Romeo and Juliet Tragedy Essay Example for Free

Romeo and Juliet Tragedy Essay Romeo and Juliet is a romantic tragedy play by Willam Shakespeare. The play is about two young adults who are in love. They are both victims of a bitter feud between their well-respected families. I have looked up Romeo in the dictionary to give me an insight as to what the play was about and as soon as I read the meaning of Romeo I knew it was a love play: A hero- hence a man who is an ardent lover The play is set in the city of Verona. Romeo and Juliet (the main characters of the play) are part of the Montague family (Romeo) and part of the capulets family (Juliet). The play begins with a street fight between the servants of both families. The price brings the fight to an abrupt end. Juliet is meant to be getting married to Count Paris, chosen by her father. However Romeo and Juliet, who meet at a ball, soon fall in love and get married in secret. Juliet fakes her own death with a drug friar Lawrence issued her and is found in bed dead on her wedding day in which she is too marry Count Paris. She is buried in a tomb, which is where Romeo finds her. Romeo has not yet received a note saying that Juliet is not dead and kills him with poison. Juliet wakes up after the drug has worn off and Romeo dead and she kill herself (for real) with Romeos dagger. The two grieving families end the feud between them at the end of the play. Only do they end the feud when death is struck upon them. Romeo and Juliet is a tragedy because Romeos and Juliets love was singled to end in death and is the only thing that ends the feud between the families: The fearful passage of their death-marked love I understand that dramatic tension is when someone is creating a scene being big and powerful, having something struck upon you suddenly. This relates to the play because the play is powerful and it captures the audiences attention. It has a lot of cliffhangers for example; where Romeo kills Tybalt in act 3 scenes 1 we think what will happen next? Will Romeo die? What will Juliet do if her love is brutally murdered by her own family? All of these create dramatic tension. By the use of characters, events, lanuage the essay aims to explain my views on Romeo and Juliet and to tell and explain to people the play of Romeo and Juliet so that they understand what is happening and what it is all about. It will also increase my knowledge of the play so I can understand it and put myself in their shoes hopefully capturing what they must have felt and been like. From reading the prologue I understand that both of the capulets and Montagues is as equal as one another, they both have the same amount of wealth and respect: Two households both alike in dignity I know that Romeo and Juliet are madly in love and are destined for one another: A pair of star crossed lovers takes their lives A pair of star-crossed lovers could mean that Romeo and Juliets love is doomed by the influence of the stars and that they are madly in love. However the stars are crossed and this shows us that there is a shadow in the way and that something will go wrong. Also from the prologue the audience is told of the ending of the play, they are told that the lovers are fated, they are star-crossed, their love will end in death, and that the lovers death, and the lovers death is the only thing that will end the long feud between the families. But their childrens end, nought could remove In act 3 scenes 1, Mercutio, who is Romeos best fiend, picks a fight with tybalt who wants to fight Romeo. Instead Romeo trys to prevent the fight between Mercutio and tybalt. Romeo then kills tybalt and flees the scene of the murder. Before Romeo appears on the scene he has come from his secret wedding to Juliet. Friar Lawrence has married them, so only the friar, Romeo and Juliet know about the marriage and the Montagues and capulets are bonded. They are bonded through the two lovers marriage, unknown to lady Capulet she is now Romeos mother in law. I think that this scene has more dramatic tension because in this scene we are really on edge as to what will happen to Romeo now that he has murdered tybalt. Also we are anxious to know what will happen to Mercutio now that he has been wounded and we wonder whether he will live or die. Mercutio is brave in this scene and when he is injured by tybalt he puts a brave face on and pretends his injuries are not serious and people believe him because he is known as the fool, however after a while Romeo realises he is lying and that he is dieing. This also causes tension because when Mercutio is first injured we (the audience) believe that he is not really hurt, so we wonder what will happen? Will he be ok? Will his injuries cause his