The Scare Mongers are at it again!

C S Radhakrishnan

The recent news about Arctic Ice melting from Global Warming causes the scare to be further heightened. Do the facts justify the scare?

The Arctic Ice Cap is stated to be melting and causing total disarray of the life of the Eskimos and other animal life on the frozen region. The evidence cited for this claim is the gradual moving away of the Eskimos from the warming areas and settling at other points where the climatic position is what they were used to. Same is the case with the other life forms in the region. What is so scary about it? It has always been the human nature to spot adverse factors in the environment, whether it be presence of predators, emergence of desertification in the land, or depletion of food material, and search for more congenial places, and resettle at such places. If this were not so, we would still have stayed on in the African continent or what was Gondwana land and probably got extinguished as the Homo Sapiens species. All migrations across every continent have occurred from this primary instinct for survival.

Even for the animals facing adverse climatic conditions, the urge to move to safer habitats is innate. While the animals will adjust with the changes, prompted and aided by natural instinct, and get themselves rehabilitated, it is the humans who have problems of adjustment or take advantage of the innocence of the less fortunate brothers. For example, by spreading the scare of the prospect of Arctic Sea  Ice disappearing, and forcing a large scale migration of the Eskimo population and persuading a minority to stay back, the manipulators can get control of the vast areas of uninhabited Arctic sea for Oil exploration, in future. That is quite a bounty for a very less expensive endeavor!. Remember the speed at which North Sea Oil Exploration was expedited! They won’t even have to incur the cost of an Iraq type war for  this!

Let us examine the claim of shrinking of the Arctic Ice Cap. The basis for this claim is the very old outline of the Ice cap from the days of the pioneering cartographers of the nineteenth century who explored the Polar Region. By the admission of the Global Warming theorists, the Arctic Ice cap has been shrinking at the rate of 9 % every decade. At that rate, the entire Arctic Cap ought to have disappeared in the last one century! But that has not happened. What in fact happened is that the outline of the Ice cap has changed, with more ice melting from the western parts and more water from warmer areas in the East solidifying, thus extending the Ice cap Eastward. If we look closely at the Satellite map, we can very easily see that the new Ice formation has almost equaled the area lost to melting.

It should be obvious to any straight thinking person that the gradual tilt of the Earth backwards continues to re-adjust the climatic conditions in various parts of the Earth. New areas will get warmer or colder as a result of this. But the over-all gross heat radiation received from the Sun will be dependent only on the Sun and not any insignificant factor on the Earth.

I wind up throwing a new challenge to the experts: How many of them have studied the possibility that the   Earth as we know it now was a smaller planet earlier and it has been expanding at a very slow rate, which is why the Earth which was completing a cycle of climatic variations in ten Calendar months earlier now takes twelve months to do so? Also has it occurred to them that climate has always been changing all through the life of the planet? Without conceding that the surface area of the Earth has actually expanded due to the said expansion, the theory of Gondwana Land and of Continental shift cannot be accepted.

All the Epics of every civilization refer to the long life of certain heroic persons of the ancient past. This was possible because of the smaller size of the Earth and consequent shorter span of a year.  It is quite possible that our successors will  live less number of longer Years, or some day, the Earth’s gaseous mass inside will  get exhausted completely and the Planet may shrink to much smaller size and Climate cycles of less than one Lunar Year may become a reality. Let us not scare the innocent people with the theoretical possibilities which may take millennia to materialize, and make their life miserabletoday!

World War I and II had almost destroyed the economies of Japan and Germany. Their Revival and Resurgence had much to do with the emergence of Small and Medium enterprises in those countries.

Initially the Germans focused on regaining the market share through focus on quality while their Japanese counterparts stressed on affordability for the consumers of the depressed economy. Once these respective focus areas were strengthened, further progress was achieved on the remaining areas also. German products achieved mass production and reduction in prices to affordable level and Kaizen and Quality Circle concepts improved the quality of Japanese products to the very best level.

