Gramsci and Hegemony Essay Example for Free

Gramsci and Hegemony Essay Antonio Gramsci is an important figure in the history of Marxist theory. While Karl Marx and Friedrich Engels provided a rigorous analysis of capital at the social and economic levels – particularly showing how capital antagonises the working class and gives rise to crisis – Gramsci supplemented this with a sophisticated theory of the political realm and how it is organically/dialectically related to social and economic conditions. He provides us with a theory of how the proletariat must organise politically if it is to effectively respond to capital’s crises and failures, and bring about revolutionary change. Incidentally, this innovation has proven to be of interest not only to Marxists, but also to those involved in other forms of progressive politics, from the civil rights movement, to gender politics, to contemporary ecological struggles. The reason why his approach has proven so popular and generally adaptable is because Gramsci was himself a man of action and his fundamental concern was with progressive strategy. Thus while in this article I plan to give a give a general outline of Gramsci’s theory of hegemony and the reasons behind its formulation, it’s important that we build on this by thinking about how we can use these concepts strategically in our own struggles. What is hegemony? It would seem appropriate to begin this discussion by asking What is hegemony?’’ It turns out to be a difficult question to answer when we are talking about Gramsci, because, at least within The Prison Notebooks, he never gives a precise definition of the term. This is probably the main reason why there is so much inconsistency in the literature on hegemony – people tend to form their own definition, based on their own reading of Gramsci and other sources. The problem with this is that if people’s reading of Gramsci is partial then so too is their definition. For example, Martin Clark (1977, p. 2) has defined hegemony as how the ruling classes control the media and education’’. While this definition is probably more narrow than usual, it does reflect a common misreading of the concept, namely that hegemony is the way the ruling class controls the institutions that control or influence our thought. Most of the academic and activist literature on hegemony, however, takes a slightly broader view than this, acknowledging more institutions than these being involved in the exercise of hegemony – at least including also the military and the political system. The problem is that even when these institutions are taken into account, the focus tends to be exclusively on the ruling class, and methods of control. Hegemony is frequently used to describe the way the capitalist classes infiltrate people’s minds and exert their domination. What this definition misses is the fact that Gramsci not only used the term hegemony’’ to describe the activities of the ruling class, he also used it to describe the influence exerted by progressive forces. Keeping this in mind, we can see that hegemony should be defined not only as something the ruling class does, it is in fact the process by which social groups – be they progressive, regressive, reformist, etc. – come to gain the power to lead, how they expand their power and maintain it. To understand what Gramsci was trying to achieve through developing his theory of hegemony, it is useful to look at the historical context that he was responding to as well as the debates in the movement at the time. The term hegemony’’ had been in general use in socialist circles since the early 20th century. Its use suggests that if a group was described as hegemonic’’ then it occupied a leadership position within a particular political sphere (Boothman, 2008). Lenin’s use of the term gegemoniya (the Russian equivalent of hegemony, often translated as vanguard’’), however, seemed to imply a process more akin to what Gramsci would describe. During his attempts to catalyse the Russian Revolution Lenin (1902/1963) made the observation that when left to their own devices, workers tended to reach only a trade union consciousness, fighting for better conditions within the existing system. To bring about revolutionary change, he argued that the Bolsheviks needed to come to occupy a hegemonic position within the struggle against the tsarist regime. This meant not only empowering the various unions by bringing them together, but also involving all of society’s opposition strata’’ in the movement, drawing out the connections between all forms of political oppression and autocratic arbitrariness’’ (Lenin, 1963, pp. 86-87). In the post-revolutionary period, however, the implication changed. Lenin argued that it was crucial to the establishment of the hegemony of the proletariat’’ that (a) the urban proletariat retain an ongoing alliance with the rural peasants (who made up the majority of Russia’s population) in order to retain national leadership and (b) that the expertise of the former capitalists be utilised, by forcing them to effectively manage state industries. These dual processes of leadership via consent and the command of force in the development of hegemony would play a crucial role in Gramsci’s theory. Gramsci had been in Russia from 1922-23 while these debates were raging and it was after this time that we see hegemony begin to take a central role in his writings. Italy As much as he was influenced by what was going on in Russia, Gramsci was also influenced by his own political experiences. Gramsci had been heavily involved in the struggle against capitalism and fascism in Italy and for a while served as the leader of the Communist Party of Italy. In the period following the World War I, there had been a lot of optimism in Europe, and Italy in particular, that now that people had seen the atrocities that the ruling classes could unleash and the alternative that was developing in Russia, some kind of workers’ revolution in Europe was imminent. Gramsci certainly shared this optimism. Events that took place in the early 1920s seemed to confirm this. Tensions at all strata of society were high, there were mass agitations and people were forming factory councils and workers co-operatives. But despite the intensity of the mobilisations, it fizzled out remarkably quickly. Unions were co-opted, workers’ co-ops became marginal and uncompetitive. Common people were intimidated by elites or otherwise captivated by the allure of fascist rhetoric. Gramsci and others formed the Italian Communist Party to try to reinvigorate the movement, but it was evident that people were too disillusioned by the failures of the previous years to really become involved. Votes for the Communist Party were disappointingly low. When Gramsci was arrested in 1926 as a part of Mussolini’s emergency measures, he found himself in prison with a lot of time to reflect on what had happened and where things went wrong. How