Instinct and circumstance Free Essays

Buber accepts, that then â€Å"I† of the human is twofold, and comparative with the connections into which it enters. The â€Å"I† that answers to â€Å"Thou† is inconceivably not the same as the â€Å"I† that answers to â€Å"It†. Each demonstration of saying I is a demonstration of being I in one of these ways. We will compose a custom paper test on Intuition and condition or on the other hand any comparative subject just for you Request Now I-It is any being as understanding, investigative, I-Thou is the being as a relationship, engineered. There is nothing specifically to be thought about the Thou, it must be comprehended in its completeness and not known. We see it obviously but then can't tell the subtleties. I-Thou precedes I-It, it is the fundamental â€Å"main word†. It is the primary understanding of the Other. Be that as it may, I-Thou is bound to be come I-It as we acclimate ourselves with it and locate an utilitarian way to deal with the Other. But I-It might become I-Thou if the examining man decides to facilitate the relationship and not take a gander at the subtleties of the one with who he is associating, however at its substance. All things considered, it is difficult to live in the I-Thou mode continually, for it is in effect just in the present and focusing just to the present. Profound and fundamental it might be, but then flighty and doesn't look good for endurance. As Buber puts it, â€Å"The individual can't live without the It. Yet, the person who lives just with the It is definitely not a human being†, as these couple of flighty minutes are the most immediate sign of what makes us human †our capacity to exchange legitimately. A developing human progress implies a developing universe of It, in light of the fact that each new civilization accumulates inside itself the â€Å"It† of the past culture. It is typically erroneously called a development of otherworldly life, however this isn't correct: profound life is the area of the I-Thou, a reaction to the Absolute, while the development of psychological limit by and large decreases the capacity for having a genuine Relationship. The I-It word is not all that much, except if it endeavors to replace its legitimate partner, as one is pointless without the other. On the off chance that one partitions the â€Å"spheres of interest† of the Thou and It, he will get networks with nothing in like manner on one hand and emotions without substance on the other, a separated and tragic presence. Buber talks about two inverse sets: of opportunity and fate and of need and destiny. The first have a place with I-Thou, the second to I-It. Predetermination is a proportion of self-realization: just the individual who has accomplished opportunity and comprehended what he is and what he genuinely wants can discover his fate. Then again, he who surrenders to the laws of need and causality and doesn't act from the very profundities of his being limiting causality meets the jaws of destiny as his type of presence. He is the toy of the powers past him, while the man who follows his fate rides the waves. Any culture for the most part begins the drive of I-Thou and decays on I-It, as does the individual. Buber separates between the Will and oneself will. The first is the excellent motivation to meet with one’s predetermination, to partake in the exchange. The second is just the flighty wants of the restricted person, the lesser will constrained by impulse and situation. It is dependent upon each human to pick what way he will take. This is the contrast among distinction and character, between learning one’s limits by making a greater amount of them or by wrecking them †the outcome, at long last, is very much the same, however how extraordinary the experience! It is the decision between living in a human world or of blending †even however quickly †with Eternity itself. By relating the limits of the I-Thou one shapes them, also, and makes them in a living reaction to outside condition, in discourse with it. By setting up dividers in the I-It relationship, one separations oneself from the world, and can't respond to any circumstance within reach, he may simply recollect and attempt to act as per experience. There is no outer contrast between how the men in I-Thou and in I-It live. Both collaborate with the outside world, the man in I-Thou doesn't quit seeing the contrasts between things, lost in exchange. The thing that matters is inside. For the man in I-Thou it is every one of the a piece of one living discourse. For the man in I-It, things are isolated and just dubiously