death? The action in this scene is crucial because it keeps us on edge and makes sure that we continue watching the play to see what happens, the action builds up the tension for the final scene when both Romeo and Juliet take their own lives. The action shows that whatever happens Romeo is still a good guy because although he has killed tybalt he has done it in good faith for Mercutio. The characters involved in act 3 scene 1 are Benvolio, Mercutio, tybalt, Romeo, Petrucio, a citizen, the prince and lady Capulet, lady Montague. My thoughts/ impressions of the families from this scene are: The capulets are an evil family who only care about them selves. However there is some caring members of the family (Juliet), as she does not hold any grudges against the opposite familys think the family is uncaring because when tybalt kills Mercutio although he did not mean it he does not show any signs of sorrow for what he has done. I think that the Montagues are a caring family because as soon as Romeo enters he talks about love, this shows he has loving feelings for someone, also Romeos best friend Benvolio is a peacemaker and does not like fighting: Out of her favour where iam in love Romeo does not want to fight, he does not want to harm anyone or cause trouble or fight with a member of the family and he only kills tybalt because he has murdered his best friend, and this shows that Romeo values friendship: I thought all for the best Mercutio pretends or trys to tell everyone that he is not in pain and this makes us wonder whether he is lying or whether he is telling the truth. However Romeo sees through him and we realise how much Mercutio and Romeo are hurting and we wonder what will happen next. Romeo is hesitant to get involved because he is Tybalts cousin, because he is a member of the family. This shows that he cares not just about himself and his reputation but that he cares about his family as well. At the end of the scene lady Montague feels that Romeo must not live and hat he deserves to die a tybalt has. I think that this has come about because Romeo has killed tybalt therefore he is a murder, and in time when the first play was wrote, death was a penalty for murder. I also think that the capulets do not want to accept that a member of their family was in the wrong. The characters change in act 3 scene 1 because Benvolio turns into a troublemaker; Romeo shows the audience his bad side and turns really angry and upset resulting in the murder of tybalt. In act 3 scenes 1 lady Capulet takes up the violence of the fed and demands that Romeos punishment is death. She does not change throughout the play and remains a hard, unfeeling, unsympathic woman who pushes her daughter away and is party responsible for her death. In act 3 the prince is personal because Mercutio is a kings man has been killed, the prince fulfils his words from act 1. Instead of killing Romeo the prince banishes him from the country as a result of causing death of tybalt: Else, when hes found, that hour is his last The play ends in tragedy. The death of two lovers, Romeo and Juliet. Romeo arrives at the tomb where Juliet has been buried, meets Paris and kills him. Believing Juliet is dead, Romeo takes the potion and dies. Juliet awakens, sees that Romeo is dead and commits suicide. As a result of this the capulets and Montagues promise never to feud again: Poor scarifies of our enmity I have learnt hat dramatic tension is as I thought it to be; it is something that is big, powerful but also keeps the viewers on edge because we wonder constantly what will happen next. In this play there are lot of themes. The themes involved are: Disorder this is a theme because there is fighting, anger, passion and false love (between Juliet and Paris) disorder means: A lack of order or confusion There is light and darkness because there is death, violence, sadness and secrets. Lightness is represented by the love between Romeo and Juliet. Darkness id represented because Romeo is sad and depressed and the sadness at the end of the play of the lovers death. Light is represented by love, life and hope. Darkness means: Gloomy, dismal, sullen, threating, obscure, mysterious, evil, in secret Light means: A way of looking at or considering a matter; aspect There is also love and passion because Romeo is in love with Juliet and passion because lady Capulet is only in her marriage because it makes her wealthy and noticeable. Romeo also shows passion regarding his feeling for Mercutio when he kills tybalt in revenge. Love means: Deep affection and warm feeling for one another Passion means: Strong desire or lust Overall I think that the play is very dramatic. The other themes as well are lies, deceit, truth, love and hate.

