Fools and Love

In the play, A Midsummer Night’s Dream, Shakespeare draws the reader’s attention to the roles of Nick Bottom, and Puck. Nick Bottom and Puck are both considered to be the fools in this play, although both characters fulfill this role in different ways. Bottom is a contemporary fool, who is overconfident and lacks common sense. While Bottom is very confident in himself, especially his acting ability, he is not a very intelligent character. Puck’s role in the play is more of a traditional fool. Puck plays practical jokes and enjoys entertaining though mischief. Puck’s service to the fairy king, Oberon, is similar to a jester’s role in a medieval society. Though the two fools of the play are very different, they offer several helpful observations about life and love. Bottom and Puck teach the audience valuable lessons about taking love too seriously, instead of enjoying it as it comes. The fools also offer insight on the consequences of being overly confident in oneself. The first lesson that the fools offer is that love should not be taken too seriously, but enjoyed just as it comes. Puck offers this insight in his quote, â€Å"Lord, what fools these mortals be† (Act 3, Scene 2, Line 116). After attempting to make Demetrius fall in love with Helena, Puck’s plan self-destructs when he realizes that he has put the love potion on the wrong man. When Puck watches the reaction of the young lovers, he realizes how silly it is for them to all be chasing after love so desperately, rather than taking it as it comes and enjoying it. Nick Bottom offers this same lesson through his short relationship with Titania, the fairy queen. Though Bottom is obviously not a perfect match for the beautiful Titania, he enjoys her affections while they last, never second-guessing that she could be in love with him. Though Titania’s affections for Bottom are induced by a potion, Bottom throws himself into his newfound relationship with her, unaware that Puck has transformed Bottom’s head into that of a donkey. When Bottom awakes and Titania’s affections for him have ended, Bottom enjoys the memories as though a dream. The second lesson that Shakespeare impresses upon his audience is the effect of over-confidence on others. Early in the play, Bottom gathers with the other actors to start planning their play. Rather than listen to Peter Quince, the stage manager, and take direction from him, Bottom wants to tell everyone what to do. He tells Quince how to announce the parts and how to organize the actors. Then, Bottom wants to play every single part in the play, and brags about how wonderful his portrayal of each character would be. Shortly after this scene, Puck changes Bottoms head into that of a donkey, which is symbolic of Bottom’s conceited behavior. Upon his entrance in the play, all of the other actors run away from Bottom and his grotesque appearance. Upon seeing Bottom, Quince yells, â€Å"O’ monstrous! O, strange! We are haunted. Pray, masters! Fly, masters! Help† (Act 3, Scene 1, Line 99-100). Puck changed Bottom’s appearance to match his personality by placing the head of the donkey on his shoulders. Puck, although obviously less power hungry than Bottom, also shows that he has plenty of confidence in himself. Puck exhibits his over-confidence at several points in the play, bragging about the tricks that he has played on others and enjoying laughing at their misfortune. The audience sees that Puck is also confident in his ability to serve Oberon, as well. When Oberon send Puck out to find Helena in the woods, Puck replies, â€Å"I go, I go, look how I go, swifter than arrow from the Tartar’s bow† (Act 3, Scene 2, Lines 100-101). By comparing his speed and accuracy to that of the Tartars, who were famous for their skill with a bow and arrow, Puck shows that he believes himself to be equally as accurate. This shows the audience a very confident Puck, but the audience cannot help but realize that Puck’s comparison of himself to the Tartars is an overexaggeration. Ironically, Puck is the reason that the mix-up with the love potion happened, so in effect, he is obviously not as accurate as he might like to think. The third lesson that is conveyed in the play is the basic concept that ignorance can be bliss. Nick Bottom is portrayed as an overly self-assured and ignorant fellow. He is absorbed in all things of himself and does not take much interest in anything that does not directly affect him. After Puck turns his head into that of a donkey, his fellow actors run away from him in fear. Instead of wondering what happened to scare them off, Bottom brushes it off and doesn’t think about it further. And again, when Bottom is awakening from his slumber in the forest after his short-lived romance with Titania, Bottom again shows his ignorance. Bottom remembers all of the things that had happened to him through the night, but he refuses to accept them as anything more than a dream. By brushing off these events as a mere fantasy, Bottom rejects reality and chooses to be ignorant of the events and remember them as nothing more than a dream. Puck is also ignorant of other people in the play. Puck’s only concern is entertaining himself and Oberon, and he does not consider anyone else in his actions. Early in the play, Puck talks about the pranks that he has been known to play, telling the audience that, â€Å"†¦ sometimes lurk I in a gossip’s bowl, in very likeness of a roasted crab, and when she drinks, against her lips I bob and on her withered dewlap pour the ale. The wisest aunt, telling the saddest tale, sometimes for three-foot stool mistaketh me; then slip I from her bum, down topples she, and â€Å"tailor† cries, and falls into a cough† (Act 2, Scene 1, Lines 47-54). By turning himself into a crab and lurking in a bowl of ale to scare a woman, and making himself appear to be a stool so that when a woman sits on him, he can make her fall, Puck makes it obvious that he cares about nothing but entertaining himself and his king. Again, in Act Three, Puck shows his selfishness when he realizes that he has made a mistake with the young lovers in the woods and the love potion meant for Demetrius and Helena. When Puck tries to fix it, he realizes that now both men will fall in love with Helena. Rather than try to remedy the problem, Puck thinks it will be fun to watch. Puck shows his complete lack of interest in the young couples when he says, â€Å"Then will two at once woo one; that must needs be sport alone. And those things do best please me that befall preposterously† (Act 3, Scene 2, Lines 118-121). Puck shows a disregard for the true feelings of the young lovers so long as it is entertaining to him. In conclusion, A Midsummer Night’s Dream, contains two fools who are able to share insight into life and love throughout the play. Shakespeare strategically places Nick Bottom and Puck in the play as fools, but these fools have a purpose. Shakespeare uses Bottom and Puck to teach his audience valuable lessons about the importance of living in the moment of love, instead of taking love too seriously. Puck and Bottom also show the audience is that over-confidence is not an attractive quality in anyone. The fools also give new meaning to the old adage, â€Å"Ignorance is bliss†, through their actions in this play. Shakespeare illustrates this through the self-serving actions of both Bottom and Puck throughout the play. By using Bottom and Puck to illustrate these lessons, Shakespeare allows the audience to see how ridiculous these two characters are, thus enabling the audience to laugh at them while still receiving his message. Works Cited Shakespeare, William. A Midsummer Night's Dream. New York, NY: Bantam Books, 1980.   

To Be a Californian

Every day, thousands of people migrate to different sectors of the globe, to capitalize opportunity or pursue better lifestyles for themselves. California is one such state, which prides itself in being able to accommodate diverse populations and cultures. Like many stipulated theories. Immigrants chose the land to Inhabit based on the desire to acquire better living standards for themselves. Immigrants that arrive in California for instance seek the warm natural scenery provided by the state, the freedom to live whichever way they deem fit, the available bob resources, and the willingness to dream and achieve one's dreams.Those who aspire to be Californian are told that there are deferent methods to do this. The promises linked with being Californian leaves them with the desire to migrate and gain the new life promised to them. On closer examination, it becomes apparent that the concept of being Californian is linked to Individuals that have the freedom to live their lives as they p lease, work hard to achieve their dreams, and be tolerant of diversity. Nevertheless, any concept that goes against this remiss may lead to failure of not becoming a â€Å"real† Californian.To support this discussion, an examination of Denies Sponsor's â€Å"A new Perspective on the Dream,† Quays â€Å"Interviews† together with support from the survey result on Californian identity, will show that individuals' that desire to live a free life, are tolerant of diversity, and aspire to achieve their dreams qualify to be â€Å"real† Californians. Excerpts from Sponsor's article gives the illumination that a â€Å"real† Californian is a person that lives freely and enjoys every aspect of life. Spooned (2008, p. 2) gives an illustration of how people migrated from Iowa so that they could get away from the Judgment surrounding the community. In the post war era, California presented an area where one could run away from sexism, racism, and self-freedom. T he essence that surrounds freedom is the desire to escape imprisonment or slavery offered within the society. It is also the desire to give an individual's TO BE A CALIFORNIAN 3 family new opportunity to experience realities that one may have missed. Therefore, they choose to migrate to California since they experience a lack of advancement or retardation in their current environment.As I conduct some interviews with some of the individuals in the region, one respondent retorted that he migrated to be free from poverty. This is a similar story to the one given by Spooned, which talks about a young girl who experiences a sense of freedom through her uncle's migratory nature. It is evident through this story that freedom is acquired through progression areas may ring restriction into how much an individual can progress, California offers a place to gain new insight into freedom and its splendor.Spooned continues and says that when many people hear of the wonderful life in California, they cannot help, but find ways to get there (spooned 2008). This is a clear indication of the sense of peace and freedom experienced within the state. An essential component of being a â€Å"real† Californian is taking risks as a way of achieving one's dreams or combating one's problems. Many people are deprived of the splendid essentials that life has to offer, and so grow up hoping to create better lives than they had.This is evident in an interview of Cruz Reynolds as presented by Quay Cruz grew up in an age where many Mexicans experience segregation, but through his efforts, he was able to acquire equality for his school members of Mexican descent. Cruz, like many immigrants, had a desire to live better lives than their parents or make better lives for future generations. Sometimes, however, this implies sacrificing one's time to struggle for the things that are essential or meaningful in their lives.

