Quantization effects in digital filters

Quantization effects in digital filters ABSTRACT: Quantization effects in digital filters can be divided into four main categories: quantization of system coefficients, errors due to A-D conversion, errors due to roundoffs in the arithmetic, and a constraint on signal level due to the requirement that overflow must be prevented in the comparison. The effects of quantization on implementations of two basic algorithms of digital filtering-the first-or second-order linear recursive difference equation, and the fast Fourier transform (FFT) are studied in some detail. For these algorithms, the differing quantization effects of fixed point, floating point, and block floating point arithmetic are examined and compared. The ideas developed in the study of simple recursive filters and the FFT are applied to analyze the effects of coefficient quantization, roundoff noise, and the overflow constraint in two more complicated types of digital filters frequency sampling and FFT filters. Realizations of the same filter design, by means of the frequency sampling and FFT methods, are compared on the basis of differing quantization effects. All the noise analyses in the report are based on simple statistical models for roundoff and A-D conversion errors. Experimental noise measurements testing the predictions of these models are reported, and the empirical results are generally in good agreement with the statistical predictions INTRODUCTION: Digital filters are widely used in modern signal-transmission systems. The first-order filters are used for extracting lower-frequency or upper-frequency signals. Quantization errors due to the finite number of binary digits in the representation of numbers are typical of digital filters. Quantization is a representation of data samples with a certain number of bits per sample after rounding to a suitable level of precision. Quantization errors in a Digital Signal Processing (DSP) system can be introduced from three sources; one source is input quantization, a second is coefficient quantization and the third is the finite precision in the arithmetic operations. The quantization error in the arithmetic operations can be controlled by carefully selecting the size of buffer registers according to the input word length. Quantization errors from input and filter samples are considered in this article. The effects of quantization errors and the tradeoffs required between precision and hardware resources are discussed in relation to the implementation of the DSP in Field Programmable Gate Array (FPGA). This article is divided into three main sections; quantization effects for upconversion, quantization noise due to rounding off arithmetic and quantization effects for digital beamforming (DBF). Fixed length samples cause reduction in the filter dynamic range and gain resolution. Quantization In digital signal processing, quantization is the process of approximating (mapping) a continuous range of values (or a very large set of possible discrete values) by a relatively small (finite) set of (values which can still take on continuous range) discrete symbols or integer values. For example, rounding a real number in the interval [0,100] to an integer 0,1,2,100. In other words, quantization can be described as a mapping that represents a finite continuous interval I = [a,b] of the range of a continuous valued signal, with a single number c, which is also on that interval. For example, rounding to the nearest integer (rounding  ½ up) replaces the interval [c .5,c + .5) with the number c, for integer c. After that quantization we produce a finite set of values which can be encoded by say binary techniques. A. QUANTIZATION EFFECTS ON UPCONVERSION: In multirate systems, upconvcersion can be achieved with oversampling and filtering techniques. For the proposed digital TIGER system, input Gaussian pulses are upsampled to produce higher order Nyquist zones. A high pass FIR filter is employed to acquire a spectral zone at the expanded band edge. In this case, higher efficiency is possible by exploiting filter symmetry. For a higher throughput rate, polyphase implementation of the FIR filters can be employed. Since signal amplification is performed in the analog domain, a high speed 14 bit DAC is used for digital to analog conversion. Finite precision causes similar effects in the input data samples and filter coefficients. Fixed word length effects on filter coefficients, filter length and dynamic range are described in the following sections. 1. Sensitivity of Filter Coefficients to Quantization Finite precision plays a significant role in the dynamic range of filter gain and DC offset. A large number of quantization levels will decrease the quantization error; on the other hand it requires larger silicon space to implement the design. The quantization affects the input Gaussian pulse and the filter coefficients. The pole and zero maps show perturbations in Figure 1 when samples are restricted to finite word length. The filter coefficients in the lower parts are constrained to 14 bit quantized samples and the length of the filter is 100 taps. This constraint arises from the fast DAC of 14 bit width used for converting a digital signal into the analog domain. Since the dynamic range of the quantizer is less than that of the filter coefficients, the quantized coefficients are disturbed from the unit circle. The gain of the quantized filter response is displayed in Figure 1 which is distinctly less than that for the infinite precision filter. For these simulations infinite prec ision representation is regarded as floating point, which provides significantly better precision than the quantization levels discussed here. The zeros around Z = -1 are responsible for passband attenuation and are less displaced. As the dynamic range of the quantizer is increased to match the filter coefficients, the signal to quantization noise ratio (SNR) improves, but at the cost of increased hardware resources. Similar results can be obtained for the input Gaussian pulse when quantized to specified fourteen bit word lengths. Finite precision is hardware efficient since the system data width is less than the infinite precision (or floating point) case. Quantization reduces a few out of 100 coefficients to zero, which will further ameliorate the memory cell and arithmetic processing requirement. Quantization also reduces the filter gain compared to infinite precision samples; however this reduction is acceptable as long as it remains within an attenuation limit. The fourteen bit quantizer provides more than 80dB attenuation which is better than the standard of 60dB used by many communication systems. 2. Quantization Effects on Filter Order For direct conversion transmission, a cascaded design performs better than a single stage. This is because quantization errors are reduced with a lower filter order. Secondly a lower order design requires less logic resources. Quantization errors vary with the length of a filter and we now study the effects of the filter order on the quantization error. A simulated result is shown in Figure 2, where quantization error is plotted against variable filter order. The quantization is performed by rounding the infinite precision samples to the closest fixed point value. The quantization error increases with increased filter order, since the highest power index in the filter polynomial is the most affected by the rounding. When the quantizer is increased with one more bit in the precision, the error is reduced by approximately 6dB as would be expected. The lower order filter provides better dynamic range than the higher order for eight and nine bit quantizers. This fact is also evident in Figure 2. At lower filter order of fifty, accumulative quantization error is around -43dB and at higher order of 200, it is -31dB. The 12dB difference is equivalent to two additional bits in quantization. Non-linear effects of the quantization can be reduced using a smaller filter order in the modulator. Since the cascaded design comprises a filter of lower order, compared with the single model, it introduces less quantization error than the single stage. 