related. The man in I-Thou is reliant on his discourse with the Absolute, yet the Absolute is subject to him, also. The man in I-It thinks himself free however is reliant upon a thousand things. These two states are unusually interrelated. The more grounded the It takes its hang on the I, the more grounded the revelations the individual relationship of the I-Thou assortment brings. Just through the best murkiness will there be the best light, just through the loss of the word †discourse, just by heading off to the edges of destiny would we be able to know opportunity, and through causality we get familiar with the methods of predetermination. Such are the patterns of the world in its unceasing upheaval. Step by step instructions to refer to Instinct and condition, Papers

What are the main reasons for Sony PlayStation’s profitability? Essay

What are the fundamental purposes behind Sony PlayStation’s productivity? In the year 1994, Sony propelled its own video support called the PlayStation which is currently one of the most notable and top of the line gaming supports in the entire world. The PlayStation has been considerably more effective since the item has been re-propelled and enhanced in 2000, called PlayStation 2. The mystery behind the accomplishment of high benefit will be examined in this coursework, principally the primary reasons have been Innovation, the Advertising Strategy applied and the rest of the advertising blend utilized by the Sony Corporation. One of the primary purposes for the PlayStation being a ‘winner’ for the Sony Corporation is Innovation. Development is the procedure of carrying another plan to the commercial center. Sony’s PlayStation uncovered the CD-ROM gaming innovation without precedent for the market of the cartridge-based innovation which was utilized by its individual contenders, Nintendo 64 and Sega Saturn. This staggering innovation assisted with improving the designs giving a 3D sight and sound view along with the fuse of a 1024K double separated VRAM which permitted the picture showed on-screen to change rapidly. These high caliber illustrations demonstrated to increase the value of the item and in this manner numerous shoppers chosen to go for the PlayStation. To Sony’s enchant, PlayStation sold in excess of 300,000 units in the initial 30 days: an incredible accomplishment which helped up the benefit of the organization, leaving the contenders negligent. Another explanation which has assisted with expanding PlayStation’s benefit is the publicizing effort drew nearer by Sony. The PlayStation is normally publicized through magazines and TV adverts. This time it didn't focus on the conventional 8-16 years of age segment target crowd. In spite of the fact that, this time the item was focused on a more seasoned crowd with the goal that higher buyer mindfulness could be accomplished. The great thing about the PlayStation’s TV adverts is that it attempts to separate the item from the opposition while additionally producing intrigue and consciousness of the new item dispatch. Likewise, Sony attempts to support certain enormous and popular occasions, for example, 1995 MTV Music Awards also, the UEFA Champions League so as to build greater gainfulness. Besides, such an excess of promoting has assisted with making a positive picture about the organization. This solid and po... ...his has assisted with fulfilling the interest better which has expanded Sony’s deals and hence prompted higher gainfulness. Aside from every one of these things, Sony’s PlayStation has had other imaginative thoughts which have expanded gainfulness. The PlayStation 2 likewise has a DVD player joined with it. This implies now the buyers appreciate the additional estimation of a DVD player and they needn't bother with to have a different one. Besides, Sony was the first to present multiple players gaming through the Multi Tap. This implied presently buyers could play with one another simply utilizing one comfort which assisted with expanding adaptability. Besides, it additionally presented the Memory Card which permitted clients to spare their game information in it. Like this, the client could proceed with the game from last spared stage or could take it to an elsewhere and play there. What is more that, PlayStation’s remote control have all the more better plan which make it simpler to play and end up being increasingly agreeable. All these creative thoughts have assisted with making the PlayStation significantly more engaging than the competitors’ items. The gainfulness has again been influenced due to these elements by augmenting it.