Steroids and Sports Essay -- Sports Argumentative Drugs Essays

Steroids and Sports Steroids, ever since their introduction into the sports world five decades ago, they have been a controversial issue (WebMD medical news). Anabolic performance dates as far back as the original Olympic Games. Today walking into any gym you will find some one who is using steroids or some kind of enhancement supplement. Anabolic steroids are so popular with athletes from high School level all the way up to the top. For the past fifty years, athletes around the world use steroids to gain muscle mass, and along with regular work-outs try to achieve the results they desire. Kids today using these drugs are getting younger and younger every day. But is it worth the cost? I believe the ban on steroids should be strictly enforced because besides the health risks it provides, it also compromises the integrity of the game in sports. The history of anabolic steroids can be traced back to the 1930's when a team of scientists first produced synthetic testosterone. The purpose of this synthetic steroid was to improve malnutrition and muscle loss in patients. In to the sports arena they were first introduced by the German athletes in preparation for the 1936 Olympic Games (Measles 2). The Russian Weight-lifting team won several metals in 1952 Olympic Games due to the use of "synthetic testosterone (Measles 54). After this American sport's physicians determined the US athletes should have the same completive advantage, and so the Americans started to use steroids. By the 1968 Olympic Games in Mexico City, the debate was not over the ethical or moral use of the drugs, but whether which drug was more effective. By 1969 all was in the open; the talk among users was all praise of the effect steroids had on performance (M... ...ung athletes should be encouraged to rely on their natural talents and strengths for the sake of fair play and medical safety. Anabolic steroids improve strength but that doesn't necessarily make you a better player. Work Cited Anabolic steroids in Sport and Exercise. Second edition. Charles E. Yesalis, MPH, ScD the Pennsylvania State University Editor. Explains the history of Steroids and also talks about how it is used in today's sports, and how steroids can be prevented. www.9NEWS.com/acm_news.aspx?OSGNAME=KUSA&IKOBJECTID=b401471f-0abe-42 In this article they talk about the growing use of steroid in sports. INFOFACTS; Steroids : www.drugabuse.gov In this website they talk about the health hazards of using Anabolic steroids. AMETRICAN COLLEGE of SPORTS MEDICINE Steroid survey reveals dangerous trends among users: June 1, 2005. www.acsm.org

How is Global Warming Effecting Hurricanes Essay

As we all know oceans cover about 70% of the Earth’s surface and typically the principle component of hydrosphere and contain roughly 97% of the Earth’s water supply. It plays very important role in the Earth’s climate by transferring warm as well as cold air and precipitation to coastal regions, where they may be carried inland by winds. The winds give energy to the sea surface that result in ocean currents. The currents carry heat from one location to another, changing the Earth’s surface temperature patterns and bring in changes in the atmosphere. Hence, ocean has a tremendous affect on climates and visa-versa. The thermohaline circulation of the ocean distributes heat energy between the equatorial and Polar Regions of the earth while other ocean currents do the same between land and water. However, today with the increase in the emissions of greenhouse gases, scientists and environmentalists are equally concerned that the polar ice caps could probably melt and contribute to the increase in ocean level. In recent years global warming is linked by many to the strength and number of hurricane. This is a research paper on a â€Å"CASE ANALYSIS† of a crisis we are facing with global warming and how it is affecting hurricanes. There are several studies that show that in the past years temperature has risen on the globe including the ocean temperature. Incidentally, during these years the number of hurricanes has also risen. This is the basic reason that scientists began to think if the increase in temperature is causing the disaster of hurricanes which need warm water to thrive. A few scientists also think that the temperature increase could also cause a â€Å"super-hurricanes† or the ultimate hurricanes in the U. S. east coast shores. It is predicted that these hurricanes will be more powerful than the once experienced till now (personal. psu. edu, N. D. ). Before we get into the details of how global warming can result in stronger and increasing number of hurricanes, it is important to understand what is global warming. Global Warming Global Warming as the word suggest is an increase of the global average temperature and is also termed as Greenhouse Effect. In general, the greenhouse gases include water vapor, carbon dioxide, methane and nitrous oxides which are responsible to trap heat that has been reflected from the earth’s surface. Scientific studies provide enough proof that on an average, the global temperature has increased 0. 