FINANCE

Big Data in Financial Accounting

Financial reporting, also known as the fiscal report can be said to be a formal record of commercial activities and position of a business, person, or any other entity. Financial reporting includes some basic financial statements such as balance sheet, income statement, statement of retained earnings, and cash flow statements (Charifzadeh and Taschner 2017). The current world is composed of new and improved technology which changes the ways in financial reporting is done in business. Precisely, evolution in technology has revolutionised financial reporting to Big Data. Big Data can be defined as extremely large data sets that can be analysed computationally to reveal trends, patterns, and associations concerning the behaviour and interaction of an entity or an individual (Charifzadeh and Taschner 2017). The large and complex nature of Big Data makes it impossible for traditional software to be used in their analysis. The focus of this study is to analyse Big Data as developed with financial reporting. Further, the study will explain some of the benefits and drawbacks of big data in financial accounting.

As explained earlier, big data is a series of information that is extraordinarily enormous and complex (Charifzadeh and Taschner 2017). Due to this complexity, this information cannot be analysed using old methods and technologies. It should be noted that data analysis is a very crucial concept in business because it provides the required information to categorise a business. Further, the results from a study are used to the government while taxing, and by the shareholders to understand the financial health of an organisation.

An analysis suggests that big data concerning finance office should consist of all the information that companies collect internally in the normal operation. The use of big internal data in financial reporting is always note encouraged by the chief financial officer (Charifzadeh and Taschner 2017). However, those who have used the big data in financial analysts argue that it assist in identifying cases of fraud in business. In this case, one can say that the use of big data in financial reporting helps in determining and detecting fraud and some credit or risk identification as used in an organisation. The benefits mentioned earlier are only possible in a small organisation by reorganising data and then applying advanced analysis.

On the same note, it should be noted that the financial reporting has seen new development in the past that affects the way in which organisations conduct financial reporting. The new accounting framework introduces two different suites of standards for-profit entities and for public benefit entities (Segall and Cook 2018). The for-profit standards must follow the international financial reporting standards (IFRS). On the other hand, the public benefit entities’ reporting standards must follow the international public sector accounting standards. Both of these suits are based on IFRS which are in continuous and progressive changes in the due to the ever-changing financial economy.

The new financial reporting standards are likely to affect several businesses including the banks and their customers. The reason why the big data affects banks and some small companies is that they lack proper bookkeeping that can be used as a source of big data. Further, the implication of the use of big data means that organisations have to apply and dedicate their efforts to technical, methodological issues. In particular, this part would require onto think of how they can affect forward-looking assumptions macroeconomic settings in their existing facsimiles and techniques. Besides, IFRS requires that business organisations recognise financial assets or liability in its statement of financial position. In this case, some organisations like banks face strategic as well as business challenges when it comes to the adaptation of their operation in a new environment under IFRS (Segall and Cook 2018). If they have to address this issues, then they would have to apply fundamental changes in their model and affects areas such IT and risk management (Charifzadeh and Taschner 2017). Besides, the IFRS is likely also to affect the ability of banks to lend cash. This discouragement is so because some sections of the IFRS discourages credit origination for clients. For instance, if one considers venture investment to be substance to volatile cyclic behaviour, then they may resolve to limit new business expansion in such arrangements.

Benefits of Big Data in Financial Accounting

Investors use the information presented by a business to determine whether they should or should not invest in a given organisation. In the modern day, the world is increasingly driven by data and how organisations outline its strategy and approaches is a crucial determinant of its ability to compete in a given industry (Al-Htaybat and von Alberti-Alhtaybat 2017). Further, stakeholders across the world use big data to make all sorts of economic decisions regardless of the size of their business. In other words, big data is a primary source and guide related to decision making in either small or large organisation.

Another benefit of using big data is that it provides descriptive analytics. It involves classifying and categorising data into useful information. In other words, it can be used to analyse which region or branch sold a given brand in high number, which brand has the highest demand, and what feedback customers give to a given brand among others. Another example of descriptive analytic in an organisation is when a business may need to spend some cash on marketing and want to find out how this spending can affect their sales or profit realisation.

Besides, big data can be used in real-time impacts and financial predictions which are crucial in determining the effectiveness of a business. It can be incorporated into a measure of financial forecasting. Such predictions can then be used to increase the efficiencies, assess risks, and identify any form of advantage or weakness via inquiry.

Lastly, accountants and CFOs in business can use big data to present the industry as a potential business partner. In this case, the finance department is expected to use the predictive analytics tool in collaboration with customer data to make future forecast operation of a business (Al-Htaybat and von Alberti-Alhtaybat 2017). Thus the move can be used to form alliances with potential investors.

Drawbacks of Big Data for Financial Accounting

Despite the vast advantages of big data, it also presents some challenges in a business setting. For instance, if the financial managers in an entity fail to understand the need for big data in a business, then they are most likely to lead the market into turmoil. Besides, a company may end up paying more taxes if they present big data in a wrong way. Further, the method of collecting and analysing big data is quite tedious and cumbersome, especially for some organisations. Lastly, a big information is like to negatively affect small organisations.

 

References

Al-Htaybat, K. and von Alberti-Alhtaybat, L. (2017). Big Data and corporate reporting: impacts and paradoxes. Accounting, Auditing & Accountability Journal, 30(4), pp.850-873.

Charifzadeh, M. and Taschner, A. (2017). Management accounting and control. Weinheim: Wiley-VCH Verlag GmbH & Co. KGaA.

Segall, R. and Cook, J. (2018). Handbook of research on big data storage and visualization techniques. IGI Global.

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Adidas Financial Challenge Strategy Document

Introduction

Most organizations face financial challenges classified based on their attributes. Financial challenges affect business functionality, impeding operational difficulties which may lead to loss of sustainability power of an entity (Pointer & Stillman, 2004). It is in this regard that the study evaluates the appropriate strategy to remedy Adidas from its financial challenge, as the problem is largely affecting its operational efficiency. Therefore, the study focuses on providing a strategy to overcome the financial challenge affecting the company, and through guidance from business valuation outcomes, the appropriate strategy is identified. It is found that Adidas should expand on its ownership structure to add more debt funds to finance its operations, as well as leverage its value.

Analysis of the financial challenge facing Adidas

Adidas owns a recommendable progress in terms of performance, characterized by its growing revenue over the analysis period. However, the company is facing a financial challenge characterized by high operating expenses, which may adversely affect its performance in the future (Adidas, 2017). Critically, the forecasted operating expenditure level accounts to 64.17 per cent of its gross profit, signaling high level of operating costs on its activities. Despite this posing a financial risk to the company, emanating from decline operating efficiency, the challenge may lead to loss of company value, as it leads to low profitability in the company. Apparently, it is evident that the challenge has led to a low forecasted net profit margin and the operating profit margin, accounting to 10.32 per cent and 17.20 per cent, respectively.

Loss of company value is common in instances of low profitability, as there is low return on assets as well as on the capital employed (Wahlen, Baginski, & Bradsh, 2010). This is an indication of low efficiency, which leads to decline in the value of the supply chain of the company. Moreover, with a low return on capital employed, investors worry about the sustainability power of the company, thus opting to hold less capital in the company. As a result, the growth rate of the company declines, as there is low level of invested capital, affecting its going concern attributes (Drury, 2004). Therefore, the financial challenge facing Adidas is worth to be proactively amended, to limits its spread effects on the company at large. Moreover, operating efficiency in an organization provides a strong operating backbone of a company, leading to the attainment of a strong financial muscle for thriving in the market space.

Business valuation

In business valuation, key concepts are evaluated to determine and evaluate the sustainability of an entity (Stickney, Weil, Schipper, & Francis, 2009). Therefore, based on the available information in the forecasted financial statements of Adidas, the valuation is based on its profitability, efficiency, as well as financial health of the company. This is done via various ratio analyses, as the ratio metric helps to determine the relative performance of the company.

Financial health valuation

Apparently, the financial strength of the company in relation to the industry and past history is recommendable, as it is ranked to have 7 out 10 in the ranking scale. This is mainly contributed by cash to debt ratio of 1.78, which is higher than the industry value of 1.45 (MorningStar, 2018). This is an indication that the company owns more net cash from operating activities than the average current liabilities. In addition, the company is in a position to pay its maturing obligations when they fall due for payment. This certifies the credit worthiness of the company, as its liquidity position is strong (Lumby & Jones, 2003).

In additional, the amount of assets that shareholders can claim from accounts to 44 percent, but this is lower than the industry average, whose level is 58 percent (GuruFocus, 2018). This means that almost 50 percent of the asset value equates to shareholder’s equity, a level which is recommendable to investors. This guarantees a sustainable return and minimal loss in instances of solvency. Importantly, on an average of 10 years, the maximum equity to assets ratio is 47 percent. In addition to its financial strength, Adidas has a promising future characterized by low debt in its capital structure. Based on the debt to equity ratio value, the company owns a debt level which equates to 17 percent of its equity value, a level lower than the industry average which is 34 percent. With strong capital structure, characterized with strong liquidity position and equity-asset ratio, the financial health of the company can be termed as strong, providing evidence of strong valuation exhibited by the company. This can be illustrated by the diagram below.

Source: https://www.gurufocus.com/stock/ADDYY

Profitability and growth valuation

The operating margin of the company is 9.6 percent, making it being ranked as one of the companies in Global footwear and Accessories industry with a meaningful operating profit. The industry operating profit level is 5.92 percent, an indication that the industry operating expenditure level is high. Despite Adidas being ranked among the best companies in the industry, this level of performance is not recommendable, as it lowers its financial muscle to run effectively its operations. Moreover, with a low operating profit margin, the company is characterized by a low net profit margin of 5.12 percent, which lowers its profitability growth prospects.

Investors in the company realizes a return accounting to 17.01 percent of its earnings, a figure higher than that of the industry, which accounts to 7.59 percent of the industry’s earnings. Apparently, the company has an appealing performance in the industry, but the investment competition operates above the industry boundaries, thus terming its performance as non-appealing to the majority of investors. This lowers its growth power, as investors tend to focus on companies with high returns in other industries. Moreover, the negative perception on the company by investors is detrimental to its survival rate, thus increasing solvency chances (Gocejna, 2014). This can be illustrated by the diagram below.

Source: https://www.gurufocus.com/stock/ADDYY

Investor’s perspectives valuation

Investors add up the capital in an entity, with anticipation of return from the entity’s earnings. Therefore, the valuation of the company in terms of earnings and share prices plays a fundamental role in determining the investment profile in an organization. Adidas’ investors are required to pay $ 35.94 to earn a dollar of the company earnings, a price which is higher than the industry average, whose stock price per industry earnings is $ 20.38. This is an indication that the company shares are overvalued in comparison with the industry, a factor that may lead to loss of investors. This is a similar case when the analysis is based on the predicted earnings verses current stock price, as the company forward price earnings ratio is $ 24.04. Investors in the industry are required to pay less by $ 7.35, a factor that will adversely affect the company valuation by investors. This can be illustrated by the diagram below.

Source: https://www.gurufocus.com/stock/ADDYY

From the valuation reports, it is evident that the company financial health is recommendable, but much need to be done on its profitability and growth, as well as its investment profile in terms of pricing, as both experience a lower performance than the industry average.

