Round The World Tips: Desember 2011

Senin, 26 Desember 2011

What does an audit do?

If a business breaks the rules of accounting and ethics, it can be liable for legal sanctions against it. It can deliberately deceive its investors and lenders with false or misleading numbers in its financial report. That's where audits come in. Audits are one means of keeping misleading financial reporting to a minimum. CPA auditors are like highway patrol officers who enforce traffic laws and issue tickets to keep speeding to a minimum. An audit exam can uncover problems that the business was not aware of.

After completing an audit examination, the CPA prepares a short report stating that the business has prepared its financial statements, according to generally accepted accounting principles (GAAP), or where it has not. All businesses that are publicly traded are required to have annual audits by independent CPAs. Those companies whose stocks are listed on the New York Stock Exchange or Nasdaq must be audited by outside CPA firms. For a publicly traded company, the expense of conducting an annual audit is the cost of doing business; it's the price a company pays for going into public markets for its capital and for having its shares traded in the public venue.

Although federal law doesn't require audits for private businesses, banks and other lenders to private businesses may insist on audited financial statements. If the lenders don't require audited statements, a business's owners have to decide whether an audit is a good investment. Instead of an audit, which they can't really afford, many smaller businesses have an outside CPA come in on a regular basis to look over their accounting methods and give advice on their financial reporting. But unless a CPA has done an audit, he or she has to be very careful not to express an opinion of the external financial statements. Without a careful examination of the evidence supporting the amounts reported in the financial statements, the CPA is in no position to give an opinion on the financial statements prepared from the accounts of the business.

What is a sole proprietorship?

A sole proprietorship is the business or an individual who has decided not to carry his business as a separate legal entity, such as a corporation, partnership or limited liability company. This kind of business is not a separate entity. Any time a person regularly provides services for a fee, sells things at a flea market or engage in any business activity whose primary purpose is to make a profit, that person is a sole proprietor. If they carry on business activity to make profit or income, the IRS requires that you file a separate Schedule C "Profit or Loss From a Business" with your annual individual income tax return. Schedule C summarizes your income and expenses from your sole proprietorship business.

As the sold proprietor of a business, you have unlimited liability, meaning that if your business can't pay all it liabilities, the creditors to whom your business owes money can come after your personal assets. Many part-time entrepreneurs may not know this, but it's an enormous financial risk. If they are sued or can't pay their bills, they are personally liable for the business's liabilities.

A sole proprietorship has no other owners to prepare financial statements for, but the proprietor should still prepare these statements to know how his business is doing. Banks usually require financial statements from sole proprietors who apply for loans. A partnership needs to maintain a separate capital or ownership account for each partners. The total profit of the firm is allocated into these capital accounts, as spelled out in the partnership agreement. Although sole proprietors don't have separate invested capital from retained earnings like corporations do, they still need to keep these two separate accounts for owners' equity - not only to track the business, but for the benefit of any future buyers of the business.

What happened in corporate accounting scandals?

When a corporation deliberately conceals or skews information to appear healthy and successful to its shareholders, it has committed corporate or shareholder fraud. Corporate fraud may involve a few individuals or many, depending on the extent to which employees are informed of their company's financial practices. Directors of corporations may fudge financial records or disguise inappropriate spending. Fraud committed by corporations can be devastating, not only for outside investors who have made share purchases based on false information, but for employees who, through 401ks, have invested their retirement savings in company stock.

Some recent corporate accounting scandals have consumed the news media and ruined hundreds of thousands of lives of the employees who had their retirement invested in the companies that defrauded them and other investors. The nuts and bolts of some of these accounting scandals are as follows:

WorldCom admitted to adjusting accounting records to cover its operation costs and present a successful front to shareholders. Nine billion dollars in discrepancies were discovered before the telecom corporation went bankrupt in July of 2002. One of the hidden expenses was $408 million given to Bernard Ebbers (WorldCom's CEO) in undisclosed personal loans.

At Tyco, shareholders were not informed of the $170 million in loans that were taken by Tyco's CEO, CFO, and chief legal officer. The loans, many of which were taken interest free and later written off as benefits, were not approved by Tyco's compensation committee. Kozlowski (former CEO), Swartz (former CFO), and Belnick (former chief legal officer) face continuing investigations by the SEC and the Tyco Corporation, which is now operating under Edward Breen and a new board of directors.

At Enron, investigations against uncovered multiple acts of fraudulent behavior. Enron used illegal loans and partnerships with other companies to cover its multi-billion dollar debt. It presented erroneous accounting records to investors, and Arthur Anderson, its accounting firm, began shredding incriminating documentation weeks before the SEC could begin investigations. Money laundering, wire fraud, mail fraud, and securities fraud are just some of the indictments directors of Enron have faced and will continue to face as the investigation continues.

How is accounting used in business?

It might seem obvious, but in managing a business, it's important to understand how the business makes a profit. A company needs a good business model and a good profit model. A business sells products or services and earns a certain amount of margin on each unit sold. The number of units sold is the sales volume during the reporting period. The business subtracts the amount of fixed expenses for the period, which gives them the operating profit before interest and income tax.

It's important not to confuse profit with cash flow. Profit equals sales revenue minus expenses. A business manager shouldn't assume that sales revenue equals cash inflow and that expenses equal cash outflows. In recording sales revenue, cash or another asset is increased. The asset accounts receivable is increased in recording revenue for sales made on credit. Many expenses are recorded by decreasing an asset other than cash. For example, cost of goods sold is recorded with a decrease to the inventory asset and depreciation expense is recorded with a decrease to the book value of fixed assets. Also, some expenses are recorded with an increase in the accounts payable liability or an increase in the accrued expenses payable liability.

Remember that some budgeting is better than none. Budgeting provides important advantages, like understanding the profit dynamics and the financial structure of the business. It also helps for planning for changes in the upcoming reporting period. Budgeting forces a business manager to focus on the factors that need to be improved to increase profit. A well-designed management profit and loss report provides the essential framework for budgeting profit. It's always a good idea to look ahead to the coming year. If nothing else, at least plug the numbers in your profit report for sales volume, sales prices, product costs and other expense and see how your projected profit looks for the coming year.

Gains and Losses

It would probably be ideal if business and life were as simple as producing goods, selling them and recording the profits. But there are often circumstances that disrupt the cycle, and it's part of the accountants job to report these as well. Changes in the business climate, or cost of goods or any number of things can lead to exceptional or extraordinary gains and losses in a business. Some things that can alter the income statement can include downsizing or restructuring the business. This used to be a rare thing in the business environment, but is now fairly commonplace. Usually it's done to offset losses in other areas and to decrease the cost of employees' salaries and benefits. However, there are costs involved with this as well, such as severance pay, outplacement services, and retirement costs.

In other circumstances, a business might decide to discontinue certain product lines. Western Union, for example, recently delivered its very last telegram. The nature of communication has changed so drastically, with email, cell phones and other forms, that telegrams have been rendered obsolete. When you no longer sell enough of a product at a high enough profit to make the costs of manufacturing it worthwhile, then it's time to change your product mix.

