Financial Analysis of Coles Ltd

Financial Analysis of Coles Ltd 1. INTRODUCTION 1.1 Purpose In this report my purpose is to do a financial analysis of Coles Ltd which provides a basis, on which the valuation of company can be done. 1.2 Scope This report conducts a financial analysis for Coles by performing a trend analysis of financial ratios using the data given for past 5 years. It also includes a cash flow analysis which along with financial ratios helps compare coles with its industry counterparts, Woolworths and Metcash; and finally this analysis would help in price valuation to calculate a fair price for coles share. 1.3 Methodology This report is based on primary data available from Coles website as well as secondary data such as research paper, electronic database and other publications. 1.4 Limitation Although all efforts have been made to use as much available information as possible but there were some constricting factors such as lack of available data of past financial information which restricted this research. Reliability of data and time constraints were also hurdle in performing this analysis. The biggest shortcoming was that current data was based on AIFR and data for years before 2005 was based on AGAAP, which made comparative trend analysis very difficult. 2. FINANCIAL ANALYSIS In this we will be evaluating the firms financial ratios and cash flow measures of the operating, financing, and investing performance of a company in relation to key competitors historical performance. Given the firms strategy and goals, together these tools allow the analyst to investigate and examine a firms performance and its financial condition. Ratio analysis is the tool which involves assessing the firms income statement and balance sheet data. On the other side, the cash flow analysis relies on firms cash flow statement. 2.1 Ratio analysis The ratio analysis deals with evaluation of the performance of Coles in perspective of its mentioned strategies and goals. In order to achieve this objective a combination of cross sectional analysis and time series analysis is performed. Workings of Ratios for 2006 are mentioned in APPENDIX 4. 2.1.1 Profitability analysis If we look at the return on equity (ROE) of Coles, for a period of 5 years, it is being observed that ROE has increased in 2006 as compared to 2002. Although ROE has fallen in 2006 (15. 30%) as compared to 2005 (18.30 %) but it can be seen that on an average Coles ROE has been stable or increased over last 5 years. Return on asset (ROA) has also been stable around 10% during the last 3 years and increasing from 7.17% in 2002 to 9.54% in 2006.The main reason for stable ROE and ROA are better performance delivered by the management and as well as the mature characteristic of the industry, that produces stable return as well as stable growth seeing population demographics in the country. Table 1 Profitability Ratio of Coles Ltd Source: Coles financial statement after adjustment Gross profit has been quite stable and good for the last 5 years but the concerned part is the net profit margin. Net profit margin has been very low, it had been increasing from 2002 to 2005 but it again fell in 2002 to 1.57% from 2.08%. Coles need to reduce its operating and interest expenses so as to increase its net profit margin. Table 2 Profitability Ratio Comparison within the industry in 2006 On comparing the performance of Coles with its industry counterparts we can conclude that Coles Ltd is way behind its major competitor, Woolworths, in terms of ROE and ROA which might be attributable to lower net profit margin and lower financial leverage. Coles has higher financial leverage as compared to Woolworths and metcash, which means it, has greater financial risk. But despite of high leverage it has low ROE which confirms the fact that Coles has low net profit margin asset turnover ratio. 2.1.2 Activity Analysis A firms operating activities require investments in both short-term (inventory and accounts receivable) and long term assets. Activity ratios describe the relationship between the firms level of operations and assets needed to sustain operating activities. Asset turnover is important in determining firms ROA; it also formulates reasons of how it will affect firms ROE. Evaluating the effectiveness of asset management is the purpose of asset turnover analysis. 2.1.2.1 Short term activity ratios Working capital is our main concern while evaluating a company. It can clearly be observed that since Coles has high turnover ratios it uses cash basis in its sales. It can be clearly being seen that it took only 4.48 days on an average for Coles to convert its inventory investment back in to cash. From the figures last 5 years we can clearly interpret that Coles has drastically improved its cash conversion cycle from 23 days in 2002 to 4.48 days in 2006. Table 3 Short-term Activity Ratios for Coles Ltd Table 4 Short-term activity ratio comparison, 2006 Now, if we compare Coles with its competitors we can see that Woolworths has lower cash conversion cycle and metcash has higher cash conversion cycle. Woolworths has lower cash conversion cycle because it keeps inventory in stock for shorter duration and stock is converted in to good sold in less span of time. On the other hand Metcash keeps inventory in stock for lower no. of days but it provides more no. of days to its receivables for payment due to which it has higher cash conversion cycle. Seeing the industry it can be concluded that Coles has good cash conversion cycle but it can improve on it by reducing the Average number of days for which inventory is in stock. 