Ljb Company Essay Example for Free

Ljb Company Essay Introduction LJB Company has asked the accounting firm to evaluate their system of internal controls because of the plan to go public in the near future. The president wants to be aware of any new regulations required of his company if they go public. The current system of internal controls was explained to the accounting firm. Under SOX Sarbanes-Oxley Act of 2002, all public traded U.S. corporations are required to maintain a sufficient system of internal controls. In order for this to be implemented all Corporate Executives and board of directors have to ensure that the controls are reliable and effective. With LJB Company incorporating the information from SOX act this will allow them reduce corporate fraud by making sure that all of the procedures for financial reporting is following in accordance to all guidelines. Internal Control Requirements In order for LJB Company to become a public trade, under the Sarbanes-Oxley Act of 2002 requires a registered U.S. publicly traded company to have an independent audit committee as a part of its Board of Directors. My accounting firm recommends that since LJB is a small sized company in terms of its employees should reevaluate their costs versus the benefits of being a public traded company. If LJB decides to go public in the near future there will be some new internal control requirements. One of the factors of the internal control system is to ensure that the management is in control of its environment. Top management needs to make it clear and concise on what can and won’t be tolerated especially when it comes to the organizations values, mission statement and unethical behavior. The second factor of the internal control system is the company leading its control activities. The control activities are considered as the post that holds the company’s effort to address all risks that they may possibly face going public. One thing that the company may face is fraud and in order to reduce fraud, management has to create and build policies to address those specific risks. Strengths and Recommendations Since LJB Company is relatively small, they have an advantage over their competitors who are large companies. Being a small company due to its size of employees, one of the things they are doing right is being able to set expectations and implement those within the organization. As a smaller company, the accountant’s decision to switch to pre-numbered invoices and the purchase of an indelible ink machine was a good idea and investment. The pre-numbered invoices will prevent transactions from being recorded multiple times. With the internal control system this will require that the employees forward their source documents for the accounting entries. The indelible ink machine will help organize all of the accounting duties. We recommended that LJB Company purchase an indelible ink machine to print all employees and cut checks. With the indelible ink machine this will make it difficult for unauthorized users to endorse checks and be approved. This will cut down on fraud and theft within the company. Violations LJB Company is very susceptible to fraud due the weaknesses and threats presented in the day to day operations. The type of threats include: no human resource control, lack of cash control, and no duties defined for each individual. LJB Company is lacking in the separation of duties because the Treasurer and Controller functions is being done by the same person. Although these two duties are being performed by one person and stream lining the process this causes LJB to be susceptible to fraud and out of compliance with the SOX act requirements. Each of these duties should be performed two different individuals. LJB Company has lack of cash controls. The lack of cash control has to be watched because within LJB each employee has access to petty cash and that shouldn’t be the case. Access to petty cash should be restricted to authorized personnel only. Any time there is a disbursement from the petty cash there should be an original receipt and signature that received the reimbursement. LJB Company human resource controls are very limited. Within this company both the Accountant and President have to review and approve all of the new hires which is the process. If LJB had a proper human resource control there would be a function set in place for new hires by hiring someone with HR experience that has risk training. Having a more defined HR control resource this would allow the company to clearly define the different roles and responsibilities for each employee. Also with the HR resource all employees would go through background check, each employee be given their own username and password and be tracked with the activity report. Conclusion We believe that this assessment of the current controls of LJB Company and the recommendations provided will meet your expectations and allow your company to be a fully traded public company. To reinstate this problem; in order for LJB Company to become a public trade, under the Sarbanes-Oxley Act of 2002 requires a registered U.S. publicly traded company to have an independent audit committee as a part of its Board of Directors. My accounting firm recommends that since LJB is a small sized company in terms of its employees should reevaluate their costs versus the benefits of being a public traded company. Works Cited Kimmel, Paul D.. Financial Accounting: Tools for Business Decision Making, 7th Edition. John Wiley Sons, 02/2013. .

An evaluation of impact on financial and operations consequence

An evaluation of impact on financial and operations consequence INTRODUCTION Choosing the Topic After completion of all my fundamental papers in August 2010, I waited till the next session to decide to submit a research and analysis project for the Oxford Brooke University. The reason for such delay was the pressure to complete three professional papers in December session. This report is also important to me because I believe by having combination of both Profession qualification and a degree will uplift my career. To base my project on ACCA provided me with a list of 20 recommended topics to choose from. After reading through the list, the topic that immediately attracted my attention was topic 19 which was â€Å"The financial and operational consequences of a merger between two organisations or of the acquisition of one organisation by another†. What attracted me the most about this topic was that, it was all very relevant to my studies as I am thinking to pursue financial management after ACCA. I knew this topic will allow me to try out and learn the all important, analytical skills. Other reason to choose this topic was the much talked about acquisition of KRAFT and Cadbury therefore it encouraged me to choose this topic. Another reason was availability of the vast amount of information through the internet and press release because of recent release of Krafts recent fourth quarter in the month on February 2011. Choosing the organisation Once I chose my topic, I had to choose an organisation to base my research on.   