Relationship between Assets and Liabilities on Balance Sheet

Relationship between Assets and Liabilities on Balance Sheet Cement industry indeed a very important part of industrial sector that plays a essential role in the economic development. Though the cement industry in Pakistan observed its lows and highs in recent past it improved during the last couple of years and floated once again. A basic economic decision deal with a financial intermediary is the mixture of assets to buy and liabilities to sell, a decision that reflects a complex set of economic and institutional considerations. When viewed as a decision under uncertainty, the outcomes from this decision involve interactions among the assets, among the obligations and among assets and obligations. The asset and obligation structures of cement sector of Pakistan necessarily reflect these interactions as well as many regulatory and institutional constraints unique to the cement industry. Multivariate statistical procedures such as canonical correlation analysis are being used more frequently and the methods used in thesis can be applied to other studies. The mixture of assets and liabilities chosen can be viewed as a basic portfolio theory decision. In thesis canonical correlation analysis was applied to examine the relationship between assets and liabilities made by a cross-section of 18 large cement companies of Pakistan listed in stock exchange. Canonical correlation is a multivariate statistical technique that was used to assess the nature and strength of relationship between assets and liabilities. The correlation between each set of assets and each set of liabilities indicates the relationship between assets and liabilities but all of these correlations assess the same hypothesis that assets influence liabilities. The thesis focused on firms of the Pakistans cement industry and the purposes of the thesis was to identify relationships between assets and liabilities exhibited by these corporations and to explain the nature of these relationships. The teaching of corporate finance as reflected in the major textbooks compartmental izes the decision areas of finance and within each compartment management is assumed to attempt to maximize the firms wealth, holding the other areas of the firm constant. For example, capital budgeting decisions are made given a cost of capital or required rate of return (a capital project is evaluated independent of how it is financed), or the capital structure is chosen given the character of the firms assets. Cash, receivables, and inventory balances tend to be optimized independently. There is a tradeoff between the rigor afforded by global models of the firm (such as the CAPM) versus the realism afforded by the various approaches used in the compartmented models (e.g., cash management models, equipment replacement models, leasing, etc.). Business practice has the same dilemma; complex organizations must decompose the overall wealth maximization problem into sub problems which, when solved, allow the firm to make satisfactory decisions. Business executives may be uncomfortable with an assumption of independence between investing and financing decisions for two reasons. First, even if the decisions were independent, the decisions may occur simultaneously because of the necessity of raising the funds to invest. Second and more importantly, the assumptions necessary to obtain independence may not be obtained. Several interdependencies might be anticipated between assets and liabilities: Hedging is commonplace, where firms go with maturity structure of their assets and obligations (i.e., short-term assets tend to be financed with short- term obligations and long-term assets tend to be financed with long-term obligations). Some assets are used as collateral for loans. For example, accounts receivable can be used as collateral for short-term bank loans or factor loans and real estate as collateral for mortgages. Commodity-producing firms will maintain inventories which may be financed with credit from suppliers (accounts payable) while service-providing firms may have little of either inventories or accounts payable. High risk businesses may try to manage risk by using less leverage on right hand side of balance sheet (high equity) and by maintaining larger liquidity balances on the left-hand side. This process may enable management to reduce the probability of insolvency It was the objective of the thesis to determine relationships between assets and liabilities on balance sheet exhibited by a sample cement firms of Pakistan. Canonical correlation analysis was used to identify and study the nature of relationship between the structure of the left and right hand sides of the balance sheet. Though canonical correlation analysis is very similar to discriminant and factor analysis, it has not been widely employed in finance. The variables used in this study are, Cash, Account Receivable, Inventories, Long-term Assets, Account Payable, Short-term Debt, long-term Debt and Share Holder Equity. CHAPTER 2 LITERATURE REVIEW Stowe,John D,Watson,Collin J Robertson ,Terry D (1980) observed the relationship between assets and liabilities with the help of canonical correlation analysis. The purpose of research was to identify relations between the two sides of balance sheet (Assets and liabilities) revealed by the corporations and to explain the nature of these relationships. Data from balance sheet for a cross-section of firms was used in the study. For each firm / corporation, a general size (or percentage breakdown) balance sheet was constructed with 4 asset and 4 liability accounts. A big diversity of balance sheet structures was present between 510 firms. A number of remarkable relationships were found in the study i.e. inventories were positively correlated with accounts payable and long-term assets