Ethnic group and Discrimination Essay Example for Free

Ethnic group and Discrimination Essay The issue on racial discrimination continues to prevail in developed countries although in subtle manner. Minority groups in United States have had a turbulent history fighting against ethnic group discrimination by the whites. In this paper, I choose to focus on the African America perspective on their fight against prejudice, segregation and racism. The first blacks to arrive in America were slaves. They were brought there against their own will contrary to other immigrants in the land of opportunity. Terms like Negroes were used to refer to black slaves and from the onset, prejudice remarks were used on them. It is documented that black slaves were seen to have similar attributes to dumb animals hence inferior. In fact, whites held that Negroes ranked between chimpanzees and human being. Its not clear as to where and when racism started or why but a clear definition of racism exists it means exclusion, division, restriction of any kind based on skin color, race, ethnic origin or nationality It is indeed a shame to see that the society has imposed the three ills of society upon Blacks Americans. The Blacks have and continue to experience segregation prejudice and discrimination even today. During the period of colonialism and slavery, blacks were not privileged to attend school inorder to keep them down form any form civilization. They were thought to endure and fight all kinds of discriminations either on basis of skin color, in life style, social class, academic, criminal justice and economic circles. (Karenga, 2002). In retaliation, the blacks Americans have also propagated Afro centric ideologies against whites which emphasis their superiority. Seemingly, it is fair for blacks to habour feelings of oppression and dislike against whites and other minority groups because these racial ideologies are deeply rooted in society. The weight of past negatively against blacks is a big challenge felt up until today. The effects have not worn off and hence blacks continue to log a step behind whites not because they are ‘lesser’ being but society has a way of pressurizing them to stay at their place i. e. second citizens. In the past, African Americans have faced challenges of security employment and have shaky single headed homes. Thus, they are poor. The whites on the other hand, get preference in well paying jobs, hence a form of discrimination. Perhaps, the blacks are the most segregated community in America. This is because of the quality of housing and congestion in black concentration neighbourhoods. It is common to find premium pricing in real estate, which ensures that Black Americans do not afford spacious homes to live in. Even those who make it to purchase prime property face a degree of segregation in the white neighbourhood. As a result, infant mortality is high and health issues are common in black neighbourhoods. At the same time, crime rates and violent crimes occur among teenagers as they try to fight for survival in poverty-stricken homes. Martin Luther King, Malcolm X and other black heroes realized these disconnect and lead black liberations movements aimed at bringing to advance in life. (Amnesty International, US Domestic Human Rights Program, 2004). These discrimination prevent African American from attaining the ‘American dream’ since blacks stand out sharply than any other minority group, their color has often been used to dictate the quality of housing, education, service or products that they will given (Kitano, 1997) often it is low quality. Similarly in the criminal justice arena, prejudices and racial profiling persist. Perceptions or rather misconceptions about police action as accidental shooting, use of force, slow response and so on are constructed by blacks to be a racist conspiracy and segregation. ( Karenga, 2002). Due to these underlying prejudices and racist ideologies, reverse discrimination, policies have been formulated to try to correct historically oppressed groups in the Diaspora. This is seen in cases where jobs are reserved for black candidates even where there are qualified whites to fill the position. This is the same policy used to propel affirmative action and boost women participation of women in state affairs. Despite the noble cause behind this policy, it has not gained ground sufficiently owing to the connotations of pity and sympathy stringed to it. Similarly, it goes against the equal protection clause of the fourteenth Amendment and Title VI of the civil rights Act, 42 (Amnesty International, US Domestic Human Rights Program, 2004) Other forms of discriminations against the African Americans include redlining. This practice dates back to the 1930s where banks took survey on residential areas to determine the level of security and hence their real estate value and thus award loans. Neighbourhoods inhabited by blacks were regarded as insecure and thus not eligible for loans. As such, blacks were segregated directly from acquiring mortgage loans, which in turn ensured that they had access to rich suburbs with decent housing. This form of discrimination was fought and overcome after the Fair housing Act 1968. This law guarded against any kind of redlining based on skin color, race, ethnicity, gender and so on (Amnesty International, US Domestic Human Rights Program, 2004) The community reinvestment Act 1977 also put blacks and other minority groups a step ahead in fight against racial segregation. Racial discrimination against blacks affects their presence in the labor market. The opportunity structure in the labor market is one that ensures that blacks dominate the cheap labour pool in occupation such as gardening, janitors’ waiters and so on. In addition, historical influence of past black discrimination forms a culture whereby blacks do not enroll for long-term educational training (Karenga, 2002). Similarly, black resided in urban outskirts where employment opportunities were limited and economic activities few. (Kitano, 1997) thus causing a dual market to form. Moreover, employers also prefer to employ workers from so-called ‘superior’ races, until they exhaust their supply. All these forces create a dual market one, which is discriminate against blacks. The advancement of black people within social and career circles is limited owing to discrimination on racial lines. Women are particularly subject to this glass ceiling. Notably, the expression used ‘glass† means that this form of discrimination is unwritten and unofficial yet real. It is commonplace to see a high black achiever unable to advance in career just because of gender or racial bias. In terms of promotions, most employers prefer superior races. Conclusion Personally, I do not identify with any ethnic group. I identify with the human race Blacks, whites, Asians stereotyping prejudice and discrimination ultimately resorts to hate speech and violence against groups. Often than not, these prejudices are reinforced for scapegoats inorder to justify own failures. It is worthless to hate each other and in extreme cases resort to genocides just because of differing color and nationality. Once humanity can accept that there is no superior person, area only then can we pride ourselves of true intelligence and harmony in the world.