5 °C over the last 100 years. However, there was a rapid increase in temperature only in the past 10-15 years and has resulted in climate changes (personal. psu. edu, N. D. ). The sea interacts with the atmosphere in two different methods, physically and chemically. The physical way is through the exchange of heat, water, and momentum. More than 70 percent of the Earth’s surface is covered by ocean and contains about 97 percent of its surface water and stores huge amounts of energy in the form of heat. Besides, the sea has comparatively large temperature resistance to change. Today, it is understood that the biological and physical performance of the ocean can change rapidly over minute and large areas. It usually decides the timing and models of climate change. When the heat increases over the ocean it escapes to warm the atmosphere and creates temperature variation in the atmosphere which in turn causes winds. As a result, winds move horizontally over the sea surface to drive ocean motion patterns. The variations in temperature and salinity cause vertical ocean currents which makes the warmer, fresher waters flow upwards as colder, denser or saltier water tends to move down. Eventually, a complex flow pattern is created through which the warm surface waters move pole ward where heat escapes fast to outer space, as cold, deep currents are established in the sea depths. Because of this complex ocean circulation movement system, the oceans and atmosphere get together to distribute heat and control climate. As this movement conveys huge amounts of heat and as a result more moderate climates on land areas that are nearer the ocean. It is not surprising to note that man’s increasing needs have simultaneously increased the load of greenhouse gases in the atmosphere. The burning of fossil fuels releases many harmful pollutants particularly the greenhouse gases into the atmosphere and contributes global warming. Increases of greenhouse gases in the atmosphere increases the earth’s temperature and results in malting of glaciers and ice sheets (Meehl, et al. 2005).

Overview And Analysis Of Ahc Limited Finance Essay - Free Essay Example

Sample details Pages: 11 Words: 3277 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? Financing Proposed : The purpose of this written lending submission is to explore the possibility of lending $5 million to AHC Limited Purpose : Funding in the construction of new office buildings in the area of Northern New South Wales Section 2.0: Overview of Business Subsection 2.1: Business Description and History AHC Limited (AHC) is a property development company based in Queensland. The companys business operations include incorporating contract residential and commercial building, property development for long-term asset portfolio creation and subdivision of land for residential and industrial development. AHC was listed on the Australian Stock Exchange on 24th of March 1988. The business operation is split in two divisions: commercial and housing divisions. Both businesses were operational in the geographic area between Hervey Bay, Queensland to Ballina in Northern New South Wales. Within the commercial segment, the offerings of the companys consist of Worongary Town Center and Saltwater Estate. In addition, a medical center was completed with doctor, dentist and physiotherapy open at the end of the fiscal year June 30, 2007. Besides that, AHC commercial division specializes in the construction of service stations, shopping centers, factories, show rooms as well as low-rise office bu ildings. On the other hand, within the housing segment of AHC, AHC Homes have been engaged in the development of new homes for Queensland and Northern NSW families. AHC Homes have earned enviable reputation for stylish design and value for money and have been known as one of the innovators in the quality new home market. AHC display homes are located at Sea Breeze Estate, Pottsville and Regatta Waters Oxenford and Halpine Lake Mango Hill. Don’t waste time! Our writers will create an original "Overview And Analysis Of Ahc Limited Finance Essay" essay for you Create order Subsection 2.2: Current Borrowings The company currently holds bank overdraft amounting to $25,748. This overdraft is secured by a floating charge over the Company assets. Besides that, the bank bills are secured by first mortgages over certain freehold land, buildings and work in progress. National Australia Bank has a registered fixed and floating charge over the assets of the Company including: Registered mortgage over property situate 7 South Quay Drive, Biggera Waters Qld 4216 Registered Mortgage Debenture over the whole of AHC Ltd assets including goodwill and uncalled capital and called but unpaid capital together with relative insurance policy assigned to the National Australia Bank Limited Registered Mortgage over property situate Worongary Village Shopping Centre 1 Mudgeeraba Road Worongary Qld more particularly described