was it that the ruling class had been able to so effectively stifle the potential of the movement, and what would be required for the progressive forces to mobilise the masses in a way that would enable them to bring about a fundamental change in society? These questions would of course be central to Gramsci’s theory of hegemony. Stages As suggested above, in The Prison Notebooks Gramsci refers to hegemony to describe activities of both currently dominant groups as well as the progressive forces. For Gramsci, whatever the social group is, we can see that there are certain common stages of development that they must go through before they can become hegemonic. Drawing on Marx, the first requirement is economic: that the material forces be sufficiently developed that people are capableof solving the most pressing social problems. Gramsci then goes on to state that there are three levels of political development that a social group must pass through in order to develop the movement that will allow change to be initiated. The first of these stages is referred to as economic-corporate’’. The corporatist is what we might understand as the self-interested individual. People become affiliated at the economic-corporate stage as a function of this self-interest, recognising that they need the support of others to retain their own security. Trade unionism is probably the clearest example of this, at least in the case of people joining a union for fear of pay cuts, retrenchment etc. One can also speak of short-term co-operation between otherwise competing capitalists in these terms. The point to emphasise is that at this stage of a group’s historical development there is no real sense of solidarity between members. In the second stage, group members become aware that there is a wider field of interests and that there are others who share certain interests with them and will continue to share those interests into the foreseeable future. It is at this stage that a sense of solidarity develops, but this solidarity is still only on the basis of shared economic interests. There is no common worldview or anything of that nature. This kind of solidarity can lead to attempts to promote legal reform to improve the group’s position within the current system, but consciousness of how they, and others, might benefit through the creation of a new system is lacking. It is only by passing through the third stage that hegemony really becomes possible. In this stage, the social group members becomes aware that their interests need to be extended beyond what they can do within the context of their own particular class. What is required is that their interests are taken up by other subordinate groups as their own. This was what Lenin and the Bolsheviks were thinking in forming an alliance with the peasants – that it was only through making the Bolshevik revolution also a peasants’ revolution, which peasants could see as being their own, that the urban proletariat could maintain its leading position. Gramsci reckoned that in the historical context that he was working in, the passage of a social group from self-interested reformism to national hegemony could occur most effectively via the political party. In this complex formulation, the different ideologies of allied groups come together. There will inevitably be conflict between these ideologies, and through a process of debate and struggle, one ideology, or a unified combination thereof, will emerge representing the allied classes. This ideology can be said to be hegemonic, the group that it represents has acquired a hegemonic position over the subordinate groups. At this stage, the party has reached maturity, having a unity of both economic and political goals as well as a moral and intellectual unity – one might say a shared worldview. With this unity behind it, the party sets about transforming society in order to lay the conditions for the expansion of the hegemonic group. The state becomes the mechanism by which this is done: policies are enacted and enforced that allow the hegemonic group to more effectively achieve its goals and to create symmetry between its goals and those of other groups. Although these goals are formulated with the interests of a single group in mind, they need to be experienced by the populace as being in the interests of everybody. In order for this to be effective, the hegemonic group must have some form of engagement with the interests of the subordinate classes. The dominant interests cannot be simplistically imposed upon them. Progressive hegemony While Gramsci considers these pragmatic moves as being requirements for any group to come to power, he also has a very deep ethical concern for the way in which the process occurs. In this sense, we can detect in Gramsci’s work a qualitative difference between the operations of hegemony by regressive, authoritarian groups on the one hand, and progressive social groups on the other. At an ethical level, Gramsci was above all else an anti-dogmatist believing that truth could not be imposed from the top down, but only made real through concrete and sympathetic dialogue with people. Where a regressive hegemony involves imposing a set of non-negotiable values upon the people, chiefly through use of coercion and deceit, a progressive hegemony will develop by way of democratically acquired consent in society. To give some flesh to these differences, the remainder of this article will elaborate on the different ways in which Gramsci talks about hegemonies of currently and previously ruling classes and how these contrast with the progressive hegemony that he hoped to see in the future. It is evident that if we look through history, the capitalist class has retained its hegemony primarily through various forms of coercion, ranging from the direct deployment of the military through to more subtle forms, for example, using economic power to marginalise political opponents. It would, however, be a great mistake to think that capitalism does not also rely heavily upon building consent. Indeed, it could be argued that it is capitalism’s consent-building that we, from a strategic point of view, need to pay more attention to, as it is on this level that we compete with them. The nature and strength of this consent varies. There are ways in which capitalism succeeds in actively selling its vision to subordinate classes. This means not only selling the distorted vision of a society of liberty, freedom, innovation, etc., but also deploying the ideas of bourgeois economics to convince working people, for example, that although capitalist policy is in the ultimate interests of the capitalist class, they too gain some of the benefits via trickle-down effects. Capitalism can also win consent among those who perhaps don’t buy the idea that the system is in their interests, but who have been convinced that there is no alternative or that the alternatives would be worse – in other