Four Main Forms Of Deviance Criminology Essay

Four Main Forms Of Deviance Criminology Essay There are four main forms of deviance, those are societal deviance this is an act which most of society would agree is not classed as part of normal behaviour. Drug abuse could be considered as societal deviance, most of society believes that it is not normal and encourages criminal behaviour. Drug users become outcasts and are considered to be deviants. Concealed deviance is that which no one sees, something which a person can keep hidden away it is still considered not part of societies set of norms. A man, who likes to dress up in womens clothes, could be considered a concealed deviant as they do this in the privacy of their own homes. This however, is considered to be not normal behaviour of the wider society and he would be considered deviant. In Arab countries such as Dubai and Yemen it is socially unacceptable, due to the religious culture of these countries for women to be seen without wearing the traditional hijab, however in western society any women wearing one is seen as being deviant as it is not part of western culture. This would be considered situational deviance, where it is only considered deviance in the culture you are in at that time and may not be considered deviant by every society. There is also collective or public deviance, this is deviance shared by a group of people which does not conform to that which is considered social norms, however follow a set of norms they have created within their own subculture. Gang culture could be described as deviant as most would say that the values of the gangs would not conform to the values of normal society. This is considered anti-social behaviour and in 2003 the government considered this a problem they created the Anti-Social Behaviour Act 2003 (legistlation.gov.uk). Crime is considered to be the act of breaking the law of the society you are in however, a crime can often be considered deviant by some societies. An example of this is speeding, some may consider speeding to be deviant however the police and social institutions consider this to be a crime. Although we have a set of laws and social norms in this country these may not be considered either crime or deviance in other cultures. With the introduction of the Firearms Act 1968 it became illegal for anyone in the United Kingdom to freely carry a weapon on their persons and all weapons had to be locked away (legistlation.gov.uk) however in some states of America people can still carry firearms in their everyday life. Troyer and Markles (1983) study of smoking in the USA illustrated how attitudes to smoking and cigarettes changed over time, and in fact ended with smoking being bans being introduced in the 1990s. During the late 19th century smoking was considered deviant behavior by many as it was associated with low social status and immigrants. Women who smoked were thought to be particularly deviant as it was also associated with prostitution. These attitudes began to change after World War 1, and smoking began to increase however by the end of the 1940s smoking was considered a socially acceptable with people of all classes now choosing to smoke. With the advance of science came the downfall of the cigarette and by the 1960s evidence towards smoking ruining health began to surface. This led to the ban of cigarette related advertising in 1970 and the eventual ban on smoking in public (Troyer Markle, 1983 as cited in Moore et al, 2006). Some believe that the need to commit crime comes from biological construction that certain types of people have hormonal or brain differences which causes them to become deviant from society and makes them more inclined to commit crimes. Cesare Lombroso one of the first criminologists did studies of criminals and believed that you could tell what crime a person committed just by how they looked, that physical abnormalities in a person made them more likely to commit crimes. This theory has now been discredited but some do still believe that there are some biological factors contributing to why people commit crime. Over time and as social attitudes change so do the norms and values of those societies these can often lead to acts which were once considered crimes or deviant to become norms. Until 1969 homosexuality was considered a crime and anyone caught would be brought before a judge and punished. In 1967 it became legal for men over the age of 21 to have consensual sex in private. This age was then lowered in 1994 and 2001. (Haralambos Holborn, 1980). It is now considered a norm to see couples of the same sex. Crimes change with time and culture and what is considered a crime in one society may not be in another, it is believed by most that crime is a social construction made up by norms and values of each society and culture. As each society evolves with time so does its set of Norms. Can we ultimately say that we gain our knowledge of what is right or wrong comes from the society we live in and the values that are set upon us as not everyone brought up in the same society falls into criminal or deviant behavior. References Anon.(2012) Firearms Act 1986(online). Available from: http://www.legislation.gov.uk/ukpga/1968/27/contents (accessed: 18th October 2012) Anon. (2012) Anti-Social Behaviour Act 2003 (Online). Available from: http://www.legislation.gov.uk/ukpga/2003/38/contents (accessed: 18th October 2012) Moore S et al. (2006) Sociology A2 for OCR. 2nd Ed. London: Collins Haralambos, M and Holborn, M. (2004) Sociology, Themes and Perspectives. 6th Ed. HarperCollins: London Troyer, R.J and Markle, G.E (1983) Cigarettes: The battle over smoking. New Brunswick, NJ: Rutgers University Press. Cited in Moore et al. (2006) Sociology A2 for OCR 2nd Ed. London: Collins Type: Outline: Strengths: Weaknesses: Police Statistics These are the official statistics that are used by the government, they based on what is reported to the police and also can tell which crimes have been resolved They can be used to show what types of crime are most prevalent in which areas. Police statistics can be useful in showing how many crimes get reported and what sort of crime is being reported. Not all crimes get reported so often the statistics cannot be 100% reliable Not all crimes can be categorised a crime and what one force might consider one type of crime another might not for example, distinguishing between burglary and theft. Often these statistics can be manipulated to show better results Doesnt take into account the dark figure of crime. Victimisation Surveys These studies, the main being The British Crime Survey, were introduced by the government to try and uncover the dark figure of crime. They choose a section of people at random and ask them to talk about crimes which they may not have reported and crimes which have been reported within the last year which they have been victim of. They are now considered part of the official statistics used by the government They account crimes which may have not been reported to the police They can help to uncover the dark figure of crime It goes deeper than the police statistics They rely on people remembering if or what crimes were committed against them They rely on people telling the truth about crimes committed Still assumes that everyone defines what is or isnt a crime the same way Self-Report Studies These studies are not part of the national crime statistics used by the government. They are questionnaires which rely on people admitting to crimes which they commit. Can be used to compare against official states to high light differences Can highlight crimes that are not generally report Again relies on peoples memory It relies on people telling the truth about the crimes they committed. May only concentrate on only a limited range of groups.