3. Quantization and Word length The dynamic range of the scaled filter depends on the number of bits assigned to the quantizer. For maximum signal power, the quantizer range should be equal to the signal magnitude. An FIR filter with filter variance 2 f s and quantization noise variance 2 n s has a signal to noise ratio of This expression can be used to estimate the appropriate word length for the FPGA implementation. A comparison of SNR versus word precision using the above expression has been calculated and is shown in Figure 3. From this graph it is evident that for each bit added to the word length, there is approximately a six decibel improvement in the SNR. For a higher precision level, a system can still be implemented, but at the cost of increased FPGA logic resources. B. QUANTIZATION NOISE DUE TO ROUNDING OF ARITHMETIC: In the poly phase filter, like in any other filter, quantization has to be performed on the result of any arithmetic operation. This is because any such operation requires more bits to represent the result than is required for each of the operands. If the Word length were always to be adjusted to store the data in full precision, this would be impractical, as there would soon be too many bits required to be stored in the available memory. Therefore, the word length of the internal data, has to be chosen, and the result of any arithmetic operation has to be constrained back to using the quantization scheme chosen from the ones shown in the previous section, as appropriate for the given application. The quantization operation may cause a disturbance to the result of the arithmetic operation. For normal filtering operations, such a quantization disturbance can usually be successfully considered as white noise and modeled as an additive noise source at the point of the arithmetic operation with the quantization step equal to the LSB of the internal data, . This certainly is not the case for zero-valued or constant input signals. However, modeling the quantization has-in most cases-the purpose of determining the maximum noise disturbance in the system. Hence, even if the additive quantization noise model gives overestimated values of the noise for very specific signals, this fact does not decrease the usefulness of the approach. After the shape of the quantization noise power spectral density (NPSD) is found, it can be used to identify regions that might cause overloading or loss of precision due to arithmetic noise shaping; also the required input signal scaling and the required internal arithmetic word length can be estimated for a given noise performance. The standard methods of estimating the maximum signal level at a given node are L1-norm (modulus of the impulse response-worst-case scenario), L2-norm (statistical mean-square), and L -norm (peak in frequency domain giving the effect of the input spectral shaping). These norms can be easily estimated for the given node from the shape of the NPSD. The quantization noise injected at each adder and multiplier, originally spectrally flat, is shaped by the noise shaping function (NSF), , calculated from the output of the filter to the input of each of the noise sources, i.e., to the output of each of the arithmetic operators. These functions were calculated for all of the all pass filter structures are shown in Fig. 2. The shapes of the nontrivial of the NFS are shown in Fig. 3. The accumulated quantization NPSD transferred to the output, , is obtained by shaping the uniform NPSD from each of the quantization noise sources by the square of the magnitude of the NFS corresponding to the given noise injection point and can be described by The results show that all structures perform in a way very distinct from the other ones. Structure (a)has the best performance at dc, half-Nyquist , and Nyquist , where the NPSD falls toward minus infinity. Its two maxima are symmetric about and independent of the coefficient value. The peaks are distant from for small coefficient values and approaches it as the coefficient increases. Structure (b) has uniform noise spectral distribution as all the arithmetic operations are either at the filter input-then noise is shaped by the allpass characteristic of the whole filter-or at its output. Structure (d) also has a minimum at v=0.25 . Its average noise power level decreases as the value of the all pass coefficient increases. Structure (c), the best from the point of view of the required guard bits, has its maximum at v=0.25 going toward infinity for coefficient values approaching one. This effect is a result of the denominator of the Nth-order all pass filter causing the poles of the filter to move toward the unit circle at normalized frequencies of v=2pik/N,k=0.N-1 for the coefficient approaching one. If there is no counter effect of the numerator, like for the case of P1(Z) for structure (c) and for structure (a), then the function goes to infinity. Even though structure (c) goes to infinity at v=0.25 for alfa=1, it has the lowest average noise power from all the structures. This structure has a big advantage in terms of the number of required guard bits and ease of cascading a number of them into higher order all pass filters. If the filter coefficients appro ach one, then the increase in quantization noise power could be countered with few additional bits. Using other structures would only replace the problem of dealing with an increase in the quantization noise with the problem of having to increase the number of guard bits required to deal with an increase of the peak gains. The NPSD of the quantization noise at the output of the poly phase structure can be calculated as the sum of the NPSD at the output of all all pass filters in the filter scaled by the 1/N factor N, being the number of paths. If the filter is cascaded with another filter, the NPSD of the first one will also be shaped by the square of the magnitude of the second filter. sources. The intention was to check the correctness of the theoretical equations by applying the white noise sources instead of quantization and by performing the quantization after addition and multiplication (rounding and truncating) to verify the shaping of the quantization noise and its level both for white input noise sources and real-life signals. The shape of the output quantization noise accumulated from all arithmetic elements for a wide-band input signal assuming, for simplicity, no correlation between the noise sources, is shown for all considered all pass structures in Fig. 4. The solid curve indicates the theoretical NSF that is very well matching the median of the quantization noise (curves lying on top of each other). The quantization noise power increase calculated for the given coefficient was 8.5 dB for structure (a), 6 dB for structure (c), 7.3 dB for structure (d), and 9 dB for structure (b). It is clear that the quantization noise differs from the assumed white n oise characteristic. However, the approximation still holds with an accuracy of around 5-10% depending on the structure of the input signal. An example of more accurate modeling of the quantization noise caused by arithmetic operations can be found in (a). The arithmetic quantization noise certainly decreases the accuracy of the filter output. The value of the arithmetic word length has to be chosen such that the quantization noise power is smaller than the stop band attenuation of the filter and the stop band ripples. In certain cases, the design requirements have to be made more stringent to allow some unavoidable distortion due to the arithmetic word length effects. For the case of decimation filters for the based A/D converters, the quantization noise adds to the one originating from the modulator. In such a case, each stage of the decimator has to be designed so that it filters out this noise as well. The verification of the peak gain analysis was performed by applying single-tone signals at the characteristic frequencies- where functions from Fig. 2 have their extremes-and by using wideband signals to make sure that the estimates are accurate. The experimental results confirmed the theoretical calculations. The results of the simulation for the white noise input signal of unity power are given in Fig. 8. The simulation was performed for a white noise input signal of unity power in order to have a uniform gain analysis across the whole range of frequencies. The theoretical shape of the gain is shown by a solid line that is very closely matching the median value of the signal at the test points. C. QUANTIZATION EFFECTS ON DIGITAL BEAMFORMING: The quantization of infinite precision samples into fixed word length degrades the phased signals. As was discussed in the previous section, the use of more levels for higher precision decreases the quantization error at the expense of larger hardware resources. For a reduced precision level, quantization error is spread to the main beams and to the grating lobes as well. In this section we present effects of quantization on beam resolution and associated grating lobes. 1. Quantization effects on Beam Pattern Phased signals have similar quantized effects on main beam resolution as the filter samples. However non-linearity arises in the sidelobes since the quantizer is not of adequate resolution to represent small changes that affect the sidelobe levels. In order to investigate the quantization effects, an example is presented with fixed word length delay samples. The coefficients of the time vector are quantized into four and ten bits; the increased number of bits will reduce the quantization effect. For an actual design the fixed bit width will depend on available hardware resources. The quantized beam in Figure 1 shows that a four bit fixed number does not adequately represent the beam pattern and thus introduces quantization noise. The ten bit numbers will also introduce quantization error, but at a lower level as shown in Figure 1(b). As can be seen from this simple example, the four bit quantization compromises the sidelobes at the 20dB level, while the ten bit quantization provides a reasonably faithful reconstruction of the theoretical sidelobes at this level. Therefore we conclude that for the 14 bit DAC of the proposed system, the sidelobe level will be essentially unaffected by the quantization at the -20dB level. 