Understanding the phenomenon of shale gas revolution Research Paper

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Wind turbines Research Paper Example | Topics and Well Written Essays - 2750 words

Wind turbines - Research Paper Example The concept and the technology of wind turbine is not a new one and it has existed for hundreds of years. The existence of wind turbines can be traced back to the period of 200 BC when this technology was recognized as a windmill and was used in the region of Persia (Fraenkel, 2006, p.212). The first ever wind turbine was named as the wind wheel that was developed by an individual who belonged to the field of mathematics and engineering. But the first ever wind turbine that existed in operational condition was developed in the region of Sistan during the period of 7th century (Fraenkel, 2006, p.212). After more than 5 centuries later the first ever windmill or wind turbine was utilized in the region of England and by the period of 14th century these windmills were witnessed as being used to drain the regions of Rhine Delta (Northrop, 2013, p.143). The first ever wind turbine that was used for the purpose of generation of electricity was during the period of 1887 when James Blyth used the technology in order to provide electricity for his holiday home and after a small period of time the first ever wind turbine that operated automatically without battery was developed by Charles F. Brush and this development helped in providing energy for the region of Ohio (Northrop, 2013, p.143). 13 years later these technological devices were used in the region of Denmark for the production of around 30 MW of electric energy. By the period of 1908, United States had even adopted this technology and had installed 72 generators of electricity that were producing electricity with the assistance of wind turbines. 22 years later these electricity producing devices were most commonly in use within the farms of the region of United States to produce energy (Northrop, 2013, p.143). The wind turbines that are available in the present day society, which is made up of horizontal-axis wind generators were developed and

Think 3 Essay Example | Topics and Well Written Essays - 500 words

Think 3 - Essay Example judged the government was in welcoming a technology that allowed human beings to produce androids which resemble human beings in every way only that they lacked bone marrow and empathy. "Emigrate or degenerate! The choice is yours!" (pg. 6). This indicates that the government believed that the American government disintegrated after WWT and a new society could only be created in a new land. However, as the novel progresses, the new glimpse of life seen on earth are deem and incomparable to the attractive life in Mars. The question of what makes us human is evident when the author states "...ultimately, the empathic gift blurred the boundaries between hunter and victim, between the successful and the defeated" (Dick 29). It is empathy that differentiates us from androids. However, technology is challenging this inordinate ability and the continual use of technology is making us isolated and might soon challenge our very existence. Living a false life is currently the order of the day as evident through social platforms such as Twitter and Facebook which makes us highly connected yet very isolated. â€Å"The electric things have their life too. Paltry as those lives are† (Dick 239). The technological devices invented by human beings have a life of their own, but we increasingly find ourselves attracted to ‘their’ life, forgetting our life. Reading Philip Dick’s novel, one realizes how the present world is actually experiencing the situation that was foreseen decades ago. It is an outstanding masterpiece to every student who believe in the destructive nature of

Research Methodology, Design & Process Essay Example | Topics and Well Written Essays - 6000 words

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The Service Quality in Bunzl Limited from the Customers' Perspective Essay

The Service Quality in Bunzl Limited from the Customers' Perspective - Essay Example It opens up a battle of supremacy between the workers’ union and the management. Watsons also has unnecessarily huge number of managers (actually 40) when the total workforce is just 200. It is impractical to have such a small company having 20 percent of the workforce at the management level. This means there is too much control and pressure towards the ordinary workers. As suggested, Managing Director Gordon Watson operates in a hands-off style where he rarely ventures in the shop-floor. It seems he has added many boxes in the chart so as to be left with little work to do. Organisational design is almost synonymous to organisational architecture. This architecture is designed to enable the company to realise its objectives as outlined in both its mission and vision. It acts as the basic infrastructure that supports all business processes and it should enable the company to take advantage of its core qualities (Triplett 2007). Watsons fails hugely also in this respect owing t o the fact that it operates without a concrete mission or vision. H&M Consulting is depicted as a successful company that has changed with the changing business environment by adopting better organisational structure and design. Considering its large global presence in 120 countries, the company has to have a reliable and practical organisation design and structure. Unlike Watsons, H&M Consulting has more than 13,000 workers meaning that handling all of them is a daunting and tricky task. For this company to be as successful as it is today, it has employed a networked structure with project teams. Most of its operations revolve around managing projects by their engineering experts or... Managing an organisation is not easy especially when operating in an international platform. Nevertheless, this needs not be an excuse for firms’ failure to persistently produce impressive results. There are many international firms that are doing well. However, looking deeply into reasons behind either performance or lack of it, it is clear to see that a great deal lies in the way a firm is managed. Contrary to the popular believe that employees can determine failure or success of a firm, they only do so as secondary participants as they simply act as agents of the management. Therefore, when employees constantly fail to deliver the responsibility should first fall on the management. Issues like organisational design and structure, extent and nature of teamwork, approaches to leadership and management and organisational culture need to be considered and formulated carefully for an organisation to achieve meaningful positive performance on a sustainable basis.

Judy Baca Research Paper Example | Topics and Well Written Essays - 250 words

Judy Baca - Research Paper Example hat is interesting in this endeavor is the cooperative effort done by artists around the world who is collaborating with her to complete the travelling mural. I t is dubbed as a â€Å"global village† because as the â€Å"World Wall† tours the world; artists from different parts of the world paints a panel to form part of a global community. . Latest contributions came from artists from Finland, Russia, Palestine, Israel, and Canada. (Chavez, Cesar. n.d.) A mural is designed to bring beauty to the wall, building, freeways, or underpass. Sometimes, it depicts the culture of the community wherein it is painted, the concerns and values of its people. This is the theme shown in the Great Wall of Los Angeles, done in 1976 and is said to be the world’s largest mural, with 13’ x 2500’. The mural is a combined effort of the community and several artists that took five summers to complete. (â€Å"Judy Vaca†) I believe that the work of Judy Vaca carries with it a unifying theme that has been desired by everybody in the world. I think that her painting is just not a painting or a piece of art but something that brings to mind what one wants to achieve for life, for the community and for the world in general. The mural is also one way in which Judy Vaca develops the artistic ability of her students in arts. The mural, as a collective work, gives the artists a chance to use their painting skills to be in unison with the others. In the end, I see that there is a taint of activism in mural works, but at the same time provides portrayals of nationalism in the way she carried out all of her

NONE Essay Example | Topics and Well Written Essays - 500 words - 1

NONE - Essay Example For this reason, he purports that capitalists simply get paid for their patience in not using their money on consumer goods (Buchholz 128). However, as much as this may be true, Marx opines that labor is known to produce a surplus that goes far beyond its wages and the wear and tear that is sustained by the capital used. I totally agree with Marx that the wrong done here is exploiting the surplus by others in the form of labor. The reason why I think that Marx’s reasoning here is valid is the fact that capitalists usually enjoy the highest benefits from sale of products where as the laborers are usually the least compensated. A good example to explain the validity of Marx’s reasoning here would be to look at the amount of labor that goes into manufacturing contemporary product such as luxury cars. As much as it is prudent to appreciate the waiting that capitalists have to wait, and the sacrifices that they make by not spending their money on buying consumer goods, I do not think that this can be compared to the work that laborers put in, and the amount of compensation they receive. Many big companies today are owned by rich capitalists who pump in huge sums of their money as capital. These capitalists usually employ laborers who work hard to ensure that the final product is up to standard (Beb 29). However, when these products are sold, it is the capitalists who receive and enjoy the most amount of profit after having used the labor and expertise of others. It would be unrealistic to expect the capitalists and the laborers to enjoy the same amount of profit. However, fact remains that the investors in blue chip companies usually enjoy way much more profit than the laborers who put their efforts in coming up with final products that will be sold to bring money to the companies. I think that Marx’s reasoning here was

Why did I become a Christian Essay Example | Topics and Well Written Essays - 500 words

Why did I become a Christian - Essay Example Islamic doctrinal message is not typically delivered and spread as Christianity is with God’s Word for the Muslim culture appears exclusive for the followers of Muhammad who are disposed to reconcile materialism and spirituality under the context of political setting. Becoming a Christian is entirely and remarkably different as I experience living by faith through Christ and having a personal relationship with God. I particularly appreciate the fact that in Christianity, the values of love and compassion are magnified rather than the rigidity of moral order and punishment for sins, believing that God’s unconditional love is a kind that is sincere, patient, and does not keep record of wrongs (Cor. 13:4 – 5). According to the Holy Scripture, it was through Father God’s plan of salvation that Jesus Christ be given biological birth by an ordinary pure woman after which the gospel declares ‘a word became flesh’ to live among men that the prophecy in the Old Testament of the Bible may be fulfilled. To me, this is something that entails more than a significant event in the history of redemption for it reflects the heart of God by virtue of humility that despite His divine nature, He reaches out to sinful men by allowing His holiness to touch the earth’s ground and take no other form higher than that of us when Jesus was born to live in utter simplicity and thereafter carry out his ministry apart from worldly wealth and power. Basically, Jesus embodies his teachings and I am quite fascinated to discover how consistent this truth holds as stated via Luke 14:11 -- â€Å"For everyone who exalts himself will be humbled, and he who humbles himself will be exalted.† Gaining deeper understanding of God’s Word all the more settles my conviction toward Christianity wherein besides knowledge of the Scripture, I learn to refine my ways by wisdom in meditative prayer and