in Certificate of Title Reference 50310789. Registered Mortgage over property situate Caltex Service Station 2 Helensvale Drive Helensvale more particularly described in Certi ficate of Title Reference 50366042. Registered mortgage over property situate 9 South Quay Drive, Biggera Waters Qld 4216 Registered mortgage over property situate Cnr Ramsay Woolgar Roads, Gympie, Qld. The bank bills amounting to $18,432,718 are rolled over monthly and a variable rate of interest is payable on roll over. Specific to the development of the companys non-current asset Worongary Village Shopping Centre, The bill arrangement was originally established in 2003. As such, these bills are classified as non-current debt even though the company does not have an unconditional right to defer settlement for at least twelve months after reporting date. The amount of Current Secured Loan totaling $4,278,352 with Suncorp Metway Ltd is secured by a registered mortgage over property situated at Lots 400, 502 2 on SP 213534 Siganto Drive, Helensvale. It is noted that the company also has a bank guarantee facility in place with National Australia Bank amounting to $250,00 0. Section 3.0: Industry Analysis Property Industry Outlook: AHC Limited is categorized as part of the property development industry with the company operations divided into 2 divisions: Housing property and commercial property. With the recent global economy downturn due to the US sub prime mortgage crisis, Australia was the only G20 member that did not fall into a recession in 2009 (Westpac 2010). However, the effects of the downturn negatively affected the property market. According to Westpacs outlook on the property market for the next three years, as the price increased in the residential sector in the beginning of 2009 and there are signs that commercial property have begun to recover, the outlook for the next three years would be continued growth (Westpac 2010). The challenge remains however for the property market to grow in a period when the stimulus package is removed (Westpac 2010). Subsection 3.1: Residential Property According to Westpacs outlook, expectations for 2010 are for demand to remain healthy in the residential property market as job growth surges over the next few years in respond to the recovery of the economy (Westpac 2010). Interest rates are also expected to increase to ensure the property market will not be overheated. Even though the stimulus is being removed through the forecast period of 2010-2012, the recovery of the economy should stimulate demand in the property market as price stabilizes in 2010 due to expected rise in interest rates (Westpac 2010). These indications of probable signs of growth will bring positive impact on AHC Limited Housing Divisions financial position as there will be more opportunities in the future. This might assist to improve AHC Limiteds cash flow to service and repay the $5 million loan proposed. Subsection 3.2: Office Property As supply remained low and demands are expected to improve, the office market is near its peak in most markets over Australia, this is especially true in New South Wales (Westpac 2010). It is also stated in Westpacs outlook that while most markets have peaked, recovery of rents or values is not anticipated until later in the year of 2011 (Westpac 2010). As the proposal of lending $5 million to construct new office buildings in a fast growing area of Northern New South Wales is currently being considered, the future outlook looks well for AHC Limited. As supply of office buildings is currently low where market has peaked, it would be a good opportunity for AHC Limited to use the funds to construct these office buildings to take advantage of the expected outlook. As such, it would be reasonable to say that the funds lent to AHC Limited suits the purpose of the loan, as supply remains low and economy rising, the New South Wales market is expected to improve in future. The commercia l property markets are also said to be entering the recovery phase of the investment cycle (Property Council 2010). As total returns recorded for Australias commercial property market has improved at the end of December 2009, the results indicates improvement for the markets and signifies the commercial property market recovering from a trough in the property investment cycle in mid 2009 (Property Council 2010). As such, it is safe to say that AHC Limiteds decision to use the funds to invest in office buildings has a positive outlook and it is unlikely that the company would default on the loan. Another similar article by Lynne Blundell (2010) stated that Australias office market has retained their shine in comparison to other countries around the globe after the global financial crisis. Even though Australia withstood the global economic downturn better than most countries, the country still experienced a decline in office demands and rising vacancies in 2009 (Lynne Blundell 201 0). However, recent fall in national unemployment and rising rental incentives offered by landlords would indicate an intense