2. Sensitivity of Sidelobe Levels to Quantization Quantization causes gain errors in sidelobe levels. Higher resolution in quantization introduces lower quantization error. The graph in Figure 1 shows that the four bit samples result in a quantization error which reduces the first sidelobe gain while producing a gain error in the second sidelobe. The quantization error changes the dynamic range of the grating lobes and degrades the adjacent beam resolution for multiple beam systems. A simulated graph is displayed in Figure 2 to demonstrate non-linear behavior of the quantizer in the sidelobe resolution. For a lower order quantizer, the quantization step is not perfectly matched with the sidelobe levels. For the first sidelobe, the quantized resolution is less than the infinite precision case, although it approaches the floating point value with increasing quantized levels. Figure 2(a) shows that for a three bit quantizer, the first sidelobe resolution is at -18dB, while at ten bits it approaches the infinite precision value of -13.5dB. Unlike the first sidelobe, the second sidelobe exhibits higher resolution error at a lower precision level, since the quantizer can not represent the dynamic range adequately. Again, quantization error reduces with an increase in the number of bits. CONCLUSION: In this paper, effect of fixed word lengths on signal upconversion, quantization noise due to round of arithmetic and quantization effects on digital beam forming have been discussed. For the digital up conversion process, the quantization error can be described using pole/zero filter and frequency response plots. Filter resolution and stop band attenuation are degraded when quantization is introduced. For an increase in filter order, the quantization error increases as the highest order in filter polynomial is effected the most. To overcome this limitation, the number of precision levels of a quantizer can be increased, however this will require increased logic resources for FPGA implementation. Quantization effects in phasing are more complex than in the filter quantization since finite precision degrades the side lobe resolution. For lower precision levels, the quantization error exhibits non-linear behavior in the second side lobe. The quantization error is higher for lower precision levels. In order to overcome these non-linear effects, a precision level of more than eight bits is required. Performance of the proposed digital system will be effectively unaffected by the fixed word length limitations since a system data bus of at least 14 bits is suggested. REFERENCES: A. B. Sripad and D. L. Snyder, A Necessary and Sufficient Condition for Quantization Errors to be Uniform and White P. P. Vaidyanathan, On coefficient-quantization and computational roundoff effects in lossless multirate filter banks. 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Financial statement analysis

Most notable products from Apple include the Phone, Pod, Pad, ND Imax personal computers. Apple is also involved in computer and web based application developments, which support their essential products such as Tunes, Safari, and Cloud. Through its innovative, streamlined, user-friendly designs, Apple has achieved a meteoric rise to industry domination since 2002. This growth, however, has recently come to a relative standstill following its peak in 2012 and has investors speculating if this marks the end of Apple's bullish behavior, or just a minor setback because of the company's change of management.Apple Inc. Saw a 9% total increase in revenue this sat year from SSL 56,508 million in 2012 to $170,910 million in 201 3(Apple Inc. , 2013). This growth is in part due to the release of the Phone â€Å"As† and â€Å"c† models, the introduction of the Pad â€Å"Mini† retina display as well as the company's normal day to day sales. This 9% growth may be some cause f or concern though, as prior years increase in revenue saw a 45% average growth from year to year (44% in 2012 and 65% in 2011).Apple's annual release of new products typically yields a 30% overall growth in revenue, which potentially indicates there is stagnation of growth overall in the current racket. This stagnation may be attributed either to heavy saturation of products within the current market, leaving little opportunity for expansive growth, or that consumers are unimpressed with the current product line. Apples peer firm Microsoft (MOST) has seen a modest 5% increase in total revenue from $73,723 million to $77,849 million from 2012 to 213 respectively (Microsoft Corporation, 2013).This increase is consistent with prior 3 years which have each yielded a 4-5% increase in revenue. Compared to Apple, Microsoft has a relatively stable growth and be attributed to the elatedly consistent flow of products from year to year. The â€Å"earnings per share† ratio (PEPS) reflect s the decline in overall profitability as well, with a 10% decline in Apple's PEPS from $44. 43 to $40. 29 in 2012 and 2013 respectively (Apple Inc. , 2013).This can be attributed to two factors: a decrease in net profit margin and a paralleled decrease in gross profit margin. There was an 11% decrease in net profits because of an increase in overall inventory. Increasing inventory will also increase a company s operating expenses as they accommodate new production. Companies typically raise their inventory evils as they release new products in anticipation for projected consumer demand for these products.As is the case with Apple, this will have a negative impact on a company's net profit when there is less than anticipated demand for their new product. The depreciation of older inventories can also be responsible for an overall decrease in profitability. Microsoft has conversely seen an increase in PEPS from $2. 03 per shard to $ 2. 63 per share as a result of an increasing profit margin ratio from 23% to 28% in 201 3(Microsoft Corporation, 2013). Overall this increase can be attributed to an increase in ales over the period as new technologies are release.Overall PEPS increase as a result of Microsoft's lower CEQ duty/investment into their company where as Apple has put much more equity into the release of their new releases in 2013. The increase in cost of sales is reflected in the decline of the gross profit margin ratio which is an additional indicator for a comprehensive decrease in profitability. Apple's total gross profit fell from $44. 00 to $38. 00, in 2012 to 201 3 respectively, which is below the $42. 00 industry average as their cost of sales experienced a 22% increase from 587,846 million to 1 06,606 million dollars.The decrease in gross profit is explained by a number of factors according to Apple: â€Å"introduction of new versions of existing products with higher cost structures and flat or reduced pricing; a shift in sales mix to products w ith lower margins; introduction of pad mini with a gross margin significantly below the Company's average product margins; higher expenses associated with changes to certain Of the Company's service policies and other warranty costs; price reductions on certain products, including pad 2 and phoned; and an unfavorable impact room foreign exchange fluctuations. (Apple Inc. , 2013). An intangible effect that could positively impact Apple's gross profit in the long run is an increase in the number of product consumers as well as a potential increase in consumer loyalty. When compared to Microsoft smaller 2% decrease of gross profit margin from 76% to 74% in 2013. Microsoft decision to decrease sales price of windows 8 and decrease margins for the Oxbow One is responsible for the decrease in gross profit margin much like Apple. Tooth Apple inch's and Microsoft's overall decrease of gross profit margin can be said o increase consumer satisfaction because more advanced technologies are sol d at a lower margin thus giving a customer more value to their purchase. By lowering the price on certain high value items, such as the phone 4 and the pad 2 mentioned in Apple's statement, Apple has made these products more accessible to potential customers with lower incomes or frugal spending habits.Furthermore, if there is an increase in Apple product consumers as a result of the change in price, there will likely be an increase in customer loyalty and satisfaction with these products. The PEPS decline and he increase in cost of sales can further be explored through an analysis of the company's balance sheet. There was a significant increase in Apple's inventory from $791 million to SSL . 76 billion from 2012 to 2013 respectively. This 123% increase in inventory demonstrates a wholesale investment in anticipated consumer demand and loyalty.Apple typically announces product releases long before the actual release date in order to build market â€Å"hype† and also sets rele ase dates to coincide with times of historically greater spending in the market, such as the Christmas holiday season. This â€Å"hyping† recess, however, can go both ways in terms of sales by either positively building up consumer anticipation or by allowing time for consumers to second guess the product before it is released. There is also an inherent risk in inventory expansion based on projected sales; consumers may just not be in the market for new products.An indication that this may be the case is found by looking at the inventory turnover ratio which experienced a decrease from 11 1 times per quarter to significantly lower 83 times per quarter. Microsoft, like Apple, has seen a significant decrease of inventory turnover of 14% from 15. 2 times to 13. 13 times per quarter. This decrease in overall turnover much like, Apple is due to customer anticipation of newer release. However, these changes were significantly different for Microsoft as their offerings have less vol atility, especially in sales of operating systems, and usually see less adoption by consumers in starting stages.Apple acid test ratio, involving current assets over current liabilities, stands at 1. 64 in 2013 which is an increase of approximately 8 points from 2012. This is much higher than the industrial average of 1. 