be rewritten as: P0   =   S Dt/(1 + ke)t This model states that the value of a stock is settled simply by the current value of the dividends. Calculating the current value of an unlimited stream of dividends can be  problematic. Basic models have been created to make the calculations easier such as: The Gordon Growth Model Table 2: The Gordon Growth Model P0 = D0(1+g)1   +   D0(1+g)2 +ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦..+   D0(1+g)ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¾ (1+ke)1 (1+ke)2  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   (1+ke)ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¾ where D0 = the most recent dividend paid, g = the expected growth rate in dividends   ke   = the required return on equity investments. The model can be simplified algebraically to read: P0 = D0(1 + g)  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   D1      Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  (ke g)  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  (ke g) Dividends continue to rise at a constant rate for a lengthy period of time. The growth rate is supposed to be less than ke. Gordon proved that if this were not so (g exceeds k) a nonsensical result occurs because of the use of the history growth rate (Glen, 2010) , in the long run the firm would grow dreadfully huge to endlessness which show that DMVs are extremely sensitive to the assumption. However, if a firm is not paying dividends like many airlines at this time or has an unpredictable growth rate, the method will not work and more general types of the discounted dividend model need be used to worth the stock. Therefore, other approaches are required. This relates toward the terminal case of the Discounted cash flow approaches. Gordons model is hence appropriate to the terminal case. When the growth g is zero, Which means Nevertheless for many growth stocks, the present growth rate can differ with the cost of capital considerably year by year. In this case this model should not be used as Gordons model is sensitive if k is close to g, the price is very high, going to infinity and share prices change, often dramatically, on a daily basis.   The DVMs will not forecast this, nonetheless will give an approximation of the underlying value of the shares; Globusz.com (n.d). Understand Pros and Cons of historic PER In Valuation Of Companies The P/E ratio of a company is a one of the most important indicators in fundamental analysis for better or worse, because it shows how cheap or expensive a companys stock is. Theoretically, a company with a low P/E ratio is a better deal than a company with a high price to earnings ratio. There are multiple ways to look at a stocks price to earnings ratio. One method, is called the crude historic P/E and it is calculated by using the earnings from the most recent year past. The advantage of the historic P/E is calculated with real results and not the predictions of analysts which can be wrong, sometimes by a lot. The disadvantage of the crude historic P/E is that it tells you what the stock should have been worth based on earnings from the past The advantage of a perspective P/E is that it is not based on a companys previous performance. Nevertheless, all lot of things can change in a year and a company might be doing much better, or much worse now that it was last year. The disadvantage of a perspective P/E ratio is that it depends basically on a guess as to what the companys earnings will be since there is no way to know for sure how much a company will earn in the future. Each of these approaches gives us an insight into the company but there are limitations. How the analysis be improved? Deciding which kind of P/E to use for figuring out good stock investments can be eliminated and analyse by finding stocks which have good value P/E ratios for both the perspective P/E and the historic P/E. That means the stock is a good value no matter which earnings one looks at. It is important to know that many other factors go into determining whether or not a stock is a good investment. A stocks P/E may be high because there are solid expectations of large future growth (a growth stock) or the stocks P/E may be low because their futures prospects are dim (a low price but not a good value) as a rule of thumb see appendix 2: 2.2. Value of a share of Marks and Spencer (MS) Beta (B) represents the market risk involved in transacting a financial instrument. Reuters shows the value of Beta (B) for the