Essay on Slavery Throughout Time Essay Example for Free

Essay on Slavery Throughout Time Essay One might describe money as being stored up labor; therefore to make money you must simply labor. This is how industries all around the world have made money, by paying workers to labor. However if you could have your workers labor for no pay then you yourself would essentially be making free money. The appeal of this free money is why slavery has been a predominant trend throughout history. It doesn’t matter what the labor is but, there are three main types of slavery that have been present in the world and those are labor slaves, war slaves, and trafficking slaves. I predict that slavery will continue to exist in the future because the appeal of free money it is too great, wars will bring with it war slaves, humans have a natural sex drive which means there will be a steady need for trafficking, and because there will continue to be people who believe they are above other humans. The greatest account of slavery for simply labor and free money without the presence of war is the African slave trade that existed in the early Americas. Europeans would sail to Africa and bring over boat loads of African people to the Caribbean and the colonies in North America, where they were forced to labor. They would be bought by people and then would usually end up Rydalch 2 working on a plantation. The plantations would have them do a variety of tasks. The slaves would be beaten and lived in horrible conditions, some would try and escape and others would not because of the fear they had of being caught. This type of slavery of enslaving innocent people and forcing them to labor rarely exists in today’s world. In most first world countries there are laws that prevent this from happening but there may be rare occasions in other parts of the world in which this happens. The reason that slavery such as this is so appealing is mainly because of the wealth that it can bring you. It can put you in a more prestigious class without actually having the intuition to get there. I also think that some of the slave masters enjoyed there power and took pride in the fact that there were people who feared them. I think that this version of slavery will continue to diminish in the future. Warfare as been a factor of human civilization since human civilizations began and it will continue to be a factor. War can result from a number of things and it can lead to a number of things. The winner of the war however can take their land and their people. When they take the people these people could possibly become slaves of war. Many ancient civilizations captured people to be used as slaves when they were at war, such as the Egyptians. The slaves were held in a variety of conditions depending on who enslaved them. As long as there is still war in the world then there will still be slaves of war, whether they are forced to labor, used as prostitutes or are just held hostage. In the future I believe that slaves of war will not be forced to do labor but will more likely be held as hostages or forced into prostitution. Rydalch 3 The more modern issue involving slavery is not that of labor slaves or slaves of war but it is slaves of human trafficking. Human trafficking is when people are held against their will and are usually forced to do sexual acts with those who pay to do so. The reason why human trafficking can be a successful business is because humans have a natural sex drive. Human trafficking taps into this natural longing and gives people a way to pay their way to satisfaction. The people who run the trafficking don’t have to pay the women who perform the acts. That is what separates human trafficking from prostitution. This is the most predominant type of slavery in the world today because of laws that have restricted other types of slavery. People all around the world abduct girls anywhere from teenagers to adults; they then sometimes addict them to drugs or other cruel things. Most often they are forced to do sexual acts with customers. The world is taking notice to this and some things are being done to try and stop it. Google recently made huge contributions and donations to try and prevent this from happening. I however think that human trafficking will continue on into the future. Although it may not grow it will always be there because humans will always have a natural sex drive, and people will always be looking for means of satisfaction. With the African slave trade that I mentioned earlier in my paper, they were taking innocent people and putting them to work. In today’s world we would find that to be extremely unjust, unlawful, and immoral. However back when the Europeans were doing it they did not think that what they were doing was bad. They thought of themselves as being superior to the rest of the world. They thought that since the African people were of dark skin and frankly not Rydalch 4 European that they were below them and therefore taking them as their slaves was no problem whatsoever. This reason for enslaving other people rarely, if ever, exist in today’s modern world. This is because all humans have accepted that we are all the same species and that we all of certain rights. I do not see this form of slavery rising to power again in the future unless one civilization takes over the whole world, which is extremely unlikely as you may know. Over the course of following my trend of slavery I discovered many things about the different forms of slavery and the motives behind each of them. By understanding these I was able to make my predictions about whether or not I thought they would continue in the future. Many of them are nearly non existent today which provides for easy predicting of its future, while others I was not sure on. I discovered that the ultimate reason for slavery along with many other things in the world is money. Slavery provides for a way to get free money and it is not that hard to do, especially before modern laws were put in place. Today all forms of slavery are frowned upon greatly and are deemed by most morally wrong and lawfully wrong. This is why there are things being done to stop it, but no matter how many laws you pass there will still be people who try to do it. Slavery will continue to exist in the future because the appeal of free money it is too great, wars will bring with it war slaves, humans have a natural sex drive which means there will be a steady need for trafficking, and because there will continue to be people who believe they are above other humans. The worlds view on slavery might change but for the near future I see it Rydalch 5 staying the same. The modern view on slavery is clearly for the majority that it is a bad thing. However in the future it could be that slavery is accepted, but only time will tell.