Lawsuits and other legal actions can cause extraordinary losses or gains as well. If you win damages in a lawsuit against others, then you've incurred an extraordinary gain. Likewise if your own legal fees and damages or fines are excessive, then these can significantly impact the income statement.

Occasionally a business will change accounting methods or need to correct any errors that had been made in previous financial reports. Generally Accepted Accounting Procedures (GAAP) require that businesses make any one-time losses or gains very visible in their income statement.

What is financial window dressing?

Financial managers can do certain things to increase or decrease net income that's recorded in the year. This is called profit smoothing, income smoothing or just plain old window dressing. This isn't the same as fraud, or cooking the books.

Most profit smoothing involves pushing some amount of revenue and/or expenses into other years than they would normally be recorded. A common technique for profit smoothing is to delay normal maintenance and repairs. This is referred to as deferred maintenance. Many routine and recurring maintenance costs required for autos, trucks, machines, equipment and buildings can be delayed, or deferred until later.

A business that spends a significant amount of money for employee training and development may delay these programs until the next year so the expense in the current year is lower.

A company can cut back on its current year's outlays for market research and product development.

A business can ease up on its rules regarding when slow-paying customers are written off to expense as bad debts or uncollectible accounts receivable. The business can put off recording some of its bad debts expense until the next reporting year.

A fixed asset that is not being actively used may have very little current or future value to a business. Instead of writing off the un-depreciated cost of the impaired asset as a loss in the current year, the business might delay the write-off until the next year.

You can see how manipulating the timing of certain expenses can make an impact on net income. This isn't illegal although companies can go too far in massaging the numbers so that its financial statements are misleading. For the most part though, profit smoothing isn't much more than robbing Peter to pay Paul. Accountants refer to these as compensatory effects. The effects next year offset and cancel out the effects in the current year. Less expense this year is balanced by more expense the next year.

What are auditors?

Accountants and auditors help to ensure that the Nation's firms are run efficiently, its public records kept accurately, and its taxes paid properly and on time. They perform these vital functions by offering an increasingly wide array of business and accounting services, including public, management, and government accounting, as well as internal auditing, to their clients. Beyond carrying out the fundamental tasks of the occupation-preparing, analyzing, and verifying financial documents in order to provide information to clients-many accountants now are required to possess a wide range of knowledge and skills. Accountants and auditors are broadening the services they offer to include budget analysis, financial and investment planning, information technology consulting, and limited legal services.

Specific job duties vary widely among the four major fields of accounting: public, management, and government accounting and internal auditing.

Internal auditors verify the accuracy of their organization's internal records and check for mismanagement, waste, or fraud. Internal auditing is an increasingly important area of accounting and auditing. Internal auditors examine and evaluate their firms' financial and information systems, management procedures, and internal controls to ensure that records are accurate and controls are adequate to protect against fraud and waste. They also review company operations, evaluating their efficiency, effectiveness, and compliance with corporate policies and procedures, laws, and government regulations. There are many types of highly specialized auditors, such as electronic data-processing, environmental, engineering, legal, insurance premium, bank, and health care auditors. As computer systems make information timelier, internal auditors help managers to base their decisions on actual data, rather than personal observation. Internal auditors also may recommend controls for their organization's computer system, to ensure the reliability of the system and the integrity of the data.

Government accountants and auditors work in the public sector, maintaining and examining the records of government agencies and auditing private businesses and individuals whose activities are subject to government regulations or taxation. Accountants employed by Federal, State, and local governments guarantee that revenues are received and expenditures are made in accordance with laws and regulations. Those employed by the Federal Government may work as Internal Revenue Service agents or in financial management, financial institution examination, or budget analysis and administration.

Revenue and receivables

In most businesses, what drives the balance sheet are sales and expenses. In other words, they cause the assets and liabilities in a business. One of the more complicated accounting items are the accounts receivable. As a hypothetical situation, imagine a business that offers all its customers a 30-day credit period, which is fairly common in transactions between businesses, (not transactions between a business and individual consumers).

An accounts receivable asset shows how much money customers who bought products on credit still owe the business. It's a promise of case that the business will receive. Basically, accounts receivable is the amount of uncollected sales revenue at the end of the accounting period. Cash does not increase until the business actually collects this money from its business customers. However, the amount of money in accounts receivable is included in the total sales revenue for that same period. The business did make the sales, even if it hasn't acquired all the money from the sales yet. Sales revenue, then isn't equal to the amount of cash that the business accumulated.

To get actual cash flow, the accountant must subtract the amount of credit sales not collected from the sales revenue in cash. Then add in the amount of cash that was collected for the credit sales that were made in the preceding reporting period. If the amount of credit sales a business made during the reporting period is greater than what was collected from customers, then the accounts receivable account increased over the period and the business has to subtract from net income that difference.

If the amount they collected during the reporting period is greater than the credit sales made, then the accounts receivable decreased over the reporting period, and the accountant needs to add to net income that difference between the receivables at the beginning of the reporting period and the receivables at the end of the same period.

Inventory and expenses

Inventory is usually the largest current asset of a business that sells products. If the inventory account is greater at the end of the period than at the start of the reporting period, the amount the business actually paid in cash for that inventory is more than what the business recorded as its cost of good sold expense. When that occurs, the accountant deducts the inventory increase from net income for determining cash flow from profit.

the prepaid expenses asset account works in much the same way as the change in inventory and accounts receivable accounts. However, changes in prepaid expenses are usually much smaller than changes in those other two asset accounts.

The beginning balance of prepaid expenses is charged to expense in the current year, but the cash was actually paid out last year. this period, the business pays cash for next period's prepaid expenses, which affects this period's cash flow, but doesn't affect net income until the next period. Simple, right?

As a business grows, it needs to increase its prepaid expenses for such things as fire insurance premiums, which have to be paid in advance of the insurance coverage, and its stocks of office supplies. Increases in accounts receivable, inventory and prepaid expenses are the cash flow price a business has to pay for growth. Rarely do you find a business that can increase its sales revenue without increasing these assets.

The lagging behind effect of cash flow is the price of business growth. Managers and investors need to understand that increasing sales without increasing accounts receivable isn't a realistic scenario for growth. In the real business world, you generally can't enjoy growth in revenue without incurring additional expenses.

What is forensic accounting?

Forensic accounting is the practice of utilizing accounting, auditing, and investigative skills to assist in legal matters. It encompasses 2 main areas - litigation support, investigation, and dispute resolution. Litigation support represents the factual presentation of economic issues related to existing or pending litigation. In this capacity, the forensic accounting professional quantifies damages sustained by parties involved in legal disputes and can assist in resolving disputes, even before they reach the courtroom. If a dispute reaches the courtroom, the forensic accountant may testify as an expert witness.

Investigation is the act of determining whether criminal matters such as employee theft, securities fraud (including falsification of financial statements), identity theft, and insurance fraud have occurred. As part of the forensic accountant's work, he or she may recommend actions that can be taken to minimize future risk of loss. Investigation may also occur in civil matters. For example, the forensic accountant may search for hidden assets in divorce cases.