Newly independent countries like India looked up to both these models for developing their small and medium industries. But Infant Mortality rates in India were as high in Industrial units  as they were in the Humans . There were States where mortality rates of new industries became as much as 90% plus. Initially this was blamed on lack of entrepreneurial skills in the owners of the businesses. The Government of India responded to this by creating a nation –wide network of Small Industries Service Institutes. They provided Initial Training as well as Continuing Education to the Entrepreneurs and their skilled staff. Lack of co-ordination between Demand and Supply was another Diagnosis. Establishment of District Industries Centres was an important initiative of the Government in the ‘Seventies. They were expected to monitor the demand trends and co-ordinate the production and supply of the products by the SSI sector.

Later the diagnosis came to lack of marketing support.  Price Preference in Government procurement was introduced as a remedy. By 1986, the small scale sector had accounted for almost 99 %of all industrial sickness in the country. It was at this stage that the financial Institutions and the Banks became really worried about the trend of sickness and the resultant blocking of financial resources in the sick units. Models for testing financial viability of the sick units were adopted from the Large scale establishments and training programs were organized for the SSI owners and managers. The famous Altman model of test was adopted from the United States. In this model, values of five variables in a business were computed and their inter-relationship and total impact was found. The Variables computed were Ratio of Working Capital to Total Assets,(X1),Retained Earnings to Total assets(X2), Earnings before Interests and Taxes to Total Assets (x3)Market5 Value of Equity to  Book Value(X4) and Sales to Total Assets(x5).  Altman [Corporate Bankruptcy In America,1971] postulated the inter-relationship of these ratios in the equation: Z= 0.012 X1+0.014 X2+0.033 X3+0.006 X4+0.010X5

Shri.C S Radhakrishnan is a freelance Journalist and former Member Secretary. Goa Institute of Rural Development and Administration,INDIA

C S Radhakrishnan

An industrial Unit passes through several stages of financial stress before it reaches the stage of sickness and eventual degeneration beyond redemption. Internal Financial Advisors/Executives can play an important role in checking the progress of the sickness and even in preventing it from the very beginning.

What are the tools at the disposal of the Financial Executives to detect an emerging sickness trend? There are four broad categories of Financial ratios traditionally employed to check the financial health of a business. These are: Profitability Ratios, Solvency Ratios, Liquidity Ratios and Turn- Over Ratios. External Financiers like Banks, Mutual Funds, Private Equity Investors, and ordinary shareholders of the business are interested in knowing the status of the business for deciding whether or not to  stay invested  or withdraw their investments. They would therefore be keeping a hawkish eye on the published quarterly financial results of the business.  Let us briefly examine the scope of each of these groups of Ratios in judging the financial health.

A.      Profitability Ratios: There are seven ratios that come under this category.

The first is GROSS PROFIT RATIO. It is calculated as the percentage of the Gross profit for the Accouinting period to the total sales during that period. This ratio is normally checked by investors from the annual accounts and reports. But the internal finance team can use it for any given period to satisfy them that the business is remaining profitable. There is however, a Caveat. Sales Volumes tend to fluctuate during different spells of the year. Market Cycles, Seasonal demand etc. have an impact on the Sales volume as well as the Profit. During dips in demand, the business may have to resort to inducing demand through special discounts, or other promotional activities and the profitability may show stress. Thus there should not be any hasty conclusion during such a phase that the business is not viable or is heading for sickness.

The second Profitability Ratio is NET PROFIT RATIO. It is worked out as the percentage of Net Profit of the Accounting period to Total Sales for the same period. This is also calculated conventionally by the investors on Annual Basis. But using the tool on a monthly or quarterly basis can give internal teams useful hints about developing stressful situations.  Here too, caution must be exercised that no hurried conclusions are drawn. Any decline in the ratio, compared to previous accounting period should be investigated to pin point the exact cause and remedial action taken, if needed.

