SAM! You hurt me......

A poet of urdu says in his poetic verse that...

"Naram Naram Lafzon Se Bhi Lag Jati Hain Chotain Aksar...
Dosti To Bara Nazuk Sa Hunar Huwa Karti Hai...."

(A little word can hurt you a lot, and friendship is even a too sensitive relation)
When somebody hurts you, it really painful. And when he / she reacts that he / she did not know, then it hurts even a lot. And you hurt me and then criticize upon my attitude and reaction. Its very painful.

You hurt me SAM!!!

Personal Finance

Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies, and income tax management.

A key component of personal finance is financial planning, a dynamic process that requires regular monitoring and reevaluation. In general, it has five steps:
Assessment: One's personal financial situation can be assessed by compiling simplified versions of financial balance sheets and income statements. A personal balance sheet lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). A personal income statement lists personal income and expenses.
Setting goals: Two examples are "retire at age 65 with a personal net worth of $1,000,000" and "buy a house in 3 years paying a monthly mortgage servicing cost that is no more than 25% of my gross income". It is not uncommon to have several goals, some short term and some long term. Setting financial goals helps direct financial planning.
Creating a plan: The financial plan details how to accomplish your goals. It could include, for example, reducing unnecessary expenses, increasing one's employment income, or investing in the stock market.
Execution: Execution of one's personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.
Monitoring and reassessment: As time passes, one's personal financial plan must be monitored for possible adjustments or reassessments.
Typical goals most adults have are paying off credit card and or student loan debt, retirement, college costs for children, medical expenses, and estate planning.
The six key areas of personal financial planning, as suggested by the Financial Planning Standards Board, are:
1 - Financial Position: this area is concerned with understanding the personal resources available by examining net worth and household cash flow. Net worth is a person's balance sheet, calculated by adding up all assets under that person's control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the expected sources of income within a year, minus all expected expenses within the same year. From this analysis, the financial planner can determine to what degree and in what time the personal goals can be accomplished.
2 - Adequate Protection: the analysis of how to protect a household from unforeseen risks. These risks can be divided into liability, property, death, disability, health and long term care. Some of these risks may be self-insurable, while most will require the purchase of an insurance contract. Determining how much insurance to get, at the most cost effective terms requires knowledge of the market for personal insurance. Business owners, professionals, athletes and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance also enjoys some tax benefits, utilizing insurance investment products may be a critical piece of the overall investment planning.
3 - Tax Planning: typically the income tax is the single largest expense in a household. Managing taxes is not a question of if you will pay taxes, but when and how much. Government gives many incentives in the form of tax deductions and credits, which can be used to reduce the lifetime tax burden. Most modern governments use a progressive tax. Typically, as your income grows, you pay a higher marginal rate of tax. Understanding how to take advantage of the myriad tax breaks when planning your personal finances can make a significant impact upon your success.
4 - Investment and Accumulation Goals: planning how to accumulate enough money to acquire items with a high price is what most people consider to be financial planning. The major reasons to accumulate assets is for the following: a - purchasing a house b - purchasing a car c - starting a business d - paying for education expenses e - accumulating money for retirement, to generate a stream of income to cover lifestyle expenses.
Achieving these goals requires projecting what they will cost, and when you need to withdraw funds. A major risk to the household in achieving their accumulation goal is the rate of price increases over time, or inflation. Using net present value calculators, the financial planner will suggest a combination of asset earmarking and regular savings to be invested in a variety of investments. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, which typically will subject the portfolio to a number of risks. Managing these portfolio risks is most often accomplished using asset allocation, which seeks to diversify investment risk and opportunity. This asset allocation will prescribe a percentage allocation to be invested in stocks, bonds, cash and alternative investments. The allocation should also take into consideration the personal risk profile of every investor, since risk attitudes vary from person to person.
5 - Retirement Planning: retirement planning is the process of understanding how much it costs to live at retirement, and coming up with a plan to distribute assets to meet any income shortfall.
6 - Estate Planning: involves planning for the disposition of your asset when you die. Typically, there is a tax due to the state or federal government at your death. Avoiding these taxes means that more of your assets will be distributed to your heirs. You can leave your assets to family, friends or charitable groups.

Best of Luck for Salman Cecil...