2.1.2.2 Long term activity ratios In the analysis of long term activity ratios, long-term asset turnover and property, plant and equipment turnover have been utilized. Table 5 Long term activity ratios for Coles Ltd On the whole both ratios moved in the same pattern during these periods. Relatively, this pattern shows that asset utilization has improved uniformly for the period ranging from 2002 (310.12%) to 2006(372.70%). This helps to conclude that company is continuously improving its utilization of assets to increase its production. Table 6 Long term activity ratios comparison, 2006 While comparing to its competitors it can be seen that Coles total asset turnover ratio is approximately 30% higher than its competitors. It helps to analyze that Coles is more efficiently utilizing its resources to increase its production as compared to its competitors. Metcashs high PPE turnover ratio can be contributed to the fact that PPE forms a very small part of Metcashs total assets. If compare Coles with its major competitor Woolworth on PPE Turnover Ratio we can conclude that Coles has been utilizing its fixed asset better than Woolworths. 2.1.3 Liquidity Analysis Liquidity is referred to a firms ability to have sufficient funds when needed and convert its non-cash assets in to cash easily. Liquidity Ratios are employed to determine the firms ability to pay its short-term liabilities. Liquidity analysis enables us to determine Coles ability to cover its liquidity risk. Liquidity risk may arise due to shortfall or over liquidity within the firm and this in turn lead to firms disability of fulfilling its liquidity needs. In order to determine firm liquidity level, Current ratio, quick ratio and cash ratio are short- term liquidity ratios which have been employed. Table 7 Coles Short-term Liquidity Ratios On doing the trend analysis for last 5 years it can be observed that Coles current ratio has been consistently falling, which increases the possibility that Coles will not be able to meet up its short term liabilities. Current ratio has fallen from 1.37 in 2002 to 0.98 in 2006 which is of major concern, as a current ratio of less than 1 means that company has negative working capital and is probably facing a liquidity crisis. The more stringent measure of liquidity is quick ratio and cash ratio which have also been falling uniformly in last 5 years. It seems Coles is falling in to liquidity crunch and might need short term funds to meet its current liabilities. There has been lot of volatility in the cash ratio of the firm as they have been rising and again falling, so we can conclude that Coles is not able to maintain stable liquidity. Table 8 Short term liquidity ratios comparisons, 2006 As compared to its competitors Coles has better current ratio than Woolworths but has current ratio less than Metcash. Comparing Coles with its major competitor in retail sector, Woolworth, we can clearly see Coles has better current cash ratio but is behind on quick ratio. On comparing with metcash we see that Coles is behind on all the short term liquidity ratios by a very high margin. Metcash has twice the cash ratio as compared to Coles, which makes Coles ability to meet its short term liabilities questionable. 2.1.4 Long term Debt and solvency Analysis The analysis of a firms capital structure is essential to evaluate its long term risk and return prospects. The long term debt and solvency ratios which we are going to use here are debt to equity, debt to capital and interest coverage ratio. Table 9 Coles long term Debt and Solvency ratios As indicated by Coles debt and long term solvency ratios, it denotes that firm is not a solvent company and relies heavily on debt financing. The firms debt to equity and debt to capital ratios are consistently above 1.00 which shows that Coles employed more debt than equity as its source of financing. Debt to total capital has also been consistently been around 0.55-0.60 during the 5 year period. This shows that firm has been stable with its financing policy and has not done much change with its debt and equity mix. Since it relies so heavily on debt financing, issues can be raised regarding its ability to pay off the interest arising due to long term debt financing but we see that company has EBIT 7 times more than the interest charges it has to pay, so that should concern much. It can be observed interest coverage ratio has declined in 2006, as compared to 2005 2004, but it is still able to meet industry benchmarks. Table 10 Debt and Solvency ratios Comparison 2006 Compared to its competitors, long term solvency ratios of Coles seem to be performing optimally. Woolworths has got the highest debt to equity, debt to capital interest coverage ratio. Historically a debt to equity ratio of 2:1 is considered optimal so Coles can still rely on debt to finance its future undertaking rather then issuing new shares. It can be observed that Coles has interest coverage ratio greater than Metcash but less than Woolworths but that can be attributable to its low profit margin as compared to Woolworths. It seems Coles is at par with its competitors in terms of debt and solvency ratios. 