Forensic accounting involves looking beyond the numbers and grasping the substance of situations. It's more than accounting...more than detective work...it's a combination that will be in demand for as long as human nature exists. Who wouldn't want a career that offers such stability, excitement, and financial rewards?

In short, forensic accounting requires the most important quality a person can possess: the ability to think. Far from being an ability that is specific to success in any particular field, developing the ability to think enhances a person's chances of success in life, thus increasing a person's worth in today's society. Why not consider becoming a forensic accountant on the Forensic Accounting Masters Degree link on the left-hand navigation bar.

Minggu, 25 Desember 2011

43 What's the difference between private and public company reporting

A public corporation is a business whose securities are traded on the public stock exchanges, such as the New York Stock Exchange and Nasdaq. A private company is held solely by its owners and is not traded publicly. When the shareholders of a private business receive the periodical financial reports, they are entitled to assume that the company's financial statements and footnotes are prepared in accordance with GAAP. Otherwise the president of chief officer of the business should clearly warn the shareholders that GAAP have not been followed in one or more respects. The content of a private business's annual financial report is often minimal. It includes the three primary financial statements - the balance sheet, income statement and statement of cash flows. There's generally no letter from the chief executive, no photographs, no charts.

In contrast, the annual report of a publicly traded company has more bells and whistles to it. There are also more requirements for reporting. These include the management discussion and analysis (MD&A) section that presents the top managers' interpretation and analysis of the business's profit performance and other important financial developments over the year.

Another section required for public companies is the earnings per share (EPS). This is the only ratio that a public business is required to report, although most public companies report a few others as well. A three-year comparative income statement is also required.

Many publicly owned businesses make their required filings with the SEC, but they present very different annual financial reports to their stockholders. A large number of public companies include only condensed financial information rather than comprehensive financial statements. They will generally refer the reader to a more detailed SEC financial report for more specifics.

Types of Costs

Direct costs are those costs that cann be directly attributed to a product or product line, or to one source of sales revenue, or one business unit or operation of the business. An example of a direct cost would be the cost of tires on a new automobile.

Indirect costs are very different and can't be attached to any specific product, unit or activity. The cost of labor or benefits for an auto manufacturer is certainly a cost, but it can't be attached to any one vehicle. Each business has to devise a method of allocating indirect costs to different products, sources of sales revenue, business units, etc. Most allocation methods are less than perfect, and generally end up being arbitrary to one degree or another. Business managers and accounts should always keep an eye on the allocation methods used for indirect costs and take the cost figures produced by these methods with a grain of salt.

Fixed costs are those costs that stay the same over a relatively broad range of sales volume or production output. They're like an albatross around the neck of business and a company must sell its product at a high enough profit to at least break even.

Variable costs can increase and decrease in proportion to changes in sales or production level. Variable costs vary proportionately with changes in production/

Relevant costs are essentially future costs that could be incurred, depending on what strategic course a business takes. If an auto manufacturer decides to increase production, but the cost of tires goes up, than that cost needs to be taken into consideration.

Irrelevant costs are those that should be disregarded when deciding on a future course of action. They're costs that could cause you to make a wrong decision. Whereas relevant costs are future costs, irrelevant costs are those costs that were incurred in the past. The money's gone.

What does an audit report contain?

Most audit reports on financial statements give the business a clean bill of health, or a clean opinion. At the other end of the spectrum, the auditor may state that the financial statements are misleading and should not be relied upon. This negative audit report is called an adverse opinion. That's the big stick that auditors carry. They have the power to give a company's financial statements an adverse opinion and no business wants that. The threat of an adverse opinion almost always motivates a business to give way to the auditor and change its accounting or disclosure in order to avoid getting the kiss of death of an adverse opinion. An adverse audit opinion says that the financial statements of the business are misleading. The SEC does not tolerate adverse opinions by auditors of public businesses; it would suspend trading in a company's stock share if the company received an adverse opinion from its CPA auditor.

One modification to an auditor's report is very serious - when the CPA firm says that it has substantial doubts about the capability of the business to continue as a going concern. A going concern is a business that has sufficient financial wherewithal and momentum to continue it normal operations into the foreseeable future and would be able to absorb a bad turn of events without having to default on its liabilities. A going concern does not face an imminent financial crisis or any pressing financial emergency. A business could be under some financial distress but overall still be judged a going concern. Unless there is evidence to the contrary, the CPA auditor assumes that the business is a going concern. If an auditor has serious concerns about whether the business is a going concern, these doubts are spelled out in the auditor's report.

What happened at Enron?

Everyone knows at least a little about the Enron story and the devastation it created in the lives of is employees. It's a story that belongs in any discussion of ethical accounting processes and what happens when accounting standards and ethics are discarded for personal greed.

Enron began in 1985 selling natural gas to gas companies and businesses. In 1996, energy markets were changed so that the price of energy could now be decided by competition among energy companies instead of being fixed by government regulations. With this change, Enron began to function more as a middleman than a traditional energy supplier, trading in energy contracts instead of buying and selling natural gas. Enron's rapid growth created excitement among investors and drove the stock price up. As Enron grew, it expanded into other industries such as Internet services, and its financial contracts became more complicated.

In order to keep growing at this rate, Enron began to borrow money to invest in new projects. However, because this debt would make their earnings look less impressive, Enron began to create partnerships that would allow it to keep debt off of its books. One partnership created by Enron, Chewco Investments (named after the Star Wars character Chewbacca) allowed Enron to keep $600 million in debt off of the books it showed to the government and to people who own Enron stock. When this debt did not show up in Enron's reports, it made Enron seem much more successful than it actually was. In December 2000, Enron claimed to have tripled its profits in two years.

In August 2001, Enron vice president Sherron Watkins sent an anonymous letter to the CEO of Enron, Kenneth Lay, describing accounting methods that she felt could lead Enron to "implode in a wave of accounting scandals." Also in August, CEO Kenneth Lay sent e-mails to his employees saying that he expected Enron stock prices to go up. Meanwhile, he sold off his own stock in Enron.

On October 22nd, the Securities and Exchange Commission (SEC) announced that Enron was under investigation. On November 8th, Enron said that it has overstated earnings for the past four years by $586 million and that it owed over $6 billion in debt by next year.

With these announcements, Enron's stock price took a dive. This drop triggered certain agreements with investors that made it necessary for Enron to repay their money immediately. When Enron could not come up with the cash to repay its creditors, it declared for Chapter 11 bankruptcy.

What are partnerships and limited liability companies?

Some business owners choose to create partnerships or limited liability companies instead of a corporation. A partnership can also be called a firm, and refers to an association of a group of individuals working together in a business or professional practice.

While corporations have rigid rules about how they are structured, partnerships and limited liability companies allow the division of management authority, profit sharing and ownership rights among the owners to be very flexible.

Partnerships fall into two categories. General partners are subject to unlimited liability. If a business can't pay its debts, its creditors can demand payment from the general partners' personal assets. General partners have the authority and responsibility to manage the business. They're analogous to the president and other officers of a corporation.