Installment Loans More Mileage for Your Money (Part 3 of 3)

Installment Loans More Mileage for Your Money (Part 3 of 3) Installment Loans: More Mileage for Your Money (Part 3 of 3) Installment Loans: More Mileage for Your Money (Part 3 of 3)In the world of lending, especially for people who have less-than-stellar credit scores, a payday loan is like a racecar: expensive and dangerous. Payday loans, with their high Annual Percentage Rates (APRs) and debt-trap structure, cause the average payday loan customer to take out ten loans per year and spend almost 200 days of the year in debt.[1] Looks like they’re not so “short-term” after all!An installment loan, on the other hand, is more like the family car: safe and functional, it gets the kids to school, you to work, and you can rely on it year round.The Payday Way is a Dead End.Let’s say your car breaks down on the way to work, and you need $1,000 in a hurry to pay for repairs. You take out a 14-day payday loan that costs $15 per $100 borrowed. The total cost of the loan is $150, and full repayment ($1,150) is due in two weeks.But is $1,150 something you could actually pay back in two weeks? Probably not. In fact, most payday loan customers can only afford roughly $100 per month towards their loan.[2] So you roll the loan over and pay the $150 you owe in interest in order to secure a two-week extension. However, those two weeks means paying another $150 in interest. Your payday loan now costs $300 and you still owe $1,150 to the lender. Basically, you’re right back where you started.Let’s say it takes you six months to finally pay the loan back in full, having rolled it over 13 times. It would have cost you $1,950 in total. After half a year, you’ve ended up paying nearly twice what you originally borrowed in fees and interest alone! Payday loans might not seem disastrous in the short term, but over time their costs really add up. The APR for a 14-day payday loan that costs $15 per $100 borrowed would be an astronomical 390%. You can read more in the eBook How to Protect Yourself from Payday Loans and Predatory Lenders.Long-Term Installment Loan = Long-Term SavingsNow what if y ou take out a $1,000 installment loan to pay your mechanic’s bill instead? It’s a six-month loan, with six monthly payments, and an Annual Percentage Rate (APR) of 99%. Right away, you see a huge difference in cost. Whereas the payday loan cost $1,950 over six months, this installment loan costs $307.75. That’s over six times less.This lower cost is due to a couple of different factors. One of them is the APR. The installment loan’s 99% APR is much lower than the payday loan’s 390% APR, which means that the installment loan is less expensive. APR measures the cost of a loan over a full year, so it doesn’t matter as much when a loan is only two weeks long. But when a loan lasts for six whole months? It matters a lot.  Also see  What’s the Difference Between a Payday Loan and an Installment Loan?  in our Blog for more information.But there’s another factor at work that makes the installment loan even cheaper: it’s called “amortization”, and it’s not nearly as c omplicated as it sounds.Amortization: The Electric Car of Personal LendingAmortization is a specific type of loan repayment structure. Amortized loans are designed to be repaid in a series of regularly scheduled, equally sized payments. Each payment also consists of two parts: one part pays down the principal, and the other part pays down the interest. Why is that important? Because it means that every payment you make reduces the amount you owe.Every time you reduce the principal amount owed on an amortized loan, you also reduce the amount charged in interest. With an amortizing installment loan, interest is charged as a percentage of the principal. If the principal is smaller, than the interest charge is smaller as well. The difference from one payment to the next may be small, but it adds up over time.Installment loans are amortizing, while payday loans are not. That’s why installment loans are so much less expensive. From the first payment you make on your installment loan, yo ure reducing the amount you owe. With a payday loan, on the other hand, the interest is a flat fee based on the original amount loaned. Every time the loan is rolled over, youre being charged that same fee all over again.Installment loans get cheaper over time; payday loans only get more expensive. Choosing between the two is just like choosing between a minivan and an F1 racecar: it’s not really a choice at all. It’s just common sense.References: Payday Loans and Deposit Advance Products. (2013, April 24). Retrieved from https://files.consumerfinance.gov/f/201304_cfpb_payday-dap-whitepaper.pdf Bourke, N., Horowitz, A., Roche, T. (2013, February). Payday Lending America: How Borrowers Choose and Repay Payday Loans. Retrieved from https://www.pewtrusts.org/~/media/assets/2013/02/20/pew_choosing_borrowing_payday_feb2013-%281%29.pdf

Analysis Of Malcolm X And Tillie Alson s I Stand Here...