Creating a Professional Development Plan for advancement in the Industry

Creating a Professional Development Plan for advancement in the Industry Without setting goals an individual will not be able to measure his or her level of success. Late last year, as I reflected on my career path I began to feel unaccomplished and unfulfilled. I have been a nurse for over eighteen years and worked in long-term care nursing homes, acute care hospitals, and home care settings. My experiences working in medical surgical, telemetry, and critical care doing bedside nursing challenged me to further my career by obtaining a Bachelor of Science in Nursing (BSN). My decision to go back to school was carefully thought about as I took into consideration my work schedule, family commitments, and the length of time needed to complete my degree. When I decided to become a nurse, I did not fully understand the different aspects of nursing as I was only ten years old. At that age, however, I knew that nursing was about taking care of people. As a result, I developed short-term and long-term professional goals which embraced my philosophy of nursing. Philosophy of Nursing My philosophy of treating people as I would like to be treated was instilled in me from my grandmother from an early age. With this in mind, I strive to provide the best care to my patients as I seek to connect and identify with their experience. According to Watson (2008), the human-to-human connection expands our compassion and caring and keeps alive our common humanity. Patients are depending on the nurse to give them the care that will enhance and improve their health physically, emotionally, and spiritually. As nurses, we do not only care for the sick but we also reach out to the families of individuals because they play a big role in helping to maintain their dignity and integrity. Role of the Baccalaureate Nurse The baccalaureate prepared nurse will have a more advanced education in leadership and management therefore will be better able to make more independent clinical decisions (Sara Ellis). After completing my nursing degree I will have a better opportunity in moving up the clinical ladder. Although I will not get an increase in pay for obtaining my BSN it will be self fulfilling and gratifying as this has always been one of the goals in my nursing career. With a degree, I will be more marketable and flexible as I broaden my horizons. This will allow me to seek employment in many health care settings such as community health, case management, and supervisory positions (Blais, Hayes, Kozier, Erb, 2006, p. 3). With the rising challenges of the health care needs in todays society, more and more nurses are graduating with a BSN as the minimum level education. Therefore, it is important to have a higher level of education to be competitive and stay abreast with the latest technologies in nur sing. Professional Role Transition Nurses are governed by a code of ethics as set forth by the American Nurses Association (ANA), which holds nurses accountable and obligated to protect patients rights and privacy. They are morally obligated to provide quality care that will maintain the patients optimal level of functioning. Nurses play a vital role in helping patients to improve their quality of life. Each decision the nurse makes contribute to the overall welfare of the patient. Thus, it is best if the nurse view each decision as a life changing decision, no matter how small it may seem. As a nurse, I must acknowledge each of my patients as having their own cultural backgrounds, needs, values, and beliefs (American Nurses Association, 2001). Therefore, I should treat them the way I would like to be treated, with the best care and respect. My patients family is a great source of support and influence in their well-being. Therefore, it is imperative to treat the patients family with extreme respect as well. Families are important in providing valuable information that will assist the nurse in giving quality care and improve patients level of functioning (Potter Perry, 1985, p. 441). Role of the Baccalaureate Having a BSN is not only rewarding but it prepares the nurse to advance from bedside nursing and to explore new opportunities as it pertains to management positions. It also allows me to use the knowledge, capability and skills that I have acquired to help others achieve quality lifestyles, health and well-being. The feeling that comes with knowing that I am making a positive difference in someone elses life is more than money can buy. Short-term Professional Goals The twenty-first century is without a doubt, a time period in which computer literacy is vital. Once upon a time, the use of computers was not an integral part of a nurses day to day activity. However, that is not the case today. Thus my short-term goals are to increase my computer literacy and become a nurse preceptor within the next six months. Currently my level of knowledge in regards to computers is on a beginners stage. I plan to reach the intermediate stage within the next six months by attending various computer classes and constantly practicing the different techniques that I learn. Mastering the basics of computer technology will enable me to research more efficiently, whether it is to complete an assignment or keep up-to-date with the changes in the health care arena. Furthermore, developing my computer skills will assist me in being an effective nursing preceptor. The use of technology is incorporated in various aspects of a nurses duties. Therefore, adequate computer knowledge will empower me to effectively mentor new nurses. In addition, I would need to attend training classes and demonstrate that I am a good communicator to be promoted to a nursing preceptor. Not having immediate access to a computer and my family commitments are several barriers that may prevent me from reaching my short-term goals. My commitment as a wife and a mother does not provide me with the flexibility to attend all the computer classes which are available. In addition, my family commitments may also prevent me from attending the necessary training classes to become a nursing preceptor. However, having my family as one of my biggest support system will assist me in overcoming these barriers. I will implore my children to teach me as much as they can when we are home. In addition, I will purchase a laptop so I can practice and develop my computer skills at my convenience. Furthermore, I will allocate different chores to the members of my family so that I will have free time to attend the various training classes. Long-term Professional Goals My long-term professional goals are to successfully complete the BSN program in a year and a half and become a Clinical Instructor in the next five years. Having a BSN is not only rewarding but it prepares the nurse to advance from bedside nursing and to explore new opportunities as it pertains to leadership and management. After completing my BSN I plan to continue my studies and pursue a Master of Science in Nursing (MSN) degree. In doing so, I will achieve my ultimate long-term goal which is to become a clinical nurse instructor. A Clinical Instructor is required to have a vast amount of knowledge of nursing skills and techniques. Thus, my present experience as a Registered nurse and my enrollment in the BSN program is the stepping stone to achieving my ultimate long-term goal of becoming a clinical instructor. Even though my role as a Clinical Instructor takes me away from personally fulfilling my philosophy of nursing, I belief it will still be just as rewarding since Im empowering others to fulfill their philosophy of nursing. As with my short-term goals, my family commitments are barriers to achieving my long-term goals. My family commitments may force me to extend the time frame in which I hope to accomplish my goals. To get over these barriers, I will have to compromise some of my family activities such as vacation time and family time. In addition, my family is my biggest support system in achieving my long-term goals; their desire to see me succeed motivates me to do my best. Also, being a role model to my children motivates me to do well. In addition, having to work while Im enrolled in the BSN program is a challenge. However, the encouragement of graduates of the BSN program is a constant reminder that I too can successfully complete the BSN program. Thus, I requested the necessary days off from my job so I can attend classes. Conclusion In conclusion, providing quality care to patients is my personal philosophy of nursing. As a result, my short-term and long-term professional goals are centered on this philosophy. Therefore, I continuously seek to obtain higher education, skills and techniques to empower me to assist my patients in possessing optimal health. This will enhance my professional development and fulfillment as a nurse.