Limited partners escape the unlimited liability that the general partners have. They are not responsible as individuals, for the liabilities of the partnership. These are junior partners who have ownership rights to the profits of the business, but they don't generally participate in the high-level management of the business. A partnership must have one or more general partners.

A limited liability company (LLC) is becoming more prevalent among smaller businesses. An LLC is like a corporation regarding limited liability and it's like a partnership regarding the flexibility of dividing profit among the owners. Its advantage over other types of ownership is its flexibility in how profit and management authority are determined. This can have a downside. The owners must enter into very detailed agreements about how the profits and management responsibilities are divided. It can get very complicated and generally requires the services of a lawyer to draw up the agreement.

A partnership or LLC agreement specifies how profits will be divided among the owners. While stockholders of a corporation receive a share of profit that's directly related to how many shares they own, a partnership or LLC does not have to divide profit according to how much each partner invested. Invested capital is only of the factors that are used in allocating and distributing profits.

Depreciation

Depreciation is a term we hear about frequently, but don't really understand. It's an essential component of accounting however. Depreciation is an expense that's recorded at the same time and in the same period as other accounts. Long-term operating assets that are not held for sale in the course of business are called fixed assets. Fixed assets include buildings, machinery, office equipment, vehicles, computers and other equipment. It can also include items such as shelves and cabinets. Depreciation refers to spreading out the cost of a fixed asset over the years of its useful life to a business, instead of charging the entire cost to expense in the year the asset was purchased. That way, each year that the equipment or asset is used bears a share of the total cost. As an example, cars and trucks are typically depreciated over five years. The idea is to charge a fraction of the total cost to depreciation expense during each of the five years, rather than just the first year.

Depreciation applies only to fixed assets that you actually buy, not those you rent or lease. Depreciation is a real expense, but not necessarily a cash outlay expense in the year it's recorded. The cash outlay does actually occur when the fixed asset is acquired, but is recorded over a period of time.

Depreciation is different from other expenses. It is deducted from sales revenue to determine profit, but the depreciation expense recorded in a reporting period doesn't require any true cash outlay during that period. Depreciation expense is that portion of the total cost of a business's fixed assets that is allocated to the period to record the cost of using the assets during period. The higher the total cost of a business's fixed assets, then the higher its depreciation expense.

Parts of an Income Statement, part 1

The first and most important part of an income statement is the line reporting sales revenue. Businesses need to be consistent from year to year regarding when they record sales. For some business, the timing of recording sales revenue is a major problem, especially when the final acceptance by the customer depends on performance tests or other conditions that have to be satisfied. For example, when does an ad agency report the sales revenue for a campaign it's prepared for its client? When the work is completed and sent to the client for approval? When the client approves it? When the ads appear in the media? Or when the billing is complete? These are issues a company must decide on for reporting sales revenue, and they must be consistent each year, and the timing of reporting should be noted on the financial statement.

The next line in an income statement is the cost of goods sold expense. There are three methods of reporting cost of goods sold expense. One is called "first in-first out" (FIFO); another is the "last in-last out" (LIFO) method and the last is the average cost method. Cost of goods sold expense is a huge item in an income statement and how it's reported can make a substantial impact on the reported bottom line.

Other items in an income statement include inventory write-downs. A business should regularly inspect its inventory carefully to determine any losses due to theft, damage and deterioration, and to apply the lower of cost or market (LCM) method. Bad debts are also an important component of the income statement. Bad debts are those owed to a business by customers who bought on credit (accounts receivable) but are not going to be paid. Again the timing of when bad debts are reported is crucial. Do you report it before or after any collection efforts are exhausted?

42 What is price/earnings ratio

The price/earning (P/E) ratio is another measurement that's of particular interest to investors in public businesses. The P/E ratio gives you an idea of how much you're paying in the current price for stock shares for each dollar of earning. Earnings prop up the market value of stock shares, not the book value of the stock shares that's reported in the balance sheet.

The P/E ratio is a reality check on just how high the current market price is in relation to the underlying profit that the business is earning. Extraordinarily high P/E ratios are justified only when investors think that the company's earnings per share (EPS) has a lot of upside potential in the future.

The P/E ratio is calculated dividing the current market price of the stock by the most recent trailing 12 months diluted EPS. Stock share prices bounce around day to day and are subject to big changes on short notice. The current P/E ratio should be compared with the average stock market P/E to gauge whether the business selling above or below the market average.

P/E ratios are currently running high, despite a four-year slump in the stock market. P/E ratios vary from industry to industry and from year to year. One dollar of EPS may command only a $10 market value for a mature business in a no-growth industry, while a dollar of EPS in a dynamic business in a growth industry may have a $30 market value per dollar of earnings, or net income.

To sum up, the price/earnings ratio, or P/E ratio is the current market price of a capital stock divided by its trailing 12 months' diluted earnings per share (EPS) or its basic earnings per share if the business does not report diluted EPS. A low P/E may signal an underbalued stock or a pessimistic forecast by investors. A high P/E may reveal an overvalued stock or might be based on an optimistic forecast by investors.

What is the Sarbanes-Oxley Act?

The Sarbanes-Oxley Act of 2002 is a United States federal law passed in response to the recent major corporate and accounting scandals including those at Enron, Tyco International, and WorldCom (now MCI). These scandals resulted in a decline of public trust in accounting and reporting practices. Named after sponsors Senator Paul Sarbanes (D-Md.) and Representative Michael G. Oxley (R-Oh.), the Act was approved by the House by a vote of 423-3 and by the Senate 99-0. The legislation is wide-ranging and establishes new or enhanced standards for all U.S. public company Boards, Management, and public accounting firms. The first and most important part of the Act establishes a new quasi-public agency, the Public Company Accounting Oversight Board, which is charged with overseeing and disciplining accounting firms in their roles as auditors of public companies. Some of the major provisions of the Sarbanes-Oxley Act's include:

--Certification of financial reports by chief executive officers and chief financial officers

--Auditor independence, including outright bans on certain types of work for audit clients and pre-certification by the company's Audit Committee of all other non-audit work

--A requirement that companies listed on stock exchanges have fully independent audit committees that oversee the relationship between the company and its auditor

--Significantly longer maximum jail sentences and larger fines for corporate executives who knowingly and willfully misstate financial statements, although maximum sentences are largely irrelevant because judges generally follow the Federal Sentencing Guidelines in setting actual sentences

--Employee protections allowing those corporate fraud whistleblowers who file complaints with OSHA within 90 days, to win reinstatement, back pay and benefits, compensatory damages, abatement orders, and reasonable attorney fees and costs.

What are other ratios used in financial reporting

The dividend yield ratio tells investors how much cash income they're receiving on their stock investment in a business. This is calculated by dividing the annual cash dividend per share by the current market price of the stock. This can be compared with the interest rate on high-grade debt securities that pay interest, such as Treasure bonds and Treasury notes, which are the safest.