I chose Kraft and Cadbury for my analysis; it was an obvious choice as this was the acquisition that impelled me to select this topic. This was one of the most controversial and largest takeovers in the year of 2010. I believed the takeover by the 2nd Largest Food Giants in its industry would accomplish the objective I had in mind for the project. Aims Objectives The main objective of this report is to evaluate the consequences of the acquisition on the finance and operations aspect of KRAFT FOODS. The financial statements by themselves only provide the quantitative data which need to be analysed by drawn graphs. The main focus of this report, therefore, is as follows: * To analyse the reasons for Kraft to make a strategic choice of acquiring Cadbury and whether it satisfy the strategic fit as claimed by the CEO of KRAFT FOODS in terms of financial and business operations. * The second part of the research aims to analyse whether Kraft is on the track to achieve its targets it promised its stakeholders at the time of acquisition. * Since financial information wasnt sufficient for my research, I need to review the strategic decisions made by Kraft for its subsidiary Cadbury after the acquisition along with the friction identified while integrating both business. The anticipated future of Cadbury under Kraft Group. In order to achieve the aims mentioned above, I have done qualitative analysis using SFE (Suitability, Feasibility Acceptability) and Ashridge model along with quantitative analysis using financial ratios and linking both to get an overall picture. THE ORGANISTAION Company Profile Kraft Kraft Foods is the worlds second largest food company headquartered in North Field, Illinois manufactures and market packaged food products, including biscuits, confectionery, beverages, cheese, convenient meals and various packaged and grocery products.( KRAFT FOODS INC, 2009)The business was formed by James L. Kraft and his four brothers who began by wholesaling door to door cheese business in Chicago. Kraft then achieved growth by merging with other companies and increases the size of the business by expanding more product lines.( Wikimedia Foundation,2011) Being listed on NYSE, Kraft now has approximately 127,000 employees worldwide. Kraft sells products to consumer in approximately 170 countries. At 31 December 2010, Kraft had operations in more than 75 countries and made products at 223 manufacturing and processing facilities worldwide. Kraft portfolio included eleven brands with annual revenues exceeding $1 billion each: Oreo, Nabisco and LU biscuits; Milka and Cadbury chocolates; Trident gum; Jacobs and Maxwell House coffees; Philadelphia cream cheeses; Kraft cheeses, dinners and dressings; and Oscar Mayer meats. Kraft portfolio included approximately 70 brands which each generate annual revenues of more than $100 million. (KRAFT FOODS INC, 2010) Cadbury Cadbury was a leading global independent business in the exciting world of confectionery, a large, growing, brand-led industry. With an outstanding portfolio of chocolate, gum and candy brands, the largest emerging markets business and a focused and experienced team, Cadbury is committed to its long-term vision to be the worlds biggest and best confectionery company. Cadbury operated in more than 60 countries with a workforce of 46000. (Cadbury, 2008) Cadbury made its beginning by opening one single shop by John Cadbury. As time progressed John Cadbury moved into the manufacturing of drinking chocolate and cocoa. Cadbury grew bigger through some organic growth and some mergers. During the first world war Cadbury started to achieve great success, its products were regarded as necessities and Cadbury were at their peak. Cadbury kept investing in technology, new factories and in new products to remain ahead of competition. With factories all over the world and a host of well known brand names it has become a household name in many countries. (Birminghamuk, (n.d.)) INFORMATION GATHERING Sources of Data Data can be collected for any research by the following ways: * Primary Research: Under primary research new information is collected via interviews, survey or questionnaire etc; hence information is collected first hand. * Secondary Research: Also known as Desk Research is gathered from information which has already been provided but may not be for the same purpose. Such information are easy to access and are my cheaper than carrying out primary research. Such information gathered should be analysed and screened properly so that it fits for the purpose. Kraft and Cadbury both being listed companies although listed in different countries were required to issue annual accounts for its stakeholders by Sarbanes Oxley and Companies House respective. These companies especially Kraft issued Interim Reports as per the stock list requirement. Therefore much of the quantitative and qualitative date was readily available for analysis. Hence I chose to use secondary data over primary. The only complication I faced apart from time pressure was obtaining latest financial information for Cadbury (2009 accounts). Fortunately Kraft public relation team co-operated and emailed me 2008 and 2009 Cadbury annual accounts on my request. The following are the sources of secondary information I used for my project: Annual and Interim Financial Accounts and Reports This is the main source I used for financial aspect of my business and to draw graphs. I had to use interim reports even to demonstrate impact of Cadbury acquisition on Kraft at each and every quarter due to complexity of the business. Krafts annual accounts were available to view and download on Krafts Investors Website. However Cadbury financial statement isnt easily available. Internet This is the source of limitless information; hence it took me a lot of time to extract information which was relative to the point. Firstly it provided me the qualitative information which was missing or less in the financial statement of both entities. Secondly it also provided me information from a third party or neutral point of view. Letters and Reports Under this source, I analyzed the documents sent by Kraft to Cadbury management or reports addressed to Kraft shareholder explaining them the strategic fit of Cadbury acquisition. These documents were available over the internet. Library I used study text published by Kaplan for ACCA to brush my skills and be of aid when I got confused during an analysis phase. Apart from my course books I visited local library for reference books. As I mentioned earlier I didnt had an opportunity to visit British Library for the access of database such as Datamonitor and Mintel. However I was able to get access to Euromonitor through internet and used it as a tool to aid understanding of the application of analytical tools regarding acquisition and both the entities. Data Collection Methods Its easy to collect data, but skills are required to make sense of data and using it for the purpose. It was a fiddly job to collect reliable authentic information to base my reports on. Any negligence on my behalf may cause me a failure in achieving the report objectives. I was cautious and took my time to read through all the information once before starting with my project. As this acquisition was of the biggest acquisition in the year 2010, too much was written by the newspapers and media about it. Reading about the merger in 2011 gave me this idea to do a project on Kraft and Cadbury, as Kraft were about to issue its fourth quarter results. I started my data collection by reading articles from local newspapers as well as papers or journal published in other counties. I viewed them retrospectively. The most prominent newspaper I viewed was Financial Times, Guardian, Reuters, Wall Street Journal and Economists. After I got a general idea behind the acquisition and critics claiming the acquisition as a failure. I downloaded the fourth quarter as well as annual report. I need to know what did CEO responded on the acquisition as it had been a year. Then I looked at financial data provided to support any statement by the CEO. Internet provided me great deal of help in my project. I type in the keywords such as Cadbury Kraft in etc at www.google.com . Find the relevant articles and making notes as well as bookmarks of the WebPages if I needed to read it again for qualitative part of my research. I even visited many libraries in my local areas; the librarian helped me by giving me advice on referencing as I had no idea on references. Unfortunately I couldnt make a trip to British Library to access database which could help me in my project. But I was pretty content with the amount of information I already collected to carry out my analysis. Referencing I have used the HARVARD REFERENCING SYSTEM for the referencing in my research and to aid readability, I have cited the source below the paragraph if the whole paragraphs were written based on the same single source. Acquisition for Kraft PreAcquisition To systematic analyse the strategic choice by Kraft to acquire Cadbury, I will be using Johnson and Scholes framework (Suitability, Feasibility and Acceptability Model). (Wu, 2010) Suitability Kraft Foods Inc. being the second largest food company still looks for opportunities to grow and try to remain one of the market leaders in the industry and and to spread risk by a diversified portfolio. Kraft believes in rapid expansion by acquiring other businesses. Kraft adopted new strategy implemented by new CEO who believed low growth segment should be disposed of and adopt those strategies that will achieve rapid growth even by means of acquisition .Kraft will look for businesses that will build on its strengths and guide against its threats. Kraft has a successful track record of acquiring iconic brands and businesses and effectively using it for its expansion.   