Public Health Issue: Smoking

Public Health Issue: Smoking ENHANCING HEALTH AND WELLBEING ACROSS POPULATIONS: INTRODUCTION: The purpose of this essay is to identify a public health issue related in my field. To facilitate the discussion smoking as a public health issue has been chosen. The holistic impact smoking have on the wellbeing of an individual will be explored. The stage of change model and the Healthy Lives (2010) policy will be explored in relation to smoking. The rationale for choosing this topic is because smoking is an important public health issue. The smoke is very toxic to every human tissue it touches on its way into, through and out of the smoker’s body (Ewles 2005). The impact of tobacco smoking on public health extends beyond the direct effects on the individual smoker and their personal health, plus taking into account the effect on their economic, environmental and social effects (Ewles 2005). Smoking harms nearly every organ of the body thereby causing many diseases, reducing quality of life and life expectancy. Also it has been estimated that in England, 364,000 patients are admitted to NHS hospitals each year due to smoking related diseases which translates into about 7,000 hospital admission per week and 1,000 admissions per day (ASH 2006). In the UK, smoking causes about a fifth of all deaths, approximately 114,000 each year, most of which are premature with an average of 21 years early (Ewles 2005). According to Pe to et. al. (2003) cited in Ewles (2005), most premature deaths caused by smoking are Lung and coronary cancer, chronic obstructive heart diseases and coronary heart diseases with 42800, 29100 and 30600 deaths respectively every year. In addition, smoking is known to also bring increased risk of many debilitating conditions like impotence, infertility, gum disease, asthma and psoriasis (Ewles 2005). Research has also shown that non-smokers are put at risk by exposure to other people’s smoke which is known as passive or involuntary smoking and is also referred to as second-hand smoke (SHS) or environmental tobacco smoke (ETS) (Cancer Research 2009). Smoking is considered as a health hazard because Tobacco smoke contains nicotine, a poisonous alkaloid, and other harmful substances such as carbon monoxide, acrolein, ammonia and tars.Gorvenment initiatives like the Public Health White Paper, choosing health; Making Choices Easier (DH 2004) will be addressed. The nurse’s role and other professions involved will be highlighted .Confidentiality shall be maintained throughout this essay as prescribed by the Nursing and Midwifery Council (2008). In addition the fact about Nicotine (2006) suggests some people they smoke for different reason to justify their bad habits, some beliefs that smoking will make them loose weight/or maintaining their weight, peer pressure, reliefs stress, their families and siblings are smoking. Many people thinks it is a good thing to smoke whereas young ones thinks it is cool to be a smoker .The more you smoker too many cigarettes that’s how you get more the hormones from it.Smoking can cause chronic swelling of the mucus membranes of the airways, which adds to airways resistance. Public health is defined it as the science and art of protecting and promoting health and wellbeing, preventing ill health and prolonging life through the organised effects of society (Faculty of Public Health 2010). Smoking is defined as the inhaling and exhaling of smoke from tobacco of other drugs (World Health Organisation 2008). The Department of Health (2011) states that in the United Kingdom, smoking is one of the causes of avoidable premature deaths. The WHO (2008) estimates that tobacco smoking accounts for almost 6 million deaths worldwide that is including second-hand smoke and the number is expected rise to 7 million by 2020. Allender, et al (2009) states that for every smoking related death, 20 people are likely to suffer some disease associated with smoking such as cancer, COPD heart disease and stroke. In England between 2010-2011 smoking related diseases accounted for 5 percent of NHS hospital admissions and treating smoking related diseases costs the NHS approximately  £5 billion a year (Ericksen et al 2012). Smoking is known to affect the bio-psychosocial life of an individual as people smoke for different reasons Health Psychology: Biological, Psychological, and Sociocultural Perspectives. According to the DH (2009) nicotine, tar and bupropion are the most common toxins that have damaging effects to the body. â€Å"Pearson Nurse’s Drug (2010), states that Nicotine acts as a stimulant within the cardiovascular system and causes vasoconstriction, the thinning of blood vessels causing hypertension and chest pains. Goddard (2008) suggests that tar, is also toxic when inhaled during smoking and it reduces the elasticity of the lungs thereby reducing the intake of oxygen in the blood stream. Marmot The review key massage is on decreasing the social sectors and public groups has to work in organisation. (Marmot 2010) gradient in order to accomplish purposes in reducing health inequalities. Chances to decrease the social gradient has to be universal that is starting at a local level. For example authorising local groups and individuals shall be effective than concentrating on the disadvantaged only. This means that the NHS, private. The governments document Choosing Health (2004) seeks that people have choices about their health through health guides, receiving advice on their healthy living and being encouraged to make healthier changes in their lives. The introduction of the stop smoking service and a 24 hour free telephone service are important in supporting people to stop smoking. NICE (2011) highlights that Health professionals play a very important role in teaching them about the results of chain smoking and motivating them and empowering them into changing their behavioural life style. Tanahill model describes three aspects of health promotion, these three circle Identify the major functions of public health. The aspects are Health Education, Prevention and Health Protection. A vital component of health promotion is health education which aims to change behaviour by providing people with the knowledge and skills they require to make healthier decisions and enable them to fulfill their potential FILL IN SOMETHING LEFT†¦Ã¢â‚¬ ¦ The health issues described above could be tackled in diverse angles. A Tanahill model of health is a guideline that professionals uses to protect, promote and educate individuals to make healthy choices. By educating and offering support health professionals can empower individuals to choice a healthy lifestyle. In 2012Hisocock, Bauld, Amos Filder and Munafo indicated that individuals use smoking as a coping device to manage pressures and stress. Also, Mendelsohn (2012) stated that smoking is intensely connected with depression, people that are depressed are more likely to smoke. In 2012, Turrell, Hewwitt and Miller identified that individuals that lives in deprived neighbourhood have more probability to smoke. Health inequalities are the differences in health status or in the distribution of health determinants between different population groups. (RNC, 2012). These differences are social determinants and may include: housing, financial security, education and environment in which people are born, grow up and live in. Housing: The National Institute for Health and Clinical Excellence (NICE) identified that the possibility of being a smoker is considerably intensified for individuals that lives in a rented accommodation.Moreover,In 2011,Howden –chapman,Chandola,Stafford and Marmot stated that the self-esteem of an individual can be affected by the quality of their house. They further stated that, the effect of stress and not having control over repairs of one’s house can affect mental health. Also 2012 study by Ansell,Gu,Tuiut and Shinha stated that increasing stress is connected with increase chance of smoking. In 2013, Prochorskaite and Miliene stated that, damp condition in the house can lead to breathing problems and asthma, skin irritation’s and are also related to poor housing. According to Dahlgren and Whitehead (1991) Unemployment is a very popular determinant of health, many people and their family suffer from premature deaths because of this. NHS (2004) states that when an individual loses their job this can affect their self-esteem including their financial circumstances, which can therefore trigger emotional distress. Even though the relationship between unemployment and ill health is similar, unemployment is clearly related with greater levels of physical and psychological health for the individual who is unemployed, together with those close to them, as well as their community. NHS (2009). â€Å"A lot of jobless people will eventually lose contact with who they are as well as what they are† NHS (2012). Tanahill model states that nurses should be role model when providing education or assistance about smoking, as Carmel and Rijid (2000) said that nurses were the best people to give information in educating and counselling the public about smoking. Bethel J (2008) impulses all health profession who have yet to quit smoking not to give patients confusing smoke motions. When counselling the Nurses should continuously use four A’s, Ask, Assist, Arrange and Advice. The individual would be asked about their smoking pattern and assisted in making a choice. The clever methodology should be applied in setting accurate aims for the patients to follow. Information on the benefits of quitting to smoke and information such as brochures must be given to support the patient in making a choice People should be discharged and then referred to local NHS Stop Smoking . When discharging patients as nurse we should be helping by educating patients, counselling them, giving out flyers, try to educate them as much as we can, also nurses must make some referrals to community campaigners like Stoptober. Also knowledge of a person’s health beliefs is a condition to supporting interactive adjustment cessations. Marmot Report (2010), showed that there is more possibility for adults who take parts in courses in education to give up smoking and also that adults learning significantly aid positive alterations in health behaviours. The Report goes on to say individuals can be empowered through early intervention and local health trainers to manage their health however, several deprived individuals finds it hard to access and explore healthcare. In 2012 Tenn , Herman and Wendling stated that, education may raise alertness of the damaging health effect of smoking and individuals that are more educated are far less expected to smoke. As nurses we must indicate by models, we need to implement current smoking cessation interventions to reduce the tobacco credited flexibility and death.Smokers should be advised to stop smoking by following smoking cessations like clinical for behavioural supports.The National Institute for Health and Care Excecllence (NICE) recommending to reduce the prevalence of smoking in people in groups and ethnic groups. The Government gets profits by selling tobacco, yet this is an obstacle to people who are trying to stop smoking. When it comes to preventing and treating tobacco requirement nurses are the best people to act as agents of changes. Patients must have more counselling from Health professionals in order for them to quit smoking. Providing service users with some advices it benefits them to urges smoke, especially when speaking to somebody, keeping themselves busy or taking a walk. Smouldering cessations is a preventative health measure’s, yet several medical doctor give it only perfunctory mention during unchanging office appointments or avoid over it totally. (NRT) Nicotine Replacement Therapy or bupropion is to be given to people who are planning to quit smoking.These should be used as interventions.Goddard (2008) stated that smoking causes cardiovascular diseases occurs to people who are light smokers as well ( Dunn et al 1999). 24 300 deaths were from Chronic obstructive pulmonary disease such as chronic bronchitis and Emphysema were direct results of smoking. According to Jerome (1987) smoking one cigarette immediately raises a person’s blood pressure and heart rate decrease the blood flow to the body extremities such as the fingers and toes. Brain and nervous system activity is stimulated for a short time and then reduced, a smoker may also experience dizziness, nausea, watery eyes and acid stomach.Apettite and smell are weakened. Healthy Lives Healthy People (2010) highlight the vital role nurses play in the delivery of health promotion with particular attention on prevention at primary and secondary levels.Nurses have a wealth of skills and knowledge and use this knowledge to empower people to make lifestyle changes and choices. This encourages people to take charge of their own health and to increase feelings of personal autonomy (Karen.et.al 1999). Smoking is one of the biggest threats to public health, therefore nurses are in a prime position to help people to quit by offering encouragement, provide information and refer to smoking cessation services. Secondary prevention detects on early stage and it gives a swift treatment of diseases to cure the disease earlier. This helps to reduce the impact on peoples in community also states that screening for diseases has to be done, such as computerized test so that it will detect the heart diseases early, eye tests for glaucoma, blood tests, Pap test for cervical test and Prostate Specific Antigen (APS) test for prostate cancer screening will benefit people by getting disease to be detected early so that the treatment can be initiated.Tannahil model states that preventing helps to lessens mortality, morbidity and all those serious complications. In 2010 the white paper Healthy Live Healthy People set out the government long term policy for improving public health and in 2011 a new tobacco control plan was published (Department of Health 2011). The Whitepaper Healthy Life Healthy People set out a range of measures aimed at preventing people from starting to smoke and helping them to stop, such as banning cigarettes advertising on billboards, in size and action on tobacco intensified (DH, 2011).Issues highlighted were to ban retailers who sell tobacco to people. England shops under a series of measures set out by the Department of Health (DPH 2011).In 2010 a box of cigarette was higher up by 15p, later the head of government increased duties by 1% above deflation. Liability will double to 2% above deflation over 2011-2015.NHS smoking services is the health promotion strategy, which was started by the government in 2000.The administration has made stop smoking aid presented on NHS treatment, bupropion (zyban).NICE has hand out regulation on use of NRT and bupropion (zyban).NICE has given control on use of NRT and bupropion and role of therapy and support. The government release money every year to encourage the stop smoking packages and training is given to health care workers and Nurses. The Legal age limit was elevated from 16 to 18 years in October 2007 (ONS 2007 ).The Health Commission was to observed what PCT were doing to decrease smoking. Free smoking was banned from the 1st of July 2007 in England and it’s now a crime /offence .National Health Services (NHS 2010) The NHS stop smoking services and A24 hour free phone services is offered to help broad public quit smoking. The DH has employed so many adverts in the broadcasting concerning the hazards of smoking. Additional amount planned in the 2010 White Paper -smoking kills was to end the advertising and sponsorship and promotion of tobacco (ONS 2007). Who defines about what influences people’s health and what are effective interventions or strategies to improve health. Health promotion a process of enabling people to increase control over and to improve, their health. It implies that the ideology moves beyond a focus on individual behavior towards a wide range of social and environmental interventions. Naidoo and Wills (2010), states ‘health promotion is based on theories. The Government strategy in England was to reduce the impact of tobacco in communities, campaigns organizations was organized and came up with a consultation report on the future of tobacco control (2008).this was to be achieved by working in partnership with local regional, national and international levels. In consultation 17% in the general population of which 23% among RM to be achieved by 2015.Maybe fewer smoking people by 2020, and to achieve one in 20 fewer smoking people by 2030.The government‘s goals were to achieve by Better enforcement of existing laws with respect of underage smoking linking with social market campaigns and tackling underage smoking linking with social markets campaigns, also PTC authorities to work in partnership to set priority groups. The United Kingdom Support International initiative and effort on tobacco control through the world health organization. (WHO) treaty Framework Convention on tobacco (FCTC), (DOH 2008).As smoking remains to be a majo r cause of preventable premature deaths with statistics of 137,000 smokers approximately. North Staffordshire came up with a vision of tobacco control Agenda for West Midlands in 2005-2008 , with the aim of Support for smoking cessation:- this consist a network scheme providing support to people who are determined to stop. Professionals are always available to help with brief interventions. Reducing exposure to second-hand smoke:-businesses in Staffordshire are encouraged to implement smoke-free policies to reduce passive smoking therefore enhance a safe environment for the public children inclusive (Stoke-on-Trent PCT).Naidoo Willis (2006) stated that reducing tobacco advertising and promotion:-this reduces smoke recruitment in youth.(smoke busters) (Stoke-on-Trent PCT National smoking communication.:- a national network and partnership in promoting smoke free environment in Staffordshire. Reducing availability of illicit and smuggled tobacco and underage sales.(DH2005). The impact of tobacco smoking on public health extends beyond the direct effects on the individual smoker and their personal health, plus taking into account the effect on their economic, environmental and social effects (Ewles 2005).). Smoking harms nearly every organ of the body thereby causing many diseases, reducing quality of life and life expectancy. Also it has been estimated that in England, 364,000 patients are admitted to NHS hospitals each year due to smoking related diseases which translates into about 7,000 hospital admission per week and 1,000 admissions per day (ASH 2006). In the UK, smoking causes about a fifth of all deaths, approximately 114,000 each year, most of which are premature with an average of 21 years early (Ewles 2005). According to Peto et. al. (2003) cited in Ewles (2005), most premature deaths caused by smoking are Lung and coronary cancer, chronic obstructive heart diseases and coronary heart diseases with 42800, 29100 and 30600 deaths respectively ev ery year. In addition, smoking is known to also bring increased risk of many debilitating conditions like impotence, infertility, gum disease, asthma and psoriasis (Ewles 2005). Research has also shown that non-smokers are put at risk by exposure to other people’s smoke which is known as passive or involuntary smoking and is also referred to as second-hand smoke (SHS) or environmental tobacco smoke (ETS) (Cancer Research 2009). Having mentioned prons and cons of smoking .The writers ‘s opinion is that stopping smoking is a better idea.