Book value per share is calculated by dividing total owners' equity by the total number of stock shares that are outstanding. While EPS is more important to determine the market value of a stock, book value per share is the measure of the recorded value of the company's assets less its liabilities, the net assets backing up the business's stock shares. It's possible that the market value of a stock could be less than the book value per share.

The return on equity (ROE) ratio tells how much profit a bus8iness earned in comparison to the book value of its stockholders' equity. This ratio is especially useful for privately owned businesses, which have no way of determining the current value of owners' equity. ROE is also calculated for public corporations, but it plays a secondary role to other ratios. ROE is calculated by dividing net income by owners' equity.

The current ratio is a measure of a business's short-term solvency, in other words, its ability to pay it liabilities that come due in the near future. This ratio is a rough indicator of whether cash on hand plus the cash to be collected from accounts receivable and from selling inventory will be enough to pay off the liabilities that will come due in the next period. It is calculated by dividing the current assets by the current liabilities. Businesses are expected to maintain a minimum 2:1 current ratio, which means its current assets should be twice its current liabilities.

Bookkeeping

So what goes on the accounting and bookkeeping departments? What do these people do on a daily basis?

Well, one thing they do that's terribly important to everyone working there is Payroll. All the salaries and taxes earned and paid by every employee every pay period have to be recorded. The payroll department has to ensure that the appropriate federal, state and local taxes are being deducted. The pay stub attached to your paycheck records these taxes. They usually include income tax, social security taxes pous employment taxes that have to be paid to federal and state government. Other deductions include personal ones, such as for retirement, vacation, sick pay or medical benefits. It's a critical function. Some companies have their own payroll departments; others outsource it to specialists.

The accounting department receives and records any payments or cash received from customers or clients of the business or service. The accounting department has to make sure that the money is sourced accurately and deposited in the appropriate accounts. They also manage where the money goes; how much of it is kept on-hand for areas such as payroll, or how much of it goes out to pay what the company owes its banks, vendors and other obligations. Some should also be invested.

The other side of the receivables business is the payables area, or cash disbursements. A company writes a lot of checks during the course of year to pay for purchases, supplies, salaries, taxes, loans and services. The accounting department prepares all these checks and records to whom they were disbursed, how much and for what. Accounting departments also keep track of purchase orders placed for inventory, such as products that will be sold to customers or clients. They also keep track of assets such as a business's property and equipment. This can include the office building, furniture, computers, even the smallest items such as pencils and pens.

Profit and Loss

It might seem like a no-brainer to define just exactly what profit and loss are. But of course these have definitions like everything else. Profit can be called different things, for a start. It's sometimes called net income or net earnings. Businesses that sell products and services generate profit from the sales of those products or services and from controlling the attendant costs of running the business. Profit can also be referred to as Return on Investment, or ROI. While some definitions limit ROI to profit on investments in such securities as stocks or bonds, many companies use this term to refer to short-term and long-term business results. Profit is also sometimes called taxable income.

It's the job of the accounting and finance professionals to assess the profits and losses of a company. They have to know what created both and what the results of both sides of the business equation are. They determine what the net worth of a company is. Net worth is the resulting dollar amount from deducting a company's liabilities from its assets. In a privately held company, this is also called owner's equity, since anything that's left over after all the bills are paid, to put it simply, belongs to the owners. In a publicly held company, this profit is returned to the shareholders in the form of dividends. In other words, all liabilities have the first claim on any money the company makes. Anything that's left over is profit. It's not derived from one element or another. Net worth is determined after all the liabilities are deducted from all the assets, including cash and property.

Showing a profit, or a positive figure on the balance sheet, is of course the aim of every business. It's what our economy and society are built on. It doesn't always work out that way. Economic trends and consumer behaviors change and it's not always possible to predict these and what income they'll have on a company's performance.

Bookkeeping Basics

Most people probably think of bookkeeping and accounting as the same thing, but bookkeeping is really one function of accounting, while accounting encompasses many functions involved in managing the financial affairs of a business. Accountants prepare reports based, in part, on the work of bookkeepers.

Bookkeepers perform all manner of record-keeping tasks. Some of them include the following:

-They prepare what are referred to as source documents for all the operations of a business - the buying, selling, transferring, paying and collecting. The documents include papers such as purchase orders, invoices, credit card slips, time cards, time sheets and expense reports. Bookkeepers also determine and enter in the source documents what are called the financial effects of the transactions and other business events. Those include paying the employees, making sales, borrowing money or buying products or raw materials for production.

-Bookkeepers also make entries of the financial effects into journals and accounts. These are two different things. A journal is the record of transactions in chronological order. An accounts is a separate record, or page for each asset and each liability. One transaction can affect several accounts.

-Bookkeepers prepare reports at the end of specific period of time, such as daily, weekly, monthly, quarterly or annually. To do this, all the accounts need to be up to date. Inventory records must be updated and the reports checked and double-checked to ensure that they're as error-free as possible.

-The bookkeepers also compile complete listings of all accounts. This is called the adjusted trial balance. While a small business may have a hundred or so accounts, very large businesses can have more than 10,000 accounts.

-The final step is for the bookkeeper to close the books, which means bringing all the bookkeeping for a fiscal year to a close and summarized.

Personal Accounting

If you have a checking account, of course you balance it periodically to account for any differences between what's in your statement and what you wrote down for checks and deposits. Many people do it once a month when their statement is mailed to them, but with the advent of online banking, you can do it daily if you're the sort whose banking tends to get away from them.

You balance your checkbook to note any charges in your checking account that you haven't recorded in your checkbook. Some of these can include ATM fees, overdraft fees, special transaction fees or low balance fees, if you're required to keep a minimum balance in your account. You also balance your checkbook to record any credits that you haven't noted previously. They might include automatic deposits, or refunds or other electronic deposits. Your checking account might be an interest-bearing account and you want to record any interest that it's earned.

You also need to discover if you've made any errors in your recordkeeping or if the bank has made any errors.

Another form of accounting that we all dread is the filing of annual federal income tax returns. Many people use a CPA to do their returns; others do it themselves. Most forms include the following items:

Income - any money you've earned from working or owning assets, unless there are specific exemptions from income tax.

Personal exemptions - this is a certain amount of income that is excused from tax.

Standard deduction - some personal expenditures or business expenses can be deducted from your income to reduce the taxable amount of income. These expenses include items such as interest paid on your home mortgage, charitable contributions and property taxes.

Taxable income - This is the balance of income that's subject to taxes after personal exemptions and deductions are factored in.

What is accounting fraud?

Accounting fraud is a deliberate and improper manipulation of the recording of sales revenue and/or expenses in order to make a company's profit performance appear better than it actually is. Some things that companies do that can constitute fraud are:

--Not listing prepaid expenses or other incidental assets

--Not showing certain classifications of current assets and/or liabilities

--Collapsing short- and long-term debt into one amount.

