Financial Planning and Forecasting Essay

We have also provided comprehensive documentation on the templates so that you do not need to guess or figure out how we implemented the models. All our template models are only in black and white color. We believe this is how a professional financial template should look like and also that this is the easiest way for you to understand and use the templates. All the input fields are marked with the ‘*’ symbol for you to identify them easily. Whether you are a financial analyst, investment banker or accounting personnel. Or whether you are a student aspiring to join the finance world or an entrepreneur needing to understand finance, we hope that you will find this package useful as we have spent our best effort and a lot of time in developing them. ConnectCode Pg iii Financial Planning and Forecasting Version 1. 0 1. 1. 1 Financial Planning and Forecasting Pro Forma Financial Statements Financial statements projections and forecasting are very common in corporate financial analysis. The reason is that it is very useful and important to forecast how much financing a company will require in future years. The projections are achieved by using historical sales, accounting data and assumptions on future sales and costs. These financial statements projections are known financial modeling as Pro Forma financial statements. 1. 2 Financial Statements Modeling This spreadsheet provides a template for financial statements forecasting. It requires simple financial statements inputs from the past 5 years and will automatically generate all the necessary Pro Forma Financial Statements projections outputs. The following diagram illustrates the process of using this template for financial statements forecasting.

How to Deal with Difficult People

I work at JC Penney's and I hear griping all the time from other associates and definitely from customers. Even I gripe about how work does not get finished. My job is to bring out merchandise from the stockroom so I can hang them up on racks. Every morning after I clock in we have to get our bags so we can put our money in the registers. Right as I leave to get my cart from the stockroom a customer always has a return. It never fails that someone has to return. This customer wanted to return a pair of jeans without a receipt or tags. It is hard to explain to a customer our policy if she doesn't want to listen. I told her the policy was that if she wanted to return something she would have to have a receipt or the tags. She wanted me to call management since she knew someone that worked there. I call the operator and ask to see if there were any managers available. The operator told me that there was no one available until noon. I knew after I hung up the customer would not be happy. The irritation arose when the customer said, â€Å"Well I don't have until noon I want my money now! † After telling her again that no one was available she was just standing there with her arms crossed wanting her money back. After a few minutes I finally decided to tell her that she can exchange it for the same thing she had. You aren't supposed to do that but that was the only thing I could think of right then. That idea had worked. I could finally get her off my back and get on with my work. She went to get another pair of jeans. She wasn't happy with what she got but we both apologized for the mess and that was it. I finally made it to the stock room to get my cart. Most of the clothes I put out needs to have a security ink tag on the sleeve. The people who work in the stock room are supposed to hang and put one on each article of clothing. I can not take anything out of the stock room until they are hung right and ink tagged. I went over to the associate and asked her why they haven't been ink tagged. She gave me a nasty look and said that I could do it. That part takes up to much time so I can't get my work finished. I told the lady I wasn't going to take out the cart until it was done right. There were about eight people working in the stockroom at the same time so you would figure the cart would be finished. Another lady decided to quit what she was doing to complete the job. While I was back out on the floor arranging for the clothes to all fit on the racks she brings the cart out to me instead of me having to go back there and get it for myself. She told me that the other girl that didn't do the tagging wasn't feeling to well and wanted to get out of there as soon as possible so that was why she didn't do it. I told her that I was mad or anything I just wanted to get this cart out so I could get another cart. The phone rang as I was getting ready to put shorts out and it was my manager. She told me over the phone that if they don't have time to do something in the back that you should be able to finish the job on your own. I told her that it wasn't our job to ink tag the clothes. Even the people in the back were told from management that they had to do it. I didn't even have any ink tags to do it anyway. She told me that it was ok and I went on with my work. Later in the evening when my work was just about complete I was ringing up a customer and this lady stormed up to the register with an New World Order wrestling shirt. The shirt was from the Children's Department and I work in the Men's Department clear on the other side of the store. I asked her if she needed any help. She started complaining about how these shirts are a disgrace to our children and shouldn't be sold in stores. Waiting to check out about she was preaching to me and the other customers of how it will influence children to fight and get hurt. As I was just standing there I could feel the heat arise in my body because I didn't know what to tell her. I just told her that this is the in-thing and it is a big seller for kids. She snapped back at me wanting to speak to a manager. I called management and they came right away. The customer started going on and on to her about the same thing and the manager told her she was sorry how this clothing has an effect on her and should not buy it if she doesn't like it. We are not the only store that sells this article of clothing. The manager offered her a ten-dollar gift certificate but the customer refused saying she will never shop here again. She simply threw the shirt on the counter and everyone in line was staring at me. The next person in line said that I shouldn't have to put up with people like that. That lady was rude to cut in line to argue about some clothes. I was talking to her how there were stores all over the world selling wrestling shirts. The griping customer saw that I was busy so she came to interrupt my work. I just forgot about what happened and went back to doing my work. Gripers today are found every-where you go. If you want to quit griping just try to keep whatever you want to gripe about to yourself and then there won't be any problems or arguments.

Policing in Kelsey Essay

In this paper, I will discuss the budget cuts on the City of Kelsey. The mayor has assigned me as a budget director to review and perform budget cuts on the City’s Police Department, due to a 15% budget cut on the City deficit. The state legislature wants to hire less Police Officers and build more prisons. The Police Department currently has an annual budget of $16,177,678. With the 15% budget cut, the mayor is requesting from the Police Department, that leaves a new annual budget of $14,236,356, a decrease of $1,941,322. The major change that will affect the fiscal cycle of this budget year is the decrease in the hiring of Police Officers. The City of Kelsey was in the process of hiring 10 new Police Officers to fill the 10 position that were vacant, due to six retiring Police Officers and four Police Officers finding other employment. Now with the 15% budget cut, the City will not be filling these opened positions, thus saving the City $1,200,000. New vehicle and maintenance cost will also decrease, due to not hiring the new officers. Last fiscal year the City Manager allotted $150,000 for 5 new vehicles and maintenance cost for the hiring of the new Police Officers. As a budget director, I went to the Police Union and request a 10% cut in wages or freeze the wages until the next fiscal year, thus saving $300,000. Also cutting 16 paid holidays a year will save the City $400,000. The Police Union Committee advised the Union has only agreed to a 1% pay cut within the next fiscal year, which will save the City $30,000. The Committee has also agreed to 10 paid holidays a year instead of 16. This will save the City an annual $150,000 a year. The Chief of Police has agreed to cut the training budget by 80%. The City will save an annual budget of $125,000. With these cuts alone, the City will save $1,655,000 alone. Another proposal will cut community programs and events within the next fiscal year. The annual â€Å"Shop with a Cop† or â€Å"Trunk or Treat† is in the annual budget for $10,000. Domestic violence programs can also be cut saving the City an  annual budget of $50,000 a year. Finally, the City will cut all overtime pay for the reminding of the fiscal year, saving the City an estimate of $500.000. With all the above-mentioned budget cuts, the City will project to see a 10% increase in crime. First, not filling the 10 Police Officers position will decrease the number of Police Officer per shifts, thus running the shift at staff minimal. Running the shift at staff minimal will decrease response time to service calls. The Mayor and City Council requested a 5 to 7 minute response time to every service call last fiscal year. With the decrease in personal, a new projective response time will be 10 to 12 minutes. The city has a collective bargaining contract with the Police Union. The Police Union has agreed to a 1% pay cut. Per the collective bargain contract, the City will repay the 1% back at the beginning of the next fiscal year, plus the cost of living increase (7%). I, as the Budget Director will have to go back to the Police Union next fiscal year and asked for an additional pay cuts. Per the collective bargaining contract, the Police Union does not have to cut pay or other benefits that the city provides. If the Police Union does not cut pay next fiscal year, the city will be forced to cut more position instead. Which means fewer Officers per shift, and longer response times to calls. Cutting the domestic violence program that helped victims and offenders will increase the number of incident of domestic violence more than 30% over the next six months. The program-helped victims relocate to a safer environment. The program also helped offenders with counseling. With the shifts at staff minimal, a plan of assigning Officers to areas will have to be established. The City is broken up into three sectors. Sector 1 is the business community and normally requires 40 Officers per shift. Sector 2 is residually areas that normally require 40 officers per shift. Lastly, sector 3 is rural area of the city, and this area requires 10 officers per shift. With the decrease in staff and overtime, area command staffs will assets the needs of each area and assign officers as needed. A federal grant was proposed for an additional $300,000 per year for the next three years is now in the works. The federal grant is for community police programs. The final approval for the grant will take up to 90 days. Inclusion, the 15% budget cut in this year’s fiscal year was successful. Hopeful the economy gets better and next fiscal year is a huge success. The City of Kelsey will continue to grow and  be a safe community to live. Reference Kelsey Annual Budget for the Fiscal Year 2005-06 (2012, Jan). Retrieved from https://ecampus.phoenix.edu/secure/ aapd/cist/vop/ Government/KelseyCity/citygovernment.asp

The Effect of Heroin on Pregnant women Essay Example | Topics and Well Written Essays - 1500 words