The third Ratio in this group is TOTAL ASSET TURN- OVER RATIO..This is ideally checked on Half- yearly and Annual basis. If tested against shorter period, it may not show significant results. The ratio is the percentage of Sales to Total Assets.

The fourth Ratio in this lot is RETURN ON INVESTMENT. It is worked out as the percentage of Net Profit After Tax to Total Assets..It is useful to monitor this ratio on a monthly and quarterly basis so as to check any abnormality and initiate corrective action.

The fifth Profitability Ratio is the Return on Equity share  holding fund ratio. It is the ratio of the [Net Profit Less Preferential shares Dividend] as percentage of [Equity share +Reserves] This is useful only after preferential dividends are paid out and hence to be used only annually

The sixth ratio in this group is the Earnings per share.[Net profit minus preferential shares dividend] divided by number of  shares gives this ratio. As stated above, since this ratio also involves amount paid out as preferential didend, it is useful only for annual assessment of profitability.

Similar is the case with  the seventh Profitability Ratio, viz, dividend per share. It is calculated as the ratio of didend paid to the number of Equity shares.

We shall look at the other Ratios in the subsequent articles.

Choosing Your Initial Team

C S Radhakrishnan

Nothing is more important than choosing your initial team when expanding the business idea from a mere dream to the reality stage. If you create a team of persons with a synergetic approach to problems who can contribute to the solution of the problems, you would have laid a strong foundation for your budding business. But if your team is composed of persons with competing interests and very high personal egos, your project would certainly be doomed. Ego is a normal part of every person’s psychological make-up. There is nothing wrong with it, as long as it is kept within reasonable limits and tuned towards achieving Project Goals and also achieving personal goals in that process.

As the creator of the Project Dream, it is your responsibility to translate your dream to your team members as the way for them also to achieve their own dreams .This is very often difficult, when the personal goals are at conflict with each other. The role of the Entrepreneur in this area is to tailor the Project in terms of what it can do to the Community or a significant part of it. For example, when the Laundering machine was designed, it was definitely a profitable idea for the designer and the entrepreneur, but it was the great convenience to the community that large volumes of washing work could be done at a time and several families would be saving massive amounts of time from their daily routine which made the Project a common goal for the entire team. Same was the case when Flour mills were invented, helping out the women to reduce the day long drudgery of grinding the grains to various grades of powder.

Customer focused thinking always helps to keep the business on the right track and reduces chances of unnecessary conflicts of interests in the team.Personal goals of career growth, financial success, etc are definitely necessary as a significant motivation for hard work. But it is when these are achieved through the achievement of collective goals that everybody in the team benefits the maximum. If you look at some of the most successful businesses around the World today, you will find that they were all started off as problem solving missions, aimed at helping the customers to reduce their burdens or enhancing their quality of life.

The initial agreement with your team on how the rewards for hard work would be structured is very critical also. While it is important that the team should be able to make a reasonable living from the earnings of the business, it is also necessary that the team should be willing to invest a part of the profit in growing the business. That would mean less of take home pay in the early stages of the business. How do you motivate the team to do this? The best option here is to treat such amounts as personal investments by each Team Member in the business, for which they should be given Stock options or Debenture Bonds. Thus they see that while they are taking home less pay than what they could have had if all the profits were shared with them, they are also growing financially and investing significantly in the growth of the company.

As the investments grow, the team members should progressively be involved in the financial decisions of the business, so that transparency prevails and misunderstandings are avoided. Those who feel they have invested in the company would be careful to notice any cases of unproductive expenses or other areas of wastage of resources. They would also be on the look-out for more opportunities for the business to grow. Instead of just one pair of eyes and ears keeping a watch on the minute details of the business, you will have several ones doing this for you. This is the strongest cement for building the edifice of the new business.

