Analysis of Financial Performance

Analysis of Financial Performance Name: Anjeli d/o Panjalingam Questions Scenario: You have just been appointed for the job of finance executive of a company that is involved in the hypermarket industry, Tisku. Using the Tisku’s financial income and balance sheet provided here, you are required to analyze the financial performance and financial position using ration analysis. Based on the information given in the income statement and balance sheet, calculate the following ratio for both years 2012 and 2013 and compare them to access the financial performance of Tisku. As the finance executive, propose the TEN axioms if finance to your management that would affect their decision, in the relation and examples of hypermarket industry. Task 1 Scenario: You have just been appointed for the job of finance executive of a company that is involved in the hypermarket industry, Tisku. Using the Tisku’s financial income and balance sheet provided here, you are required to analyze the financial performance and financial position using ration analysis. Based on the information given in the income statement and balance sheet, calculate the following ratio for both years 2012 and 2013 and compare them to access the financial performance of Tisku. Introduction Ratio In mathematics, ration is a relationship between the numbers of the same kind. A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprise’s financial statements. There are many standards of ration used to try to evaluate the overall financial condition of an corporation or other organization. Financial ratio may be used by mangers within a firm, potential shareholders (owner) of a firm and by a firm’s creditors. Financial ratio is also used to compare the strength and weakness in various companies. Values used in calculating financial ratio are taken from the balance sheet and income statement. The statements data is based on the accounting method and accounting standards used by the organization. Types of Ratio There are four basic types of financial ratio used to measure a company’s performance. They are:- Liquidity ratio This is the most common ratio of current assets to current liabilities. This ratio indicates a company’s ability to pay its short term bills. Current assets = currents asset/ current liability Acid test ratio= currents asset – inventory/ current liability Return of capital employed = net profit/capital employedÃâ€" 100 Profitability ratio Profitability ratio indicates management ability to convert sales dollars into profit and cash flow. Gross profit = gross profit/salesÃâ€"100 , net profit/salesÃâ€"100 Efficiency ratio Two common efficiency ratios are inventory turnover and receivable turnover. A high account receivable turnover means that the company is successful in collecting its outstanding credit balance. Inventory turnover = cost of sales/average inventory Market ratios Market ratios are used to understand how other investors value money. The current market price of a share of common stock versus an indicator of the company’s ability to generate profits or assets held by the company’s is evaluated. Calculations Gross profit margin Net profit margin Current ratio Quick ratio Net working capital Inventory turnover Return of equity Fixed assets turnover Average collection period Average payment period Debt ratio 2012 2013 Gross profit margin= Gross profit /Sales Ãâ€"100%  ­Ã‚ ­ = 7,047,000/31,437,000 Ãâ€"100% = 7,658,000/ 34,654,000 Ãâ€"100% = 22.42% = 22.10% Net profit margin= Net income/ Sales Ãâ€" 100% = 220,000/ 31,437,000 Ãâ€"100% =571,000/ 34,654,000 Ãâ€"100% = 0.70% = 1.65% Current ratio= Current Assents/ Current Liabilities = 8,198,000/ 3,602,000 =9,162,000/3,264,000 = 2.28 =2.81 Quick ratio = Current Assents- Inventory/ Current Liabilities = 8,198,000- 6,354,000/3,602,000 = 9,162,000/6,635,000/3,264,000 =0.511:1 = 0.774:1 Net working capital= Current Assents- Current Liabilities = 8,198,000-3,602,000 = 9,162,000-3,264,000 =RM 4,596,000 = RM 5,898,000 Inventory Turnover= Cost of goods sold/ Inventory = 24,390,000/ 6.354,000 = 26,996,000/ 6,635,000 =3.836 times/year = 4.069 times/year 2012 2013 Return on equity= Net income/ Shareholder’s equity = 220,000/ 6,072,000 = 571,000/ 5,280,000 = 0.0362 = 0.1081 = 3.62% = 10.81% Fixed assets turnover= Sales/ Net Fixed Assents = 31,437,000/ 6,553,000 = 34,654,000/ 6575,000 = 4.797 = 5.271 Average collection period= Accounts receivable/ Daily credit sales =N/A =N/A Average payment period= Accounts payment/ Daily credit purchases =2,009,000/ (24,390,000à ·365) =1,993,000/ (26,996,000à ·365) =30 days =27 days Debt ratio= Total debt( Total Liabilities)/ Total assets Ãâ€"100% = 31,437,000/ 6,553,000 Ãâ€"100% =10,457,000/ 15,737,000 Ãâ€"100% = 58.83% = 66.45% Task 2 As the finance executive, propose the TEN axioms if finance to your management that would affect their decision, in the relation and examples of hypermarket industry. Introduction Finance is the middle ground between the theoretical economics and the accounting world of numbers. Finance is applied