competition for office blocks in 2010 (Lynne Blundell 2010). Subsection 3.3: Risk factors in Property Development Industry Part 3.3.1: Pre-construction Risk A study conducted by Newell and Steglick (2006) shows that overall respondents in the study think that this phase of property development has the highest overall risk due to uncertainty in pre-construction phase and other factors being out of developers control. The study also shows that Environmental risk which scored the highest among the risk ratings is seen as the highest risk factor in this phase of property development (Newell and Steglick 2006). There are other risk factors which include risk in terms of approval, title, political, feasibility and infrastructure in the pre-construction phase (Newell and Steglick 2006). In mitigating such risks, various strategies can be employed by AHC Limited such as analyzing cost impacts before committing to address environmental risk; purchase conditional on rezoning, confirm pre-DA if extra approvals are needed to address approval risk; evaluate land deficiency into land price to address market risk; and dealing only with experienced bu ilders and developers to avoid experience risk (Newell and Steglick 2006). Such strategies would assist in reducing the risk involved when making decisions in the pre-construction phase. Part 3.3.2: Contract Negotiation Risk The contract negotiation phase of property development is seen as the second highest overall risk in the study conducted by Newell and Steglick (2006). In this phase, it is found that land cost and acquisition terms are significant risk factors to manage in the contract negotiation phase (Newell and Steglick 2006). To address the land cost risk involved, proper price negotiation is done to provide adequate contingencies. AHC Limited can also negotiate adjustment mechanisms for price and conditions to minimize acquisition term risks (Newell and Steglick 2006). By carefully mitigating those risks, property developers will gain a fair and flexible contract terms as well as allowing for reasonable profit margin. Part 3.3.3: Construction Risk In this phase of property development, there are three specific risk factors seen to be important in the overall development process: time delay risk, cost increase risk and engineering risk (Newell and Steglick 2006). In order to overcome time delay risk, property developers usually take steps in ensuring there is adequate insurance cover (Newell and Steglick 2006). Besides that, developers also usually penalize builders for any delay in the construction to avoid any time delay costs as delay of construction would lead to a breach of terms of construction contract and would cost the company (Newell and Steglick 2006). Cost increase risk on the other hand is usually overcome by negotiating fixed price building contract in order to avoid any sudden cost increase (Newell and Steglick 2006). Section 4: Financial Analysis Sub-Section 4.1: Ratios Analysis Part 4.1.1: Ratios Analysis Table 4.1: Current Ratio Calculation 2007 2008 2009 Current Ratio = 2.27:1 = 1.97:1 = 2.39:1 The current ratio is categorised under liquidity ratio. Liquidity ratio is compute to determine whether the business has the ability to meet its short-term financial obligations (Sathye et al. 2003). The ideal ratio for the current ratio is 2 but there a fluctuation between 1.5 and 2 is still acceptable (Clemens Dyer 1986 cited in Sathye et al. 2003). From the table above, we can see that the current ratio for AHC Limited have an almost ideal ratio according to the benchmark. These ratios mean that AHC Limited has been utilising their current assets for profitable use. These ratios also show that AHC Limited do not have a high amount of debtors. Part 4.1.2: Debt-to-Equity Ratio Table 4.2: Debt-to-Equity Ratio Calculation 2007 2008 2009 Debt-Equity Ratio = 1.06:1 = 1.23:1 = 1.13:1 The debt-to-equity ratio is categorised under the leverage ratios. Leverage ratios are used to judge the proportions and manageability of debt carried by a firm (Sathye et al. 2003). The debt-to-equity ratio specifically shows the proportion of amount borrowed by a firm compared with the proprietors investment in the firm (Sathye et al. 2003). The generally accepted benchmark for this ratio is that it should not exceed 2. Based on the debt-to-equity ratio for the 3 years, the proprietors stake in AHC Limited has not fluctuated much. The proprietors stake in AHC Limited has remained an average of 47%. Thus, creditors enjoy a higher level of protection due to the fact that the proprietors stake in AHC Limited is large. Part 4.1.3: Inventory Turnover Ratio Table 4.3: Inventory Turnover Ratio Calculation 2007 2008 2009 Inventory Turnover Ratio = 0.68:1 = 1.14:1 = 1.05:1 The inventory turnover ratio is categorised under the efficiency ratios. Efficiency ratios are used to measure how efficiently the firm utilise its assets (Sathye et al. 2003). The inventory turnover ratio reflects the efficiency of the firm in management of inventory (Sathye et al. 2003). The inventory turnover ratio