We will be using one of the criteria of Ashridge model under suitability. Under Ashridge model we will be examining two criteria; whether Kraft has sufficient skills, resources and understanding of the Cadbury business and whether there are opportunities for helping to achieve critical success factors. (Steiner, 20 09) * One key reason for Kraft to acquire Cadbury was to penetrate in those growing markets where Cadbury has good base such as China, India and Mexico. Brands such as Cadbury Dairy Milk dominated such markets by a vast length compared to its rivals. Cadbury did receive 40% of its revenue from fast growing emerging market.   Cadburys acquisition of Adams played a vital role to increase their market share in Latin America.   Cadbury has experienced 12% growth in revenue in emerging market over five years (EUROMONITOR, 2008) this can be beneficial for Kraft as it intends to use Cadbury s distribution network to sell its brands. (Cadbury, 2008) (Cadbury, 2009a) Kraft being aware of Cadbury s heritage and its strong confectionery business ranking and its iconic brands makes Cadbury globally number one in chocolate, gum and candy. By attaining all these eponymous brands Kraft will become a global powerhouse in snacks, confectionery and quick meals with exceptional portfolio of leading brands in the world. Hence will be one step closer in achieving organic growth objective. Feasibility Under feasibility we would evaluate Krafts position before acquisition in terms of internal resources of the organization this can even be connected to Ashridge s model criteria of possessing sufficient resource by Predator Company. Kraft being second largest business in its industry has huge cash reserve which reflects in its Cash flow Statements of 2008 and 2009 ($1.24 billion and 2.10 billion respectively). Buts its worth mentioning   the disposal of Krafts North American Pizza to Nestle for total consideration of $3.7 billion contributed majorly to its high cash reserve. High cash reserve helps them to with acquisition cost and integration cost and any other abnormal cost. Apart from cash reserve Kraft does have reasonable current ratio of 1.04 reflecting its above average liquidity position then its peers. Although Cadbury has a strong hold on overall emerging markets Kraft have a greater position in some markets such as Brazil and Russia. As Kraft being a huge conglomerate bu siness it has vast amount of resources in terms of specialist staff, a highly invested research and development teams and finance etc to back up Cadbury to face competition from other rivals such as Hershey and Mars. Kraft can eve use its power over major supermarket chains such Wal-Mart to increase shelf value of Cadbury as majority of its sales come from small convenient store. Kraft is even able to promote Cadbury heritage brand more rigorously due to available of immense resources. It would be worth mentioning the fact that billion dollar Kraft empire has been experiencing an average growth of impressive 5 % over period of four years to 2008 (where it achieved 13% growth than previous year).(Daltorio, 2009) Acceptability To carry on with a strategic choice it also need to be acceptable by the stake holders. As shareholders are key stakeholders their consent is highly important. Although Kraft assured them the acquisition would result in increase in shareholders wealth as it fits in into its business culture, some shareholders have different opinion. One of the reasons for such conflict of interests is the fear of increase in companys gearing. By 2008 Kraft had a high gearing of 1.34 (ratio) compare to its rival Nestle of (0.36). They fear by acquiring Cadbury, Kraft would issue more long-term debt that may adversely affect the gearing ratio and hence increasing the financial risk of the business and affecting the capability of paying out dividends, hence damaging shareholders interest. The other reason for conflict of interest was the reaction from one of the biggest shareholders Warren Buffett of Berkshire Hathaway who regarded the acquisition as â€Å"bad deal â€Å".He believed Kraft has overval ued Cadbury for purchase consideration and the disposal of pizza business to Nestle for $3.7 billion   was a mistake. He firmly believed Kraft is paying high premium for the acquisition. One shareholders view didnt affected Krafts strategic choice and Kraft went ahead with the acquisition despite got rejected first time. (Barr, 2010) Ballast Businesses *CADBURY* Heartland Businesses Alien Business Value trap Business According to my analysis I think Kraft values Cadbury as Heartland Business as Kraft has the skills to exploit opportunities from Cadbury. (UNDER ASHRIDGE MODEL) ACQUISITION for Kraft The long clashing 5 month battle between Cadbury and Kraft was finally over on 2nd February 2010 as Kraft clinches control over Cadbury by 72% holding. Kraft then took total control of Cadbury on June 2010. Cadbury shareholders had a deadline of 2nd February to accept Kraft offer of 500 pence in cash for each Cadbury share and 0.1874 new Kraft shares for each Cadbury share which altogether values each Cadbury share at 840 pence including a special 10 pence dividend. This sums up the total valuation of Cadbury business to approximate of  £11.9 Billion ($19.4 Billion). Kraft offered this purchase price on 19th of January after a long negotiation with Cadbury management. Kraft tried to make hostile takeover on 7th September by a bid worth 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share (valuing it 745 pence a share). However Cadbury rejected the bid immediately and regarded it â€Å"derisory†. Kraft sweetened the bid by raising the original offer and increa sing the cash component from 40% to 60% to make it more appealing for Cadbury shareholders. (Cimlluca et al, 2010) I have extracted this graph from Thomson Reuters to illustrate the impact on the share price for both involved parties after the announcement of take-over. We notice an increase of almost 40% in the market value of Cadbury. The increase in Cadburys share price was triggered by the initial announcement by Kraft of its intention to take over Cadbury in early September of 2009. The announcement was received well by Cadbury Shareholders causing an increase in demand and thereby price of the stock. However we see a fall in the share price of Kraft food at the time announcement (graph below), some analysts believe this was due to Warren Buffet dissatisfaction of Kraft Acquisition. He regarded the acquisition as ‘bad deal, which caused chaos amongst other shareholder hence a price falls. This price fall deteriorated the purchase price offered by Kraft which was immediately rejected by Roger Carr, Chairmen of Cadbury. KEY POINTS FOR FINANCIAL ANALYSIS Kraft foods acquired Cadbury plc in February2 2010. Hence Cadbury