Recent orders
Effect of the unemployment and inflation existing in that economy.
Course: Macroeconomics Semester: Spring – 2014
Code: ECO 200 Lecturer: Dr. Hassan
Handout date: 14th Feb, 2014 Due date: 14th March, 2014
Assignment Assignment Maximum Mark: marks
Student Name: __________________________________ ID:____________________
Effect of the unemployment and inflation existing in that economy.
Inflation has been one of the most commonly used terms both among scholars and the general public. The general public expresses panic in instances where it inflation goes beyond a certain level. Economists are usually concerned about inflation thanks to its effects on the Growth Domestic Product (GDP) or the economy of a country at large. The resultant effects of inflation are a product of its effects on other variables in the economy including consumption and investment. Macroeconomic policy makers have had their central objective as the sustenance of low levels of inflation coupled with high and sustained economic growth. The increased research on inflation usually emanates from the serious implications that it has for income distribution and growth in the economy.
The United States has, in the recent times experienced rising inflation rates. The most commonly used measurement of the increase in prices is the CPI (Consumer Price Index), a measure whose basis is the monthly survey carried out by the United States Bureau of Labor Statistics. The Consumer Price Index compares the past and current prices in a sample market basket of goods derived from varied categories such as apparel, transportation, food and housing. While the CPI has its shortcomings or limitations, it is widely recognized that inflation is an extremely consistent fact of the United States economy. The purchasing power of the U.S. dollar has been reducing every year since 1945 except in 1949 an 1950. The inflation rate per year since 1900 to 1970 rested at about 2.5%. This rate went up from 1970, spiking to approximately 6% and going to an all-time high of 13.3% as at 1979 (Mankiw, 2009). However, the inflation rates since then have been close to the range between 2% and 4%. In fact, the rate of inflation in 2010 rested at 1.5%. These variations in inflation have different effects on the GDP of the United States.
Still on investments, inflation increases the costs pertaining to information and transactions thereby limiting economic development. Inflation makes investment planning difficult due to the resultant uncertainty in the nominal values. Investors would be reluctant to get into contracts in instances where there is uncertainty pertaining to future inflation. Intermediaries such as financial institutions would be less eager to offer long-term financing (Masimo, 2001).
In addition, inflation has a bearing on the employment component of GDP. Scholars note that inflation being an increase in the prices of commodities where a dollar would purchase less products than it used to in the past means that commodities become more expensive. This would cause employees to demand higher wages and salaries in an effort to maintain their way of life or keep up with inflation (Lipsey et al, 2007). However, this results in a reduction in the employment rate as companies try to cut their labor costs to manageable levels. This, therefore, results in reduced household income and a reduction in the GDP or total aggregate output in the economy.
In addition, inflation has an impact on the balance of payment in the United States. When the cost of items increase relative to those of other countries, it becomes cheaper for consumers to obtain these commodities from outside the country than buy them domestically. On the same note, other countries would find the commodities in the United States too expensive (Lipsey et al, 2007). This means that the United States would be importing more than it would be exporting as its commodities would be considerably less competitive in the world market. In essence, trade deficits would occur thereby reducing the Gross Domestic Output and the economic growth at large (Wessels, 2006).
Needless to say, high rates of inflation would trigger negative effects on the Gross Domestic Product of the United States. However, this does not mean that the government should entirely eliminate inflation. However, too high inflation has a bearing on the investment decisions. Investors and lenders would be unable to invest as they cannot predict the future prices of their investment projects. On the same note, the overall costs of investment would be increased especially considering that investors would incur higher costs in gaining information pertaining to future trends, as well as transacting on any investment that they make. In addition, the government would be likely to put a price ceiling in order to limit the interest rates, which discourages investment (Lipsey et al, 2007). In addition, it increases unemployment, and the trade deficits as the United States would be importing more than it exports, thereby reducing the Gross domestic Product. All these factors hamper economic growth and reduce the Gross domestic Product of the country.
Advantages and the disadvantages of the current fiscal and monetary policy and monetary policy being implemented in the chosen country.
Effects of Fiscal and monetary policies in organizations in UAE
The fiscal and monetary policies may affect organizations either positively or negatively. First and foremost promoting various education and job training programs designed to develop a high skilled hence productive and competitive labor force is a very important policy that would boost the company miles and miles in realizing its goals. The back bone of any organization is its employees. If the employees have high level skills the profits output is likely to increase in any organization. When the workers idle around and take time to do what they would have done in less time if they had high level skill then they achieve less. The company with high skill worker reduces the cost of production as the worker takes less time to do work given and may then undertake something else. Also the quality of work produced is very important. If the quality of work is poor then the company is likely to make less profit. The workers with low level skills will produce poor quality work. Poor quality work cost the company not only in the cost of production but also its market and thus can really destroy its profit margins with high cost of production and les of supplies made (Anderson 2005).