were correlated with long-term debt. On the other hand, stockholders equity was not highly correlated with any of the asset proportions. An independence of asset and liability composition of the firm is tilted in much modern financial theory, the independence of investing and financing decision is a prominent part of Modigliani and Millers classic capital structure research. Though the distribution of financing and investment decision is an invaluable assumption which greatly makes simpler many business financial decisions, real balance sheets of modern corporations do not exhibit independence between assets and obligations on balance sheet. The aim of the study was (1) to recognize relationships between t assets, obligations and equity on a balance sheet reveal by these firms and (2) to clarify the nature of these relationships. Independence of liability and asset composition is explicit in Modigliani and Millers capital structure proposition. In their article, they exhibited that, given a flow of risky earnings; the firms total market value and cost of capital are independent of capital structure. The education of corporate finance, as imitated in the major textbooks, compartmentalizes the decision spots of finance and, within each box, management is assumed to effort to maximize the firms wealth, holding the other spots of the firm stable. For example, capital budgeting decisions are made given a cost of capital or required rate of return (a capital project is evaluated independent of how it is financed), or the capital structure is chosen given the character of the firms assets. Cash, receivables, and inventory balances tend to be optimized independently. There is a tradeoff between the rigors afforded by global models of the firm (such as the CAPM) versus the realism afforded by the various approaches used in the compartmented models (e.g., cash management models, equipment replacement models, leasing, etc.). Business practice has the same dilemma; complex organizations must decompose the overall wealth maximization problem into sub problems which, when solved, allow the fi rm to make satisfactory decisions. Business executives may be uncomfortable with an assumption of independence between investing and financing decisions for two reasons. First, even if the decisions were independent, the decisions may occur simultaneously because of the necessity of raising the funds to invest. Second and more importantly, the assumptions necessary to obtain independence may not be obtained. Several interdependencies might be anticipated between the assets and liabilities, those are, (1) Hedging is commonplace, where firms go with maturity structure of their assets and obligations (i.e., short term assets tend to be financed with short term obligations and long-term assets tend to be financed with long-term obligations), (2) some assets are used as collateral for loans. For example, accounts receivable can be used as collateral for short-term bank loans or factor loans and real estate as collateral for mortgages, (3) commodity-producing firms will maintain inventories which may be financed with credit from suppliers (accounts payable) while service providing firms may have little of either inventories or accounts payable and (4) high risk businesses may try to manage risk by using less leverage on right hand side of balance sheet (high equity) and by maintaining larger liquidity balances on the left hand side. This process may enable management to reduce the probability of insolvency. It was the intent of the study to determine relationship between assets and lia bilities on balance sheet are exhibited by a sample of large corporations. Canonical correlation analysis was used to identify and examine the nature of relationships between the structures of the left- and right-hand sides of the balance sheet. While canonical correlation analysis is very similar to discriminate and factor analysis, it has not been widely employed in finance. There were two general conclusions of study. The first basic purpose of study was satisfied that there are basic relationships between assets and obligations on a balance sheet which were identified with canonical correlation analysis. The assumptions behind much of modern financial theory allow us to separate investing and financing decisions. Relaxation of these assumptions can admit interdependencies between assets and obligations and several interdependencies were found in our empirical study. These relationships across the balance sheet include (1) hedging, (2) the use of collateral for loans, (3) invento ries associated with accounts payable, and (4) manage risk with instantaneous use of inferior leverage and larger liquidity balances. The capital structure research since M and Ms original irrelevance argument has attempted to utilize the effect of the current value of interest tax shelter due to debt financing and the effect of expected bankruptcy costs on the firms optimal capital structure. The interdependencies between assets and liabilities found in this empirical study could be incorporated into models of capital structure. The second general conclusion was to recommend canonical correlation analysis of financial statement data for other research topics. Much of the published empirical research concerning financial statements is on topics with a single, well defined dependent variable; these topics would include predicting bankruptcy, bond ratings, or loan defaults and explaining market risk measures. Canonical analysis, where there is a set of dependent variables, would allow empirical analysis to proceed where no unique variable can be chosen as the dependent variable. Furthermore, variables which are linear combinations of financial statement proportions might be employed instead of the usual financial ratios.7 Canonical variate scores