2.2 Cash Flow Analysis Cash flow analysis is essential to understand that whether the firms cash flow have the ability to sustain the business, to meet unexpected obligations and to meet its short term liabilities. This also helps to understand whether firm will be requiring additional financing and firm can take advantage of new business opportunities as they arise. In cash flow analysis we will evaluate 3 ratios; Operating cash flow to current liabilities, Interest coverage (cash flow basis) operating cash flow to dividend payment. Methodology for calculation of cash flow ratios is shown in APPENDIX 5 Table 11 Cash flow ratios for Coles Ltd Based on the table above, we can say that Coles has the ability to service its debts which can be seen in firms interest coverage ratio from cash flow basis. Moreover, we observe that Op. cash flow to dividend payment has fallen over the time span from 2002 to 2006 which could be an area of concern. Operating cash flow to current liabilities has also fallen a bit, which means it can be a problem for the firm if certain unexpected obligation come up due to which it might require additional financing. Table 12 Cash flow ratios Comparison, 2006 If we compare Coles to its competitors in the industry which it operates we observe that Coles has got better interest coverage ratio (cash flow basis) as compared to Woolworths Metcash which means that Coles has better ability to service its debts than its counterparts. Coles also has a shortcoming in operating cash flow to dividend payment ratio, as it can be seen it has the lowest operating cash flow to dividend payment ratio. It can be attributable to the fact that it pays more dividends than it should pay. So it can be concluded that Coles needs to reduce dividend payment as it might lead Coles in to financial difficulties if some unexpected obligations turn up. In terms of operating cash flow to current liabilities we see that although it has fallen substantially for Coles in last 5 years but it is at par with its biggest competitor Woolworths greater than Metcash. 3. Prospective analysis Prospective analysis enables us to determine future performance of the firm based on historical performance of the company. Here will be determining the mean return for sales and earning before interest taxes (EBIT) . Using those mean returns we will be making a sales forecast and EBIT forecast. 3.1 Sales and EBIT forecast In determining the sales growth, I have considered the following assumptions- Past trend of sales is going to continue in the following years. Firm is not going to bring a major change in its pricing policy. The foundation for sales EBIT growth is historical sales EBIT growth and I have used mean reverting model to determine the future sales growth, in which future sales EBIT growth will be mean return of last 4 years sales growth. I have not taken the 5 year sales EBIT growth because EBIT growth rate is to high in 2002 (73%) which could adversely effect the mean return considering present situation of Coles. Table 13 Sales EBIT Growth Rate for Coles Ltd Using the mean reverting model we are able to find out a growth rate of sales for 7.64% EBIT growth rate of 11.87%. Using these growth rates we will be able to make a sales forecast EBIT forecast. This forecast will help in proper valuation of Coles on the basis of its predicted future performance. Figure 1 Line chart for sales EBIT growth Table 14 Sales EBIT Forecast for Coles LTD Using the growth rates we can forecast the sales and EBIT for Coles which helps an analyst in a fair valuation of the company. The main reason we use the sales growth as a base for forecasting, is that the majority of firm income is derived from its supermarket business. This forecast suffers from one serious shortcoming that EBIT growth has fallen from 34.31% in 2004 to 11.16% in 2005 and then to -17.07% in 2006 but we are still predicting a growth in EBIT of 11.87% in 2007 and thereafter. 4. Conclusion I have gone through the multi-step process of ratio analysis, cash flow analysis and prospective analysis to present a report on financial analysis of Coles ltd. During the process, I have identified that Coles is operating in a mature industry with small profit margins. I have performed ratio analysis, cash flow analysis prospective analysis which would help a great deal in valuation of Coles based on its current market situation. During the Ratio analysis I was able to conclude that Coles has got good activity liquidity ratios but the major area of concern is profitability ratios. Coles needs to improve its net profitability so as survive in this competitive environment. Cash flow analysis helped us to depict that Coles has cash flow ratios at par with its competitor, Woolworths, but Coles need to reduce its dividend payout as it is too high as compared to industry counterparts. By doing a prospective analysis I am able to forecast the future sales EBIT for Coles for next 4 years. Growth rate for forecast has been calculated using the mean return for past 4 years. This helps us to understand future growth of the company. I would like to conclude by saying that although Coles is competing in a low profit margin industry but it is the 2nd biggest company in the retail industry, therefore if it brings about certain petite changes in its financing and operating activities it can add a great deal to its shareholders value.