stocks of MS PLC at 0.90. This implies that the market risk involved in dealing with the stocks of MS PLC is lower than the industry and competitors involved so the stock is a safe investment (Bloomberg 2010). Dividends announced by the company over the last five years are provided in Appendix 3. The common stock prices of Marks and Spencer PLC are valued by the following approaches. Net Asset Value (NAV) A financial instrument is valued by NAV. The expected market value of common stocks of MS PLC as per NAV is  £2185.9m (or more properly 2168.6 when minority interest are removed) of MS compares with a market capitalisation value placed on all shared when totalled of  £6.46bn (taken from FT at 22.20pm on 07th November 2010). This great difference make it clear that the shareholders of MS are not rating the firm on the basis of balance sheet net asset figures. Table 1: MS Net Asset Value (NAV) Market value of MS shares Liabilities No. of Common stocks outstanding Common stocks price per share  £6.46bn  £4,967,300,000.00 1,583,508,000  £2185.9m Common stocks price per share = (Total Value of all stocks liabilities) / No. of Common Stocks outstanding (Fabozzi, 2001). Dividend Valuation Models (DMV) DVM is based on using historical financial information of MS PLCs common stocks to calculate the current price of the stock. With the P0 and D0 given g calculated by averaging the percentage changes in final dividend in FY 2009 and 10. The value of Required Rate of Return (Ke) will be 0.1152 or 11.52%. The price derived from this is 278.70p (Marks and Spencer 2010; Bloomberg 2010). The Required Rate of Return (Ke) is calculated using CAPM model as follows: Ke = Rf + ÃÆ'Ã… ½Ãƒâ€šÃ‚ ² (Rm-Rf) where Ke = 3.5% + 0.9 x (5.5%) = 8.45% Using Dividend Valuation Model for one period based on the following equation: P0 = Div1/(1+Ke)+P1/(1+Ke) The reason for using one period Dividend Valuation Model is due to the estimated required rate of return which is less than the dividend growth rate and therefore, Gordons Model may not hold. We have assumed a constant dividend growth rate in our calculation. From this equation, we have a price of 384.88p which implies that if the price is equal to 384.88p or less than investment in the company stock is feasible. Moreover, when Ke is compared to the growth rate of the stock 11.48% it could be suggested that long term investment in the companys stock is a viable option. Table 2: MS Dividend valuation model Current share price (P0) Current dividend (D0) Required Rate of return (Ke)  £417.30p  £0.10 8.45% P0= D0 /(1 + ke) + P1/(1+K e) P0= 0.10/(1+0.0845) + 417.30(1+0.0845) =  £384.88p Historic Price Earnings Ratio Graph1 provide comparison of Marks and Spencer PLCs historical PER of the same year with major competitors. The PE ratio of MS is at 11.46 which is lower than 11.66 (sector PE ratio) in the markets they operate in. MS PLCs is in a moderate condition than Next PLC but is more unstable in comparison to Tesco PLC. It crossed the minimal barrier for P/E ratio in the industry (11.1) so the stock is performing reasonably well in the industry. From this analysis it could be suggested shareholders can expect relatively higher returns from their investment in the companys stock. The companys NAV is 92.310p indicating return to stock holders even if the company liquidates. Table 3: MS PER and Beta comparison with major competitors Price Earnings Ratio and Beta comparison Industry Sector MKS (Marks and Spencer Plc) Next Plc (NXT) Tesco Plc P/E Ratio (TTM) 11.1 11.66 11.46 11.24 13.29 Beta 0.99 0.96 0.9 0.95 0.77 Source: (Reuters 2010) Prospective Price Earnings Ratio The P/E ratio (perspective) is shown in table 4, the P/E Ratio (perspective) falls to 287.79 showing a decline in the P/E Ratio to 287.79 (for the next year) from 1264.54 (FY 2010). Due to lower EPS the stock is not worth keeping in the portfolio as it will decrease the value of the portfolio and the company is expected to incur reduction in profits (Chisholm and Chisholm 2009). Table 4: EPS (Future) e1(Next Years EPS)=S0 x (Ke -g))/b Earning Per Share(perspective) P/E ratio (perspective) (417.3*(0.1152-0.1148))/0.1148 1.45 287.7931 (Chisholm Chisholm, 2009) From this analysis it could be suggested that shareholders can expect higher returns from their investment in the companys stock. The companys NAV is positive and the P/E ratio is presently at a higher value and shareholders can expect an increase in the price of the companys stock and therefore, higher capital