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What arethe differences between basic and diluted earnings per share? Whatare the differences between the numerator and the denominator inthe basic and diluted earnings per share calculations? What actionscan an organization take in order to improve their earnings pershare? What is the experience of eitheryour organization or an organization that you are familiar withwhen it comes to any of these actions? Asan investor, do you evaluate a company as a potential investmentusing basic or diluted earnings per share? Explain why.

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What are the differences between basic and diluted earnings pershare? What are the differences between the numerator and thedenominator in the basic and diluted earnings per sharecalculations? As an investor, do you evaluate a company as apotential investment using basic or diluted earnings per share?Explain your answer

Read the article below and write a brief (1-2 paragraph) summary. This assignment should be approximately 250 words . Complete this assignment as a Word document.

Time to Scrap Performance Appraisals

Times have changed. More and more companies have decided to radically change (read “scrap” or “re-engineer”) their performance appraisal process.

Last week at our research conference we spoke with Adobe, Juniper, Kelly Services, and a variety of other companies who have decided to do away with traditional performance ratings and dramatically change the annual appraisal process.

Our research shows that this is a strong and positive trend.

Why the process must change.

Why do companies have annual reviews in the first place? They are an artifact from traditional top-down organizations where we had to “weed out” the bottom performers every year. By forcing managers to rate people once per year we can have annual talent reviews and decide who gets more money, who to promote, and who to let go.

Coupled with the performance rating is the “potential” rating, which tries to capture an individual’s potential to move up two levels in the organization (the traditional definition).

This approach is based on a philosophy that “ we cant totally trust managers” so we’re going to force them to fit people into these rating scales. And in many companies (around 20%) there are forced distributions, which mandate that some percent of employees are rated at the bottom and only a limited percent can be rated at the top.

The well publicized problems with this process abound. These include:

Employees need and want regular feedback (daily, weekly), so a once-a-year review is not only too late but it’s often a surprise. Regular coaching is the key to alignment and performance.

Managers cannot typically “judge” an entire year of work from an individual at one time (imagine if your spouse gave you an annual review!), so the annual review is awkward and uncomfortable for both manager and employee.

Manager-employee relationships are not 1:1 like they used to be. We work with many leaders and peers during the year, so one person cannot adequately rate you without lots of peer input.

While some employees are a poor fit and likely are poor performers, these issues should be addressed immediately, not at the end of the year.

Some companies really do have a lot of high performers, so forced ranking eliminates great people and damages the culture.

People are inspired and motivated by positive, constructive feedback – and the “appraisal” process almost always works against this.

The most valuable part of an appraisal is the “development planning” conversation – what can one do to improve performance and engagement – and this is often left to a small box on the review form.

Companies are nervous about eliminating this process because:

We need a fair and validated way to distribute compensation increases (don’t we?)

We need a record of low performance when we let someone go

We need to capture performance data in an employee’s profile for future promotion and other talent reviews, development plans, and career migration

We need a way to make sure managers are doing their jobs well.

Well, I’ve probably discussed these issues with 100+ companies over the last five years and our research shows more and more that companies are ready to let this process go.

Organization structures have changed and companies need to be more agile. We have a shortage of key talent and the keys to success now focus on regular alignment, coaching, creating passion and engagement, and continuous employee development.

The new keys to success:

Develop a “feedback-rich” culture and set of tools (often online, sometimes formal, often informal) that encourages all employees to give each other feedback. Tools from companies like Achievers, Globoforce, and most HR software vendors now enable and make this easy.

Separate the discussions about performance from discussions about potential and future career plans. Yes we need to evaluate people when raise time comes, but that can be a totally different conversation from.

Talk about performance regularly and let employees create their own goals on a regular basis. Force managers to provide ongoing feedback and teach them how to have honest conversations.

Assume that employees already know something about their own performance, and force them to self-assess. People tend to have a good idea of their own strengths and weaknesses – give them an open and positive opportunity to share it. That starts the dialogue about expectations and the match between their self-assessment and that of the organization.

Enable managers to assess performance regularly. Software teams now use Agile tools which evaluate code on a weekly basis. Managers should be giving people feedback regularly. If they learn to do this on a regular basis it will get easier and employees will learn to appreciate it.

Focus managers on hiring the best, so they build a team which strives for 100% high performers. This is never possible of course, but rather than assuming that 20% of your employees will perform poorly, spend more time on assessment, culture, and fit to make sure very few low performers make it into the organization in the first place.

Remember that everyone wants to succeed. If they aren’t performing well it’s not necessarily their fault – the organization should take responsibility for helping them find a better fit if possible.

Set and reset goals frequently. Companies that set performance goals quarterly generate 31% greater returns from their performance process than those who do it annually, and those who do it monthly get even better results. This means employees get feedback on a continuous basis (most sales organizations work this way). Read our research for more details.

Beware of pay for performance plans. While many companies (particularly investment banking, sales) have large pay for performance plans, research showsthat these can create perverse behavior. People focus on their own goals at the expense of the organization. In sales related roles this process works well – when you move to customer service, engineering, and other “builder” roles they can create problems.