As Salman Cecil from Faisalabad is going to Mumbai, India for participating in Sa Re Ga Ma Pa Challenge 2010 of Zee TV India, a famous music talent hunt programme, my best wishes for win is for him only. Saregamapa 2010 is going to start soon. Auditions have already completed and Salman Cecil is achieved the entry level success. Zee Television Channel announced audition dates and venue for the singing talent hunt reality show Sa Re Ga Ma Pa 2010 for age group of 16 to 28 years. The auditions for Sa Re Ga Ma Pa 2010 has started from 14th May. Salman Cecil after qualifying from Dubai, now he is India for a big show.
Sa Re Ga Ma Pa, formerly known as Sa Re Ga Ma before Shaan's debut, is a musical contest shown on Zee TV. It was last hosted by Aditya Narayan and directed by Gajendra Singh. The contest is named for the first few notes of the standard octave in Indian classical music. The first episode aired on May 1, 1995 and was hosted by Sonu Nigam; the show was extremely popular at that time.
From 1999 till 2001, the show was hosted by the brothers Amaan Ali Khan and Ayaan Ali Khan, sons of legendary sarod-player Amjad Ali Khan.
After that, Shaan started hosting the show. Later, the name "Sa Re Ga Ma Pa" became known as the "brand name" of the series and completely changed the concept of the show to include public interaction through voting. This was first done in 2005, when the old show concept was completely scraped and Sa Re Ga Ma Pa Challenge 2005 was introduced.
After Sa Re Ga Ma Pa Challenge 2005, Gajendra Singh departed from Zee TV and joined hands with Star Network, along went some others like Shaan. The concept rights are not clear yet, but Zee TV claims rights on the format of the shows originally made for Zee TV, like Sa Re Ga Ma Pa and Antakshari. In February 2007, Real Media - Zee TV in Dubai, produced and started airing Sa Re Ga Ma Pa Middle East - Pakistan Challenge 2007 for the Middle East and Pakistan viewers based on the original format of the show, without Gajendrra Singh.
Zee TV Telugu has also started "Sa Re Ga Ma Pa" in 2007 and successfully run 2 series named "Sa Re Ga Ma Pa Seniors" and "Sa Re Ga Ma Pa Little Champs" and has started a new series "Sa Re Ga Ma Pa Super Seniors" for aged group above 35 years.
Zee Marathi also has its own version of "Sa Re Ga Ma Pa."
The last episode, Sa Re Ga Ma Pa Challenge 2007 aired in the year of 2007 and was hosted by Aditya Narayan. Highlights from Sa Re Ga Ma Pa 2005 and 2007 are currently aired under the title "Rock the Dhunn".
The third installment Sa Re Ga Ma Pa Challenge 2009 is being aired and premiered on July 4. Aditya Narayan returns as the host with three new mentors, who join Himesh Reshammiya.
The concept and "elimination" process was very different from today's format of public voting. Each week, a contestant would challenge the previous week's winning contestant through various different rounds such as singing a song from their own choice, singing a song of the judge's choice et cetera. The contestant who got the most points at the end of the episode would go ahead into. In total, there were usually four contestants per episode, two girls and two boys. The main goal of the contestants was to get a streak of continuous wins each week from which if they were successful would be given a break into the musical industry in India.

Salman, my ever best wishes is for you munnah!!!

"While the attitude that luck is the primary difference between success and failure would be a good excuse to easily accept the defeatist position in life, it is one that is untrue. Many, many successful people met what appeared to be insurmountable challenges on their way to achieve success."
All of us have bad luck and good luck. The man who persists through the bad luck -- who keeps right on going -- is the man who is there when the good luck comes -- and is ready to receive it.

Common Size Financial Statements

Common size ratios are used to compare financial statements of different-size companies, or of the same company over different periods. By expressing the items in proportion to some size-related measure, standardized financial statements can be created, revealing trends and providing insight into how the different companies compare.
The common size ratio for each line on the financial statement is calculated as follows:
Common Size Ratio = Item of Interest / Reference Item

For example, if the item of interest is inventory and it is referenced to total assets (as it normally would be), the common size ratio would be:
Common Size Ratio for Inventory = Inventory / Total Assets

The ratios often are expressed as percentages of the reference amount. Common size statements usually are prepared for the income statement and balance sheet, expressing information as follows:
• Income statement items - expressed as a percentage of total revenue
• Balance sheet items - expressed as a percentage of total assets
The following example income statement shows both the dollar amounts and the common size ratios:

Common Size Income Statement

Income Statement Common-Size Income Statement
Revenue 70,134 100%
Cost of Goods Sold 44,221 63.1%
Gross Profit 25,913 36.9%
SG&A Expense 13,531 19.3%
Operating Income 12,382 17.7%
Interest Expense 2,862 4.1%
Provision for Taxes 3,766 5.4%
Net Income 5,754 8.2%

For the balance sheet, the common size percentages are referenced to the total assets. The following sample balance sheet shows both the dollar amounts and the common size ratios:

Common Size Balance Sheet

Balance Sheet Common-Size Balance Sheet
ASSETS
Cash & Marketable Securities 6,029 15.1%
Accounts Receivable 14,378 36.0%
Inventory 17,136 42.9%
Total Current Assets 37,543 93.9%
Property, Plant, & Equipment 2,442 6.1%
Total Assets 39,985 100%

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities 14,251 35.6%
Long-Term Debt 12,624 31.6%
Total Liabilities 26,875 67.2%
Shareholders' Equity 13,110 32.8%
Total Liabilities & Equity 39,985 100%


The above common size statements are prepared in a vertical analysis, referencing each line on the financial statement to a total value on the statement in a given period.
The ratios in common size statements tend to have less variation than the absolute values themselves, and trends in the ratios can reveal important changes in the business. Historical comparisons can be made in a time-series analysis to identify such trends.
Common size statements also can be used to compare the firm to other firms.

Comparisons Between Companies (Cross-Sectional Analysis)

Common size financial statements can be used to compare multiple companies at the same point in time. A common-size analysis is especially useful when comparing companies of different sizes. It often is insightful to compare a firm to the best performing firm in its industry (benchmarking). A firm also can be compared to its industry as a whole. To compare to the industry, the ratios are calculated for each firm in the industry and an average for the industry is calculated. Comparative statements then may be constructed with the company of interest in one column and the industry averages in another. The result is a quick overview of where the firm stands in the industry with respect to key items on the financial statements.

Limitations

As with financial statements in general, the interpretation of common size statements is subject to many of the limitations in the accounting data used to construct them. For example:
• Different accounting policies may be used by different firms or within the same firm at different points in time. Adjustments should be made for such differences.
• Different firms may use different accounting calendars, so the accounting periods may not be directly comparable.

Qualification On The Usefullness Of Financial Statements

Although financial statements provide information useful to decision-makers, there is much relevant information that they omit. Factors of market demand, technological developments, union activity, price of raw materials, human capital, tariffs, government regulation, subsidies, competitor actions, wars, acts of nature, etc. can have a dramatic effect on a company's prospects.

