Estimate the five operating expenses for each of the past three fiscal Essay

Estimate the five operating expenses for each of the past three fiscal years, and evaluate what operating leverage, if any, was applied each year - Essay Example According to both financial statements the five costs are Cost of Revenue, Research and Development, Selling General and Administrative Expenses, Non-Recurring and Others. For the sake of simplicity, Cost of Revenue and Selling, General and Administration Expenses would be regarded as Variable Cost and the other expenditure as Fixed Cost. From the Income Statement Extract for 2003 (Fig 2), it is clear that PFIZER operated with a higher degree of operating leverage than GlaxoSmithKline. This is evident in the company's fixed cost percentage as PFIZER's fixed cost position is 2% higher that its competitor. The fact that PFIZER has a substantial amounts of capital tied up in its fixed assets and in particular in Research and Development Expenditure, would account for its higher operating leverage. It should be of no surprise therefore, that PFIZER's Research and Development accounts for over 50% of its total fixed cost. GlaxoSmithKline may have been a little more conservative since its Research and Development Expenditure spans only 5% of its total fixed cost. The strategy therefore would be for PFIZER to reduce its fixed cost percentage and thus enable itself to manage its risks. It has successfully done so in December 2004 (Fig 3) and as a result its operations have expanded by 13%. GlaxoSmithKline, on the other hand, operating income expanded by only 3% despite the reduction of its operating leverage. This is owing to the fact that its revenue of $39 Billion only increased by 3%. Fig 4 According to Fig 4, the Operating Income of GlaxoSmithKline has improved by an additional 4% where as PFIZER fell by 5%. PFIZER operating leverage has increased again and hence would account for the fall in Operating Income by $3 Billion. It was clear that GlaxoSmithKline managed its operating leverage better and hence reduces its risk. Conclusion The question, which may arise, is whether PFIZER is in a better situation than GlaxoSmithKline The truth is "leverage is neither good or bad"(Schmedt May 1998). Each company must assess the amount of risk it is willing to take while striving to achieve its corporate objectives. It is important to understand the company's cost structure to enable management to make effective decisions so that it can compete effectively and achieve the competitive advantage it so desires. References Fred Schmedts, The concept of Operating Leverage : The Samuel Roberts Noble Foundation http://www.noble.org/Ag/Economics/OperatingLeverage/index.html Glaxosmithkline PLC Financial Statements December 2003 to December 2005 - Yahoo Finance http://finance.yahoo.com/q/iss=GSK&annual PFIZER Inc Financial Statements December 2003 to December 2005 - Yahoo Finance http://finance.yahoo.com/q/iss=PFE&annual Buccino, Gerald P. and Kraig S. McKinley, "The Importance of Operating Leverage in a Turnaround," Secure Lender (September / October 1997),

Anishinaabe change maker Term Paper Example | Topics and Well Written Essays - 500 words

Anishinaabe change maker - Term Paper Example Much has been borrowed from her scholarly work as well as joint writing that reflect on her early life and personal contributions as an author and as a visionary politician. To bring or promote an acceptable positive change is a tasking accomplishment and contributions of Winona LaDuke cannot go unrecognized. She was brought up on a time when there was massive loss of land from her community a time in history when Ojibwa were reduced to inhabit reserves, which they only controlled about 10% of the land (Silverstone 91). The main factor influencing the need for a change was the immediate impacts related to land loss including unemployment and social problems such as poverty as well as the charge from her father who was an established activist on treaty rights and tribal issues (LaDuke 75). There was a dire need to re-establish the fading standards within the community and to ensure that they did not remain victims of land loss at any particular time. Winona LaDuke engagement in advanced studies and politics also influenced her role in championing for a change since this was the high time that she integrated with people social lives and learnt about their needs and existing community gaps. For instance, while undertaking her masters in community economic development LaDuke moved to White Earth where she was highly involved in local activities, which compounded her charge to engage in local tribal issues, and struggled to recover lands for Anishinaabe by practically all means possible (LaDuke 85). Her achievements are mainly embedded on the observable results and being an integral team player in instituting organizations which their central role was fighting for the well being of the marginalized or disadvantaged. As an activist LaDuke was an elemental team player in establishing and sustaining the Indigenous Women Network (1985), a center for affirmative action and social development that publicized forced sterilization and in turn activated a change for the