We Need Gun Control Essays -- Argumentative Persuasive Topics

We Need Gun Control    Baton Rouge, Lousiana--October 17, 1992--8:30 P.M....A Japanese exchange student, Yoshihiro Hattori, was searching for a party he had been invited to. Thinking he had found the house in which the social would take place, Yoshihiro knocked on the door. Not knowing that they had the wrong house Yoshihiro and his companion startled the proprietor. After having the front door shut in their face the two boys began walking back to Yoshihiro's car. Yoshihiro Hattori and his friend, Webb Haymaker, then turned back towards the house upon hearing the carport door open behind them. Instead of seeing the party's host, these two boys were greeted by a " 'Freeze' " and a .44 Magnum-carrying Rodney Peairs. Yoshihiro, thinking he had found the party after all, stepped towards Mr. Peairs and said, " 'We're here for the party' ". Webb Haymaker then found himself standing over his dying friend, Yoshihiro Hattore, a victim of unintentional homicide. (Haymaker 26) Tragic incidents like this one seem to be becoming more and more common in modern America. The availability of a firearm was the direct cause of Yoshihiro's death. Likewise the availabilty of firearms in general is related to accidental, as well as intentional, homicide. The United States Congress should therefore limit or illegalize the sale, use and carrying of handguns and assualt weapons. The reasoning behind this statement is that I do not believe that these aformentioned weapons have a legitimate place in American society. Nor do I believe that the typical American is responsible enough to own one of these particular firearms. Conversely though, many Republicans view assault weapon and handgun restrictions as an infringement upon an American's rig... ...nd-held weapons available to them. " 'The greatest threat to our structure is the possession and sale of weapons in this society,' ". - Former President Jimmy Carter (Gerik 2) Works Cited Academic American Encyclopedia. "American Bill of Rights": Jan 1995, 128.83.216.11 Gerik, Melanie. "Carter stresses handgun control". The Daily Texan: March 7 1995, p1-2 Graves, Debbie. "Carter discusses guns, politics, peace in speach". Austin- American Statesman: March 7 1995, pB3 Haymaker, Holley G. "Another Magnum, another victim". The New York Times: Oct 31 1992, v144, p15(N) pA26(L) Ifill, Gwen. "Congress still torn on gun control by complex regional divisions". The New York Times: Oct 20 1991, v141, Sec. 1, p13(N) p19(L) Toner, Robin. "Senator Decides to Fight N.R.A.'s Fire With Fire". The New York Times: Oct 27 1994, v144, pA10(N) pA26(L)

Voices of Protest :: essays research papers

Voices of Protest: The Politician and the Radio Priest   Ã‚  Ã‚  Ã‚  Ã‚  Alan Brinkley, the author of Voices of Protest, wrote about Huey Long and Father Coughlin who launched attacks on Roosevelt’s administration during the years of 1933 – 1935. This period of time was during the great depression. The book described in great length and detail about Huey Long and Father Coughlin, who were extremely influential politicians, and their opposition to the new society of big business and high technology. They felt that the owners of large companies such as Rockefeller, Carnegie and Pullman were to blame for the financial woes of the United States. Long and Coughlin were successful in taking their arguments and beliefs to the American people in the 1930’s.   Ã‚  Ã‚  Ã‚  Ã‚  Huey Long was an energetic, passionate young man at a very young age. In fact, at the age of twenty he stated he planned to run for election. He said, â€Å"first to secondary stated office Louisiana, then for governor, then for United States Senator, and finally for president.† He wrote in the New Orleans Item, â€Å"that about 65 or 70 percent of the entire wealth of the U.S. is owned by two percent of the people†¦wealth is fast concentrating in the hands of the few.† He had the combination of ambition, along with the love and compassion of the less fortunate Americans. He was known throughout Louisiana as â€Å"the kingfish† because of the power and influence he possessed, almost to the point of dictatorship. For several years he was in the limelight and news constantly, in part before of his very colorful and extravagant lifestyle. Even after his death, the people of Louisiana still supported him even though his life was the center of greed and controversy. During his term as Governor, he built hundreds of miles of paved highways, provided free textbooks, constructed bridges, built hospitals, schools and a major university, Louisiana State University or better known as â€Å"LSU.† He obtained his law degree from Tulane and age the age of twenty-one, he moved back to Louisiana to practice law. At the age of thirty-five, Huey Long was elected Governor of Louisiana. He did a couple of things that no governor had ever done before such as consolidating his personal power over all levels of state government and forcing through a program of progressive legislation, thus enabling him to fulfill his promise to the common people of the state.

Meet The Simpsons Essay -- essays research papers fc

Meet the Simpsons Over time, the definition of what exactly "family" means has changed with time. Usually, what constitutes making up a family is relative to a specific culture, but as always, there are exceptions to the rule. Ever since the golden age of television had sprung upon American culture, television has tried to mimic the "ideal" American family through it's programming. Even as early as the 1950's, television producers made programming that would represent what exactly the ideal American family was. Take for example the show "Leave It to Beaver". While I am not going to go in detail about each character, I am going to summarize the family structure and the role of the member. There was a father figure, his job, or responsibility rather, was to financially support the family, while being an exemplary father to his children. The mother on the other hand, was solely responsible for being a typical housewife, while not neglecting the rearing of her children. The children did not have any real responsibility, but they respected their parents and attempted to stay out of trouble. Television shows for the most part in this early era of programming followed among these lines. There has always been at least one show each decade that followed the evolution of American life. In the 1960's, there was the "Andy Griffith Show". In the 1970's, there was a different spin on family life with the show "All in the Family", which did not have the typical white collar father, and its emphasis was not on raising the children, rather it was after the children had grown up. While in the 1980's there was a split in the television programming representation of American families. There were still shows that represented the "ideal" American family, such as "Different Strokes" and "Family Ties" as well as "The Cosby Show", but there was also a more realistic representation of American life in "Married With Children". However, it is not in a drama that American family life is best represented in the 1990's. Instead, it is in the animated series, "The Simpsons". "The Simpsons" follows suit with the other dramas that reflected the decade in which they aired. According to the U.S. consensus for March 1... ...certain traits that common among many American middle aged men. Marge is a housewife that holds the family together by straightening out any problems that arise and by being a concerned, caring mother. Bart and Lisa are two different examples of the youth of our generation. Bart is the typical rebellious child, while Lisa is the aspiring and more intelligent of the two. Thus, the Simpsons best represent American family life in the 1990's. Works Cited: Cawley, Donovan; "A Summery of Lisa Simpson"; Http://www.xoom.com/LisaSimpson/summery.html; 2/15/99 Hall, Dave; "The Bart File"; Http://www.snpp.com/guides/bart.file.html; 2/15/99 Hall, Dave; "The Homer File"; Http://www.snpp.com/guides/homer.file.html; 2/15/99 Hall, Dave; "The Marge File"; Http://www.snpp.com/guides/marge.file.html; 2/15/99 U.S. Bureau of the Census; All Parent/Child Situations, by type, race, and Hispanic Origin of Householder or Reference Person; Http://www.census.gov/population/socdemo/hh-fam/htabFM-2.txt; 2/15/99 U.S. Bureau of the Census; Households by Type and Characteristics: 1998; Http://www.census.gov/population/socdemo/hh-fam/98ppla.txt; 2/15/99