economics. Financial implications are at the heart of every business transaction and decisions. Finance is also a valuable tool used to communicate, judge and monitor the result of business decisions. Axioms are the principle universally accepted within a practice or subject area on the basis of its self evident truth or intrinsic merit. The ten axioms used in financial management is the foundation of financial decision making. There are ten important axioms and almost all the industries do uses this uses it in making decision making in finance. How does the ten axioms of finance would affect decision in hypermarket industry? Main Body Axiom 1: The Risk-Return Tradeoff Additional risks will not be taken unless an additional return is expected. At some point, people will have some saved money. What will they do to it? The answer is simple, to expand future consumption activities. Savings are invested to earn more return. Investment alternative have different amount of risk and expected returns. Investors choose to put money in risky investments because investment offer higher expected returns because the more risky an investment, the higher will be its returns. This is a relationship between risk and unexpected returns. In hypermarket industry, for example a new hypermarket is opened, the investors have to invest a lot of money as hypermarket is an expensive retail facility selling a wide range of products under one roof. Thus hypermarket industry needs a lot of money. Investors do not know whether the hypermarket will go popular among the people as it’s newly open. This is creates a higher risk to them. As hypermarket such as Tesco, Giant an d EON is a big industry and not a small business, a big amount of money should be invested. This creates a very big risk which don’t have guarantee in return. Axiom 2: The Time Value of Money A dollar worth today worth more than dollar tomorrow. This is a fundamental concept in finance the money has a time value associated with it. A dollar received today worth more than a dollar received a year from now. Because we can earn interest on money received today, it is better to receive money earlier rather than later. If the benefits overweigh the cost the project creates wealth and it should be accepted. If the cost overweighs the benefit, it should be rejected. In hypermarket industry, when they investors invest money and get profit, they should wisely use the profit get from the business. For example, when get an amount of money after the sales of product, the money should be reinvested to get more profit such as bringing in more product inside the hypermarket. Axiom 3: Cash-Not Profit In measuring wealth, or value, cash flow will be used. Cash flow is received by firms and can be reinvested. A firm’s cash flow and accounting profit may not occur together. For example, capital expenses, such as purchase of new equipment or building are depreciated over several years, with the annual depreciation subtracted from profit. However, the cash flow associated with this expense generally occurs immediately. Therefore cash flow involving paying money out and cash flows that can be reinvested reflect the timing for the benefit of cost. In hypermarket industry, the cash received by the investors will be reinvested into the industry to make the hypermarket bigger and wider. The money that they get can be used for example to pay the dividends to the shop in the hypermarket. Besides, cash can also be used to double the products and sales in the hypermarket. Axiom 4: Incremental Cash Flow The incremental cash flow is the difference between the cash flow if the project is taken on versus what they will be if it is not taken on. Not all cash flow is incremental. The difference between revenues generated by introducing the new product maintaining the original series are the incremental cash flow. The difference reflects true impacts of decision. Guiding rule in deciding whether a cash flow is incremental is to look at the company with and without new product. In hypermarket industry, people should know the difference when there is a new product and their new product and the cash flow in their hypermarket whether it brings profits or not. Thus choosing a new product should be done wisely. Axiom 5: The Curse of Competitive Market Why is it hard to find exceptionally profitable projects? This question tells how competitive market operates and where to look for profitable projects. In competitive markets, extremely large profit cannot exist for so long. How can we find new projects that return more than the required rate of return? Although competitions make them difficult to find, investment should be invested in markets which is not perfectly competitive. Two ways to making less making competitive is to differentiate the products in some key ways to achieve a cost advantage over competitors. Thus, in hypermarket industry, the products being introduced or sold should be differ than the other hypermarkets. Variety kind of product which is hard to find in other hypermarkets can be sold. Besides, different