for AHC Limited is relatively low. Although a high inventory turnover ratio indicates a fast moving inventory. However, this does not necessarily apply in this case. AHC Limited operates its business in the real estate industry. Their inventory consists of residential, commercial and industrial buildings developments (AHC 2010). Part 4.1.4: Net Profit-Sales Ratio Table 4.4: Net Profit-Sales Ratio Calculation 2007 2008 2009 Net Profit-Sales Ratio = 84.04% = 11.44% = 7.25% The net profit-sales ratio is categorised under the profitability ratios. The profitability ratios are used to measures the profitability of sales generated through operations (Sathye et al. 2003). Net profit-sales ratio specifically measures the profitability of the firm when all the costs, including administrative costs are taken into account (Sathye et al. 2003). There is no specific benchmark for this net profit-sales ratio. However, the higher the ratio, the better it is. We can see from the table above that the net profit-sales ratio has been decreasing in the last 3 years. This indicates that the profit for AHC Limited has been decreasing even though sales have been increasing at the same time. Sub-Section 4.2: Financial Position and Performance Analysis Table 4.5: Summary of Key Balance Sheet Figures 2007 $ 2008 $ 2009 $ Cash and cash equivalents 1,756,335 1,337,936 1,571,454 Trade Other Receivables 58,050 712,682 122,925 Inventories 12,680,859 14,863,448 13,124,996 Current Tax Asset 14,334 Other current assets 122,662 114,250 64,936 Total Current Assets 14,632,240 17,028,315 14,884,311 Trade Other Payables 2,481,750 3,421,965 1,837,038 Financial liabilities 3,766,343 4,939,466 4,392,082 Provisions 197,828 281,951 Total Current Liabilities 6,445,921 8,643,383 6,229,120 (Source: AHC Limited Annual Report 2009 2008) Part 4.2.1: Short-Term Liquidity AHC Limited has a fair amount of cash and this amount of cash at hand had been more or less been maintained over the 3 years period. This would mean that the firm will have available funds to fulfil its obligations to creditors. However, we can see that the amount collected from debtors has dwindled over the years. This will inadvertently tied up possible cash for investment or working capital purposes. Nonetheless, short-term liquidity does not pose as an important factor in this analysis as the funding proposed is in longer term. Part 4.2.2: Long-Term Solvency Long-term solvency level of a firm determines the firms ability to meet its interest cost and payment schedules of long-term obligations. This can be observed from the debt-to-equity ratio. It is shown that AHC Limited has sufficient capital and this will poses a lesser risk to the lender. This is due to the fact that there is capital to provide a permanent and unrestricted commitment of funds and to absorb arising losses. Part 4.2.3: Business Performance AHC Limited has seen a drop in their net profit especially in year 2008 where profits has decreased dramatically from $7.2 million in year 2007 to $1.9 million. The profit has further decreased in year 2009 to $1 million. This continuous decrease in net profit is a result from the global economic downturn which is a factor to the lower than expected sales from the firms contract housing division (Business Spectator 2009). Although AHC Limited has raked in profits for the last 3 years, the net profit however has become lesser. A worrying factor would be that the firm could possibly be making losses in the future. Section 5: Security Acquiring security over the borrowers assets can be seen as taking insurance on the lending which will protect the lender in unforeseen circumstances (Sathye et al. 2003). The security can be viewed as the second way out for repayment and usually come in the form of land, guarantees and other kinds of asset (Sathye et al. 2003). We can see from the AHC Annual Report that AHC possessed some property, plant and equipment. However, further details are needed to determine on the feasibility of taking those property, plant or equipment as security. Further details are also needed to measures the strength of those assets as the second way out. Nevertheless, for the purpose of this current analysis, we are assuming there is no available security for the taking at the moment. Section 6: Key strengths and weaknesses relating to the proposal Key Strengths: The current outlook for the property industry is positive for the next few years which would support AHC Limiteds loan purpose in constructing new office buildings The company has been operating for over 20 years in the property industry. Thus, time has allowed the management to develop significant management and employee expertise. There is a growing demand for office buildings and current supply of office buildings in the market is low as well. It is most probable that AHC Limited will be able to rent out or sell the building blocks as soon as construction is done. With the continued job growth in Australia, there would be expected growing demand for office buildings. A relatively low debt to equity ratio