A critical assumption in the use of financial statements (aside from stewardship), is often made that the past will predict the future. For trends that have continued for many years this will usually be true, at least for the near future. Ratio analysis for a single company or within an industry using similar accounting methods will be the most fruitful way of using the data provided by financial statements.

Study of Behavior on Empirical Controllers

Questionnaires were sent to controllers of the 500 largest American industrial firms with a 53.8% response. The accountants were asked to evaluate the adequacy of current reporting procedures. The disclosure rated as more deficient, accounting for human resources, was ranked fifth in importance. Effects of price-level changes were deemed the second largest deficiency, but ranked sixth in importance. The rate of return on investment was rated third in deficiency, but first in importance [Francia and Strawser,1972].

Study of Behavior on Empirical Investors

Extensive studies were conducted of three categories of investors: individual investors, institutional investors and financial analysts. Both individual and institutional investors regarded long-term capital gains as more important than dividend income which was more important than short-term capital gains. Both individual and institutional investors with portfolios under $10,000 rated short-term capital gains higher than investors with large portfolios [Most and Chang,1979].

All groups in the USA regarded financial statements as the most important source of information for investment decisions. In the United Kingdom, only institutional investors made that judgement. Financial analysts regarded communications with management as the most important source, whereas individual investors preferred newspapers and magazines. Financial statements were found to be equally important for "buy decisions" as for "hold/sell decisions" [Chang and Most,1981].

Study of Behavior on Empirical Investors (2)

A survey of bank lending officers revealed that half of them would refuse to loan to a company that did not submit financial statements, even though these might not be explicitly requested. Bank lending officers exhibited no preference for inventory or depreciation methods, but believed that consistency in the use of accounting methods is important [Stephens,1980].

Another study attempted to compare General Price Level (GPL) and traditional ratios in the prediction of bankruptcy. GPL data was found to be neither more nor less accurate than historical data. To justify the expense of preparing GPL statements, GPL data would have to be more useful. The investigators noted that GPL data may or may not be of value for other uses of accounting data [Norton and Smith,1979].

An extensive study was made of ratio tests in the prediction of bankruptcy. All nonliquid asset ratios performed better than any of the liquid asset ratios -- including the highly-touted current ratio and acid-test ratio -- for anywhere from one to five years in advance of bankruptcy. The researcher explains that a firm with good profit prospects in a poor liquid asset position rarely has trouble obtaining necessary funds. Another surprising discovery was that the failed firms tended to have less rather than more inventory -- contrary to what the literature might suggest [Beaver,1968].

Footnotes

There are generally two kinds of footnotes. The first type identifies and explains the major accounting policies of the business. The second type provides additional disclosure, such as details of long-term debts, stock option plans, details of pension plans, previous errors, lack of internal control and law suits in progress.

Although the footnotes are required, there are no standards for clarity or conciseness. Footnotes often seem intentionally legalistic and are awkwardly written [Tracy,1980].

Window Dressing

If these methodological variations are not enough to make the would-be investor wary, he or she should be aware that those who prepare financial statements often have an intention to misinform rather than to inform. Reduction in discretionary costs (research, adverstising, maintenance, training, etc.) can increase net income while having a detrimental effect on future earnings potential. A new management may similarly write-down the value of assets to reduce depreciation and amortization expenses for future years. A businessman may avoid replenishing inventory during the period prior to closing the books so as to increase his current ratio. Temporary payment of a current debt just prior to the financial statement date will achieve the same result. Retained earnings can be appropriated for future inventory price decline and later reported as net profit. Often an analysis of a series of annual statements, rather than those of a single year, will highlight such methods. More extreme practices are generally avoided by firms that must answer to regulatory agencies to be quoted on the stock exchange.

Examples of Striking Effects of Accounting Methods

Superior Oil Company owned 1.4% of Texaco, Inc. which was carried at a cost of $64 million, despite its market value of $118 million. A major brewery using LIFO inventory valuation revealed that the average cost method would increase inventory value by $33 million [Kiesco and Weygandt,1982]. High interest rates and a drop in oil prices caused Texaco, Inc. to reduce its LIFO-valued inventories by 16%, netting $454 million. A loss year was thereby turned into a profit year. General Motors doubled its net earnings in 1981 by changing its "assumed rate of return" on its pension plan from 6% to 7% [Bernstein,1982]. With its many old and historical-cost undervalued plants and buildings, Ford Motor Company showed historical cost earnings of $9.75 per share in 1979, despite a current cost income of $1.78 [Greene,1980].

Patents may represent unrecorded assets insofar as their true earning value far exceeds their costs. Goodwill is another asset with a true value which is hard to assess.

What Different Classes of Statement Users Look For

Government officials are generally concerned that reporting and valuation regulations have been complied with -- and that taxable income is fairly represented. Labor leaders pay particular attention to sources of increased wages and the strength and adequacy of pension plans (which tend to be chronically underfunded). Owners, shareholders and potential investors tend to be most interested in profitability. Many investors look for a high payout ratio (cash dividend/net income). Speculators pay more attention to stock value insofar as growth companies tend to have a low payout ratio because they reinvest their earnings. Bondholders are inclined to look for indicators of long-run solvency. Short-term creditors, such as bankers, pay special attention to cash flow and short-term liquidity indicators, such as current ratio. Both classes of creditors prefer lending to firms with low (usually no higher than 40-50%) leverage ratios, such as debt to total assets.