Assessment of Financial Health

Reocities Home Neighborhoods Making Of Cases in Finance – Final Project Report Friendly Cards, Inc. (1988) Gary Cao Noah N Flom Robert Harris Srini Pidikiti May 1997 TABLE of CONTENTS 1 Assessment of Financial Health & Pro Forma Financial Statements 1. 1 Review of History and Statement of Financial Health 1. 1. 1 Industry 1. 1. 2 Friendly Cards History 1. 1. 3 Friendly Financials 1. 2 Review and Evaluation of Pro Forma Statements 1. 3 Financial Policy / Covenants 2 Beaumont's Decisions 2. 1 Envelope Machine Proposal 2. 1. 1 Evaluation 2. 1. 2 Financial Effect of Investment 2. 1. Recommendation 2. 2 Evaluation of West Coast (new equity offer) 2. 2. 1 Advantages 2. 2. 2 Disadvantages 2. 3 Valuation of Creative Designs, Inc. 2. 3. 1 Capital Structure Argument 2. 3. 2 Weighted Average Cost of Capital Assumptions (WACC) 2. 3. 3 Cash Flows, Terminal Value, Equity Value Valuations 2. 4 Pooling Implictions (Friendly + CD) 2. 5 Friendly Cards Stock Valuation 3 Overall Assessment 4 Goal s for the Financial Structure of Friendly Cards, Inc. ——————————————————————————- PART 1. Assessment of Financial Health & Pro Formas 1. Review of History and Statement of Financial Health Wendy Beaumont, president of Friendly Cards, Inc. , has rapidly expanded her greeting card business through internal growth and acquisitions. Ms. Beaumont realizes that money is currently tight, however, she is adamant about future growth and has sought our opinion as to determine her best course of action. In presenting a decision we will first conduct an analysis of the industry, then give a short history of Friendly Cards, Inc. (Friendly), and then examine Friendly's financial statements to determine the financial health of the company. Industry Information The greeting card industry is dominated by three large companies, (Hallmark, American Greetings, & Gibson), which are referred to as ‘The Big Three'. ‘The Big Three' dominate market share, and the remaining competitors are predominantly small private and family owned firms. The greeting card industry is characterized high fixed costs due to: large inventory costs, large investment costs in the establishment of efficient distribution lines, and the need for a highly diversified product lines. Market leaders enjoy great economies of scale which tends to hinder new ntrants into the market. As a result, the card industry is capital intensive and very competitive. The number of firms competing in the industry has decreased by an annualized rate of 15% over the last three decades. Exiting firms were typically smaller in size, the majority of which had less than 50 employees. Additionally, the competitive nature of the market results in a high degree of pric e sensitivity which culminates in smaller margins on sales. Sales tend to be very seasonal in nature with peaks during major holidays. There is trending toward a larger variety of card offerings (increasing inventories), shorter carrying/selling periods, increased diversification of product lines, and an increase in sales of everyday cards as compared to holiday cards. Friendly Cards, Inc. Beaumont Greeting Card Co. was founded by Wendy Beaumont in 1978, in New York City. She later acquired Lithograph Publishing Co. and took these companies public a year later for $3 a share under the name Friendly Cards, Inc. Friendly has rapidly expanded by acquiring Glitter Greetings of Lansing, Michigan (for cash and equity), whose primary market was selling cards to supermarkets. Soon thereafter, it acquired Edwards & Co. of Long Beach, New York (for cash), whose primary market was selling juvenile valentines through chain, drug, variety, and discount stores, as well as, to wholesalers and supermarkets. These acquisitions greatly enhanced Friendly's distribution line expanding it to a regional power. Later Friendly acquired a California firm (Friendly Artists) which extended the distribution line to a national basis. Friendly Artists' primary market was prepackaged cards direct to the warehouse. Twenty-five percent of Friendly's sales are prepackaged boxes, which have a higher margin than regular cards due to lower return rates and lower handling costs. Currently, Friendly appears to be a niche player in the prepackaged box cards market and has avoided entry into the premium card market, thus, avoiding direct competition with the ‘Big Three. ‘ Friendly's sales are more concentrated than the industry with the majority of sales occurring near Christmas at 30% (vs. Industry 32%), and Valentines Day at 25% (vs. Industry 7%). Thus, over 55% of sales occur within a 3 month period. Plants at Friendly are being used at capacity thus, growth would necessitate further additions or acquiring contract services. Friendly's distribution line is effective for a smaller firm due to its structure. Of twenty salesmen, one-third work on commission thus lowering Friendly's costs. However, one problem with using salesmen on commission and having such a small sales force is the tendency to sell to rack jobbers and wholesale distributors. This decreases the potential margin on cards by two-thirds. Friendly's Financials Sales have increased by over 50% between 1985 to 1987. Cost of goods sold has decreased as a percentage of sales in each of those years thus, producing an increasing margin ( 29. 36% in 1985 to 35. 15% in 1987). The rapid growth by acquisition and the national distribution channels that were accomplished by it, have affected the number slightly. In 1986 selling and delivery expenses increased by 1. 45% and this leveled out in 1987. G&A expenses also spiked in '86, reflecting the recent purchase of another company, and then settled back in 1987. However, while sales may have grown rapidly they have not matched the increase in asset growth, which nearly doubled in 1986. Growth in this company is being funded by improving margins and by increasing leverage, as indicated by the Dupont Data. Although the acquisitions were acquired by both cash and equity, the majority were debt financed, which explains why the ROE figures have increased so dramatically (almost 16%) in the last three years. The activity ratios indicate that the receivable to payable were in arrears by 36 days in 1985 increasing to 52 days in 1987. This is probably a result of increased sales to less creditworthy individuals or inattention to collections. Inventory turnover umbers are shrinking due to the continually larger inventories being carried. Net fixed asset turnover has decreased by 2. 