Gun Control: Research Paper Essay

People of this country have the right to protect themselves and own guns, so long as they are capable and responsible. Even though guns are dangerous, being defenseless is even more dangerous and everyone should have the right to defend themselves, whether or not firearms are used. As people of this country we should have the right to defend ourselves, and that should include defense by firearms. The gun owner does not have to pull the trigger of a firearm. Sometimes the threat of the gun and the possibility of it being fired is enough to send those who intend harm away. Statistics show that in true life instances of self-defense with firearms, firing the gun was necessary only one third to one half of the time, the rest of the time the mere presence of a gun was enough to scare away the attacker† (Moore 5). Some people are more defenseless than others including the elderly and smaller men and women. People have the right to defend themselves, but sometimes they are limited in doing so by inadequate physical ability, age and other factors. Statistics show that people who are attacked by a criminal are safer if they use a weapon to resist their attacker than if they do not resist. In addition, those who resist with a gun are less likely to be injured than those who use a less effective weapon, such as a knife. (Moore 5) Although there are means of defense other than guns, they are the most effective form of protection from someone trying to harm you. A knife is threatening, but there is not much you can do from a long distance, and throwing it won’t be the best option, since you would essentially be losing your weapon if you miss. Self-defense such as karate and other martial arts techniques also really can’t be used at a long distance, and are of no match to a criminal threat with a gun. Larry Pratt says, â€Å"Evil is in our hearts, not in the guns† (Burbaker1). Many advocates for gun restrictions and bans like to state that â€Å"Guns kill; people do not† (Zaremski1). I find this to be a faulty argument. It is people who kill, a gun will not kill unless the person holding it decides to use it to kill, and pulls the trigger. A gun lying around is not going to do any harm a gun is not making the decision to kill or to shoot its bullets; it does not have a mind. It is when a person picks up that gun that it is fired, the person with thoughts and a mind, he or she is killing not the gun. Anything can be fashioned into a weapon, and there are so many already made weapons out there. We should have the right to our guns, just as we have the right to any weapon out there. None of these weapons are doing any harm to us unless someone makes that happen. We should have the right to defend ourselves with a firearm if necessary if we are threatened by someone. The second amendment of the constitution states that, â€Å"A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed. † Back then, a militia was comprised of ordinary, common male citizens, who not only had the right, but the duty to own guns to protect the country and form a militia. Don Kates states that, â€Å"The amendment, in guaranteeing the arms of each citizen, simultaneously guaranteed arms for the militia† (2347). The founding fathers set it up so that the people had means of defense from anyone, including other citizens, foreigners, and even their own government. People such as James Madison, who was the one to introduce the Bill of Rights stated that the amendments in it â€Å"relate first to private rights† (NRA-ILA). He is stating that the Bill of Rights relates to private rights of the citizens before it relates to state or national rights, proving that it is the right of the people to own a firearm for protection. The second amendment talks about us as citizens owning guns for defense, not just the government. It would be going against the Constitution, and the Bill of Rights to take away or limit gun ownership and usage. Yes, this privilege should be taken away from those who abuse it and harm others or have the potential to harm, but not from regular, responsible citizens. This amendment is not only for personal and military defense, but also was intended to protect citizens from a tyrannical government, so that if it happens, people are able to defend themselves. Moore also states that, â€Å"The Founding Fathers of our country won our freedom with firearms. After we won our independence the Founding Fathers included the right to keep and bear arms in the Constitution to ensure that the freedom they fought for would last† (6). They put this in so that we had the right not only to defend ourselves from any harm from others or even animals, but also so that we had a defense to protect our freedom if it was ever threatened by the government. By taking away our guns, you are in a sense taking away part of our freedom as the people of this country. Some people argue that we have the right to protect ourselves from all dangers, including guns, and that there should be a more restrictive gun control. While it is true that we should make sure that guns should stay out of the hands of felons and mentally unstable people, they should not be banned from regular, responsible citizen’s hands. Moore defines what a responsible citizen is, The citizen must