for a firm could be associated with its bond ratings, probability of default, or systematic risk. These topics usually have been investigated using financial ratios as predictor variables Stowe,John D Watson,Collin J(1985) did the multivariate analysis on balance sheet composition of life insurer. The purpose of that analysis was to study the empirical relationships between the assets and obligations structure of the life insurer. The assets and liabilities mixture that chosen by life insurer can be viewed in terms of basic portfolio theory decisions. Canonical correlation analysis was used by the researcher to study or examine the internal structure of these portfolio decisions that was made by a cross section of large life insurers. The financial intermediaries study, such as life insurers, is distinguished from that of nonfinancial businesses for several causes. First, the financial intermediaries assets consists just about entirely of financial assets as opposed to the real assets that bulk large on the balance sheets of nonfinancial businesses. As suggested by Moore B. J (1968) in his article an introduction to the theory of finance that the financial assets dif fer from tangible assets; the financial assets are intangible and they are held for the income they generate as opposed to the direct physical services they yield; financial assets are more liquid and finally financial assets can be more freely converted from one form to another while real assets are indurate. A second difference between intermediaries and nonfinancial businesses involves the nature of their obligations. Financial intermediaries accumulate loan able funds through issuing a variety of claims. For example, the commercial banks and life insurers claims are quite different from the obligations issued by nonfinancial corporations. A final significant difference between financial intermediaries and other businesses is that the intermediaries normally are more seriously regulated and sometimes are subject to separate taxation from other firms and individuals. Like other intermediaries life insurers have been the subjects of a range of empirical research projects. J. D (197 3) Cummins in his article An econometric model of the life insurance sector of the U.S economy and J. E Pesando, in his article The interest sensitivity of the Flow of funds through life insurance companies presented an econometric analysis for the comprehensive flow of funds through the life insurance sector. J.D Stowe (1978) in his article examines the investments of individual life insurers in a cross-sectional, time-series study. The basic operational hypothesis for the study on balance sheet composition of life insurer was that a number of categories of assets on the left hand side of life insurer balance sheets had more than one pattern of correlations when they are associated with several liability and surplus classes from right hand side of balance sheet. In addition to testing this hypothesis, the natures of the relationships between assets and obligations were examined and the strength of the multivariate relationship was anticipated. The structure of life insurer assets w as explained as a function of the structure of the other side of the balance sheet and of some additional firm specific variables. In this study it was necessary to predict several criterion variables simultaneously by means of a second set of predictor variables. Under these circumstances, no single regression equation can presented a fully adequate solution. Any linear combination of the criteria may be used as the dependent variable in a regression equation, and in general not one but a number of regression equations must be used to give an appropriate picture. The problem of finding linear combinations of the criterion variables that can be most accurately predicted from the predictor variables was solved by H. Hotelling in his article The most predictable criterion commonly known as canonical correlation analysis. G. Donald Simonson, D. J Stow, and J. Collin Watson (1983) analyzed a canonical correlation analysis between assets and liabilities structure of commercial banks in. They analyze the balance sheets of all 435 domestic U.S banks with assets in excess of $300 million at year end 1979. Data was taken from the December 31, 1979 Foreign and domestic Report of Condition files prepared on magnetic tape by the three federal bank supervisory agencies. They limited the analysis to large banks for two reasons. First, smaller banks do not have the talent or market position to aggressively practice liabilities management and therefore their balance sheets are not as likely to reflect differentiated policies relative to bearing interest rate risk. Second, the three federal agencies require only banks with assets over $300 million to report maturities of both de posits and selected loans, as well as a breakdown of loans in to those with predetermined versus floating interest rates. These large bank data permit us to construct several key balance sheet accounts on the basis of interest sensitivity. Six asset and six liability/capital categories were expressed a s a proportion of total assets for each of the 435 banks in the study. The purpose of a study was to identify and describe the relationship including heading behavior of a single dependent variable as a function of a set of independent variables, canonical correlation analysis relates two sets of variables. In the present case one set of variables is the composition of the left hand side of the balance sheet and the other set is the right hand side. The variables used in this study are asset and liability/ capital categories expressed as proportion of total bank assets. These portions were used in lieu of the more usual financial ratios and no information exogenous to the bank was employed. During the