3% between 1985 and 1987. This can be explained by higher growth in assets than in sales. The liquidity ratios indicate that the asset to liability ratio for this company is trending down. The current ratio indicates that the company is becoming slightly more insolvent with a current ratio of 1. 1 8 during '87. However, by looking at the Quick ratio and discounting for the affect of inventory in the asset number, the company is dramatically less liquid at 0. 67 in 1987. This indicates that the company is very highly leveraged and is using its large inventory levels in order to support its substantial borrowing needs. Friendly's actual growth rate exceeded the sustainable growth rate in 1986 and was equivalent in 1987. This difference in 1986 produced a need for added debt to finance growth. However excess funds were not needed to fund additional growth in 1987 since the actual rate of growth did not exceed the sustainable rate of growth. This can also be seen in the total debt to equity ratio which increased from 3 in 1985 to 5. 21 in 1986 and reduced to 4. 1 in 1987. The leverage ratios indicate that the bank loans to debt are fairly well matched, with loans being less than receivables, however, increasing in percentage. Interest bearing debt jumped dramatically in 1986 as a result of debt funded acquisitions but continues to level off along with total debt to equity figures in 1987. Finally, debt to assets has increased dramatically in the last th ree years, increasing by 7. 5% to 82. 5% in 1987. Thus Friendly Cards seems to be very highly leveraged, even more so than other firms in the industry although the trend is to increase debt. This highly leveraged position coupled with the high fixed costs and low margins characteristic of the industry, exposes Friendly as extremely susceptible to fluctuations in the market. Therefore, further debt growth may not be advisable–especially since it is currently violating its existing debt covenants. However, Continued growth, however, is needed as to allow the company to further take advantage of its existing distribution lines and realize further economies of scale. 1. 2 Review and Evaluation of Pro Forma Statements The parameters that Ms. Beaumont has set for the pro formas seem reasonalbe for the most part. There are, however, some questionable numbers. For instance, all the forecasts are based on continued sales growth at 20% per year. When compared to astronomical growth rates of 58% in 1986 and 27% in 1987, these estimates appear almost conservative. The majority of the growth in the past, however, were associated with major acquisitions which served to inflate the sales numbers. The historical reluctance to use equity to grow would serve to limit growth if continued into the future. Furthermore, it may be difficult to continue to grow at such a high rates in an increasingly competitive market. Holding costs of goods runs at 65% of sales and may also present a problem depending on whether the company can continue to manage its costs as it continues to grow. It could be argued that the reason CGS has dropped recently is due to the acquisition of Friendly Artists and the increasing reliance on a sales mix made up of low cost prepackaged boxes of cards. A shift in the mix away from these items could increase costs. Also, further acquisitions will serve to push up delivery and selling costs. For our purposes, however, holding them flat seems reasonable. The tax rate seems low at 38% but, depending on the new volume of sales and the maximum tax rate for a corporation, this rate could be even higher. And while the rest of the numbers seem to follow their previous assumptions, the inventory turnover, debt to asset, and interest rate assumptions could be assumed differently. As a result of increased competition in the industry, increasing variations of cards as well as shorter holding duration, it is very unlikely that inventory turnover would improve to 1. 1, and it may very well drop well below this number, possibly to 1. 75. Since growth is likely to continue into the future, an increased amount of inventory will be needed for new market areas. Debt to assets needs to decrease, but this will be difficult to do without funding growth by equity rather than debt. The large sales growth assumptions are directly related to acquisitions, thus increasing assets. If this is done through equity, this number is very realistic. Finally, there may be a problem with the assumption that interest rates on LTD will be 11%. The Monetary Policy Report to Congress indicates that rates should tend to decrease in the future so this rate may be attainable even to such a highly leveraged firm as Friendly. Without more information this estimate seems fine. 1. 3 Financial Policy / Covenants Friendly's apparent financial policy is rapid growth by debt. This debt-financed growth may be due to a ownership issues that could affects Ms. Beaumont's control over her company. The financials indicate that growth is also taking place at the expense of margins, as indicated by the Dupont data. The company believes in the economies of scale of the industry and appears to be establishing a national distribution network. While costly in the short run, this strategy may enable a viable and profitable position in the industry. The elements of Friendly's financial policy appear to be the following. Friendly's capital structure mix is governed by a debt orientation. Its debt/assets ratio is currently at 82. 5% which places is significantly below the AAA rate. AAA bonds are listed at 9. 7% while Friendly can only borrow at 11. 5%. While equity has been used in recent acquisitions there is a strong preference by management to use debt funding. Without question, Friendly is at an integral juncture. Existing lines of credit are maxed out and the bank is imposing new covenants on future loans: bank loans ; 85% of AR and liabilities not to exceed three times the BV of the company. Friendly currently has a $6. 25 million line of credit. Under the current structure Friendly will be in violation in 1987 with bank loans at 87% of AR and debt to equity is at 3. 13 times. Significantly, bank and trade credit for Friendly is expected to reach over $9 million in Dec. '87. Long term and short term debt are both fueling growth. The basis is assumed to be the prime rate (which is 8. 5%) plus 2. 5% points. This is assumed to be a fixed rate established at the time of borrowing. The company's currency is the U. S. dollar and the company does not have any exotica policy to mention. Control of the company rests solely with Ms. Beaumont as she is both the president and the leading shareholder, possessing 55% of the stock. An additional 20% of the stock is owned by employees and officers of the company. Finally, earnings are retained for future growth and meeting current obligations. There are no dividend payments and the stock has depreciated in value from a high of $15 a share. PART 2. Decisions faced by Ms. Beaumont 2. 