0, indicating Apple is a relatively safe investment and has enough in current assets to cover its debt Obligations. This sets Apple as one of the safer blue chip stocks that can provide consistent wealth for their share holders. Microsoft has experienced a increase acid test ratio from 2012 to 201 3 from 2. 57 to 2. 66 respectively this is significantly higher than Apple Inc. ND can be said to be a safer investment. Microsoft overall keeps their balance of ratios to asset very consistent and insures that they can meet their bottom line as well as provide security for their investors, more so than Apple In the third quarter of 201 3 Apple accrued total of 1 6,960 mil lion dollars in debt. The long term debt was used to offset the repurchase of stock of $22. 9 billion as well as dividend equivalent rights of $10. 6 million dollars. This accrued debt helps Apple Inc avoid taxes of upwards of $9. 2 billion dollars (Burrows, 2013) meanwhile Apple will only incur a $308 million interest a year.Had they used their offshore cash Apple would have had to pay a 35% tax and will save another $1 00 million as these interest payments are tax deductible (Burrows, 2013). Apple's move to take on this debt to finance $55 billion dollars in stock repurchase is an effort to increase overall earnings per share as well as increase total value to the consumer meanwhile adding to overall company value. The statement of cash flows revealed that In 201 2 Apple board of directors authorized a $10 billion stock which was later raised to a total of $60 billion in 2013.Apple repurchased/retired a total of $22,860 million dollars worth of stock in 201 3 as opposed to issuanc e of 665 million in 2012. Apple stated that this repurchase was a move to increase end value to shareholders. Shareholders that are offered buy back will in turn gain profit and will decrease the overall outstanding shares. By decreasing the total shares the company's earnings per share ratio will consequently increase, and given the current plan should increase PEPS by around $4 over the following fiscal year (Hughes, 2013) and adding to the company's overall worth.The overall decrease in outstanding shares also decreases the total amount of dividends paid to investors thus cutting expense and adding to company revenues. Apple began issuing dividends toward the end of 2012 and has since seen a significant raise in dividends issued to its stockholder. Apple has since issued $10,564 million of vividness to shareholders representing a 324% increase dividends paid for 2013 from the $2,488 of dividends paid in 2012. Quarterly dividends were raised by 15% from SO. 65 per share to $3. 05 per share in 2013.The price to earnings ratio also increased from 9% to 13 % as well as the increase in payout ratio from . 29 to. 06 reflects this change value to stockholders as a consequence of stock retirement and increased dividend payout.. A very lucrative opportunity presents itself for current stockholders as the prospective raise of PEPS due to buy back will ultimately add incredible attention value due to increased dividend yield. Microsoft's plan to buy back a total $40 billion plan began in 2008, they began this buy back to increase overall PEPS and PIE as well as increase the companies payout ratio.Buyback has thus far increase PEPS however subsequent drops in PIE ratio from 12. 36 to 10. 24 and stagnant dividend yield make investment into Microsoft a riskier endeavor than Apple as the decrease in P/E does not bode well for buyer confidence. Though the higher dividend yield is still attractive to investors and is higher than that of Apple Inc. Apples market share in sma rt phones should e of particular concern to interested investors as of recent events. Market share, especially for key products, gauges the company's current position amongst its competition and overall pull within the market.It can effectively gauge if the company is meeting the needs of its consumers and prospective growth. Within the past year the Phone only gained around a 13% overall growth in sales, however this is miniscule compared to overall Smartened market growth of 44% in 2013. Apples market share shows further struggles as overall mobile market share decrease by a full 4% from 19% market share n 2012 to a 15% in 2013. (Gardner, 2013) However, other companies like Microsoft and Samsung saw significant increases in SO use and hardware use with Samsung clearing 31% total market share from its 30% in 2012.This may be worrisome as Apple may not providing what customers want and can account for a decrease in overall prospective growth. However, this may be remedied by Apples breakthrough to markets china and Japan late in 2013. The departure of Steve Jobs and the arrival of Tim cook in august of 2011 has been a cause for a weaker overall product line. The recent introduction of ewe products have spawned a lackluster response by consumers especially in the release of the Phone 5 variants (as and c) as well as the improved retina display pad mini.These products neglected to offer anything new or revolutionary to set Apple apart, they were just mere improvements to tested product. The lack of ingenuity has potential to cause a decline Apples growth in sales and may cede market share competitors who have more to offer to the consumer. Microsoft on the other hand has remained consistent in its product offerings throughout the years. This is expected of Microsoft as hey re key product involves enterprise systems that provide basic needs for businesses. Financial Statement Analysis (2004-2008) Course Title: Managing Financial Resources Course: MSc. Finance Date: 11th January 2010. TABLE OF CONTENT Executive Summary This report shows the analysis of the financial performance of Centrica Plc, one of the top energy business providers in UK. Based on my analysis from this report I can conclusively state that: Centrica Plc has an upper hand in the energy and gas market than it s competitor; Scottish Power. Centrica Plc’s turnover was very high in 2008 which shows that it made better sales than its competitor. Although Centrica’s sales turnover was high in 2008 but the profit margin dropped drastically. In the overall financial performance Centrica Plc made a loss of ? 645million in 2008 compared to the previous year 2007 when the company had a retained profit of ? 1088million. This was considered to be an impact of the global financial crises that hit the UK and US economy causing increase in oil prices and a drastic fall again as the level of global oil demand rises and at the same time causing a tight supply position. Centrica Plc’s Total shareholders return has an upper hand when compared with other 99 members of the FTSE 100 in 2008. INTRODUCTION evaluate the impact of financial accounting concepts on corporate reporting of Centrica Plc. evaluate the limitations of ratio analysis discuss the role of management accounting in the evaluation of Centrica’s business performance. I have been motivated to choose Centrica Plc because of the type of product they deal in, which is energy. It is a product that is essential for all, not just households. And it will be good to know if this company is actually doing well in terms of profitability and customer’s satisfaction. LITERATURE REVIEW *PROFITABILITY RATIO ANALYSIS *OF CENTRICA PLC AND SCOTTISH POWER (Reference: FAME (Financial Analysis Made Easy) FINANCIAL RATIO ANALYSIS OF CENTRICA PLC AND SCOTTISH POWER (Reference: FAME (Financial Analysis Made Easy) GRAHPICAL PRESENTATIONS OF RATIOS {draw:frame} {draw:frame} {draw:frame} {draw:frame} {draw:frame} {draw:frame} ANALYSIS AND DISCUSSION FINANCIAL PERFORMANCE ANALYSIS BASED ON THE GRAHPS According to Barry Elliot and Jamie Elliot, ratios show different items in the financial statements. A ratio is not useful in isolation and its usefulness depends on what aspects of the firm’s business affairs are being investigated. Ratios, according to them are a powerful tool in interpreting and understanding a company’s account. Therefore, the graphs above show the performance of the Centrica plc and its competitor; Scottish Power over a period of 5years and will be analyzed below. DEBTORS TURNOVER: This ratio shows how long it takes debtors of a company to pay back credit purchases. In as mush as credit facilities enhances sale turnover in a competitive market, it is very important to take adequate control of it because it is an essential part of working capital management. (Buz/ed, 2009) It is calculated as: Debtors' Turnover*= Average Debtors * ? 365days Centrica Plc has been able to achieve a positive stock turnover ratio over the years with a 55% less time between 2004 and 2008 compared to its competitor that has a longer time of 18% to sell off its products. This shows that Centrica Plc has more sales turnover than Scottish Power. The trend on the graph show that Centrica Plc has been more liquid than Scottish power because the higher the ratio, the more liquid the business is said to be. It is obvious from the graph that Centrica Plc is more liquid than Scottish Power. That is Centrica Plc has a better capacity to pay it short term debt than Scottish Power, with reference to their current ratio of 1. 12 to 0. 