words, through the promotion of the belief that the system is a necessary evil. The 20th century saw capitalism massively expand this form of consensus, largely through the corporate control of the media and advertising. In the United States in particular, the promotion of the American dream’’, and all of the useless commodities required to attain it, served not only to massively boost consumption and thereby the economic interests of the capitalists, it also sold a way of life which only capitalism could deliver. This was of course aided throughout the Cold War with simultaneous attempts to smear any alternative to capitalism as slavery. The capitalist class, in opposing any policy attempts to close in on corporately owned media, used its hegemonic political power to create the conditions for the building of further consent, in turn expanding their interests. The hegemonic group will continually struggle in this fashion to reach greater levels of consent – in this case by locking people into rigid mindsets and overcoming any optimism. We can look at former Australian Prime Minister John Howard’s attempts to expand privately owned schools, and to change high school history syllabi to make them more favourable to bourgeois perspectives as a part of this ongoing hegemonic process. The ruling class will constantly try to expand its field of interests and win further consent in response to changes in context and challenges to legitimacy. `Syndicalism’ Certain forms of trade unionism can also be seen as examples of capitalist hegemony. What Gramsci calls syndicalism’’ the view that the conditions of the workers can be maximally uplifted via the increasing power of the trade unions reflects a social group (the workers) left in the economic-corporate stage of development due to the hegemonic influence of capitalists, specifically free trade advocates, in the realm of ideology. The free trade advocates argue that the state and civil society should be kept separate, that the state should keep out of the economic sphere, which functions autonomously – leave it to the invisible hand of the market’’ and so on. The syndicalists had adopted this assumption of an arbitrary separation of the social and economic realms on the one hand and the political realm on the other, and assume that they could bring about radical change without political representation. The concrete result of this is that they are left to negotiate for narrowly defined improvements in the economic sphere, with no policy changes that would allow these wins to take on a more permanent basis. Meanwhile, the free trade advocates are themselves actively involved in policy, despite their claims, setting up conditions that will be favourable to the capitalist class! When the interests of the capitalist class are directly threatened, however, the hegemonic forces will inevitably resort to coercion. There is no room to negotiate on this, within the current hegemonic order. On a simple level this can mean legislating to allow police to crack down on workers taking industrial action, who threaten profits in an immediate sense. But a far bigger threat to the capitalists is the development of a hegemonic alternative within civil society. The threat is that people will move from the economic-corporate phase, and recognise that their interests overlap with all of those whom capitalism marginalises and holds back, that they will come to recognise their power and demand radical change. This being the greatest threat to capital, the most effective way for it to use coercion is to break apart emerging progressive alliances between subordinate groups. When confronted with force and economic bullying, the people are less able to relate to the group. Concerns for survival mean that people have to defend their own interests as individuals. The movement of the progressive hegemony is slowed, as people are forced to behave in a corporatist manner. The ruling class can also try to violently break apart movements by stirring up ideological differences, appealing to religion, for example. Democracy and consensus Gramsci saw the development of a progressive hegemony involving a far greater degree of openness, democracy and consensus, rather than coercion. In so far as there is coercion, it should only exist to hold back those reactionary forces that would thwart society’s development. This would allow the masses the space in which to reach their potential. A large part of The Prison Notebooks is devoted to figuring out what would be required for this kind of hegemony to develop, and a lot of Gramscian thinkers since have devoted themselves to this puzzle. As a starting point, we can say that while the existing hegemony tries to keep all the disaffected and subordinate social groups divided, the emergent progressive hegemony must bring them together. Gramsci certainly recognised the challenge involved in this. In his own historical situation (and as is undoubtedly still the case in ours), there were considerable barriers between the marginalised groups in terms of experiences, language and worldview. What all of these groups had in common, however, was that none of them had adequate political representation within the current system. Gramsci calls these groups that lack political representation subaltern’’. The challenge of the hegemonic group is to provide a critique of the system such that subaltern groups are made aware of their commonality and then raised up’’ into the political life of the party. In order to facilitate this incorporation of others, Gramsci stressed the need for the hegemonic group to move beyond its economic-corporatist understanding of its own interests, sacrificing some of its immediate economic goals in the interest of deeper moral and intellectual unity. It would need to overcome its traditional prejudices and dogmas and take on a broader view if was to lead while maintaining trust and consensus (both necessary to overcome existing power). If these aligned forces are to have any historical significance, they need to be enduring and organically related to conditions on the ground, not merely a temporary convergence. To develop mass momentum they would need to demonstrate, both in people’s imagination and in action, that they were capable of coming to power and achieving the tasks they had set for themselves. These tasks must effectively be everyone’s tasks – they must come to represent every aspiration, and be the fulfilment of the failed movements of the previous generations. Such a demonstration of power and historical significance could not be achieved through a passive action, of which Gramsci provides the example of the general strike. If the movement simply represents the rejection of the existing system or non-participation in it, then it would quickly fragment into everyone’s unique ideas of what should replace the system precisely at the moment when unity is most called for. It must be an active