types of services and advertising methods can be used. Cleanliness of the hypermarket should be considered such as toilets. Free parking and can be given to the members of the hypermarket to attract more custom ers. Axiom 6: Efficiency of Capital Market Goals of financial manger are to maximize the shareholder wealth. The markets are quick and prices are right. Information is incorporated into security prices at the speed of light. Assuming the information is correct, and then stock price will reflect all publicly available information regarding the value of the firm. In hypermarket industry, business should be done without wasting resources as they use capital that is invested by the shareholders to buy resources. When selling items, they have to have a target on the selling of a product such as age group, gender, trend and so on. Besides, selling of a product should be according demand, popularity, seasons and festivals to avoid wastage. The four resources which are land, labor, capital and entrepreneurship should be used wisely as it is very limited nowadays. All the resources should be well organized. Axiom 7: The Agency Problem The agency problem results from separation of management and ownership of the firm. Managers are not typically owners of the firms. Managers may make decisions that are in their best interest and not in the line with the long term best interest of the owners. For example, cutting research and development cost on new products to maximize current income and pay for performance. They also may approach less energetically and attempt benefits themselves in terms of salary and perquisites at the expense of the share holders. This produces conflict between two parties. Thus, in the hypermarket industry, managers might bring in a new product in the hypermarket to increase their income without asking any permission from the owner. This might increase the risk to the owner and might bring conflict between them. Besides, there will also be communication barrier because of the foreign workers. Axiom 8: Taxes Bias Business Decisions Any decision taken by financial manager will go impact on taxes. When a new project is evaluated, income taxes play a significant role. Because cash is king, after cash flow of an investment should be considered. The tax consequences of a business decision will impact (reduce) cash flow. Companies are given tax incentives by government to influence their decision. Besides, governments use this fact to shape the decision of a business for. In hypermarket industry, for example, investment tax credit reduces taxes. One of the best example is plastics will not be given and customers will be charged RM 0.20 for the plastics. This will reduce the pollution and it might tax them on the basis on pollution output. Axiom 9: All Risks are not equal Some risks can be diversified away and some cannot. Don’t put all eggs in one basket. Diversification allows good and bad events or observations to cancel each other out preferably reducing total variability without affecting expected return. Process of diversification can reduce risk and as result measuring a profit or an asset’s risk is very difficult. In hypermarket industry, investors can split money and invest in many hypermarkets. This will increase diversification and reduce risks. Resources such as land, labor, capital and entrepreneurship should be divided and cash should be equally spent as it can reduce overall risk. Needs and wants of customers are unlimited, so there should have no more or less stock. Stock should be balanced to reduce wastage. Estimation on the average should be done as early preparation. Axiom 10: Ethical Behavior Means Doing the Right Thing, Ethical Dilemmas are everywhere in Finance Ethical behaviors means is doing the right thing. A difficulty arises however in attempting in define doing the right thing, because each of us have own set of value which forms personal judgments about what is the right thing to do. This will create issues and disagreements in firms. Unethical dilemma eliminates trust and loss in public confidence. Shareholders values suffer and take a long time to recover. Firms have to responsible more than just on owners. In hypermarket industry, to avoid any dilemma all stakeholders should be considered when taking decisions. Some ethical dilemma might happen between the workers itself as each other can’t tolerate or do have some misunderstandings. Products sold in hypermarkets should be guaranteed with the expire date and also quality. Products that are being used should be safe. Ingredients should be checked before a product is being sold in a hypermarket. For products which is used by Muslims, ‘ Halal’ logo should be ensur ed. Besides, when customers were promised with promotional such as free gifts, discounts and so on it should be fulfilled without disappointments to make sure the hypermarket do not lose trust. It is very hard to catch back the trust when next promotion is done. Conclusion Axioms are much statement of common senses as they are the theoretical statements. These