The Parallels of Poverty In today’s society, there is a clear boundary between being wealthy and living in poverty. It is believed that in the world today, around 1% of people own more wealth than the bottom 98% of people living. Although living with money may bring you happiness from materialistic items, when people start to become money minded and greedy, they fail to appreciate how valuable the money they have is. Living in poverty has very negative effect on one’s ability to survive, their loss of spirit and overall happiness. In the readings by Malcolm X in The Autobiography of Malcolm X and in Tillie Alson’s I Stand Here Ironing, both explore the parallels of poverty and how poverty means more than just being monetarily poor.†¦show more content†¦As a black, one would live in poverty and not dream of anything more than shining shoes or have a respected profession (Malcom 5). African American people were targeted by white supremacists and in the Lit tle’s family, many had been killed due to their skin color. Malcolm exclaims â€Å"it has always been my belief that I, too will die by violence. I have done all that I can be prepared† (Malcolm 2). Poverty is a very common thing for the African American people at this point in time. In the autobiography, we move into the Great Depression where the life of a colored person has many hardships and how these damaging effects cause poverty of the self. Malcolm moves away from his family in Lansing, Michigan at fifteen years old after spending the summer in Boston, Massachusetts. Malcolm believes that he has much more potential than to stay in Michigan and have a dissatisfied life. While in Boston, he will stay with his half-sister Ella who tells Malcolm to explore the city before he ties himself down to a job. When he goes into the city, he sees how their are different types of black people. On Roxbury Hill where he lives, it is populated with ghetto black people who are poor and jobless which is towards the bottom of the hill. And at the top of the hill, he sees the Hill Negroes who were â€Å"breaking their backs trying to imitate white people† (Malcolm 42). While Malcolm searches for a job, he meets Shorty who brings him to the Roseland State

Cultural Background Of The Mexican Revolution - 935 Words

The Mexican Revolution was greatly influenced by the peasants in the villages. Conditions like haciendas run by Europeans or mestizos lead to exploitations of peasants and reform laws that lead to the Agrarian Revolution of the peasants. Agrarian Revolt in a Mexican Village focus on the village of Naranja, through Paul Friedrich historical analysis of this town, we see how the conditions like hacienda led these people to mobilize against Porfirio Diaz. The cultural background of Najarana is crucial in understanding the sentiment of the villagers, they spoke Porepicha, and were described as Indian. These cultural difference had political significance that lead to a peasant uprising. Prior to European intervention, Indian communities participated in ejidos, communal land that belonged to no one person in particular. This was a tradition that had been in practice for decades prior. Once the Europeans began to intervene in Indigenous villages, the practice of communal lands began to disappear. This was a result of reform laws passed by the Porfirian dictatorship, going into practice in the second half of the 1800s. Through these measures the area saw major change, to the Indigenous population this was not positive change. These laws encouraged Indians to divide land with the intentions to sell it as they wished. Later this laws changed and allowed private companies to settle public lands, the only issue being that the lands were occupi ed by Indians. Through this practice manyShow MoreRelatedPedro Paramo : An Enormous Impact On Latin American Writers And Readers From All Over The World1694 Words   |  7 Pages and the world of Mexican contemporary writers. By using the New Historicism approach to the novel, readers will be benefitted greatly because they can unravel the history of Mexico City and the Mexican Revolution and revolts that is reflected in the novel. 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Moral Philosophy Sport †Hockey Violence Free Essays

Karen Kyung Fuhrmann – PHL376H1S – February 15, 2013 Fist Fight: The NHL Doesn’t Need Goons Introduction Fighting in NHL hockey is illegitimate; it is not an essential part of the game and is merely gratuitous violence. There is no need for a â€Å"goon† on the roster of any hockey team, and fighting should be prohibited in the NHL. This paper will make the above argument in three parts: the first part of the paper will show that such gratuitous violence is not a necessary component of the structure of the game; the second part will show the counter argument for the legitimation of such violence; and the third part will provide a refutation of the counter argument. We will write a custom essay sample on Moral Philosophy Sport – Hockey Violence or any similar topic only for you Order Now Fighting is Illegitimate in NHL Hockey The reason why fighting is illegitimate in NHL hockey is that it is gratuitous violence. Such violence is illegitimate as it gives rise to what Jim Parry calls a genuine moral problem, which occurs â€Å"when violence