59 respectively in 2008. DISCUSSION IMPACT OF FINANCIAL ACCOUNTING CONCEPT UPON CORPORATE REPORTING OF CENTRICA PLC Going Concern: The Board of directors of Centrica Plc continues to adopt the going concern basis in preparing the financial statement because they have a reasonable expectation that the company has adequate resources needed to continue operational existence for the foreseeable future Business Entity: Centrica Plc operates as a separate business entity from its investors. Cost: Centrica Plc reports the market value of its assets. Sincerity: The financial Statement of Centrica Plc is prepared and audited by auditors from the Pricewaterhouse coopers Monetary Unit: The financial statement of Centrica Plc shows a single monetary unit dominated in GBP (? ) because the parent company is in the UK. Dual concept: Centrica presents it total assets as liabilities (debt finance) plus equity (shares). Accrual: The revenue or income of Centrica Plc are recorded when they are actually earned. (Asmii V. 2009) ROLES OF MANAGEMENT ACCOUNTING ON THE BUSI*NESS PERFORMANCE OF CENTRICA PLC According to Institute of Management Accountants, Management accounting can be defined as â€Å"the internal business building role of accounting and finance professionals who work inside the organizations† They are concerned about the growth of the business in terms of evaluating the business prospects, budgeting and forecasting, implementing and monitoring internal controls for the purpose of achieving economic value. The Board of Directors of Centrica Plc believes that there must be high standards of corporate governance which are relevant to the overall integrity and performance of the business. The Company adopted a new set of Articles of Association which states the power of the Board of directors at the 2008 Annual General Meeting and stated below are few of the responsibilities of the Directors with respect to the managerial accounting of the company. the Group’s corporate governance and system of internal control development of strategy and major policies nterim dividend payments and recommendation of final dividends the appointment and removal of Directors and the Company Secretary the Group’s corporate responsibility arrangements including health, safety and environmental matters reviewing management performance approval of the annual operating plan, the financial statements and major acquisitions and disposals The Board gives thorough monitoring to the development of the co mpany’s strategies and also during the year 2008, the Board had a full review of the company’s overall strategy with the assistance of an independent external consultant. The Board also place value on their investors and promote communication program in order to hear their views of their shareholders as regards the key matters affecting the company. The Chief Executive and Group Finance Director held regular meetings with the Company’s major shareholders during the year and the Company’s Rights Issue which was the main topic of discussion was successfully completed during December 2008 after which an approval was given at the Company’s General Meeting held on 21 November 2008. The company’s Executive Committees also established a control infrastructure to ensure proper monitoring and management where major risks have been identified. *THE NON-FINANCIAL PERFORMANCE* OF CENTRICA PLC The fluctuation in demand and prices of oil worldwide as well as the global financial crises in 2008 made Centrica Plc face series of challenges and the Chairman of the company (Roger Carr) tagged the year â€Å"a difficult year†. But despite the difficulty, the company still performed well because it is a company that aims at delivering stability and growth for the benefit of their customers, employees and shareholders. Centrica Plc’s non-financial performance can be outlined in terms of the following: *BUSINESS PERFORMANCE OF CENTRICA* PLC LIMITATIONS OF RATIO ANALYSIS Ratios are useful methods of analyzing the performance and financial position of a business but they have their flaws which are seen as limitations and will be analyzed below. THE IMPACT OF THE CHANGE FROM UK GAAP TO IFRS ON THE CORPORATE REPORTING OF CENTRICA PLC that IFRS has improved the company’s 2004 operating profit and statutory Earnings Per Share (EPS) reduction in shareholder’s fund as a result of pensions deficit Adjustment the company’s policy to link dividend to earnings thereby increasing pay out ratios. Some assets and liabilities will be treated differently which will affect timing of profit. CONCLUSION With reference to the ratios analyzed above, Centrica Plc has an upper hand in the energy and gas market than it s competitor; Scottish Power. Centrica Plc’s turnover was very high in 2008 which shows that they made better sales than its competitor. Although Centrica’s sales turnover was high was high in 2008 but the profit margin dropped drastically. In the overall financial performance Centrica Plc made a loss of ? 645million in 2008 compared to the previous year 2007 when the company had a retained profit of ? 088million. This was considered to be an impact of the global financial crises that hit the UK and US economy causing increase in oil prices and a drastic fall again as the level of global oil demand rises and at the same time causing a tight supply position. Finally, we can say that from the record of 2007, the financial performance in 2008 was good despite the economic instability. Centrica Plc made strong progress against the strategic priorities set out at the end of year 2006. The global financial crises which remain very challenging in the UK till date could pose as a problem for many of the company’s customers. But Centrica Plc promises to continue to place their customers’ needs at the forefront of their agenda, alongside the determination to deliver increasing long-term value for our shareholders FUTURE OF CENTRICA PLC According to the Chief Executive’s Review, some priorities have been set for the future growth of Centrica which would help measure performance in year 2009. Some of which are: To build on the company’s growth platform: Increasing the value of their customer base by expanding the overlap between the energy and services business. Also establishing a centralized service platform and the acquisition and construction of gas and power assets which will enable the company to compete efficiently in the energy market. To reduce risk through integration: There will be more focus on UK in the coming year 2009, due to the high demand. Therefore more production has to be made by integrating/building closer relationship with the National Oil Companies. To transform British Gas: In order for Centrica Plc to succeed, British Gas Residential which seems to be the core backbone of Centrica’s business has to deliver high level of profitability. Therefore, there will have to be an integration of the British Gas Residential, British Gas Business and British Gas Services into a single customer-focused organization. Amidst all these future plans briefly mentioned above, I can now conclusively say that the future performance of Centrica Plc is not 100% certain of profitability as they are not exempted in the effect of the global financial crises which is still hitting the UK economy. Although demand for product might rise causing increase turnover but consumers might not be able to meet up with financial obligations of paying cash. So, Centrica must be prepared for more credit sales which might decrease its debtor turnover. Also, prices of product must be put into consideration despite the goal of maximizing profit not forgetting its competitors. And finally, the leadership of Centrica Plc will be playing major role in delivering stability and growth for the benefit of customers, employees and shareholders. REFERENCES Asmii Vernekar, 2009. Available at: http://www. buzzle. com/articles/basic-accounting –concepts-and –principles. html. Assessed on 15th December, 2009 Buz/ed, 2009. Available at: http://www. bized. co. uk/compfact/ratios/sdc5. htm Assessed on 13th December, 2009. Centrica Plc, 2005. International Financial Reporting Standards. Available at: http://www. centrica. co. uk/files/results/2004_ifrs_transcript. pdf. Assessed on 15th December, 2009 FAME (Financial Analysis Made Easy), 2009. Available at: http://www. fame. bvdep. com/version-20091130. Assessed on 11th December, 2009 Peter Atrill, and Eddie McLaney (2008), Accounting and Finance for Non-Specialists, 6th ed. Prentice Hall, financial times. David Alexander and Christopher Nobes. (2007), Financial Accounting, An International Introduction, 3rd ed. Prentice Hall, financial times. Financial statement analysis Most notable products from Apple include the Phone, Pod, Pad, ND Imax personal computers. Apple is also involved in computer and web based application developments, which support their essential products such as Tunes, Safari, and Cloud. Through its innovative, streamlined, user-friendly designs, Apple has achieved a meteoric rise to industry domination since 2002. This growth, however, has recently come to a relative standstill following its peak in 2012 and has investors speculating if this marks the end of Apple's bullish behavior, or just a minor setback because of the company's change of management.Apple Inc. Saw a 9% total increase in revenue this sat year from SSL 56,508 million in 2012 to $170,910 million in 201 3(Apple Inc. , 2013). This growth is in part due to the release of the Phone â€Å"As† and â€Å"c† models, the introduction of the Pad â€Å"Mini† retina display as well as the company's normal day to day sales. This 9% growth may be some cause f or concern though, as prior years increase in revenue saw a 45% average growth from year to year (44% in 2012 and 65% in 2011).Apple's annual release of new products typically yields a 30% overall growth in revenue, which potentially indicates there is stagnation of growth overall in the current racket. This stagnation may be attributed either to heavy saturation of products within the current market, leaving little opportunity for expansive growth, or that consumers are unimpressed with the current product line. Apples peer firm Microsoft (MOST) has seen a modest 5% increase in total revenue from $73,723 million to $77,849 million from 2012 to 213 respectively (Microsoft Corporation, 2013).This increase is consistent with prior 3 years which have each yielded a 4-5% increase in revenue. Compared to Apple, Microsoft has a relatively stable growth and be attributed to the elatedly consistent flow of products from year to year. The â€Å"earnings per share† ratio (PEPS) reflect s the decline in overall profitability as well, with a 10% decline in Apple's PEPS from $44. 