Overview of an appropriate strategy to overcome the financial challenge

The financial health of Adidas ascertains its sustainability power, thus exiting the business is not an appropriate strategy of recovering from its financial challenge. In addition, improve its spending will add more to its prevailing challenge, and its investment valuation lowers its credibility in obtaining additional equity. Moreover, its stock is priced higher than the industry average, thus having a low investor’s interest. Therefore, to recover from the prevailing financial challenge, the company needs to acquire more funds through changing ownership of its capital structure, through additional of debts in its capital.

With its strong financial health, characterized by strong liquidity position and low debt levels, inclusion of additional debt will provide funds to finance its operating expenditure. Moreover, additional of extra debt helps in leveraging the value of a firm, thus gaining more value from investor’s perceptions (Adam, 2015). In the long term, the value of the company will improve, providing a sustainable power over its operations.

Conclusion

Inefficient operations in an entity lead to financial challenges that impact the value of entity in association with the rate of growth of its sustainability power. Apparently, as a financial challenge facing Adidas, its operation efficiency is at risk if proactive strategies would not have been taken place to remedy the situation. Moreover, with inclusion of additional debt capital in its ownership structure, the entity achieves a financial muscle to remedy its ailing operations, as well as attain a leverage value emanating from debt financing.

 

 

 

 

 

 

 

 

 

References

Adam, P. (2015). Managing Internationalisation. Zlín: UTB.

Adidas. (2017). Annual Report 2017. Herzogenaurach: Adidas.

Drury, C. (2004). Management and Cost Accounting, Volume 2; Volume 6. Boston: Cengage Learning EMEA.

Gocejna, M. M. (2014). Investor Expectations in Value Based Management: Translated by Klementyna Dec and Weronika Mincer. Boston: Springer.

GuruFocus. (2018). Adidas Valuation. Retrieved March 19, 2018, from https://www.gurufocus.com/stock/ADDYY

Lumby, S., & Jones, C. (2003). Corporate Finance: Theory & Practice. Boston: Cengage Learning EMEA.

MorningStar. (2018). Adidas valuation . Retrieved March 19, 2018, from http://www.morningstar.com/stocks/PINX/ADDYY/quote.html

Pointer, D. D., & Stillman, D. M. (2004). Essentials of Health Care Organization Finance: A Primer for Board Members. New Jersey: John Wiley & Sons.

Stickney, C. P., Weil, R. L., Schipper, K., & Francis, J. (2009). Financial Accounting: An Introduction to Concepts, Methods and Uses. Boston: Cengage Learning.

Wahlen, J. M., Baginski, S. P., & Bradsh, M. (2010). Financial Reporting, Financial Statement Analysis and Valuation: A Strategic Perspective. Cengage Learning: Boston.

 

Financial Analysis & Statement Preparation

Introduction

Adidas is a multinational corporation, headquartered in Germany. The company is known for designing and manufacturing high-quality clothing, shoes, and accessories. Its innovation and reliability has made the company the second largest manufacturer of sportswear in the world. Adolf Dassler started the company and later, his brother, Rudolf, joined him. The company made its first innovation when it replaced metal spikes in athletic footwear by rubber and canvas. The company has a vast portfolio, extending from sports clothing and footwear to bags, eyewear, watches, etc. (Lebron, 2010). The company employs around 50,000 employees and also incorporates 170 subsidiaries.

The company employs a vast differentiation strategy. With its corporate strategy focusing on innovation, the company also makes consistent efforts on improving its product line to stay ahead in the competition. The company also strives for investing in potential markets and employing a unique channel approach. The company has a supply chain that maintains a high response rate with the customers by making a quick response to the market changes. The company recently centralized its Excellency and Sales Strategy team so that the company can effectively manage global markets. The company offers high competition because of its multi-brand portfolio. This further helped the company to create an international sales function which, in turn, managed commercial activities of the company. The company also dwelled upon dividing its global sales function- the plan that company implemented later. Retail and wholesale became the two critical elements of the global sales function.

Adidas also strengthened its presence by embracing e-commerce. This helped Adidas to reach and attract more customers. Adidas has a corporate culture that encourages employees to be more innovative. This has supported the company to design products that are highly innovative as well as highly reliable. The company has successfully maintained sustainability by satiating the concerns of employees as well as shareholder’s interest.

Business Model

A business model is often looked upon as a plan that businesses employ for their successful operations (Seelos, 2010). Adidas has been emphasizing upon innovate products to satiate the needs of their customers. The company, in the past few years, has been less focused upon endorsing their products while at the same time, developing and advancing their product line to suit the specific needs of consumers, mostly athletes. The company has also been improving its infrastructure so that they can produce products at a faster rate. They have also streamlined the global range of their products to reduce the complexity. To complement the decrease in complexity, the company moved further and harmonized the above market services and consolidated their warehouse base. The supply chain has also been encouraged by innovating models, and as a result, the response rate with the customers has been increased immensely. This strategy was highly successful in attracting investors from all over the globe and easily persuaded many of them into buying Adidas’ common stock.

Adidas has three product categories. The products in the first category are shoes, perfume, and eyewear (Mahdi, Abbas & Mazar3, 2015). The product in the second category includes vintage clothing and superstar sneakers. The third category of products includes belts, bags, style caps, and handbags. Adidas launches its products at high prices. Adidas uses market skimming strategy to price its products. The company’s price is generally dependent upon color and looks. For example, the price of white color shoes is generally higher than other color shoes, given their same quality. The company is also focused on providing the best shopping experience to its customers by customizing its products according to the needs of its customers (Piller, Lindgens & Steiner, 2012). Due to high prices, the company only focuses on individuals who are in the higher income bracket.

The current and projected costs

The current cost of the company is defined as the cost that is incurred by the company to generate a certain amount of the revenue. It is also known as the cost of revenue. The current costs of the company for the years 2015, 2016 were 8748000000 and 9912000000 Euros respectively. The projected costs of the company were predicted on the basis of the percentage change. The projected costs for the year 2017 was 15175680000 Euros.

Nevertheless, the projected costs for years ahead of 2017 are mentioned in the pro-forma financial statements.

Break-Even Analysis

This is a measurement system that measures the margin of safety by identifying the number of units that are to be sold in order to cover the expenses regarding variable and fixed costs (Catanzaro, 2016). In simple words, it provides insights on when a business will start earning profit. The main purpose of carrying out a break-even analysis is to find out the minimum amount of sales that will make a business eligible to earn some profit.

There are different ways to calculate the break-even; however, the method that I am employing uses contribution margin. Contribution margin is equal to the difference between the selling price of the product and the variable cost that is related to the product (Tambrino, 2001). Now, based on the market research, I have assumed the selling price to be €100 and the variable cost associated with each product to be €75.

Therefore, contribution margin = selling price – variable cost

= €100-€75

=€25.

Calculation of break-even point

Break-even point can be calculated in different ways; however, the method that I have employed uses total fixed costs and contribution margin. Now, from the financial statements of Adidas, I took the fixed costs as €7296000000.

Now, the break-even point is calculated as the ratio between total fixed costs and contribution margin.

Therefore BE= €7296000000/€25

BE= 291840000 units

This reflects the fact that the company has to sell 291840000 units annually, in order to reach the break-even point. In other words, when the company’s amount of sales is beyond 291840000 units, the company will start earning some profits. This is also to say that the number of monthly sales should be 24320000 units.

Pro-forma financial statements

Pro-forma is often looked upon as a method with the help of which the calculation regarding the financial results are executed (Dilla, Janvrin & Jeffrey, 2014). It includes hypothetical conditions and a few assumptions about events that might occur in future, or it also reflects the impact of events that might have occurred in the past. Pro-forma financial statements for Adidas is given below, and it includes various assumptions which are also listed.

Income Statement

From the break-even analysis part, we found out that 24320000 units must be sold monthly to equate revenue with the expense. The number of units sold per year was increased by (10-20) percent. Revenue for years 2017-2021 has been formulated accordingly. From the latest financial statements of Adidas it was found out that, for all the years, the cost of revenue was around 50 percent and therefore, for the upcoming years, the cost of revenue is taken as 52 percent of the revenue.

Operating expenses were also calculated by adding R&D and SG&A costs. R&D was assumed to be 0.8 percent of the revenue, and for all the subsequent years, the research and development costs were also assumed to be 0.8 percent of the revenue. SG&A costs were assumed to be 30 percent of the total revenue, and for all the subsequent years, it was also assumed to be 30 percent of the revenue.

Later, operating income was calculated by subtracting total operating expenses from the gross profit. Provision for income taxes was assumed to be 40 percent of the operating expenses. Later, net income was calculated by subtracting provision for income taxes from the operating income.

 

INCOME STATEMENT
           
Fiscal year ends in December 2017 2018 2019 2020 2021
USD          
Units Sold (monthly) 34320000 41184000 45302400 49832640 54815904
Revenue (Annualy) 41184000000 49420800000 54362880000 59799168000 65779084800
Cost of revenue 21415680000 25698816000 28268697600 31095567360 34205124096
Gross profit (A) 19768320000 23721984000 26094182400 28703600640 31573960704
           
Operating expenses          
Research and development 329472000 395366400 434903040 478393344 526232678
Sales, General and administrative 12355200000 14826240000 16308864000 17939750400 19733725440
Total operating expenses (B) 12684672000 15221606400 16743767040 18418143744 20259958118
           
Operating income (A-B) 7083648000 8500377600 9350415360 10285456896 11314002586
(-) Provision for income taxes 2833459200 3400151040 3740166144 4114182758 4525601034
Net income 4250188800 5100226560 5610249216 6171274138 6788401551

 

Balance Sheet

Cash and cash equivalents and receivables were assumed to be 11 percent of the revenue, and for the subsequent years, they were also assumed to 11 percent of the revenue. Inventories were assumed to be 16 percent of the revenue, and for the subsequent years, they were also assumed to be 16 percent of the revenue. Total current assets were calculated by adding cash and cash equivalents, receivables, and inventories. Total fixed assets were calculated by subtracting depreciation from the sum of the building, equipment, and other assets. Later, total assets were calculated by adding total current assets and total fixed assets.

Short-term debt was assumed to be 4 percent of the revenue, and for all the subsequent years, they were also assumed to be 4 percent of the revenue. Accounts payables were assumed to be 12 percent of the revenue, and for all the subsequent years, they were also assumed to be 12 percent of the revenue. Total current liabilities were calculated by adding short-term debt and accounts payable. Assumptions were also made when the long-term debt was assumed to be 8 percent of the revenue, and for all the subsequent years, they were also assumed to be 8 percent of the revenue. It became the total current non-current liabilities. Later, total liabilities were calculated by adding total current liabilities and total non-current liabilities. Total stockholder’s equity was also calculated by subtracting total liabilities from total assets.