C S Radhakrishnan

Content Writing for Web- sites dealing with Kerala is an interesting challenge. For one thing, the State is a mosaic of different sub-cultures and traditions. The scenic beauty of the State is alluring and to some extent unique. It has its parallels in the Hawaiian Landscape, but those w are island territories. Mexican Coast, Brazilian coast and the Sub-Sahara West African Coast are more comparable. The comparisons end there. The cuisine of Kerala is ethnic to the place and it has also imbibed some of the elements of other cultures it had inter-action with. Thus you find the wines of Italy and France, Portugal and England have found their way on many Tables of Kerala.  But Port Wines-both Red and White -are more popular among these. The Cassava (Tapioca) of South America has become staple food of the poor in this State. Cashew Nut travelled all the way from Brazil to Kerala and is a major export item from here.

Venice’s Gondolas are having their counter parts in the Snake Boats of the Backwaters of Kerala. Venice and Amsterdam have their canals reflected in the water lanes of Alappuzha (literally meaning ‘River of Houses”).Chinese and Japanese Martial Arts have their parallel in the Kalari Martial Art of Kerala. Kabuki of Japan has its Indian Version in Kathakali of Kerala.

Kerala’s Coir Fibre assumes innumerable shapes and forms adorning the interiors and exteriors of homes around the around the World, besides serving as strong Ropes that anchor mighty ships at sea.

The Kerala model of Health Care was much recommended by the W H O, since it is based on a Healthy Life Style. The traditional Matrilineal Society has since changed to Patrilineal system, but conventions and traditions still follow that old pattern.

A Content Writer will never run short of ideas and Topics for cooking up his pieces on Kerala.

C S Radhakrishnan

Charles Darwin, in explaining the mysterious disappearance of a large number of species of life forms from the Earth’s surface, had propounded the Theory of Survival of the Fittest. The theory holds good for the survival of Businesses and industries facing adverse circumstances. Every time there is a down trend in a business cycle, there is a test of fitness to survive.

And then there are Global Economic cycles which leave massive impacts on the economic activities of Nations and the World as a whole. When these cycles are on the upward swing, even incompetent businesses survive. Some even thrive, in spite of their incompetence. This happens because the booming economy creates demand for Goods and services, far in excess of the available supply. Thus incompetence is hidden by the apparent success of every player in the field.

The real test of competence comes when the business cycles and the Economic Cycles are on their downward swing. Pent up demand may keep a few incompetent ones going for the initial few months of a Down- trend. But the reality bites hard once the demand shrinks. That is when the competent ones seize adversity by its horns and turns it into opportunity. They create Demand where none existed before or develop existing opportunities. A field deserted by the incompetent becomes a blessing for the ones who know the art of survival.

It is interesting to watch the emergence of competent ones from the debris of adverse circumstances. Some solve their financial problems through tie up with Private Equity Players, some syndicate their marketing efforts with others in allied fields, yet others find new ways to reach out to existing and new customers and sharpen their Customer Satisfaction efforts.

The Global slow-down in the Economy has been attributed to competitive relaxation of lending norms made by Bankers in the bigger economies in order to sustain a high level of demand, and subsequently reaching a level of Bad Debts which became irrecoverable. In sharp contrast to the confusion created about Housing Loans to the Poor and Lower Income Groups, Tight Purse Policies were being followed in dealing with the Applications for SME Loans. The crisis in this sector came about as a result of drying up of funding. Smart businesses saw the writing on the Wall and devised ingenious ways to reduce dependence on Banks. They negotiated longer Credit spells for the Inputs and gave incentives for quicker payments from the buyers.

The past three years have demonstrated more than ever that a crisis is not the end of your business. It is your failure to rise to the occasion and create solutions appropriate to the Crisis that lets your business down.

In the case of the Real Estate Business, one thing is certain: as long as a population grows, there will be need for new Housing Units and shopping facilities. Only in countries which reached extreme levels of high Wealth, the Demand for even a second home would have been met and there would be some stagnancy. Even in such economies, generational changes in preferences for Housing styles will create Demand.