gains on their holdings. The stocks of MS PLC show an expectation of growth in the current FY according to their financial statements of FY 2010, since the profit before taxation indicates an increase of  £94.6million in the adjusted profit before taxation. The EPS basic and diluted have shown an increase in FY 2010.The net assets show an increase in the company accounts and so does the profit. The stock prices exhibit a rising trend and capital gains can be earned on the stocks in the short term as well. It is also viable for long term investments; according to London stock exchange the dividend payment per share is exh ibiting a rise of approximately 5%, showing recovery in dividend payments. With the borrowing decreasing in April 2010 the over all equity of the company is increasing making it financially stable. The half yearly accounts also show increase in revenues in the market segments (LSE 2010; Marks and Spencer.com, 2010). 2.3. Ratios analysis of MS The ratio analysis of MS PLC is as follows: Liquidity analysis The liquidity position of MS is also weak as values of both current and quick ratio is less than 1 and MS may run into problems to pay its current liabilities effectively shown in graph 2. Table 5: Marks and Spencer PLC Liquidity Ratio Liquidity Ratio Current Ratio=Current Assets/ Current liability Quick  ratio=(Cash + A/c Receivable + Short term Investment)/ Current liability FY2009 0.60 0.37 FY2010 0.80 0.39 Gearing ratio analysis The gearing ratios suggest that the company has high proportion of debt -to- equity. Although, it is earnings sufficient to pay interest but its equity to assets ratio remains quite weak shown in graph3 and 4. Table 6: Marks and Spencer PLC GEARING RATIO GEARING RATIO debt-to-equity ratio= Total Debt /Total Equity times interest earned=EBIT/ Total Interest Equity Ratio=Equity/ Assets Debt ratio= Total Debt/ Total Assets FY2009 2.45 4.06 0.28 0.71 FY2010 2.29 5.25 0.30 0.69 Profitability analysis The ROA has shown an increase showing that the net profit generated per dollar of assets has increased by 0.3% showing better usage of assets. The ROE shows a decline of 0.2 %, showing that the returns given to the common stock holders have declined in FY 2010 shown in graph 5. Table 7: Marks and Spencer PLC Profitability Ratios Profitability Ratios FY2009 FY 2010 ROA = Net Profit/ Total Assets 7% 7.3% ROE = Net Profit / Total Equity 24.1% 23.9% Investment Ratio analysis The Dividend yield ratio shows a decline of 0.181 in FY 2010, due to decline in the dividend payout. The PE ratio however shows an increase due to increase in share price of the share FY 2010 refer to Graph 6. Therefore, the stocks of MS PLC are expected to perform well with fluctuating returns to stock holders in the short run to investors, who are looking for capital gains. Table 8: Marks and Spencer PLC Investment Ratios Investment Ratios 2009 2010 Dividend Yield: Dividend Per Share /EPS 0.636 0.455 Price/Earning Ratio: Share Price / EPS 1018.75 1264.545 3. Conclusions and Recommendations The stocks of Marks and Spencer PLC show an expectation of growth in the current FY according to their financial statements of FY 2010, since the profit before taxation indicates an increase of  £94.6million in the adjusted profit before taxation. The EPS basic and diluted have shown an increase in FY 2010.The net assets show an increase in the company accounts and so does the profit. The stock prices exhibit a rising trend and capital gains can be earned on the stocks in the short term as well. It is also viable for long term investments; according to London stock exchange the dividend payment per share is exhibiting a rise of approximately 5%, showing recovery in dividend payments. With the borrowing decreasing in April 2010 the over all equity of the company is increasing making it financially stable. The half yearly accounts also show increase in revenues in the market segments (LSE 2010; Marks and Spencer 2010). The recommendation to the board of directors will be to marg inally reduce the dividend keeping in mind the market condition and increase its retained earnings to finance its short term liabilities and further boost its Return on Equity (ROE) which has dropped by 0.2 percent and Return on Assets (ROA). To gain the trust of the stock holders the company will have to communicate to the share holders that the company will payout bigger dividends in the coming period once it stabilizes and captures a greater market share in the sector.