past two years bankers and bank analysts have been concerned about how interest rate risk is derived from cross balance sheet relationships. The mismatching of maturities or interest sensitivities whether interest sensitive assets financed with long term liabilities or long term assets financed with interest sensitive liabilities creates interest rate risk. For example high interest rates and a downward sloping yield curve, one whose short term rates exceed long term rates for borrowers of similar creditworthiness, especially expose institutions which pursue the traditional financial intermediation formula of borrow short lend long. In commercial banking, the exposure is greatest for banks which finance fixed rate term loans and long term fixed income securities with short term funds at money market rates. Banks can defend themselves against this exposure by practicing asset/liability management; by coordinating their procurement of funds and acquisition of assets. There was early theoretical appreciation of the necessity for management of the maturities of asset and liability portfolios. In a simple three variable model D.H Pyle (1971) in his article theory of financial intermediation shows that assuming banks maximize the expected utility of terminal wealth, ba nks choices of assets (liability) portfolio will be conditioned upon the parameters, including maturity, of their liability (assets) portfolios (given nonzero covariance of liability and assets yields). According to the applied asset/liability management dictum, banks with volatile short term interest sensitive source of funds should attempt to structure their asset portfolios to emphasize short term and floating rate movements and in general maturities of asset and liability portfolios should be matched. Such banks can be said to adopt defensive loan portfolios. Other banks by their nature are less dependent on short term market rate funds and are in a better position to offer fixed rate loan terms to borrowers their customers provide a relatively large core of stable savings and time deposits with average interest costs well below current market rates. As result these banks have to be free to acquire long term assets at predetermined interest rates that are they can adopt aggressi ve loan portfolios. HO, T.S.Y in his article (1980) The determinants of bank interest margin showed that balance sheet hedging is a rational response to interest margin uncertainty which results from the interplay between volatile interest rates and asset and liability structural interrelationships. Their research attempts to find evidence of such asset/ liability hedging practices among U.S banks during a period of high and volatile interest rates and a downward sloping yield curve. If banks in aggregate tend to hedge interest sensitive funds with core funds, the banking industry would appear to be coping appropriately with interest rate risk. On the other hand, if there is a systematic tendency for many banks to combine fixed rate long term assets with volatile short term funds, the industry might be excessively exposed to interest rate risk. The issue of capital adequacy also concerned with the comparative maturity structure and duration of the two sides of the balance sheet. S.T. Maisel and R. Jacobson in his article Interest rate changes and commercial banks revenues and costs they showed that over the period 1962 to 1975 for the average bank, the threat of insolvency due to the instability of economic returns stemmed primarily from the mismatch of asset and liability durations. They concluded that unheeded interest rate risk might require additional equity capital. Other sources of risk, such as default risk, would dictate a positive relationship between the amount invested in riskier loans and securities and the amount of equity capital. Research was limited because data on the market values of asset and liability items are not available. Presumably, potential changes in cross balance sheet market values are transmitted to changes in the market value of the firm. There was a considerable literature addressing asset-l iability management in banks. One of the key motivators of asset-liability management worldwide was the Basel group. The Basel group Banking Supervision (2001) formulated broad supervisory standards and guidelines and recommended statements of best practice in banking supervision. The purpose of the committee was to encourage global convergence toward common approaches and standards. In particular, the Basel II norms (2004) were proposed as an international standard for the amount of capital that banks require setting to the side to protect against the types financial and operational risks they face. Basel II proposed setting up accurate risk and capital management necessities designed to make sure that a bank holds capital reserves suitable to the risk banks picture their self to throughout its lending and investment practice. In general, these regulations mean that the larger risk to which the bank is showing, the larger the amount of capital the bank requires to hold to defend it s solvency and whole economic strength. This would ultimately help to defend the international monetary system from the kind of problems that may take place should a major bank or a sequence of banks collapse. Gardner and Mills (1991) discussed the principles of asset-liability management as a part of banks strategic planning and as a response to the changing environment in prudential direction, e-commerce and new taxation treaties. Their text provided the foundation of subsequent discussion on asset-liability management. Haslem (1999) used canonical analysis and the interpretive structure of asset/liability management to identify and interpret the foreign and domestic balance sheet approach of large U.S. banks. Their study found that the least