embodiment of the collective will, crystallised in a constructive and concrete agenda for change. Clearly this is no small ask, and Gramsci is certainly not of the view that one can just implement these strategies as though reading from a manual. What is called for is for rigorous work on the ground laying the moral and intellectual terrain upon which these historical developments can occur. One develops the unity, self-awareness and maturity of the movement, making it a powerful and cohesive force, and then patiently, with careful attention to the contextual conditions, waits for the opportune moment for this force to be exerted. Moment of crisis This moment is the moment of crisis within the existing, dominant hegemony: the moment at which it becomes clear to the populace that the ruling class can no longer solve the most pressing issues of humanity. Provided that the progressive forces adequately assert the alternative at this moment and the ruling group is unable to rapidly rebuild consent, it becomes visible that the conditions under which the ruling group became hegemonic are now passing away and society can collectively say We don’t need you anymore.’’. Gramsci calls this process of historical purging catharsis’’ in which structure ceases to be an external force which crushes man, assimilates him to itself and makes him passive; and is transformed into a means of freedom, an instrument to create a new ethico-political form and a source of new initiatives.’’ (Gramsci, 1971, p. 367.) For Gramsci the need for this transition from the world as it is to the freedom to create the world anew should be the starting point for all Marxist strategy. So, what does Gramsci have to offer us? His insistence that the socialist political form should be one of openness, democracy and the building of consensus certainly provides us with greater vision and focus and really ought to inform the activities of all progressive political groups – if not for ethical reasons, then at least because in the present environment, without a willingness to genuinely work on building consensus with others, one’s chances of success are very much diminished. (We’re not the ruling class – we don’t have the means to coerce). More than this, however, Gramsci provides us with a way of thinking; he gives us the conceptual tools to dissect the political situation we find ourselves in, to view it in historical context and to understand where we can find the conditions for the further development of our power. †¢ [Trent Brown is a doctoral student at the University of Wollongong and a member of Friends of the Earth Illawarra.] Bibliography Boothman, D. (2008). Hegemony: Political and Linguistic Sources for Gramsci’s Concept of Hegemony’’. In R. Howson and K. Smith (Eds.), Hegemony: Studies in Consensus and Coercion. London: Routledge. Clark, M. (1977). Antonio Gramsci and the Revolution that Failed. New Haven: Yale University Press. Gramsci, A. (1926). Some aspects of the southern question’’ (V. Cox, Trans.). In R. Bellamby (Ed.), Pre-Prison Writings (pp. 313-337). Cambridge: Cambridge University Press. Gramsci, A. (1971). Selections from the Prison Notebooks of Antonio Gramsci, Q. Hoare G. N. Smith, eds. trans. London: Lawrence and Wishart. Howson, R. (2006). Challenging Hegemonic Masculinity. London: Routledge. Howson, R. Smith, K. (2008). Hegemony: Studies in Consensus and Coercion. London: Routledge. Lenin, V. I. (1963). What is to be Done? S.V. Utechin P. Utechin, trans. Oxford: Oxford University Press. From: http://links.org.au/node/1260

Analysis of My Papas Waltz by Theodore Rothke Essay -- My Papas Walt

Analysis of My Papa's Waltz by Theodore Rothke My Papa's Waltz is by Theodore Rothke it is about a childhood memory written later in his lifetime. Theodore Rothke's dad was an alcoholic drunk. Theodore Rothke went through a period where he was depressed and mentally unstable. Theodore Rothke was fascinated by the nature of the world; many of his poems were about this subject. Some people who read My Papa&'s Waltz come to the conclusion that it is about a drunken abusive father. However, I think when he was writing this he was reminiscing about a good childhood memory from when he was around seven years old. Theodore Rothke?s life was anything but ordinary. Not only alcoholism but also mental breakdowns through out the middle and later part of his life troubled Theodore Rothke. Roth...

Power of Cash Flows

The Power of Cash Flow Ratios EXECUTIVE SUMMARY CASH FLOW RATIOS ARE MORE RELIABLE indicators of liquidity than balance sheet or income statement ratios such as the quick ratio or the current ratio. LENDERS, RATING AGENCIES AND WALL STREET analysts have long used cash flow ratios to evaluate risk, but auditors have been slow to use them. SOME CASH FLOW RATIOS COMPARE THE RESOURCES A company can muster with its short-term commitments. OTHER CASH FLOW RATIOS MEASURE A COMPANYS ability to meet ongoing financial and operational commitments.THERE IS NO CONSENSUS ON THE DEFINITION OF NET free cash flow, although the authors suggest taking off-balance-sheet financing into account. AUDITORS CAN USE THE INSIGHTS uncovered by cash flow ratios to spotlight potential problem areas, thus helping them plan their audits more effectively. JOHN R. MILLS, CPA, PhD, is a professor in the Department of Accounting and CIS at the University of Nevada, Reno. His e-mail address is www. [email  protected] unr. edu1. Mills experience includes auditing and consulting in the gaming industry. JEANNE H.YAMAMURA, CPA, PhD, is an assistant professor in the accounting and CIS department at the university's Reno campus. Her e-mail address is www. [email  protected] edu2. Yamamura worked as an auditor overseas, including a stint in Papua, New Guinea. To fully understand a company's viability as an ongoing concern, an auditor would do well to calculate a few simple ratios from data on the clients cash flow statement (the statement of sources and uses of cash). Without that data, he or she could end up in the worst possible position for an auditor—having given a clean opinion on a client's financials just before it goes belly up.When it comes to liquidity analysis, cash flow information is more reliable than balance sheet or income statement information. Balance sheet data are static—measuring a single point in time—while the income statement contains many arbitrary noncas h allocations—for example, pension contributions and depreciation and amortization. In contrast, the cash flow statement records the changes in the other statements and nets out the bookkeeping artifice, focusing on what shareholders really care about: cash available for operations and investments.For years, credit analysts and Wall Street barracudas have been using ratios to mine cash flow statements for practical revelations. The major credit-rating agencies use cash flow ratios prominently in their rating decisions. Bondholders—especially junk