When people are unemployed they don’t have the money to buy goods and so their spending habits are cut. The rise of joblessness led the federal government to increase its own spending and cut taxes. This way the federal government was trying to combat the rise of joblessness in either of the ways incomes rises people will spend more and the economy could start growing again. The government was ready to run a deficit for this purposes. Now going back to the company we realize that he good move fast when they are bought and that in return the time the company makes a lot of profits. When good are slowly moving the company may not make losses but all the same the huge profits that are every companies dream may not be realized. So for the goods of the company to sell the consumer must have money to buy the good. When the government policy is to reduce the state of joblessness, this means that people will have more income and they will be able to buy good. The company in return will have its goods moving fast and can make huge profits. The company can even reinvest these profits. However when the good are moving slowly it means the company will take a long time to make profits the money that could have been made a long time and then reinvested results in a huge loss. When people have no income they cause the other companies supplying raw materials to fall if they have less people to consume their products. The cost of production, in the case of our company, may increase because of the unavailability of raw materials. This is very uneconomical. It is always important to have low cost of production (Vining 2003).
The effectiveness of various economic growth reforms that were carried out in the past 5 years in UAE.
Before the implementation of trade liberalization and economic reforms years back, UAE was adamant on sticking to poor economic policies, which made the economy vastly inefficient, stagnant, discriminated from global economies and centrally controlled. After the initiation of programs such as the opening up of foreign investment together with trade and initiating free markets late in the 70s, UAE then has risen to a world class fast growing economy with actual annual gross domestic product which has over time averaged at ten percent to 2013. Recently, UAE has emerged as a vital global trade and economic power (Yeh). At the moment it is the biggest manufacturer, second biggest economy in the world, biggest foreign exchange reserves holder, biggest product exporter, second product importer and also second biggest destination for foreign direct investment.
The effects of the balance of payments on the exchange rates
Taking UAE as an example country, the country controls the amount of debts it covers form other countries. The country also uses balance sheets to track its transactions and debts. Balance sheet can help one to grasp financial health in a given business organization also to provide snapshots for potential investors and lenders. Whether the business is in debts or it considers the assets, a balance sheet helps one to keep the tracks of the current situations as well as planning for what will happen in coming years. Keeping of accurate balance sheet requires maintaining the outgoing records, for example, the assets plus liabilities at once using some strategies of balancing the checkbook, as well as keeping tracks on statements of the credit cards, and bank accounts.
References
Lipsey, R. G., Chrystal, K. A., & Lipsey-Chrystal, . (2007). Economics. Oxford [u.a.: Oxford Univ. Press.
Massimo, Ca. (2001) “Investment and the Persistence of Price Uncertainty,” Research in economics, Vol. 55,
Mankiw, N. G. (2009). Principles of economics. Mason, OH: South-Western Cengage Learning.
Samuelson, P. A., & Nordhaus, W. D. (2005). Economics. New Delhi: Tata mcGraw-Hill.
Wessels, W. J. (2006). Economics. Hauppauge, N.Y: Barron’s.