money-making very large banks have the biggest size of foreign loans, yet they give emphasis to domestic balance sheet (asset/liability) matching strategies. on the other hand, the most money-making very large banks have the smallest size of foreign loans, but, however, they emphasize foreign balance sheet matching strategies. Vaidyanathan (1999) discussed issues in asset-liability management and elaborates on various categories of risk that require to be managed in the Indian context. In the past Indian banks were primarily concerned about adhering to statutory liquidity ratio norms but in the changed situation, namely moving away from administered interest rate structure to market determined rates, it became important for banks to equip themselves with some of these techniques, in order to immunize them selves against interest rate risk. Vaidyanathan argued that the problem gets accentuated in the context of change in the main liability structure of the banks, namely the maturity period for term deposits. For instance, in 1986, nearly 50% of term deposits had a maturity period of more than five years and only 20%, less than two years for all commercial banks, while in 1992, only 17% of term deposits were more than five years whereas 38% were less than two years Vaidyanath. It was found that several banks had inadequate and inefficient management systems. Also argued that Indian banks were more exposed to international markets, especially with respect to forex transactions, so that asset liability management was essential, as it would enable the bank to maintain its exposure to foreign currency fluctuations given the level of risk it can handle. It was also found that an increasing proportion of investments by banks were being recorded on a market to market basis, thus being exposed to market risks. Is was also suggested that, as bank profitability focus has increased over the years, there is an increasing possibility that the risk arising out of exposure to interest rate volatility would be built into the capital adequacy norms specified by the regulatory authorities, thus in turn requiring efficient asset-liability management practices. Vaidya and Shahi (2001) studied asset-liability management in Indian banks. They suggested in particular that interest rate risk and liquidity ris k are two key inputs in business planning process of banks. Using firm-level data, an extensive accounting literature focuses on the contemporaneous correlation of stock returns and earnings. Despite the statistically reliable positive association between stock returns and earnings, Ball and Brown (1968), Beaver, Clarke, and Wright (1979), Beaver, Lambert, and Morse (1980), Easton and Harris (1991), Collins, Kothari, Shanken, and Sloan (1994), and others find that the explained fraction of stock return variation was significantly less than one (typically under 10 percent). Lev (1989) and others suggest that the relatively low explanatory power stems from earnings lack of timeliness and/or value-irrelevant noise in earnings. The idea that correlation between a cash-flow proxy and stock return may be due to any of the three components was not novel. Fama (1990), Schwert (1990), Kothari and Shanken (1992), Campbell and Ammer (1993), and others recognize that when stock returns are regressed on cash flow proxies, any of the three effects may be d riving the regression coefficients. They do not, however, clearly quantify the relative importance of these three effects. Thus, in the end, it is still unclear why cash-flow proxies are or are not related to stock returns. The fundamental subject of working capital is to provide optimal balance between each element forming working capital. Most of the efforts of finance directors in a firm are the efforts they make to carry the balance between current assets not at optimal level and responsibilities to an optimal level Lamberson (1995). One reason for this was the decisive influence of current assets on others, another reasons was liabilities of completion of present responsibilities. The combination of the elements forming working capital are change over time. Need for working capital manipulate liquidity stage and profitability of a company. As a result, it affects investment and financing decisions, too. Amount of current assets to be calculated at a level where total cost is of a least degree means an optimal working capital level. The optimal working capital point is case wherein balance between risk and effectiveness is provided.. The entire current assets hold by a firm known as working capital. Net working capital is calculated when short term obligations are took out from current assets. Return of total assets of a firm as a result of an activity is closely related to level and distribution of assets of the firm and efficiency in application of these assets. In lots of firms current assets called working capital make up of a remarkable part of community assets. (Note 1) But it is clear that working capital is ignored in finance journalism compare to long term financing decision. Corporate finance studies usually concentrate on core decisions like, dividend, capital structure and capital budgeting. Though, the sum of assets group is a important part of entire asset and called working capital (inventories, quasi money and money. short term liabilities and trade receivables) is a focus matter in all main books relating to corporate finance where efficiency level of distribution and application of assets influe nce profitability and risk level of the company. The major purpose of a company is to increase the market worth. Working capital management influence profitability of the company, its risk and thus its value Smith, (1980). Further, effective management of working capital is a key component of the broad strategy aim to increase the market rate (Westhead and Howorth (2003). Since the flexibility of this group of assets is very high in terms of adapting to changing conditions and due to these uniqueness they can frequently be applied to understand the major aim of financial management through policy changes. Success of a firm mainly depends on efficient management capability of finance director to manage receivables, inventories and liabilities (Filbeck and Krueger, 2005). Firms can strengthen their funding capabilities or decrease the source cost reducing source amount they allocate to current assets. In finance literature there is a common opinion about the importance of working capi tal management. Explanations about why effective capital management is important for a company usually concentrate on the association between effectiveness in working capital management and company profitability. Effective working capital management includes controlling and planning of present assets and liabilities in such a way it avoid extreme investments in current assets and prevents from working with few currents assets insufficient to fulfill the responsibilities. In relevant studies the measure taken as an indicator of efficiency in working capital management is generally cash conversion cycle. For firm cash conversion cycle is the period during which it is transited from money to good and again to money. In the studies conducted by Shin and Soenen (1998), Deloof (2003), Raheman and Nasr (2007) and Teruel and Solano (2007) it was concluded that there is a negative relationship between profitability of a firm and cash conversion cycle. Thus, it is possible to increase firm profitability through more effective working capital management. It is necessary to realize that major basics of cash conversion cycle (short term account receivables, short term trade liabilities and inventories) should be managed in a way they maximize firm profitability. An efficient working capital management will increase free cash flows to the firm and growth opportunities and returns of stockholders. Working capital level of a firm indicates that it wants to take a risk. The more working capital amounts, the liquidity risk and profitability become lower. The working capital strategies of firms differ according to the segments and within each segment it varies over time Filbeck and Krueger (2005). Ganesan (2007), put forward that the firms in less competitive sectors focus on cash conversion minimizing receivables, while the firms in more competitive sectors have a relatively higher level of receivables. Lazaridis and Tryfonidis (2005) stated that small firms focus on inventory management, the firms with low profitability on credit management. Statements in literature of finance about the significance of working capital for companies are being once further emphasized in these unstable days of international economy. While firms make efforts to increase return on assets in a way they pay their due obligations as late as possible and keep the cash, decreases in activ

European Cars Are Better Than Japanese Essay

The design is specialized to cater to the specific needs of a consumer. Every country in the world manufactures its own cars, whether it is Japan, America or Europe. European cars are vastly superior to Japanese cars when examining performance, design and safety. The key feature that makes European cars better than all other cars is performance. Performance of a care is judge by how well the, brakes, suspension, traction, transmission and engine work. When European car manufacturers talks about performance they are referring to power generated by the car. European cars manufacturers combine all the aspects of performance to create an extraordinarily spectacular engine, which has maximum horse power and torque. Some European cars engines are hand-built, which helps delivers performance at a perfect level. Power from the engine has to be delivered to the wheels; transmission plays a vital role in delivering the power and speed from the engine to wheels. Car manufacturers in Europe develop a transmission system which is particularly adept at applying output so that it can be delivered quickly, smoothly and efficiently when called upon. European car manufacturers are especially renowned for their designs, because their designs allow precision in handling, efficiency in engine performance and good brakes. An efficient power output of the engine leads to an increased maximum speed limit that the car can reach. To maximize the speed that a car can reach the external shape of the body of a car is designed with special care as well. When European car manufacturers talk about speed, they keep in mind the aerodynamics of the car. Designers ensure that the car has a streamlined body shape, which reduces air resistance experienced by a car while it is in motion. In addition, aerodynamics designing provides for the external appearance of the car to look elegant, fashionable, artistic and sensational. European cars are made out of high-strength steel body panels make the safer when an impact takes place. They are manufactured with 7 different air bags inside the care to avoid the impact and causing the driver and passenger to be much safer. If a car can reach high speeds in a short span of time then it needs good brakes. European engineers ensure safety and handling does not become an issue for the driver and the passenger by providing an anti-lock braking system. This system prevents the car from skidding and allows the driver with greater control over the car because due to the anti-braking system the wheels of the car are only gradually reduced in speed. Rather than bringing the wheels of the car to an abrupt halt, the brakes of the car provide with better independent suspension for each wheel, which can help withstand shocks and bumps. European cars are superior in