Working Capital Management And Profitability

Working Capital Management And Profitability Working capital management (WCM) refers to management of a firms current assets and current liabilities, which is also a primary function that support firm daily operation such as used to funds its stock, credit sales, and credit purchases. The management of working capital is important in order to maintain its liquidity in day-to-day operation; to ensure it operation is running smoothly and meets its obligation (Eljelly, 2004). A firm without sufficient cash flow will have difficulties to survive in the future as it will be unable to pay its obligations. Therefore, if a firm does not manage their liquidity position well, it will affect firms growth, survival and profitability (Shafii, 2010). The trade-off between profitability and liquidity are essential, however most of the firms ultimate objective is to maximise profit, while disregarding the dilemma of liquidity. One objective should not be cost of the other because both of them have their important (Raheman Nasr, 2007). Jose et al. (1996) also point out this fact saying firms with glowing long term prospects and healthy bottom lines do not remain solvent without good liquidity management. For these reason WCM should be given proper consideration. However, the management of working capital is complex as it needs to manage a number of different components which are inter-linked to each others. The management needs to concern on account receivables, account payables, inventories and cash, as altering one component will affect the others. Therefore, firms need to identify the optimal level of working capital that can maximise firms value (Afza and Nazir, 2007). According to Ganesan (2007), optimization of working capita l means minimisation of related costs and maximisation of related income. Efficient WCM will increase firms free cash flow, which in turn increases the firms growth opportunities and return to shareholders. Consequently, efficient WCM is crucial in order to maintaining firms survival, liquidity, solvency and profitability. Thus, WCM has enormous influence to firms performance. Research Question Does the past evidence showing a relationship between WCM and profitability hold true in Malaysian Listed Companies -manufacturing and services industries. 1.2 AIM The aim of this study is to provide empirical evidence of the relationship between WCM and profitability in a sample of Malaysian listed companies by looking at the manufacturing and services industries. The cash conversion cycle (CCC) will be the indicator of firms liquidity which is a comprehensive measure, so that able to identify the most important variable that will affect CCC for two different industries. 1.3 OBJECTIVES OF THIS STUDY Examine the relationship between the CCC and firm profitability. Examine the relationship between CCC components which are account receivables, account payable and inventory turnover period with firms profitability. Investigate whether the two industries have the same effect on the relations. 1.4 RATIONAL OF THIS STUDY Extensive empirical research on WCM has been carried out around the world widely and those researches had given different results on the relationship between WCM and profitability. As the studies on the data undertake from Ernst Young, 2010 reveals that WCM vary across different industries. The study also gives significant evidence that different firms or sectors adopt different approaches to WCM. So, different firms will use different approaches and strategy to manage their working capital, such as those firms that is less competitive will choose to minimise their receivable in order to increase their cash flow. While for those firms that depends on supplier will maximise their payable account. Therefore, the impact of various working capital mechanisms on firms performance from Malaysia perspective might be different due to divergence business environment and culture between other countries. Besides that, there are few factors that may influence firm working capital such as nature of business, production policy, production cycle, credit policy, and availability of supply (Rama, 2009). Nature of Business The nature of business between different industries or firms is different. Thus, working capital requirement needed, also different among different industries or firm. For example, manufacturing is the productions of the product where the inventory can be keep in the warehouse. While services are the services provided to customer which cannot be stored. It also does not have investment in either raw materials, work in progress (WIP) or finished goods. Besides that, it also involves in immediate realization of cash after the services are provided, which means there will be less accounts receivables is exists. In here, it can be believed that services will have lower working capital requirement. [low wc, more risk n return] This is further proven by John Louie Ramos Production Policy The management of hospitality capacity (inventory) is difficult as compared to manufacturing firm due to fluctuating demand pattern. For example, for service industry their inventory is room availability. The number of rooms in a hotel is fixed, once the room is vacant, they will lose the chances of earning money and the inventory during the period is wasted. Meanwhile, the services provided to customer cannot be store. Besides that, if the demand for the room is more than supply, they had to lose the income as they cannot produce the inventory based on demand. While for the manufacturing firm, they can produce their inventory based on the seasonal demand. They can produce more inventories during the peak demand and less during off-seasons. Then, the firm will have low working capital during off-season. While for those firm that have fixed inventory production policy which means produce the same quantity of inventory to meet the peak demand, then the firm will have large accumulation of inventory during the off-seasons. The large accumulation of inventory will increase the amount of working capital. Thus, the production policy will affect the firm and industry working capital requirement. Production Cycle The time and process involved in manufacture of goods will also affect firm working capital requirement as more fund is needed to invest, in order for the goods to be completed in time and in good quality. Credit Policy Credit policy also one of the factors that will affect firm or industry working capital requirements which it determine the firms receivables. For services industry, it will have low working capital as it involved cash sales while for manufacturing the working capital requirement will depend on the firms credit policy. If the firm offer short credit period, then it will only need low working capital and vice versa. Availability of supply The availability of inventory such as raw materials will affect firm working capital requirements. If the availability of raw materials is easily to obtain then firm can maintain low inventory which mean only need low working capital. However, if the level of supply is hard to predict or obtain then the firm had to keep a large amount of inventory in their warehouse in order to avoid the shortage of production. Thus, the firm need large amount of working capital. Therefore, this study is to examine the differences of the WCM between to the two industries and relationship between liquidity and profitability in Malaysia listed company. 2. LITERATURE REVIEW 2.1 WORKING CAPITAL MANAGEMENT Working capital represents safety cushion for providers of short term funds of the firm. Without a proper management of working capital, it will have cash shortages and will result in difficulty in paying its obligations, especially in the competitive business worlds nowadays (FPR, 2010). Besides that nowadays, most companies normally do not think of improving liquidity management until them faces financial crisis or becoming on the edge of bankruptcy. In order to make sound decision and survive in the long term, firm must combine strategic planning with comprehensive data by using both financial and non-financial data. Working capital and liquidity management is important for all businesses either are small, medium or large firm. As cash is the most liquid asset in a firm, therefore efficient liquidity management involves planning and controlling firms current assets meets its current liabilities is essential so that firm will not excessive invest in short term finance and avoid risk of inability to meet its short term obligation. Furthermore an efficient WCM enable firm to minimise the need for external financing as the external financing comprises of financial risk. By referring to the risk and return theory (Pettengill et al, 1995), higher risk investments will result in higher returns and vice versa. Hence, firms with low liquidity of working capital may have higher risk then high profitability. Conversely, high liquidity of working capital may face low risk then low profitability. Therefore, firm must take into consideration all the current assets and current liabilities when making financial decision making and try to balance the risk and return. As a result, in addition to profitability, liquidity management is vital for ongoing concern. Working capital management comprises of inventory management, cash management and credit management. A detailed of those components will be discussed below: 2.1.1 INVENTORY MANAGEMENT Inventory management is essential for businesses, without proper control and management of the inventory will lead to serious issues facing by the firm. For example, if the inventory does not managed properly or in an efficient manner, it may delay firms production process, lost of important customer, customer dissatisfaction, and or result in working capital curtailment (Richard A, 1978). Inventory consists of raw material, WIP and finished goods (Adeyemi, 2010). By referring to (Marilyn, 2006) raw materials are used to make production scheduling easier, to take advantage of price changes and quantity discounts, and to hedge against supply shortages. If raw material inventories were not held, purchases would have to be made continuously at the rate of production. This would not only mean high ordering costs and less quantity discounts, but also production interruptions when raw materials cannot be procured in time. WIP serves to make the production process smoother and more efficien t. Besides that, it will provide a buffer between the various production processes. Finished goods have to be held to provide immediate services to customers and to stabilise production by separating production and sales activities. Firm can improve the inventory turnover or shortening the inventory turnover period by speeding up the WIP into finished goods, however it cannot be fully transformed. While for the raw material and finished goods is depend on management decision. Thus, it can be said every firms inventory turnover level is significantly different from each other. High inventory holding in a firm will reduce the risk of shortage and decrease the ordering cost. However, hold too much inventories on hand there may be a risk of inventory obsolesces (Van Horne, 1995). Therefore, firm must find a trade-off between those risks by discovery an optimal inventory level. An optimal inventory level can be measured using the economic order quantity (EOQ) as it minimise the annual ho lding costs and ordering costs (Adeyemi, 2010). The formula for EOQ is as below: A = Annual demand Cp = Cost to place an order Ch = Cost of holding an inventory in a year Besides that, EOQ can also be explained using graph in the Figure 1. The graph is plotted for total ordering cost, total holding cost and total cost for the quantities ordered. The point at which the line of total ordering cost intersects with the total holding cost is the EOQ. At the point of EOQ, it will show the minimum costs that will incurred when the firm placing the total amount of quantities. The graph also shows that the cost of ordering is decreased when the order quantity is increased. Then, the holding cost will increase when the order quantity is increased. In addition, when the order quantity is increased or decreased, the total cost will increased and decreased as well, where the total cost is the sum of total ordering cost and total holding cost. Hence, the optimal level of inventory cost is at the point of EOQ. According to Abraham (2005) inventory for services industries consists of two kinds of perishable inventory. One is room availability and the other is food beverages. The identification of fast and slowing moving of these inventories is within the total inventory is essential in order to avoid insufficient inventory. He also states that an optimal inventory is important in order to have a proper management of the inventory as those unused inventory will lead the firm suffer a lost. 2.1.2 CASH MANAGEMENT According to Van Horne (1995) cash management is involves managing the monies of the firm in order to maximize cash availability and interest income on any idle funds. Cash management also include the trade receivable of a firm which play an important role in managing working capital. By improving the trade receivable routine more efficient, firm can reached optimal receivables by having adequate credit policy and collection procedure. A credit policy specifies requirements to value the worthiness of customers and a collection procedure provides guidelines to collect unpaid invoices that will reduce delays in outstanding receivables (Richards Laughlin, 1980). An efficient cash management is essential as it can be an instrumental in preventing losing of cash, maintain sufficient cash to made payment and prevents unnecessary large amounts of cash from being held idle in banks account that produce little or no revenue. 2.1.3 CREDIT MANAGEMENT Lastly, the optimal payables can be achieved by extending its trade credit from supplier. Simona and Paul (2007) state that trade credit is a substitute financing choice of short term borrowing, where trade credit is free while short term borrowing is costly as it needs to incur interest cost. For example, when firm extends its credit period from suppliers it will save the cost of short term borrowings. This means that an increased in account payables, will lead to a decrease in the short term borrowing costs. However, by delaying the payments to supplier will damage the firms reputation and loss some of the cash discounts offered by supplier for early settlements. 