be law-abiding, with no felony record, must not abuse alcohol or drugs, must not be mentally ill, must not have renounced U. S. citizenship, must not have been dishonorably discharged from the military, and must be in the U. S. legally (2). Upon purchasing a gun you have to take a class on gun safety and use and are required to have a full criminal background check and to give your full set of fingerprints. I do not think that this is being enforced enough and shouldn’t be taken lightly. If we can keep the guns out of the wrong hands, we can eliminate most of the crimes caused by them. â€Å"By definition, a criminal is someone who breaks the law. Criminals have many ways to obtain weapons without going through the process mandated by the Brady Bill. Two obvious examples are theft and black market purchases. According to studies only one firearm of every six used in a crime is obtained legally† (Moore 3). Eliminating guns in this country will do nothing, stopping the wrong people to get their hands on it could. We are not going to ban cars because someone crashed it and they died. Many things are dangerous, it is up to the person to be responsible with it. Most products have a warning label or say what not to do with them, such as do not use your hair dryer in the bath, but, it is up to you as a person to be responsible with it and to protect yourself from harm. If another person lacks that responsibility, and uses something to harm you, such as a weapon, you should be able to defend yourself, even with a gun. Think about how well it went in the 1920’s when the prohibition happened and alcohol was made illegal, people still got alcohol through the black market, and because of that demand, the black market grew. The same is true today with the ban on drugs, they are illegal, but people can still get them, and people still use them. The same thing is going to happen, only with guns. Many surveys suggest criminals obtain their weapons through this illegal firearms market. One study indicated that in 37 percent of their arrests the criminal said they could obtain a gun in less than a week, while another 20 percent said they could get a firearm in a day or less. (O’Niell 1). You everyday criminals don’t just walk to the gun store and buy a gun; they get it from the black-market. These guns are usually stolen guns and unregistered. Taking away our right to legally have and buy guns is only going to lead to guns being in the wrong hands and ordinary citizens will be defenseless. Chicago, once seen as one of those go-to American cities, with its sweeping skyline and the lake, is now seen and is a haven for gun violence and crime. It has the strictest gun laws in the country; the question is what went wrong. Houston is very similar to Chicago in terms of socioeconomic factors such as population, density, and segregation. Houston, like Chicago, is a major center for illegal activities such as the drug trade and human trafficking. Despite all this, Houston has a murder rate  two-thirds [than]  that of Chicago. This is because the people of Houston are well armed, while innocents in Chicago have been condemned to be sitting ducks. (Vidal1) Many of the guns in Chicago that are used for these shootings are illegally obtained and are in the hands of criminals and gangs. You are able to get a gun in Chicago now, but you have to go through a firearms training class, 2 background checks, and have a firearm’s owner I. D. card. Only 7,640 people legally own a gun in Chicago, the rest are illegally had, 7,400 illegal guns last year were confiscated from crimes (Maass 1). The gun free law in Chicago is clearly not working if more guns are being confiscated from criminals than responsible citizens who own guns. Many people complain about the high rate of crimes involving guns and gun use in America. A law banning guns probably won’t lower this number at all. If we don’t have means to protect ourselves, we would have to find a way to call for help, such as law enforcement. There are not enough police to go around and protect everybody, and sometimes they come and too late. In that time it took for the cops to get there, that could have been the last few moments of that person’s life. We need to be able to defend ourselves. â€Å"Laws are not enough to protect people from aggression. We must allow people the means to protect themselves. Protection is a major reason that about half of all Americans own a firearm† (Moore 5). Yes firearms can be used against us, but they can also be used for us. We need to have more effective criminal regulations and crime control, rather than more gun control. This is the only way to stop crimes whether or not they involve guns. The tragedy in Newtown, Connecticut was unsettling, killing twenty-seven people, including twenty school children and seven adults. This school, just like all in the United States, is a gun-free zone, but should that mean those teachers and other staff, such as the cop in the school should not have access to guns? The gun free zone did not stop Adam Lanza, the shooter from bringing in his three guns to the school and killing 20 students and six adults. â€Å"Police and other first responders arrived on scene about 20 minutes after the first calls† (Sandy Hook 1). Had these teachers and staff had a gun or