Anderson. B. (2005) Consumer Fraud in the United States. Washingon D.C. DIANE Publishing
Brown.J. (2006) United States Economics. California. In the Hands of a Child
Vining.D. (2003) Economics in the United States of America edt 3.michigan. University of Michigan
A Call to Limit the Number Inhabitants of Single-Family Homes in College Station No More than Four Unrelated People
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A Call to Limit the Number Inhabitants of Single-Family Homes in College Station: No More than Four Unrelated People
Introduction
Often, single-family residents experience housing challenges when they live in a city surrounding colleges or universities. Regardless of housing facilities available on campuses, some students opt to look for housing outside their campuses. These homes originally meant for single-housing dwelling are modified to suit student housing structures for students who live near their college. Among the issues that arise are the high rates of congestion, noise, lack of enough parking space, ownership of property, and safety issues ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”6BPLgk9R”,”properties”:{“formattedCitation”:”(Sorensen and Ohm 2)”,”plainCitation”:”(Sorensen and Ohm 2)”,”noteIndex”:0},”citationItems”:[{“id”:941,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/J7EMUF2L”],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/J7EMUF2L”],”itemData”:{“id”:941,”type”:”article”,”title”:”How to Define a Family? The Special Case of Regulating Student Rental Housing In Single-Family Residential Neighborhoods In Wisconsin’s College and University Communities”,”author”:[{“family”:”Sorensen”,”given”:”Matthew J.”},{“family”:”Ohm”,”given”:”Brian W.”}],”issued”:{“date-parts”:[[“2015″]]}},”locator”:”2″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (Sorensen and Ohm 2). The traditional definition of the term family means individuals with blood, marriage, or adoption relations. However, currently, a family can be defined as people who live together and share a house, cooking, sleeping, or eating spaces. A family does not include people with a temporary association, organizations, or clubs ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”GN9MOiMt”,”properties”:{“formattedCitation”:”(Sorensen and Ohm 3)”,”plainCitation”:”(Sorensen and Ohm 3)”,”noteIndex”:0},”citationItems”:[{“id”:941,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/J7EMUF2L”],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/J7EMUF2L”],”itemData”:{“id”:941,”type”:”article”,”title”:”How to Define a Family? The Special Case of Regulating Student Rental Housing In Single-Family Residential Neighborhoods In Wisconsin’s College and University Communities”,”author”:[{“family”:”Sorensen”,”given”:”Matthew J.”},{“family”:”Ohm”,”given”:”Brian W.”}],”issued”:{“date-parts”:[[“2015″]]}},”locator”:”3″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} ( 3). College Station is a city that developed around Texas A&M University around the 20th century. The university led to the development of residential places and, thus, a growing economy for the city. To maintain integrity and safety within the region, the city council adopted an ordinance restricting single-family homes to consist of not more than four unrelated people living in a household ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”yJTsdsqS”,”properties”:{“formattedCitation”:”(Wilkins 2)”,”plainCitation”:”(Wilkins 2)”,”noteIndex”:0},”citationItems”:[{“id”:940,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/ZA827ZG6″],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/ZA827ZG6″],”itemData”:{“id”:940,”type”:”article”,”title”:”College Station City Council OKs ordinance allowing up to six to live in single unit”,”author”:[{“family”:”Wilkins”,”given”:”Emily”}],”issued”:{“date-parts”:[[“2015″]]}},”locator”:”2″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (Wilkins 2). The council also required the registration of rental property. Apart from maintaining integrity, the ordinance also stipulated that people would be living in a safe and healthy neighborhood. A large number of students, therefore, renting single-family units will have an impact on the economy, social livelihood, and general characteristics of the affected region. This paper will discuss the assessment of the current situation in City Station and the benefits of the ordinance, which is to limit the number of inhabitants of single-family homes in College Station to no more than four unrelated people. It will further discuss its benefits, counterarguments, and recommendations for the proposal.
Assessment of the Current situation
Many who are not students vacate the area to move to affluent neighborhoods. The major reason is to avoid the noise, property crimes, and sex-related offenses often associated with the influx of students. The number of the student population has steadily increased to an average of 43% in College Station ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”9xIUHVHN”,”properties”:{“formattedCitation”:”(City of College Station)”,”plainCitation”:”(City of College Station)”,”noteIndex”:0},”citationItems”:[{“id”:947,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/XGA2SQVZ”],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/XGA2SQVZ”],”itemData”:{“id”:947,”type”:”speech”,”abstract”:”City of Bryan Neighborhood Protection Ordinances”,”genre”:”Government & Nonprofit”,”note”:”source: SlideShare”,”title”:”City of Bryan Neighborhood Protection Ordinances”,”URL”:”https://www.slideshare.net/ColinKillian/city-of-bryan-neighborhood-protection-ordinances”,”author”:[{“family”:”City of College Station”,”given”:””}],”accessed”:{“date-parts”:[[“2020″,5,11]]},”issued”:{“literal”:”20:05:25 UTC”}}}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (City of College Station). Because of this reason, many landlords have invested in more rental houses, where they have included the single-family residence to house a maximum of four people, such that roommates can share a housing facility to minimize costs. For instance, residents of College Station protested against more installment of student housing. Some residents who are earning merger incomes feared for displacement because they may not be able to afford these houses, as the college houses have an increased market value and demand ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”YrNQPIpJ”,”properties”:{“formattedCitation”:”(Falls 1)”,”plainCitation”:”(Falls 1)”,”noteIndex”:0},”citationItems”:[{“id”:936,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/EHV38RKW”],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/EHV38RKW”],”itemData”:{“id”:936,”type”:”article”,”title”:”College Station Neighborhood Working With City to Limit Size of College Rental Homes”,”author”:[{“family”:”Falls”,”given”:”Clay”}],”issued”:{“date-parts”:[[“2015″]]}},”locator”:”1″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (Falls 1). The author maintains that residents agree on the existence of a decree about the restriction of four-unrelated members in a single housing unit. Still, the order does not highlight how many bedrooms it should contain.