Over-recording sales revenue is the most common technique of accounting fraud. A business may ship products to customers that they haven't ordered, knowing that those customers will return the products after the end of the year. Until the returns are made, the business records the shipments as if they were actual sales. Or a business may engage in channel stuffing. It delivers products to dealers or final customers that they really don't want, but business makes deals on the side that provide incentives and special privileges if the dealers or customers don't object to taking premature delivery of the products. A business may also delay recording products that have been returned by customers to avoid recognizing these offsets against sales revenue in the current year

The other way a business commits accounting fraud is by under-recording expenses, such as not recording depreciation expense. Or a business may choose not to record all of its cost of goods sold expense fore the sales made during a period. This would make the gross margin higher, but the business's inventory asset would include products that actually are not in inventory because they've been delivered to customers.

A business might also choose not to record asset losses that should be recognized, such as uncollectible accounts receivable, or it might not write down inventory under the lower of cost or market rule. A business might also not record the full amount of the liability for an expense, making that liability understated in the company's balance sheet. Its profit, therefore, would be overstated.

Depreciation reporting

In an accountant's reporting systems, depreciation of a business's fixed assets such as its buildings, equipment, computers, etc. is not recorded as a cash outlay. When an accountant measures profit on the accrual basis of accounting, he or she counts depreciation as an expense. Buildings, machinery, tools, vehicles and furniture all have a limited useful life. All fixed assets, except for actual land, have a limited lifetime of usefulness to a business. Depreciation is the method of accounting that allocates the total cost of fixed assets to each year of their use in helping the business generate revenue.

Part of the total sales revenue of a business includes recover of cost invested in its fixed assets. In a real sense a business sells some of its fixed assets in the sales prices that it charges it customers. For example, when you go to a grocery store, a small portion of the price you pay for eggs or bread goes toward the cost of the buildings, the machinery, bread ovens, etc. Each reporting period, a business recoups part of the cost invested in its fixed assets.

It's not enough for the accountant to add back depreciation for the year to bottom-line profit. The changes in other assets, as well as the changes in liabilities, also affect cash flow from profit. The competent accountant will factor in all the changes that determine cash flow from profit. Depreciation is only one of many adjustments to the net income of a business to determine cash flow from operating activities. Amortization of intangible assets is another expense that is recorded against a business's assets for year. It's different in that it doesn't require cash outlay in the year being charged with the expense. That occurred when the business invested in those tangible assets.

Sabtu, 24 Desember 2011

Investing and financing

Another portion of the statement of cash flows reports the investment that the company took during the reporting year. New investments are signs of growing or upgrading the production and distribution facilities and capacity of the business. Disposing of long-term assets or divesting itself of a major part of its business can be good or bad news, depending on what's driving those activities. A business generally disposes of some of its fixed assets every year because they reached the end of their useful lives and will not be used any longer. These fixed assets are disposed of or sold or traded in on new fixed assets. The value of a fixed asset at the end of its useful life is called its salvage value. The proceeds from selling fixed assets are reported as a source of cash in the investing activities section of the statement of cash flows. Usually these are very small amounts.

Like individuals, companies at times have to finance its acquisitions when its internal cash flow isn't enough to finance business growth. financing refers to a business raising capital from debt and quity sources, by borrowing money from banks and other sources willing to loan money to the business and by its owners putting additional money in the business. The term also includes the other side, making payments on debt and returning capital to owners. it includes cash distributions by the business from profit to its owners.

Most business borrow money for both short terms and long terms. Most cash flow statements report only the net increase or decrease in short-term debt, not the total amounts borrowed and total payments on the debt. When reporting long-term debt, however, both the total amounts and the repayments on long-term debt during a year are generally reported in the statement of cash flows. These are reported as gross figures, rather than net.

What is acid test ratio and ROA ratio?

Investors calculate the acid test ratio, also known as the quick ratio or the pounce ratio. This ratio excludes inventory and prepaid expenses, which the current ratio includes, and it limits assets to cash and items that the business can quickly convert to cash. This limited category of assets is known as quick or liquid assets. The acid-text ratio is calculated by dividing the liquid assets by the total current liabilities.

This ratio is also known as the pounce ratio to emphasize that you're calculating for a worst-case scenario, where the business's creditors could pounce on the business and demand quick payment of the business's liabilities. Short term creditors do not have the right to demand immediate payment, except in unusual circumstances. This ratio is a conservative way to look at a business's capability to pay its short-term liabilities.

One factor that affects the bottom-line profitability of a business is whether it uses debt to its advantage. A business may realize a financial leverage gain, meaning it earns more profit on the money it has borrowed than the interest paid for the use of the borrowed money. A good part of a business's net income for the year may be due to financial leverage. The ROA ratio is determined by dividing the earnings before interest and income tax (EBIT) by the net operating assets.

An investor compares the ROA with the interest rate at which the corporation borrowed money. If a business's ROA is 14 percent and the interest rate on its debt is 8 percent, the business's net gain on its capital is 6 percent more than what it's paying in interest.

ROA is a useful ratio for interpreting profit performance, aside from determining financial gain or loss. ROA is called a capital utilization test that measures how profit before interest and income tax was earned on the total capital employed by the business.

Senin, 19 Desember 2011

Read a Map

Knowing how to read a map isn't innate. The symbols, topography lines and direction helpers all require some understanding before you can read a map effectively. So, when Google Maps deserts you and you're left holding a real map, here is what to do. Here's Tips On How to Read a Map :

How to read maps. Choose the right map. Invest in a good map. A detailed map is worth the money. Look for a Rand McNally Map Book of the United States at truck stops. In the UK, look for an Ordnance survey map (ideally not explorer, though better than an A5 national map). A map is a navigation aid. A wide variety of maps is available for a wide variety of uses. For example, there are road maps (for drivers; with all the roads available) or tourist maps (for the tourist, usually available at Tourism Boards of the locality and have areas of interest clearly labeled on the maps) and maps for hikers or back country users that feature topographical, geographical and other specific features to help with specific activities. So figure out what you want to do and pick the correct map. Visit a decent map shop for expert assistance in choosing a map.
Check the map's orientation. Most how to read maps are drawn with north located at the top. West is therefore left, east is right and south is at the base of the map. This enables you to turn the map until it is facing the real directions wherever you're located. Sometimes this may be depicted using a "compass rose" or a cross-like shape. Or, it might simply be stated to be the assumption of the map. If there is nothing there, presume it is north at the top unless this clearly doesn't make sense.
Understand how do i read a map. Maps are made in scales and these differ in size from map to map. Look for the scale in the form of a ratio, located on the side or bottom of the map. It will look something like 1:100,000, which denotes that 1 unit on the map is the equivalent of 100,000 units in real life.
Note the recording of the latitude and longitude. The latitude refers to the distance in degrees north or south of the equator. The longitude refers to the distance in degrees east or west of the Greenwich Meridian Line. Each degree is divided into 60 minutes, with each minute representing a nautical mile (or 1.15 land miles/1.85km). This means that one degree is the equivalent of 60 nautical miles or 69 land miles/111km.
Learn how do you read a map. How high or flat the land is is represented on the map by using contour lines. Each line represents a standard height above sea level. When contour lines are close together, this means that the gradient is steep (the closer together, the steeper the gradient becomes). When the contour lines are further apart, the gradient is flatter, so the further apart they are located, the flatter the ground on the map.
Look for the map symbols denoting particular items of interest. Most maps have a legend or key of symbols on the map itself and since the origin of the map doesn't necessarily conform to any standard, always look for the legend or key first.
Figure out where you are. You have your map and you're ready to use it. Now you need to figure out where you are on it before you can plot your route. You can do so by matching what you can see in real life with what is on the map. Common features that help identify your location on a map includes road names, landmarks and prominent natural features, like rivers.
Find the location you want go. Now it's time to figure out where you want to go. If you just want to go from one place to another, all you need to do is to plot that single route out. However, if there are several places you intend to go to, you need to plan your route in such a way that you visit all the places in the shortest possible manner. You can do so by going to the nearest places first after which you will go to the further places.
Use the map's index. Some maps have indexes stating the location of certain places on a map. This location could be grid numbers or pages. You should take note of a map's scale (distances between points) so that you can estimate your travel time and if you are taking longer then you expected, you should stop to recheck your map. You should also take note of a map's legend, this will let you know what you are looking at.
Plot the route out in your mind or with a pen. Now you have figured out where you want to go, plot the route for your first journey in your mind. You could also draw out your route with a pen, but that would be permanently imprinted on the map.
Travel to the desired spot with the map. Here is where you need to ensure you are 'On Course' as plotted. If you miss out this step, you may be seriously off course before you realise it. You can check you are on course by counter-checking landmarks or road that are on the map on on-route when you actually pass them. Refer to the pictures and example below to get an idea on how to do how to read a map.