As indicated earlier, management can use financial statements for diagnostic purposes -- with different managers paying attention to different ratios. A buyer may look closely at inventory turnover. Too much inventory may mean excessive storage space and spoilage, whereas too little inventory could mean loss of sales and customers due to stock shortages. A credit manager may be more interested in the accounts receivable turnover to assess the correctness of her credit policies. A high sales-to-fixed-assets ratio reflects efficient use of money invested in plant and in other productive or capital assets. Higher levels of management, as with investors, tend to look at overall profitability ratios as the standards by which their performance is judged [Tamari,1978].

Differing Accounting Methods

Much of the incomparability of financial statements between businesses can be traced to different accounting methods. The most striking differences occur in (1) inventory valuation (FIFO, weighted average, etc.) (2) depreciation (straight-line, sum-of-the-years'-digits, etc.) (3) capitalization versus expense of certain costs, eg. leases and developmentof natural resources (4) investments in common stock carried at cost, equity, and sometimes market (5) definition of discontinued operations and extraordinary items [Kieso and Weygandt,1982].

Example of Ratio Analysis Use

Ratios are useful to indicate various symptoms. Usually those symptoms require more detailed analysis. For example, ratio analysis may reveal an increase in sales volume relative to inventory and receivables. But inventories could have increased less rapidly than sales due to reduced cost of goods, inability to replace inventory items, change in inventory policy or a change in inventory valuation. Receivables could have increased less rapidly than sales because of a more efficient collection policy, a larger proportion of cash sales or a change in policy with regard to the extension of credit. Sales volume could have increased due to plant expansion, an aggressive sales campaign, price increase, price decrease or extension of sales territories. Ratio changes lead managers to ask pointed questions.

Examples of Ratio Variation Between Businesses

A five-year average (1960-1964) of current ratio stands at 4.56 for hardware stores, 1.95 for grocery stores, 4.11 for cotton cloth mills and 1.70 for building construction contractors. Note the variation between types of retailer and manufacturer. These industry standards are not unhealthy. Another interesting ratio is fixed assets (depreciated book value) per tangible net worth. Five year percentages for this ratio are 5.7% for manufacturers of womens' coats, 80.1% for manufacturers of bakery goods, 59.9% for grocery stores and 10.2% for furniture stores. In general, this ratio is best kept low for new businesses, which should rent land and buildings until the future of the business is ensured. Experience has shown that small businesses should attempt not to exceed 66% and large businesses should avoid exceeding 75% [Foulke,1968].

Current Ratio - The Patriarch Ratio

Current ratio (the ratio of current assets to current liabilities) was perhaps the earliest ratio to gain widespread use as a measure of solvency. On the theory that $2 in current assets could safely cover $1 of current liabilities (with enough remaining to operate) a 2-to-1 value became an inflexible standard. But inventories can vary greatly in their liquidities. Oil, for example, can be rapidly liquidated, but inventories of service parts could take years to sell -- hardly "current assets". Also, small businesses can often liquidate their inventories more rapidly than large ones, indicating that current ratio may not be comparable for different size firms. Moreover, the relative investment in inventory rose from 77% of working capital to 83% of working capital between 1950 and 1962 for American corporations [Miller,1966]. Just-In-Time (JIT) inventory control using computers has dramatically decreased the amount of inventory held. Thus, indicators from the past might not be useful for the future. A 1-to-1 "acid-test" ratio which excluded inventory from current assets was a suggested replacement for current ratio, but the liquidity of the receivables portion of current assets is still open to question without information on collectability. In a strike or a recession, the business might have to pay its current liabilities by liquidating its current assets. Yet it is questionable if this could be done without a loss in operating capacity -- especially serious in a recession. In the case of an airline, cash flows are more a function of its current assets than of its non-current assets.

Types of Ratio Analysis

Careful financial statement analysis usually means the extraction of meaningful ratios from the statements. These ratios have been classified as measuring (1) liquidity (current ratio, acid-test ratio, etc.) (2) activity (receivables turnover, inventory turnover, etc.) (3) profitability (profit margin on sales, rate of return on assets, earnings per share, etc.) and (4) leverage (debt to total assets, times interest earned, etc.) [Kiesco and Weygandt,1982]. Ratios are often used to assess performance or as diagnostic tools to point up potential problem areas. Given the extremely varied entities for which financial statements are made -- and even the extreme variation between industries of an entity type -- the most productive use of these ratios is probably made either against industry standards or against ratios for previous years of the entity in question.

Characteristics of Entities Having Financial Statements

Non-profit organizations such as government and charities typically present statements which exhibit their resources and the way those resources are distributed or held. Stewardship and responsibility are the focus for these statements. Financial statements for private individuals focus on resources and obligations -- helping the person to assess his or her financial condition and to plan financial affairs (or obtain a bank loan) [Rosenfield, 1981]. Retailers are typically highly mortgaged, rely on credit to wholesalers (following a desire for a large and varied stock), often offer extensive credit to customers (or no credit, on a strictly cash basis) and reside in high-rent locations. Wholesalers tend to be characterized by large inventories, large sales volume (with small profit margin) and chronic credit problems with retailers. Manufacturers tend to have a substantial investment in fixed assets (machinery, equipment and buildings) and often face major problems due to a large work-force [Costales,1979]. Service industries -- such as railroads, airlines and public utilities -- have less of a problem with flow of inventory. Their focus tends to be on balancing operating revenue against operating expenses dominated by fixed assets (depreciation, repairs, replacement, maintenance, etc.). Companies with high proportions of current assets tend to be financed through short-term borrowing and shareowner investment. Industrial corporations tend to be financed primarily through shareowners, whereas public utilities and railroads are more often financed by long-term borrowing (bonds) [Holmes, et al,1970].