The Effect of Heroin on Pregnant women - Essay Example eroin, Marijuana, Brown sugar and others have adverse and harmful side affects and it is doubly harmful for any pregnant mother as it spoils her health. Once addicted to a drug, a person finds it extremely difficult to get over it and even if he or she Many pregnant, addicted, substance abusing mothers suffer tremendously when they go through withdrawal symptoms during later pregnancy and child birth. Initially when the drug is taken by a person, it makes them feel heavy and drowsy. They are hardly conscious of their surroundings and very often go into delirium. (Bauer, C.R., et al. September, 2005) Heroin affects the nervous system, making the person’s mental responses slow and clouded. Their breathing becomes heavy and slow and the Cardiac function slows down very much, sometimes to the point of death. Withdrawal symptoms are extremely difficult to go through. During this period, the mother experiences, extreme craving for the drug, and if left alone, can use it once again. The mother undergoing these symptoms is irrational and exhibits irritability. She becomes moody and throws a lot of frustration around. She has sleep abnormalities and The addicted pregnant mother experiences all this, in addition to severe hormonal imbalance which adversely affects the growing fetus in the mother’s womb. The results of such an experience, is fatal to the unborn child and may damage the fetus for life. Though it is quite a difficult task to treat addiction, yet there are ways and means that a person can get over his or her addiction. Treatment can be done in two ways. The person can be treated as an out – patient or in the very severe cases it is better to treat the addiction if she is an in- patient. For pregnant mothers addicted to heroin, it is better for them to be treated as in – patients because they can be always under the watchful eyes of the physician or nurse who could help immediately if things did not go quite right. Illicit drugs such as Heroin,

Court system in England and Wales Essay Example | Topics and Well Written Essays - 1500 words

Court system in England and Wales - Essay Example This provides the judge with an opportunity to grow his knowledge and expertise on the basis of the experience of hearing similar cases; this has supported his understanding of and familiarity with the subject matter. This procedure has saved out the time required by the previous judges to educate themselves for the variety of cases, the fundamental benefit of Specialist court is that it has reduced the duration of hearings, and reduced the costs for litigants, courts, and administrative staff. The procedure will develop the command and affiliation of a particular judge towards a particular issue and reference, the fact that the specialist judge is familiar with the particular area of law has frequently enabled the court to resolve and reach the conclusion at an early stage, through case management at a directions hearing, to ensure that only the core issues are pursued, and thus the reduction in the number of issues can be expected. (Graeme C. Moodie. The Government of Great Britain . 1961. Crowell. pp.241) The strong and comprehensive understanding of the respective judges with the case material has ensured greater consistency in the decision making phase, and the outcome of the proceedings is more predictable. This is especially important in certain fields, such as family law, where the ultimate decision usually requires the exercise of a discretionary judgment. The practice has resulted in the uniformity of decisions and verdicts; the uniformity of the decision is expected to further improve by judges having a collegiate association with each other. The consistency of the decision is required especially in family cases, where the court's decision may well impact forcefully on the parties. If such consistency of the decision is not reflected by the court, it is feared that people and families will develop lack of confidence in the court system, and subsequently the court's authority will dilute. (Edward Cazalet. Specialised courts: Are they a "quick fix" or a long-term improvement in the quality of justice A Case Study. 5th March, 2001) DEVELOPMENT OF CORPS OF SPECIALIST ADVOCATES The Court system of England and Wales, has recommended the establishment of Specialized Court, provided that there is sufficient amount of work, which will be followed by the development of a corps of specialist advocates. The purpose and existence of the court is compulsory, so as to assist and support the running court. Furthermore, the practice of the specialist court will enable the newly appointees of specialized court in identification of the important issues relevant to the case, and thereby give to the parties concerned a more informed prognosis about the outcome of the case. The Court system has further reduced the caseload of generalist courts, which are often overburdened. The specialist court is responsible for relieving the general court in case, a new legislation in particular field require thorough interpretation by the court. The specialist court is also responsible for ensuring that the mainstream of litigation is not impeded. (Philip Norton. The British Polity. 1984. Longman. pp.152) INCREASED MOMENTUM OF LITIGATION The adopted Court system has resulted in the increased momentum of litigation and saved costs. According to reports, the benefits of case management through the family court have been seen

Compare and contrast two companies that have adopted differing Essay

Compare and contrast two companies that have adopted differing approaches to generating and implementing innovation. Consider su - Essay Example The need for innovation has been necessitated by the recognition by companies that efficiency and world-class operational performance are important in the creation of a competitive advantage in today’s challenging global market. Innovation is highly dependent on the corporate culture, the people involved in innovating in the business or the company and must be under a proper management, and a program for improvement at all times (Herzog, 2011, p. 91). As businesses and companies have recognized the fact that structured innovation and management is important, they make efforts to get the most from their people, customers and partners in the achievement of their business goals. Improving innovation mostly starts with strategy that must address culture, processes and technology that works in the most reliable and affordable way. Innovation framework includes best practices and solutions that must have techniques that improve innovation and its management. Innovation approaches by organisations Different companies adopt different approaches to innovation and this determines their success and the overall nature of the goods they introduce to the market. It is the ability of an organisation to develop wining ideas that provides the momentum for growth and expansion in the current competitive market. Thus, every company is unique based on its own understanding of innovation and the framework its employs in motivating internal innovation and discoveries. In this paper, the innovation frameworks that have been adopted by two key computer companies in the United States will be analysed in this paper. In this analysis, the different approaches to innovation adopted by the two companies and how each affected the performance of the each company will be discussed. Innovative approaches differ depending on an organisation and their ultimate organisation structure and culture. Some organisations integrate innovation as a strategic organisational policy that is implement ed from the top management level to the lowest employees within the organisation. In such setups, innovation is not left to a few people within the organisation but is the responsibility of all the employees at different levels in the company (Kolah, 2003). There are four fundamental components of innovation include co-operation amongst all stakeholders in the business or company, ideation that means the conception and application of ideas, and execution and creation of value for the products of the business. Collaboration is simply teamwork that makes it essential to getting things done and involves the three basic concepts of relationships, processes and outcomes that may result into successes in the development of the business in line with its objectives and missions. Ideation on the other hand is based on fresh new ideas that are important in helping the business or the organization stand out amongst its peers. Implementation involves the organizations engaging the best human re source to help in putting the ideas and make them move forward. Value creation is important in that the ideas implemented must aim at creating value to those concerned with the business or in simple terms create business value. It is the incremental improvements to the products that exist or the creation of new

Disifectant lab Assignment Example | Topics and Well Written Essays - 250 words

Disifectant lab - Assignment Example It was highly effective in Gram positive S. aureus (inhibition diameter of 20mm) compared to the Gram negative bacteria (P. aureginosa and E. coli at inhibition diameters of 0 and 6 mm). Chlorox, which contains sodium hypochlorite works by unfolding and permanently aggregating vital bacterial proteins hence killing bacteria. Fabuloso is a cleaning agent without antimicrobial properties. However, it inhibited the growth of S. aureus and P. aureginosa (at inhibition diameter s of 25 mm and 36 mm respectively) by acting as a detergent and interfering with the cell membrane. 3. The disinfectants worked differently on different organisms because certain microbes such as E. coli and P. aureginosa were Gram negative while S. aureus was Gram positive. All disinfectants were effective against S. aureus because they were able to traverse the thick peptidoglycan layer of its cell wall. In addition, the disinfectants contained different active ingredients, which had different chemical properties. 4. The disinfectant of choice for use in the kitchen, laboratory or on myself would be Clorox. I would choose Clorox because it showed the largest inhibition distance in the growth of the three microbes at inhibition diameters of 55 mm 54 mm and 46 mm for E. coli, P. aureginosa and S. aureus respectively. Therefore, it would be an effective disinfectant because it would destroy an array of bacteria. In addition, it is relatively safe for human use since it contains chemicals that are used in the treatment of drinking

Seatbelt and Exhaust System Defects Essay Example | Topics and Well Written Essays - 1500 words

Seatbelt and Exhaust System Defects - Essay Example The company should recall these cars to be fixed, if not replaced, in order to ensure the customer's safety. 3) Ensure the market that such problems are inevitable and are easily dealt with. Approach and Analysis: The first step into solving this problem is to reacquire the previously sold cars and repair the defects. The owners must be contacted, informed about the problem and be requested for a recall. This process entails sacrifices for both parties which mean that a just compensation must be provided to get the customers' full cooperation. The whole repair will, after all, be done in forty minutes. Even with an estimate of 1.35 Million cars to be recalled, the process could not be that troublesome. After acquiring the cars, experts should be present to asses the defects. See if it is uniform among the cars or are there differences. Data should be gathered differentiating the defects and damages acquired across the models, logistics, etc. Then the data should then be analyzed by economists, medical experts and the board along with the car experts. A decision should then be made whether to continue production alter the design or revamp the design all in all. Though this process, better techniques on both manufacturing and detecting defects on sold cars must be made. The market should then be wooed so as not to loose trust for the company. This is very important since the world is undergoing financial crisis. Many companies has already downsized or closed up, Toyota should not be one of them.Results: Recalls are still yet to be done but as of the moment some cars had been gathered and upon inspection of the acquired cars, the said defects had been confirmed. The seatbelt indeed can cause fire. When the tensioner is activated upon collision, the sound insulator may melt thus causing a fire, just as mentioned earlier. The exhaust pipe on the other hand, is prone to damage and will probably crack. This might cause substandard emissions to leak out which will endanger the environment. So far, no other defects were found. Discussion: The industry knows that releasing cars with defects are inevitable. This though must be detected immediately, preferably before the product even leaves the show room. The mistake seen on this situation is the delay of detection. This might possibly be seen earlier if the cheapest model in the market was not overlooked. An equal attention between cars should have been given. The recall of the cars will further the understanding of the company about the defects on the car parts and how testing should be done. There must also be enough cars to be reverse engineered to see a better picture. Most cars will be going to the dealer and get the desired repair but it must also be seen that some cars are to be acquired to be further tested. The mistake of just fixing and not doing in depth investigation must be avoided. The gathered data should be used to develop better techniques. This includes all aspects from manufacturing to sales to maintenance. This will ultimately benefit the company. Ethical and Economic Discussion: Recalls may be bothersome for both the owner and the company but it should be looked as a beneficial process,