results are restricted to 10 months rather than full 12 years and its subject to fluctuate with moving exchange rates. Cadbury data was adjusted from IFRS (previously applied by Independent Cadbury) to U.S GAAP followed by its new Parent Kraft Foods Inc. Cadbury previous years figures couldnt be compared with unless comparison is made in percentile due to the size difference of both businesses. Kraft even revised its Net Revenue retrospectively 2009 onwards. Post Acquisition Financial Perspective The above graph represents s the growth and decline in sales over a period of 4 years by means of percentage. The 2010 information contains data post acquisition, specifically contribution from Cadbury of $9143 that has been converted using the exchange rate of $1.595 per  £1.00 for the aid of analysis. It can clearly be noted the reason why Cadbury was so desirable by Kraft. Cadbury attained significant growth from 2007. In June 2007 Cadbury introduced their Vision into Action plan which insisted in strengthening their position in emerging market. This strategy was immediately effective and can be reflected in the graph. As stated earlier in this research report one of the key reasons for Kraft to acquire Cadbury was their better position in emerging market as compared to Kraft. Although Cadbury has just been acquired for 11 months under Kraft we see a marginal fall of 4% in Cadbury sales than its preceding years. This maybe because Kraft maybe getting acquainted to Cadburys opera tion and network hence not utilizing Cadburys full potential. (Cadbury, 2009a) This graph explains what did Krafts CEO meant by â€Å"GLOBAL POWER HOUSE†. If we examine the two graphs we see a change in the revenue from developing and North American markets. The main reason for Kraft to takeover Cadbury was to derive maximum benefit of Cadburys strong hold in emerging market. Although Kraft is one of the largest companies in food industry it drives more than 57% of its revenue from its Home Market US. As US market is experiencing economic recession Kraft needed to adopt an effective strategy to broaden its operations globally. Hence Cadbury looked more attractive from Krafts perspective. Its worth mentioning that Cadbury earns more than 40% from the fast emerging markets portraying its position being better than Kraft.. It should be taken into consideration that fact that Kraft hasnt launched any new aggressive marketing scheme or any strategic step via Cadbury in emerging markets. In 2010 Kraft has continued to run Cadbury operation without making any m ajor changes. Talking quantitatively Cadbury boosted Krafts net revenue in emerging markets by $3382 million which can be seen clearly in the graph at the bottom. Krafts strengths in Russia, Brazil and China along with Cadbury great position in United Kingdom, India and Mexico has spread its revenue source which has reduce the risk of a recession affecting Krafts sales .By acquiring Cadbury Kraft enhanced its distribution channel which became effective in the first year of acquisition and clearly be seen in the 2010 net revenue segments. In 2010 revenue from US market contributed less than 50% to Total Net Revenue minimizing the business risk driven by recession. (Farrell et al, 2010) The above illustrated graphs represent the change in Krafts revenue source after the acquisition of Cadbury. Krafts adopt a rational approach and pursue the strategy of selling off less profitable brands and achieving quick growth by acquisition. Kraft faced fierce competition from private label companies in the cheese and packaged meat market. Therefore Kraft acquired Cadbury to diverse its revenue source as there were dangers of fall in revenue from its main segments. There is an increase of 16% in the contribution made by confectionery segment. This segment is a high potential growth segment and Kraft would like diverse its business risk by investing more in promotion of this segment. (Trefis, 2011) The Gross margin shows the amount of gross profit generated by the company as a percentage of the sales revenue. Kraft Gross Profit Margin has been plotted against each quarter from 2009. It can be analyzed by the graph that Kraft tried to maintain its Gross Profit Margin in mid 30s percentile despite economic downturn in US market and increase in raw materials Kraft is able to maintain its objective, the main grounds for such level gross profit margin was the acquisition. By acquiring Cadbury Kraft has widen its distribution network as Cadburys main selling networks are convenient stores open on High Street therefore reach of every individual. Talking in respect on cost of sales (100 Gross Profit Margin) Kraft will benefit from economies of scale especially regarding purchases as Kraft will be bulk buying and using Cadbury suppliers rationally to minimise cost of sales as possible. (Szalai, 2011) Net Profit Margin is an indicator of profitability, calculated as net income or net profit divided by net revenue. As shown by the graph, we see a downward trend in the net profit margin against each quarter in 2010.Despite the fact that there has been a 27% increase in Net Revenue in 2010 as compared to its preceding year, we notice a fall of 23% in net profit especially in the fourth quarters of 2009 and 2010 ($711m and $547 respectively. However in aggregate there has been an increase in the net profit from 2009. The major reason for such deteriorates result for the fourth quarter was the cost associated with integration between Kraft and Cadbury. The pizza business of Kraft did contributed to the net profit in 2009 , by the sale of its pizza business to Nestle ,Kraft has deprived itself from the positive contribution of its disposal component.(BBC, 2011) The Prime objective of making investment in any business is to obtain satisfactory return on capital invested. Hence, the return on capital employed is used as a measure of success of a business in realizing this objective. Return on capital employed establishes the relationship between the profit and the capital employed. It is used to show the overall profitability and efficiency of the business. By analysing we see a fall in return on capital employed although the sales and net profit overall has increased however it hasnt increased by the proportion of investment made by KRAFT FOOD. As Mr. Warren Buffet feared that Kraft did overpay for the acquisition this can be reflected in diminish of return on capital employed. I have also included a graph showing fall in earning per share that illustrate the point of less return for the investors this maybe due to issue of new share to Cadbury shareholders. (Wilson , 2010) I have included this graph in my research report especially to breakdown the positive and negative contribution made by Cadbury to Kraft operating income in 2010 as compared to Kraft in 2009. As announced by CEO of Kraft Foods, Kraft is highly likely to expect $1 billion in incremental revenue synergies apart from $750 million in cost saving by 2013. In order to achieve the synergies Kraft has budgeted to spend $1.5 billion in the first three years following the acquisition to combine and integrate the two businesses and already incurred $657 million in 2010. As stated in Kraft Annual Account 2010, Kraft incurred and expensed transaction related fees of $218 millions in 2010 and $40 million in 2009.Kraft has recorded the mentioned costs under selling, general and administrative expenses in Profit and Loss Statement (Statement of Comprehensive income). However in the above graphs include figures which has been given in the Kraft 2010 annual accounts analysis of operating profit rather than actual incurred cost as some cost have been taken under finance cost which hasnt been included in arriving at operating profit for 2010. This seems a draw back in the acquisition object ive and maybe criticizes by its stakeholders as integration cost has reduced Krafts earning by 33%. (BBC, 