exceeds what is necessary for its success, whether used instrumentally or not† (210). In hockey, the primary aim is to score the most goals to win and fighting does not contribute significantly to that aim. There are other forms of hockey, like pond hockey or pick-up hockey, which do not include fighting. Fighting in NHL hockey is a mere consequence of a dominant model of competition, where external rewards can only be won by one party at the loss of others (McMurtry 205); this is translated into the commercial model of NHL hockey, and according to McMurtry, â€Å"†¦well-known and systematic pathologies of competitive conflict – violence, cheating†¦ and so on – are a law-like consequence of the dominant structure of competition and not a problem of competition as such† (201). In submerged and free models of competition, however, such pathologies do not occur (or as often) as in dominant models, because there are no ‘zero-sum’ rewards (external rewards that only benefit one party at the expense of others) to motivate pathological behaviour like fighting. Fighting is thus an inessential part of the hockey game. It is merely a negative effect of the dominant model of competition. The benefits of fighting (such as intimidation) do not outweigh its disadvantages (such as serious physical injury and wasting time) for ecuring victory – such violence exceeds what is needed to succeed and is a genuine moral problem. Counter Argument Fighting occurs to deter future illegal assaults from the opposing team and helps keep more dangerous play at bay. First of all, fighting serves as an informal mode of social control, because it is near impossible for a referee to view most illegal assaults (like cross-checking, spearing, etc. ) that occur around co rners, nets, or when an official’s back is turned; especially with the speed and continuous play of hockey (Colburn 168). Colburn asserts that â€Å"†¦to accommodate both these conditions of the game and also the demand for hard-hitting, contact type of sport, rule-enforcement in ice hockey has, to a greater degree than in any other major sport, been partially delegated to individual players† (Colburn168). Moreover, fighting serves as a deterrent for more serious assaults (with hockey sticks, and etc. ), as they give rise to intimidation and give enforcers a mental advantage over opposing players. Players view fighting as more honourable than illegitimate assaults (a. k. a. heap shots), and fighting directly calls out such occurrences. Unlike cheap shots, there are implicit standards for fighting known as â€Å"the code†. Such standards for fighting affirm that only two players are allowed to fight at a given time, both players must give some form of consent to fighting, and both players must drop their gloves. It is a misunderstanding that fighting in the NHL is gratuitous violence a nd Colburn states that â€Å"†¦formal rules of ice hockey do not coincide with the informal, social norms held by players as these pertain to the definition of violence† (156). Refutation Fighting does not help prevent more serious injuries from occurring/recurring, and the issue of accurate surveillance by referees can be remedied by removal from the game and future game suspensions. A 2012 article in the Canadian Medical Association stated that research from Boston University School of Medicine has shown that repeated head trauma can lead to permanent brain damage, and claimed that hockey enforcers are especially vulnerable with their consistent fighting. What researchers†¦ have found in the brains of three prominent hockey players – Rick Martin, Reggie Fleming and Bob Probert – should be enough to sway minds to impose a ban on all forms of intentional head trauma, including fighting, along with severe deterrent penalties such as lengthy suspensions for breaches† (Kale 275). With fighting and other intentional head hits, hockey has now been listed as a sport that results in chronic traumatic encephalopathy (CTE). CTE is associated with memory disturbances, behavioural and personality changes, Parkinsonism, and speech and gait abnormalities (Kale 275). Moreover, players often overestimate the level of protection their face masks and helmets offer. This can be a contributing factor to cheap shots and reckless play, which in turn leads to fighting. These factors reveal that fighting merely contributes insult to injury. Conclusion Overall, fighting does not have a legitimate place in NHL hockey and thinking otherwise can lead to serious injury for all involved parties. Harsher penalties for illegal assaults and fighting should be implemented for both of them to stop occurring (immediate removal and future game suspension) and remove any gratuitous violence from NHL hockey. Sources Colburn, Kenneth Jr. â€Å"Honor, ritual and violence in ice hockey. † Canadian Journal of Sociology. 10. 2 (1985). 153-168. Web. Juhn, Mark, et al. â€Å"Violence and Injury in Ice Hockey. † Clinical Journal of Sport Medicine. 12 (2002):46-51. Web. Kale, Rajendra. â€Å"Stop the violence and play hockey. † Canadian Medical Association Journal. 184. 3 (2012): 275. Web. McMurtry, John. â€Å"How Competition Goes Wrong. † Journal of Applied Philosophy. 8. 2 (1991) 201-210. Web. Parry, Jim. â€Å"Violence and aggression in contemporary sport. † Ethics and Sport. Ed. Mike McNamee. London: E FN Spon, 1998. 205-224. Web. How to cite Moral Philosophy Sport – Hockey Violence, Papers