2.2 LIQUIDITY MEASURES Corporate liquidity is examined from two distinctive dimensions either static or dynamic views (George, 1997; and Lancaster et al., 1999). 2.2.1 CURRENT AND QUICK RATIO The static view is normally based on traditional measure of current ratio and quick ratio which is calculated based on information at the balance sheet and incorporates no cash flow variables. The underlying behind why these two ratios are well-known in used is due to its simplicity. Current ratio is defined as the relationship between currents assets and current liabilities. It is calculated by dividing the total of the current assets by total of the current liabilities. The current ratio represent margin of safety to the firms creditor, an index to the firm stability. While for quick ratio is the ratio of liquid assets to current liabilities. Kamath (1989) argues that the information generated from the ratios is inadequate to measure the liquidity and future cash flow due to their static nature which measures liquidity at a given point of time. George (1997) assert that it will be more appropriate and accurate to evaluate effectiveness of WCM by CCC, rather than the traditional mea sures of liquidity current ratio and quick ratio. 2.2.2 CASH CONVERSION CYCLE (CCC) Whereas dynamic CCC measures ongoing liquidity from the firms operation is define as more comprehensive measure of working capital and as a supplement to current ratio and quick ratio (Richards and Laughlin, 1980). CCC shows the time lag between expenditure for the purchases of raw materials and the collection of sales of finished goods (Schilling, 1996). This CCC measures also has been highly recommended by Kamath (1989), and others. CCC is a measure for the efficiency of WCM as it indicates how quickly the current assets are converting into cash. CCC comprise three components of days inventory outstanding (DIO), days sales outstanding (DSO) and days payables outstanding (DPO) [CCC = DIO+DSO-DPO]. DIO is a key figure that measures the average amount of time that a firm hold its inventory. It is calculated by inventory/cost of sales x 365 days. A decrease in the DIO represent an improvement, increase is deterioration (Ross et al, 2005). DSO is the key figure that measures the average amount of time that a firm hold its account receivables. It formula to calculate is account receivables/sales x 365days. A decrease in DSO represents an improvement, whereas increase represents deterioration (Ross et al, 2005). DPO is the key figure that measures the average amount of time that a firm hold its trade payables. It is calculated by trade payable/cost of sales x 365days. For DPO, an increase in days represents an improvement, whereas decrease indicates deterioration (Ross et al, 2005). The traditional view on CCC and profitability highlight that the shorter the CCC, the superior the firm profitability. The firm can shorten their CCC by improving the inventory turnover, collects cash from receivables more quickly and slowing down the payments to suppliers. This will increase the efficiency of firm internal operation and result in greater profitability (Mohammad, 2010). This can be seen in the case of Dell manufacturer in American, which it mainly business is sales of its own brand (Dell) computer and computer accessories through internet and open door sales. Their primary focus is on student market and home user. Richard (2003) had analyse on the Dells working capital showing that the increase in inventory turnover and receivable turnover days were affect Dells overall profitability. Later in the year 1997, Dell had made some changes on its business operation by only producing those computers when the order is placing by customers and thus, the company able to reduc e its CCC to negative working capital due to low inventory turnover. The negative CCC show that Dell able to collect payments from customers before they made payment to their supplier. On the other hand, shortening the CCC could harm firms profitability as reducing the inventory conversion period could increase the shortage cost, reducing the receivable collection periods could makes the companys lousing its good credit customers, and lengthening the payable period could damage the firms credit reputation. Therefore, shorter cash conversion cycle associated with high opportunity cost, and longer cash conversion cycle associated with high carrying cost. By achieving the optimal levels of inventory, receivable, and payable will minimize both carrying cost and opportunity cost of inventory, receivable, and payable and maximises sales, and profitability of firms. In this regards, an optimal cash conversion cycle as more accurate and comprehensive measure of working capital management. Schilling (1996) mentions optimum liquidity position, which is minimum level of liquidity necessary to support a given level of business activity. Briefly, he says it is critical to deplo y resources between working capital and capital investment, because the return on investment is usually less than the return on capital investment. Therefore, deploying resources on working capital as much as to maintain optimum liquidity position is necessary. Then he sets up the relationship between CCC and minimum liquidity required such that if the CCC lengthens, the minimum liquidity required increases; conversely, that if the CCC shortens, the minimum liquidity required decreases. 2.3 EMPIRICAL EVIDENCE There are numerous empirical research had done on the relationship between WCM and profitability in different countries and industries by using different variable selection for analysis. Some of the research prove that there is a positive relationship between profitability and CCC such as Dell, however there also had research shows that there are negatively related. Richards and Laughlin (1980) concluded that there is a positive relationship between the current and quick ratios and the cash conversion cycle. Besides that, Chowdhury and Amin (2007) also had found positive correlation between working capital and profitability which examine on the pharmaceutical industry in Bangladesh. The study done by Lazaridis and Tryfonidis (2006) using the sample of listed company from Athens Stock Exchange for the period 2001-2004 showed that there is a significant relationship between CCC and profitability, which use gross operating profit as a measure of profitability. It same apply for Ganesan (2007), analysis on the WCM efficiency in telecommunication equipment industry, found that there is negative relationship between working capital and profitability. It can be said that management of working capital have significant impact on profitability and liquidity in different countries and industries. Besides that, an empirical research on Pakistani firms done by Raheman and Nasr, (2007) with a sample of 94 firms listed on Karachi Stock Exchange from period 1999-2004, shows that there is a negative relationship between variables of WCM and debt with profitability of the firm. In addition, a study in Indias hospital for the period 2005-2006 by Christopher and Kamalavalli, (2010) the correlations and regression analysis signifying that working capital component namely current ratio, cash turnover ratio, current assets to operating income and leverage negatively influence profitability of the firms. Lastly, the recent study in 2009 by Uyar (2009), he used the ANOVA and Pearson correlation to analyse the relationship between CCC and return on asset for the firm listed in the Istanbul Stock Exchange for the year 2007. The research showed that there is a significant negative correlation between those two variables. Belt (1985) examined for US companies the trends of cash conversion cycle and its components during the period 1950-1983, for those lines of businesses for which Quarterly Financial Report for Manufacturing, Mining and Trade Corporations (QFR) . He found that retailing and wholesaling firms both had cash conversion cycles shorter than those of manufacturing firms. Mining firms had the shortest cash conversion cycle because this type of industry has the longest payment deferral period of all the major business types. Besley and Meyer (1987) evaluated empirically the interrelationships among the working capital accounts and cash conversion cycle, the firms industry classification and the rate of inflation for US companies for the period 1969-1983. Using the Spearman rank correlation coefficient they found that the cash conversion cycle was most correlated with the average age of inventory and least correlated with the age of spontaneous credit. The conclusion suggests that inventory ac tivity is the most important input to the cash conversion cycle. The age of inventory, the average collection period and the age of spontaneous credit proved to be highly correlated. The cash conversion cycle and its components for the examination period differed from industry to industry, but did not vary from year to year. By looking at the empirical literature on WCM, there is limited research study on the consequences of WCM from Malaysias firm perspectives. Irene Lee (2007) research results show that the Malaysian public listed firms have positive relationship between profitability and working capital to a certain extent. Besides that, the recent study by Mohammad (2010) explores the relation between WCM and firms performance. He measures the relationship by selecting 172 listed companies in Bursa Malaysia for the period 2003-2007. Using the Pearson correlation and multiple regression analysis, he found significant negative associations between working capital variables with firms market value and profitability. Therefore, he highlights the importance of managing working capital requirements to ensure an improvement in firms market value and profitability and must consider the working capital when making companys strategic. It can be seen from the above that many studies have done on the WCM, its component and profitability by using different variable to test those relationship. From those studies, different countries, industries and strategies gives different results, some are positively related between WCM and profitability while some are negatively related. Since the previous studies of WCM in Malaysia, is focusing on the relationship between WCM and profitability. Therefore, in studies will further study on the relation of the both variables by making comparison on the two listed industries of manufacturing and services industries in Malaysia. 3. RESEARCH METHODOLOGY The objective of this study is to look at one parts of financial management which known as WCM with reference to Malaysia. Here, will see the relationship between WCM practices and its effects on profitability of two industries in Malaysia; 16 firms listed on main board of Bursa Malaysia for the period of three years from 2007 to 2009. This section of the study will discuss on the sample selection, variables, and statistical techniques that will be used to examine the relationship between firms WCM and profitability. 3.1 DATA SET SAMPLE In this study secondary data; firms financial statements will be used to examine the research question. Those secondary data will be collected from Bursa Malaysia. A sample of eight companies will be randomly select for both manufacturing and services industries for the period of three years from 2007-2009. The reason for selecting this period was that latest data that will be available for investigation. Manufacturing and services industries are selected for this study because they reveal district difference in term of nature and management of the business. The services industries have a seasonal period and profit as they unable to predict the sales and demand from customers as services industries are people-oriented and people-driven, it is more difficult to effectively automate and control the service costs than in other non-services business sectors. Whereas the inventory for the manufacturing can be stored in the warehouse in order to avoid shortage but for the services industri es unable to stored their capacity (inventory) as it will affect their firms profitability. Therefore, a comparison of the WCM between the two industries will be look at in this study. Primary data will not be used as the data that has not been gathered before and the collection of data is time consuming, and high cost. Besides that, the primary data is not able to measure the firms financial strength and weaknesses. The measurement of firms financial wealth can only be measures and compare by using quantitative data. In addition, this study is to examine the relationship between WCM and profitability which required the quantitative information. 3.2 VARIABES This study had identified key variables that will influence Malaysia firms WCM. Choice of variables is influenced by previous study on WCM and also to further study on the previous study on Belgians WCM by Deloof. CCC will be used as a comprehensive measure of WCM which also used as independent variables. CCC is simply DSO plus DIO  less  DPO. Profitability is measured by gross operating income (GOI), which is defined as sales minus cost of sales, and divided by total assets minus financial assets. Why it was divided by total assets minus financial assets? As from the list of companies that are randomly selected from Bursa Malaysia, their financial asset is a significant part of its total assets, where financial asset include cash and bank balances, stock and securities that can be readily converted into cash. This also the reason why return on assets is not considered as a measure of profitability in this research, as if firm has mainly financial assets in its balance sheet; its operating activities will contribute little to the overall return on its assets. Besides that, sales growth ([this years sales previous years sales]/previous years sales) will be used as control variable in the regression analysis. 3.3 HYPOTHESIS TESTING As the objectives of this study are: Examine the relationship between WCM and profitability. Examine relationship between the DSO, DIO, DPO and firms profitability. Investigate whether the two industries have the same effect on the relations. The following hypothesis will be formulated and attempt to find statistical evidence for the two industries to support those hypothesis. Hypothesis H1: The CCC is negatively related to firms profitability (ROA) higher CCC, lower the firm profitability and vice versa. Hypothesis H2: Shortening the DSO will increased firms profitability. Hypothesis H3: Shortening the DIO will increased firms profitability. Hypothesis H4: Lengthening the DPO will increased firms profitability. 3.4 ANALYSIS USED IN STUDY In this study, two types of analysis are performed; there are descriptive and quantitative analyses. 