Concept Of Operation Management For Senior Management

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Accounting Theories Telecommunication Companies

Question: Discuss about the Accounting Theories for Telecommunication Companies. Answer: Introduction: The leading company in the market of service industry and the telecommunication is the Telstra. The contribution of the company in the retail fixed broadband services is 3.6 million and the mobile services provided by the company is 17.2 million. The company believes that it would gain opportunities by connecting the people. Telstra being one of the largest mobile network in Australia, the company seeks to build technologies in a way that would be easily accessible. The company helps in improving the lives and the business work of the people it serves and has its network established in more than 22 countries. The company has worked hard in being where it is today by providing its consumers with the best products and services available in the market. The company has an eye to the future with ideas that will only develop them into a far better company. Telstras success story this year is based on three pillars involving improvement in customer advocacy, building new growth business and sustaining the core values of the organization. Conceptual framework: One of the objectives of Telstra regarding the financial reporting is to assist its stakeholders in making decisions by offering valuable information. This would in turn help the company in identifying the useful economic resources and destination the cash flow and making any changes if necessary. The financial statements of the company consist of statement of cash flow, balance sheet and income statement. All the financial reporting are provided to the stakeholders of the company regarding the financial status of the company such as its assets, income, revenue, equities. The principles of accounting and its assumptions are used to measure and recognize the financial concepts. Some of the characteristics, which need to be ensured, are the ability to understand, reliability, and to seek whether the reports are consistent and easy to compare. The diversification of Telstra ranges from the clod consulting of network to its mobility. The companys department is well branded as depicted by the Telstra organizational chart. The branding is in terms of the employees of the departments and the reporting the members appropriately. Corporate Governance: The practice of the corporate governance make the organization to run in a controlled way and the incorporated in to the corporate governance is the guidelines, rules and regulations of the company. The policy of the Telstra concerning the corporate governance is to grow continuously and to increase the value of the shareholders. The decisions of the Board regarding the company are made in the framework of the proper guidelines. The guidelines ensures that the company is working by keeping itself align with the practices of the corporate governance and is in the shareholders interest and the interest of the community and the employees are largely met (Adams and Borsellino 2015). The Board of Directors implements the framing of strategies and the major decisions and they are appointed on several criteria such as the expertise level in handling the complex situations and the skills they possess and changing the fortune of the company by taking effective decisions. The working procedures of the directors are looked after and taken care of by various committees. The directors are responsible to carry out their duties in the interest of the shareholders and to make the judgments independently. Whether there exists any relationship that is of fiscal nature or not is the directors responsibility to declare the same in an open way. The rules of the corporate governance as laid down under the ASX provides the framework within which the directors should performs their duties. The policies concerning the risk management need to be upgraded timely in the presence of the upcoming and new challenges. Therefore, such conclusion can be made that the organization has an able of corporate governance at high level. Ethics: The regulations and rules in the book of the company is considered by the Telstra in the area in which it is conducting its business and it is one of its requirement. The guidelines concerning the policies of the company entrusts that the business activities are carried out in such a way that it is not against any laws. In order to ensure the proper channelization of the donations made in the politics, the company had anti bribery law and the taking of the bribe is strictly prohibited. If the members of the company had been involved in such acts, then it needs to be disclosed to the management of the company. the company makes to ensure that the base of the customers is made strong and is aligned with the quality control output and this is done by the focusing on the standards of the Quality control and this is evident to the fact that the company. (Loe, Ferrell and Mansfield 2013). In the financial year 2016, Telstra provides ethical behavior training to 1700 employees spanning over 12 countries. A climate change risk assessment was carried out to recognize the risks caused and the ways to tackle this adverse situations within the business. For the financial year 2017 the company has plans for rolling out risk training and awareness sessions across all departments and continue its good work with the ethical behavior risk assessment program. Deontology: Telstra is a strong believer of human rights. Over the years it gone about its business in the most ethical and environmentally sound way. The Human rights policy of the company guidelines its work process and level of commitment to everyone who is associated with the firm in own way or the other. Telstra is a proud signatory of the United Nations Global Compact, a charitable programme to support ten globally established principles covering labor, environment and anti-corruption practices. The company lessens the overextension and this is depicted structure of the whole environment. It provides support to everyone to access the web in a safe and responsible way. The company has also taken the initiative of making people digital literate which will ensure everyone ripping the benefits of being on the net (Vadastreanu, Maier and Maier 2015). Libertarianism: Doing the business with appropriate freedom is one of the primary objectives of the Telstra. The company does not make sure of the