Give your leaders a cultural framework and set of values to work from. Companies like Juniper and Deckers (Uggs shoes) focus very heavily on corporate values, forcing managers to hire and manage to these values. This makes selection easier and enables us to evaluate and coach people against higher level frameworks.

Invest in leadership development. Being a manager is a tough job. Managers at all levels struggle with selection, hiring, training, coaching, and evaluation. Give them time and tools to learn, a framework for feedback, and a continuous development process so they learn how to become better.

Reward talent “production” not talent “hoarding.” If you pay your managers to “produce output,” they will focus heavily on talent performance and evaluation. This may be a good thing, but ultimately companies thrive by building skills – so in addition to encouraging managers to produce good work, incent them to produce good talent as well.

I’ve had the opportunity to study HR and performance management for almost 15 years now, and this topic has been controversial for a long time. In today’s globalized,talent constrained workplace it’s clear to me that the traditional appraisal has to change.

Businesses thrive on agility, speed, passion, and alignment. The process of driving and measuring performance has to do the same.

Financial Statement Analysis Project—A Comparative Analysis ofOracle Corporation and Microsoft Corporation

Here is the link for the financial statements for OracleCorporation for the fiscal year ending 2011. First, select 2011using the drop-down arrow labeled Year on the right-hand side ofthe page, and then select Annual Reports using the drop-down arrowlabeled Filing Type on the left-hand side of the page.

You should select the 10k dated 6/28/2011 and choose to downloadin PDF, Word, or Excel format.

http://www.oracle.com/us/corporate/investor-relations/sec/index.html

Here is the link for the financial statements for MicrosoftCorporation for the fiscal year ending 2011. You need to press theword Go on the left-hand side of the page. Then you shouldselect the 10k dated 7/28/2011 and choose to download in Word orExcel format.

http://www.microsoft.com/investor/SEC/default.aspx?year=2011&filing=annual

A sample project template is available for download in DocSharing. The sample project compares the ratio performance ofTootsie Roll and Hershey using the 2012 financial statements ofTootsie Roll and Hershey provided at their websites.

Description

This course contains a Course Project. You will be required tosubmit one draft of the project at the end of Week 5 and the final,completed project at the end of Week 7. Using the financialstatements for Oracle Corporation and Microsoft Corporation,respectively, you will calculate and compare the financial ratioslisted further down this document for the fiscal year ending 2011and prepare your comments about the two companies’ performancebased on your ratio calculations. The entire project will be gradedby the instructor at the end of the final submission in Week 7, andone grade will be assigned for the entire project.

Overall Requirements

For the Final Submission

Your final Excel workbook submission should contain thefollowing items. You cannot use any software but Excel to completethis project.

A completed worksheet title page tab, which is really acoversheet with your name, the course, the date, your instructor’sname, and the title for the project.

A completed worksheet profiles tab that contains a one-paragraphdescription regarding each company with information about theirhistories, what products they sell, where they are located, and soon.

All 16 ratios for each company, with the supporting calculationsand commentary on your worksheet ratio tab. Supporting calculationsmust be shown either as a formula or as text typed into a differentcell. The ratios are listed further down this document. Yourcomments for each ratio should include more than just a definitionof the ratio. You should focus on interpreting each ratio numberfor each company and support your comments with the numbers foundin the ratios.

The Summary and Conclusions worksheet tab is an overallcomparison of how each company compares in terms of the majorcategory of ratios described in Chapter 13 of your textbook. A niceway to conclude is to state which company you think is the betterinvestment and why.

The Bibliography worksheet tab must contain at least yourtextbook as a reference. Any other information you use to profilethe companies should also be cited as a reference.

Required Ratios for Final ProjectSubmission

Earnings per Share of Common Stock

Current Ratio

Gross Profit Margin

Rate of Return on Sales (Net Profit Margin)

Inventory Turnover

Days’ Inventory Outstanding (DIO)

Accounts Receivable Turnover

Days’ Sales Outstanding (DSO)

Asset Turnover

Rate of Return on Total Assets (ROA)

Debt Ratio

Times Interest Earned Ratio

Dividend Yield (For the purposes of this ratio, useYahoo Finance to look up current dividend yield and stock price;just note the date that you looked up thisinformation.)

Rate of Return on Common Stockholders’ Equity (ROE)

Free Cash Flow

Price/Earnings Ratio (Multiple) (For the purpose of thisratio, for Oracle, use the market price per share on May 30, 2011and for Microsoft, use the market price per share on June 30,2011.)

The Excel files uploaded inthe Dropboxes should not include any unnecessary numbers orinformation (such as previous years' ratios, ratios that were notspecifically asked for in the project, etc.).

Here are some of theMicrosoft Ratios – (first 12) to ensure you are on the righttrack.

1. EPS – $2.73

2. Current ratio – 2.6

3. Gross profit rate – 77.7%

4. Profit margin ratio – 33.1%

5. Inventory turnover – 14.8

6. Day in inventory – 25 days

7. Receivable turnover – 5.0

8. Average Collection Period – 73 days

9. Asset Turnover Ratio – 0.72

10. Return on Assets Ratio –23.8%

11. Debt to Total AssetsRatio – 47.5%

12. Times Interest Earned –96.2

Thank you.

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