BALANCE SHEET
Fiscal year ends in December 2017 2018 2019 2020 2021
USD          
Assets
Current assets          
Cash and cash equivalents 4530240000 5436288000 5979916800 6577908480 7235699328
Receivables 4530240000 5436288000 5979916800 6577908480 7235699328
Inventories 6589440000 7907328000 8698060800 9567866880 10524653568
Total current assets (A) 15649920000 18779904000 20657894400 22723683840 24996052224
           
Building 2242000000 2466200000 2712820000 2984102000 3282512200
Equipment 2425000000 50000 50000 50000 50000
Other assets 242500000 278875000 320706250 368812188 424134016
Depreciation 245475000 137256250 151678813 167648209 185334811
Total Fixed assets (B) 4664025000 2607868750 2881897438 3185315978 3521361405
           
Total assets (A+B) 20313945000 21387772750 23539791838 25908999818 28517413629
           
Liabilities
           
Short-term debt 1647360000 1976832000 2174515200 2391966720 2631163392
Accounts payable 4942080000 5930496000 6523545600 7175900160 7893490176
Total current liabilities (A) 6589440000 7907328000 8698060800 9567866880 10524653568
           
Long-term debt 3335904000 4003084800 4403393280 4843732608 5328105869
Total non-current liabilities (B) 3335904000 4003084800 4403393280 4843732608 5328105869
           
Total liabilities (A+B) 9925344000 11910412800 13101454080 14411599488 15852759437
           
Stockholders’ equity
Total stockholders’ equity 10388601000 9477359950 10438337758 11497400330 12664654192

 

Cash Flows

Cash from operations was calculated by adding depreciation and profit after tax. Total source of cash was calculated by adding cash from financing and cash from operations. Later, the total change in working capital was calculated by subtracting accounts payable from the sum of inventory and accounts receivable. Values for total fixed assets, total financing and total use of funds are also mentioned in the pro-forma cash flow cash flow statements.

 

Cash Flow
Funds 2017 2018 2019 2020 2021
Profit After Tax 10090080000 12108096000 13318905600 14650796160 16115875776
Depreciation 245475000 137256250 151678812.5 167648209.4 185334810.8
Cash from Operations 10335555000 12245352250 13470584413 14818444369 16301210587
           
Cash from Loan instrument 3335904000 4003084800 4403393280 4843732608 5328105869
Cash from Financing 3335904000 4003084800 4403393280 4843732608 5328105869
Total Source of cash 13671459000 16248437050 17873977693 19662176977 21629316456
           
Changes in Working Capital          
Inventory 6589440000 7907328000 8698060800 9567866880 10524653568
Accounts Receivable 4530240000 5436288000 5979916800 6577908480 7235699328
Accounts Payable 4942080000 5930496000 6523545600 7175900160 7893490176
Total Change in Working Capital 6177600000 7413120000 8154432000 8969875200 9866862720
           
Acquisition of Fixed and other assets          
Total Fixed Asset 4664025000 2607868750 2881897438 3185315978 3521361405
           
Repayment of financing          
Dividend Payment          
           
Total Financing 3335904000 4003084800 4403393280 4843732608 5328105869
           
Total Use of Funds 10841625000 10020988750 11036329438 12155191178 13388224125

 

Key financials details

All the key ratios that are crucial to the company are listed in the table named Key Financial Details. Key financial details in this pro-forma statements include inventories, amount of sales (also known as the number of units sold), total asset, long-term debt, total liabilities etc.

 

Key Financial Details
  2017 2018 2019 2020 2021
Inventories 6589440000 7907328000 8698060800 9567866880 10524653568
Units sold (monthly) 24320000 29184000 32102400 35312640 38843904
Total Asset 20313945000 21387772750 23539791838 25908999818 28517413629
           
Long Term Debt 3335904000 4003084800 4403393280 4843732608 5328105869
Total Liabilities and Equity 9925344000 11910412800 13101454080 14411599488 15852759437
           
Revenue 41184000000 49420800000 54362880000 59799168000 65779084800
Margin 14414400000 17297280000 19027008000 20929708800 23022679680
           
Operating Expense 12684672000 15221606400 16743767040 18418143744 20259958118
           
Depreciation 245475000 137256250 151678812.5 167648209.4 185334810.8
Tax 4324320000 5189184000 5708102400 6278912640 6906803904
           
Profit After Tax 10090080000 12108096000 13318905600 14650796160 16115875776

 

Sales forecast

This is the method by which a business determines its future sales. If companies predict their sales accurately, then it helps them to implement informed decisions and also helps them to predict both short and long term performances (West, 1994). Most companies forecast their sales by taking into account their data from past sales, economic trends and industry-wide comparisons.

Since Adidas is an established company, it is easy to predict their sales on the basis of the available data. An accurate forecast allows companies and businesses to predict attainable future sales, allocate resource efficiently and to draft plan for future growth.

Results from the break-even analysis concluded that Adidas has to sell 291840000 units in a year to make the company eligible for earning profits. Therefore, for 2017, it was expected that the company would cross the break-even point by selling 34320000 products monthly.

I have assumed that the sales forecast for the subsequent years will increase by 10 to 12 percent annually. As a result, the monthly sales forecast for the next four years, starting from 2018, will be 41184000, 45302400, 49832640 and 54815904 respectively.

The complete sales forecast is also shown in the pro-forma financial statements.

Potential challenges to Adidas

From the available financial statements and the pro-forma financial statements, it can be said that Adidas is performing better every year and if the company continues to implement the innovative business model, it will carry on this performance. Nevertheless, the company is surrounded by considerable risks as the company incurs huge operating expenses that can change the performance track of the company.

If we calculate the company’s Return on Capital Employed ratio, which is the ratio between EBIT and capital employed, we will find out that Adidas had € 0.1 ROCE (Jayawardhana, 2016). This value of ROCE signifies that the company has less efficiency in the capital that is employed and investors always favor a stable and increasing value of ROCE. Therefore, the company should draft strategies to invest money prudently, and the company should also dwell upon selling off the unproductive assets. Also, the company should make wise investments on the productive assets such as vehicles for showrooms and sales, and equipment for their factory. In addition to their investment struggles and rising operating costs, the company is also facing few external and internal challenges. The company can incorporate an external approach to reducing the operating costs by improving their supply chain.

Adidas’ Supply Chain Structure

For big companies, the operating efficiency is dependent on their supply chain system (Joyce, 2006). The company, for several years, has been working with independent suppliers who manufacture the company’s product globally. The company has a multi-layered and global supply chain system that incorporates several types of business partners. Among these business partners, some are contacted directly, and some are indirectly contacted. This has created a complex supply chain structure for Adidas, and therefore, the company has to bear huge operating expenses to manage its supply chain. One thing that the company can do is to unify its supply chain by using fewer, however, bigger factories with larger order volumes.

Sourcing Strategy

Adidas should also focus on its sourcing strategy by balancing security with growth and flexibility. The major outsourcing countries for company’s products are China, Vietnam, Indonesia, Turkey, and Thailand. The company should take initiatives for improving competitiveness and managing their cost-control system.

Conclusion

It is evident that a company’s success is defined by its understanding of the market trends. The company should be able to analyze the market and should identify its core capabilities to mitigate the risks that come along the way. The company should be well prepared to give a subtle response to the changing market trends. A company should streamline its business and should make sure that their success and their investments are in the same direction. Overall, the success of a company goes hand in hand with the strategies that the company follows.

Adidas has always been a company that challenges the market trends and streamlines its strategies accordingly. The main focus of Adidas has been on reducing the production costs and at the same time, expanding its market. The company has attracted a huge market share with its sports equipment; however, it has come at the cost of increased operating costs.

 

 

 

 

 

References

Catanzaro, T. (2016). Break Even Analysis. Journal Of Global Economics4(2).

Dilla, W., Janvrin, D., & Jeffrey, C. (2014). Pro forma accounting disclosures: The effect of reconciliations and financial reporting knowledge on nonprofessional investors’ judgments. Advances In Accounting30(1), 43-54.

Jayawardhana, A. (2016). Financial Performance Analysis of Adidas AG. European Journal Of Business And Management8(11).

Joyce, W. (2006). Accounting, purchasing and supply chain management. Supply Chain Management: An International Journal11(3), 202-207.

Lebron, W. (2010). Adidas Latest Shoes. SSRN Electronic Journal.

Mahdi, H., Abbas, M., & Mazar3, T. (2015). A Comparative Analysis of Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the context of a Dynamic and Competitive Environment. International Journal Of Business Management And Economic Research6(3), 167-177.

Piller, F., Lindgens, E., & Steiner, F. (2012). Mass Customization at Adidas: Three Strategic Capabilities to Implement Mass Customization. SSRN Electronic Journal.

Seelos, C. (2010). Theorizing and Strategizing with Models: Generative Models of Business Models. SSRN Electronic Journal.

Tambrino, P. (2001). Contribution Margin Budgeting. Community College Journal Of Research And Practice25(1), 29-36.

West, D. (1994). Number of sales forecast methods and marketing management. Journal Of Forecasting13(4), 395-408.

BUSINESS LAW ANALYSIS REPORT

Business Law Analysis Report

Introduction

The buying and selling of goods and services as well as contracts related to these transactions are guided by a set of civil laws referred to as business/commercial law. The law is important in that it maintains uniformity and consistency in legal matters in the business world. Acknowledging this, Joseph, a businessman seeks advice on a number of legal issues applicable in the operation of his small bakery/restaurant. This paper provides an analysis of the legal issues raised by Joseph and how he should go about solving each of the four cases as provided.

Case 1

Joseph has started a restaurant business on a quaint location where there is quite a high volume of foot traffic. Because of the small size of the kitchen, Joseph cannot manage to cook in the premise. He sees it fit to outsource the creating of the baked food to his cousin, Alfred. Within a few days of operation, Joseph decides to increase his output which means more baked food and, unfortunately, he is not sure whether Alfred is going to meet the demand.

Regarding the formation of a contract, Joseph needs to be aware that there are requisite elements that must be incorporated for him to be considered to have entered into a legally binging contract (McKendrick, 2014). These elements include: offer, acceptance, consideration, mutuality of obligation, capacity and competence. In this case, Joseph gave the offer of supplying the baked food daily to Alfred who accepted the offer and notified Joseph hence forming a legally binding contract (Carter & Peden, 2003).

The agreement/contract between Joseph and Alfred is not a written agreement but an oral one (by word of mouth), a form of contract that is recognized in Australian law (Utz, 2015). Generally, there are no special procedures or requirements when forming a contract, but is important to put the agreement in writing. This is because the written agreement will clearly show both parties expression of intentions and act as evidence. The court will also give more considerable weight on the party’s expressions of intentions and evidence as presented in the written document of the contract (Utz, 2015). Joseph outsourced the creation of baked food to Alfred who agreed to supply all necessary baked goods on a daily basis. Therefore, this can be termed as an oral contact between Joseph and Alfred. Joseph should go ahead and let Alfred know that he wants more baked food from him to sustain the increased output of 100 croissconenut. Alfred should be in a position to meet the demand since he promised to supply all needed baked food to Joseph.

On the other hand, if Alfred cannot meet the demand of baked goods, Alfred will have breached the contract. This means that Joseph can forward the matter to the court and Alfred will be liable for a breach of the contract. In such a situation, Alfred would pay for all damages and inconveniences caused by him as a result of breaching the contract. Although Joseph has the right to take Alfred in court in case of a breach of a contract, oral contracts present a lot of challenges in courts since without a written document, one party may decide to depend on lies for the mere fact that there is no evidence to proof he/she is not telling the truth hence the need for a written contract (Roxenhall & Ghauri, 2004).

Case 2

            Joseph wants to partner with his siblings and wants to divide the ownership of the business equally among the three of them. Joseph also want to protect them all from full liability in case of any wrong eventuality in the business. It is critical for Joseph to understand various business structures available and how these structures operates in the course of doing business thereby making it easier for him to pick the best business structure that will suit his interests. Below is an analysis of common businesses structures recognized by the law.