Chinese civilization.World history Essay Example | Topics and Well Written Essays - 750 words

Chinese civilization.World history - Essay Example Early Chinese civilization has a number of unique characteristics; to start with, the civilization process has been protected from external civilized invaders, who instead of having an effect on the civilization process get absorbed by adopting Chinese language and the culture. Secondly, its strategic geographical location boarder resourceful physical features such as the Pacific Ocean in the eastern part. Steppes, rivers, mountains and deserts are also found in it. Thirdly, Chinese culture advocates for a social welfare of the whole community other than an individual’s life style. In addition, Chinese civilization did not recognize any social class as superior than others and no single person had a valid political mandate to execute. Finally, thousands years ago before any other nation, the Chinese introduced a stabilizing institution that hired and recruited civil servants based on their academic qualification merits.The histories of the early Chinese civilization can be tra ditionally categorized into three main dynasties; the Shang, the Hsia and the Chou (Ian 229). The Shang Dynasty This dynasty is believed to have existed between ca 1766 and 1050. Historical records put it that Shang family fought and conquered the Hsia Dynasty. This was achieved under his ruler, King T’ang who was believed to have been called upon by the Heavens. It was an empire that was surrounded by a great perimeter wall situated in a rich agricultural land. This is how the Shang Civilization was structured; the King was the ruler who lived in the palace and had the social, political, economic and religious powers. In his office were the court officials, and the worriers .The armies defended the empire against internal and external enemies. They were armed with bronze swords and matches. Slaves and Agricultural workers lied at the bottom and they performed manual jobs (Ian 229). The Chou Dynasty (ca. 1050-256 BC) This is the third Chinese dynasty to originate and it was s ituated along Wei River. They conquered and captured the Shang dynasty. They borrowed the Shang Civilization system and their cultural practices such as the pictograph writing style. One of the most important contributions they made was the discovery of a ruling god. This is where the first feudalistic form of governance first originated. The King exchanged land for the loyalty he was paid to by trusted family and military members. The Ch’in Dynasty It existed between 221-202 BC. They replaced the Chou Dynasty and for the first time, its rulers united China. They brought the feudal system of governance into an end and introduced a centralized empire. They built Hsienyang and Xianyang along the Wei River that acted as their capital. Its rulers reigned over a larger empire than their former counterparts. This was the time when a centralized government and a bureaucratic form of government that acted as a basis upon which a political organization was built down to the present ce ntury (Ian 237). The Han Dynasty (202BC- AD 220) This was the regime that lasted up to AD 220. It also introduced a stabilized centralized government. Its success may be attributed to the brutal excessive force that they avoided unlike their former counterparts who applied excessive force on their subjects. Its first capital was Chang’an, Liu Bang being its first emperor who expanded the empire to the south. The new idea that they came up with in the Chinese civilization process, was the recruitment of civil servants based on merits. Confucius and Mencius According to Confucius ideas, in

Online Therapy Paper Essay Example for Free

Online Therapy Paper Essay This paper is related to an online therapy. This paper consists of the elements and contents of the information that is found on any online therapy website along with the information of the professionals that are involved in that therapy. The paper also outlines the way in which most of the communication relating online therapy. The paper will also highlight the policies and regulations that provide fundamentals to run an online therapy. The paper also comprehends the state regulation authority to observe and scrutinize online therapy. The paper will also present the information relative to the ethical and security issues like confidentiality along with informed consent. The paper will end up with a small discussion regarding the benefits and risks of the online therapy. The first selected website of online therapy that retrieved was www.lzcybershrink.com where the services are advertised by Elizabeth Zelvin. Elizabeth Zelvin is acknowledged as a licensed clinical social worker along with a psychotherapist. All services are provided by the single person that is her. Ms. Zelvin as retrieved from her biography holds 20 years of experience and was involved in a private service in New York State. Ms. Zelvin handled communication relating online therapy through implication of a chat room setting. This chat room provides opportunity to clients to arrange a schedule of treatment and appointment with Ms. Zelvin before actual arrival through employing email. The professional involved provide a password for her patients and start conversation through signing in at same time through online setting. The cost is offered based on  ½ hour, hour and email exchange. The cost of a 30 minute chat is set at $65 while a 60 min chat is priced at $100 while a single email exchange costs $45. The service accepts most of the online payment systems and credit cards but the payment have to be done before the actual schedule of therapy. The website also shows advertisements regarding the books and songs she has written along with the poetry. The website is whole relating the promotion content of the Ms. Zelvin. (Zelvin, 2009) The other website that was retrieved as an online therapy website is www.live-counselor.com. This website provides services of online therapy employing a chat room for communication purposes. The website involves 200 different professionals that are therapists, counselors, along with some social workers available. The website consists of live counselors who provide a mediating service to make connections of the clients with the  required therapist, counselors and the social workers. The site provides support with addictions, coping with crisis or physical conditions, eating disorders, parenting, personal development, personality and emotional disorders, and relationship issues. The service provided is charged per minute. The rates range from $1to $1.89. Registration of credit card is done before starting of conversation. Live-counselor is just a moderator and has not required setting appointments yet the clients may sign-in anytime their service provider is available. The profile of professionals shows a mark on them while they are online. The site does not have any other content besides service providers biographies, disclaimers in regard to not taking responsibility f or anything that occurs on the website, and the billing process. (Live-Counselor, 2009) The third website relating an online therapy was retrieved from www.serenityonlinetherapy.com. The website provides the information regarding the therapy via email or a chat-room set-up. The website centralizes on a single service provider that is Carl Benedict, a Licensed Clinical Professional Counselor (LCPC) in the State of Maryland†. He got the experience of 12 years as therapist and provides services in mental health clinic along with a hospital. Mr. Benedict counts for a three years experience in online therapy. The price of chat is charged as $50 for 60 minute chat along with a discount offered as a package for the clients of online therapy. Many categories of articles are uploaded by Mr. Benedict regarding various issues clients might be experiencing like as, depression, childhood trauma, addiction, parenting, grief and loss, and duel diagnosis. The website also shows some inspirational poems along with some sayings to motivate the clients by Mr. Benedict. (Benedict, 2009) All states in the US, except California, license professional counselors. The state counsel or licensure boards administer the application processes and procedures that have been established by law in each state. The National Board for Certified Counselors (NBCC) website lists the contact information for each states, except California, Board of Mental Health Practice. The website empowers and enables clients the ability to check the credentials of professionals who are offering online therapy and make an informed decision of whether or not to hire that particular professional. (NBCC, 2009) For the reason of advancement in technology and science there do arise some ethical and security issues. It is depicted that online therapy give rise to issues  like; security, which concerned that either online therapy is safe and effective, either there is chance that clients provide true information relative to the consent, along with the confirmation of clients and professionals as real who are involved in communication process while in chat rooms. All three websites retrieved for this paper provide disclaimers on them to make clients and professionals on safe side while online therapy like If you hav e serious thoughts of hurting yourself or others, dial 911 or if you have a chronic mental illness requiring intense treatment online therapy is not an option for you(Benedict, 2009). The three websites visited all use chat room settings for communication purposes. A password is provided to the client who registers himself by making payments through credit card. That specific password is then used by the client whenever he wants to sign in not only in chat room but also for the therapy session. The client has no way of knowing what type of security software or measures the online therapist is using to protect their personal information. Nothing guarantees that the client is who he or she claims; in a traditional setting the client and the therapist know who is present. Online therapy present some barriers regarding the options of making payment and the client is also going through a risk to pay for an online therapy session. All three websites involve a credit card payment which provides risks to clients in terms of leaking of their credit card and personal information because of providing information online. On other hand in physical setting the credit card is only swiped or the payments can be done through cash and cheques. The client holds every control regarding his personal information while in a physical office or clinical setting along with having every possible payment option for making payments. Some of the ethical issues also arise because of the technology advancements, like as is it ethical to provide online therapy when there no guarantees that the client and therapist say he or she is. In an office setting at least the client and the therapist can use ids to ensure identity. Online therapy does not require medical records; how is the therapist supposes to know the physical and mental health of a client? The therapist has to rely on self-disclosure which is taking a big risk on the therapists behalf. How can a therapist tell if the client is fully participating in therapy? In a traditional setting the therapist can rely on body language which is how most human communication is made. This part of  report presents some risks that are involved while involving oneself in online therapy. A traditional therapy session allows for a therapist to get a full picture of the clients well-being by having access to medical records and being able to read a clients body language. Another uncomfortable element with online therapy is because clients likes to know who is helping him, what he or she looks like for security reasons, and the inability to read body language is upsetting. Some benefits that are derived from online therapy in terms of clients are discussed in this part. An example of advantage is anonymity; this helps those clients who face some social difficulties in a traditional therapy setting and hence can find it advantageous to be in their comfort zone while at their own home. Clients having difficulties to approach a regular and dependable transportation can be benefited by the online therapy. This technology also facilitated those clients who lack the presence of any local therapist and thus can get the opportunity to find someone online for that help and assis tance. Online therapy is an alternative for clients and is the clients choice to decide what works best for him or her. After going through an in-depth study of the online therapy it is recommended that the client has to measure the both sides of the online therapy before deciding for himself what to implement. Individual needs vary from person to person so we cannot say what work best for whom. It is also depicted that the technology on one side is exciting as well as controversial at the same time. References Benedict, C. (2009). â€Å"Services†. Retrieved from: http://www.serenityonlinetherapy.com Live-Counselor. (2009). â€Å"Services†. Retrieved from: http://www.live-counselor.com The National Board for Certified Counselors(NBCC) . (2009). Retrieved from: http://www.nbcc.org. Zelvin, E. (2009). â€Å"Elizabeth Zelvin†. Retrieved from: http://www.lzcybershrink.com.