axioms of financial management provide logic behind what is to follow. It helps to build on them and attempt to draw out their implications on decision making. In the world of hypermarkets industry, the ten axioms helps to reduce risk on the business and increase the profit and also helps in making a wise decision in financial management. References Bibliography:TheFreeDictionary.com, (2014).axiom. [online] Available at: http://www.thefreedictionary.com/axiom [Accessed 22 Jul. 2014]. Bibliography:Managementparadise.com, (2014).Ten Axioms of Financial Management. [online] Available at: http://www.managementparadise.com/forums/financial-management-fm/200960-ten-axioms-financial-management.html [Accessed 22 Jul. 2014]. Bibliography:Mathsisfun.com, (2014).Ratios. [online] Available at: http://www.mathsisfun.com/numbers/ratio.html [Accessed 22 Jul. 2014]. Bibliography:Investopedia, (2009).Uses and Limitations of Financial Ratios CFA Level 1 | Investopedia. [online] Available at: http://www.investopedia.com/exam-guide/cfa-level-1/financial-ratios/uses-limitations-ratios.asp [Accessed 22 Jul. 2014]. Bibliography:List4everything.com, (2014).Uses of Ratio Analysis | List4Everything. [online] Available at: http://www.list4everything.com/uses-of-ratio-analysis.html [Accessed 22 Jul. 2014]. Introduction to FinancePage 1

Out Campus Mode of Studies

According to oxford dictonary the meaning of out campus learning is a separation between the instructor and the student, usually due to geographical or time concerns that prevent the student from attending an on campus course. So electronic play an important role here for our campus learners. Electronic sources are used to bridge this gap and distribute educational material for our campus learning programs using printed and mailed materials over a hundred years ago. Normally out campus programs have usually been specially designed to help best meet the needs and requirements that arise when learning is taking place outside of a traditional classroom setting. Out campus learning are very beneficial for those who are working around the clock. There are alot of advantages by doing out campus learning. First of all, for me out campus learning helps me in my career development. It helps me to get a good post after i finish my degree. Besides this, by doing out campus learning it will make a person to well expose to the paper work and presentation which may enabble the person towords career development. The other advantage of out campus studies is knowledge development. Out campus learning help me to expose to a high level of knowledge which is past either by verble or printed matters, and this knowledge will help to broaden my knowledge. Rather than this, multi tasking is one of the advantages doing out campus learning. It allow me to handle more than one job at a time which are important allement to be a profesional. Out campus students also faces some problem such as no time to study and having less of time to complete their assiment. I as a out campus student also having the same problem. After a whole day working out i have to focus on my family after come home. This make me to don’t have much time to study and do revision. Some times i will be very busy at office untill don’t have time to complete my assiment and past it to the lecturer before the date given by my lecturer. I’m sure most of the out campus students having the same problem like me. Nevertheless, out campus learners also dont have time to meet their lecturer for consultation and get advises regarding their studies. This it make them to get less mark in their studies. Besides this, out campus learning also make students to spent alot for their transportation. This is because most of the students coming from different state every month for their classes. As for me i also come from different state every month for my out campus class. As a out campus students the university never provide hostels for us. So we have to find accommodation on our own. We have to spent money for our accommodation. This make us to spent alot of money every month. The other problem that out campus students face is no cooperation among students to spent time to finish their group assiment. As a out campus student i also face the same problem. Its very difficult for out campus students to sit together and finish their group assiment that given to them. Each of the students are busy with their work and family. So they don’t have time to meet and do their group assiment together. As a conclusion, i can say that students who work well independently and who are strongly motivated to succeed in their goals will get benefit by taking out campus learning program. I as a out compus student can say that we will not be closely monitored by the instructor. So for us reading, projects and other assignments must be completed in a timely fashion. Eventhought there are a lot of problem faces by out campus students but those who are able to set deadlines and avoid the temptations of frequent procrastination will get benefit from out campus studies.