any means of protection at all, he may have been stopped before he killed anybody or at an even lower number, especially since the police arrived that long after calls. Pratt states, â€Å"Virtually all mass murders in the past 20 years have occurred in gun-free zones† (1). A mass murder is considered three or more deaths. The main reason that these have happened in gun free zones is because no one other than a police officer has a gun and can stop him and by that time one shows up there is a relatively high chance that more than three people are dead. I do believe that teachers should have a gun in their desk and ready just in case of another incident such as the Sandy Hook Tragedy or at least a cop in every school. Guns should be allowed on these gun-free zones by honest citizens. Criminal are not obeying the rules about the gun-free zones, so why should we take the chance and leave the school children, or mall goers at risk? Taking away guns is not going to solve anything, but instead leave the guns in the hands of criminals. Guns should be kept legal, and yes there should be regulations and better eye on who has it, but making them illegal all together will just cause us to be defenseless and a black market will start up for guns, just like all illegal things. We just need to better regulate the criminals, mental patients, and those on prescription drugs that could alter personality and rationality, not have guns. We need to have better crime control, rather than gun control and teach responsibility and safety and risks of guns. Making everyone well-educated on the topic and of guns themselves will overall help. Even making it mandatory to have a background check and mental health check every few years to make sure that these guns are in the right hands would help out a lot. Most of the time it’s not normal citizens that commit the crimes but criminals, and by taking away guns from normal good, people, we will be essentially leaving them in the wrong hands and taking away our protection. Works Cited Burbaker, Elisabeth. â€Å"Larry Pratt on Guns in America: â€Å"Evil’s in Our Hearts. Not in the Guns†Ã¢â‚¬ Piers Morgan RSS. Cable News Network, 8 Dec. 2012. Web. 29 Mar. 2013. KATES, DON B. , Jr. â€Å"Second Amendment. †Ã‚  Encyclopedia of the American Constitution. Ed. Leonard W. Levy and Kenneth L. Karst. 2nd ed. Vol. 5. Detroit: Macmillan Reference USA, 2000. 2346-2347. Gale Virtual Reference Library. Web. 10 Mar. 2013. Maass, Harold. â€Å"Chicago’s Rising Murder Rate: Has Gun Control Failed? – The Week. †Ã‚  The Week. N. p. , 31 Jan. 2013. Web. 17 Apr. 2013. Moore, Richard. Gun Control. Rep. N. p. : n. p. , 1995. Print â€Å"2013 NRA-ILA Firearms Fact Card. †Ã‚  NRA-ILA. N. p. , 8 Jan. 2013. Web. 1 Apr. 2013. ;lt;http://www. nraila. org;gt;. O’Neill, Kevin. â€Å"Gun Control, Unregistered Firearms and the Black Market. †Ã‚  Examiner. com. N. p. , 9 Nov. 2010. Web. 17 Apr. 2013. Pratt, Larry. Blood – Gun Owners of America. †Ã‚  Gun Owners of America. GOA, 16 Dec. 2012. Web. 29 Mar. 2013 â€Å"Sandy Hook Elementary Shooting: What Happened? †Ã‚  CNN. Cable News Network, n. d. Web. 29 Mar. 2013. Woodhill, Louis. â€Å"The Sandy Hook Horror Begs Us To Have The Courage To Do Nothing. â€Å"Forbes. Forbes Magazine, 27 Dec. 2012. Web. 17 Apr. 2013. Vidal, Charlie. â€Å"PolicyMic. †Ã‚  PolicyMic. N. p. , Feb. 2013. Web. 17 Apr. 2013. Zaremski, Miles J. â€Å"Guns: Screaming in Silence Is No Longer an Option. †Ã‚  The Huffington Post. TheHuffingtonPost. com, 11 Jan. 2013. Web. 29 Mar. 2013

Do Video Games Cause Aggression

Do Video Games Cause Aggression? Over the past few years there has been a multitude of complaints about the violent content of video games and it has been suggested that they can make players more aggressive in real life. The fact that video games are getting more and more elaborate and violent can’t be denied – game designers strive to make images more realistic and show the injuries the characters get or their suffering in agony. However, blaming games for aggression outside the virtual world appears to be ungrounded and exaggerated. Firstly, researches conducted on this issue seem to contradict each other. Although some studies show that video games affect people’s emotional state, others claim that their influence upon the players is the same as that of books or films. Moreover, according to Patrick Kierkegaard from the University of Essex, England, there is no obvious link between real-world violence statistics and the invention of video games. He argued that with millions of sales of violent games, the world should be seeing an epidemic of violence, but violence, particularly among the young, has declined. Its true that notorious school shootings in America have been committed by young game players. However, the overwhelming majority of teenage game players are law-abiding citizens. According to 2001 U.S. Surgeon Generals report, the strongest risk factors for school shootings centred in mental stability and the quality of home life, not media exposure. Thus, there is no evidence to suggest that video games are the primary factor that breeds aggression among young people. The moral panic over violent video games misdirects energy away from eliminating the actual causes of youth violence and allows problems to fester further on.