Comparability of Financial Statements

Comparison of financial statements forms the basis for much financial analysis. Four main types of comparison are made: (1) comparison of statements for the enterprise between successive years (2) comparison of a firm's statements with those of a specific competitor (3) comparison of a firm against an industry standard and (4) comparison with a target, such as a company's budget. Comparisons between different organizations may be difficult or even meaningless because of differences in (1) size of the organization (2) type of organization and (3) accounting methods used by the organization. Often, both the size and type of organization will dictate the kind of accounting methods used.

Kinds of Financial Statements

The balance sheet provides the user with data about available resources as well as the claims to those resources. The income statement provides the user with data about the profitability of the enterprise detailing sources of revenue and the expenses which reduce profit. The statement of changes of financial position shows the sources and uses of a firm's financial resources, demonstrating trends in the alteration of its capital structure. The statement of retained earnings reconciles the owners' equity section of successive balance sheets, showing what has happened to generated revenue.

Financial Statements: By Whom, For Whom?

Financial statements are summaries of monetary data about an enterprise. The most common financial statements include the balance sheet, the income statement, the statement of changes of financial position and the statement of retained earnings. These statements are used by management, labor, investors, creditors and government regulatory agencies, primarily. Financial statements may be drawn up for private individuals, non-profit organizations, retailers, wholesalers, manufacturers and service industries. The nature of the enterprise involved dramatically affects the kind of data available in the financial statements. The purposes of the user dramatically affects the data he or she will seek.

Run Mchine Has Stopped...

Pakistan’s star Test player Muhammad Yousuf announced the expected formal retirement from international cricket saying he would continue to play first class and league cricket to remain fit and in touch with the sport.
In a brief announcement which initially did not include the world retirement made here Monday on the front terrace of Karachi Press Club during a Meet the Press Programme of the club, the bearded player, who had the test average of 53 plus, better than Javed Miandad and Inzamamul Haq, said he had decided to leave international cricket because the Pakistan Cricket Board had stated in an official letter that his presence in Pakistan cricket would damage Pakistan cricket.
He said he had taken the decision to quit international cricket so that he can save Pakistan cricket from damage as alleged by the PCB in its official letter. He had consulted his elders and friends before taking the decision, he said.
He said during his cricket career spanning 12 years, he had played for the glory of the country and whatever name and fame he had achieved was due to Pakistan and the public of Pakistan.
Damaging Pakistan’s name or national cricket would be last thing on his mind that was why he had selected the road to retirement because in that way he would help Pakistan cricket.
He said he would never do any thing that would damage country’s name and after the PCB wrote that his presence in the team would damage Pakistan cricket and honor, he decided to quit cricket only to save national cricket and honor of the country.
When repeatedly asked was his decision final and irrevocable and would he reverse his decision if the public of other stake holders in cricket pursued him to take it back, he gave no categorical answer but for a number of times during the programme used the phrase “for the time being quitting cricket was his decision” giving rise to doubts that he may take back the decision if right quarters approach him.

Diabetic and Kidney Disease

Health is always an important issue for everyone but it is more painful when some of the colorful and tasteful sense of a human being causes damages to the human being like sugar. The rate of sugar in human blood varies and it causes diabetics. On the other hand kidneys are the amazing gift of God for humans. Human pair of Kidney is used to balance the different harmful material in the blood of human and act as a filtrate for wastes and toxin materials. The original count of kidney in every human is two but some people have only one kidney as one can also perform the said task and functioning according to the prescribed law. The size of kidneys almost equal to a fist and can easily be located at middle of the back exactly below the rib cage of body.
Blood is continuously passing through the kidneys and process of filtering is spontaneously occurred. The filtered waste then excreted in the shape of urine. Urine is stored in bladder and consists of water and harmful toxic materials. When we urinate, we disposed off that toxic material.
In current age, the most dangerous harm for the kidneys is nephropathy means the failure of kidneys. According to some statistics indicators that rate of kidney failure in only United States of America varies between 80,000 to 100,000 each year. In case of kidney failure, the kidneys become unable to filter the blood and passed out that toxic material from body.
When we calculate the reasons of said kidney failure, we realize that the major cause is diabetic. According to the Primary Diagnoses (Causes) for Kidney Failure Survey 1998, almost half of the kidney failure appears due to diabetic. Complete indicators are as follows;
• 43.2% Diabetes
• 23.0% High Blood Pressure
• 12.3% Glomerulonephritis
• 2.9% Polycystic Kidney Disease
• 18.6% Other Causes
Diabetic is the major cause of kidney failure but most people deny it. In USA 16 million people suffer diabetics and out of them 0.1 million have kidney failure. The patient then has only two options. First one to choose the dialysis that replaces the original function of filtering the blood upto some extent or receives a healthy kidney from any donor through transplantation.
The Federal Government is spending high amount for the cure of kidney failure patients as the budget multiplies in billion dollars. Government knows that Americans has higher probability of having kidney failure than others and all scientists are unable to know the reason of such. Diabetics are of two kinds but the ratio of having kidney failure is same in both kinds. Doctors and researchers though describe the level of diabetic kidney failure in 5 stages. But at end the best cure is good care that can save you from kidney failure.

Users of Financial Statements

Analysis of financial statements is linked with the objective and interest of the individual / agency involved. Some of the agencies interested include Management, investors, creditors, bankers, workers, Government, and public at large.