performance design and safety. Japanese cars lack behind in performance when compared to European cars. They have weaker and lighter engines, which only reduce the manufacturing cost, but result in giving a poor performance. Japanese car engines are manufactured on low budget. The lack in use of technology during the production makes the cars less reliable, because the finished engine does not produce much power. Less power means less torque and horsepower. Production companies in Japan manufacture engines using heavy equipment and machinery. This allows them to produce cars in a greater quantity, but there is no guarantee for quality . Japanese engineers focus on building lighter engines which gives more gas millage. Japanese cars are designed using weaker body structures making the car lighter. They use to steel alloy to manufacture the exterior of the less expensive material. Exterior of the car is brittle enough to not to withstand an impact, hence making less safe. Japanese cars are not safest car in the world. To avoid the cost to manufacture the car, they use disk brakes which have a higher risk of worning out faster than anti-lock brakes. They use one suspension for two pair of wheel, which causes to feel the smallest shock and bump while ridding the car. Japanese car don’t use that much technology to make their car safe enough. European cars are superior to Japanese cars. They are better in performance, design and safety. European cars are comfortable, luxurious and high end cars. Japanese cars are ordinary and standard cars. Japanese cars are cheaper that European, but buying an expensive car gives you a lot of option to enjoy the ride of the car. , and produce products with a superior passenger cabin but employ lower standards outside of the cabin. Disk brakes, Alloy Wheels, and Brake Override Systems have been standard on most mid-size domestic cars for years, yet are still optional or non-existent on many major Japanese mid-size cars being sold today. Anti-lock braking system (ABS) is an automobile safety system that allows the wheels on a motor vehicle to maintain tractive contact with the road surface according to driver inputs while braking preventing the wheels from locking up (ceasing rotation) and avoiding uncontrolled skidding. It is an automated system that uses the principles of threshold braking and cadence braking which were practised by skilful drivers with previous generation braking systems. It does this at a much faster rate and with better control than a driver could manage. With 72% of its body panels made from high-strength steel, theody structure is even more rigid than its renowned predecessors. The advanced front crumple zone has been refined with approximately 17,000 computer-simulated collisions and 150 crash tests. An innovative front bulkhead and deformation zones that act on four independent levels to help divert the energy of a frontal impact under, over and around the passenger cabin.

Nonverbal Communication Essay - 763 Words

Touch is a type of nonverbal communication, nonverbal communication is ways people communicate in addition to words. The word haptic is used to describe the study of touching. In this weeks exercises it asks to describe the rules that govern touching in four different relationships as if a person from a different culture was visiting our culture. The way a person uses touch as an addition to communicating has to be culturally appropriate, because if not it can get people into trouble for misusing it. Gender influences the way the touch rules apply for example say if a grown man outside of a 13 year old girl’s family was talking with her, he most likely won’t use touch as a way to convey his message to her. There are factors discussed in†¦show more content†¦It also helps let a child trust the adult more. Even those that arent family but still apart of the child life for example a teacher, that would be acceptable. Gender plays a big part in this relationship also when it comes to gender it is more likely that a woman would use more touch when speaking to younger audiences than men. WIth these situations it really is important where the person touched then and what their intent of it was for example did the touch last a long time, and how the person is reacting about it. The third relationship is between two friends, depending on how close the friendship is, usually friends use touch more often than other relationships. Usually people that are friends are comfortable with each other which makes things not weird to use touch. Touch isn’t typically used with pressure it is a friendly touch, nothing more than just friendly touches. With either gender friends tend to use touch regardless of male of female but female I would say use it a little bit more. The fourth relationship is between a boss and an employee, with this kind of a relationship the way you communicate should be more on a professional level. In this relationship it isn’t likely for people to use touch while communicating. Touch is a more personal way to add to communication that typicallyShow MoreRelated Nonverbal Communication Essay1543 Words   |  7 PagesNonverbal Communication Any communication interaction involves two major components in terms of how people are perceived: verbal, or what words are spoken and nonverbal, the cues such as facial expressions, posture, verbal intonations, and other body gestures. Many people believe it is their words that convey the primary messages but it is really their nonverbal cues. The hypothesis for this research paper was: facial expressions directly impact how a person is perceived. A brief literature searchRead More Nonverbal Communication Essay850 Words   |  4 Pages   Ã‚  Ã‚  Ã‚  Ã‚  Found information states that â€Å"nonverbal communication is the process of transporting messages through behaviors, physical characteristics and objects†. Its how and what we use in order to express our feelings and say things. Using symbols is a way of using nonverbal communication. Also nonverbal communication is the way we use body language and gestures too. Nonverbal communication is often used unconsciously. When using the certain communication it can be misinterpreted also. There are manyRead Morenonverbal communication Essay632 Words   |  3 PagesUnit 4 Assignment Nonverbal Communication People watching is very entertaining, you can learn a great deal about how people act, dress and interact in their environment. I choose to observe the nonverbal codes and messages of strangers in a customer service waiting room near my job. 