Is It Very Much An Open If Not A Controversial Question

That remains, I believe, still very much an open if not a controversial question. Edward Sapir and Benjamin Whorf offer two versions of the same hypothesis; one is known as linguistic determinism and the other as linguistic relativism. Linguistic determinism states that all human thoughts and actions are bound by the restraints of language( Ask a Linguist FAQ, 2015). In other words Sapir and Whorf argue that language determines how we think, and how we view our world. This version received more criticism than the much lighter version of the same theory known as linguistic relativism. This version explains that our language affects our thought to some degree. Lara Boroditsky , a proponent of the linguistic determinism version, as supporting argument speaks of a tribe in Australia, using sophisticated special orientation. Instead of using signals such as right or left they the North, South, East and West orientation. Such orientation in our culture today, would be extremely difficult and I suspect many people would get lost. This form of orientation was widely u sed our predecessors. Stone Age men directed their hunting efforts using special orientation. Caravans in Sahara oriented themselves according to the location of the sun and other stars. Indians used the bark on the tree to decide where North and South was. Sailors at night in the open sea knew how to find their way using North, South, West and East orientation. Modern man abandoned such ways of orientingShow MoreRelatedRace With A Group Of Diverse Temple Students993 Words   |  4 Pagesask and answer racial questions. Because I saw this as a current issue, I made the decision to facilitate an open and honest discussion about race with a group of diverse Temple Students. One aspect of this class that makes it not only memorable, but influential as well, was the professor’s ability to ask the questions that nobody else wanted to ask. 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My first exposure to an English that engaged me was in freshman year of hi gh school, and every class after that developed me as a writer even furtherRead Morerhetorical analysis of an article Essay1057 Words   |  5 Pages Analyzing Rhetorical Strategies in an Article In a blog posting from 2007, Pharinet asserts her beliefs about the pressing modern issue of whether or not everybody should go to college. Due to the controversial nature of this topic, many well-executed rhetorical strategies are needed in order for Pharinet to convey her point and convince the reader that her argument is valid. In her article, â€Å"Is College for Everyone?† Pharinet utilizes many rhetorical strategies such as a calm, reasonable toneRead MoreRhetorical Analysis OfIs College For Everyone?916 Words   |  4 PagesPharinet. â€Å"Is College for Everyone?† In Pharinet’s blog posting, she proclaims her beliefs about the pressing modern issue of whether or not everyone should attend college. Due to the controversial nature of the topic, Pharinet makes use some well-executed rhetorical strategies to convince her audience that her argument was credible. In her article, â€Å"Is College for Everyone?† She uses many rhetorical strategies like tone, calm, nods to opposition and she made mention of examples to support her argumentsRead MoreThe Controversy Over Mark Twains The Adventures of Huckleberry Finn610 Words   |  3 PagesThe Adventures of Huckleberry Finn by Mark Twain is a controversial book that has raised heated debates across America for the past century. It was ranked fifth most challenging books out of one hundred in the 1990s (Chadwick 2). Although this book is a hot topic, it should remain on shelves, and still be taught in schools. While Huck Finn seems to be only a book of satire, most want this book banned because it is seen as highly racial. â€Å"The reading of Huck Finn is humiliating to back students