1. MANAGEMENT

Management is interested in the financial performance and financial condition of the enterprise. It would like to know about its viability as an on going concern, management of cash, debtors, inventory and fixed asset and adequacy of capital structure. Management would also be interested in the overall financial position and profitability of the enterprise as a whole and its various departments and divisions.

2. INVESTORS

An investor is interested in the profitability and safety of his investment and would like to know whether the business is profitable, has growth potential and is progressing on sound lines. The present investors want to decide whether they should hold the securities of the company or sell them. Potential investors, on the other hand, want to know whether they should invest in the shares of the company or not. Investors (Shareholders or owners) and potential investors, thus, make use of the financial statements to judge the present and future earning capacity of the business, to judge the operational efficiency of the business and to know the safety of investment and growth prospects.

3. BANKERS AND LENDERS

Bankers and lenders are interested in serving of their loans by the enterprise, i.e. regular payment of interest and repayment of principal amount on schedule dates. They also like to know the safety of their investment and reliability of returns.

4. SUPPLIERS/ CREDITORS

Creditors dealing with the enterprise are interested in receiving their payments as and when fall due and would like to know its ability to honor its short-term commitments.

5. EMPLOYEES

Employees interested in better emoluments, bonus and continuance of the business, would like to know its financial performance and profitability.

6. GOVERNMENT

Government and regulatory authorities would like to ensure that the financial statements prepared are as per the specified laws and rules, and are to safe guard the interest of various concerned agencies. e.g.: Taxation authorities would be interested in ensuring proper assessment of tax liability of the enterprise as per the laws.

7. STOCK EXCHANGE

Stock exchange uses the financial statements to analyze and thereafter, inform its members about the performance, financial health, etc. of the company, to see whether financial statements prepared are in conformity with the specified laws and rules and to see whether they safeguard the interest of various concerned agencies.
Other Regulatory authorities (such as, Company Law Board, SEBI, Stock Exchanges, Tax Authorities etc.) would like that the financial statements prepared are in conformity with the specified laws and rules, and are to safeguard the interest of various concerned agencies. For example, taxation authorities would be interested in ensuring proper assessment of tax liability of the enterprise as per the laws in force from time to time.

8. CUSTOMERS

Customers are interested to ascertain continuance of an enterprise. For example, an enterprise may be supplier of a particular type of consumer goods and in case it appears that the enterprise may not continue for a long time, the customer has to find an alternate source.

9. PUBLIC

Enterprises affect members of the public in a variety of ways. For example, enterprises may make a substantial contribution to the local economy in many ways including the number of people, they employ and their patronage of local suppliers. Financial statements may assist the public by providing information about trends and recent developments in the prosperity of the enterprise and the range of its activities.
Different agencies thus look at the enterprise from their respective viewpoint and are interested in knowing about its profitability and financial condition. In short a detailed cause and effect study of profitability and financial condition is the over all objective of financial statement analysis.