More students from Texas A&M University have rented single-family homes in Alabama and Detroit Street ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”bWizG3Mt”,”properties”:{“formattedCitation”:”(Clark 2)”,”plainCitation”:”(Clark 2)”,”noteIndex”:0},”citationItems”:[{“id”:937,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/GACPX57Y”],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/GACPX57Y”],”itemData”:{“id”:937,”type”:”article”,”title”:”Residents fight to maintain integrity of McCulloch subdivision”,”author”:[{“family”:”Clark”,”given”:”Caitlin”}],”issued”:{“date-parts”:[[“2015″]]}},”locator”:”2″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (Clark 2). It is an indication that more students may displace the residents of these regions. The many complaints arising from the current situation is that locals have been subjected to high tax rates, much traffic, and noise. They also fear losing their neighborhood, which they have an attachment for a long period. The single-family homes are also a reflection of the income, age and gender demographics, social and economic status. These are the determinants of what comprises the single-family homes. They determine whether there will be homogeneity, integrity, equality in sharing the available resources, and access to amenities such as medical services, public transport, and schools.
Fig 1 showing how different ages earn income ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”VY5jtR5i”,”properties”:{“formattedCitation”:”(https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html)”,”plainCitation”:”(https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html)”,”noteIndex”:0},”citationItems”:[{“id”:942,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/ZF529SN3″],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/ZF529SN3″],”itemData”:{“id”:942,”type”:”article”,”title”:”College Station Demographics”,”URL”:”https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html”,”author”:[{“family”:”https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html”,”given”:””}],”issued”:{“date-parts”:[[“2020″]]}}}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html)
According to the ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”1AI4VnRk”,”properties”:{“formattedCitation”:”(U.S. Department of Housing and Urban Development 1)”,”plainCitation”:”(U.S. Department of Housing and Urban Development 1)”,”noteIndex”:0},”citationItems”:[{“id”:935,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/P85HKLZ2″],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/P85HKLZ2″],”itemData”:{“id”:935,”type”:”article”,”title”:”COMPREHENSIVE HOUSING MARKET ANALYSIS U.S. Department of Housing and Urban Development Office of Policy Development and Research As of May 1, 2007 College Station-Bryan, Texas”,”URL”:”https://www.huduser.gov/portal/publications/pdf/CMAR_CollegeStnTX.pdf”,”author”:[{“family”:”U.S. Department of Housing and Urban Development”,”given”:””}],”issued”:{“date-parts”:[[“2007″]]}},”locator”:”1″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} U.S. Department of Housing and Urban Development (1), a single-family ordinance has led to increased renter reports. There has been an increase in demand for rental housing courtesy of university students.
Fig 2 showing the housing demand in College Station from 2006 to 2010.
Fig 3 showing the number of household station in 2019-2020 ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”bApYiA74″,”properties”:{“formattedCitation”:”(https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html)”,”plainCitation”:”(https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html)”,”noteIndex”:0},”citationItems”:[{“id”:942,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/ZF529SN3″],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/ZF529SN3″],”itemData”:{“id”:942,”type”:”article”,”title”:”College Station Demographics”,”URL”:”https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html”,”author”:[{“family”:”https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html”,”given”:””}],”issued”:{“date-parts”:[[“2020″]]}}}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html)
Fig 4 showing a trend in demographics in Housing in College Station ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”LbobRAkn”,”properties”:{“formattedCitation”:”(https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html)”,”plainCitation”:”(https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html)”,”noteIndex”:0},”citationItems”:[{“id”:942,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/ZF529SN3″],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/ZF529SN3″],”itemData”:{“id”:942,”type”:”article”,”title”:”College Station Demographics”,”URL”:”https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html”,”author”:[{“family”:”https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html”,”given”:””}],”issued”:{“date-parts”:[[“2020″]]}}}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (https://www.point2homes.com/US/Neighborhood/TX/College-Station-Demographics.html)
Benefits of limiting single-family homes to not more than four unrelated people
The primary benefit is a reduction in the costs of living, especially for students. Single-family units are easy to maintain because the unrelated people staying there will have an individual responsibility of taking care of their residences. The flexibility and lack of own instead of group responsibility is an advantage to the majority of the renters ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”qoleBRwo”,”properties”:{“formattedCitation”:”(Reid et al. 7)”,”plainCitation”:”(Reid et al. 7)”,”noteIndex”:0},”citationItems”:[{“id”:938,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/2SHFIX6C”],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/2SHFIX6C”],”itemData”:{“id”:938,”type”:”article”,”title”:”The Rise of Single-Family Rentals after the Foreclosure Crisis”,”author”:[{“family”:”Reid”,”given”:”Carolina K.”},{“family”:”Moyano”,”given”:”Rocio Sanchez-“},{“family”:”Galante”,”given”:”Carol J.”}],”issued”:{“date-parts”:[[“2018″]]}},”locator”:”7″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (Reid et al. 7). Besides, since the significantly affected party is the students, they enjoy a lack of obligation to maintain their homes alone. Moreover, the author argues that people may house to live in single-family homes rather than owning or buying their own houses. The benefit of this idea is that many, who are students and low-income earners, will focus on other projects that require their maximum attention. There is, in addition, a need to share housing facilities from students and other people. These students require living comfortably outside their campuses while maintaining decency, safety, and healthy neighborhoods.