bond investors—and leveraged buyout specialists use free cash flow ratios to clarify the risk associated with their investments. That's because, over time, free cash flow ratios help people gauge a company's ability to withstand cyclical downturns or price wars.Is a major capital expenditure feasible in a tough year? If the last time total cash got a hair below where it is now the company's capital structure had to be r evamped, the auditor should treat the deficient value like a loud buzzer. Many auditors and, to a lesser extent, corporate financial managers have been slow to learn how to use cash flow ratios. In our experience, auditors traditionally use either a balance sheet or a transaction cycles approach. Neither approach emphasizes cash or the statement of cash flows.While auditors do use the cash flow statement to verify balance sheet and income statement accounts and to trace common items to the cash flow statement, their use of ratios for cash-related analysis has been limited to the current ratio (current assets/current liabilities) or the quick ratio (current assets less inventory/current liabilities). According to an informal survey of Big 5 and other national accounting firms, even now their audit procedures have not changed in ways that take advantage of the information presented in the cash flow statement, even though that statement has been required for over a decade.The value of cash flow ratios was evident in the collapse of W. T. Grant. Traditional ratio analysis performed during the annual audit did not reveal the severe liquidity problems that resulted in a bankruptcy filing shortly thereafter. While W. T. Grant showed positive current ratios as well as positive earnings, in fact it had severely negative cash flows that rendered it unable to meet current debt and other commitments to creditors. Educators have not been emphasizing the cash flow statement either. Auditing textbooks commonly include only ratios based on the balance sheet and income statement with little or no discussion of cash ratios.The next generation of auditors needs to learn how to use cash flow ratios in audits because such measures are becoming increasingly important to the marketplace. Investors and others are relying on them. The cash flow ratios we find most useful fall into two general categories: ratios to test for solvency and liquidity and those that indicate the viability o f a company as a going concern. In the first, liquidity indicators, the most useful ratios are operating cash flow (OCF), funds flow coverage (FFC), cash interest coverage (CIC) and cash debt coverage (CDC).In the second category, ratios used to assess a company's strength on an ongoing basis, we like total free cash (TFC), cash flow adequacy (CFA), cash to capital expenditures and cash to total debt. Lenders, rating agencies and analysts use all of these. Auditors should know when and how to use them, too. The gaming industry expanded to 12 states from 2 between 1989 and 1995. During that time, many of the traditional casino corporations managed asset growth rates of 200% and more. Rapid expansion led to major problems, including bankruptcy, when revenues did not meet projections.As this examination of two gaming companies shows, cash flow analysis can help avoid business meltdowns, providing auditors and clients with an additional level of comfort in both planning the audit and ev aluating the strength of the going concern. Boomtown was a relatively young but successful Nevada company that went public in October 1992, with assets of $56 million. By 1995, its assets were up to $239 million, dropping to $206 million in 1996. Company operations grew from one casino in the local Nevada market to four properties in three states—Nevada, Louisiana and Mississippi.In the same period, Circus Circus was one of the largest and most profitable gaming corporations in the industry. Its properties, also all in Nevada at that time, included the Excalibur and the original Circus Circus in Las Vegas, the Colorado Bell and Edgewater in Laughlin and the Circus Circus in Reno. The company grew from total assets of $783 million in 1992 to over $2. 2 billion by 1996, including acquisitions. By the end of 1996, it had operations in three states—Nevada, Louisiana and Mississippi. Liquidity Assessment Exhibit 13, shows a variety of ratios calculated from the financial st atements of Boomtown and Circus Circus.The figures cover the period from 1992 to 1996, although Circus Circus was on a January 31 fiscal year while Boomtown used a fiscal year ending September 30. Look at the lines for the current ratio (current assets/ current liabilities) and the quick ratio (current assets less inventories/current liabilities) for each. Viewed through the lens of these traditional balance-sheet-based ratios, Boomtown appears to be stronger financially than Circus Circus. But this was not the case. Boomtown's current ratio was frequently well over 1. 00, even soaring to 4. 4 in 1993, while Circus Circus current ratio never strayed over 1. 32. Boomtown was able to maintain a higher quick ratio as well. Over the five years in question, Boomtown's current ratio showed fairly consistent improvement, a trend that would be reassuring to most auditors. Although the balance sheet ratios for both companies are fairly low, that is normal for the gaming industry. Casinos jus t don't carry much inventory—mostly perishable foods and the like. And gaming companies carry practically no receivables because gaming generally is a cash business.The traditional measures don't address operating cash flows or cash interest coverage directly, but auditors can use cash flow ratios to answer questions about their clients liquidity—Are these companies generating enough cash to cover their current liabilities? How many times does cash flow from operations cover interest expense? Running a Casino†¦ Image Boomtown's cash interest coverage was considerably weaker than that of Circus Circus, except in 1993, when Boomtown had no long-term debt. Circus Circus consistently maintained cash in excess of 5 times debt. Now look at the line for OCF.Over the interval shown, the Circus Circus OCF ratio slipped under 2. 00 only once, meaning that it generated enough cash to cover its current liabilities twice over—and even improved on that despite a rapid gr owth rate. The company's cash interest coverage ratio also was consistently high. Boomtown's cash flow ratios, however, might surprise an auditor relying solely on balance sheet ratios. Its OCF was consistently weaker than that of Circus Circus, even slipping into a negative position in 1994. Once Boomtown's OCF slipped below 1. 