Corazon Aquino, First Female Philippines President

Corazon Aquino (January 25, 1933–August 1, 2009) was the first female president of the Philippines, serving from 1986–1992. She was the wife of Filipino opposition leader Benigno Ninoy Aquino and began her political career in 1983 after dictator Ferdinand Marcos had her husband assassinated. Fast Facts: Corazon Aquino Known For: Leader of People Power movement and the 11th president of the PhilippinesAlso Known As: Maria Corazon  Cory  Cojuangco AquinBorn: January 25, 1933 in Paniqui, Tarlac, PhilippinesParents: Jose Chichioco Cojuangco and Demetria Metring SumulongDied: August 1, 2009 in Makati,  Metro Manila, PhilippinesEducation: Ravenhill Academy and Notre Dame Convent School in New York, College of Mount St. Vincent  in New York City, law school at the Far Eastern University in ManilaAwards and Honors:  J. William Fulbright Prize for International Understanding, chosen by  Time  Magazine  as one of the 20 Most Influential Asians of the 20th century and one of 65 great Asian HeroesSpouse: Ninoy AquinoChildren: Maria Elena, Aurora Corazon, Benigno III Noynoy, Victoria Elisa, and Kristina BernadetteNotable Quote: I  would rather die  a  meaningful death than  to  live  a  meaningless life. Early Life   Maria Corazon Sumulong Conjuangco was born on January 25, 1933, in Paniqui, Tarlac, located in central Luzon, Philippines, north of Manila. Her parents were Jose Chichioco Cojuangco and Demetria Metring Sumulong, and the family was of mixed Chinese, Filipino, and Spanish descent. The family surname is a Spanish version of the Chinese name Koo Kuan Goo. The Cojuangcos owned a sugar plantation covering 15,000 acres  and were among the wealthiest families in the province. Cory was the couples sixth child of eight. Education in the U.S. and the Philippines As a young girl, Corazon Aquino was studious and shy. She also showed a devout commitment to the Catholic Church from an early age. Corazon went to expensive private schools in Manila through age 13, when her parents sent her to the United States for high school. Corazon went first to Philadelphias Ravenhill Academy and then the Notre Dame Convent School in New York, graduating in 1949. As an undergraduate at the College of Mount St. Vincent in New York City, Corazon Aquino majored in French. She also was fluent in Tagalog, Kapampangan, and English. After her 1953 graduation from college, Corazon moved back to Manila to attend law school at the Far Eastern University. There, she met a young man from one of the Philippines other wealthy families, a fellow student named Benigno Aquino, Jr. Marriage and Life as a Housewife Corazon Aquino left law school after just one year to marry Ninoy Aquino, a journalist with political aspirations. Ninoy soon became the youngest governor ever elected in the Philippines, and then was elected as the youngest ever member of the Senate in 1967. Corazon concentrated on raising their five children: Maria Elena (b. 1955), Aurora Corazon (1957), Benigno III Noynoy (1960), Victoria Elisa (1961), and Kristina Bernadette (1971). As Ninoys career progressed, Corazon served as a gracious hostess and supported him. However, she was too shy to join him on stage during his campaign speeches, preferring to stand at the back of the crowd and watch. In the early 1970s, money was tight and Corazon moved the family to a smaller home and even sold part of the land she had inherited in order to fund his campaign. Ninoy had become an outspoken critic of Ferdinand Marcoss regime  and was expected to win the 1973 presidential elections  since Marcos was term-limited and could not run according to the Constitution. However, Marcos declared martial law on September 21, 1972, and abolished the Constitution, refusing to relinquish power. Ninoy was arrested and sentenced to death, leaving Corazon to raise the children alone for the next seven years. Exile for the Aquinos In 1978, Ferdinand Marcos decided to hold parliamentary elections, the first since his imposition of martial law, in order to add a veneer of democracy to his rule. He fully expected to win, but the public overwhelmingly supported the opposition, led in absentia by the jailed Ninoy Aquino. Corazon did not approve of Ninoys decision to campaign for parliament from prison, but she dutifully delivered campaign speeches for him. This was a key turning point in her life, moving the shy housewife into the political spotlight for the first time. Marcos rigged the election results, however, claiming more than 70 percent of the parliamentary seats in a clearly fraudulent result. Meanwhile, Ninoys health was suffering from his long imprisonment. U.S. President Jimmy Carter personally intervened, asking Marcos to allow the Aquino family to go into medical exile in the States. In 1980, the regime allowed the family to move to Boston. Corazon spent some of the best years of her life there, reunited with Ninoy, surrounded by her family, and out of the scrum of politics. Ninoy, on the other hand, felt obligated to renew his challenge to the Marcos dictatorship once he had recovered his health. He began to plan a return to the Philippines. Corazon and the children stayed in America while Ninoy took a circuitous route back to Manila. Marcos knew he was coming, though, and had Ninoy assassinated as he got off the plane on August 21, 1983. Corazon Aquino was a widow at the age of 50. Corazon Aquino in Politics Millions of Filipinos poured into the streets of Manila for Ninoys funeral. Corazon led the procession with quiet grief and dignity  and went on to lead protests and political demonstrations as well. Her calm