aggressive policies and intends to maximize the profits in a cool manner. The main business of the company is to serve the people and its stakeholders with the platform of technology enhancement. Telstra has a Supplier Code of Conduct where it emphasis on the points related to labor, human rights, safety and environment and supply chain assortment. Telstra believes in excellence which is not stagnant and which improves on a regular basis. The supply code of conduct code assists that all the social and environmental factors are measured when selecting suppliers. They are in the process of continuously supporting their suppliers to diminish environmental impacts in their operations as well as in the products they deliver to the company. Te companys whistle blowing process is a platform where if something is found to be illegal or unethical can be reported by one and all (Lee and Fargher 2013). An independent service provider (STOP line) supports it and the admissions are taken in confidence. Virtue ethics: The main function of Telstra in the Australian market is to deliver the services and goods in a variety range of products. The company makes sure that the standard level is maintained and this has assurance as the company has good relation with the suppliers. Over the years, the business of Telstra is doing the business ethically. According to Audi (2012), One of the most impressive fact about the company is the stakes and prices which is associated with the products offered by the company. The company ensures the safety of the society and the company has put in the efforts. Another feature, which differentiate the company form others, is that the area of consumer deliverables are set at high standards. Telstra has always been committed to those who are a part of its everyday process. They have put their focus on three main areas: Employment involvement: The people of Telstra have always been part of the community service and stand for the issues that matters in daily life. Environmental leadership: In Telstra effort has been made to diminish the environmental impact along with that of the consumers too. The company believes in communication technology providing a better innovative way to generate environmental solutions. Everyone Connected: At Telstra the effort is been put in to make products for everybody so that everybody is connected irrespective of their age, ability, income and location. They want everybody to be a part of the digital family (Skelton 2015). Disaster relief and discovery: Every year Australians are affected a lot through bushfires, floods and cyclones destroying everything that stands in the way and creating havoc in the lives of the people (Van Hooft 2014.). Being the largest telecommunication provider they have their task cut out. In 2014, the company has explored in to the advancement of technology and this is provided in terms of emergency services by the LTE advanced networks, and trials of LANES on a large scale, a technology that will assist emergency service producers with trustable wireless communication in emergency situation. Legitimacy: The Telstra works with the policy of serving its customers without any issues by providing the clear and good business. It has delivered its services worldwide apart from serving the customers in Australia. The company has been conducting in a good manner with the people its serve and this is depicted by the customer value it generates by doing the business over the years ((Livingstone 2014). The company has taken major initiatives to gain the trst of the customers by providing the continued service over the years. (O'Connor 2014). They have been striving hard in making customer experience more fruitful than ever before and for that, they do not rely on customer interaction but other processes too. Telstra hold business meetings every month involving all the employees just to discuss on the ways of improving customer service. They have set up a Check-in service where they interact with customers on making things better. To be a leader the initiative needs to be taken as quickly as possible before others get on with it. They have been setting high standards in delivering better products that helps them stay ahead of its competitors. All the work procedure of Telstra that leads to customer service is examined, experienced and enhanced. Its a process that goes on for 24*7, finding new ways to make customer experience more enjoyable and hassle free. Telstras action: Over the years, the company has been contributing to the campaign by providing the donations and raising the funds for supporting the people. The company such as supporting society and children and thus serving the community has done several activities. The company has been able to raise ample amounts of funds with the help of suppliers, members and the customers. The Australian telecommunication industry involving Telstra, Vodafone and Optus have joined hands in starting a new fundraising channel pilot program named Premium SMS (PSMS) where 15 charities launching text to donate campaigns over a period of twelve months (Oboler, Welsh and Cruz 2012). Each of the 15 charities will have their own unique code and each PSMS sent under this pilot program will cost $5 (GST) free. The donor needs to avail the PSMS service and the donation amount of $5 will be charged to the bill with no extra add up costs. Report on remuneration: The fee points of individual directors and the making the proposal to the Board and this is done by the remuneration committee shapes the fees structure. The following advice is made to the shareholders by the board regarding the structure of fees. Comparison of fees pool is made and it is done compared to other entities. In order to draw and keep hold of directors, the required amount of fees which is of suitable ability The existing remuneration policies of the company is accounted for The comparison is made to the other organization regarding the individual directors fees Structure of Remuneration: The nature and extent of responsibilities taken by the non executive directors in the committee membership and the Board forms the basis of their remuneration package. The 20% shares of the fees of the non-executive director5s would go into the shares of the company. such a policy is inculcated in the company to perform their business activities in the shareholders interest. The board of the company is liable for fixing the non executive directors fees and this is depicted as the total remuneration package(Guiso, Sapienza and Zingales 2015). The