00, it was not generating enough cash to meet its current commitments.Accordingly, it had to find other sources for financing normal operations. An auditor relying solely on the quick and current ratios in this instance would have missed that important point. An auditor who bothered to calculate two other cash flow ratios—FFC and cash/current debt—would have gotten even more remarkable results. Because Circus Circus carried very little current debt, its cash covered current debt well over 175 times in every year, while Boomtown's cash didn't even cover current debt in 1994, and its cash/current debt coverage was in the single digits for three o f the other four years.More remarkably, Boomtown's FFC went negative in 1994 and again in 1996 and was consistently weaker than that of Circus Circus in every year. Accordingly, the conclusions an auditor might draw after looking at the cash flow ratios might differ sharply from his or her opinion based solely on balance sheet ratios. Going-Concern Analysis Traditionally, auditors have used the balance-sheet-based debt-to-equity ratio (total debt/total equity) and the times-interest-earned (EBIT/annual interest payments) ratio to examine a company's longer-term financial health (see exhibit 24).These measures do provide one perspective on the company's ability to carry its long-term debt obligations and its solvency. The traditional solvency ratios reveal big differences between Circus Circus and Boomtown. Although both companies expanded considerably in 1993 and 1994, the effects on each corporation's financial position were drastically different. Circus Circus showed a downward tr end in its traditional debt-to-equity ratio, an indicator of an increasingly strong balance sheet, while maintaining a fairly stable times-interest-earned ratio.After 1992, Boomtown's debt-to-equity ratio rose steadily, showing increasing reliance on outside borrowing. Its times-interest-earned ratio also weakened, even going negative twice. Cash flow ratios, however, provide an even clearer picture of each company's financial solvency. Consider the lines for TFC, two for each company—one based on actual capital expenditures and the other on estimated maintenance spending. Negative figures in 1993 reveal that Circus Circus needed to go outside to raise cash for capital expenditures in both 1993 and 1994.However, using a capital maintenance approach, figures consistently greater than 1. 0 show the company was clearly generating enough cash flow from operations to maintain its normal operations and to provide at least some funds for additional growth. But 1993 and 1994 were yea rs when total assets grew at 21% and 37%. Few companies could expand at this rate solely with internally generated funds from operations. Analysis of Boomtown's cash flow ratios unveils a very different kind of growth. Its TFC (maintenance) ratio slipped below 1. 0 for three years in a row.An auditor who notices that Boomtown wasn't able to fund normal operations from internal sources for three consecutive years has heard an alarm; however, the noise from the TFC (actual) ratio is even louder. Boomtown did not manage any of its growth from internally generated cash—it's TFC (actual) ratio never got above 1. 00! That can't go on forever. Now look at the total debt ratio line and the two cash flow adequacy (CFA) ratio lines for each company. The total debt ratio, to which credit-rating agencies and loan officers pay close attention, was quite stable for Circus Circus throughout.Boomtown's, which started out weaker, took one wild fluctuation way up and then collapsed. Looking at the CFA ratios, once again Circus Circus exhibits more than adequate funds for maintenance and sufficient internally generated cash for new capital investments in all but one year. The one exception was attributable to rapid growth. Boomtown's spectacularly negative ratios shout the company's need for substantial outside funding. Turning to the capital expenditures ratio lines, Boomtown was unable to generate enough cash internally to even maintain plant and equipment in 1994, despite more than doubling its total assets.Circus Circus, on the other hand, had plenty of cash for maintenance throughout and needed outside cash to fund growth only for a two-year interval. In fact, Boomtown's cash ratios do indeed reveal that drastic changes would have been needed for this company to survive on its own. It didn't. Boomtown was acquired by Hollywood Park, Inc. , on June 30, 1997. Boomtown also disposed of its Las Vegas property, which had generated continuing operating losses. Despite its earlier promise, Boomtown ran out of cash. Traditional ratios would not have provided sufficient warning, but cash flow ratios would have.Auditors who employ cash flow ratios to assess corporate liquidity and viability can help their clients spot trouble in time to take corrective action. HOW TO TEST SOLVENCY WITH CASH FLOW RATIOS Creditors and lenders began using cash flow ratios because those ratios give more information about a company's ability to meet its payment commitments than do traditional balance sheet working capital ratios such as the current ratio or the quick ratio. When a loan officer evaluates the risk she is taking by lending to a particular company, her greatest concern is whether the company can pay the loan back, with interest, on time.Traditional working capital ratios indicate how much cash the company had available on a single date in the past. Cash flow ratios, on the other hand, test how much cash was generated over a period of time and compare that to near -term obligations, giving a dynamic picture of what resources the company can muster to meet its commitments. Operating cash flow (OCF) Cash flow from operations Current liabilities Company's ability to generate resources to meet current liabilities Operating cash flow (OCF) ratio. The numerator of the OCF ratio consists of net cash provided by operating activities.This is the net figure provided by the cash flow statement after taking into consideration adjustments for noncash items and changes in working capital. The denominator is all current liabilities, taken from the balance sheet. Operating cash flow ratios vary radically, depending on the industry. For example, the gaming industry generates substantial operating cash flows due to the nature of its operations, while more capital-intensive industries, such as communications, generate substantially less. The gaming giant, Circus Circus, exhibited an OCF of 1. 37 for fiscal year l997 while the media king, Gannett, produced an OC F of 1. 