Sole trader also known as sole proprietorship is one of the business structures. In this type of structure, the owner conducts/operates the business individually or with the help of family, or some friends or relatives. This type of a business is easy to set up and operate since there are no much rules and regulations governing the structure (Andersson, Carlsen, & Getz, 2002). The size of the business is also small hence able to be handled by one person. There is no separate legal entity other than the owner in this type of a structure of business is taxed personally (Clayton, 2014). The business structure is advantageous in that the business owner enjoys all the profits solely, but disadvantageous since he/she is also liable for all obligations/expenses incurred in the course of the business and bears all liabilities with no one to share losses with.

Partnership is the other form of business structure and can be formed by two or more individuals or companies. This form of business structure is limited to 20 members or more in case of a professional partnership. During establishment, a partnership agreement is formed and registered with the relevant authorities. Partnership agreement is meant to define the rights and obligations of the members who are the partners (Tomasic, Bottomley, & McQueen, 2002). The partnership type of a business is not a separate legal entity and the assets of the business are jointly owned in specific proportions as set out by the partnership agreement. The profit realized from the business is shared equally among members or according to the specific proportions as defined in the agreement. Additionally, partners are liable for the obligations of the business and hence the obligations are shared equally among the partners or according to the specified ratio. Some partnership in Australia are formed in a way that liability is limited to the extent of each member’s capital contributions.

Company is another form of business structure, and in fact, it is the best choice for Joseph who wants to shield his siblings and himself from liability. The company is a separate legal entity that can own properties in its own name and also liable for its obligations. In Australian law, a private company can be comprised of not more than 50 members who are not employees while a public company which can comprise of an infinite number of members. The company must have a registered office in Australia and an Australian citizen as director (Farrar, 2001). The Director’s main responsibility is to manage company’s day to day business and affair and complying with the statutory measure put forth by the law such as diligence, and acting with care. Joseph and his siblings in this setting will be the directors of the company. As mentioned earlier, this is the best option for Joseph since it is an independent entity set apart from its members and subsequently limited liability for its members and directors.

Other forms include the Joint venture which involves multiple parties coming together to pursue a common goal as they remain a separate entity. Right and obligations of a joint venture depends on the stipulated the stipulated terms. Trust is also a business structure that involves the trustee who owns the property but carries out the business on behalf of the beneficiaries of the trust.

Case 3

Joseph is concerned about protecting the name of the business and also about the protection of his intellectual properties. Joseph wants his business to have a unique name which is not shared by any other business. A business/trading name is the name used to identify a business while carrying out the normal business transactions. The business name helps one to have a customer identification and also create the emotional relationship between the business and the customers. In Australia, ASIC is a body responsible for registering of business names in Australia (ASIC, 2008). One of the rules according ASIC is that one cannot have a name identical or similar to a name possessed by another business. For this reason, Joseph should consider registering his business at ASIC to ensure that it is not copied.

Joseph intends to obtain a design on his signature baked goods and wonders whether it is an appropriate method of protecting his business and intellectual property as a whole. Having signature designs on the food products is advantageous in that the consumers will enjoy a certain uniqueness and experience. Joseph can utilize the signature to differentiate his food products from those of other restaurants in the town. Hence joseph can take advantage of the signature design to keep the customers desire high hence product promotion. However, it is important to note that protecting intellectual property is expensive and one can spend a lot money. Apparently, intellectual property is an asset. Joseph should be careful with any partner he is dealing with especially on matters regarding the patent. It is important to have adequate security on the patent when working on it. Joseph should be cautious about how his property is being handled by the remote team. Most of intellectual property owners have also adopted the method of encrypting their intellectual property. Joseph should employ a better level of encryption and also place strong enforceable agreements that are applicable in both the developers place and owner of the intellectual property. This might seem a bit expensive but it is much better than dealing with breach of a trust. It is critical to document everything regarding the intellectual property. This is important since in case of a stolen intellectual property, presentation of the evidence and defending the property will be simple. Therefore, Joseph should consider filing for a trademark, an intellectual property right which protects the name of the business, symbols used to represent the business and the design of the products sold in his restaurant. When the trademark is registered, Joseph will enhance his rights as the owner of the intellectual property hence provide legal evidence and public notice of ownership. Subsequently, Joseph will have the right to sue anyone who copies (infringes) his rights within the 10 year period after registration and subsequent renewal of the trademark.

Case 4

On the first date of operation, a bicyclist crashed into a sign board placed outside the restaurant, on a sidewalk. When placing the sign board, it was important to have the duty of care since the restaurant was located on a busy route. When one fails to act or fails to comply with the duty of care, a tortious act may take place leading to legal suit (August, Mayer & Bixby, 2009). This is the case in Joseph’s analogy. Joseph should understand that after confirming the need to have a sign board outside the restaurant, it was important for him to place a warning sign to alert people of the existence of a sign board on the sidewalk and hence avoid incidences such as this. Now that this was not in place, the bicyclist has the right to press charges against Joseph citing an act of negligence. Joseph will be guided by the court regarding the compensation of damages caused by recklessly placing the sign board on a busy path. However, the plaintiff (bicyclist) cannot claim damages that were not caused by the sign board. Therefore, the only payable damages are those that were as a result of the reckless placing of the sign board, which amounts to be an act of negligence. Regarding the type of court Joseph is likely to appear in case this matter goes to trial is a question of which court has the mandate to handle such a case. Joseph is likely to appear in a civil court which deals with matters pertaining tort and contracts. In other words, civil courts handles issues which are not of crime in nature while civil courts deal with issues such as this one (torts, contracts, etc.) (Dobbs, 2008. Therefore, Joseph should know that he is most likely going to appear in a civil court.

 

References

Andersson, T., Carlsen, J., & Getz, D. (2002). Family business goals in the tourism and hospitality sector: Case studies and cross-case analysis from Australia, Canada, and Sweden. Family Business Review, 89-106.

ASIC. (2008). Investment Commission (ASIC). Sydney.

August, R., Mayer, D., & Bixby, M. (2009). International Business Law: text, cases and readings. Pearson education.

Carter, J. W., & Peden, E. (2003). Good Faith in Australian Contract Law’. Journal of Contract Law, 155.

Clayton, U. (2014, Jul 24). Doing Business in Australia: Business structures. There are five different business structures in Australia, each with their advantages and disadvantages.

Dobbs, D. (2008). Law of Torts (Hornbook Series). West Academic.

Farrar, J. H. (2001). Corporate Governance in Australia and New Zealand. New york: Oxford University Press.

McKendrick, E. (2014). Contract law: text, cases, and materials. UK: Oxford University Press.

Roxenhall, T., & Ghauri, P. (2004). Use of the written contract in long-lasting business relationships. Industrial marketing management,, 261-268.

Tomasic, R., Bottomley, S., & McQueen, R. (2002). Corporations law in Australia. Federation Press.

Utz, C. (2015, May 7). LEGAL RESOURCES . Australian Contract Law.

Effect of business school management learning

 

 

Effect of Business School Management LearningStudent’s nameInstitution

 

 

 

 

 