The Third Man Analysis

The Third Man Analysis According to the Internet Movie Database (imdb.com), 1949s The Third Man is the only non-American film to have made the American Film Institutes top 100 films of all time, and ranks number one in the British Film Institutes BFI 100, a similar list compiled in 1999. The Third Man was not only well-regarded decades after its release, but was a commercial and critical success in its own era. What is so special about this film? The creative talent involved with The Third Man was considerable, as was the creative tension between them. The co-producer was legendarily difficult mogul David O. Selznick, a micromanager extraordinaire whose other film triumphs included back-to-back Academy Award winning films Gone with the Wind (1939) and Rebecca (1940). The other producer, and the director, was Carol Reed (a man), equally as stubborn as Selznick, and a talent cited by no less than director Steven Spielberg as an influence. The screenwriter was Graham Greene, a former spy and acclaimed novelist who had nearly all of his books made into films. The Third Man was developed by Reed and Greene from a single sentence scribbled down by Greene: I had paid my last farewell to Harry a week ago, when his coffin was lowered into the frozen February ground, so that it was with incredulity that I saw him pass by, without a sign of recognition, amongst a host of strangers in the Strand. (Newley, 2004) Reed and Selznick fought every step of the way, and Orson Welles, whom Reed insisted to play Harry Lime, the central mystery figure to the film, was his usual temperamental yet brilliant self. Though selfishly refusing to complete some of the sewer scenes which appear at the films end, Welles also was responsible for writing what is arguably the films best speech and perhaps one of the best speeches in movie history in Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love they had 500 years of demo cracy and peace, and what did that produce? The cuckoo clock. Greene himself both conceded Welles authorship of this dialogue and its brilliance, no small gesture for an author of unparalleled brilliance himself. Beyond the remarkable power generated by the creative tension between the films key players was the content of the narrative itself. Far from being a simple-minded portrayal of good vs. evil and good people vs. evil people, like so many films of the World War II era, The Third Man was fearlessly ambiguous and complex in its morality. Harry Lime, who summons his best friend (a mediocre Western novelist) Holly Martins to Vienna ostensibly for a writing job is revered by both Martins and Limes girlfriend Anna Schmidt. Lime turns out to have been a completely selfish cretin, who cared little for Anna and who intended to use Martins in his racketeering scheme to sell watered-down penicillin on the Austrian black market. (The one exception is the fact that Lime obtains for Anna a forged passport to prevent her repatriation to Communist Czechoslovakia by the Russians.) Nonetheless, Anna is unable to stop loving Harry Lime, and Holly Martins only turns on Lime after a British major takes M artins to a pediatric ward and shows him children who are dead or suffering because of Limes racket. Even Martins redemption is flawed, as by films end he has fallen in love with and made a play for his best friends girl.However, Anna coldly rejects him in a stunning sequence at films end that went completely counter to the conventional wisdom of the time that demanded a happy ending. As witty, stylized, and cool as the narrative and dialogue are reminiscent of Casablanca the narrative itself reflects a rather bleak and paranoid sense of post World War II psychology. Just as the main characters themselves are morally complex or flawed, the narrative itself including the setting of Vienna paints a picture of a universe where the locus points of good and evil are difficult to find and loyalties are blurred and conflicting. The Third Man is a window into the future of the Cold War, where global conflicts between good and evil were to be played out on local stages by players who have little practical use themselves for the notions of good and evil. Director Carol Reed emphasized the lurking sense of paranoia and betrayal possibly waiting around any corner by the remarkable use of lighting most notably, stark shadows and a plethora of odd, oblique camera angles. One of the most famous entrances in movie history in Orson Welles first appearance as Harry Lime in the fi lm two-thirds of the way through the story, though he is referenced in virtually every scene up to this point. Lime is hiding in the shadows across the street from Martins. All that is initially visible are Limes shoes and Annas cat, which she mentioned in passing was fond of Lime. A neighbor across the way hears Martins yelling after the elusive Lime, and turns on her bedroom light. In a flash, it illuminates Limes face perfectly, and Welles delivers a telltale smirk/grin before disappearing into the night again. (Anton Karas zither music, which Reed insisted upon using over Selznicks wishes for an upbeat score, help round out the stylized grimness that permeates the film.) In a way, Harry Lime embodies the idealistic faith human beings place in institutions, in loved ones, in friendships, in straightforward black-and-white paradigms of morality. The unraveling of his mystique and the heartbreaking reveal of his amoral spiritual core reflected the stark truths of the World War which had just ended, and the Cold War which was to come both great struggles between great competing ideologies who promised much in exchange for allegiances, but failed to deliver. The Anna Schmidts and Holly Martins of the world were left only with each other, and even those tenuous bonds were often of little use. Even the title of this film, The Third Man, suggests a way of thinking that rejects the notion of binary oppositions, i.e., only one of two choices, and demanded that the audience accept a world far more morally complex than they were used to living. Beyond being a film that succeeds in the realms of pure entertainment, The Third Man succeeds in this deeper thematic manner as well.