148 for a similar period. In order to judge whether a company's OCF is out of line, an auditor should look at comparable ratios for the company's industry peers. (For further details, see the case study5. ) Funds flow coverage (FFC) EBITDA (Interest + Tax-adjusted* debt repayment + Tax-adjusted* preferred-dividends) Coverage of unavoidable expenditures *To adjust for taxes, divide by the complement of the tax rate. Funds flow coverage (FFC) ratio.The numerator of the FFC ratio consists of earnings before interest and taxes plus depreciation and amortization (EBITDA), which differs from operating cash flow. Operating cash flow includes cash paid out for interest and taxes, which EBITDA does not. The FFC ratio highlights whether the company can generate enough cash to meet these commitments (interest and taxes). Accordingly, interest and taxes are excluded from the numerator. The denominator consists of interest plus tax-adjusted debt repayment plus tax-adjusted preferred divi dends. To adjust for taxes, divide by the complement of the tax rate.All of the figures in the denominator are unavoidable commitments. An auditor can use the FFC ratio as a tool to evaluate the risk that a company will default on its most immediate financial commitments: interest payments, short-term debt and preferred dividends (if any). If the FFC ratio is at least 1. 0, the company can meet its commitments—but just barely. To survive in the long run, any company must have enough cash flow to maintain plant and equipment. To be really healthy, it should be able to reinvest cash for growth. Accordingly, if a company's FFC is less than 1. , the company must raise additional funds to meet current operating commitments. To avoid bankruptcy, it must keep raising fresh capital. Cash interest coverage Cash flow from operations + Interest paid + Taxes paid Interest paid Company's ability to meet interest payments Cash interest coverage ratio. The numerator of cash interest coverag e consists of cash flow from operations, plus interest paid plus taxes paid. The denominator includes all interest paid—short term and long term. The resultant multiple indicates the company's ability to make the interest payments on its entire debt load.A highly leveraged company will have a low multiple, and a company with a strong balance sheet will have a high multiple. Any company with a cash interest multiple less than 1. 0 runs an immediate risk of potential default. The company must raise cash externally to make its current interest payments. The cash interest coverage ratio is analogous to the old-fashioned coverage ratio (also known as the interest coverage ratio). However, where the numerator of the coverage ratio begins with earnings from the income statement, the numerator of the cash interest coverage ratio begins with cash from the cash flow statement.Cash interest coverage gives a more realistic indication of the company's ability to make the required interest payments. Earnings figures include all manner of noncash charges—depreciation, pension contributions, some taxes and stock options. A company with a low income-based coverage ratio may actually be able to meet its payment obligations, but the mask of noncash charges makes it difficult to see that. A cash-based coverage ratio gives a direct look at the cash available to pay interest. Cash current debt coverage Operating cash flow—cash dividends Current debtCompanys ability to repay its current debt Cash current debt coverage ratio. The numerator consists of retained operating cash flow—operating cash flow less cash dividends. The denominator is current debt—that is, debt maturing within one year. This is, again, a direct correlate of an earnings current debt coverage ratio, but more revealing because it addresses managements dividend distribution policy and its subsequent effect on cash available to meet current debt commitments. As with the cash interest coverage ratio, the current debt ratio indicates the company's ability to carry debt comfortably.The higher the multiple, the higher the comfort level. But like most other ratios, as long as the company is not insolvent, the appropriate level varies by industry characteristics. HOW TO USE CASH RATIOS AS A MEASURE OF FINANCIAL HEALTH Beyond questions of immediate corporate solvency, auditors need to measure a client's ability to meet ongoing financial and operational commitments and its ability to finance growth. How readily can the company repay or refinance its long-term debt? Will it be able to maintain or increase its current dividend to stockholders? How readily will it be able to raise new capital?Banks, credit-rating agencies and investment analysts understandably are very concerned with these questions. Accordingly, they have developed several ratios to provide answers to them. Auditors, who are more concerned about full disclosure, can use these same ratios to pinpoint area s for closer scrutiny when planning an audit. Capital expenditure Cash flow from operations Capital expenditures Company's ability to cover debt after maintenance or investment on plant and equipment Capital expenditure ratio. The numerator is cash flow from operations. The denominator is capital expenditures.A financially strong company should be able to finance growth. This ratio measures the capital available for internal reinvestment and for payments on existing debt. When the capital expenditure ratio exceeds 1. 0, the company has enough funds available to meet its capital investment, with some to spare to meet debt requirements. The higher the value, the more spare cash the company has to service and repay debt. As with all ratios, appropriate values vary by industry. Cyclical industries, such as housing and autos, may show more variation in this figure than noncyclical industries, such as pharmaceuticals and beverages.Also, a low figure is more understandable in a growth indu stry, such as technology, than in a mature industry, such as textiles. Total debt Cash flow from operations Total debt Company's ability to cover future debt obligations Total debt (cash flow to total debt) ratio. The numerator is cash flow from operations. The denominator is total debt—both long term and short term. Total cash flow to debt is of direct concern to credit-rating agencies and loan decision officers. This ratio indicates the length of time it will take to repay the debt, assuming all cash flow from operations is devoted to debt repayment.The lower the ratio, the less financial flexibility the company has and the more likely that problems can arise in the future. Auditors should take diminished financial flexibility into account when identifying high-risk audit areas during planning. NET FREE CASH FLOW RATIOS Other ratios that spotlight a company's viability as a going concern rely on a computation of net free cash flow. Net free cash flow (NFCF) is not yet well defined, although bankers are working to standardize these computations in a way that would facilitate comparisons across companies and across industries.However, at present, there are still many variations of net free cash flow. We propose a total free cash (TFC) ratio developed by First Interstate Bank of Nevada, which uses it to make loan decisions and loan covenant agreements. This TFC computation offers the advantage of incorporating the effects of off-balance-sheet financing—by taking into account operating lease and rental payments. Total free cash (TFC)†  (Net income + Accrued and capitalized interest expense + Depreciation and amortization + Operating lease and rental