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Similar to the way that italicizing emphasizes written language, nonverbal behavior may emphasize parts of a verbal message. The term nonverbal communication was introduced by psychiatrist Jurgen Ruesch and author Weldon Kees in the book Nonverbal Communication Notes on the Visual Percep tion of Human Relations. It includes the use of visualRead MoreNonverbal Communication Essay1413 Words   |  6 PagesIn a romantic relationship, it is easy to have miscommunication between a man and a woman. â€Å"Most researchers agree that 70% or more of the meaning of any message is communicated through nonverbal channels like eye contact, facial expressions, posture, hand gestures, etc.† (Stinnett, 2015). Verbal and nonverbal messages are like a relationship, they work well together that way the message is sent and delivered appropriately and that there is no miscommunication. Women have their way of expressingRead MoreNonverbal Communication Essay1960 Words   |  8 Pagesword is â€Å"Leadership, † and the next word is â€Å"Communication.† Leadership is the way that someone conveys themselves in different scenarios to show other in a particular community, also if they need help with anything that they can come to them for help. Communication is the way that you exchange inform ation with someone. We can categorize communication into three different types; we have verbal, written, and nonverbal communication. Verbal communication is any source of talking that is done throughRead More Cultural Differences in Nonverbal Communication Essay1612 Words   |  7 Pagesmovements, known as nonverbal communication. The reason for people using nonverbal communication is to enhance the message they are sending to the receiver. One way nonverbal communication differs is through cultural differences. 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I am going to share with you a nonverbal exercise I engaged in to determine how my nonverbal communication could, or possibly have, effected how I am perceived by others. For this self evaluated exercise I carefully choose two people, my sister Laura, who I am very close to and Wally, a colleague who I feel comfortable with. Laura’s observation took place in her home and lasted approximately thirty minutes; Wally on the other hand

Frederick Douglass And Karl Marx And Friedrich Engels

Both authors Frederick Douglass and Karl Marx and Friedrich Engels focus on the topic of freedom. Both authors argue that they are being oppressed. However, this is where the similarities end. Engels and Marx believed that capitalism was a social system used by the proletariats to oppress the bourgeoisie, and that the only way to be free was to fight back against the system. On the other hand, Frederick Douglass focuses more on his individual story and his struggle for freedom, while he tries to appeal to his audience from an ethical point of view. Frederick Douglass’ biography revolves around the idea of freedom. After seeing a traumatizing incident as a child, Douglass slowly begins to realize that he is not a free human being, but is a slave owned by other people. He is surrounded by a society that devalues him and people like him, and systematically worked to keep them ignorant and submissive. In this society, it is made clear that no slave is special, and everyone is repl aceable. Rather than accept this, Douglass struggles to maintain what little autonomy he was allowed to have. When his one of his masters, Thomas Auld, bans his mistress, Sophia, from teaching Douglass how to read, Douglass learned from the young boys on the street. His biography shows him transforming from an ignorant child into his older, more learned self. Douglass sees the idea of slaves in a country that is as passionate as about its revolution as America hypocritical; in fact, this is the basisShow MoreRelatedProgress, Not Always a Good Thing Essay2178 Words   |  9 Pagesprogress was handed to slaves. A case study to show this can be found in Frederick Douglass, since he wrote down his story it gives one of only a handful of accounts of slavery from the slaves perspective as interpreted by the slave. One of the thing that Douglass talks about first is the policy that masters in Maryland had of separating mothers from their children at a young age so that the parent child bi nds were harder to for. Douglass says he knew little of his mother since she would have to sneak inRead MoreOne Significant Change That Has Occurred in the World Between 1900 and 2005. Explain the Impact This Change Has Made on Our Lives and Why It Is an Important Change.163893 Words   |  656 Pagesof Karl Marx and Friedrich Engels. Socialist thought explained that in very ancient times there was no such thing as private property. With all goods held in common, there was accordingly a rough equality between men and women. Once private property came into being, men began controlling women’s sexuality and general conduct in order to assure that property was passed down to legitimate heirs. In his influential book, Origin of the Family, Private Property, and the State (1884), Friedrich Engels