Essential Expectations of an Economics CurriculumThe hope of any economics curriculum designer is that at the end the student will have a distinctive combination of evaluation, analysis, and critique skills. Additionally, a curriculum is designed to bring about a combination of sensibilities that enable students to engage with the development of both political, economic, and historical processes. As such, the completion of an economics course should see the student learn how to appreciate the variety of problem-solving and decision-making skills needed for the improving the effectiveness of crucial development interventions and the ones needed for engaging the society’s institutions in particular. The student must also learn to recognize the intrinsic essence of social institutions to the identities, values, and meaning of people and how such people make sense of the things which happen to them and others. The economics curriculum is also aimed at ensuring students appreciate the manner in which social institutions determine the risk management. Risk management in economics school and in the world always involves mobility and survival of economic various entities. Therefore, the students appreciate conflict mediation, the transfer of ideas, and the delivery of strategies to deprived entities. A student must also learn how to articulate the important issues that surround the assessment of the efficacy of various projects. The coursework expects to produce a graduate who can demonstrate the different ways in which the research, development theory, and policy from a variety of sectorial and disciplinary perspectives can be integrated usefully and coherently. A person is taught how to incorporate various forms of evidence from primary, web-based, and secondary sources and articulate such ideas to a different group of listeners. The ultimate goal of any economics curriculum, therefore, is to reimage development for this century. More expectations at school include the student’s ability to struggle with abstract ideas, marshal concrete evidence from different origins, and use such ideas and evidences in concreting and complexing policy problems in a developing world. While most economic programs lack formal prerequisites, students are still expected to increase their levels of conversance with major issues and theories relating to matters of decision-making such as marginalism, opportunity cost, and efficient markets. Additionally, there is usually a high level of emphasis on the integration of various theoretical and methodological perspectives from across various bodies of knowledge including social, political, and actuarial sciences. Students trained in the economics discipline are also expected to attend classes on weekly basis and learn from each other to harness their diverse backgrounds. This feature is a key concept in most schools and is aimed at giving students the experience necessary to handle matters of diversity and international relations as a key eye-opener in the practical world. From the beginning, students need to be informed about the importance of maintaining respect for potentially radical and diverse views which may be voiced during the course. The practical application of skills depends on the confidence to attempt measures outside the bounds of conventional business operations. Some of the ideas that are considered controversial usually aid in the creativity process which, of nurtured, has potentially useful applications.Flawed Economics Principle CourseDoran & Business Expert Press (2012) point out the inability of the Economics Principles Course offered in most colleges to enhance economic literacy. There have been numerous calls for various colleges to improve their focus on economic literacy. For example, a 1950 report written to the American Economic Association recommended the reduction of the total number of content and objectives in the elementary course. The report also recommended that students needed training on ways to follow current news in a bid to enhance their interest in the field of economics. O’Sullivan et al., (2017) also points out that the encyclopaedia which currently makes up the large part of the course at the beginning of college-level economics fails in teaching students about how to think with regard to economic questions. Students end up memorizing a few diagrams, policy recommendations, and facts and after ten years they will be as illiterate in economics as the day they first joined college.  Mallard, (2012) suggests that the most appropriate way to teach economics, especially microeconomics in the introductory classes is to expose students to a series of applications of a number of short-listed main ideas of the field. The major goal of the Principles of Economics course is to provide a viable foundation of economic knowledge which is required for subsequent coursework in economics. However, the explosion in economic knowledge has derailed the pursuit of the foundational goals in economic knowledge and instead caused the texts and syllabi to be fuller. Numerous topics have been added including topics such as public choice, game theory, environmental economics, new classical economics, growth, and monetarism. For all these topics, there are very few which get deleted in the end. The addition of topic and increased sophistication and complexity of the course increases the cost. Even at such high costs, most students are seen to leave the course with little knowledge of the fundamentals of economics. The typical course needs to focus more on the importance of acquiring knowledge by agents regarding the drivers of a rational decision-making exercise. As such, the macro-economic principles should be memorable, simple, and focussed on policy. Students would have higher levels of literacy if they began to understand issues such as what the real interest rates are and how they are determined. The current scenario is one where the instructors spend the large part of the class time lecturing and almost no time emphasizing on the acquisition of hand-on skills. This trend is consistent for the research, masters, doctoral, associate degree, and liberal arts institutions. The Principles course does not improve an individual’s economic literacy the people that take it as well as those who are scared away by the technical nature of the course. Major failures pointed out about the course result from the inability to enhance the students’ application of economics to their professional, personal, and public lives. When multiple topics get jammed into the course, students almost never master the basic aspects. These aspects are the building blocks for the addition of further knowledge on economics but their weakness devalues the student’s literacy levels. Alternatives for The Principles of Economics CoursePhaneuf & Requate (2017) offers a method for refocussing the course that is geared towards the achievement of economic literacy. Hence, the literature proposes a single term course which has the potential to improve the levels of economic literacy of students undertaking a single economics course. The aim of the proposed changes is to equip learners with knowledge and skills for work in business, economics, and other majors which need a firm background in economics. Changing the Focus of Principles of EconomicsMost courses in economics have a number of standards which constitute the building blocks. These standards usually contain the operational description of economics literacy. They are often divided into a number of topics such as allocation of goods, economic behaviour, scarcity and choice, markets, macroeconomics, or the relationship between the government and the economic institutions. Various standards include at the very least a number of statements that define the core of knowledge on economics and descriptions that explain the things that students are supposed to do with such knowledge. The literature presented by Phaneuf & Requate (2017) shows just how some of these standards explain basic economic ideas. Regarding scarcity, most standard agree that the productive resources are not abundant. As such, people may not acquire all the goods and services that they want. They have to choose some of the goods and give up others. In such a case, students are required to demonstrate their understanding of the concept by explaining such issues as the costs of things that a community avoids in preference for using tax revenue to give a professional sports team a rent-free stadium. Economic BehaviorThe second matter concerns five common standards which often define the rationale for economic behaviour and hence address the concerns of Phaneuf & Requate (2017). For a person to make a decision effectively, the standards assume that one must make a comparison of the extra costs of alternatives with the additional advantages. Most of the choices that students are expected to make in the real world involve doing a little more of something and at the same time doing a little less of another thing. There are very few decisions in which a person is expected to select an entire item and forego another. Decision-making lessons also assume that people tend to respond predictably to both negative and positive incentives. Additionally, standards about decision-making lessons emphasize on the voluntary exchange and how it occurs only when the parties taking part expect to get fair gains. The voluntary exchange condition is true for the trading activities between individuals, organizations, and countries. In case various regions, nations, or individuals specialize in the things that they can produce at minimal cost and then engage in trade with others, both the consumption and production increase. Moreover, the price levels are used as indicators of various signals that make sense to buyers and sellers. However, the changes in demand or supply causes adjustments in the market prices and various incentives are affected as well. The demonstration of a mastery of the notion of economic behaviour standards by students may be done by expecting students to come up with an explanation for seemingly complex economic concepts. For example, students may be required to explain why the allowance of firms to exchange pollution rights may lower the economic cost of minimizing pollution or why it is more sensible to have a number of firms specializing in the reduction of pollution and why the pollution rights give incentives to businesses to seek cleaner technology in their production processes. Allocation of Goods and ServicesThe standards touching on the allocation of goods and services dictate that a variety of methods may be used for the allocation of various goods and services. The individuals who act solely or collectively through governmental institutions have to choose the specific methods which they use in the allocation of the goods and services at their disposal. The standards also emphasize that a market’s existence results from the interaction of a buyer and a seller. Therefore, the interaction of the buyer and seller is the main determinant of market prices and also causes the allocation of scarce goods and the scarce resources. With regard to the allocation standards, students are expected to show that they have mastered allocation issues through description of benefits and costs of mechanisms in the market for an issue such as the prioritization of candidates for donor organs or a similar scenario. Literacy of StudentsStudents may be considered as literate if they can make use of standards set for various goals in economics courses to describe the benefits and costs, elaborate events, and make solid arguments. If a course targets literacy, it must be more focussed on the basic concepts as opposed to the trend evidenced from the areas of focus of modern day texts and courses. The learning resources which are released by limiting the number of issues should be exploited to enhance the understanding of the important ideas. BudgetingA number of topics and lessons need to be eliminated from the traditional Principles course. The major constraint on knowledge acquisition is the student’s ability to learn the content and not the ability of the instructor to cover it. The typical description of economists of their courses is based on the material which they cover. However, Husted & Melvin (2017) argues that the most important things in a course is what a person learns and not what they cover. The choice of a broad coverage by an instructor causes the students to have a high level of familiarity with very many concepts but they cannot apply the majority of these concepts including the basic ones. Principles instructors may set higher goals than the coverage and mastery of the standards but they should also assure that students thoroughly master the standards before they proceed. Again, it is important to realize that the most important achievement for the course is that students successfully apply the things they learn in the school environment and later after they complete their studies. Therefore, the improvement of economic literacy would require that the course focusses on concepts which students may use throughout their whole lives. These concepts include the identification of the opportunity cost of a proposed public-spending. As such, the course must be seen to instil the art of practice of these concepts until the concepts become a way of thinking for the students. The Principles coursework needs to drop some of the traditional topics so that some of the available resources can be released and enable students to master the standards. Majority of the dropped topics could be forwarded to Principles Two coursework. One of the major features that needs to be dropped is the cost curves. The understanding of cost curves by students does not in any way contribute to what constitutes economic literacy. Cost curves help students to predict the exact output levels for firms that set or take the prices. They also have the capacity to decide whether there are any economic profits earned and also make the decision for firms to enter or exit an industry. However, the cost of mastering these cost curves exceeds the benefits. Most of the students have little post-college chances to use marginal analysis using cost curves. Instead of learning such cost curves, students are better equipped if they study marginal costs and marginal benefits in similar problems as those which they will dace later in life. Students need to learn the ways through which agents enter beneficial industries and quit the unprofitable ones and they can easily learn that without studying and mastering the cost curves. Another recommendation is that graphs should e limited. Graphs provide an effective way for students who understand them quickly to represent the functional relationship between various economic variables. However, there are still students in most economics classes who do not catch on to graphs quickly. The mastery of graphs becomes a compulsory aspect and is a requirement for passing various college-level tests. However, students who have not mastered the graphs in the past do not apply them in the future and the same goes for a substantial section of the students who understand graphs well. The way to learn graphs for most students is to memorize them and forget them soon after the course is over. A common understanding of economics courses is that students need to memorize the multiple graphs or obtain relevant data from exams from the past to predict which graphs to memorize. This understanding is usually common for students in their first two semesters of college and could prevail throughout the course. However, tutors have the ability to develop methods of teaching that minimize on the use of graphs.Another redundant and seemingly tiresome concept taught in college is the behaviour of industries without perfect competition. These include the comparisons between the monopolistic and oligopoly competition which needs to be eliminated for favour of focussing on price-seeking and price-taking behaviours. Students are also more knowledgeable if they have sufficient understanding of the ways in which competition enhances welfare as well as how agents seek payments. For example, a student is not deemed more literate just because they can say if a fast-food industry is an oligopoly or more like a monopolistic competition. Such details may not be as useful as knowledge about the drivers of price and cost because even of a person knows that certain firms are duopolies, the data is inapplicable in any form of decision-making process and it probably does not take an expert in economics to make such a deduction. The relevance of business education in real lifeBusiness education is broadly acknowledged as a real and effective pivot for the growth of skilled or professional manpower in all the facets of commercial, managerial and industrial areas. Osuala (2004) asserted that the introduction of business studies emphasizes the need for equipping the youth or learners with experience that furnish them with saleable competencies and skills. Business activities influence people’s daily lives as they travel, work, spend, save, play and invest. Business affects incomes, opportunities, and jobs for personal development and also has an important effect on the quality of life, the standard of living and on the surrounding or environment where people live.Business education involves not only studying the individuals, organizations, and communities but also involves assessing and evaluating their problems and needs, in addition to generating solutions. The subject helps in building a strong background for the learners who have ambitions of furthering their training and study in specialized fields such as marketing, management, accounting, entrepreneurship, communication technology among other fields. Again, it helps in providing practical skills for the learners who have the desire of moving straight into their places of work. Generally, business education endows the learners with a new and practical context for the other subjects they have learned such as science, mathematics, languages, social studies and technology. It helps the learners in recognizing the relevance and applicability of these subjects whenever they are used in the business world. Business education demonstrates how various subjects of study can coalesce in an industrious and productive activity. It gives an increased comprehension of mutual reliance through business approach, as individuals become increasingly reliant on others. Being also a dynamic field, business education is a significant tool for building and cultivating skills to deal with change.Business education helps the learners in the following ways:Business education teaches learners self-reliance and the ability to manage projects and other resources.Business studies is a type of studies which is devised or designed to instill in learners knowledge, business spirit, skills and acumen required to succeed in the field of work and to be self-reliant. Igboke (2000) looked business education as a changing field of education which is geared towards equipping the adults and youths for and also about business. He further stated that learning for business is training for a job in business when it is planned to equip adults and youths for real practice in the field of business.Skill is viewed as the capacity to perform a task expertly, Abanyam (2014). It is the mean dexterity and ability which if used on a given task like a business, the outcome will be proportionate to the set objective and hence brings about enhanced economic status. A learner who acquires enough skills and knacks in business operations during the training process stands a high chance of establishing an occupation he/she likes and even able to employ many other individuals afterward. Such an individual is regarded as self-reliant and self-sufficient in the area where he/she domiciles.Self-reliance can be defined as the economic and social ability of a person, household or a society to meet important needs (including food, water, shelter, protection, health, education, and safety) in a sustainable way and with decorum. Ogbonna (2012) hypothesized that self-reliance means the dependence on an individual’s own judgments, resources, and abilities or being independent. Hence, it refers to the ability to depend on oneself in undertaking a given task. To be self-reliant, learners need to acquire particular skills which can equip them and enable them to stand on their own in the society. Some of such skills are marketing skills, accounting skills, communication technology skills and information skills.Accounting is one of the major areas of business education which equips learners with requisite dexterity, attitude, and knowledge which is relevant in doing financial computations in any job. Accounting skills range from reporting skills, record keeping skills to financial management that are necessary for promoting efficient and successful financial management in any kind of business activity (Eze, Ezenwafor & Igberaharha, 2016). Accounting skills learned in business education entails the ability to understand and interpret financial statements, prepare reconciliation statements, prepare cash and bank reports, understand various deductions and payroll, compute depreciation, ability to evade unplanned expenditures and the ability to record various business transactions.Business education has changed the education system to a system that aims at preparing or grooming manpower with an objective of filling the ever increasing vacuum caused by unemployment. It is disturbing and shocking to learn that graduate unemployment is experienced in almost all the countries around the world. However, it is not possible to name an academic discipline which is not represented adequately in the increasing society of unemployed graduates who are employable. Therefore, preparing graduates and all the other learners for the competitive environment of work has become the main objective of business education. Entrepreneurship education and skill acquisition are regarded as indispensable towards sustainable growth of the nations and self-reliance. Persuasive and effective oral and written communication skillsCommunication skills are essential for success in any field. It enables the learners to develop the ability to shape or tailor their messages to various types of people and audiences. For instance, courses in business communication and marketing help in creating effective campaigns which target specific customers, while corporate communication helps in designing effective and successful business presentation, guide group meetings and also in writing internal business documents for workers guidance. Communication acquired in business education is relevant and can be applied in the other areas of life such as:Leadership Good leadership in any field needs effective communication with all the members of the organization such as the managers, employees, investors, and customers. Each group of these people may need a different style of communication and leadership. Leaders should, therefore, adapt depending on the people they are leading or communicating with at different times. Therefore, communication proficiency is an essential aspect of leaders’ set of experience and skills.Communication is an essential skill for individuals entering the job marketThe International Journal of Business Communication did and published a research where 354 directors were requested to rank and grade incompetencies when employing fresh college students. The research findings suggested that effective communication abilities are the most desirable and attractive qualities in a new employee. Unfortunately, it was found to be the first incompetency in the list among the graduates, followed by dearth of self –motivation and problem-solving skills, Weldy & Icenogle (1997).Effective communicators make much moneyAccording to the research which was done in the year 1988 by Curtis and submitted at the Annual Meeting of the Speech Communication Association, it was found that communication skills are the most cherished skills in the current job market. The research surveyed 1000 managers and arrived at this conclusion. The findings suggested that the most valuable skill individuals can invest within themselves is sound communication. If individuals can communicate more effectively, then they can surely land jobs which can enable them earn the highest amount of money, Moreale (2000).Good communicators possess greater self-esteemAccording to an editorial titled “Self-Esteem and Effective Communication Skills” which was aired by Live Strong, it was found that individuals who are great communicators tend to be majorly extroverted. The study stated a 2001 research which was published by the Journal of Research in Personality which says that extroverted individuals tend to possess greater self-esteem. Extraversion always makes it simpler for individuals to approach foreigners and strangers, speak in large gatherings and also appear friendly. This makes the other people perceive extroverts positively which boost their self-esteem further. Individuals suffering from low self-esteem are always anxious about relating to strange people and also uncomfortable in gathering or group settings, Thompson (2017).Effective communication helps in building a thriving family unitA study done by Pearson and Sessler in the year 1991 called Family communication and health: Maintaining marital satisfaction and quality of life, presented at the International Communication Association stated that communication is linked to the family satisfaction. Disclosing, supporting, negotiating, communicating needs, positively distorting and showing the understanding of members of the family are some of the communicative aspects which are essential in developing a family unit which is happy and healthy, Pearson & Sessler (1991).Time ManagementTime management mostly focuses on the relationship between it and the productivity on the work. Stack (2005) indicates that job satisfaction and work success can be measured by productivity or output. The two methods which can be used to increase productivity include; finding ways of working faster at the job that people always do and by getting rid of activities which waste time. A good meaning of “wasted time” is the time that is spent in achieving no output or in achieving an output which is of low value. As Benjamin Franklin once said “time is money”; it makes a great sense and meaning in business. Therefore, time management which the learners are taught in business education helps them in several ways in real life experiences. Some of the benefits of time management include:Stress level reductionThe main benefit of time management is reduction of the stress level. If one follows time management appropriately, he/she can get better output or results. Stress always leads to ruining of the job schedule and a troubled or messed up work schedule/program can never produce the best results. The outcome will undoubtedly come but nobody can claim that the result will be worst or the best.