2011) Liquidity ratio expresses a companys ability to repay short-term creditors out of its total cash. The liquidity ratio is the result of dividing the total cash by short-term borrowings. This Graph represents the two liquidity ratio one normal current ratio and another quick test ratio. Unlike Current ratio, quick ratio focus on the most liquid assets hence it exempt inventory from current asset while calculating ratio. Some of the key points that need to be addressed before analysis of the graph are the disposal of the pizza business and all the working capital relating to it. We should also account for the current assets and current liabilities acquired by Kraft such as Net Receivable of $ 1333 m and Accounts Payable of $ 1605 m etc. Another point to be mentioned is that while calculating Quick ratio I havent excluded the deferred tax asset, while some analyst exclude deferred tax asset as they dont regard it liquid. We see a significant difference between both ratios as inventory has occupied much of the working capital. Comparing it to the last year it is almost consistent with the growing sales. We notice a slight deterioration in both the ratio of 2010. The $3.7 billion cash raised by disposal of the pizza business was used to pay cash component of the acquisition. The rise in the actually figure is in line with the growing and diverse sales (Kraft Foods Inc, 2010) Gearing Ratio is a measure of financial leverage, demonstrating the degree to which a firms activities are funded by owners funds versus creditors funds (investopedia).The above   graph represents   how much company has borrowed compare to equity raised by KRAFT FOODS. Kraft had issued a long term debt of $9.379 billion (net proceeds) to support the cash component of Cadbury of acquisition along with proceeds from Pizza Business. Kraft even made a repayment $2.1 billion of long term debt during the year. This has increased the total debt of the business from $18990 million to $28724 Million. Kraft has also issued 262 million shares to existing Cadbury shareholder as part of purchase consideration. This has enlarged Krafts share capital affecting the gearing ratio. By taking into consideration the above mentioned circumstances, we see an increase in the gearing ratio of 7%. This may cause some concerns amongst shareholders and lenders of Kraft as the financial risk of the business has increased as more interest will be paid from the profits available to pay dividends to shareholders. (Tradition Financial Concept.). This may even damage the creditability of KRAFT FOOD in lenders market as it has borrowed 80% to Equity, hence it may be charged high interest rate by the lenders in future. (Kraft Foods Inc, 2010) (Hoskins, 2010) Interest cover is a measure of the adequacy of a companys profits relative to interest payments on its debt. This ratio will help to explain the previously mentioned financial due to increase in gearing. Due to the increase in leverage we see a fall of 0.94 in interest cover which means there would be less profit available for dividends.   This maybe is one of the reasons why Warren Buffet (one of the major shareholder in Kraft) reduced its stake from 9% to 6%. The ratio is over 2 which is considered strong by analyst and reflects Krafts strong position in borrowers market. However Fitch, one of reputed credit rating agency, has downgraded the default rating on both companies to BBB-. However its rivals havent downgraded the rating as yet but our reviewing if they should follow their peers. Flitch has downgraded the rating due to anticipated increase in financial leverage of the combined Kraft/Cadbury. (Peters   et al, 2010) Operational Changes Post Acquisition The significant changes in operations along with their impact on KRAFT FOOD GROUP as a whole: Closure of Somerdale factory Days after acquisition Kraft announced the closure of Cadbury factory in Bristol. During the acquisition struggle, Kraft pledged to retain Somerdale Factory. The announcements created a chaos amongst Cadbury workforce and British Unite trade union as 400 employees were being made redundant. It would be worth mentioning; Cadbury prior to its acquisition (in year 2007) had already announced the closure of its Somerdale factory as they had invested more than  £100million in the production plant

Saint Augustine Essay -- Biography Biographies Augustine Essays

Saint Augustine Saint Augustine (354-430 AD), also known as Augustine of Hippo created an image of himself through his writings and teachings. He was born in Tagaste, a town in North Africa, on November 13, 354 AD. He was born into a middle class family. Patricius, his father, was a pagan, but later converted to Christianity because of his wife, Monica, was a devout Christian. Augustine’s mother, who was devoted to the Roman Catholic church, constantly tried for her son's conversion. Augustine was educated as a lecturer in the former North African cities of Tagaste, Madaura, and Carthage. The philosophical works of Marcus Tullius Cicero, a Roman speaker and politician, inspired Augustine to become a seeker after truth. Augustine engaged restlessly in philosophical studies, and passed from one phase of thought to another, unable to find satisfaction. From 373 until 382, in Carthage, he conformed to Manichaeism, a dualistic philosophy dealing with the conflict between good and evil. This seemed to be the answer to the confusion in his own heart. It solved the mysteries that confused him in his own experience. After realizing that this philosophy wouldn’t make a great ethical system, he abandoned this philosophy. After being educated throughout North Africa, he left Carthage and in 384 found himself in Milan where he would pursue his career of a professor in rhetoric. Also, in Milan he met and was influenced by the bishop, Ambrose. With this, Augustine was at tracted again to Christianity and was baptized by Ambrose in 387. Augustine was also influenced by Platonism. He than returned to North Africa where he became the bishop of Hippo in 391, a title he held until he died. This great â€Å"Father of the Church,† wrote a handbook on the three theological virtues: faith, hope, and love. The Enchiridion on Faith, Hope, and Love was written in the year 420. It is a brief handbook on the proper mode of serving God, through faith, hope, and love. It is easy to say what one ought to believe, what to hope for, and what to love. But to defend our doctrines against the slander of those who think differently is a more difficult and detailed task. If one is to have this wisdom, it is not enough just to put an enchiridion in the hand. It is also necessary that a great eagerness be in the heart. Saint Augustine says that God created all things good. In Chapter XI, ... ...t evil is but the absence of good. I feel that God did make everything good, and it is the absence of good that causes evil. People choose the road they feel like taking throughout life. I think of it this way; God started us off on this world all consisting of good and it is we who choose to become evil. This follows through with Augustine’s next idea, which I also agree with, in that there can be no evil where there is no good. This holds true because everybody consists of good, and evil is the absence of good, so that just concludes that in order for evil there must be good. Augustine also says that good and evil can exist at the same time, but evil cannot exist without good, however, good can exist without evil. I feel that one can embody good and evil, there are many humans like that now. It’s true that evil cannot exist without good because we are only evil when we aren’t good, but one can be good without being evil. I hope I have made it clear that there are some points that I agree with and there are some ideas of Augustine that I don’t agree with. As for the way to serve God, I believe that as long as you live your life to the best of your ability, you will succeed.