strength under horrific conditions made her the center of anti-Marcos politics in the Philippines—a movement known as People Power. Concerned by the massive street demonstrations against his regime that continued for years, and perhaps deluded into believing that he had more public support than he actually did, Ferdinand Marcos called new presidential elections in February of 1986. His opponent was Corazon Aquino. Aging and ill, Marcos did not take the challenge from Corazon Aquino very seriously. He noted that she was just a woman, and said that her proper place was in the bedroom. Despite massive turnout by Corazons People Power supporters, the Marcos-allied parliament declared him the winner. Protestors poured into the Manila streets once more and top military leaders defected to Corazons camp. Finally, after four chaotic days, Ferdinand Marcos and his wife Imelda were forced to flee into exile in the United States. President Corazon Aquino On February 25, 1986, as a result of the People Power Revolution, Corazon Aquino became the first female president of the Philippines. She restored democracy to the country, promulgated a new constitution, and served until 1992. President Aquinos tenure was not entirely smooth, however. She pledged agrarian reform and land redistribution, but her background as a member of the landed classes made this a difficult promise to keep. Corazon Aquino also convinced the U.S. to withdraw its military from remaining bases in the Philippines—with help from Mt. Pinatubo, which erupted in June 1991 and buried several military installations. Marcos supporters in the Philippines staged a half dozen coup attempts against Corazon Aquino during her term in office, but she survived them all in her low-key yet stubborn political style. Although her own allies urged her to run for a second term in 1992, she adamantly refused. The new 1987 Constitution forbade second terms, but her supporters argued that she was elected before the constitution came into effect and did not apply to her. Retirement Years and Death Corazon Aquino supported her Defense Secretary Fidel Ramos in his candidacy to replace her as president. Ramos won the 1992 presidential election in a crowded field, although he was far short of a majority of the vote. In retirement, former President Aquino frequently spoke out on political and social issues. She was particularly vocal in opposing later presidents attempts to amend the constitution to allow themselves extra terms in office. She also worked to reduce violence and homelessness in the Philippines. In 2007, Corazon Aquino publicly campaigned for her son Noynoy when he ran for the Senate. In March 2008, Aquino announced she had been diagnosed with colorectal cancer. Despite aggressive treatment, she passed away on August 1, 2009, at the age of 76. She did not get to see her son Noynoy elected president; he took power on June 30, 2010. Legacy Corazon Aquino had a tremendous impact on her nation and on the worlds perception of women in power. She has been described as both the mother of Philippine democracy and as the housewife who led a revolution. Aquino has been honored, both during and after her lifetime, with major international awards including the United Nations Silver Medal, the Eleanor Roosevelt  Human Rights Award, and the Womens International Center International Leadership Living Legacy Award. Sources â€Å"Corazon C. Aquino.†Ã‚  Presidential Museum and Library.Editors of the Encyclopà ¦dia Britannica. Corazon Aquino.  Encyclopà ¦dia Britannica.  Maria Corazon Cojuangco Aquino.  National Historical Commission of the Philippines.

Economic Growth Essay Example Pdf - Free Essay Example

Sample details Pages: 4 Words: 1105 Downloads: 8 Date added: 2017/06/26 Category Economics Essay Type Review Did you like this example? Introduction Reich (2010, p. 1) argues that economic growth leads to increased prosperity in the developed, emerging and developing world. The argument is focused on the negative effects of slow economic growth for the world and the environment. This article provides a unique perspective regarding the impact of growth on environment and approves of economic growth as an indicator of improving environmental and economic conditions of people throughout the globe. This essay provides a critique of the argument made by the writer in support of economic growth. Critical Review of the Article The importance of economic growth should be considered in context of the impact of growth on environment. It is observed that economic growth tends to negatively impact the environment during its initial phase but growth leads to positive outcomes over the long-term. The focus of governments is to first improve the economic well being of their citizens and as the economic conditions improve the regulatory authorities direct their attention towards improvement of the environmental conditions. This article correctly suggests that the negative impact of growth on the environment is the result of inadequate and poor implementation of international law regarding the protection of environment (Troy 2011, pp. 1-6). The economic growth resulted in widespread damage to the environment in the developed world including the United States, Japan and the Western Europe during its initial phase; however, the introduction of strict environment regulation in these regions has improved the e nvironmental impact of growth. The spread of education across the developed world has also raised awareness regarding the need for environmental protection and businesses have responded to consumer awareness by becoming increasingly concerned about their footprint