Survival of the Fittest

After the 2008 Elections, the economy of the world which is creeping towards a disaster before, come to a worst end named “The Global Recession 2009”. We have a knowledge of many recessions likewise The Great Depression 1920-30, Oil Crisis 1973-74 and also the 9/11 Crisis but the storm generated by the war against terror in 2009 was the mother of all. It is useless to make lame excuses or give reasons about the occurrence of such a great catastrophe because it is a normal phase of capitalism, more likely a bitter truth, that there will be a downturn after every boom.
This Global Recession has changed the whole story of economic development and capitalism. The Wall Street and Capital Markets come to downturn. Many popular brands are ready to quit the competition. The sector is wheezing from the collapse of at least five major financial institutions and the loss of more than 200,000 jobs — 60,000 in New York alone. Recriminations are not the only solution of this slump. We have to reconsider all of our approaches towards our economy because end of the day we all be responsible for our actions.
Despite of the fact that the welfare factor has been eliminated from our approach towards financial dealings, some of us has been called a serious responsible for such crisis and we can grind some names as well, Daniel Mudd, Frank Raines, Richard Syron, Angelo Mozilo, Barney Frank, Chris Dodd, Jimmy Cayne, Phil Gramm and many others too, but what has changed in the economy during this Recession 2009 and what is next to come, is more important to think. It is much important and alarming to think and for consideration.
People of the age are ready to witness “Survival of the Fittest” as the stage is ready for the addition and deletion of many famous brands of the world. Only those will remain on the stage which is ready to work for the regulars rather that their own hypothetic decision makings. The requirement of the customers has been changed during this global financial uncertainty.
Loss of faith on the major brands causes a lot towards their own saving strategies. People have come to know that what are the savings means and for what and when they are utilized. They bitterly know the reality of easy credits, and also the higher cost for such easy loans which they had paid before. They have lost their jobs and their nest egg too.
Do you believe that this episode of bad slump has also changed the priorities of the people in the world? Now they are much focused on better relations rather than financial dealings. Bank accounts, foreign reserves, electronic money and financial instruments are near to vanished from front role to a secondary priority. Cash – Net Cash will become a market leader and a king soon. Inventories are going to their ultimate end – the death. True partnerships are golden for the people and they are striving for them. A new environment of experimentation is awakening on the globe and it is necessary.
Has this new wave of change cause to the buying behaviour? It is the question of this right time because now it is necessary for the corporate brands to work in accordance with the behaviour of potential buyers. This misery of market changed the whole marketing segmentation of the buyers. Now they are totally different in their demographics & psychographics personal attribute, their desired benefit and most importantly their behaviour.
A time ago in past, the buyer’s psychology is totally ignored when considering economics. Later on after 1960, a lot of work has been done on the Behavioural Studies of Buyer and its different attributes. A lot of work is being acknowledged by Solomon, Bamossy and Askegaard. That is why a special attention is paid to it because it is very important to have a good understanding of Consumer Psychology and Behaviour when trying to market products and services. Traditional economics and marketing view people as rational decision makers.
When deciding to buy a certain product or make use of some service we often make very irrational decisions influenced by many different factors. Something that also should be taken into account is the way we process information and the fact that we are limited in our capacity to process this information. This is especially of importance for the way advertisements are designed.
The chances of irrational decision making are eliminated because of a great ruin of the economy. People have been change to their desires and psychic approaches. It is the time to design a new customer focused behavioural strategy to win a new range of customers. Marketing Professor of Harvard Business School Mr. John Quelch is also one of those who offer a new recommendation for marketers to grow in a new environment. Mr. Quelch has directed to change focus from high-volume customers to high-potential customers.
The main points of his new theory is are as follows;
• Focus on high-potential customers not on high-volume
• Don’t assume a return to normal but what is being regarded by customer
• Create brand trust and market repute among your target customers
• Stay focussed on costs and save extra expenditures
• Know your lead indicators
• Develop scenarios and create market demand
• Don’t wait for permission, just finished your home work before hand
Mr. Quelch is said what he felt but according to my point of view the total focus must be on the point that what is being regarded by the customer. If the corporate marketers of this current and coming age have focussed on this point, the remaining 6 can also be achieved without any extra effort.
The above whole plan of Mr. Quelch is basically adopted from the Islamic Economic System, Sharia’h Law and the Golden Code of Ethics described by the Great Prophet of Muslims Muhammad (Peace Be Upon Him). Capitalism is going to its economical death and the revival is only possible if you implement the Islamic Financing & Trading System and it’s not a new system for this universe. Just think that what Islamic System is and what it means for. It totally focussed on welfare likewise implemented in 623-43 A.D by the Muslim Caliphate.
Interest is the mother of all evil. It changed the psyche of human and it will turn from a welfare state to a selfish state. Remember the days when interest is forbidden by the Christian Church, there are no such financial shocks as these are in modern age. After the age of Henry V, when the relationship with church has been broken down, the financial uncertainty tends to grow and the current crisis was worst of all.
In a welfare state, either it is named as Islamic or not, but in a welfare state the confidence of buyer is rebuilt and the uncertainty goes to its ultimate end, because the current financial crisis is the crisis of confidence. Buyers have no confidence upon the corporate brands and also upon the financial institutions because they know and they believe that the purpose of these icons is only to generate profit in any ways.
The Rogue Economics generated a gap between the people and the government. Governments are more eagerly on a mission to discover new sources of income generation and they have no association with the welfare of their nation. This breaks up the confidence stream among them and at the end a huge slump is ready to ingest the current economy of the world.
The economists of US are ready to accept the golden code of ethics stated by the Islam to transform their economy from a profit oriented state to a welfare oriented state and it’s a good sign in this age of emergency. Mr. Quelch’s points are actionable and connected with each other transforming a complete cycle of Buyers Behaviour. These points are honestly representing that they are trying to build the buyers’ trust and confidence again by a rational use of Islamic Welfare Principles as being implemented by Prophet Muhammad (Peace Be Upon Him) along with the Caliph Abu Bakar (R.A) and the Caliph Umar (R.A) in their Caliphate.
If all the marketers of the world focused on the point “Don’t assume a return to normal but what is being regarded by customer” then I hardly believe that there will never take place such crisis like we have in our current days. Corporate brands can only win the trust of buyers if they provide a complete regard to a buyer’s desire and a total utility satisfaction which he is claiming for.
I will conclude the whole from the words said by a Rogue Economist of United States Ms. Loretta Napoleoni some days before, “Developing a new model based on Islamic finance may be the solution to the current economic crisis. We’ve got to be open-minded if we want to carry on going ahead. Otherwise we’ll get stuck, and otherwise we’ll really be in a serious crisis, and then something new will come only from the ashes of what we have constructed before”.