Effect of the Financial Crash on Islamic Banks in the UK

Effect of the Financial Crash on Islamic Banks in the UK Chapter 1: Introduction Introduction to the Subject Background of the Subject General Objective The purpose of this study is to examine how the internal factors of the Islamic Banking affected their performance before, during and after the financial crisis in the GCC in comparison to the conventional banking in the same area. Research Questions This study aims to answer the following questions: How did the financial crisis affect the profitability of Islamic Banks in comparison to Conventional Banks? What are the internal factors (bank specific characteristics) that influence the profitability of Islamic banking for every year from 2006 2009? Did these factors have the same impact on the profitability of Islamic Banking before, during and after the financial crisis? Did these internal factors influence the profitability of Islamic Banking in the same manner as of the Conventional Banking? Need for the Study Significance of the Study Assumptions of the Study Limitations of the Study Although we cannot neglect the importance of the external factors on the profitability of Islamic Banking, they were not included in this study. To understand the reason behind this decision, we need to go through the different types of external factors and how they are classified: Macroeconomic Factors Country Regulation Rules Bank Regulation Rules These factors were not included for the following reasons: Since we are examining the performance of 92 banks (27 Islamic Banks and 65 Conventional Banks) in 6 countries, the number of countries used in the study is not significant enough to study the impact of GDP and inflation accurately on Bank profitability especially when examining each year separately Country Regulation Rules as per the IMF Database, although it differs slightly for the selected countries, did not change over the period from 2006 to 2009. This means that for each bank, these factors remained constant. Data about Bank Regulation Rules could not be obtained for GCC banks Delimitation of the Study This study was delaminated to the Islamic and Conventional Banks in the GCC whose data could be obtained in the Bankscope database. Chapter 2: Literature Review Overview of Islamic Banking Islamic Baking has established as an alternative to conventional interest-based banking. The first stirring of the Islamic Banking movement began in 1963 by Dr. Ahmed Alnajar in a small town in Egypt, called Mit Ghamar. Dr. Alnajar completed his education in Germany and found that it had many saving banks operating on interest. He took the idea from a savings bank in Germany and created his own small Islamic bank that was interest free. After Dr. Alnajars small bank proved successful, the establishment of other Islamic banks followed. In 1971, the Nasser Social Bank was founded in Egypt with the objective of lending out money as a charity on the basis of a profit and loss sharing system and helping people in need. And in 1975, the idea of Islamic banking spread to other Islamic regions such Dubai Islamic bank in United Arab Emirates and The Islamic Development (IDB) Bank in Jeddah, Saudi Arabia (Wilson, 1990). Even though Islamic Banking has only been around for thirty years and is still in an evolving stage, Islamic Banking is the fastest growing segment of the credit markets in the Muslim countries. In 2009, Assets held by Islamic Banking banks rose by 28.6 percent to $822bn from $639bn in 2008, according to The Bankers â€Å"Top 500 Islamic Financial Institutions† survey while conventional banks posted annual asset growth of just 6.8 percent. Furthermore, GCC states accounted for $353.2bn or 42.9 percent of the global aggregate, while Iran remained the largest single market for Shariah-compliant assets, accounting for 35.6 percent of the total. Finally, Islamic banking operations are not limited to Islamic countries but are spreading throughout the world. One reason is the growing trend toward transcending national boundaries, and unifying Muslims into a political and economic entity that could have a significant impact on the pattern of world trade (Abdel-Magid, 1981). Islamic Banking Rules and Principles Islamic banking rules are according to the Islamic Shariah derived from the Quran and prophet Mohameds sayings. The three main practices that are clearly prohibited in the Quran and the prophets sayings are, Riba (Interest), Gharar (Uncertainty), and Maysir (Betting). Prohibition of Riba or any predetermined or fixed rate in financial institutions is the most important factor in the Islamic principles pertaining to banking. As stated in the Quran â€Å"Allah forbids riba†. Riba means an increase and under Shariah the term refers to the premium that must be paid by the borrower to the lender along with the principle amount as a condition for the loan (Omar and Abdel, 1996). Gharar occurs when the purchaser does not know what has been bought and the seller does not know what has been sold. In other words, trading should be clear by stating in a contract the existing actual object(s) to be sold, with a price and time to eliminate confusion and uncertainty between the buyers and the sellers. Maisir is considered in Islam as one form of injustice in the appropriation of others wealth. The act of gambling, sometimes referred to betting on the occurrence of a future event, is prohibited and no reward accrues for the employment of spending of wealth that an individual may gain through means of gambling. Under this prohibition, any contract entered into, should be free from uncertainty, risk and speculation. Contracting parties should have perfect knowledge of the counter values intended to be exchanged as a result of their transactions. Therefore, and according to Ahmed and Hassan (2007), the principles of Islamic banking and finance enshrined from al-Quran and Prophet Mohamed‘s Sayings can be summed up as follows: Any predetermined payment over and above the actual amount of principal is prohibited. The lender must share in the profits or losses arising out of the enterprise for which the money was lent. Making money from money is not acceptable in Islam. Gharar (deception) and Maisir (gambling) are also prohibited. Investments should only support practices or products that are not forbidden or even discouraged by Islam. Islamic Banking Products Islamic Banking products have to be done according to Islamic rules and principles, based on profit and loss sharing as well as avoiding interest. According to BNM statistics 2007, Al Bai Bithaman Ajil financing is the most common in Islamic Banking. There are a lot of Islamic Banking products; however there are some famous Islamic products that will be discussed in this section. 1. Al Bai Bithaman Ajil /BBA This involves the credit sale of goods on a deferred payment basis. In BAA, the Islamic bank will purchase certain assets on a deferred payment basis and then sell the goods back to the customer at an agreed price including some margin or profit. The customer will make payment by installments over an agreed period. A fixed rate BBA is a powerful hedging tool against interest rates (Rosly, 1999). 2. Murabahah Murabahah is a contract of sale. The Islamic Bank acts as a middle man and purchases the goods requested by the customer. The bank will later sell the goods to the customer in a sale and purchase agreement, whereby the lender re-sales to the borrower at a higher price agreed on by both parties. These are more for short term financing 3. Mudharabah According to Kettel (2006), Mudharabah is a basic principle of profit and loss, where instead of lending money at a fixed rate return, the banker forms a partnership with the borrower, thereby sharing in a ventures profit and loss. Mudharabah is an agreement between the lender and entrepreneur, whereby the lender agrees to finance the project on a profit sharing basis according to a predetermined ratio agreed by both parties concerned. If there are any losses the lender will bear all the losses. 4. Musharakah Musharakah means partnership whereby the Islamic institution provides the capital needed by the customer with the understanding that they both share the profit and loss according to a formula agreed before the business transaction is transacted. In Musharakah all partners are entitled to participate in the management of the investment but it is not compulsory. Musharakah can help in providing financing for large investments in modern economic activities 5. Al Ijarah Ijarah means meaning to give something on a rental basis. In Ijarah, the bank acquires ownership based on the promise and leases back to the client for a given period. The customer pays the rental but the ownership still remains with the bank or lender. As the ownership remains with the lessor (bank), it continues to give the service for which it was rented. Under this contract, the lessor has the right to re-negotiate the quantum of the lease payment at every agreed interval to ensure rental remains in line with the market rates (Hume, 2004). 6. Wadiah Wadiah is a trust contract and the bank provides gift (hibah) and various types of benefits to the customer. This is exactly like a normal conventional savings account. 7. Istisna Istisna allows one party buys the goods and the other party undertakes to manufacture them according to agreed specifications. Normally, Istisna is used to finance construction and manufacturing projects. 8. Salam Salam is defined as the forward purchase of specified goods with full forward payment. This contract is normally used for financing agricultural production. According to Hassan (2004), Salam based future contracts for agricultural commodities, supported by Islamic Banks, can help to overcome the agricultural financial problems Table 2.1 lists the products of conventional banking and their correspondent products in Islamic Banking. Source: Obaidullah, 2005 Financial Crisis and the Islamic Banking To be able to compete with conventional banks, Islamic banks have to offer financial products that are comparable to the ones offered by the conventional banks. This exposes the Islamic banks to similar credit, liquidity and risks driven by market instability. Despite that, Islamic banks managed to remain stable at the early phases of the crisis. That was driven by three main Factors. First, Islamic banks financing activities are strongly tied to the real economic activities than their conventional counterpart. Even though Musharakah and Mudharabah both provide better risk sharing while keeping strong link to the real sector, they are used minimally for different reasons. Most financing activities are done through Murabah and Ijarah followed by Istinsa. In the GCC and during 2007, Murabaha comprised of 65.4%, Ijarah 12.78% and Istinsa 2.83%. Both Murabaha and Ijrah transactions require the Islamic bank to know the clients purspose and use of finance as well the ownership of the asset by the bank. This help in ensuring that the funds are used for their stated purposes. On the other hand, conventional banks do not require disclosing the use of funds as long as the client is believed to creditworthy or can post suitable collateral. Second, Islamic banks avoid direct exposure to exotic and toxic financial derivative products. Since Shariah prohibits riba and gharar, the asset portfolio of Islamic banks did not include any CDOs, CMBSs, and CDSs which turned out to be highly toxic for conventional banks and amplifying factor for the crisis. These derivative products, initially used for hedging purposes, became device for highly speculative investments among conventional financial institutions. Unavailability of hedging instruments for Islamic financial institutions, which was perceived as weakness before the crisis, became a strengthening factor for them. However, exposure to other investment risks driven from equity markets, sukuk, real-estate and ownership stakes in other businesses remain a source of concern when overdone or undertaken purely for speculative gains. Third, Islamic banks in general have a larger proportion of their assets in liquid form than their conventional counterparts. This is driven by two main reasons: (1) there is no lender of last resort (LOLR) facility available to Islamic banks, and they do not have access to market liquidity in the form of the interbank market, high liquidity was maintained for risk management purpose. (2) Excess liquidity is required due to lack of interest-free short-term investment opportunities as real economic investments require some development period. As the global financial crisis became a global economic crisis, it started to affect Islamic banks in an indirect manner. The financial crisis has triggered a chain reaction whereby the slowdown in the real economies of the developed countries has started to affect economic growth and investment activities in export driven economies of the developing countries through lower trade in goods and services as well as through the declining commodity prices including that of oil. The economic downturn is not only affecting the investment and financing activities of financial institutions including those of Islamic banks, it is also reducing the funding of these banks through lower personal savings and declining corporate profits. It should be noted that most of the Islamic banking industry comprises of commercial banks whose major funding source are retail deposits, investment banking constitutes only a small portion of the industry. Islamic banks in some regions may face risk on their fina ncing and investment side of the balance sheet due to the crisis induced