The situation in India is nowhere near such a stagnancy. Even in the few pockets of affluence, second home or Holiday Time Share remains as viable options.

Business Persons in this sector should concentrate on improving customer satisfaction and proactively cultivate new clients. Efforts at achieving economy of scale and minimizing Inventory holding costs should receive high priority. Associations of Builders can play an active role in providing training in these matters. The India Institute of Realty at Pune can also help organize Professional Education through condensed courses in addition to the three courses of long duration already being conducted by them.

Survival of the Fittest is a foregone thing. But it is also to be remembered that most of the inventions and discoveries in Sciences and commerce came about in thinking positively about ways to overcome adversities. Every shadow will lead you to the object casting the shadow and the source of light beyond it casting the shadow. It is in exploring the shadow that the secret of success lies.

C S Radhakrishnan

When it comes to implementing any change in our life style, we always make pious resolutions , but fail to keep up with our promises to ourselves. Has it ever occurred to you to introspect, to see why do we do this? Do we really not care fir the need to effect changes? Are we satisfied with the life we are leading? Or, is it that something is pulling us back from implementing the resolutions?

The truth is that both the desire for change and the desire for status quo are essential parts of our life. Status quo gives us the reassurance that everything is familiar and we are not exposed to shocks. We have a native fear of change, because change implies risk. This is the theory behind habitats. Whenever confronted with disadvantages and setbacks, our inner mind prompts us to seek change. People who lived comfortably along the sea coasts wanted to migrate from there after a tsunami swallowed their dwellings and means of livelihood. Those who lived in high mountains amidst Nature’s beauty found it wise to move away after they realized the risk of Landslide or Volcanic eruption.

The desires for change are promptly implemented where the negative experiences were massive and life threatening. But small discomfort which one could withstand but would like to see eliminated, became the motivation for an inner urge for evolutionary change. The migration of amphibians to the land, and the emergence of flying skills in certain species of life are two extreme examples of how the desire for change became strong and brought about the desired change.

How do we reconcile these two extremes and make orderly changes in current state of life? Our desire for change is necessitated by our dissatisfaction with some aspects of our life. And our habit of postponing the change is dictated by our desire for the state of comfort exemplified by status quo. Any significant change has to be introduced in a pattern of change and status quo integrated into one. Do we have any past guidelines for such effort?

Almost every religion prescribes days of religious rituals running for a few days at a time and at specified intervals during a year.. During these periods, changes in food habits and ordinary way of life are prescribed. Those who strictly abide by these guidelines find it easier to incorporate changes in other aspects of life, through continuous repetition of the new way for a few days. In other words introduce a change which you desire and repeat the practice for a few days continuously, till the conscious action is accepted as the new policy by the unconscious mind. It then prevents you from sliding back to the old ways.

Nine days at a time, One month at a time and six weeks every year are some of the standard spells found suitable for bringing about desired changes. Whatever you repeat for nine days will help you stay on that track for that season. What is done continuously for one month will last with you for six months or a little more. But most effectively, what you do for six weeks at a stretch will last you for the whole year. Herein lies the secret of bringing about changes for the better. First of all, regulate your daily life around a fixed routine. Then progressively introduce the changes, one at a time, devoting Nine days for small matters, One month  for more serious changes, and Six weeks for the most important changes.

By C. S. Radhakrishnan

Most people who desire progress in their life find it difficult to pin- point a specific cause or factor that is blocking the progress. Many may initially mention lack of money as the cause. Show them how their money problem could have been solved with their known resources, and the blame will quickly shift to lack of Time. Teach them a few time management skills, and you find that “others” are the new target of their blame. Rarely do you come across an honest admission that unwillingness to change fro the beaten path and known ways of work is the principal obstacle to progress. Some are vaguely aware of the fact, while most are ignorant of it.