role of the non-executive directors in the committee membership and the board forms the basis of the total remuneration package. Over the last few years, the report remuneration framework of Telstra has remained constant. The company received various opinion form the market regarding having the clear view of the plan relating to the long term incentive and cash return investment made by the company. These opinions were provided at the annual general meeting of the company. Outcomes of remuneration in FY 2016: The company offers the financial rewards based on the performance of the company. the company has been able to take good care of the shareholders but the few things have been depicted in the financial report of the company that company needs to improve the skills and knowledge of the customers (Heenetigala and Lokuwaduge 2013). Incentive design and Performance Assessment: The focus of the remuneration committee is to employ the healthy methods that would support the performance of the senior executives. Few incentive plan have been placed at the very beginning of the financial year in terms of short and long term incentives. The strategy implemented to increase the value of the share of the company is the use of the particular measures such as the performance measures. In order to settle the figures of the restricted shares under the long-term incentive plan and performance rights, a volume of the weighted average share price is utilized by the company (www.telstra.com.au 2016). In the case of performance targets, the company awards the fifty percent of the potential and this comprise of 200% of compensation that is fixed. In the event of over achievement, the company makes the maximum level payment and in the case of threshold performance, the company rewards no incentives. The board assess the financial performance of the company by rewiring the res ults of the non financial process and the financial results which is audited (Telstra 2016). After measuring the performance, the board assesses the percentage outcome of the incentives plan. The policy of the company that helps in generating the value to the shareholders by incorporating executive remuneration into the line are executives share ownership policy. The executives would be able to hold share to 100% extent of the fixed amount of remuneration, this is provided by the policy, and such shares would be allotted within the time span of five years after the appointment of senior executives. Performance Measures FY 16 $m FY 15 $m FY 14 $m Earnings Total Income 27050 26112 226296 EBITDA 10845 10533 11135 Net Profit 5780 4231 4275 Shareholder value Share price 5.56 6.14 5.21 Total dividends paid per share (cents) 31.0 30.0 28.5 Source: (www.telstra.com.au 2016) Note: the results from the operation in the financial year 2013 is included in the EBITDA Inventories of Telstra: The net realizable value and the lower cost vale are used to measure the inventories in the company. The company using the basis of the weighted average costs allocates the cost concerning the inventories. The goods that are anticipated to be sold is at the net realizable value. The valuation is done at the selling price that is estimated by deducting the completion costs and the cost, which is estimated in the selling, distribution and marketing of the products. Conclusion: The factors, which can be attributed to the Telstra in becoming the market leader, is the companys ethics and corporate governance policies. The community and the society that the company serves helped in maintain the position of the company at the top level. The consistency and the class of operations contributed to the Telstras reputation. Telstra, recently has indulged itself into fifteen acquisitions and ventures in remote diagnostics, secure health recordkeeping and telemetric. The company has made some strategic investments in the last few years to strengthen its bas e in the e-health services market. References: Adams, M. and Borsellino, G., 2015. Is there a positive link between corporate governance and board diversity? Lessons from Asia.Journal of Business Systems, Governance Ethics,10(1). Audi, R., 2012. Virtue ethics as a resource in business.Business Ethics Quarterly,22(02), pp.273Audi, R., 2012. Virtue ethics as a resource in business.Business Ethics Quarterly,22(02), pp.273 Guiso, L., Sapienza, P. and Zingales, L., 2015. The value of corporate culture.Journal of Financial Economics,117(1), pp.60-76. Guiso, L., Sapienza, P. and Zingales, L., 2015. The value of corporate culture.Journal of Financial Economics,117(1), pp.60-76. Heenetigala, K. and Lokuwaduge, C.S.D.S., 2013. Directors Duties and Responsibilities towards other Stakeholders: A Discussion of Case Studies on Corporate Disasters.Journal of Business Systems, Governance and Ethics,8(1), p.51. Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability: Empirical insights into the development, leadership and implementation of responsible business strategy.Journal of Business Ethics,122(1), pp.145-165. Lee, G. and Fargher, N.L., 2013. Whistle-blowing on financial misconduct: When do companies retaliate against whistle-blowers?.Available at SSRN 2266204. Livingstone, C., 2014. Enabling business leaders to drive change for a flourishing Australian future. Loe, T.W., Ferrell, L. and Mansfield, P., 2013. A review of empirical studies assessing ethical decision making in business. InCitation Classics from the Journal of Business Ethics(pp. 279-301). Springer Netherlands. Oboler, A., Welsh, K. and Cruz, L., 2012. The danger of big data: Social media as computational social science.First Monday,17(7).v O'Connor, S., 2014. Responsible investment-What, how and why?.Equity,28(9), p.4. Skelton, P., 2015. Telstra tackles digital home health.Connected Home Australia, (Dec 2015) Telstra. (2016).Telstra. [online] Available at: https://www.telstra.com.au/aboutus/our-company [Accessed 2 Sep. 2016]. Telstra. (2016).Telstra. [online] Available at: https://www.telstra.com.au/aboutus/investors/financial-information/financial-resultshttps://www.telstra.com.au/aboutus/investors/financial-information/financial-results [Accessed 2 Sep. 2016] Telstra. (2016).Telstra. [online] Available at: https://www.telstra.com.au/content/dam/tcom/about-us/investors/pdf-e/2016-Annual-Report.pdfv [Accessed 2 Sep. 2016]. Vadastreanu, A.M., Maier, D. and Maier, A., 2015. Is the Success Possible in Compliance with Ethics and Deontology in Business?.Procedia Economics and Finance,26, pp.1068-1073. Van Hooft, S., 2014.Understanding virtue ethics. Routledge.