Gain self-confidenceSelf-confidence does a significant duty in the life of human beings and self-confident individuals always live better lives as compared to their counterparts who suffer from timidity or low self-confidence. The feeling regularly comes when one plans his/her work correctly and take proper decisions on time for better results. With self-confidence, one is able to do almost anything and self-trust can lead people to another level.Financial soundnessThe success results in financial soundness with itself. Individuals always become financially stable when they plan their lives properly and also maintain and follow a timetable of their professional and personal life. The lifetime learning enhances the empowerment of people with the know-how. They can always do research and find whatever information they need. The interpretation of the information and sharing gives the individuals the opportunity to have network connectivity.Become healthyBeing healthy is a good thing for human beings and it can always be realized by a suitable maintenance. To live a healthy life, time management is helpful since an individual will have to adopt a schedule in his/her life; this will enable him/her save and have time for exercise and other works that are health related. Once individuals have decided to manage their time, they should discipline themselves and practice self-improvement with fitness/health as the major factor.
Time management helps one to challenge his/her productivityThe capacity of everyone is the same and it is only the habits which differentiate their outcomes. The individuals who get 100 percent are not robots but also human beings; what brings about the difference is that they pursue their dreams passionately. One can prioritize while also planning the job execution order. Productivity is always a challenge to face since it’s a process that put individuals on their heels. It is a race that must be won by everyone. Concisely, it’s something great to adopt but always requires the capacity to cope up or handle the pressure it presents.Business education  helps in understanding organizational behavior and structureOrganizational behavior studies the impact and the influence that organizational structure, individuals, and groups have regarding the behavior in an organization or institution with the aim of using such knowledge in enhancing the effectiveness of the organization, Robins, Judge and Sanghi (2006). In the world of business nowadays, organizational behavior is a vital tool for effective management of teams and it helps in understanding and predicting the behavior of individuals in an organization. It examines how institutions can be accurately structured and how external events affect organizations. An organizational study is one of the most important features in management sciences since it enables the management to study and learn from a phenomenon which has been successful somewhere. Learning organizational behavior is very useful and relevant in real life situations. Some of the significance of organizational behavior includes;
a. Organizational behavior helps in understanding employees and the organization in a better wayStudying organizational behavior helps individuals understand the organization and the employees in a better way. This enhances the relationship between the employees and the organization hence creating a suitable working environment/condition in an institution. Organizational behavior helps in finding out the factors causing different behaviors and also helps one to apply various strategies to manage the serious behavior that can cause damage to the organization.b. Organizational behavior helps in effective use of human resourcesIf the head of an organization or a manager have the skills of organizational behavior, he/she can apply human resource management skills in the needed area. This reduces the chances of incurring losses and at the same time increases the chances of making profits and promoting sustainable development of an organization. c. Organizational behavior helps in enhancing labor/industrial relationsThe knowledge of organizational behavior helps in comprehending the root-causes of different issues, predict their future solving mechanisms and also manage their negative consequences. Since the leaders know about the negative and positive consequences of various behaviors, it allows them uphold friendly relationships with the workers hence creating peace in the institution or organization.

d. It helps in motivating employeesStudying organizational behavior helps business owners in motivating their employees hence facilitating organizational performance. Since the employees are different from one another, organizational behavior helps the managers in applying suitable skills and motivational tools in line with the individual nature of the employees. Business education offers learners with a wide range of field for specializationBusiness studies degree prepares the learners for different and dynamic managerial and expert purposes. The education emphasizes operating in a dynamic international environment. The degree course in business education offers the learners with the chance of specializing in the fields that respond best to the requirements of the job market and their specific interests. The students doing degree courses in business education can always take advantage of the other courses provided by the School of Management. By choosing programs in administrative sciences such as political science, the students can develop appropriate study course for themselves.  Some of the options in master’s studies include; Specialization in Insurance and Risk Management, Specialization in Leadership in Service Economy, Specialization in Accounting, Specialization in Economics, Specialization in Business Management, Specialization in Marketing and Specialization in Business Law and Tax Law.

 

 

ReferencesAbanyam, F.E., (2016).Self-Employment skills possessed by business education students of colleges of education for sustainable development in cross river state, Nigeria (Master Thesis).Curtis, D. B., Winsor, J. L., & Stephens, R. D. (1989). National preferences in business and communication education. Communication Education, 38(1), 6-14.Doran, D. T., & Business Expert Press. (2012). Financial reporting standards: A decision-making perspective for non-accountants. New York, N.Y.] (222 East 46th Street: Business Expert Press.Eze, T.I., Ezenwafor, J. I., & Igberaharha, C. O.,(2016). Assessment of entrepreneurial skills needed for self-employment by business education graduates in Delta state, Nigeria. European Journal of Management and Marketing Studies, 1(2), 1-14. Husted, S. L., & Melvin, M. (2017). International economics. Boston: Pearson/Addison-Wesley.Igboke, S.A. (2000).Business education: Principles and methods. Owerri: Cape PublishersInternational LtMallard, G. (2012). What to Expect from Your Economics Course. The Economics Companion, 24-29. doi:10.1007/978-0-230-35645-0_3Morreale, S. P., Osborn, M. M., & Pearson, J. C. (2000). Why communication is important: A rationale for the centrality of the study of communication. JACA-ANNANDALE-, 1, 1-25.Ogbonna, M.N. (2012). Restructuring Teacher Education as an Instrument for Achieving Self-Reliance and Sustainable Development in Nigeria.Proceedings of School of Voc.Ed.FCE, Eha-Amufu 6th National Conference. 33-41Osuala E.C. (2004), Foundation of vocational education. Enugu-Nigeria: Cheston Agency Publishers.O’Sullivan, A., Sheffrin, S., & Perez, S. (2017). Economics. Pearson Education UK.Pearson, J. C., & Sessler, C. J. (1991). Family Communication and Health: Maintaining Marital Satisfaction and Quality of Life.Phaneuf, D. J., & Requate, T. (2017). A Course in Environmental Economics. West Nyack: Cambridge University Press.Robins S. P., Judge, T. A., & Sanghi, S. (2006). Organizational Behaviour.  Stack, Laura, Career Advice; Leave the Office Earlier, Washington Post. com, March 24, 2005Thompson, V. Self-Esteem & Effective Communication Skills.  Published June 13, 2017. Livestrong.com.Weldy, T. G., & Icenogle, M. L. (1997). A Managerial Perspective: Oral Communication Competency Is Most Important for Business Students in the Workplace Jeanne D. Maes. The Journal of Business Communication (1973), 34(1), 67-80.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of business school management learning

 

 

Effect of Business School Management Learning

 

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Institution

 

 

 

 

 

 