volatility of equity markets where these banks have large positions. Downturn in the real estate markets where these banks have large direct and indirect exposures is also another source of risk. Similarly, the changing wealth position of their high-net-worth (HNW) clients who also hold financial exposure in the hard-hit conventional financial sector of the West and therefore are now postponing any investment plans is also a factor. The relative importance of each of these factors varies by the region. For example, the banks in the GCC and particularly in the UAE are more exposed to real estate market risk, followed by risk of international equity markets. For the banks in Asia, their investments in domestic and international equity markets are a source of concern as equity markets are showing higher volatility. In some of the countries, the existing fiscal imbalance which has widened after the crisis is also a factor in the increased volatility of the markets Previous Literature The study of bank profitability is an important tool to evaluate bank operation by examining the different factors affecting bank profitability and using these factors for management planning and strategic analysis. In the last four decades, many studies have been conducted to study both bank profitability and the determinants of bank profitability either for particular country or for a panel of countries. These studies normally divide these factors into internal factors and external factors. Internal factors represent the bank-specific characteristics such as bank size, liquidity structure; liabilities†¦etc while external factors can be macroeconomic factors such as inflation and GDP growth or Country-specific regulations rules and practices. In the area of banking profitability, many studies have been conducted to investigate the profitability of conventional banks while only few were conducted in the field of Islamic banking. In this chapter, we will review these studies for conventional banking first and then will focus on studies in the Islamic banking field. Then we will cover the conceptual framework of this research. Conventional Banking Different studies have been conducted in the field of conventional banking profitability. Short (1979), Bourke (1989), Molyneux and Thornton (1992), Goddard, Molyneux, and Wilson (2004), Peters et al. (2004) are some of the researchers in the field. Short (1979) is one of the early scholars who studied the relationship between banking profit rates and concentration for sixty banks in Canada, Western Europe and Japan during the 1970s and he included independent variables including government ownership and concentration by using H index to quantify concentration. Results showed that the government ownership impact on profitability varied throughout the countries studied but expressed an overall negative relationship. He also found evidence that indicated higher concentration rates lead to higher profit rates (Short, 1979). Bourke (1989) also compared concentration to bank profitability but included other determinants. Bourke (1989) covered ninety banks in Australia, Europe, and North America between 1972 and 198 and examined different internal and external factors: internal factors such as staff expenses, capital ratio, liquidity ratio, and loans to deposit ratio; external factors such as regulation, size of economies of scale, competition, concentration, growth in market, interest rate, government ownership, and market power. His results show that increase in government ownership leads to lower profitability in banking. He also found that concentration, interest rates, and money supply are positively related to profitability along with capital and reserves of total assets as well as cash and bank deposits of total assets. Bourke adds that well capitalized banks enjoy cheaper access to sources of funds as they are less risky than less capitalized banks (Bourke, 1989). Later, Molyneux and Thornton (1992) studied the determinants of European banks profitability. The paper examined eighteen counties in Europe between 1986 and 1989. This paper replicated Bourkes (1989) work by using internal and external determinants of bank profitability. However, Molyneux and Thornton (1992) results showed that government ownership expresses a positive coefficient with return on capital (profitability) which contradicts with Bourkes findings. Other results were similar to Bourkes, showing that concentration, interest rate, and money supply were positively related to bank profitability (Molyneux and Thornton, 1992). In one of the recent papers on bank profitability on European banks, Goddard, Molyneux, and Wilson (2004) shows similar findings to the paper by Molyneux and Thornton (1992). It investigates the determinants of profitability in six European countries and it covered 665 banks between 1992 and 1998. The study used cross-sectional and dynamic panel models. The variables used in the regression analysis were ROE, the logarithmic of total assets, Off Balance Sheet (OBS) dividends, Capital to Asset Ratio (CAR). The results from both models were similar: evidence reveals that there is a positive relationship between size (total assets) and profitability. Meanwhile, OBS appears to have a positive relationship with profitability for UK but neutral or negative for other European countries. Moreover, results also state that CAR has a positive relationship with profitability. Furthermore, the paper touched on ownership type by indicating that there is high competition in banking due to the fact t hat there is foreign bank involvement in domestic banks, and that profitability is not linked to ownership (Goddard, Molyneux, and Wilson, 2004). Peters et al. (2004) studied the characteristics of banks in post-war Lebanon for the years 1993 to 2000 and compared the results to a group of banks from five other countries in the Middle East including UAE, KSA, Kuwait, Bahrain and Oman for the years 1995 through 1999. They used Return on Equity (ROE) measure profitability and leverage and they employed regression models that relate bank profitability ratios to various explanatory variables. This study tests the relationships between bank profitability and size, asset portfolio composition, off-balance sheet items, ownership by a foreign bank, and the ratio of employment to assets. The results show a strong association between economic growth and bank profitability, whether measured by ROE or ROA. They found that Lebanese banks are profitable, but not as profitable as a control group of banks from five other countries located in the Middle East. Islamic Banking In the area of Islamic Banking, Bashir (2000) assessed the performance of Islamic banks in eight Middle Eastern countries. He analyzed important bank characteristics that affect the performance of Islamic banks by controlling economic and financial structure measures. The paper studied fourteen Islamic banks from Bahrain, Egypt, Jordan, Kuwait, Qatar, Sudan, Turkey, and United Arab Emirates between 1993 and 1998. To examining profitability, the paper used Non Interest Margin (NIM), Before Tax Profit (BTP), Return on Assets (ROA), and Return on Equity (ROE) as performance indicators. There were also internal and external variables: internal variables were bank size, leverage, loans, short-term funding, overhead, and ownership; external variables included macroeconomic environment, regulation, and financial market. In general, results from the study confirm previous findings and show that Islamic banks profitability is positively related to equity and loans. Consequently, if loans and equity are high, Islamic banks should be more profitable. If leverage is high and loan to assets is also large, Islamic banks will be more profitable. The results also indicate that favorable macro-economic conditions help profitability (Bashir, 2000). Hassoune (2002) examined Islamic bank profitability in an interest rate cycle. In his paper, compared ROE and ROA Volatility for both Islamic and conventional banks in three GCC region, Kuwait, Saudi Arabia, and Qatar. He states that since Islamic banking is based on profit and loss sharing, managements have to generate sufficient returns for investors given that they are not willing accept no returns (Hassoune, 2002). Bashir and Hassan (2004) studied the determinants of Islamic banking profitability covers 43 Islamic Banks between 1994 and 2001 in 21 countries. Their figures show Islamic banks to have a better capital asset ratio compared to commercial banks which means that Islamic banks are well capitalized. Also, their paper used internal and external banks characteristics to determine profitability as well as economic measures, financial structure variables, and country variables. They used, Net-non Interest Margin (NIM), which is non interest income to the bank such as, bank fees, service charges and foreign exchange to identify profitability. Other profitability indicators adopted were Before Tax Profit divided by total assets (BTP/TA), Return on Assets (ROA), and Return on Equity (ROE). Results obtained by Bashir and Hassan (2004), were similar to the Bashir (2000) results, which found a positive relationship between capital and profitability but a negative relationship between loans and profitability. Bashir and Hassan also found total assets to have a negative relationship with profitability which amazingly means that smaller banks are more profitable. In addition, during an economic boom, banks profitability seems to improve because there are fewer nonperforming loans. Inflation, on the other hand, does not have any effect on Islamic bank profitability. Finally, results also indicate that overhead expenses for Islamic banks have a positive relation with profitability which means if expenses increase, profitability also increases (Bashir and Hassan, 2004). Alkassim (2005) examined the determinants of profitability in the banking sector of the GCC countries and found that asset have a negative impact on profitability of conventional banks but have a positive impact on profitability of Islamic banks. They also observed that positive impact on profitability for conventional but have a negative impact for Islamic banking. Liu and Hung (2006) examined the relationship between service quality and long-term profitability of Taiwans banks and found a positive link between branch number and long-term profitability and also proved that average salaries are detrimental to banks profit. Masood, Aktan and Chaudhary (2009) studied the co-integration and causal relationship between Return on Equity and Return on Assets for 12 banks in KSA for the period between 1999- 2007. For their research, the used time series model of ADF unit-root test, Johansen co-integration test, Granger causality test and graphical comparison model. They found that there are stable long run relationships between the two variables and that it is only a one-direction cause-effect relationship between ROE and ROA. The results show that ROE is a granger cause to ROA but ROA is not a granger cause to ROE that is ROE can affect ROA input but ROA does not affect the ROE in the Saudi Arabian Banking sector. Conceptual Framework Theoretical framework is a basic conceptual structure organized around a theory. It defines the kinds of variables that are going to be used in the analysis. In this research, the theoretical framework consists of seven independent variables that represent four aspects of the Bank Characteristics. Theses aspects are the Bank Size (Total Assets), Capital Structure (Equity and Tangible Equity), Liquidity (Loans and Liquid Assets) and Liabilities (Deposits and Overheads). Bank profitability is the dependent variable and two measures of bank profitability are used in this study, namely return on average equity (ROAE) and return on average assets (ROAA). In this section we develop the hypothesis to be examined in this research paper. Development of Hypotheses This paper attempts to test seven hypotheses. A hypothesis is a claim or assumption about the value of a population parameter. It consists either of a suggested explanation for a phenomenon or of a reasoned proposal suggesting a possible correlation between multiple phenomena. According to Becker (1995), hypothesis testing is the process of judging which of two contradictory statements is correct. Hypothesis 1: Profitability has a positive and significant relationship with the total assets (ASSETS). Total Assets of a company represents its valuables including both tangible assets such as equipments and properties along with its intangible assets such as goodwill and patent. For banks, total assets include loans which are the basis for bank operations either through interest or interest-free practices. Total assets is used as a tool to measure the bank size; banks with higher total assets indicate bigger banks. Molyneux and el (2004) included total assets in their study and found a positive significant relationship between total assets and profitability. Therefore, total assets are expected to have positive relation with profitability which means that bigger banks are expected to be more profitable. Total assets are converted logarithmic to be more consistent with the other ratios Hypothesis 2: Profitability has a positive and significant relationship with equity to asset ratio (EQUITY). Total equity over total assets measures banks capital structure and adequate. It indicated bank ability to withstand losses and handle risk exposure with shareholders. Hassan and Bashir (2004) examined the relationship between EQUITY and bank profitability and found positive relationship. Therefore, EQUITY is included in this stud