indicates the company is not relying on leverage and the equity to sustain the company is sufficient. Key Weaknesses: Interest rate risk. AHC Limiteds construction cost might increase due to increase in interest rates. Mitigant : Interest c ost can be more predictable if interest rate derivatives are used. AHC Limited recorded high level of losses for the last 3 years as a result of the global economic downturn. This may mean that equity available to sustain these losses is decreasing. Mitigant : AHC Limited can raise more capital by issuing shares or bonds in order to compensate for the losses. In the property industry, there are many strong competitors like Land Lease ($3,304 million) and Australand ($806 million) which possessed much higher market capitalisation than AHC ($11 million). Mitigant: AHC Limited should expand the companys operation into other states of Australia to remain competitive in the industry Section 7: Recommendation Sub-section 7. 1: Proposed Loan Pricing The following pricing of loan calculation take into account the credit and non-credit 1risks. It has also considered the risk to weighted asset and capital adequacy level. Balance Sheet Asset Liabilities Loan $5,000,000.00 Deposits $4,957,639.18 Liquid Asset $154,639.18 Equity Capital $200,000 $5,154,639.18 $5,154,639.18 Profit and Loss Statement Financial Performance Yield Balance Loan $349,459.67 6.99% $5,000,000 Liquid Asset $5,412.37 3.5%1 $154,639.18 Prepayment Charge $10,000 0.2%1 $5,000,000 Less : Cost of Deposits $148,729.18 3%2 $4,957,639.18 Operating Cost $150,000 Expected Loss $9,000 0.18%3 $5,000,000 Profit before Tax $57,142,86 Tax $17,142.86 30%4 Net Profit after Tax $40,000 20%1 $200,000 1. Assume prepayment risk of 20 basis points, liquidity rate at 3% against lending assets, which currently earn 3.5% and ROE rate at 20% 2. According to Australia Banks, the current deposit rate is 3%. 3. Assume the probably of default is 3.0% while its recovery rate is 94%. 4. The standard company income tax is 30%. 5. Assume the cost of marketing and monitoring the loan is $150,000. 6. Assume the Risk to Weighted Asset is 50% and capital adequacy is 8% Capital Allowance = Loan Amount x Risk to Weighted Asset x Capital Adequacy Rate ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ = $5,000,000 x 50% x 8% ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ = $200,000 ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ After tax return on equity = Capital Allowance x Required Return ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ = $200,000 x 20% ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ = $40,000 ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ Liquid Asset = (Loans + Liquid Asset) x Liquidity rate ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ = ($5,000,000 + Liquid Asset) x 3% ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ = $154,639.18 ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ Expected Losses = Default probability x (1- recovery rate) ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ = 3.0 % x (1- 94%) ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ = 0.18% ÃÆ' £Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬ The proposed interest rate based on the loan pricing calculation is 6.99%. Assumptions were made on the necessary information needed to complete the calculation. Sub-section7.2: Conclusion AHC Limited is a company that suffered high losses at the year ended 2008 due to the global financial crisis which heavily affected Australias property market as a result of job losses and fall in demand for housing and commercial properties. Therefore, currently the company is not in its past health and financial position as it was before. This is due to the financial crisis which caused the statement of financial position of the company to shrink greatly as it absorbed heavy losses. The financial health position of the company appears to be relatively good compared with industry benchmark in terms of current ratio and debt to equity ratio. However, it is noted that the company is not doing well in terms of profitability ratio as the Net profits to sales ratio fell from 84% to 7.25% at the year ended 2009 from 2007. This might indicate AHC poor ability to generate profit as their total profit plunged from $7 million to $1.9 million. This will affect AHCs capacity to service and repay the $5 million credit facility. At the moment, it can be concluded that AHC Limited would not be suitable as a lending proposition. Even though the outlooks on the property seems to be positive and there will be growth in the industry in near future, it is not evident that AHC Limited would be able to generate necessary cash flows to service and repay the $5 million credit facility. It is also probable that other strong competitors within the industry would cause setbacks for AHC Limited within the loan period, which would lead to risks that AHC defaulting on the loan. As such, it is recommended that we do not consider the possibility of lending to AHC $5 million for working capital.