1 Envelope Machine Investment Evaluation of the Envelope Machine We do not agree that the investment in the envelope machine will result in a return of 31%. The reason for this is that the working capital needed to fund the machine would be funded by additional debt by the company. The interest on the debt needs to be considered before evaluating the total return on the investment. Under this scenario, and considering that Friendly Cards' interest on debt is 11% the interest expense is $22,000 per year before taxes. Our Estimated Annual savings from Operation of Envelope Machine, Years 1 through 8 ( Dollar figures in thousands) is as follows: Savings: Outlays for envelopes purchased in 1987 $1,500 Incremental expenses from manufacturing envelopes: Materials$ 902 Warehouse 94 Labor 91 Depreciation 62 Total Expenses $1,149 Increase in Profit before Taxes (decrease in COGS) 351 Interest Expense on Working Capital 22 Actual Increase in Profit before Taxes 339 Increase in Income Taxes @. 38 125 Increase in profit after taxes $ 204 The projected Cash flows for the investment in the machine are: (attachments). Based upon the cash flows projected in the above Table the internal Rate of Return on the investment is 26%. Based upon Friendly Cards Cost of Equity which is 20% (Appendix WACC) buying the machine with all equity at 20% or debt at 11% is recommended Financial Effects of Investment The Financial effects of buying the envelope machine are can be examined in detail in Appendix Machine. The activity ratios for Friendly if the investment in the machine is made are: (attachments). The investment in the machine has the following effects: * Decreases Cost of Goods Sold by about 1. 5 % which in turn increases the Gross Margins * Decreases Inventory Turnover from 1. 91 to 1. 86 * Increases Funds needed in 1988 by $418,000, in 1989 by $323,000 and in 1990 by $112,000. * Earnings per share increase to $2. 89 in 1990 from $2. 53 in 1990 without investment * By making the investment in the machine Friendly would not be able to meet both of the covenants required by the bank The ratio of the bank loans to receivables exceeds . 85 in all three periods. * Ratio of Friendly's total liabilities to the book value of the company's net worth exceed 3 in 1988 and 1989 which do not meet the covenant but in 1990 the ratio drops down to 2. 94 where it meets the covenants. 2. 2 Evaluation of West Coast Offer (New Equity) We agree with Ms. McConville's conclusion that Friendly should accep t the offer from the West Coast Group at the terms stated if that was the only option available to Friendly Cards. The advantages of this proposal would be: Agency costs will be only 5% compared to the actual costs if an investment bank was used to sell securities of the company in a public offering. * The infusion of equity would enable Friendly to meet all the covenants required by the banks (Appendix WC) enabling Friendly to continue its rapid growth without any financial restrictions from the bank. * The equity infusion would enable Friendly to invest in the envelope making machine and reduce its cost structure and still meet all covenants required by the bank. * The uncertainty about how many securities will be sold if a public stock offering is held is eliminated. Continuing rapid growth would enable Friendly to retain most of the sales representatives who might shift to a competing firm if growth is slowed to enable Friendly to meet its financial covenants * The price that Fr iendly is getting is more than reasonable based upon the present value of the discounted cash flows as shown in (Appendix Valuation) Disadvantages of accepting the proposal would be: * Loss of control. Ms. Beaumont's who presently owns 55% of the outstanding shares would own 40. 37% of the company after the equity infusion. Even though along with the employees of the company she would own 60% of the company she would not be able to make unilateral decisions. * The West Coast Investors who would own 26% of the company would have a significant say in how the company should be run which may affect the current management structure and aversely effect their ability to mange the company as they wish. * Reduction of EPS. Earnings per share would be reduced to $2. 29 per share from the projected $2. 89 per share in 1990 with the purchase of the machine and without equity infusion due to the dilution effect of the new shares. This earnings dilution would probably result in a lower share price. (Approximately $18. 32 instead of $23. 12 considering a price multiple of 8). 2. 3. Valuation of Creative Designs, Inc. Capital Structure Argument Ms. Beaumont had been considering a possible acquisition of Creative Designs, Inc. (CD), a small mid-western manufacturer of studio cards. She had examined the details of CD's operations for four months, and believed that under her management, CD could immediately reduce cost of goods sold by 5%, and reduce other expenses by 10%. If Friendly acquires CD in early 1988, assumptions are made that CD's sales would stay flat during 1988 but would grow at 6% per year thereafter. Based on the following table from case facts, there is a wide range of Debt-to-Equity Ratios for the four companies within the same industry. American Greetings'(AG) D/E ratio increased from 0. 35 in 1985 to 0. 63 in 1987. The reason for this upward trend was that American Greetings had diversified its business segments; from solely relying on greeting card sales AG expanded into gift wrap and stationary goods, such as playing cards, gift-books, and college study guides. Such diversification efforts demanded higher debt levels. In addition, AG was a large company with annual sales of $1,174 million in 1987, up 16% from 1985. Gibson Greeting's (GG)D/E ratio decreased from 0. 71 in 1985 to 0. 49 in 1987. The reason for this downward trend was that Gibson was a relatively small company, with annual sales of $359 million in 1987, an 8. 8% increase from 1985. GG's growth rate was significantly lower than American Greetings. The total debt-to-equity ratio of Creative Designs would decrease over the next several years. Since CD's sales in 1987 was $5 million, it was much smaller than the above two companies. Based on the pro forma financial statements for the period of 1988 to 1990, we see growing sales and EBIT. As a small-size manufacturer, the best capital structure would be: financing its operations mainly by internal growth and a significant reduction in the company's debt levels. Ms. Beaumont wanted to acquire CD for the following reasons: * In the highly competitive market with high cost in distribution and low margin, Friendly had to grow in order to survive, and CD was a good target; Since CD's shareholders agreed to the acquisition by stock-exchange, â€Å"pooling of interests† accounting method would be used, and the consolidated financial statements more attractive than without CD, and Friendly need not record goodwill (if any) and avoid amortization of goodwill; * Since CD had a relatively low debt level and a very low â€Å"bank loan to receivable ratio†, while Friendly had difficulty meeting its bank borrowing restrictions, acquiring CD would make possible for Friendly to meet the covenants; Friendly can easily integrate CD to its high growth strategy, and expand Friendly's market presence in the mid-western region. Weighted Average Cost of Capital Assumptions (WACC) Based on the case facts that the premium for equity risk was 6% on long-term governmental bond rate of 8. 37%, we may calculate the unleveraged beta for American Greetings and Gibson Greeting, and use a derived estimate as a proxy for CD's unleveraged beta. 1987 Financial Data for Two Large Publicly Traded Companies To be conservative, we assume the unleveraged beta for CD is 0. 77. Since the cost of debt was 11% and the tax rate was 38%, we calculated CD's cost of equity is 13. 