Hitchhike

Whether Hitchhike getting a lift to the corner shop, covering the four corners of the world or simply just in case, there is a method Hitchhike to the madness of hitchhiking. The following instructions have been collected from the experiences of many a weathered hitchhiker. Here's Tips On How to Hitchhike :

Invest in a good map. A detailed map is worth the money. In the US, hitchhike america look for a Rand McNally Map Book of the United States at truck stops. In the UK, look for an Ordnance survey map (ideally not explorer, though better than an A5 national map), these can be borrowed free of charge from libraries. It's what cross-country truckers use and it denotes rest areas, truck stops, and service stations. If you need a free map, though, find a tourist spot (hotel, airport, bus station, tourist information booth) and pick up a pamphlet that has a decent map inside. State welcome centers on interstate highways also have free highway maps for their state. Rental car places tend to have the best free maps. Look for a map that shows road numbers, rest areas, and gas stations.
Become familiar with the road numbering system, if there is one. On hitchhike usa interstate highways, even numbered roads go east/west, and the higher the number, the more northern the interstate. Odd numbered roads go north/south, and the higher the number, the more eastern the interstate. Three-digit interstate numbers indicate spurs and loops off the main interstates. In Europe, two digit numbers ending in 5 indicate a reference road that goes from north to south, whereas those ending in 0 indicate reference roads that go from east to west.
Take precautions. Scan your ID (and passport, if traveling internationally) and e-mail it to yourself. If it gets stolen, print out copies at a library. For passports, go to an embassy with your copies and do what you need to do to get a new passport. Americans will need to provide two passport photos and fill out a few forms to get a temporary passport. Have the phone number for your credit card company before you leave. If you lose your credit card, call them immediately, cancel your card, and have them send a new one to an address where you can receive it (like an embassy). Pack some pepper spray, in case you encounter a shady character, on or off the road.
Make a sign. It shows people that you're literate, and you're on a planned trip. Pack a black or blue marker and a notebook. Write your destination clearly (it doesn't have to be your final destination). Add a border around the whole thing--it makes the sign a little easier to read.
Find a good hitchhike meaning spot. Get on the side of the city or town that's in the direction you're traveling. E.g. If you're heading west, get on the west side of town. Look for a spot that meets most or all of the following criteria: is on a straight stretch of road (700 meters in either direction) and, preferably, has an incline so drivers can see you for a longer time, cars passing at less than 50 mph (80km/hr), enough lighting to make eye contact with passing drivers, cars headed in your direction, a visible and easily manageable pull-over and pick-up area, does not have another hitchhiker in sight--if you see someone there first, go out of sight, and wait your turn., and do not hitchhike next to a broken down vehicle,if the cops or the owner stop to investigate, that will be problems you do not need. Not to mention,most passing motorists, upon learning the vehicle isn't yours, will probably decline to give you a ride after discovering the deception you just presented.
Present yourself how to hitchhike well. Look like you know where you are going, and what you are doing. Have a clean, well-kept appearance, hold a clear, neat sign, and smile.[1] One male hitchhiker shares the following observations: you're less likely to get picked up if you wear too much denim, shorts on male hitchers are looked down upon in many rural communities in the American South and West, super short hair,tends to make people assume that you are AWOL from an institutional setting (prison, military,asylum, boarding school, etc), or recently released from any of the preceding, wearing sunglasses is not a good idea because it obscures eye contact, couples tend to wait longer, based on 'real estate' issues in passing vehicles, however,, as long as you make it clear from the start that you're in a relationship with the woman, or else the driver might go after her; be protective, and rain will not increase your chances of getting picked up, especially if you're totally drenched. Snow, however, or a recent snowfall, however, tends to increase odds of getting a ride. People generally don't mind the occasional snowflake on their upholstery,as it brushes off easily, before it melts, but rain on clothes tends to collect in seat cushions.
Be selective about which rides you take. You'll actually get to your destination faster that way. It's better to travel 50 miles and get dropped off at a gas station or truck stop than to travel 100 miles and get dropped off in a bad hitchhiking spot. So use that map! If you've been on a busy roadway for more than two hours and people aren't stopping, you're probably on the wrong road or the wrong side of the road.[1] If someone stops and you don't want to take the ride, for whatever reasons, tell them you want to wait for a ride that's longer or takes you to a better position. Just because they pull over doesn't mean you should get Hitchhike. Always Follow Your Intuition.
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Food for Vegetarians

Getting the correct Food for Vegetarians sources of nutrition and sustenance is essential to any diet. It can be a challenge to buy food for vegetarians if you are not familiar with this type of diet. You may end up making them sick due to unfamiliar Food for Vegetarians ingredients being consumed as well as contributing to their social discomfort. Here are a few tips on buying food for a vegetarian. Here's Tips On How to Buy Food for Vegetarians :