Moreover, single-family homes consisting of unrelated people have lessened discrimination against racer and class. People who begin living as strangers will opt to live as a family, even with differences in quality, race, and economic backgrounds ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”vDAm4tn1″,”properties”:{“formattedCitation”:”(REDBURN 4)”,”plainCitation”:”(REDBURN 4)”,”noteIndex”:0},”citationItems”:[{“id”:944,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/NXYJLS64″],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/NXYJLS64″],”itemData”:{“id”:944,”type”:”article”,”title”:”Why are Zoning Laws Defining What Consitutes a Family?”,”author”:[{“family”:”REDBURN”,”given”:”KATE”}],”issued”:{“date-parts”:[[“2019″]]}},”locator”:”4″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (REDBURN 4).
As opposed to the other housing types, single-family units are in increased demand. This is a benefit to landlords who want to invest in the housing markets ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”i8VnbW6N”,”properties”:{“formattedCitation”:”(CLARK 4)”,”plainCitation”:”(CLARK 4)”,”noteIndex”:0},”citationItems”:[{“id”:939,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/2E24RD9N”],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/2E24RD9N”],”itemData”:{“id”:939,”type”:”article”,”title”:”College Station City Council seeks to create zoning district”,”author”:[{“family”:”CLARK”,”given”:”CAITLIN”}],”issued”:{“date-parts”:[[“2018″]]}},”locator”:”4″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (CLARK 4). These property owners, with updated records abiding by the law requirements, will provide affordable housing to their tenants. Further, residents, especially students of these single-family housing, are conversant with the laws against noise on neighborhoods, as they will be charged a fine for violating the rules ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”3QXBp12a”,”properties”:{“formattedCitation”:”(Cogan 3)”,”plainCitation”:”(Cogan 3)”,”noteIndex”:0},”citationItems”:[{“id”:945,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/Z55PIFDJ”],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/Z55PIFDJ”],”itemData”:{“id”:945,”type”:”article-journal”,”abstract”:”The City of Evanston’s recently reported decision to enforce ordinance 6-4-1-14, also known as the “three unrelated” ordinance, and their subsequent decision to delay enforcement, has introduced a great degree of uncertainty into students’ housing”,”language”:”en”,”source”:”www.academia.edu”,”title”:”Rental Unit Occupancy Restrictions: Common Practices and Analysis of City of Evanston Ordinance 6-4-1-14″,”title-short”:”Rental Unit Occupancy Restrictions”,”URL”:”https://www.academia.edu/12877743/Rental_Unit_Occupancy_Restrictions_Common_Practices_and_Analysis_of_City_of_Evanston_Ordinance_6-4-1-14″,”author”:[{“family”:”Cogan”,”given”:”Jared”}],”accessed”:{“date-parts”:[[“2020″,5,11]]}},”locator”:”3″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (Cogan 3). More rules prevent overcrowding and congestion, which has, therefore, reflected the ordinance of four-unrelated people living in single-family homes.
Single-family homes have benefited residents who struggle through paying for housing subsidies and covering costs. Through this, they have an added advantage for larger safe spaces and attending community colleges and universities, which are affordable.