Essential Expectations of an Economics Curriculum
The hope of any economics curriculum designer is that at the end the student will have a distinctive combination of evaluation, analysis, and critique skills. Additionally, a curriculum is designed to bring about a combination of sensibilities that enable students to engage with the development of both political, economic, and historical processes. As such, the completion of an economics course should see the student learn how to appreciate the variety of problem-solving and decision-making skills needed for the improving the effectiveness of crucial development interventions and the ones needed for engaging the society’s institutions in particular. The student must also learn to recognize the intrinsic essence of social institutions to the identities, values, and meaning of people and how such people make sense of the things which happen to them and others. The economics curriculum is also aimed at ensuring students appreciate the manner in which social institutions determine the risk management. Risk management in economics school and in the world always involves mobility and survival of economic various entities. Therefore, the students appreciate conflict mediation, the transfer of ideas, and the delivery of strategies to deprived entities. A student must also learn how to articulate the important issues that surround the assessment of the efficacy of various projects. The coursework expects to produce a graduate who can demonstrate the different ways in which the research, development theory, and policy from a variety of sectorial and disciplinary perspectives can be integrated usefully and coherently. A person is taught how to incorporate various forms of evidence from primary, web-based, and secondary sources and articulate such ideas to a different group of listeners. The ultimate goal of any economics curriculum, therefore, is to reimage development for this century.
More expectations at school include the student’s ability to struggle with abstract ideas, marshal concrete evidence from different origins, and use such ideas and evidences in concreting and complexing policy problems in a developing world. While most economic programs lack formal prerequisites, students are still expected to increase their levels of conversance with major issues and theories relating to matters of decision-making such as marginalism, opportunity cost, and efficient markets. Additionally, there is usually a high level of emphasis on the integration of various theoretical and methodological perspectives from across various bodies of knowledge including social, political, and actuarial sciences. Students trained in the economics discipline are also expected to attend classes on weekly basis and learn from each other to harness their diverse backgrounds. This feature is a key concept in most schools and is aimed at giving students the experience necessary to handle matters of diversity and international relations as a key eye-opener in the practical world.
From the beginning, students need to be informed about the importance of maintaining respect for potentially radical and diverse views which may be voiced during the course. The practical application of skills depends on the confidence to attempt measures outside the bounds of conventional business operations. Some of the ideas that are considered controversial usually aid in the creativity process which, of nurtured, has potentially useful applications
Decision making
Opportunity cost
Marginalism
Efficient markets
Undergraduate economic curriculum
The relevance of business education in real life
Business education is broadly acknowledged as a real and effective pivot for the growth of skilled or professional manpower in all the facets of commercial, managerial and industrial areas. Osuala (2004) asserted that the introduction of business studies emphasizes the need for equipping the youth or learners with experience that furnish them with saleable competencies and skills. Business activity influences people’s daily lives as they travel, work, spend, save, play and invest. Business affects incomes, opportunities, and jobs for personal development. A business also has an important effect on the quality of life, the standard of living and on the surrounding or environment where people live.
Business education involves not only studying individuals, organizations and communities but also involves assessing and evaluating their problems and needs, in addition to generating solutions. The subject helps in building a strong background for the learners who have ambitions of furthering their training and study in specialized fields such as marketing, management, accounting, entrepreneurship, communication technology among other fields. Again, it helps in providing practical skills for the learners who have the desire of moving straight into their places of work.
Generally, business education endows the learners with a new and practical context for the other subjects they have learned such as science, mathematics, language, social studies, and technology. It helps the learners in recognizing the relevance or applicability of these subjects whenever they are used in the business world. Business education demonstrates how various subjects of study can coalesce in an industrious and productive activity. It gives an increased comprehension of mutual reliance through business approach, as individuals become increasingly reliant on others. Being also a dynamic field, business education is a significant tool to build and cultivate skills to deal with change.
Business education helps the learners to develop the following skills:
Communication
Communication skills are essential for success in any field. It develops the learner’s ability to shape or tailor their messages to various types of people and audiences. For instance, courses in business communication and marketing help in creating effective campaigns which target specific customers, while corporate communication helps in designing effective and successful business presentation, guide group meetings and also in writing internal business documents for workers guidance. Communication acquired in business education is relevant and can be applied in the other areas of life such as:
Leadership
Effective and good leadership in any business or any other field needs effective communication with all the members of the organization including managers, employees, investors, and customers. Each group of these people may need a different style of communication and leadership. Leaders should, therefore, adapt depending on the people they are relating or communicating with at different times. Communication proficiency is an essential aspect of leaders’ set of experience and skills.
Communication is an essential skill for individuals entering the job market
The International Journal of Business Communication did and published a research where 354 directors were requested to rank and grade incompetencies when employing fresh college students. The research findings suggested that effective communication abilities are the most desirable and attractive qualities in a new employee. Unfortunately, it was found to be the first incompetency in the list among the graduates, followed by the death of self –motivation and problem-solving skills, Weldy & Icenogle (1997).
Effective communicators make much money
According to the research which was done in the year 1988 by Curtis and submitted at the Annual Meeting of the Speech Communication Association, it was found that communication skills are the most cherished skills in the current job market. The research surveyed 1000 managers and arrived at this conclusion. The finding suggests that the most valuable skill individuals can invest within themselves is sound communication. If individuals can communicate more effectively, then they can surely land jobs which can enable them to earn the highest amount of money, Moreale (2000).
Good communicators posses greater self-esteem
According to an editorial titled “Self-Esteem and Effective Communication Skills” which was aired by Live Strong, the research suggested that individuals who are great communicators tend to be majorly extroverted. The study states a 2001 research which was published in the Journal of Research in Personality which says that extroverted individuals tend to possess greater self-esteem. Extraversion always makes it simpler for individuals to approach foreigners and strangers, speak in large gatherings and also appear friendly. This makes the other people perceive extroverts as positively, which boost their self-esteem further. Individuals suffering from low self-esteem are always anxious about relating to strange people and also uncomfortable in gathering or group settings, Thompson (2017).
Effective communication helps in building a thriving family unit
A study which was done by Pearson and Sessler in the year 1991 called “Family communication and health: Maintaining marital satisfaction and quality of life”, presented at the International Communication Association stated that communication is linked to the family satisfaction. Disclosing, supporting, negotiating, communicating needs, positively distorting and showing the understanding of members of the family are some of the communicative aspects which are essential in developing a family unit which is happy and healthy, Pearson & Sessler (1991).
Business education teaches learners self-reliance and the ability to manage projects, time, and resources
Business studies is a type of studies which is devised or designed to instill in learners knowledge, business spirit, skills and acumen required to succeed in the field of work and to be self-reliant. Igboke (2000) looked business education as a changing field of education which is geared towards equipping the adults and youths for and also about business. He further stated that learning for business is training for a job in business when it is planned to equip adults and youths for real practice in the field of business.
Skill is viewed as the capacity to perform a task expertly, Abanyam (2014). It is the mean dexterity and ability which if used on a given task like in business, the outcome will be proportionate to the set objective and hence brings about enhanced economic status. A learner who acquires enough skills and knacks in business operations during the training process stands a high chance of establishing an occupation he/she likes and even able to employ many other individuals afterward. Such an individual is regarded as self-reliant and self-sufficient in the area where he/she domiciles.

 

 

 

REHABILITATION OF STREET CHILDREN IN INDIA

  1. Introduction

The issue of street children has become a major topic of study in the world. Children go to the streets because of unstable families among other elements that make their life hard to live. Such families are characterized by alcoholism, low incomes, substance abuse, divorce and separation, weak relationships, and death of parents (Mathur, 2009). These children face challenges such as inadequate access to early childhood education, cleaning drinking water, food, clothing, and proper medical care. The children engage in small chores such as working in hotels, vending newspapers, washing cars where they are underpaid and mistreated (Britto and Super, 2013). Therefore, such children are vulnerable to ailments such as waterborne disease, HIV, and psychological distress. India is one of the countries faced with the challenge of street children who account for 18 million mostly in Kolkata and Bombay cities. Therefore, this project proposal seeks to establish the plan for rehabilitating 1,000,000 street children in India through sustainable programs such as early childhood education, early, and proper nutrition for a period of two years (Mathur, 2009). The project is thereby described. It covers the objectives and justification supported by literature review. The members of the project are also explained. Also included is the timeframe, the place, the actual plan for the project, the pricing, and the project sustainability.

2.0 Rationale and Objectives

The establishment of the two rehabilitation centres will decongest the two cities of India of the street children. Therefore, the projects will assist in the provision of basic services like early childhood education, clean food and water, and proper clothing to the children. Such projects create employment opportunities to the communities involved. They will have long-term positive economic and social effects on the lives of children through social inclusion (Arnett, 2014).

2.1 Description of the project

India has faced the problem of street children for a long time and the government’s efforts to address the issue have not yielded much result (Mathur and Mathur, 2009). Most children are still wallowing in abject poverty; hence this has led to the need for this project to rehabilitate a substantial number of these children. Therefore, two rehabilitation centres are to be constructed in Kolkata and Bombay cities of India that currently host many street children. The two centres are to have classrooms, libraries, stationery, casual clothing and uniforms, furniture and fittings, kitchens, dining halls, playing fields, dormitories, and special rooms for healthcare workers (Mathur, 2009). The two centres are to be constructed at an estimated cost of $1,000,000 for a period of 2 years. They are expected to provide employment opportunities to the teachers, cateresses, and healthcare workers of the surrounding communities.

2.2 Aims and Objectives of the Project

Sen (2009) argues that to achieve sustainable programs for the street children in India projects are needed by well-wishers to address the following issues that are affecting the street children in the two cities of India.

  1. To reduce the number of vulnerable children from the streets of India.
  2. To ensure such children have access to early childhood education.
  3. To enhance proper clothing, nutrition, and healthcare for the children.
  4. To reduce the rate of drug and substance abuse among the children.
  5. To easy the government the burden of the street children.
  6. To reduce child labour in the streets of India.
  7. To create employment opportunities to the locals of the two cities.

2.3 Rationale for the Project

The demand for Early Childhood Care and Education (ECCE) in India is ever raising, due to low maternal and child mortality rates (Britto and Super, 2013). As a result of the ECCE programs offered by different bodies have been under private management as there are no laws to control their activities. Percy-Smith and Thomas (2009) claim that children’s’ rights have been advanced by The National Indian Child Care Association, Amrit Foundation of India, and international organizations like the UNICEF. This has forced the Indian government to establish laws for ECCE and the associated appropriate standards to address the ECCE needs of the children. But still the number of street children remains a challenge. Therefore, this project is intended to fill the gap left by the government in rehabilitating a large number of children who are still suffering in the streets. Khwairakpam and Sukhminder (2013) argue that the street children are not properly protected. Such children do not have access to early childhood education and their needs are not well taken care of by any responsible individuals (Mathur and Mathur, 2009). Therefore, there is need to transform the lives of the young children through the rehabilitation centres so that they can have access to basic education, better healthcare, and food.

            In India over 18million children work on the streets particularly in Kolkata and Bombay cities. Mathur (2009) claims that the children are vulnerable to diseases, lack of clean drinking water, shortage of proper clothing, inadequate food, and lack of other social protection services from the government. Thus, the project is intended to host children from hostile families and those who lack proper social protection so that they can benefit from the basic needs to be provided in the centres.

Narayan (2013) argues that family problems such as alcoholism, poor parent relationships, divorce or separation of parents, parents’ violence, or death of a parent are the most prevalent reasons why children resort to the streets. These street children mostly come from poor housing conditions characterized by high levels of illiteracy, drug abuse, and lack of employment (Praharaj and Arora, 2008).Thus, the projects will transform the lives of the children so that they can change behaviour through psychological counselling and funded learning.

Most of the children are employed by hotels, tea shops, canteens, restaurants, and eating points (Sharma and Lal, 2011). These businessmen exploit them like prisoners with low pay, sometimes with no pay, and abuses (Mathur, 2009).Because of these, some of the children have resorted to self-employment or doing multiple jobs such as collection of recyclable products such as metals, plastics, and papers. Other chores include newspaper vending, selling sweets, car cleaning, shoe shining, working in building places, small hotels, and repair shops. The older ones are involved in drug-trafficking, stealing and pick-pocketing, and sexual activities (Sharma and Lal, 2011). Therefore, this project will host the children in controlled and monitored rehabilitation centres to reduce child labour and risks of sexual activities among the young children.

Cleghorn and Prochner (2010) assert that in India the street children are highly vulnerable to low incomes since they do not enjoy the monetary and psychological support that other children have. Thus, they develop ways to deal with the harsh conditions that they thrive in (de Benítez, 2007). Such children adopt strategies such as taking alcohol, drug usage, and prostitution (Gaidhane et al., 2008). Therefore, this project will assist the children to stop drug abuse and address the life frustrations that the street children undergo because of lack of social protection services.

According to Woan and Auerswald (2013), the street children suffer food shortage since they do not have access to proper medical care, sanitation, and nutritious foods. They depend on food leftovers from hotels, garbage bins, or food stalls. Bathing in the open air is the order of the day among the children in India. They remain naked for long times after bathing, therefore, losing modesty senses. Irvine and Schroth (2011) assert that the children lack clean washrooms and therefore they resort to using the roadside as part of toilets. Hence, this project will ensure the provision of clean food, water, washrooms and toilets so that to prevent the emergence of waterborne diseases.

Embleton et al. (2013) argue that the street children are in most times faced with extortion and abuse since they do not have social belonging and individuals who can provide protection to them. Many children complain of police beating and forcing them to share the little pay they earn from the hard construction sites. Sen (2009) asserts that various forms of abuse include physical abuse, sexual abuse, healthy abuse, psychological abuse, and verbal abuse. Psychological and verbal abuses are the most prevalent among the children and those who receive substantial incomes are abused more (Towe and Sherman, 2009). Hence, the project intends to address the psychological trauma experienced by the children in the streets.