43 to $40. 29 in 2012 and 2013 respectively (Apple Inc. , 2013).This can be attributed to two factors: a decrease in net profit margin and a paralleled decrease in gross profit margin. There was an 11% decrease in net profits because of an increase in overall inventory. Increasing inventory will also increase a company s operating expenses as they accommodate new production. Companies typically raise their inventory evils as they release new products in anticipation for projected consumer demand for these products.As is the case with Apple, this will have a negative impact on a company's net profit when there is less than anticipated demand for their new product. The depreciation of older inventories can also be responsible for an overall decrease in profitability. Microsoft has conversely seen an increase in PEPS from $2. 03 per shard to $ 2. 63 per share as a result of an increasing profit margin ratio from 23% to 28% in 201 3(Microsoft Corporation, 2013). Overall this increase can be attributed to an increase in ales over the period as new technologies are release.Overall PEPS increase as a result of Microsoft's lower CEQ duty/investment into their company where as Apple has put much more equity into the release of their new releases in 2013. The increase in cost of sales is reflected in the decline of the gross profit margin ratio which is an additional indicator for a comprehensive decrease in profitability. Apple's total gross profit fell from $44. 00 to $38. 00, in 2012 to 201 3 respectively, which is below the $42. 00 industry average as their cost of sales experienced a 22% increase from 587,846 million to 1 06,606 million dollars.The decrease in gross profit is explained by a number of factors according to Apple: â€Å"introduction of new versions of existing products with higher cost structures and flat or reduced pricing; a shift in sales mix to products w ith lower margins; introduction of pad mini with a gross margin significantly below the Company's average product margins; higher expenses associated with changes to certain Of the Company's service policies and other warranty costs; price reductions on certain products, including pad 2 and phoned; and an unfavorable impact room foreign exchange fluctuations. (Apple Inc. , 2013). An intangible effect that could positively impact Apple's gross profit in the long run is an increase in the number of product consumers as well as a potential increase in consumer loyalty. When compared to Microsoft smaller 2% decrease of gross profit margin from 76% to 74% in 2013. Microsoft decision to decrease sales price of windows 8 and decrease margins for the Oxbow One is responsible for the decrease in gross profit margin much like Apple. Tooth Apple inch's and Microsoft's overall decrease of gross profit margin can be said o increase consumer satisfaction because more advanced technologies are sol d at a lower margin thus giving a customer more value to their purchase. By lowering the price on certain high value items, such as the phone 4 and the pad 2 mentioned in Apple's statement, Apple has made these products more accessible to potential customers with lower incomes or frugal spending habits.Furthermore, if there is an increase in Apple product consumers as a result of the change in price, there will likely be an increase in customer loyalty and satisfaction with these products. The PEPS decline and he increase in cost of sales can further be explored through an analysis of the company's balance sheet. There was a significant increase in Apple's inventory from $791 million to SSL . 76 billion from 2012 to 2013 respectively. This 123% increase in inventory demonstrates a wholesale investment in anticipated consumer demand and loyalty.Apple typically announces product releases long before the actual release date in order to build market â€Å"hype† and also sets rele ase dates to coincide with times of historically greater spending in the market, such as the Christmas holiday season. This â€Å"hyping† recess, however, can go both ways in terms of sales by either positively building up consumer anticipation or by allowing time for consumers to second guess the product before it is released. There is also an inherent risk in inventory expansion based on projected sales; consumers may just not be in the market for new products.An indication that this may be the case is found by looking at the inventory turnover ratio which experienced a decrease from 11 1 times per quarter to significantly lower 83 times per quarter. Microsoft, like Apple, has seen a significant decrease of inventory turnover of 14% from 15. 2 times to 13. 13 times per quarter. This decrease in overall turnover much like, Apple is due to customer anticipation of newer release. However, these changes were significantly different for Microsoft as their offerings have less vol atility, especially in sales of operating systems, and usually see less adoption by consumers in starting stages.Apple acid test ratio, involving current assets over current liabilities, stands at 1. 64 in 2013 which is an increase of approximately 8 points from 2012. This is much higher than the industrial average of 1. 0, indicating Apple is a relatively safe investment and has enough in current assets to cover its debt Obligations. This sets Apple as one of the safer blue chip stocks that can provide consistent wealth for their share holders. Microsoft has experienced a increase acid test ratio from 2012 to 201 3 from 2. 57 to 2. 66 respectively this is significantly higher than Apple Inc. ND can be said to be a safer investment. Microsoft overall keeps their balance of ratios to asset very consistent and insures that they can meet their bottom line as well as provide security for their investors, more so than Apple In the third quarter of 201 3 Apple accrued total of 1 6,960 mil lion dollars in debt. The long term debt was used to offset the repurchase of stock of $22. 9 billion as well as dividend equivalent rights of $10. 6 million dollars. This accrued debt helps Apple Inc avoid taxes of upwards of $9. 2 billion dollars (Burrows, 2013) meanwhile Apple will only incur a $308 million interest a year.Had they used their offshore cash Apple would have had to pay a 35% tax and will save another $1 00 million as these interest payments are tax deductible (Burrows, 2013). Apple's move to take on this debt to finance $55 billion dollars in stock repurchase is an effort to increase overall earnings per share as well as increase total value to the consumer meanwhile adding to overall company value. The statement of cash flows revealed that In 201 2 Apple board of directors authorized a $10 billion stock which was later raised to a total of $60 billion in 2013.Apple repurchased/retired a total of $22,860 million dollars worth of stock in 201 3 as opposed to issuanc e of 665 million in 2012. Apple stated that this repurchase was a move to increase end value to shareholders. Shareholders that are offered buy back will in turn gain profit and will decrease the overall outstanding shares. By decreasing the total shares the company's earnings per share ratio will consequently increase, and given the current plan should increase PEPS by around $4 over the following fiscal year (Hughes, 2013) and adding to the company's overall worth.The overall decrease in outstanding shares also decreases the total amount of dividends paid to investors thus cutting expense and adding to company revenues. Apple began issuing dividends toward the end of 2012 and has since seen a significant raise in dividends issued to its stockholder. Apple has since issued $10,564 million of vividness to shareholders representing a 324% increase dividends paid for 2013 from the $2,488 of dividends paid in 2012. Quarterly dividends were raised by 15% from SO. 65 per share to $3. 05 per share in 2013.The price to earnings ratio also increased from 9% to 13 % as well as the increase in payout ratio from . 29 to. 06 reflects this change value to stockholders as a consequence of stock retirement and increased dividend payout.. A very lucrative opportunity presents itself for current stockholders as the prospective raise of PEPS due to buy back will ultimately add incredible attention value due to increased dividend yield. Microsoft's plan to buy back a total $40 billion plan began in 2008, they began this buy back to increase overall PEPS and PIE as well as increase the companies payout ratio.Buyback has thus far increase PEPS however subsequent drops in PIE ratio from 12. 36 to 10. 