Free Essay: Comparing Heroism in Tess of the DUrbervilles and Othello :: comparison compare contrast essays

Tragic Heroism in Tess of the D'Urbervilles and Othello In tragedy the reader often sympathizes and empathizes with the protagonist who attains "wisdom through suffering." Tess Durbeyfield, in Thomas Hardy's Tess of the D'Urbervilles and Othello, in William Shakespeare's Othello are protagonists who elicit the sympathy of the reader as they suffer, act, and triumph over their antagonists, who are embodied by the characters of Alec D'Urberville, Tess' wealthy defiler, and Iago, Othello's amoral lieutenant. In both works the protagonists succumb to the pernicious influences of revenge, which are instigated by their antagonists and result in the deaths of the protagonists. Such tragedy in the protagonists' stories allows the reader to experience catharsis and realize the tragic heroism of Tess Durbeyfield and Othello. Tess Durbeyfield, an innocent dairymaid with "innocent instinct towards self-delight," displays her character in her persistent devotion toward Angel Clare, her husband. Her suffering is evident in her defilement by Alec D'Urberville, a wealthy aristocrat, and in her separation from her husband. In the "First Phase" Tess is physically taken advantage of by D'Urberville who recognizes her innocence and vulnerability. Later, in "Phase the Third," she then falls deeply in love with Angel Clare, an affluent agriculturist. Tess soon alienates Angel by revealing her earlier encounter with D'Urberville. Othello is an outsider and soldier who "loved not wisely but too well." His noble character is evident in his overwhelming fidelity towards his wife, Desdemona: "My life upon her faith," and the reader is quickly cognizant of the strong relationship between Othello and his wife. However, he is manipulated by Iago, his amoral lieutenant, and Othello's reality about his wife becomes twisted by Iago, who cleverly uses rhetoric to persuade him that his wife is disloyal. Iago informs the reader of Othello's transformation: "This may do something. The Moor already changes with my poison." Eventually, Othello is driven to murder his wife as a result of Iago's deception: "Get me some poison, Iago, this night. I'll not expostulate with her, lest her body and beauty unprovide my mind again. This night, Iago!" At the conclusion of each work the protagonist reaches a realization of her/his actions and accepts the responsibility for the consequences. In the novel, Tess realizes how D'Urberville abuses her and the importance of Angel Clare, her husband, and therefore murders D'Urberville and begs Clare to accept her into his life again: "I could not bear the loss of you any longer- you don't know how entirely I was unable to bear your not loving me!" Tess accepts the consequences for her actions and accepts her execution: "it was as is should be.

The Power of a Symbol in The Yellow Wallpaper, The Glass Menagerie and

Years ago, Sister Mary Corita Kent, a celebrated artist and educator of the 1960’s and 1970’s stated, â€Å"A painting is a symbol for the universe. Inside it, each piece relates to the other. Each piece is only answerable to the rest of that little world. So, probably in the total universe, there is that kind of total harmony, but we get only little tastes of it† (Lewis "Quotes from Women Artists"). Nowadays, a painting is not the main form of art humans appreciate. In fact, literature of all sorts can be considered a different form of art and often found in literature are symbols. A "symbol" is an object, person or action which represents an abstract idea (Warren â€Å"English 102†). In literature, a symbol or set of symbols can have a wide range of meanings. For example, color is a universal symbol; some may say it is a general symbol for life. However, each color separately can symbolize something different depending on the context. Analyzing five pie ce of literature for symbolism, one will be able to gain a deeper understating of symbols. To begin, the short story by Charlotte Gilman, â€Å"The Yellow Wallpaper,† uses the deteriorating wallpaper to represent the narrator’s failing mind. The narrator is suffering and is confined in an uncomfortable house in a room she did not choose; she becomes obsessed with the wallpaper of the room. As the yellow wallpaper represents the narrator’s mind, the statement made by the narrator, â€Å"The color is repellent, almost revolting; a smoldering unclean yellow, strangely faded by the slow-turning sunlight. It is a dull yet lurid orange in some places, a sickly sulphur tint in others† refers to the condition of her mind by suggesting her condition is revolting and unclean. She is fading away in the su... ...at could these five pieces of literature possibly have in common?’ The answer to this question is very simple, these pieces of literature each possess symbolic colors that represent something different. Yellow wallpaper represents a deteriorating mind, a shabby, black box represents a gruesome, sacrificial death, green is the physical representation of power and wealth in society, a mixture of blue and yellow represents the confusion of a clear sky with dead grass and ‘Blue Roses’ and Blue Mountain represent the longing someone feels for something they can never have. Perhaps a paining is not the only symbol for the universe. Perhaps every piece of literature is related to each other in such a way that by reading each piece of literature, one can connect the different symbols an author chooses to use and recognize the complex harmony that binds the literature world.

Certainty and Doubt Essay Essay

William Lyon Phelps and Bertrant Russel have conflicting views regarding the importance of certainty and doubt. Phelps position is that having certainty in oneself allows you to accomplish impossible tasks. While Russel believes it is healthy to have a certain amount of doubt in oneself and that people should not only believe in any one philosophy. Both Russel and Phelps make good points on the relationship between doubt and certainty but a combination of the two would be the most helpful. You should always have certainty when it comes to your own capabilities, but doubt is useful when forming your own beliefs and when it comes to others beliefs. Having certainty in yourself is the only way to have the confidence and drive to reach your goals. You cannot be confident if you are not certain in what you believe in or what you are capable of achieving. This is true for most athletes or dancers. My dance coach always says that you have to go out on the floor with confidence, when you are confident you seem certain in what you are doing even if you do it wrong. This certainty and confidence can lead to personal success or a team’s success. It shows that the most powerful way to have confidence is to trust your capabilities and that you know what you are doing. Russell’s views on doubt will create a well-rounded view when added to this. Especially in science when doubt must be included at all times. Scientist and doctors have a hard time proving there theories or ideas true, they have to rewrite and improve these theories many times over even if they are right or leaning in the right direction. Doubt also allows someone to view issues or ideas through the eyes of others. When you think differently than someone it opens up a discussion that could lead to doubt on one side of the argument. Doubt allows you to think critically about situations and see all perspectives of a discussion or theory. When it comes to the relationship between certainty and doubt they are both equally important.