Get the basic nutritional food vegetarians needs. Proteins: Sources include, beans, legumes, nuts and grains. Dairy and egg products can also be a good source of protein. Quinoa is a complete protein, meaning it has all 8 amino acids the body needs. Other sources like beans and lentils can be paired with brown rice to make complete foods for vegetarians. Meat Substitutes: Tofu, textured vegetable protein, tempeh, seitan and other soy-based meat substitutes are available and can be used in place of the meat in some common omnivorous recipes. Using the same spices and seasonings used on a meat-based dish is an easy way to mimic the intended flavor of the original dish. Vitamin D: Vitamin D is commonly found in meat and other animal products and often needs to be supplemented in a vegetarian diet. Vitamin D fortified tofu, soy milk and basic cow's milk are all good sources. Calcium: Calcium can be derived from cow's milk and cheese, but if he or she abstains from these--or prefers other sources--there are calcium fortified milk alternatives available. These include rice milk, almond milk and coconut milk. In addition, nuts and seeds such as sesame seeds are high in calcium. Iron: Iron is good food for vegetarians commonly found in meat and is essential to good health. Sources include potatoes, spinach, tofu, watermelon, pinto beans and cashews. You should consume more vitamin C to increase the absorption of iron. Oranges and other citrus fruits can provide you with adequate amounts. Vitamin B12: This vitamin is essential to healthy brain function and is mainly derived from animal products. Dairy products provide adequate amounts and additional sources include nutritional yeast and fortified milk alternatives. Omega fatty-acids: Vegetarians commonly have lower fat intake than meat eaters, unless cheese and milk are a large portion of their diets. Omega fatty-acids are essential to healthy joints and brain function. Fish are traditional sources of this type of fat, but are not usually included in a vegetarian diet. Flax seeds, flax oil and walnuts can be incorporated into a recipe to provide adequate amounts of omega fatty-acids.
Read the great cooking recipes. It is essential to read the label on processed food when buying food for a vegetarian. Many packaged foods include things like chicken broth and other meat products that might otherwise look entirely vegetarian.
Ask them what they like. It might be best to ask what the person prefers to eat. It is common for vegetarians to be aware of what they should and should not eat. Make sure you are aware of their dietary restrictions. Ask if they eat fish, drink milk or eat eggs. There are many types of vegetarians who do it for health, ethics or both. Be sure to learn as much about the person as you can.
Buy simple Food for Vegetarians ingredients. Simple ideas for breakfast and snacks are bananas, apples, oranges, grapes, avocados, spinach, kale, carrots, crackers, hummus, chips and salsa. These simple foods provide a vegetarian with adequate nutrition and are easy to prepare.
Read also about Hitchhike.

Great Cooking

Great Cooking - Do people grimace at your food when it's your turn to cook? Do you feel hopeless in the kitchen? Follow these steps, and next time people may grin when it's your turn to great cooking! Here's Tips On How to Be a Great Cooking :

Visit the library and check out recipes and great cooking ideas. Understand all the basics. See how a recipe is written, the common steps for a particular type of food (bread, soup, meat, cake, etc)
Test out some great cooking recipes; don't get mad if they fail. Practice makes perfect. Start with simple things that require a few cheap ingredients and don't take much time.
Keep reading and cooking. You need to practice how to taste something and then make it taste better.
Check out free great cooking tips all over the internet. See what others say about a certain recipe. Use Google. Google is your friend. If you have a question about something or need to research a certain topic, search using Google.
Watch cooking shows to get some more great cooking gifts. Talk to other cooks. Observe them.
Know what kinds of flavors you like and try to get them in your dish.
Ask someone before you cook or use ingredients in a new recipe! Or see what others say in the internet forum or comment section for a recipe.
Don't be afraid to experiment with cheap ingredients, and be ready to add flavors to repair a dish.
Find a brave friend to taste test your new creations and give you honest feedback and suggestions.
Make sure you know the basic terms and follow recipes carefully at first.
Learn basic techniques for repairing mistakes, such as thickening or thinning a food. However, some mistakes can't be fixed. Learn when to simply throw out something and try again.
Don't try anything with expensive ingredients, a very long list of steps, or notoriously difficult at first.
Start by cooking one dish at a time.
Don't make something you've never heard of great cooking, or you think you won't like yourself.
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Overstimulation

Becoming overstimulation because you've spent too much time in a highly stimulating environment can leave you feeling irritable, with too much pent-up energy waiting to be released. This would be OK if you can take a run outside but getting overstimulation before class, an event, sleep, work, or other obligation is hardly ideal. Here is how to avoid over-stimulation. Here's Tips On How to Avoid Overstimulation :

Don't watch too much TV. Even though a passive form of entertainment, TV can make symptoms of overstimulation you when watched for too long, especially watching action, adventure, drama, etc. shows.
Avoid playing video games for long periods of time without breaks. Break down game playing into smaller chunks with big breaks and lessen the amount played each day.
Keep your computer usage to a few hours daily. Surfing the web can infant overstimulation your thinking, especially before bedtime. Have at least an hour's break between surfing and sleeping.
Learn which foods overstimulation in children. Keep a food diary if this helps and record the foods or drinks that bring about hyper behavior. Once you know, avoid these foods and drinks.
Decrease your caffeine intake. Too much caffeine can bring about baby overstimulation.
Ask your doctor about any drugs you're taking. Sometime drugs can cause overstimulation including OTC and recreational drugs.
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Lung Capacity

Many sports in today's action-packed world require you to use a vast amount of air from lung capacity to be successful. While there are ways to the size of your lungs, there are many ways to increase the amount of air taken in by your lung capacity, and the efficiency with which they capture oxygen. Practice these exercises daily, and you are bound to see an increase in your lung capacity. Here's Tips On How to Increase Your Lung Capacity :

Training at higher altitudes, if possible, you can also help increase average lung capacity. The air in high altitude areas has less oxygen in it, which will force your lungs to work harder and become more efficient. But be careful, though, as altitude sickness is a possibility until your body adjusts -- this will require weeks to a couple of months.
You probably already know to stay away from any kind of smoking, but you should also stay away from smoke-filled environments, where you're exposed to second-hand smoke.
Playing any wind instrument with correct diaphragm breathing techniques can make a dramatic change in lung capacity and exercise. Singing is also a great way to achieve the same results.
In a pool, position your chest as far underwater as possible and breathe through a tube. The further underwater you are, the more pressure is applied to your chest, making it hard to breathe. Make sure you can keep the tube above water or you will end up with lung volume capacity. Note that at even a couple feet down it may be impossible to inhale. AND DON'T COME UP WITH LUNGS FULL OF AIR - exhale before you return to the surface or you risk a lung barotrauma (this can occur at 2 - 3 metres or more).
A 3/4" (1.9 cm) NON-PVC (PVC is highly toxic) pipe coupler is the perfect tube for most people to hold between their teeth to practice breathing exercises and, if it isn't right for a particular individual, they can use a 1/2" (1.2 cm) or 1" (2.5 cm) coupler. They are cheap and can be sterilized vital lung capacity. They are a great aid to help singers open up!
Instead of using a piece of pipe you can use two knuckles. Also, thinking about breathing from the bottom up--like a glass of water being filled--helps.
Breathing exercises during everyday activities can be helpful lung capacity. Breathe in for 2-20 seconds, breathe out for 10-20 seconds, and slowly increase the rate. Soon you will find yourself breathing out 45 seconds-2 minutes if your practice enough! You can easily do it while driving, sitting in the office, watching television, playing video games, doing paperwork, at the desk at school, or when you are simply bored!
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