11 Billion US Dollars

The Finance Advisor of Pakistan has told in Press Conference some days before that the Pakistan is suffering a loss of 24 Billion Dollars on its new project named “The War on Terror” launched in the Tribal Areas of Pakistan way back in 2006. He stated that the original expenditures incurred on this project are approximately 35 Billion US Dollars but the reward received by the Pakistan against the products of the above said project is only 11 Billion Dollars. Hence the deficit of this project crossed over 24 Billion Dollars.
The above said project is launched on 14th January 2006 with the help of heavy US machineries named as “Drowns” and the end product of this project is the Blood and the Dead Bodies of Muslim Pakistani Nationals without any exception of the age, caste and colour. The life of this project has completed its 1193 days successfully with an indicator of 889 Deaths of the Muslim Pakistani Nationals included the school going children, infants, women and senior citizens with a success ratio 0.7452 deaths per day.
If we go into statistics more deeply in accordance with the instructions displayed by the International Federation of Accountants (IFAC) and also some other regulationary authorities which deals with the fairness and true & fair view of the project’s revenue and costs, we come to know that the per day cost is 38.5583 million US$ or 51.7435 million US$ per death. It’s a huge expense paid by the Pakistani Government with the helping hands of their masters not friends. On the other hand we know that we (The Pakistan Government – a Government lead and driven by the US Policy Makers & Think Tanks) have just received 9.2205 million US$ per day or 12.3735 US$ per death, conceiving a loss of 20.1174 million US$ per day or 26.9966 million US$ per death. It is the only directly attributable cost which I have mentioned here and has not yet included the indirect cost so we can say that this is only gross loss and not the net loss we are suffering per day or per murder of Pakistani Muslim Nationals by the crushing blades (Missiles) of American Drowns.
It’s a matter of Job Order Costing and we can discuss it through the following table;
Overall
Statistics Per Day Per Death
US$ PKR US$ PKR
Revenue (US$ Aid) $11,000,000,000 $9,220,453 PKR 737,636,211 $12,373,453 PKR 989,876,265
Cost (Incurred by Pakistan) ($35,000,000,000) ($29,337,804) (PKR 2,347,024,308) ($39,370,079) (PKR 3,149,606,299)
End (Loss) / Profit ($24,000,000,000) ($20,117,351) (PKR 1,609,388,097) ($26,996,625) (PKR 2,159,730,034)
From the above Job Order Costing Schedule (though it is in table format but the accounting professionals can easily judge it that where the job order costing is) we can easily extract that after the every death of a Pakistani Muslim National (despite of his age or gender), the Pakistani Government has generated a revenue (or Aid) of Rs. 990 million and from the last 1193 days (From 14th of January 2006 to 27th of April 2009) this government has been generating a fund of Rs. 738 on daily basis. In other words every murder of our brother / sister / child gave a rise of Rs. 990 million to this Pakistani Government and this murder costs our Government a Rs. 3.15 Billion.
I have a detail discussion on this matter later on; first of all have a look on the use of American Machinery on this Project (A War on Terror). There are 60 Drown attacks on our Tribal Areas from the last 1193 days. It means after every 20 days, there is a Drown Attack within the boundaries of our sovereign state. This bimonthly Drown Attack lasts from the 14th of January 2006 and has a total of 60 in numbers as on 27th of April 2009. It will multiply itself in future as we are in a state of severe loss on this Project and we may demand for the use of this machinery on weekly or even daily basis as the situation of the Tribal Area is not in our control (so called).
Has a deep look also on the financial analysis of these Drown Attacks;
Overall
Statistics Per US Drown
US$ PKR
Revenue (US$ Aid) $11,000,000,000 $17,713,366 PKR 1,417,069,243
Cost (Incurred by Pakistan) ($35,000,000,000) ($56,360,709) (PKR 4,508,856,683)
End (Loss) / Profit ($24,000,000,000) ($38,647,343) (PKR 3,091,787,440)
This table shows that every flight of a Drown in Pakistani sky will generate a fund of Rs. 1.4171 billion. Its mean that this Project is the best revenue generated source for Pakistan as none of our Industry / Organization generated so much revenue for us. Moreover every Drown Attack has given us a gift of 15 dead bodies of our brothers / sisters and children on an average base for completing 15 jobs per flight. So it is the highest revenue generating Project / Business of Pakistan but there is problem with this business that it is yet not established in any of the legal forms of business organization as it is conducted by the Government of Pakistan in a sole-proprietorship format.
In accordance with currently enforceable laws in Pakistan, likewise Companies Ordinance 1984, Companies Rules 1985, Income Tax Ordinance 2001, Income Tax Rules 2002, Sales Tax Act 1990, Sales Tax Rules 1991, Partnership Act 1932 and many others have a point that with such a huge revenue, this Organization / Project must be registered with these Laws & Regulations for the true and fair practice of the profession. This Project yet not has any NTN or Sales Tax Registration Number and saving a lot of tax. So FBR must take a strong step towards this organization to recover all the dues against Income Tax, With Holding Tax and Sales Tax. This Organization / Project must also file a return through electronic ways using the digital signatures of NIFT for an ease. Even Government can hire the services of highly qualified individual consultants or consulting firms.
Stock Exchanges (SE), Federal Board of Revenue (FBR) and Securities Exchange Commission of Pakistan (SECP) must take it serious to regulate the fair trade practice in this country and also I think it necessary to register this Organization / Project with Monopolies & Restrictive Trade Practices Control Authority for the betterment of the profession. Hope these Institutes take it serious to regulate this business within the legal restrictions of the Pakistan as it is the best revenue generating business I have ever seen in corporate sector.
Regarding the huge expenses beard by the Government of Pakistan on this “Project”, I must say that I have not yet received any auditable assurance about these expenses because Government yet not supply any breakup of these heavy expenses near about 35 Billion US$. If Government provides the Income Statement of this “Project” then we can comment on this Operating Loss. I think that this declared loss is only a tactic to save tax under the currently prevailing laws of the country. And if in real sense this Government has been suffering from such a great loss against this “Project” then there are also many ways to overcome this loss. Some of these tactics are the hiring of professional consultants and obtaining different loans under the different schemes of SBP.
If Government starts to export these dead bodies (15 in numbers bimonthly) then it has a chance to cover all its losses because our Financial Institutions are offering some credit limits for exporters like FAPE I, FAPE II, FAPC etc. With such great and assured foreign generated revenue, none of our financial institute can refuse this application of loan. The financial statements and audit reports can be obtained by paying high consultancy fee to any of the renowned chartered accountancy firms and on the basis of these strong documents and facts & figures, the above stated deficit of 24 billion US$ can easily be covered by the disbursement of loan.
The CEO of this Project is much experienced in this regard and he is also very much known to the tactics through which every type of heavy loans can be waived off easily. With the help of this highly talented administrator, the future of this Project is pretty much secure despite of the announcement of current deficit.
I hope that this Project will be spread all over the Pakistan in near future as our Government is paying full attention to this and is using all of his resources for the success of this project “War on Terror” whole heartedly.