Data-collection in Qualitative Research Essay

This Chapter is about methods and techniques in data-collection during a qualitative research. We mentioned earlier that qualitative research is eclectic. That is, the choice of techniques is dependent on the needs of the research. Although this should be true for almost all social research, it is particularly so with qualitative research in that the appropriate method or techniques is often identified and adopted during the research. Qualitative research is also multi-modal. The researcher may adopt a variety of research techniques, or a combination of such, as long as they are justified by the needs. The discussion below is therefore not to identify a set of techniques unique to qualitative research, but rather, to introduce the methods and techniques most commonly used in qualitative research, and the issues related to such use. We shall introduce the methods and techniques in three broad categories: observations, interviews and study of documents. These are also the basic methods used in cultural anthropology (Bernard, 1988:62). Indeed, the discussions about qualitative research in education can be viewed as a particular case in cultural anthropology. Observations Observation usually means the researcher’s act to find out what people do (Bernard, 1988:62). It is different from other methods in that data occur not necessarily in response to the researcher’s stimulus. Observation may be obtrusive or unobtrusive. A researcher may simply sit in the corner of a school playground and observe how students behave during breaks. He may also stand by the school gate and observe how students behave at the school gate. Such cases of observation may be seen as unobtrusive. In other cases, the researchers may not apply any stimuli, but their presence per se may have some influence on the scene. The most common example in this category is classroom observation. Although the researcher may just sit quietly at the corner of a classroom, the presence of the researcher may  change the classroom climate. It is, nonetheless, still observation. Observation is a basic technique used in almost all qualitative research. Even if other methods or techniques are used, the researcher remains the most essential â€Å"sensor† or â€Å"instrument† and hence observation always counts (McCracken, 1988:18-20). For example, when interviewing is used, a qualitative researcher also takes into account the tonic or facial expressions of the informant, because they help interpret the verbal responses. Such expressions are only sensed by observation. If the interview is done in the field, then the surroundings of the interview site also provide meaningful data for the research. The surroundings can only be depicted through observation. Hence observation is indispensable in almost all occasions of qualitative research. However, the term observation may sometimes go beyond what is seen. It also pertains to what is heard, and even sometimes what is smelled. Case 4.1 provides one of such examples. Case 4.1: Classroom Observation Scheme In the IIEP project on basic education, Leung designed for the Chinese research a scheme for classroom observation. Classroom was taken as one of the environmental factors affecting students’ learning. The scheme was designed after Leung stayed in local schools for two days. The scheme did not confine itself to the performance of the teacher, although that was a part. The figure on the next page shows one of the six sections of the scheme. Different writers have different ways of classifying observations. Without running into juggling of definitions, we shall briefly introduce observations as participant observations and non-participant observations. More detailed classification of observations can be found in Bernard (1988), Goetz and LeCompte (1984) and Patton (1990). Participant Observation Participant observation is perhaps the most typical of qualitative research.  Some authors even use participant observation as a synonym for ethnographic research. Different writers may have slightly different definitions of participant observation. The following description by Fetterman is perhaps the most agreeable to most researchers. Participant observation is immersion in a culture. Ideally, the ethnographer lives and works in the community for six months to a year or more, learning the language and seeing patterns of behaviour over time. Long-term residence helps the researcher internalize the basic beliefs, fears, hopes and expectations of the people under study. (1989:45) Immersion of the participant can either be continuous or noncontinuous. The three classical cases we quoted in Chapter 1 all include participation in the continuous mode. Li’s study of classroom sociology (Cases 3.8 and 3.9) involved one year’s continuous residence. In the second and third year she went to the school three days a week. She combined continuous with noncontinuous participant observations. Fetterman used noncontinuous participation when he was doing qualitative evaluation of educational programmes. Case 4.2: Noncontinuous Visits In two ethnographic studies, of dropouts and of gifted children, Fetterman visited the programmes for only a few weeks every couple of months over a three-year period. The visits were intensive. They included classroom observation, informal interviews, occasional substitute teaching,interaction with community members, and the use of various other research techniques, including long-distance phone-calls, dinner with students’ families, and time spent hanging out in the hallways and parking lot with students cutting classes. (Fetterman, 1989:46-7) II. Environment of the classroom 1. The classroom is on the _____ floor of the school building. 2. The classroom is near ( ) residential area ( ) factories ( ) road(s) ( ) field ( ) marketplace ( ) others _______________________________________ 3. The number of windows which provide lighting and ventilation to the classroom: ( ) satisfies the required standard ( ) is below the required standard 4. The main artificial lighting facility in the classroom is: ( ) florescent tubes total no.__________________ ( ) light bulbs total no.__________________ 5. Condition of lighting during the lesson : ( ) bright ( ) dim ( ) dark 6. Ventilation in the classroom: ( ) well ventilated ( ) stuffy ( ) suffocating 7. Quality of air in the classroom: ( ) refreshing ( ) a bit smelly ( ) stingy 8. Environments for listening: ( ) very quiet ( ) occasional noise ( ) noisy 9. Classroom’s floor structure: ( ) concrete ( ) log ( ) mud ( ) carpet 10. Classroom’s floor condition: ( ) clean ( ) some litter ( ) full of rubbish 11. Classroom’s wall conditions: ( ) smooth & clean ( ) some stains ( ) dirty & damaged 12. Classroom’s area: _____________m2; area/person: _____ m2. 13. Space use in classroom: ( ) looks spatial ( ) fairly crowded ( ) very crowded 14. Furniture and other article arrangements in the classroom: ( ) orderly and tidy ( ) messy 1Figure 1 Classroom Observation Scheme (Designed by Leung Yat-ming) Whyte’s experience in the Italian slum (Case 2) is perhaps the nearest to ideal in participant observation. He stayed in the community for two years. He experienced the life of a member of the Italian slum. In Whyte’s case, native membership allows the researcher the highest level of participant observation. Most researchers are denied such an opportunity, often because of constraints in time and resources, as we have discussed at length in Chapter 3. Under all sorts of constraints, at best the researcher â€Å"lives as much as possible with and in the same manner as the individuals under investigation† (Goetz and LeCompte, 1984: 109). In these circumstances, the researchers may not claim that they was doing ethnography, but it is legitimate to apply ethnographic approach and techniques to the study (Fetterman, 1989:47). Participant observation in its broad sense therefore tolerates different lengths of time and different degrees of depth. There is a full range of possible modes of participant observation, what Wolcott calls â€Å"ethnographer sans[1] ethnography† (Wolcott, 1984: 177). The most frequent case in education is that a researcher may stay in a school and become a teacher in that school. The researcher identity may or may not be disguised. The researcher may then, as a participant, observe teachers’ behaviours in teaching, in meetings, in conversations, and so forth. Sometimes, the researcher is readily a member of the community (say, a school) and may still carry out research as a participant observer. However, in this case, the researcher should be aware of his/her knowledge of the community and should be cautious that such knowledge would not lead to preoccupations about the school under research. In cases where