97% in 1988, and the weighted average cost of capital (WACC) is 11. 07%. Over the next five years, CD's WACC would increase to 11. 92% in 1992 due to the decreasing D/E ratio and therefore the tax shield effect. Cash Flows, Terminal Value, Equity Value Valuations In addition to the above information on WACC and sales growth rate, we have made the following assumptions: * Sales will stay flat in 1988, but will grow at 6% per year after 1989. * Cost of goods sold will stay at 55. 2% of sales level. * Depreciation, â€Å"Selling, delivery, and warehousing expenses†, and â€Å"general and administrative expenses† will grow proportionately to sales growth. * Increased Retained Earnings will be used to reduce long-term debt. * Prepaid expenses will increase by a small amount each year. * Interest expenses will decrease over the period since the debt level will decrease. * No divi dend will be paid after 1988. Based on the above assumptions, we found that the total present value for CD was $4. 349 million. Adjusting for the interest-bearing loans totaling $1. million, the net worth of CD would be $3. 049 million, $1. 168 million higher than the calculated value of the stock exchange ($1. 881 million). This indicates that acquiring CD is a good transaction for Friendly. 2. 4 Pooling Implications (Friendly + CD) By using the â€Å"pooling of interests† accounting method, we constructed the Friendly and CD consolidated financial statements. (see Appendix Valuation – Friendly + CD) The impact on 1988 pro forma financial statements is as follows: * New bank loans needed decreased from $1. 585 million to $1. 357 million; * EPS increased from $1. 7 to $1. 73; * Net profit margin increased from 4. 96% to 5. 49%; * Assets turnover increased from 1. 01 to 1. 03; * ROA increased from 5. 01% to 5. 49%; * ROE decreased from 25. 23% to 20. 5%; * Days in Recei vable reduced from 157 to 149; * Bank loan to receivable ratio decreased from 0. 9 to 0. 74; * Interest bearing debt to equity ratio decreased from 2. 62 to 1. 92; * Total debt to equity ratio decreased from 4. 04 to 2. 62. The overall impact of acquiring CD to CF is positive. The result of pooling is in line with Friendly Cards' financial strategy. In the long run, acquisition of CD would become an integral part of Friendly Cards' strategic plan for the next few years to achieve a higher growth rate and increased market share. In the short run, acquisition of CD would meet Friendly Cards' immediate financial needs enabling the company to meet the bank's covenants, specifically, to reduce the â€Å"bank loan to receivable† ratio to an estimated 0. 9 in 1988 to 0. 85 or lower, and to decrease â€Å"total liabilities to equity ratio† from an estimate 4. 04 in 1988 to 3 or lower. The result of pooling shows that these two requirements are met. 2. 5 Friendly Cards Stock Valuation Assumptions: Capital structure Based upon the pro forma financial statements and the bank covenants' requirements, we assume the capital structure to be 75% debt and 25% equity. Any other capital structures with the reduction of debt would make it more difficult to get additional capital through equity. We need the debt financing to be able to meet Ms. Beaumont's growth requirment. Discount rates We assume the cost of debt to be 11%. This is based upon the following facts: In early 1988, interest rates were declining, the 10-year Treasury Notes rate declined from 9. 52% in October 1987 to 8. 9% in January 1988; even though the short-term Prime Rate increased to 9. 07% by October 1987, it had decreased to 8. 5% by January 1988; furthermore, the Federal Reserves Monetary Policy Report(Jan. 1988) stated that â€Å"high rates of capacity utilization and low unemployment suggest the needs in maintaining progress toward price stability†, indicating that interest rates would stabiliz e at the present level. Also the need to reduce the trade deficit, business and labor would continue to exercise restraint in price and wage behavior, indicating the Fed would hold interest rate at the present level, or even reduce them. We assume the interest rates would hold stable at the present level of 8. 5% and that the lending institution will continue its premium of 2. 5% over prime. We assume all the funding for the debt to be short term as most of the debt would be used to fund the current assets (receivable and inventories). This would be a proper matching of funds. Based on the valuation of Friendly Cards, we found that * FCFE Method (Free Cash Flows for Equity): the valuation was -$ . 95 per share ; * Free Cash Flow for Capital: the valuation was -$5. 5 per share ; * Book Value Method: using 11/2 times Book Value the valuation was $7. 40 ; * P/E ratio (multiple) method: using the industry average P/E ratio of 7, the valuation was $9. 50 per share. (Please refer to appendix Valuation – Friendly Cards, Inc. ) The only way the company's stock price was worth $8 to $9. 50 per share was that West Coast Investors and Creative Designs valued the company using a Price to Earnings multiple method. **Note** We attempted to back out a discounted cash flow model that would justify an $8 or $9. 50 share price. By altering certain assumptions, most specifically the sales growth rate we can achieve positive valuations of the stock price. Slower growth in sales PART 3 Overall Assessment Our recommendation to Ms. Beaumont is to (1) First, acquire CD with a stock exchange of 198,000 shares at $9. 5/share, (2) With the additional leverage obtained by the CD acquisition, purchase the envelope machine. As evidenced by the above matrix and graphs, even though Friendly Cards would achieve a higher EPS by not acquiring CD but buying the machine, it would not meet the bank covenants. Advantages of our recommendation: * Meet all of the bank's covenants; * Meet Ms. Beaumont's growth needs; * Meet Ms. Beaumont's requirement on D/E ratio of 2 by 1990; * Maintain a relatively high level of control for Ms. Beaumont over the company; * Position the company for future growth by providing a more favorable D/E ratio. Disadvantages of our recommendation: * EPS dilution by acquiring CD from $4. 64 per share in 1992 as compared to $4. 15 with the CD acquisition; * Reduce Ms. Beaumont's control from currently 55% to 41. 5% with CD acquisition. PART 4 Goals for the Financial Structure of Friendly Cards, Inc. 4. 1 Friendly Cards capital structure consideration Our recommendation is that Ms. Beaumont to move Friendly Cards' capital structure closer to 60% debt and 40% equity (a D/E ratio of 1. 5). Our reasoning for such a recommendation is as follows: Flexibility: For future growth and possible acquisitions, Funds for acquiring more assets (another envelope machine! ) to reduce costs. Risk: Ability to deal with possible adversity into the future (i. e. , low sales) Lower risk level than current D/E ratio Income: Future growth in earnings due to ability to acquire market share through acquisitions. Further exploit the economies of scale to reduce CGS, Handling and Distribution Costs Control: Maintain controlling interests in the company Timing: Having a higher D/E Friendly can issue equity at more favorable terms at a later date when EPS is higher, the market environment is â€Å"friendlier†, and the company will be in a better financial position. Our recommended target capital structure for Friendly Cards, Inc. of 60/40 D/E is realistically attainable within 3-4 years (mid 1991). Friendly Cards Case Attachments