The Garden Party Essay Example

The Garden Party Paper The Garden Party is written by Katherine Mansfield, a New Zealand prominent modernist writer of short fiction. Set in colonial New Zealand, The Garden Party falls into two clearly differentiated parts. For the major characters, Laura Sheridan, Mrs. Sheridan, Meg Sheridan, Jose Sheridan and Laurie Sheridan are considered by because they appeared in the story quite often. And for the minor characters, they are mostly the workers and helpers in the party, except for Mr. Sheridan and Mr. Scott. From this short story, we have encountered some literary theories. First theory that we have analysed is cultural theory. â€Å"The Garden Party† is a story about the differences between the upper class and the lower class lives. The Sheridan family represents the upper class while the Scotts represent the lower class. Mansfield gives certain importance for many words by repeating them persistently, especially hats, lilies, flowers, all those are symbols of wealth and superiority, in connection to the Sheridans. The Sheridan’s life appears more comfortable even when Mansfield is talking about them she uses only positive images, pleasure, flowers, songs, even in the house is highly organized. While talking about the Scotts and their class, only images of dark, ugliness, sorrow, disorder, and chaos came to our minds. Psychoanalysis theory is also one of the theories that we have encountered in this short story. The Garden Party traces the psychological and moral growth of Laura Sheridan. We will write a custom essay sample on The Garden Party specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Garden Party specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Garden Party specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The story presents her adolescent confusion regarding the social values of her family and her awakening to a more mature perception of reality after her exposure to poverty and death at the carters cottage. The third theory will be likely criticism theory. Most criticism of Katherine Mansfields short story The Garden Party concentrates on the story as a story of the growth and maturity of a young idealistic character. For example, see Lauras initiation as a passage from the dream world of her parents and social class to the real world of the Sheridans neighbouring working-class. This also describes the symbolic significance of the garden party, The garden party epitomizes the dream world of the Sheridan women, a world whose underlying principle is the editing and rearranging of reality for the comfort. Throughout this short story, we have also analysed a few themes. For the overall theme and sub-themes from this story, â€Å"The Garden Party†, the major theme is growth. Lauraà ¢â‚¬â„¢s mother summons Laura to supervise the workmen who come to set up the marquee for the garden party, she intends to leave everything to her children as a way to make them independent. When Laura suggests placing the marquee on the lily lawn, a workman rejects the idea, saying that she should the marquee â€Å"where it’ll give you a bang slap in the eye. † Laura then wonders whether it is respectful of a laborer to speak to a girl of her upbringing in the crude language of the common people. However, Laura ends up approving of the men even though they are the ones who choose the location for the marquee–against the karaka trees. Thus, though failing to supervise the men with authority, Laura learns to overlook class distinctions in dealing with the outside world. The another theme will be the contrast between life and death. The Sheridans garden is a place of thoughtless pleasure and burgeoning energy, where young people resemble brilliant butterflies and arum lilies bloom with an almost frightening vitality. In contrast, the home of the dead carter is dark and oppressive, guarded by an aged crone and surrounded by a shadowy crowd. Mansfield deliberately exaggerates the difference between these two locations in order to emphasize her theme. That life and death are part of the same continuum is suggested by the temporal structure of the story, which begins at dawn and ends in a gathering dusk. As many critics have noted, Lauras journey to visit the bereaved family has strong mythic overtones and resembles the tale of Proserpina, a goddess who was abducted by Hades into the underworld. Lauras moment of epiphany testifies to a kind of knowledge unavailable in the sunny world of the garden party. In this way, her journey also has the quality of an initiation rite, in which a naive young girl achieves emotional and moral maturity. Last but not least, we realized that this short story is focused on third person point of view. It is because the narrator withholds information in favor of limiting what she says to what Laura thinks and experiences. Besides, she generally does not understand the incident of what she undergoes that day, at least not until the very end, when she says isnt life, isnt life? only for her brother to interrupt her, misinterpret her, and silence the knowledge about death she had just obtained from visiting the cottage of the man who had died.