Counterarguments
It is argued that continuously building single-family houses with four to five bedrooms and bathrooms will have lost the meaning of what a ‘single-family’ comprises. Besides, the number of bedrooms with unrelated people may present difficulties in maintaining the integrity of neighborhoods as earlier implied (Clark 4). Also, only the unrelated should not share a housing unit. However, related people may share a bedroom ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”vWphN4FY”,”properties”:{“formattedCitation”:”(Wilkins 3)”,”plainCitation”:”(Wilkins 3)”,”noteIndex”:0},”citationItems”:[{“id”:940,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/ZA827ZG6″],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/ZA827ZG6″],”itemData”:{“id”:940,”type”:”article”,”title”:”College Station City Council OKs ordinance allowing up to six to live in single unit”,”author”:[{“family”:”Wilkins”,”given”:”Emily”}],”issued”:{“date-parts”:[[“2015″]]}},”locator”:”3″,”label”:”page”}],”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”} (Wilkins 3). The “four-unrelated people” ordinance might not be easy to enforce because it does affect not only students but also young professionals and the elderly. These have had a newer definition of the term family, which should not be tied to traditional meanings. The elderly are cohabiting in the quest to save finances and take care of each other. Besides, these people require assistance from other people while they carry out their normal lifestyles ADDIN ZOTERO_ITEM CSL_CITATION {“citationID”:”TVqNOs8t”,”properties”:{“formattedCitation”:”(March 3)”,”plainCitation”:”(March 3)”,”noteIndex”:0},”citationItems”:[{“id”:943,”uris”:[“http://zotero.org/users/local/rEYGfGF8/items/4WRLI3AW”],”uri”:[“http://zotero.org/users/local/rEYGfGF8/items/4WRLI3AW”],”itemData”:{“id”:943,”type”:”article”,”title”:”Some renters living in violation of “four-person rule””””
Financial Ratio Analysis of Gulf Livestock Company
College of Business AdministrationMaster of Business Administration ProgramMaster of Human Resource Management Program
Financial Management: FIN512
Spring Semester AY2013-2014
Financial Ratio Analysis of Gulf Livestock Company
Under the supervision of
Dr. Najla Ellili
Table of Contents
Introduction ————————————————————————————— 3
Companies Profile ——————————————————————————- 4
Company Analysis——————————————————————————– 6
Cross Sectional Analysis For the Three Companies ————————————– 21
Conclusion —————————————————————————————– 31
References —————————————————————————————– 32
Appendix ——————————————————————————————- 33
Companies Profile
Gulf Livestock Company
The company was founded in 1982 and is headquartered in Ras Al-Khaimah, the United Arab Emirates. The company was as a Kuwait shareholders company by Al-Homaizi group and other 38 employees. Currently Gulf livestock is among the largest specialized cross-breeding company involved in livestock trading. The company also process frozen and fresh meat and other animal products and these facilities are located in Australia.
The company’s history commenced in 1984 when Australian state asked the owner to infuse investment and consequently control a hybrid research program in developing high quality cross-breed sheep in Australia. This process went successfully and made the company to be popular and greater access to the marketplace.
Presently, Gulf livestock import nearly 150,000 sheep to other countries and Kuwait. The company got listed in Abu Dhabi securities Exchange in 2009 and in October 2009, Gulf Livestock Company offered 100 million shares with a nominal value of Dh1 of equivalent to $0.27.
The company’s owners are Sklyer Group General Trading who owns shares of 36.14 %, Naif Al Sabah who has 8.76 % worth of shares, Al Salem Ltd Co with 6.18 %, Ahmed Al Nuaemi with shares of 5.18 %, and Ras Al Khaimah Government who owns 5.00 % of shares.
Company AnalysisGulf Livestock Company
Liquidity AnalysisCurrent RatioThe total current assets in 2012 was 94,215,792 while in 2013 it was 112,881,415. The current liabilities in 2012 was 50,019,988 while in 2013, current liabilities was 48,749,478. Current ratio in 2012 was 94,215,792/50,019,988 coming to 1.883563. For 2013 current ratio was 112,881,415/48,749,478 coming to 2.315541. The current ratio increased indicating a strengthening company assets. The assets increased and liabilities decreased.
Quick RatioQuick ratio is obtained by (Current assets – Inventory) / Current Liabilities. The higher the quick ratio the higher the chances and ability of company to borrow on short term basis.
Year Current assets inventory Current liabilities Current assets minus inventory Quick ratio
2012 94,215,792 147,302 50,019,988 94,068,490 0.99844
2013 112,881,415 506,386 48,749,478 112,375,029 0.99551
The quick ratio decreased from 2012 to 2013 indicating that the liabilities reduced while assets increased for the company.