Cash Flow Statement free essay sample

With the development and publication of SFAS 95, the primary categories of cash flow are defined as operating, investing and financing activities. SFAS 95 also defined cash to include cash equivalents with maturities of 90 days or less, such as treasury bills, commercial paper and money market funds Compelling Reasons for requiring a statement of Cash Flow: * Information provided: The statement of cash flows can provide the information that other financial statements can’t provide.The other financial statements such as Balance Sheet, which represents the company’s financial condition at a specific point in time, the Income Statement, which presents the results of operations, i. e. profit or loss, for a specific period of time, and the Statement of Owners Equity, which details the changes in the value of the owners stake in the company. In accrual accounting, these other documents are based on when transactions took place, rather than when cash changed hands. We will write a custom essay sample on Cash Flow Statement or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The Statement of Cash Flows provides the data on what happened from a cash perspective. They present relevant information about the cash receipts and cash payments of an enterprise during a period. Statements of financial position include information that is often used in assessing an entity’s liquidity and financial flexibility, but a statement of financial position provided only an incomplete picture of either liquidity or financial flexibility unless it is used in conjunction with at least a cash flow statement.There are 3 major categories for the information that is reported on the Statement of Cash Flows. They are operating activities, investing activities, and financing activities. Between the three major areas, every aspect of a business’ transactions is covered. For example, it shows how a company purchases and finances an asset instead of just showing the amount. * Usefulness:The information provided in a statement of cash flows, if used with related disclosures and information in the other financial statements, can help investors, creditors, and others to (a) assess the enterprise’s ability to generate positive future net cash flows; (b) assess the enterprise’s ability to meet its obligations, its ability to pay dividends, and its needs for external financing; (c) assess the reasons for differences between net income and associated cash receipts and payments; and (d) assess the effects on an enterprise’s financial position of both its cash and noncash investing and financing transactions during the period; (e) improve the comparability of different fi rms operating performance by eliminating the effects of different accounting methods.For example, in Balance sheet, some companies may use FIFO method to measure inventory while some others may use LIFO method; (f) assess future cash flows, provide feedback about actual cash flows; (g) Cash flow statement helps for appraisal of various capital investment programmers to determine their profitability and viability. Support and Criticisms for Statement of Cash Flows: * A general criticism is that cash flow statements are not meaningful for some institutions such as financial institutions, small businesses, investment companies and non-for-profit organizations. Thus, the information in the statement of cash flows is not useful. In the case of financial institutions, the identification of the core operating activities is important, because they differ markedly from nonfinancial companies in this respect. Consider commercial banking institutions, where the core operations can be divided between on–balance sheet activities and off–balance sheet activities.The off–balance sheet activities consist primarily of fee-based activities for services rendered that do not create an asset or a liability. These create no problem for the cash flow presentation because they appear on the income statement and flow directly through the operating section of the cash flow statement. The major problems are created by activities that have significant impact on the balance sheet. They are: 1) managing the accounts of depositors, which appears on the balance sheet as liabilities; 2) lending money to customers, which appears on the balance sheet as assets; and 3) trading in securities, which appears on the bala nce sheet as assets.If these are a bank’s core operations, one would expect them to be in the operating activities section of the cash flow statement. Instead, customer deposits are listed as financing activities, while loans to customers and securities activities appear in the investing activities section. As a result, the figure for â€Å"cash provided by operations† is meaningless. In other words, the breakdown of cash flows into operating, investing, and financing activities—as presently constituted for financial institutions—is not useful to readers of the financial statements. A totally new form of presentation is needed to provide useful cash flow information. * Reporting of Operating ActivitiesAlthough the accounting profession talks about the importance of comparability