expense – Declared dividends – Capital expenditures) (Accrued and capitalized interest expense Operating lease and rental expense + Current portion of long-term debt + Current portion of capitalized lease obligations) Company's ability to meet future cash commitments †  These rat ios require computation of the company's net free cash flows. As net free cash flow can vary by company as well as by industry, the formulas should be considered as recommended rather than absolute. TFC ratio . The numerator of this ratio is the sum of net income, accrued and capitalized interest expense, depreciation and amortization and operating lease and rental expense less declared dividends and capital expenditures.The denominator is the sum of accrued and capitalized interest expense, operating lease and rental expense, the current portion of long-term debt and the current portion of long-term lease obligations. Varying definitions of capital expenditures can confuse the issue. Since different definitions change the value of free cash flow ratios, it is best to be clear about which definition the auditor is using and why it makes sense for a particular purpose. For example, if the auditor is trying to determine whether the company can maintain its present level of operations, the capital spending figure used hould exclude new investments and be limited to the amount of spending required to maintain operating assets. Sometimes maintenance spending is estimated at 2% of total assets, or up to 5% of property, plant and equipment. Industries with very long-lived capital assets may use smaller percentages to estimate maintenance spending. However, if the auditor is more interested in long-term growth potential, then actual capital expenditures from the cash flow statement should be used. Cash flow adequacy (CFA)†  (EBITDA – taxes paid – interest paid – capital expenditures) (Average annual debt maturities scheduled ver next 5 years) Company's credit quality †  These ratios require computation of the company's net free cash flows. As net free cash flow can vary by company as well as by industry, the formulas should be considered as recommended rather than absolute. Cash flow adequacy (CFA) ratio. The numerator is earnings before interest, taxes, depreciation and amortization (EBITDA) less taxes paid (cash taxes) less interest paid (cash interest) less capital expenditures (as qualified above). The denominator is the average of the annual debt maturities scheduled over the next five years.Cash flow adequacy helps smooth out some of the cyclical factors that pose problems with the capital expenditure ratio. It also makes allowances for the effects of a balloon payment. Companies with strong NFCF compared with upcoming debt obligations are better credit risks than companies that must use outside capital sources. Thus, a high CFA means high credit quality. KNOW YOUR CLIENT In order to fully understand where to set the levels at which the cash flow ratios discussed here should trigger deeper investigation, auditors need to understand their clients businesses and the industries in which they operate.As with any other ratio, an auditor should listen to the client's explanation of any unfavorable changes in cash r atios before becoming too alarmed. An auditor should know what cash concerns are critical to a company's business. We wouldn't suggest that a successful audit is just a matter of picking the right equations and plugging in the numbers. There are no absolutes. But properly applied, cash flow ratios can be revealing to auditors during the audit planning stages and can give the auditor a more accurate picture of the company. Auditors must ascertain whether the financial statements are fairly presented in accordance with GAAP.They must be satisfied with the accuracy of the transactions and balances summarized in the four financial statements and the related disclosures. Effective auditors can use cash flow ratios to improve their understanding of the cash concerns critical to the particular company and to plan the audit more effectively. References ^www. [email  protected] unr. edu (www. readability. com) ^www. [email  protected] edu (www. readability. com) ^Exhibit 1 (www. journalo faccountancy. com) ^exhibit 2 (www. journalofaccountancy. com) ^case study (www. journalofaccountancy. com)

300 the Movie Analysis - 645 Words

The movie is based upon a graphic novel by Frank Miller (of comic book fame). They are both based upon a one of the most famous battles in the Persian Wars (492 - 449 BC), The Battle of Thermopylae. The Battle of Thermopylae goes down in history for being one of the most heroic feats of bravery in any war. The Spartan King Leonidas led 300 Spartan warriors in a fight to block the Persian Army from passing into Greece through a two meter wide pass through the mountains of Thermopylae. The Persian army that vastly outnumbered the Spartans was beat back for two days and during those defeats they suffered heavy losses that outweighed the Spartans 20 to 1. All was lost on the third day after a traitor revealed to the Persian King Xexres that†¦show more content†¦I wonder, are the days of King Leonidas gone forever? I can tell you that I cant wait to see the film 300 because the story has really moved me. url 1: http://www.slideshare.net/arpit105/300-lessons-in-strategy-from-the-movie url 2 : http://www.oppapers.com/essays/Leadership-In-Movie-300/214587 How tha hell did 300 spartans beat half a million persians...? There were a few thousand greeks present. They used the terrain to bottleneck the Persain force, making the actual number of Persians they had to fight a perfectly manageable number. †¢ The Spartans lived and breathed war. They learned to fight when they were children, and trained hard for it when they were adults. In addition, their armor, weapons, everything was far superior to what the Persians used. Their swords and spears made short work of the Persians wicker shields. Strategy wise, they were also far superior. The movie 300 was fairly accurate, as to where they fought. Only a small number of persians could come at them at a time. †¢ they were in a narrow pass and they had an almost impenatrable defenese with there shields, they were very well trained (from age 8 taking as a young boy) with 40lb bronze shields persian army had wicker shields (very weak) and were untrained mostly farmers. The spartans only had to swing and stab as the persians came running afterShow MoreRelatedFilm Analysis Of 300 Movie1428 Words   |  6 PagesRichardson History 101 26 September 2017 300 Film Analysis The 300 is a spectacular movie designed to provide the viewer with a sense of excitement and anticipation. The movie is loosely based on past events with Sparta and their conflict with Persia, back in 480 BC. And while the movie is founded on a historical event, there are many historical inaccuracies throughout the film. 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