Cash RatioYear current and non-current assets current liabilities cash ratio
2012 521,552,624 50,019,988 10
2013 554,521,879 48,749,478 11
Cash ratio has increased from 10 to 11 indicating that the company has the amount of cash available to meet its short-term liabilities and because of this the creditors would be willing to extend to the company.
Long Term Solvency AnalysisTotal Debt RatioIt indicates the company’s leverage.
Year total liabilities total assets debt ratio
2012 50,019,988 307,884,208 0.162464
2013 48,749,478 333,701,647 0.146087
In 2012, debt ratio was 0.162464 while in 2013 it was 0.146087. This indicates that there was a decreasing leverage and reducing financial risks. The total debt ratio decreased, this means there is low degree of leverage and financial risk. The company had successfully reduced its outstanding debts.
Debt to Equity RatioIt indicates Company’s long term solvency.
Year total liabilities shareholder’s equity Debt to Equity Ratio
2012 50,019,988 213,668,416 0.234101
2013 48,749,478 220,820,232 0.220765
There is a reduction indicating there are more assets in 2013 compared to 2012 as is indicated in the decrease in debt to equity ratio. The reduction indicates that assets provided by the stockholders are more than assets provided by the creditors.
Time interest earnedYear Earnings before Interest and Tax Interest Expense Time interest earned
2012 94,215,792 50,019,988 1.883563
2013 112,881,415 48,749,478 2.315541
The increase in time interest earned indicates a strengthening company in terms of assets and its ability to pay its long term debts. The ratio increased from 1.88 to 2.32 indicating the company was able to pay its interest and debts compared to the previous year (2012). On the contrary, an increase in time interest earned indicates that company is excessively paying debts other than concentrating on other projects. It means the company is not using some funds properly.
Inventory AnalysisInventory Turnover RatioYear cost of goods sold average inventory Inventory Turnover Ratio
2012 94,215,792 213,668,416 0.440944
2013 112,881,415 220,820,232 0.511191
The inventory turnover ratio increased from 2012 to 2013 and this shows the company improved in its inventory and costs of goods sold. The company thus had more sales in 2013 compared to 2012. Normally, this ratio is high for companies selling perishable products like Gulf (selling milk).
Day Sales in InventoryThe day’s sales inventory for 2012 was 239.94 while for 2013 the value rose to 251.07. this was an indication that the company had increased its inventory sales but the increase was small indicating the company was not selling off its inventories. On the contrary, it could also indicate the company’s decision to maintain high inventory levels so that it can achieve high order fulfillment rates.
Receivables TurnoverYear net credit sales accounts receivable Turnover
2012 29,516,580 1,367,071 21.59111
2013 42,857,928 943,755 45.41213
The receivable’s turnover increased indicating the company was growing in assets and not using it effectively. The value in 2012 was 21.5911 while in 2013 the value rose to 45.41213 indicating almost a double the value. This is also indication that the company was able to effectively collect its receivables.
Total Asset turnoverYear Sales or Revenues Total Assets Asset Turnover
2012 29,516,580 46,000 641.6648
2013 42,857,928 76,942 557.016
The increase in asset turnover indicates the growth in sales between two years. The table indicates that converting asset ratio sales in 2013 was lower than in 2012. This indicates that only 5.5% was converted in 2013 compared to 6.4% converted in 2012. For the company it is a serious challenge to increase the ratio by improving its efficiency.
Profitability AnalysisProfit Margin Ratio
Revenue Profit Profit Margin Ratio
2012 29,516,580 9,328,884 0.316056
2013 42,857,928 26,879,473 0.627176
The company’s profit margin increased from 31% in 2012 to 62.7% in 2013. The possible reason might be increased sale or reduced operational and production costs. Increase in sales might be due to improved products or proper marketing techniques.
Return on Asset (RoA)Year net income total assets Return on Asset
2012 29,516,580 46,000 641.6648
2013 42,857,928 76,942 557.016
The returned assets decreased from 64% to 56% suggesting the profitability on total asset decreased and is negative sign the company since it indicates that in 2013, the company was bale to convert its investments to profits compared to 2012.
Return on Equity (RoE)Year net income shareholder’s equity Return on Equity
2012 29,516,580 193,263,741 0.152727
2013 42,857,928 204,166,600 0.209916
The value in 2012 was 0.15 while in 2013, the value rose to 0.21 indicating a growth in net income and reduction in shareholder’s equity. This is an indication that the company was rowing in its sales while reducing the further investments.