Effect of the Financial Crash on Islamic Banks in the UK Effect of the Financial Crash on Islamic Banks in the UK Chapter 1: Introduction Introduction to the Subject Background of the Subject General Objective The purpose of this study is to examine how the internal factors of the Islamic Banking affected their performance before, during and after the financial crisis in the GCC in comparison to the conventional banking in the same area. Research Questions This study aims to answer the following questions: How did the financial crisis affect the profitability of Islamic Banks in comparison to Conventional Banks? What are the internal factors (bank specific characteristics) that influence the profitability of Islamic banking for every year from 2006 2009? Did these factors have the same impact on the profitability of Islamic Banking before, during and after the financial crisis? Did these internal factors influence the profitability of Islamic Banking in the same manner as of the Conventional Banking? Need for the Study Significance of the Study Assumptions of the Study Limitations of the Study Although we cannot neglect the importance of the external factors on the profitability of Islamic Banking, they were not included in this study. To understand the reason behind this decision, we need to go through the different types of external factors and how they are classified: Macroeconomic Factors Country Regulation Rules Bank Regulation Rules These factors were not included for the following reasons: Since we are examining the performance of 92 banks (27 Islamic Banks and 65 Conventional Banks) in 6 countries, the number of countries used in the study is not significant enough to study the impact of GDP and inflation accurately on Bank profitability especially when examining each year separately Country Regulation Rules as per the IMF Database, although it differs slightly for the selected countries, did not change over the period from 2006 to 2009. This means that for each bank, these factors remained constant. Data about Bank Regulation Rules could not be obtained for GCC banks Delimitation of the Study This study was delaminated to the Islamic and Conventional Banks in the GCC whose data could be obtained in the Bankscope database. Chapter 2: Literature Review Overview of Islamic Banking Islamic Baking has established as an alternative to conventional interest-based banking. The first stirring of the Islamic Banking movement began in 1963 by Dr. Ahmed Alnajar in a small town in Egypt, called Mit Ghamar. Dr. Alnajar completed his education in Germany and found that it had many saving banks operating on interest. He took the idea from a savings bank in Germany and created his own small Islamic bank that was interest free. After Dr. Alnajars small bank proved successful, the establishment of other Islamic banks followed. In 1971, the Nasser Social Bank was founded in Egypt with the objective of lending out money as a charity on the basis of a profit and loss sharing system and helping people in need. And in 1975, the idea of Islamic banking spread to other Islamic regions such Dubai Islamic bank in United Arab Emirates and The Islamic Development (IDB) Bank in Jeddah, Saudi Arabia (Wilson, 1990). Even though Islamic Banking has only been around for thirty years and is still in an evolving stage, Islamic Banking is the fastest growing segment of the credit markets in the Muslim countries. In 2009, Assets held by Islamic Banking banks rose by 28.6 percent to $822bn from $639bn in 2008, according to The Bankers â€Å"Top 500 Islamic Financial Institutions† survey while conventional banks posted annual asset growth of just 6.8 percent. Furthermore, GCC states accounted for $353.2bn or 42.9 percent of the global aggregate, while Iran remained the largest single market for Shariah-compliant assets, accounting for 35.6 percent of the total. Finally, Islamic banking operations are not limited to Islamic countries but are spreading throughout the world. One reason is the growing trend toward transcending national boundaries, and unifying Muslims into a political and economic entity that could have a significant impact on the pattern of world trade (Abdel-Magid, 1981). Islamic Banking Rules and Principles Islamic banking rules are according to the Islamic Shariah derived from the Quran and prophet Mohameds sayings. The three main practices that are clearly prohibited in the Quran and the prophets sayings are, Riba (Interest), Gharar (Uncertainty), and Maysir (Betting). Prohibition of Riba or any predetermined or fixed rate in financial institutions is the most important factor in the Islamic principles pertaining to banking. As stated in the Quran â€Å"Allah forbids riba†. Riba means an increase and under Shariah the term refers to the premium that must be paid by the borrower to the lender along with the principle amount as a condition for the loan (Omar and Abdel, 1996). Gharar occurs when the purchaser does not know what has been bought and the seller does not know what has been sold. In other words, trading should be clear by stating in a contract the existing actual object(s) to be sold, with a price and time to eliminate confusion and uncertainty between the buyers and the sellers. Maisir is considered in Islam as one form of injustice in the appropriation of others wealth. The act of gambling, sometimes referred to betting on the occurrence of a future event, is prohibited and no reward accrues for the employment of spending of wealth that an individual may gain through means of gambling. Under this prohibition, any contract entered into, should be free from uncertainty, risk and speculation. Contracting parties should have perfect knowledge of the counter values intended to be exchanged as a result of their transactions. Therefore, and according to Ahmed and Hassan (2007), the principles of Islamic banking and finance enshrined from al-Quran and Prophet Mohamed‘s Sayings can be summed up as follows: Any predetermined payment over and above the actual amount of principal is prohibited. The lender must share in the profits or losses arising out of the enterprise for which the money was lent. Making money from money is not acceptable in Islam. Gharar (deception) and Maisir (gambling) are also prohibited. Investments should only support practices or products that are not forbidden or even discouraged by Islam. Islamic Banking Products Islamic Banking products have to be done according to Islamic rules and principles, based on profit and loss sharing as well as avoiding interest. According to BNM statistics 2007, Al Bai Bithaman Ajil financing is the most common in Islamic Banking. There are a lot of Islamic Banking products; however there are some famous Islamic products that will be discussed in this section. 1. Al Bai Bithaman Ajil /BBA This involves the credit sale of goods on a deferred payment basis. In BAA, the Islamic bank will purchase certain assets on a deferred payment basis and then sell the goods back to the customer at an agreed price including some margin or profit. The customer will make payment by installments over an agreed period. A fixed rate BBA is a powerful hedging tool against interest rates (Rosly, 1999). 2. Murabahah Murabahah is a contract of sale. The Islamic Bank acts as a middle man and purchases the goods requested by the customer. The bank will later sell the goods to the customer in a sale and purchase agreement, whereby the lender re-sales to the borrower at a higher price agreed on by both parties. These are more for short term financing 3. Mudharabah According to Kettel (2006), Mudharabah is a basic principle of profit and loss, where instead of lending money at a fixed rate return, the banker forms a partnership with the borrower, thereby sharing in a ventures profit and loss. Mudharabah is an agreement between the lender and entrepreneur, whereby the lender agrees to finance the project on a profit sharing basis according to a predetermined ratio agreed by both parties concerned. If there are any losses the lender will bear all the losses. 4. Musharakah Musharakah means partnership whereby the Islamic institution provides the capital needed by the customer with the understanding that they both share the profit and loss according to a formula agreed before the business transaction is transacted. In Musharakah all partners are entitled to participate in the management of the investment but it is not compulsory. Musharakah can help in providing financing for large investments in modern economic activities 5. Al Ijarah Ijarah means meaning to give something on a rental basis. In Ijarah, the bank acquires ownership based on the promise and leases back to the client for a given period. The customer pays the rental but the ownership still remains with the bank or lender. As the ownership remains with the lessor (bank), it continues to give the service for which it was rented. Under this contract, the lessor has the right to re-negotiate the quantum of the lease payment at every agreed interval to ensure rental remains in line with the market rates (Hume, 2004). 6. Wadiah Wadiah is a trust contract and the bank provides gift (hibah) and various types of benefits to the customer. This is exactly like a normal conventional savings account. 7. Istisna Istisna allows one party buys the goods and the other party undertakes to manufacture them according to agreed specifications. Normally, Istisna is used to finance construction and manufacturing projects. 8. Salam Salam is defined as the forward purchase of specified goods with full forward payment. This contract is normally used for financing agricultural production. According to Hassan (2004), Salam based future contracts for agricultural commodities, supported by Islamic Banks, can help to overcome the agricultural financial problems Table 2.1 lists the products of conventional banking and their correspondent products in Islamic Banking. Source: Obaidullah, 2005 Financial Crisis and the Islamic Banking To be able to compete with conventional banks, Islamic banks have to offer financial products that are comparable to the ones offered by the conventional banks. This exposes the Islamic banks to similar credit, liquidity and risks driven by market instability. Despite that, Islamic banks managed to remain stable at the early phases of the crisis. That was driven by three main Factors. First, Islamic banks financing activities are strongly tied to the real economic activities than their conventional counterpart. Even though Musharakah and Mudharabah both provide better risk sharing while keeping strong link to the real sector, they are used minimally for different reasons. Most financing activities are done through Murabah and Ijarah followed by Istinsa. In the GCC and during 2007, Murabaha comprised of 65.4%, Ijarah 12.78% and Istinsa 2.83%. Both Murabaha and Ijrah transactions require the Islamic bank to know the clients purspose and use of finance as well the ownership of the asset by the bank. This help in ensuring that the funds are used for their stated purposes. On the other hand, conventional banks do not require disclosing the use of funds as long as the client is believed to creditworthy or can post suitable collateral. Second, Islamic banks avoid direct exposure to exotic and toxic financial derivative products. Since Shariah prohibits riba and gharar, the asset portfolio of Islamic banks did not include any CDOs, CMBSs, and CDSs which turned out to be highly toxic for conventional banks and amplifying factor for the crisis. These derivative products, initially used for hedging purposes, became device for highly speculative investments among conventional financial institutions. Unavailability of hedging instruments for Islamic financial institutions, which was perceived as weakness before the crisis, became a strengthening factor for them. However, exposure to other investment risks driven from equity markets, sukuk, real-estate and ownership stakes in other businesses remain a source of concern when overdone or undertaken purely for speculative gains. Third, Islamic banks in general have a larger proportion of their assets in liquid form than their conventional counterparts. This is driven by two main reasons: (1) there is no lender of last resort (LOLR) facility available to Islamic banks, and they do not have access to market liquidity in the form of the interbank market, high liquidity was maintained for risk management purpose. (2) Excess liquidity is required due to lack of interest-free short-term investment opportunities as real economic investments require some development period. As the global financial crisis became a global economic crisis, it started to affect Islamic banks in an indirect manner. The financial crisis has triggered a chain reaction whereby the slowdown in the real economies of the developed countries has started to affect economic growth and investment activities in export driven economies of the developing countries through lower trade in goods and services as well as through the declining commodity prices including that of oil. The economic downturn is not only affecting the investment and financing activities of financial institutions including those of Islamic banks, it is also reducing the funding of these banks through lower personal savings and declining corporate profits. It should be noted that most of the Islamic banking industry comprises of commercial banks whose major funding source are retail deposits, investment banking constitutes only a small portion of the industry. Islamic banks in some regions may face risk on their fina ncing and investment side of the balance sheet due to the crisis induced