of financial information, the fact that interest paid is treated as an operating activity while dividends paid is treated as a financing activity makes it difficult, if not impossible, to compare the performance of companies that make different financing choices. Analysts have resorted to their own measures to make such comparisons. On e of the most common is earnings before interest, taxes, depreciation, and amortization (EBITDA); however, other means to compare exist, with no commonly agreed upon measure for all to use. Up to now, the accounting profession has simply ignored the issue. The only analytical measure that has been dealt with by the accounting profession is earnings per share, because this must be presented on the income statement. A second problem affecting the operating activities involves the financing of receivables.Years ago, receivables were financed through borrowing, with receivables pledged as collateral. The monies received were treated as a financing activity, which was appropriate. In recent years, however, increasing concern on keeping debt off the balance sheet has led companies to replace the above treatment with sales of receivables, with and without recourse. Economically, these activities still represent a form of financing. The accounting rules, however, allow these transactions to be treated as operating activities instead of financing activities. This makes these transactions doubly attractive to companies: They keep the borrowing off the balance sheet and inflate cash provided by operations. Economically, the ledge of accounts receivable is the same as the sale of accounts receivable, but they are treated differently in the cash flow statement. This treatment is inconsistent. Another problem that causes distortions in operating cash flows stems from the treatment of dividends received as an operating activity rather than as an investing activity. When a company has significant investments in affiliated companies, it has the ability to manipulate its own â€Å"cash provided by operations† by increasing the dividends it receives from such companies. This simple technique has been used by many companies to inflate operating cash flows. Furthermore, dividend income comes from investments.If the former is shown in the section of operating activities, and the latter placed in investing activities, the financial statement reader will not be able to visualize the whole picture of investment strategy. Another potentially serious distortion to operating cash flows comes from the rule that requires taxes to be treated as an operating activity, even when the gain being taxed is included in investing activities. For example, consider a company that has low operating profit but has a large gain from the sale of investments. The bulk of the pretax income is from this gain, and therefore the bulk of the income tax expense is related to this gain.On the statement of cash flows, however, the gain is removed from operating activities and included under investing activities instead, as part of the proceeds from the sale of the investments. But the income tax expense on that gain remains in the operating activities sections, genera ting substantial negative cash from operations. This clearly is misleading, and violates the matching rules required on the income statement. * The Investing Activities Section For many years, the distinction between cash equivalents (investments having no principal risk) and other marketable securities has caused serious confusion for the untrained reader of financial statements.Cash equivalents are treated as part of cash, while marketable securities are shown as investing activities. Where a company’s portfolio manager does a lot of trading and switching between these two types of securities, very large numbers will appear in the investing activities section as â€Å"purchases of marketable securities† and â€Å"sales of marketable securities. † It is not uncommon to see financial statements in which these numbers represent the largest cash flows. Were one to ask the untrained reader what the most significant events for the company were during the year, the answer might be the purchasing and selling of mar ketable securities.Yet these numbers are irrelevant for understanding the company’s performance. They merely clutter up the statement and cause confusion. Another major problem with the investing activities section is that it is based on the rule that only cash amounts may be shown in investing and financing activities. Thus, for example, if one company acquired another at a cost of $10 billion, but only $1 billion of it was in cash, with the rest paid in the form of debt and equity instruments, the cash flow statement would show only the $1 billion cash amount paid as the cost of the acquisition. The other $9 billion would be relegated to a footnote. The untrained reader would get a false picture of the true cost of the acquisition.This is another example showing the deficiency of the current rules in preparing the cash flow statement. The rules ignore the vision of a complete transaction. * Indirect Method vs. Direct Method 1. Advantages of Indirect Method The principal advantage of the indirect method is that it highlights the differences between net income and NCFO. Highlighting these differences is useful when using NCFO as an alternative performance metric to report the cash flow and accrual components of net income. As a result, the indirect method helps users understand the leads and lags between NCFO and net income. It highlights the operating changes in non-cash working capital accounts.For example, the indirect method highlights any buildup of operating receivables (payables) that decrease (increase) NCFO relative to net income, or the reduction of operating receivables (payables) that increase (decrease) NCFO relative to net income. 