on the environment. The consumers in developed world are not willing to purchase goods and services from businesses that fail to demonstrate corporate responsibility towards the environment. This does not imply that the negative impact of growth on the environment has reversed but there is substantial effort from the business community to develop processes and technologies that can result in a reduction in the carbon emissions produced by the business in order to support sustainable growth. Therefore, the article rightly suggests that government improve environmental laws after the population has reached a certain minimum standard of living based on economic terms (Yueh 2003, pp. 3-8). The unprecedented economic growth over the past three decades has resulted in severe consequences for environment due to the carbon footprint of business on the surroundings. The growth of the airline industry has offered several benefits but at the expense of the environment due to the carbon emissions in the air. The airline industry is trying to reduce its carbon footprint but growth does imply increase in the demand for travel and increase in the overall emissions. This implies that, even when businesses aim to be socially responsible, growth continues to have a negative impact on the environment. Therefore, the proposition of the writer regarding the strengthening of the international law would require airlines to reimburse the damages to the environment and this process can be costly. It is also argued that economic growth automatically slows down in response to strict international law for the preservation of the environment (Kniivila 2007, pp. 23-26). The regulatory authorities have been relu ctant to adopt strict environmental legislation as this will lead to a slowdown in economic growth. The efforts to protect the environment are reduced by a slowdown in economic growth if examined in the context of the recent global financial crisis of 2008. This does not imply that the impact of business on the environment was not reduced due to a decline in economic growth over the period. This leads to the suggestion that a decline in the economic growth leads to a reduction in the damage on the environment but at the same time creates pressures that can reduce the efforts by the business community to protect the environment against their activities. It is argued that economic growth should be maintained at sustainable levels and unmonitored economic growth does not lead to benefits to the society. Therefore, the focus of the economies and business frameworks should be diverted to the adoption of growth strategies that create a sustainable environment (IMF 2011, pp. 18-26). The critical review of the assertions made by the article and the economic literature on growth and sustainable environment lead to the suggestion that economic growth and environment tend to be competing objectives; however, the use of sustainable technologies is a step forward in the direction of reducing the impact of growth on the environment. The governments need to adopt a model of growth that offers sustainability to the environment and as suggested by the article the developed world has the resources and the capability to facilitate the protection of environment by promoting strict international laws and standards regarding the environment (ODI 2008, pp. 12-18). A slowdown in economic growth is linked to the development of competing element between economic growth and the environment due to the reduced willingness of the middle class to contribute towards the protection of the environment through the payment of taxes. This argument mentioned in the article is con flicting as it is the wealthy capitalist and corporations that are causing damage to the environment and it is the purpose of the regulatory authorities to ensure that the burden of the taxation to support environmental rehabilitation to fall on the capitalists (United Nations 2011, pp. 33-37). Don’t waste time! Our writers will create an original "Economic Growth Essay Example Pdf" essay for you Create order Conclusion The critical review of the article and the literature regarding growth and environment leads to the suggestion that these are competing objectives and that it is the responsibility of the regulatory authorities to strengthen international law for the preservation of environment. The article argues that growth leads to the enabling of the government and the society to pay for the environmental needs of the country; however, this assertion fails to recognise the competing goals of growth and environment. The objective is to ensure the growth is responsible and regulatory authorities in the developed world should rely on a strong mechanism for ensuring that growth is sustainable. Bibliography IMF. (2011) World Economic Outlook: April 2011. Washington DC: International Monetary Fund. Kniivila, M., (2007). Industrial development and economic growth: Implications for poverty reduction and income inequality. New York: United Nations. ODI., (2008). Pro-poor growth and development. London: Overseas Development Institute. Reich, R., (2010). Why growth is good? Huffingtonpost.com., [internet] 17 Aug. Available from: https://www.huffingtonpost.com/robert-reich/why-growth-is-good_b_685311.html [cited 23/03/2012] Troy, M., (2011). Working Paper: New indicators for tracking growth in real time. Washington DC: International Monetary Fund. United Nations., (2011). World Economic Situation and Prospects. New York: United Nations. Yueh, L., (2003). Chinas economic growth with WTO accession: Is it sustainable? London: Royal Institute of National Affairs.