Market Value Ratios
Price to Earnings RatioThis is determined by dividing Market Value per Share by Earnings per Share (EPS). The share prices remained the same due to similar investments and shares.
price per share earnings per share P/E ratio
2012 0.20187696 30 0.006729232
2013 0.15978455 43 0.00371592
The investors for the company is decreasing as indicated by the ratio. This is an indication that the company is willing to pay fewer prices in 2013 compared to 2012. This will led to decrease in stock prices of the company.
Market to Book Ratiobook value per share earnings per share Market to Book Ratio
2012 4.953512278 30 0.165117076
2013 6.258427364 43 0.145544822
The value has decreased from 0.16 to 0.14 in 2012 and 2013 respectively. This is an indication that the company market value was reducing compared to the previous year. It also idnciates that the investors were not ready to pump in more money to the company.
References
Peterson, D. P., & Fabozzi, F. J. (2012). Analysis of financial statements.
Vandyck, C. K. (2006). Financial ratio analysis: A handy guidebook. Victoria, B.C: Trafford.
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2012). Intermediate accounting. Hoboken, NJ: Wiley.
Appendix:
Summary of Financial ratios of the three companies
2013 Financial Ratios result
Average
liquidity current ratio 2.315541
quick ratio 0.99551
cash ratio 11
Solvency Total Debt 0.146087
debt/equity 0.220765
time interest earned 2.315541
inventory ratios inventory turnover 0.511191
days sales in inventory 251.07
receivables turnover 45.41213
days sales in receivable 140
total asset turnover 557.016
profitability profit margin 63%
return on asset 0.209916
return on equity 0.209916
market value PE ratio 0.00371592
market to book 0.145544822
2012 Financial Ratios result
Average
liquidity current ratio 1.883563
quick ratio 0.99844
cash ratio 10
Solvency Total debt 0.162464
debt/equity 0.234101
time interest earned 1.883563
inventory ratios inventory turnover 0.440944
days sales in inventory 239.94
receivables turnover 21.59111
days sales in receivable 126
total asset turnover 641.6648
profitability profit margin 31.6%
return on asset 3%
return on equity 0.152727
market value PE ratio 0.006729232
market to book 0.165117076
GULF LIVESTOCK PJSC CONSOLIDATED STATEMENT OF FINANCIAL POSITION DEC 31,2013 ASSETS Dec 31,2013 Dec 31,2012
NOTE AED AED
Non Current assets Property and equipment 5 506,386 147,302
Intangible asset 6 76,942 46,000
Investment in subsidiary 7 60,000 0
Investment properties 8 204,166,600 193,263,741
Available for sale investment 9 15,978,455 20,187,696
Refundable deposits 31,849 23,677
Total non current assets 220,820,232 213,668,416
Current assets Deferred revenue 743,160 743,160
Financial assets at fair value through profit or loss (FVTPL) 10 81,713,899 72,701,871
Trade and other recievables 11 943,755 1,367,071
Cash and cash equivalents 12 29,480,601 19,403,690
Total current assets 112,881,415 94,215,792
Total assets 333,701,647 307,884,208
EQUITY AND LIABILITIES Equity and reserves Share capital 13 100,000,000 100,000,000
Statutory reserve 14 50,000,000 50,000,000
General reserve 15 50,000,000 50,000,000
Retained carnings 83,356,601 55,498,673
Total equity and reserves 283,356,601 255,498,673
Non current liabilities Tenant’s refundable deposits 977,850 1,102,768
Provision for employees’ end of service indemnity 16 617,718 1,262,779
Total non current liabilities 1,595,568 2,365,547
Current liabilities Undistributed dividends 17 31,243,875 25,299,726
Other payables 18 17,505,603 24,720,262
Total current liabilities 48,749,478 50,019,988
Total equity and liabilities 333,701,647 307,884,208
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DEC 31,2013
Sales 19 0 302,313
Cost of sales 20 0 (427,187)
Gross (loss) 0 (124,874)
Loss on revaluation of property and equipment (126,570) (42,975)
Loss on revaluation of intangible assets (9,200) (82,000)
Selling, general and administrative expenses 21 (6,984,592) (3,840,342)
Gain from investments 22 50,805,027 35,291,685
Other income 23 1,643,235 856,583
Other cost (2,469,972) (2,541,497)
Net Comprehensive income for the year 42,857,928 29,516,580
Basic earnings per share (in UAE fils) 43 30