2. Disadvantages of Indirect Method The principal disadvantage of the indirect method is that it does not report actual operating inflows and outflows. It reports only one cash flow for operating activities — NCFO. For this reason, operating activities are reported net, not gross, under the indirect method. As a result, the indirect method is less informative than the direct method supplemented by a reconciliation of net income and NCFO.It is also criticized for repeating information already presented in the income statement and the comparative balance sheet. 3. Advantages of Direct Method SFAS-95 notes that the principal advantage of the direct method is that it is more informative than the indirect method because it reports operating cash receipts and payments. In a fundamental sense, the direct method is finer, or more informative, than the indirect method. The direct method with the reconciliation provides all the information provided by the indirect method plus information on gross operating inflows and outflows. Accordingly, report users could effortlessly transform a direct method cash flow statement into an indirect method cash flow statement.However, report users cannot effortlessly transform an indirect method cash flow statement into a direct method cash flow statement because information on gross operating inflows and outflows is not provided. Accordingly, the direct method is finer, or more informative, than the indirect method. 4. Disadvantages of Direct Method Those companies that use the direct method are required under SFAS-95 to provide a supplemental reconciliation of net income and NCFO. As a result, the direct method requires more work than the indirect method. Additionally, some accountants caution that a direct method cash flow statement seemingly duplicates similar information presented in the income statement and thereby may undermine user perception of the usefulness of accrual basis income measurement.In response to the FASB Exposure Draft, which favored but did not propose to require the direct method, many spokesmen for corporate management claimed that the direct method is impractical and costly to apply. More specifically, they claimed that the direct method would require costly modifications of accounting information systems to routinely generate information on operating cash inflows and outflows not previously accumulated. Additionally, few public companies issued direct method statements o f changes in financial position prior to the adoption of SFAS-95 than the indirect method. Influence of this statement * How can the Statement of Cash Flows be used by the investment community to determine how healthy a company may be?One primary use is to help determine future risk. A company generally will record the revenue that drives earnings when their customers receive their merchandise, whether the customer has paid for the merchandise or not. The Statement of Cash Flows can show the investment community how much cash is actually collected. So, if earnings are good yet cash collections are not, the investor should be worried: future earnings could be at risk if bad debt becomes an issue. * Investors can also get a feel for whether or not a company is playing earnings games by comparing net income on the Income Statement with Cash from Operating Activities from the Statement of Cash Flows.Investment analysts typically like to see a ratio of those two numbers close to one, because the closer it is to one, the higher-quality the earnings are considered. * Investment experts also like to compare the rates at which net income and operating cash are growing. If the two have historically moved at similar rates but cash is now slowing, it represents an early war ning sign that the company may soon experience issues. Accounting experts pay a great deal of attention to accounts receivable, representing what customers owe the company. When receivables rise at a faster pace than sales, the company may be having trouble collecting what its customers owe.Since cash isnt flowing in as it should be, a rise shows up as a negative on the cash-flow statement. * An analysis of the Statement of Cash Flows can also provide an early warning that demand for the companys products are softening. Because the purchase of inventory requires cash, an increase in inventory causes cash to fall. On the other hand, when liabilities such as accounts payable increase, so should a companys cash balances. By delaying payment to its creditors, management can free up cash. This is not always a good thing for the company to do, because it could be stringing its customers, partners, and vendors along. Possible Changes and the reasons for the proposed changes * Direct Method vs. Indirect Method