There have been issues with the education of the street child (Hart, 2013). On the other hand Jambunathan and Caulfield (2008) argue that a study that was carried out in Bombay in 2004 on the education of street children revealed worrying trends. The survey found out that 60 percent of the children had never stepped into a school compound and two-thirds of them were totally illiterate.30% had attended elementary school and 10% intermediate or high school. Most of the children in the study said they ran from their homes because they were forced to attend school or work to assist their parents (Towe and Sherman, 2009). Therefore, the study seeks to absorb all the 1,000,000 street children into educational programs so that they can grow to be responsible members of society.

2.4.0 Ethical and Political Early Childhood Education Development Practice

2.4.1 Ethical

The teachers to be employed in the two learning centers need the support of education stakeholders so that they can recognize the children who are disabled and understand complex impediments to their learning and participation. The professional help in this pedagogy of inclusion ought to involve an on-going reflection on the thinking and practices of teachers. Moss et al. (2009) advocates for transformative pedagogies focused on ethical commitment to resist discrimination and inequalities. Hence, the teachers should develop an open, listening, positive orientation, and embrace the cultural backgrounds of such children to achieve the objectives of the projects.

For the two plans to accomplish the stated goals there is need to practice social justice in the early childhood education. According to Mevawalla (2013), the recognition justice involves appreciating the values, languages, social, and cultural backgrounds of the communities around the schools. The redistributive sentence consists of the distribution and redistribution of resources equitably. In education, it involves the shifting of resources and funds to realize equal access and participation in gaining high quality and available early knowledge for all the children. Therefore, the projects seek to access the funds to accomplish this objective as well as take care of these diversities and also ensure a clean environment within the two cities.

 The teachers of the projects will be required to create environments and conditions for learning that enable participation of all the children. They will make observations by gathering information around the skills, talents, and interests of the children to nurture them well. Such information will be used to form a basis for creating shared experiences with the children. Then the teachers will develop participatory activities for the children according to the skills identified. Therefore, this ensures the full attainment of the well-being of the children such as self-esteem, control of their lives, satisfaction, and happiness (Thoits and Hewit, 2001).

2.4.2 Political

According to Naughton and Davis (2009), street children in India are both whites and non-whites. The white children can stand above racism. There is also the belief that whites are the center of knowledge and humanity. Most governments tend to empower the indigenous people to achieve self-determination and representation through decolonization. The project aims to rehabilitate all the vulnerable street children regardless of their racial backgrounds.

Darder (2018) argues that the learning experiences that are transformative are those that try to; abolish deficit thinking, assist teachers to appreciate the political and social nature of schooling, lead to teaching that recognizes social justice, equity, and diversity. The management of the two projects will not allow the oppression of children in the course of their transformative programs. Hence, this will ensure the achievement of the targeted objectives.

Intercultural and social justice education should be the ultimate objectives of such projects (Campbell, 2014). The two projects will respond in transformative ways to deal with the marginalization of some groups as ‘others’ and privileging the already ‘privileged’ as deserving of their status. There will be equality and social justice in the teaching of the children to realize intercultural education. Therefore, this will help in addressing issues of classism, racism, linguicism, and sexism among the children under rehabilitation.

2.4.3 Ethical and Political Practice

The project is intended to embrace all the white and non-white street children from diverse backgrounds and achieve social justice in education (De Benítez, 2007). There will be the appointment of student leaders from the different cultural diversities and minority ethnicities of the children who will guide in the recognition and celebration of the diverse cultural practices annually. Thus, this will be through the participation in the co-curricular activities such as drama, games and equal social interactions. There will be free interactions of children with management and their teachers who will identify their skills and   De Benítez (2007) assert that such projects need to offer personal and specialized interventions like counseling, and they try to ensure that the children have essential access services. The social workers together with teachers will also work to reduce the depriving adverse effects by engaging dedicated services such as support for substance abuse, sports empowerment, and trauma therapies.

The management of such projects ought to work closely with the local administration and the political leaders to provide significant interventions like offering treatment and psychosocial counseling to sexual abuse victims (de Benítez, 2007).Therefore, the leaders will assist with plans including those of home placements to realize reunions with families so that they will be visiting their children in the centers. Other government interventions that the project will require include the preparation of outreach workers for the street children and launch of child help hotlines so that the projects attain the one million children target. Other support services include complaint and mechanisms for reporting and psychosocial counselling.

2.5 Members of the Project

Projects must have steering committees to ensure successful implementation. Therefore, the project team should headed by the executive who consists of Chairperson, Secretary, Treasurer, Coordinator and other members (Mathur, 2009). It should also incorporate building and construction engineers, community social and health workers, community parents, community administration, community religious leaders, early childhood teachers, and government representatives.

2.6 Timeframe and Place of the Project

The 2 rehabilitation centres will be put up at the same time in a period of 2 years in the two cities of India i.e. Kolkata and Bombay. The first year will involve engaging the different stakeholders in consultations and signing agreements and the actual construction will commence in the second year. Sen (2009) claims that the Indian government should adopt Non-Governmental Organization (NGO) based approaches in addressing the issue of street children. Therefore, the implementation of such projects needs the facilitation of the government in terms of land agreements and provision of security services to the facilities.

2.7 Focus Area

The most worrying survey that was conducted in Kolkata revealed that 6 children in every 554 of age 5 to 14 were HIV positive (Bal et al., 2010). 18 million children surviving along the streets of India is a worrying number that needs to be treated with the seriousness it deserves (Sen, 2009). Hence, the project is intended to rehabilitate the lives of these children in the two common streets of India i.e. Kolkata and Bombay by providing them with early childhood education, proper clothing, nutrition and HealthCare. The street children have for a long time been subjected to torture, mistreatment, and forced labour (Bal et al.2010). Therefore, the project will assist to deal with the issue of child labour along the streets by engaging them in productive life transforming activities.

3.0 Project Planning

Phases Proposed work Responsibility Timeframe
Phase 1 Interviewing the street children, their families, and the community on the need for the project Teachers of early childhood and the community social workers June 2018-August 2018
  Consultation with community parents Community social workers September-October 2018
  Consultation with community administration and  religious leaders Parents selected November to December 2018
  Consultation with government representatives Community administration January to February 2019
  Compile & review stakeholders feedback All members of the project March to April 2019
Phase 2 Reviewing financing report

 

All members of the project May to June 2019
Phase 3 Actual construction Building and construction engineers and the project executive July to June 2020

4.0 Pricing

Cost centres Cost per unit Number of units Total cost
Project resource cost- Project resource cost-Cement $4 100,000 bags $400,000
S Project resource cost-and $20 per truck 1000 trucks $20,000
Project resource cost-Bricks $1 200,000 bricks $200,000
Project resource cost-Painting $10 1000 buckets $10,000
Human resource cost-Labour $1 100 construction workers  for 8 hrs/day for 5 months $120,000
Human resource cost- $150 1000 $150,000
Human resource cost-Managers and support staff $880 50 $44,000
Project resource cost-Stationaries $.002

$.001

2,000,000 books

2,000,000 Pens

$4000

$2000

Travel cost-Travel allowance for project team $1000 50 members $50,000
    Total cost $1,000,000

 

5.0 Sustainability  

The projects should achieve the listed objectives in two cities of India. It is expected to run to the future and there is the desire to make it a world example of a mega project which is going to transform the lives of one million street children in the Indian history (Sen, 2009). The two institutions will embrace cross-sectional exchange programs with other government schools so as to realize universal services to the street children as well (Ba et al., 2010). Therefore, the project is intended to achieve educational standards, better healthcare, nutrition clothing, and reduced child labour that has been most prevalent in India.

5.1 Participation and Ownership of the Project

The non-governmental organizations (NGOs) forced the government to form the Scheme for Assistance to Street Children to address the needs of such children but the results have not been much (Cleghorn and Prochner, 2010). Therefore, this project requires the full support of the government, the community administration, members of the surrounding communities, early childhood teachers, community health workers, and the vulnerable children in general. The two facilities will be fully owned by the communities and the children of the places they are going to be constructed. Hence, some 10 parents of the cities have offered free land where the construction will take place (Cleghorn and Prochner, 2010). The local administration together with the department of lands will assist in the drawing of land agreements so as to ensure a smooth transition.

5.2 Capacity Building Mobilising and Educating

            The project is expected to generate incomes through creation of numerous jobs to the population of the local communities such as, trained early childhood teachers, trained community healthcare workers, cateresses, and other support staff. Jambunathan and Caulfield (2008) support the implementation of exchange programs with the government-owned rehabilitation centres in the areas of child education and teachers’ continuous training. This is aimed at realizing uniformity in the educational curriculum of all the children in India. This project will also offer additional services such as seasonal trainings to untrained individuals who may want to become trainers in the future. The parents will also be trained on general skills of cooking and maintaining health standards in their households. All these will be achieved through collaboration with the local Early Childhood Development (ECD) colleges to offer free training services to aspiring teachers (Cleghorn and Prochner, 2010). The local health centres will offer free training to the parents on health-related issues within the premises of the rehabilitation centres.

5.3 Environmental and Contextual Sustainability

            The street children form groups with leaders who sometimes use the younger children to commit crimes such as stealing and drugs business (Sharma and Lal, 2011). The 2 projects will ensure a crime and drug free society where children’s lives are transformed through education, healthcare, proper nutrition and, clothing and through international education exchange programs. The projects will also provide long-term employment opportunities to the communities and it is expected to attract foreign attention on the need to advocate for the rights of children.

5.4 Generative

Street children ought to be exposed to transformative economic activities. The two rehabilitation centres will put in place some long-term sustainable projects so as to generate incomes for self-reliance (Mathur, 2009). Projects such as rearing of milk and meat cows and bees for honey will be highly considered. The milk will be consumed by the children and the excess processed into products such as yoghurt and cheese which will be sold to the local community to earn income. There will be an idea to establish a slaughterhouse for the meat cows and the meat products will be sold to the surrounding institutions and the community. Honey from bee rearing will be packed and sold to the local and national supermarkets to earn income (Mathur, 2009). Additionally, the centres will have bakeries for baking loaves and snacks for children consumption and the excess will be sold in the immediate shops and supermarkets to raise additional income.

6.0 Conclusion

In conclusion, from Khwairakpam and Sukhminder (2013) argument, the issue of street children in India’ cities is alarming. The children find their way into streets due to poor parental relationships and topics such as alcoholism, separation, inadequate incomes, and death of one or both parents. As a result, these children have no access to clean food, drinking water, proper clothing and medication. Due to hard economic conditions facing the children they are involved in child labour doing small chores such as cleaning vehicles, working in small hotels, and constructions sites where they are underpaid and mistreated. They also engage in petty crimes like pickpocketing and drug abuse which leads them to participate in immoral sexual activities thereby increasing the spread of sexually transmitted diseases like HIV. The street life does not allow these children to access early childhood education that is necessary for their future prosperity. The efforts of international NGOs like the UNICEF and the Indian government associations to rehabilitate the children into Early Childhood Care and Education have not yielded much due to the ever rising population of the children. Based on Sen (2009) findings, the two intended projects of rehabilitation centres with the support of the community administration and labour seek to provide interventions measures through ethical and political practices so as to achieve access to basic needs and the education for the children.

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