3.4.1 DESCRIPTIVE ANALYSIS The initial analysis in this study is descriptive statistic, which will provide detailed information of each relevant variable and describe the relevant aspects of cash conversion cycle. All the relevant variables were calculated using balance sheet value, rather than using market value, it is because the firms financial statement did not provided market value on the variables that is required in this study. Besides that, the measurement of profitability GOI could only be based on value in income statement values as there is no way to measure it at so-called market values. In addition, if the market values are used, there will a question on which date the à ¢Ã¢â€š ¬Ã‹Å"market values are referred to. Thus, in this study the book values of the variables in the firms financial statement will be used. 3.4.2 QUANTITATIVE ANALYSIS Two methods had been applied in quantitative analysis. Firstly, correlation analysis is carried out, which specifically to measure the possible linear relationship between different variables under consideration. Secondly, is regression analysis, which is to estimate the relationship between liquidity, profitability and other selected variables. We have used Pooled Ordinary Least Squares and Generalized Least Squares (cross section weights) methods for analysis. We used panel data in a pooled regression, where time-series and cross-sectional observations were combined and estimated. In other words, several cross-sectional units were observed over a period of time in a panel data setting. For this purpose of analysis the E views software was used to analyze financial data and especially in case of pooled data. 4. DATA ANALYSIS AND DISCUSSION The results of the two types of analysis will be discussed below. 4.1 DESCRIPTIVE ANALYSIS Initially, descriptive statistics is the first step analysis in this research. It will provide a useful summary of central tendency; mean and median, and variability such as standard deviation, minimum and maximum. Table 1 and Table 2 presents descriptive statistics for the components of working capital efficiency for eight manufacturing firms and s Working Capital Management And Profitability Working Capital Management And Profitability Working capital management (WCM) refers to management of a firms current assets and current liabilities, which is also a primary function that support firm daily operation such as used to funds its stock, credit sales, and credit purchases. The management of working capital is important in order to maintain its liquidity in day-to-day operation; to ensure it operation is running smoothly and meets its obligation (Eljelly, 2004). A firm without sufficient cash flow will have difficulties to survive in the future as it will be unable to pay its obligations. Therefore, if a firm does not manage their liquidity position well, it will affect firms growth, survival and profitability (Shafii, 2010). The trade-off between profitability and liquidity are essential, however most of the firms ultimate objective is to maximise profit, while disregarding the dilemma of liquidity. One objective should not be cost of the other because both of them have their important (Raheman Nasr, 2007). Jose et al. (1996) also point out this fact saying firms with glowing long term prospects and healthy bottom lines do not remain solvent without good liquidity management. For these reason WCM should be given proper consideration. However, the management of working capital is complex as it needs to manage a number of different components which are inter-linked to each others. The management needs to concern on account receivables, account payables, inventories and cash, as altering one component will affect the others. Therefore, firms need to identify the optimal level of working capital that can maximise firms value (Afza and Nazir, 2007). According to Ganesan (2007), optimization of working capita l means minimisation of related costs and maximisation of related income. Efficient WCM will increase firms free cash flow, which in turn increases the firms growth opportunities and return to shareholders. Consequently, efficient WCM is crucial in order to maintaining firms survival, liquidity, solvency and profitability. Thus, WCM has enormous influence to firms performance. Research Question Does the past evidence showing a relationship between WCM and profitability hold true in Malaysian Listed Companies -manufacturing and services industries. 1.2 AIM The aim of this study is to provide empirical evidence of the relationship between WCM and profitability in a sample of Malaysian listed companies by looking at the manufacturing and services industries. The cash conversion cycle (CCC) will be the indicator of firms liquidity which is a comprehensive measure, so that able to identify the most important variable that will affect CCC for two different industries. 1.3 OBJECTIVES OF THIS STUDY Examine the relationship between the CCC and firm profitability. Examine the relationship between CCC components which are account receivables, account payable and inventory turnover period with firms profitability. Investigate whether the two industries have the same effect on the relations. 1.4 RATIONAL OF THIS STUDY Extensive empirical research on WCM has been carried out around the world widely and those researches had given different results on the relationship between WCM and profitability. As the studies on the data undertake from Ernst Young, 2010 reveals that WCM vary across different industries. The study also gives significant evidence that different firms or sectors adopt different approaches to WCM. So, different firms will use different approaches and strategy to manage their working capital, such as those firms that is less competitive will choose to minimise their receivable in order to increase their cash flow. While for those firms that depends on supplier will maximise their payable account. Therefore, the impact of various working capital mechanisms on firms performance from Malaysia perspective might be different due to divergence business environment and culture between other countries. Besides that, there are few factors that may influence firm working capital such as nature of business, production policy, production cycle, credit policy, and availability of supply (Rama, 2009). Nature of Business The nature of business between different industries or firms is different. Thus, working capital requirement needed, also different among different industries or firm. For example, manufacturing is the productions of the product where the inventory can be keep in the warehouse. While services are the services provided to customer which cannot be stored. It also does not have investment in either raw materials, work in progress (WIP) or finished goods. Besides that, it also involves in immediate realization of cash after the services are provided, which means there will be less accounts receivables is exists. In here, it can be believed that services will have lower working capital requirement. [low wc, more risk n return] This is further proven by John Louie Ramos Production Policy The management of hospitality capacity (inventory) is difficult as compared to manufacturing firm due to fluctuating demand pattern. For example, for service industry their inventory is room availability. The number of rooms in a hotel is fixed, once the room is vacant, they will lose the chances of earning money and the inventory during the period is wasted. Meanwhile, the services provided to customer cannot be store. Besides that, if the demand for the room is more than supply, they had to lose the income as they cannot produce the inventory based on demand. While for the manufacturing firm, they can produce their inventory based on the seasonal demand. They can produce more inventories during the peak demand and less during off-seasons. Then, the firm will have low working capital during off-season. While for those firm that have fixed inventory production policy which means produce the same quantity of inventory to meet the peak demand, then the firm will have large accumulation of inventory during the off-seasons. The large accumulation of inventory will increase the amount of working capital. Thus, the production policy will affect the firm and industry working capital requirement. Production Cycle The time and process involved in manufacture of goods will also affect firm working capital requirement as more fund is needed to invest, in order for the goods to be completed in time and in good quality. Credit Policy Credit policy also one of the factors that will affect firm or industry working capital requirements which it determine the firms receivables. For services industry, it will have low working capital as it involved cash sales while for manufacturing the working capital requirement will depend on the firms credit policy. If the firm offer short credit period, then it will only need low working capital and vice versa. Availability of supply The availability of inventory such as raw materials will affect firm working capital requirements. If the availability of raw materials is easily to obtain then firm can maintain low inventory which mean only need low working capital. However, if the level of supply is hard to predict or obtain then the firm had to keep a large amount of inventory in their warehouse in order to avoid the shortage of production. Thus, the firm need large amount of working capital. Therefore, this study is to examine the differences of the WCM between to the two industries and relationship between liquidity and profitability in Malaysia listed company. 2. LITERATURE REVIEW 2.1 WORKING CAPITAL MANAGEMENT Working capital represents safety cushion for providers of short term funds of the firm. Without a proper management of working capital, it will have cash shortages and will result in difficulty in paying its obligations, especially in the competitive business worlds nowadays (FPR, 2010). Besides that nowadays, most companies normally do not think of improving liquidity management until them faces financial crisis or becoming on the edge of bankruptcy. In order to make sound decision and survive in the long term, firm must combine strategic planning with comprehensive data by using both financial and non-financial data. Working capital and liquidity management is important for all businesses either are small, medium or large firm. As cash is the most liquid asset in a firm, therefore efficient liquidity management involves planning and controlling firms current assets meets its current liabilities is essential so that firm will not excessive invest in short term finance and avoid risk of inability to meet its short term obligation. Furthermore an efficient WCM enable firm to minimise the need for external financing as the external financing comprises of financial risk. By referring to the risk and return theory (Pettengill et al, 1995), higher risk investments will result in higher returns and vice versa. Hence, firms with low liquidity of working capital may have higher risk then high profitability. Conversely, high liquidity of working capital may face low risk then low profitability. Therefore, firm must take into consideration all the current assets and current liabilities when making financial decision making and try to balance the risk and return. As a result, in addition to profitability, liquidity management is vital for ongoing concern. Working capital management comprises of inventory management, cash management and credit management. A detailed of those components will be discussed below: 2.1.1 INVENTORY MANAGEMENT Inventory management is essential for businesses, without proper control and management of the inventory will lead to serious issues facing by the firm. For example, if the inventory does not managed properly or in an efficient manner, it may delay firms production process, lost of important customer, customer dissatisfaction, and or result in working capital curtailment (Richard A, 1978). Inventory consists of raw material, WIP and finished goods (Adeyemi, 2010). By referring to (Marilyn, 2006) raw materials are used to make production scheduling easier, to take advantage of price changes and quantity discounts, and to hedge against supply shortages. If raw material inventories were not held, purchases would have to be made continuously at the rate of production. This would not only mean high ordering costs and less quantity discounts, but also production interruptions when raw materials cannot be procured in time. WIP serves to make the production process smoother and more efficien t. Besides that, it will provide a buffer between the various production processes. Finished goods have to be held to provide immediate services to customers and to stabilise production by separating production and sales activities. Firm can improve the inventory turnover or shortening the inventory turnover period by speeding up the WIP into finished goods, however it cannot be fully transformed. While for the raw material and finished goods is depend on management decision. Thus, it can be said every firms inventory turnover level is significantly different from each other. High inventory holding in a firm will reduce the risk of shortage and decrease the ordering cost. However, hold too much inventories on hand there may be a risk of inventory obsolesces (Van Horne, 1995). Therefore, firm must find a trade-off between those risks by discovery an optimal inventory level. An optimal inventory level can be measured using the economic order quantity (EOQ) as it minimise the annual ho lding costs and ordering costs (Adeyemi, 2010). The formula for EOQ is as below: A = Annual demand Cp = Cost to place an order Ch = Cost of holding an inventory in a year Besides that, EOQ can also be explained using graph in the Figure 1. The graph is plotted for total ordering cost, total holding cost and total cost for the quantities ordered. The point at which the line of total ordering cost intersects with the total holding cost is the EOQ. At the point of EOQ, it will show the minimum costs that will incurred when the firm placing the total amount of quantities. The graph also shows that the cost of ordering is decreased when the order quantity is increased. Then, the holding cost will increase when the order quantity is increased. In addition, when the order quantity is increased or decreased, the total cost will increased and decreased as well, where the total cost is the sum of total ordering cost and total holding cost. Hence, the optimal level of inventory cost is at the point of EOQ. According to Abraham (2005) inventory for services industries consists of two kinds of perishable inventory. One is room availability and the other is food beverages. The identification of fast and slowing moving of these inventories is within the total inventory is essential in order to avoid insufficient inventory. He also states that an optimal inventory is important in order to have a proper management of the inventory as those unused inventory will lead the firm suffer a lost. 2.1.2 CASH MANAGEMENT According to Van Horne (1995) cash management is involves managing the monies of the firm in order to maximize cash availability and interest income on any idle funds. Cash management also include the trade receivable of a firm which play an important role in managing working capital. By improving the trade receivable routine more efficient, firm can reached optimal receivables by having adequate credit policy and collection procedure. A credit policy specifies requirements to value the worthiness of customers and a collection procedure provides guidelines to collect unpaid invoices that will reduce delays in outstanding receivables (Richards Laughlin, 1980). An efficient cash management is essential as it can be an instrumental in preventing losing of cash, maintain sufficient cash to made payment and prevents unnecessary large amounts of cash from being held idle in banks account that produce little or no revenue. 