24 and stagnant dividend yield make investment into Microsoft a riskier endeavor than Apple as the decrease in P/E does not bode well for buyer confidence. Though the higher dividend yield is still attractive to investors and is higher than that of Apple Inc. Apples market share in sma rt phones should e of particular concern to interested investors as of recent events. Market share, especially for key products, gauges the company's current position amongst its competition and overall pull within the market.It can effectively gauge if the company is meeting the needs of its consumers and prospective growth. Within the past year the Phone only gained around a 13% overall growth in sales, however this is miniscule compared to overall Smartened market growth of 44% in 2013. Apples market share shows further struggles as overall mobile market share decrease by a full 4% from 19% market share n 2012 to a 15% in 2013. (Gardner, 2013) However, other companies like Microsoft and Samsung saw significant increases in SO use and hardware use with Samsung clearing 31% total market share from its 30% in 2012.This may be worrisome as Apple may not providing what customers want and can account for a decrease in overall prospective growth. However, this may be remedied by Apples breakthrough to markets china and Japan late in 2013. The departure of Steve Jobs and the arrival of Tim cook in august of 2011 has been a cause for a weaker overall product line. The recent introduction of ewe products have spawned a lackluster response by consumers especially in the release of the Phone 5 variants (as and c) as well as the improved retina display pad mini.These products neglected to offer anything new or revolutionary to set Apple apart, they were just mere improvements to tested product. The lack of ingenuity has potential to cause a decline Apples growth in sales and may cede market share competitors who have more to offer to the consumer. Microsoft on the other hand has remained consistent in its product offerings throughout the years. This is expected of Microsoft as hey re key product involves enterprise systems that provide basic needs for businesses. Financial Statement Analysis (2004-2008) Course Title: Managing Financial Resources Course: MSc. Finance Date: 11th January 2010. TABLE OF CONTENT Executive Summary This report shows the analysis of the financial performance of Centrica Plc, one of the top energy business providers in UK. Based on my analysis from this report I can conclusively state that: Centrica Plc has an upper hand in the energy and gas market than it s competitor; Scottish Power. Centrica Plc’s turnover was very high in 2008 which shows that it made better sales than its competitor. Although Centrica’s sales turnover was high in 2008 but the profit margin dropped drastically. In the overall financial performance Centrica Plc made a loss of ? 645million in 2008 compared to the previous year 2007 when the company had a retained profit of ? 1088million. This was considered to be an impact of the global financial crises that hit the UK and US economy causing increase in oil prices and a drastic fall again as the level of global oil demand rises and at the same time causing a tight supply position. Centrica Plc’s Total shareholders return has an upper hand when compared with other 99 members of the FTSE 100 in 2008. INTRODUCTION evaluate the impact of financial accounting concepts on corporate reporting of Centrica Plc. evaluate the limitations of ratio analysis discuss the role of management accounting in the evaluation of Centrica’s business performance. I have been motivated to choose Centrica Plc because of the type of product they deal in, which is energy. It is a product that is essential for all, not just households. And it will be good to know if this company is actually doing well in terms of profitability and customer’s satisfaction. LITERATURE REVIEW *PROFITABILITY RATIO ANALYSIS *OF CENTRICA PLC AND SCOTTISH POWER (Reference: FAME (Financial Analysis Made Easy) FINANCIAL RATIO ANALYSIS OF CENTRICA PLC AND SCOTTISH POWER (Reference: FAME (Financial Analysis Made Easy) GRAHPICAL PRESENTATIONS OF RATIOS {draw:frame} {draw:frame} {draw:frame} {draw:frame} {draw:frame} {draw:frame} ANALYSIS AND DISCUSSION FINANCIAL PERFORMANCE ANALYSIS BASED ON THE GRAHPS According to Barry Elliot and Jamie Elliot, ratios show different items in the financial statements. A ratio is not useful in isolation and its usefulness depends on what aspects of the firm’s business affairs are being investigated. Ratios, according to them are a powerful tool in interpreting and understanding a company’s account. Therefore, the graphs above show the performance of the Centrica plc and its competitor; Scottish Power over a period of 5years and will be analyzed below. DEBTORS TURNOVER: This ratio shows how long it takes debtors of a company to pay back credit purchases. In as mush as credit facilities enhances sale turnover in a competitive market, it is very important to take adequate control of it because it is an essential part of working capital management. (Buz/ed, 2009) It is calculated as: Debtors' Turnover*= Average Debtors * ? 365days Centrica Plc has been able to achieve a positive stock turnover ratio over the years with a 55% less time between 2004 and 2008 compared to its competitor that has a longer time of 18% to sell off its products. This shows that Centrica Plc has more sales turnover than Scottish Power. The trend on the graph show that Centrica Plc has been more liquid than Scottish power because the higher the ratio, the more liquid the business is said to be. It is obvious from the graph that Centrica Plc is more liquid than Scottish Power. That is Centrica Plc has a better capacity to pay it short term debt than Scottish Power, with reference to their current ratio of 1. 12 to 0. 59 respectively in 2008. DISCUSSION IMPACT OF FINANCIAL ACCOUNTING CONCEPT UPON CORPORATE REPORTING OF CENTRICA PLC Going Concern: The Board of directors of Centrica Plc continues to adopt the going concern basis in preparing the financial statement because they have a reasonable expectation that the company has adequate resources needed to continue operational existence for the foreseeable future Business Entity: Centrica Plc operates as a separate business entity from its investors. Cost: Centrica Plc reports the market value of its assets. Sincerity: The financial Statement of Centrica Plc is prepared and audited by auditors from the Pricewaterhouse coopers Monetary Unit: The financial statement of Centrica Plc shows a single monetary unit dominated in GBP (? ) because the parent company is in the UK. Dual concept: Centrica presents it total assets as liabilities (debt finance) plus equity (shares). Accrual: The revenue or income of Centrica Plc are recorded when they are actually earned. (Asmii V. 2009) ROLES OF MANAGEMENT ACCOUNTING ON THE BUSI*NESS PERFORMANCE OF CENTRICA PLC According to Institute of Management Accountants, Management accounting can be defined as â€Å"the internal business building role of accounting and finance professionals who work inside the organizations† They are concerned about the growth of the business in terms of evaluating the business prospects, budgeting and forecasting, implementing and monitoring internal controls for the purpose of achieving economic value. The Board of Directors of Centrica Plc believes that there must be high standards of corporate governance which are relevant to the overall integrity and performance of the business. The Company adopted a new set of Articles of Association which states the power of the Board of directors at the 2008 Annual General Meeting and stated below are few of the responsibilities of the Directors with respect to the managerial accounting of the company. the Group’s corporate governance and system of internal control development of strategy and major policies nterim dividend payments and recommendation of final dividends the appointment and removal of Directors and the Company Secretary the Group’s corporate responsibility arrangements including health, safety and environmental matters reviewing management performance approval of the annual operating plan, the financial statements and major acquisitions and disposals The Board gives thorough monitoring to the development of the co mpany’s strategies and also during the year 2008, the Board had a full review of the company’s overall strategy with the assistance of an independent external consultant. The Board also place value on their investors and promote communication program in order to hear their views of their shareholders as regards the key matters affecting the company. The Chief Executive and Group Finance Director held regular meetings with the Company’s major shareholders during the year and the Company’s Rights Issue which was the main topic of discussion was successfully completed during December 2008 after which an approval was given at the Company’s General Meeting held on 21 November 2008. The company’s Executive Committees also established a control infrastructure to ensure proper monitoring and management where major risks have been identified. *THE NON-FINANCIAL PERFORMANCE* OF CENTRICA PLC The fluctuation in demand and prices of oil worldwide as well as the global financial crises in 2008 made Centrica Plc face series of challenges and the Chairman of the company (Roger Carr) tagged the year â€Å"a difficult year†. But despite the difficulty, the company still performed well because it is a company that aims at delivering stability and growth for the benefit of their customers, employees and shareholders. Centrica Plc’s non-financial performance can be outlined in terms of the following: *BUSINESS PERFORMANCE OF CENTRICA* PLC LIMITATIONS OF RATIO ANALYSIS Ratios are useful methods of analyzing the performance and financial position of a business but they have their flaws which are seen as limitations and will be analyzed below. THE IMPACT OF THE CHANGE FROM UK GAAP TO IFRS ON THE CORPORATE REPORTING OF CENTRICA PLC that IFRS has improved the company’s 2004 operating profit and statutory Earnings Per Share (EPS) reduction in shareholder’s fund as a result of pensions deficit Adjustment the company’s policy to link dividend to earnings thereby increasing pay out ratios. Some assets and liabilities will be treated differently which will affect timing of profit. CONCLUSION With reference to the ratios analyzed above, Centrica Plc has an upper hand in the energy and gas market than it s competitor; Scottish Power. Centrica Plc’s turnover was very high in 2008 which shows that they made better sales than its competitor. Although Centrica’s sales turnover was high was high in 2008 but the profit margin dropped drastically. In the overall financial performance Centrica Plc made a loss of ? 