Why do we fear change? We tend to believe that the present state and the current way of work is good. We also believe that change will be painful or inconvenient. This is in spite of the fact that every day we see before our eyes others who have accepted change and made tremendous progress.

Fear of change is one of the most common characteristics of man and animals. Yet we can also see that those migratory birds, shifting herds of animals and travelling humans discover new opportunities, learn new skills and create a better life for themselves.

What do you think? Post your responses here.

C S Radhakrishnan

The past decade has witnessed the crescendo rising on Global Warming. With all kinds of Soothsayers painting pictures of Gloom and Doom, isn’t it time that a few counter questions are raised? What is the Scientific basis for this scare mongering and what is the hidden agenda?

Which Scientific process or Instrument is available to us to accept this scare as a reality?

It is a well known fact that the Earth keeps tilting backwards even as it continues its spin on its own axis and also its orbiting around the Sun. Periodically, the earlier  Poles will get exposed to more Sunlight and get warmer. The warming process will take some time to register significant impact, say a century or so. This will make the migration of the snow – and Ice-bound life forms to migrate  to the new surroundings comfortable to them. Equally well, earlier barren wilderness will  become covered with moss, and support new life forms that thrive on them .The entire Cycle of evolution and migrations  will be repeated afresh in that part of the Globe, with rapid progress from small life forms to the Giant ones, in a few centuries. In the Palaeontologic Clock, this is a small spell of time.  There is also recent evidence available that a cyclic pattern of Tsunami involving about six centuries has been there in the past. The modern day explosion in Information and Information transmission has brought with them the Commercial competition and One-upmanship in this field. The tearing hurry in which theories which are just hypotheses are being paraded is another Nemesis of true learning.

While the attention of the World is being hogged by the Scare- mongers, the sub polar regions getting colder as a result of this continuous tilt is totally ignored. The Quantum of Solar energy approaching the Earth’s surface has not varied in any significant manner. So also the frequent flare up on the Solar surface has also been more or less steady. If one part of the Earth is getting warmer, an equal part is getting colder also simultaneously. Hence there is no logical reason for clamoring about a Global Warming. The right thing to say would be that climatic patterns as known earlier are undergoing a change. What need to be done is to chart the rate of change and the direction in which change is occurring and then create the New Climate Charts, with good software for periodic updating  on the basis of theoretical projections as well as actual situation on the Ground.

A great opportunity for fine-tuning the existing body of knowledge about Evolution is now available from the current melting spell. Accurate observations during the next two hundred years can give us a verifiable body of data on which we can test our former hypotheses about the origin and development of Species. This is particularly relevant in the case of the microscopic and small   life forms and Plant species. The Change pattern will also pave way for new explorations and identifying of Natural Resources and  also improved and Eco-friendly ways of utilizing them

C.S.Radhakrishnan

126-C, TEEN BUILDING

ALTO PORVORIM

GOA 403521

aarkay.cs31@gmail.com

C S Radhakrishnan

The current economic slump has generated a debate whether it is worthwhile for businesses to participate in trade shows, considering the hard times. The anxiety is understandable given the cost factor. But if a cost-benefit analysis is attempted, it would be clear that the positive factors far outweigh the negative ones. This is particularly so for the new entrants.  Every economic down turn produces some degree of unemployment and gives rise to a wave of inventions, patenting, production and a better than usual number of successes. It has been rightly said that necessity is the mother of invention.

Adversity brings out the best in all of us. There is a new crop of entrepreneurs, this time around also, brimming with actionable ideas. Some are past the proof- of- concept and trial production stages, and some are well into commercial production stage. These creative people should come to the exhibition grounds and Trade Shows with their first round of commercial production and genuinely seek customer feed back and also engage the media for getting critics’ appraisals. There are some options available for economising on the expenditure and optimizing the results. In this article, we would like to discuss some of these for the benefit of our bright new entrepreneurs