volatility of equity markets where these banks have large positions. Downturn in the real estate markets where these banks have large direct and indirect exposures is also another source of risk. Similarly, the changing wealth position of their high-net-worth (HNW) clients who also hold financial exposure in the hard-hit conventional financial sector of the West and therefore are now postponing any investment plans is also a factor. The relative importance of each of these factors varies by the region. For example, the banks in the GCC and particularly in the UAE are more exposed to real estate market risk, followed by risk of international equity markets. For the banks in Asia, their investments in domestic and international equity markets are a source of concern as equity markets are showing higher volatility. In some of the countries, the existing fiscal imbalance which has widened after the crisis is also a factor in the increased volatility of the markets Previous Literature The study of bank profitability is an important tool to evaluate bank operation by examining the different factors affecting bank profitability and using these factors for management planning and strategic analysis. In the last four decades, many studies have been conducted to study both bank profitability and the determinants of bank profitability either for particular country or for a panel of countries. These studies normally divide these factors into internal factors and external factors. Internal factors represent the bank-specific characteristics such as bank size, liquidity structure; liabilities†¦etc while external factors can be macroeconomic factors such as inflation and GDP growth or Country-specific regulations rules and practices. In the area of banking profitability, many studies have been conducted to investigate the profitability of conventional banks while only few were conducted in the field of Islamic banking. In this chapter, we will review these studies for conventional banking first and then will focus on studies in the Islamic banking field. Then we will cover the conceptual framework of this research. Conventional Banking Different studies have been conducted in the field of conventional banking profitability. Short (1979), Bourke (1989), Molyneux and Thornton (1992), Goddard, Molyneux, and Wilson (2004), Peters et al. (2004) are some of the researchers in the field. Short (1979) is one of the early scholars who studied the relationship between banking profit rates and concentration for sixty banks in Canada, Western Europe and Japan during the 1970s and he included independent variables including government ownership and concentration by using H index to quantify concentration. Results showed that the government ownership impact on profitability varied throughout the countries studied but expressed an overall negative relationship. He also found evidence that indicated higher concentration rates lead to higher profit rates (Short, 1979). Bourke (1989) also compared concentration to bank profitability but included other determinants. Bourke (1989) covered ninety banks in Australia, Europe, and North America between 1972 and 198 and examined different internal and external factors: internal factors such as staff expenses, capital ratio, liquidity ratio, and loans to deposit ratio; external factors such as regulation, size of economies of scale, competition, concentration, growth in market, interest rate, government ownership, and market power. His results show that increase in government ownership leads to lower profitability in banking. He also found that concentration, interest rates, and money supply are positively related to profitability along with capital and reserves of total assets as well as cash and bank deposits of total assets. Bourke adds that well capitalized banks enjoy cheaper access to sources of funds as they are less risky than less capitalized banks (Bourke, 1989). Later, Molyneux and Thornton (1992) studied the determinants of European banks profitability. The paper examined eighteen counties in Europe between 1986 and 1989. This paper replicated Bourkes (1989) work by using internal and external determinants of bank profitability. However, Molyneux and Thornton (1992) results showed that government ownership expresses a positive coefficient with return on capital (profitability) which contradicts with Bourkes findings. Other results were similar to Bourkes, showing that concentration, interest rate, and money supply were positively related to bank profitability (Molyneux and Thornton, 1992). In one of the recent papers on bank profitability on European banks, Goddard, Molyneux, and Wilson (2004) shows similar findings to the paper by Molyneux and Thornton (1992). It investigates the determinants of profitability in six European countries and it covered 665 banks between 1992 and 1998. The study used cross-sectional and dynamic panel models. The variables used in the regression analysis were ROE, the logarithmic of total assets, Off Balance Sheet (OBS) dividends, Capital to Asset Ratio (CAR). The results from both models were similar: evidence reveals that there is a positive relationship between size (total assets) and profitability. Meanwhile, OBS appears to have a positive relationship with profitability for UK but neutral or negative for other European countries. Moreover, results also state that CAR has a positive relationship with profitability. Furthermore, the paper touched on ownership type by indicating that there is high competition in banking due to the fact t hat there is foreign bank involvement in domestic banks, and that profitability is not linked to ownership (Goddard, Molyneux, and Wilson, 2004). Peters et al. (2004) studied the characteristics of banks in post-war Lebanon for the years 1993 to 2000 and compared the results to a group of banks from five other countries in the Middle East including UAE, KSA, Kuwait, Bahrain and Oman for the years 1995 through 1999. They used Return on Equity (ROE) measure profitability and leverage and they employed regression models that relate bank profitability ratios to various explanatory variables. This study tests the relationships between bank profitability and size, asset portfolio composition, off-balance sheet items, ownership by a foreign bank, and the ratio of employment to assets. The results show a strong association between economic growth and bank profitability, whether measured by ROE or ROA. They found that Lebanese banks are profitable, but not as profitable as a control group of banks from five other countries located in the Middle East. Islamic Banking In the area of Islamic Banking, Bashir (2000) assessed the performance of Islamic banks in eight Middle Eastern countries. He analyzed important bank characteristics that affect the performance of Islamic banks by controlling economic and financial structure measures. The paper studied fourteen Islamic banks from Bahrain, Egypt, Jordan, Kuwait, Qatar, Sudan, Turkey, and United Arab Emirates between 1993 and 1998. To examining profitability, the paper used Non Interest Margin (NIM), Before Tax Profit (BTP), Return on Assets (ROA), and Return on Equity (ROE) as performance indicators. There were also internal and external variables: internal variables were bank size, leverage, loans, short-term funding, overhead, and ownership; external variables included macroeconomic environment, regulation, and financial market. In general, results from the study confirm previous findings and show that Islamic banks profitability is positively related to equity and loans. Consequently, if loans and equity are high, Islamic banks should be more profitable. If leverage is high and loan to assets is also large, Islamic banks will be more profitable. The results also indicate that favorable macro-economic conditions help profitability (Bashir, 2000). Hassoune (2002) examined Islamic bank profitability in an interest rate cycle. In his paper, compared ROE and ROA Volatility for both Islamic and conventional banks in three GCC region, Kuwait, Saudi Arabia, and Qatar. He states that since Islamic banking is based on profit and loss sharing, managements have to generate sufficient returns for investors given that they are not willing accept no returns (Hassoune, 2002). Bashir and Hassan (2004) studied the determinants of Islamic banking profitability covers 43 Islamic Banks between 1994 and 2001 in 21 countries. Their figures show Islamic banks to have a better capital asset ratio compared to commercial banks which means that Islamic banks are well capitalized. Also, their paper used internal and external banks characteristics to determine profitability as well as economic measures, financial structure variables, and country variables. They used, Net-non Interest Margin (NIM), which is non interest income to the bank such as, bank fees, service charges and foreign exchange to identify profitability. Other profitability indicators adopted were Before Tax Profit divided by total assets (BTP/TA), Return on Assets (ROA), and Return on Equity (ROE). Results obtained by Bashir and Hassan (2004), were similar to the Bashir (2000) results, which found a positive relationship between capital and profitability but a negative relationship between loans and profitability. Bashir and Hassan also found total assets to have a negative relationship with profitability which amazingly means that smaller banks are more profitable. In addition, during an economic boom, banks profitability seems to improve because there are fewer nonperforming loans. Inflation, on the other hand, does not have any effect on Islamic bank profitability. Finally, results also indicate that overhead expenses for Islamic banks have a positive relation with profitability which means if expenses increase, profitability also increases (Bashir and Hassan, 2004). Alkassim (2005) examined the determinants of profitability in the banking sector of the GCC countries and found that asset have a negative impact on profitability of conventional banks but have a positive impact on profitability of Islamic banks. They also observed that positive impact on profitability for conventional but have a negative impact for Islamic banking. Liu and Hung (2006) examined the relationship between service quality and long-term profitability of Taiwans banks and found a positive link between branch number and long-term profitability and also proved that average salaries are detrimental to banks profit. Masood, Aktan and Chaudhary (2009) studied the co-integration and causal relationship between Return on Equity and Return on Assets for 12 banks in KSA for the period between 1999- 2007. For their research, the used time series model of ADF unit-root test, Johansen co-integration test, Granger causality test and graphical comparison model. They found that there are stable long run relationships between the two variables and that it is only a one-direction cause-effect relationship between ROE and ROA. The results show that ROE is a granger cause to ROA but ROA is not a granger cause to ROE that is ROE can affect ROA input but ROA does not affect the ROE in the Saudi Arabian Banking sector. Conceptual Framework Theoretical framework is a basic conceptual structure organized around a theory. It defines the kinds of variables that are going to be used in the analysis. In this research, the theoretical framework consists of seven independent variables that represent four aspects of the Bank Characteristics. Theses aspects are the Bank Size (Total Assets), Capital Structure (Equity and Tangible Equity), Liquidity (Loans and Liquid Assets) and Liabilities (Deposits and Overheads). Bank profitability is the dependent variable and two measures of bank profitability are used in this study, namely return on average equity (ROAE) and return on average assets (ROAA). In this section we develop the hypothesis to be examined in this research paper. Development of Hypotheses This paper attempts to test seven hypotheses. A hypothesis is a claim or assumption about the value of a population parameter. It consists either of a suggested explanation for a phenomenon or of a reasoned proposal suggesting a possible correlation between multiple phenomena. According to Becker (1995), hypothesis testing is the process of judging which of two contradictory statements is correct. Hypothesis 1: Profitability has a positive and significant relationship with the total assets (ASSETS). Total Assets of a company represents its valuables including both tangible assets such as equipments and properties along with its intangible assets such as goodwill and patent. For banks, total assets include loans which are the basis for bank operations either through interest or interest-free practices. Total assets is used as a tool to measure the bank size; banks with higher total assets indicate bigger banks. Molyneux and el (2004) included total assets in their study and found a positive significant relationship between total assets and profitability. Therefore, total assets are expected to have positive relation with profitability which means that bigger banks are expected to be more profitable. Total assets are converted logarithmic to be more consistent with the other ratios Hypothesis 2: Profitability has a positive and significant relationship with equity to asset ratio (EQUITY). Total equity over total assets measures banks capital structure and adequate. It indicated bank ability to withstand losses and handle risk exposure with shareholders. Hassan and Bashir (2004) examined the relationship between EQUITY and bank profitability and found positive relationship. Therefore, EQUITY is included in this stud