645million in 2008 compared to the previous year 2007 when the company had a retained profit of ? 088million. This was considered to be an impact of the global financial crises that hit the UK and US economy causing increase in oil prices and a drastic fall again as the level of global oil demand rises and at the same time causing a tight supply position. Finally, we can say that from the record of 2007, the financial performance in 2008 was good despite the economic instability. Centrica Plc made strong progress against the strategic priorities set out at the end of year 2006. The global financial crises which remain very challenging in the UK till date could pose as a problem for many of the company’s customers. But Centrica Plc promises to continue to place their customers’ needs at the forefront of their agenda, alongside the determination to deliver increasing long-term value for our shareholders FUTURE OF CENTRICA PLC According to the Chief Executive’s Review, some priorities have been set for the future growth of Centrica which would help measure performance in year 2009. Some of which are: To build on the company’s growth platform: Increasing the value of their customer base by expanding the overlap between the energy and services business. Also establishing a centralized service platform and the acquisition and construction of gas and power assets which will enable the company to compete efficiently in the energy market. To reduce risk through integration: There will be more focus on UK in the coming year 2009, due to the high demand. Therefore more production has to be made by integrating/building closer relationship with the National Oil Companies. To transform British Gas: In order for Centrica Plc to succeed, British Gas Residential which seems to be the core backbone of Centrica’s business has to deliver high level of profitability. Therefore, there will have to be an integration of the British Gas Residential, British Gas Business and British Gas Services into a single customer-focused organization. Amidst all these future plans briefly mentioned above, I can now conclusively say that the future performance of Centrica Plc is not 100% certain of profitability as they are not exempted in the effect of the global financial crises which is still hitting the UK economy. Although demand for product might rise causing increase turnover but consumers might not be able to meet up with financial obligations of paying cash. So, Centrica must be prepared for more credit sales which might decrease its debtor turnover. Also, prices of product must be put into consideration despite the goal of maximizing profit not forgetting its competitors. And finally, the leadership of Centrica Plc will be playing major role in delivering stability and growth for the benefit of customers, employees and shareholders. REFERENCES Asmii Vernekar, 2009. Available at: http://www. buzzle. com/articles/basic-accounting –concepts-and –principles. html. Assessed on 15th December, 2009 Buz/ed, 2009. Available at: http://www. bized. co. uk/compfact/ratios/sdc5. htm Assessed on 13th December, 2009. Centrica Plc, 2005. International Financial Reporting Standards. Available at: http://www. centrica. co. uk/files/results/2004_ifrs_transcript. pdf. Assessed on 15th December, 2009 FAME (Financial Analysis Made Easy), 2009. Available at: http://www. fame. bvdep. com/version-20091130. Assessed on 11th December, 2009 Peter Atrill, and Eddie McLaney (2008), Accounting and Finance for Non-Specialists, 6th ed. Prentice Hall, financial times. David Alexander and Christopher Nobes. (2007), Financial Accounting, An International Introduction, 3rd ed. Prentice Hall, financial times.

The Unusual Puzzle Into Top Essay Topics for Competitive Exams Exposed

The Unusual Puzzle Into Top Essay Topics for Competitive Exams Exposed The Start of Top Essay Topics for Competitive Exams As soon as you finish preparing these topics thoroughly, look at these topics from prior years' SBI PO Mains exam together with sample essays to acquire a more accurate picture of the exam. Exam time is ordinarily very important. With the right guidance and hardwork you can readily crack any competitive exam. It's thought of as one of the Toughest Exams in India and over 2 lakhs students take part in CAT annually and only 1500 manage to find the percentile needed for the IIMs. Try to remember every minute counts when you are becoming ready for an exam as you truly don't understand what you might get. Don't forget you should be far away from any form of prospective distraction when you're studying or getting ready for an exam. If you do this, it would actually turn into a tremendous waste of time. You must freely speak about your problems with them. In spite of the popular concept, books that are neat always don't indicate that you're a superb student. Outline Its a very good practice to jot down the key points before you commence writing. Foreign languages ought to be compulsory in the main school. Learning a new language for an early age is helpful for kids. Since there's a word limit you want to be concise and at the exact same time you want to bear in mind not to miss out any important point. Likewise you can wind up at the giving end too. Also, make certain you aren't getting too stressed like we've mentioned and make certain to follow all the points mentioned. While writing, you have to keep in mind 3 important points before you begin to write. You should have prepared your syllabus for those Mains paper by now. Introduction has become the most crucial region of the essay. Continue reading this short article to learn about probable and associated topics for Essay writing inside this exam. Researching the topic will permit you to find out more about what fascinates you, and should you pick something you truly like, writing the essay will be more enjoyable. Persuasive essays are a fantastic means to encourage the reader to check at a particular topic in a different light. They share a great deal of resemblance with argumentative essays. Writing an impressive essay wants a thorough understanding of the topic you decide to write. Top Essay Topics for Competitive Exams: No Longer a Mystery Next you must really make sure you take a few modest breaks. Taking breaks is quite important. It is really important. If Development isn't engendered, it's endangered 10. Some developing countries invite large multinational organizations to open offices and factories so as to assist their economy. How far India can implement decent governance principles. The major aim was to boost access to technology to the people of the nation. In short for the very first topic you will need to have some understanding of banking and economics. Though our education process isn't able to deliver superior education that leads to poor this subject, the minimal literacy rate in the nation and too little access to better education system bring about an inadequate performance in the education sector, particularly within this subject. Increasing privatization of education in the surface of globalization. Odds are, all you have to do is relax and locate a topic you're passionate about and, obviously, one that's debatable. Toppr Discuss' has a feature by which you are able to ask' any type of question. The Essay Topics list is provided for English along with Hindi section. Diet can definitely make or break things so you need to be quite careful about that. Second, what you ought to do is remember the keywords. Make certain you do not repeat precisel y the same point with distinct tones and words. Doing this may shed the central basis of the sentence. In Paper II, there'll be two sub parts where the very first part will have essay or letter writing while second part is going to have a comprehension and you'll have to answer the question associated with the paragraph and will need to provide an acceptable title for the passage in the long run. The benefit is that you receive lots of responses and various opinions. Include certain information and examples to back up your selection. Use particular reasons and examples to back up your answer.

The Importance Of Quality Management For A Health Care...

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