the researchers have successfully gained membership (as Whyte did in the Italian  slum), the distinction between a native member and the researcher-as-participant begins to blur. This insider-outsider dialectics will be further discussed later. Nonparticipant Observation Strictly speaking, nonparticipant observation involves merely watching what is happening and recording events on the spot. In the qualitative orientation, because of the non-intervention principle, strict nonparticipant observation should involve no interaction between the observer and the observed. Goetz and LeCompte assert that in the strict sense â€Å"nonparticipant observation exists only where interactions are viewed through hidden camera and recorder or through one-way mirror† (1984: 143). Dabbs (1982:41), for example, used hidden camera in Atlanta at a plaza in Georgia State University, and studied an informal group that frequently gathered during the morning break. There are examples of using hidden video-cameras in school toilets to study drug problem among students, or to use unnoticed audio recording device to study student interactions. The use of audio or video recording device often invites concern in ethnical considerations. Such problems are similar to those arising in using one-way mirrors in interviews or psychological experiments. Such cases are rare in policy-related research. Another case of nonparticipant observation with ethical problem is disguised observation, or covert observation. A typical example is Humphrey’s (1975) study on homosexual activities. He did not participate in such activities, but offered to act as â€Å"watch queen†, warning his informants when someone approached the toilet. Another famous example is Van Maanen’s covert study of police. He became practically a police recruit. Over more than a decade, he â€Å"slipped in and out† of the police in various research roles (Van Maanen, 1982). Covert observations are again rare in research which is related to educational decision-making. Hidden camera or recorder and covert observation occur only exceptionally.  Most author would accept the watching of audience behaviour during a basketball game (Fetterman, 1989:47) or the watching of pedestrian behaviour over a street as acceptable examples of nonparticipant observations. Interaction between the researcher and the social community under study is often unavoidable. We have again discussed this at length in Chapter 3 under the notion of researcher intervention. If we perceive the problem of intervention as a matter of degrees, then the distinction between participant observation and nonparticipant observation begins to blur. The general principle across the board is that the researchers should minimize their interactions with the informants and focus attention unobtrusively on the stream of events (Goetz and LeCompte, 1984:143). Wolcott’s study of school principal (Case 3) was perhaps the most intensive type of nonparticipant observation that one could find in the realm of education. (He also used other supplementary methods as mentioned in Case 3). He did live with the school for two years, but he did not participate as a school principal which was his subject of study. He saw his role as one of â€Å"participant-as-observer† (Wolcott, 1984:7). So was Li’s study (Case 3.8) of classroom sociology in her first year. She did stay with the school as a teacher but she never became a student which was her subject of study. The following two years of her study, however, was not nonparticipant observation because she applied experimental measures. During the UNICEF research in Liaoning, the basic method I used was interviewing and not nonparticipant observation, but I did have, at times, nonparticipant observation when debates occurred between the local planners and the provincial planners (Case 3.7), or when planners chat among themselves about their past experience in the field. The most frequently employed nonparticipant observation which is relevant to educational decision-making is perhaps observation at meetings. Typically, the researcher attends a meeting as an observer. The researcher tries to be as unobtrusive as possible and records everything that happens during the meeting. When Wolcott did his study on the school principal, he was present at all meetings unless he was told otherwise (Wolcott, 1984:4). The following was my experience of a non-participant observation in China. Case 4.3: A Validation Seminar I realized during the UNICEF research in Liaoning (Case 4) that one essential step in the planning for basic education in China was validation. When drafting of an education plan was complete, the draft plan had to undergo scrutiny in what is known as a validation seminar. In essence, all those related to the plan, including leaders at all levels, representatives of all relevant government departments, experts from all areas – are invited to discuss. Relevant documents are sent to the participants well in advance. They are then asked to comment on the plan during the validation exercise. Only â€Å"validated† plans are submitted to relevant machinery for legislation. The validation seminar for Liaoning was unfortunately held before the UNICEF research. I got an opportunity, however, a year after in 1988, when the Shanghai educational plan was to undergo validation. The host of the meeting agreed to send me an invitation. I attended the meeting in the name of an â€Å"external expert†, although I made clear to the host that my major task was not to contribute. They agreed. During the meeting, I was able to observe the roles of the various â€Å"actors† during the meeting. I was also able to talk to individual participants during tea breaks and meals to understand their background and their general views about educational planning. I was able to do a number of things over the two-day meeting: (a) to classify the over 40 participants into technocrats, bureaucrats, policy-makers and academics; (b) to understand the different extents in which the participants contributed to the modification of the plan; (c) the disparity in capacity among participants in terms of information and expertise; (d) the inter-relations between the different categories of actors and (e) the function of the validation exercise. In the end, I concluded that val idation was a way of legitimation, which employed both technical (expert judgement) and political (participation) means to increase the acceptability of the plan before it went for legal endorsement. The political aspect came to me as a surprise. It indicated a change in the notion of rationality among Chinese planners and policy-makers. Interviewing Interviewing is widely used in qualitative research. Compared with observation, it is more economical in time, but may achieve less in understanding the culture. The economy in time, however, makes ethnographic interviewing almost the most widely used technique in policy-related research. Interviewing is trying to understand what people think through their speech. There are different types of interviews, often classified by the degrees of control over the interview. Along this line, we shall briefly introduce three types of interviewing: informal interviewing, unstructured interviewing, semi-structured interviewing, and formally structured interviewing. We shall also briefly introduce key-informant interviewing and focus groups which are specific types of ethnographic interviewing. Qualitative research of course has no monopoly over interviewing. Interviewing is also frequently used in research of other traditions. The difference between ethnographic interviewing and interviewing in other traditions lies mainly in two areas: the interviewer-interviewee relationship and the aims of interviews. Ethnographic interviewees, or informants, are teachers rather than subjects to the researcher, they are leaders rather than followers in the interview. The major aim of the interview should not be seeking responses to specific questions, but initiating the informant to unfold data. Readers may find more detailed discussions about ethnographic interviewing in Spradley (1979) who provides perhaps the most insightful account of the subject. In-depth discussions about ethnographic interviewing can also be found in Bernard (1988), Patton (1990), Fetterman (1989) and Powney and Watts (1987). Informal Interviewing Informal interviewing entails no control. It is usually conversations that the researcher recall after staying in the field. It is different from  Ã¢â‚¬Å"observation† in that it is interactive. That is, the informant speaks to the researcher. By its own nature, informal interviewing is the most â€Å"ethnographic† in the sense that it is not responding to any formal question. It is part of the self-unfolding process.