2.1.3 CREDIT MANAGEMENT Lastly, the optimal payables can be achieved by extending its trade credit from supplier. Simona and Paul (2007) state that trade credit is a substitute financing choice of short term borrowing, where trade credit is free while short term borrowing is costly as it needs to incur interest cost. For example, when firm extends its credit period from suppliers it will save the cost of short term borrowings. This means that an increased in account payables, will lead to a decrease in the short term borrowing costs. However, by delaying the payments to supplier will damage the firms reputation and loss some of the cash discounts offered by supplier for early settlements. 2.2 LIQUIDITY MEASURES Corporate liquidity is examined from two distinctive dimensions either static or dynamic views (George, 1997; and Lancaster et al., 1999). 2.2.1 CURRENT AND QUICK RATIO The static view is normally based on traditional measure of current ratio and quick ratio which is calculated based on information at the balance sheet and incorporates no cash flow variables. The underlying behind why these two ratios are well-known in used is due to its simplicity. Current ratio is defined as the relationship between currents assets and current liabilities. It is calculated by dividing the total of the current assets by total of the current liabilities. The current ratio represent margin of safety to the firms creditor, an index to the firm stability. While for quick ratio is the ratio of liquid assets to current liabilities. Kamath (1989) argues that the information generated from the ratios is inadequate to measure the liquidity and future cash flow due to their static nature which measures liquidity at a given point of time. George (1997) assert that it will be more appropriate and accurate to evaluate effectiveness of WCM by CCC, rather than the traditional mea sures of liquidity current ratio and quick ratio. 2.2.2 CASH CONVERSION CYCLE (CCC) Whereas dynamic CCC measures ongoing liquidity from the firms operation is define as more comprehensive measure of working capital and as a supplement to current ratio and quick ratio (Richards and Laughlin, 1980). CCC shows the time lag between expenditure for the purchases of raw materials and the collection of sales of finished goods (Schilling, 1996). This CCC measures also has been highly recommended by Kamath (1989), and others. CCC is a measure for the efficiency of WCM as it indicates how quickly the current assets are converting into cash. CCC comprise three components of days inventory outstanding (DIO), days sales outstanding (DSO) and days payables outstanding (DPO) [CCC = DIO+DSO-DPO]. DIO is a key figure that measures the average amount of time that a firm hold its inventory. It is calculated by inventory/cost of sales x 365 days. A decrease in the DIO represent an improvement, increase is deterioration (Ross et al, 2005). DSO is the key figure that measures the average amount of time that a firm hold its account receivables. It formula to calculate is account receivables/sales x 365days. A decrease in DSO represents an improvement, whereas increase represents deterioration (Ross et al, 2005). DPO is the key figure that measures the average amount of time that a firm hold its trade payables. It is calculated by trade payable/cost of sales x 365days. For DPO, an increase in days represents an improvement, whereas decrease indicates deterioration (Ross et al, 2005). The traditional view on CCC and profitability highlight that the shorter the CCC, the superior the firm profitability. The firm can shorten their CCC by improving the inventory turnover, collects cash from receivables more quickly and slowing down the payments to suppliers. This will increase the efficiency of firm internal operation and result in greater profitability (Mohammad, 2010). This can be seen in the case of Dell manufacturer in American, which it mainly business is sales of its own brand (Dell) computer and computer accessories through internet and open door sales. Their primary focus is on student market and home user. Richard (2003) had analyse on the Dells working capital showing that the increase in inventory turnover and receivable turnover days were affect Dells overall profitability. Later in the year 1997, Dell had made some changes on its business operation by only producing those computers when the order is placing by customers and thus, the company able to reduc e its CCC to negative working capital due to low inventory turnover. The negative CCC show that Dell able to collect payments from customers before they made payment to their supplier. On the other hand, shortening the CCC could harm firms profitability as reducing the inventory conversion period could increase the shortage cost, reducing the receivable collection periods could makes the companys lousing its good credit customers, and lengthening the payable period could damage the firms credit reputation. Therefore, shorter cash conversion cycle associated with high opportunity cost, and longer cash conversion cycle associated with high carrying cost. By achieving the optimal levels of inventory, receivable, and payable will minimize both carrying cost and opportunity cost of inventory, receivable, and payable and maximises sales, and profitability of firms. In this regards, an optimal cash conversion cycle as more accurate and comprehensive measure of working capital management. Schilling (1996) mentions optimum liquidity position, which is minimum level of liquidity necessary to support a given level of business activity. Briefly, he says it is critical to deplo y resources between working capital and capital investment, because the return on investment is usually less than the return on capital investment. Therefore, deploying resources on working capital as much as to maintain optimum liquidity position is necessary. Then he sets up the relationship between CCC and minimum liquidity required such that if the CCC lengthens, the minimum liquidity required increases; conversely, that if the CCC shortens, the minimum liquidity required decreases. 2.3 EMPIRICAL EVIDENCE There are numerous empirical research had done on the relationship between WCM and profitability in different countries and industries by using different variable selection for analysis. Some of the research prove that there is a positive relationship between profitability and CCC such as Dell, however there also had research shows that there are negatively related. Richards and Laughlin (1980) concluded that there is a positive relationship between the current and quick ratios and the cash conversion cycle. Besides that, Chowdhury and Amin (2007) also had found positive correlation between working capital and profitability which examine on the pharmaceutical industry in Bangladesh. The study done by Lazaridis and Tryfonidis (2006) using the sample of listed company from Athens Stock Exchange for the period 2001-2004 showed that there is a significant relationship between CCC and profitability, which use gross operating profit as a measure of profitability. It same apply for Ganesan (2007), analysis on the WCM efficiency in telecommunication equipment industry, found that there is negative relationship between working capital and profitability. It can be said that management of working capital have significant impact on profitability and liquidity in different countries and industries. Besides that, an empirical research on Pakistani firms done by Raheman and Nasr, (2007) with a sample of 94 firms listed on Karachi Stock Exchange from period 1999-2004, shows that there is a negative relationship between variables of WCM and debt with profitability of the firm. In addition, a study in Indias hospital for the period 2005-2006 by Christopher and Kamalavalli, (2010) the correlations and regression analysis signifying that working capital component namely current ratio, cash turnover ratio, current assets to operating income and leverage negatively influence profitability of the firms. Lastly, the recent study in 2009 by Uyar (2009), he used the ANOVA and Pearson correlation to analyse the relationship between CCC and return on asset for the firm listed in the Istanbul Stock Exchange for the year 2007. The research showed that there is a significant negative correlation between those two variables. Belt (1985) examined for US companies the trends of cash conversion cycle and its components during the period 1950-1983, for those lines of businesses for which Quarterly Financial Report for Manufacturing, Mining and Trade Corporations (QFR) . He found that retailing and wholesaling firms both had cash conversion cycles shorter than those of manufacturing firms. Mining firms had the shortest cash conversion cycle because this type of industry has the longest payment deferral period of all the major business types. Besley and Meyer (1987) evaluated empirically the interrelationships among the working capital accounts and cash conversion cycle, the firms industry classification and the rate of inflation for US companies for the period 1969-1983. Using the Spearman rank correlation coefficient they found that the cash conversion cycle was most correlated with the average age of inventory and least correlated with the age of spontaneous credit. The conclusion suggests that inventory ac tivity is the most important input to the cash conversion cycle. The age of inventory, the average collection period and the age of spontaneous credit proved to be highly correlated. The cash conversion cycle and its components for the examination period differed from industry to industry, but did not vary from year to year. By looking at the empirical literature on WCM, there is limited research study on the consequences of WCM from Malaysias firm perspectives. Irene Lee (2007) research results show that the Malaysian public listed firms have positive relationship between profitability and working capital to a certain extent. Besides that, the recent study by Mohammad (2010) explores the relation between WCM and firms performance. He measures the relationship by selecting 172 listed companies in Bursa Malaysia for the period 2003-2007. Using the Pearson correlation and multiple regression analysis, he found significant negative associations between working capital variables with firms market value and profitability. Therefore, he highlights the importance of managing working capital requirements to ensure an improvement in firms market value and profitability and must consider the working capital when making companys strategic. It can be seen from the above that many studies have done on the WCM, its component and profitability by using different variable to test those relationship. From those studies, different countries, industries and strategies gives different results, some are positively related between WCM and profitability while some are negatively related. Since the previous studies of WCM in Malaysia, is focusing on the relationship between WCM and profitability. Therefore, in studies will further study on the relation of the both variables by making comparison on the two listed industries of manufacturing and services industries in Malaysia. 3. RESEARCH METHODOLOGY The objective of this study is to look at one parts of financial management which known as WCM with reference to Malaysia. Here, will see the relationship between WCM practices and its effects on profitability of two industries in Malaysia; 16 firms listed on main board of Bursa Malaysia for the period of three years from 2007 to 2009. This section of the study will discuss on the sample selection, variables, and statistical techniques that will be used to examine the relationship between firms WCM and profitability. 3.1 DATA SET SAMPLE In this study secondary data; firms financial statements will be used to examine the research question. Those secondary data will be collected from Bursa Malaysia. A sample of eight companies will be randomly select for both manufacturing and services industries for the period of three years from 2007-2009. The reason for selecting this period was that latest data that will be available for investigation. Manufacturing and services industries are selected for this study because they reveal district difference in term of nature and management of the business. The services industries have a seasonal period and profit as they unable to predict the sales and demand from customers as services industries are people-oriented and people-driven, it is more difficult to effectively automate and control the service costs than in other non-services business sectors. Whereas the inventory for the manufacturing can be stored in the warehouse in order to avoid shortage but for the services industri es unable to stored their capacity (inventory) as it will affect their firms profitability. Therefore, a comparison of the WCM between the two industries will be look at in this study. Primary data will not be used as the data that has not been gathered before and the collection of data is time consuming, and high cost. Besides that, the primary data is not able to measure the firms financial strength and weaknesses. The measurement of firms financial wealth can only be measures and compare by using quantitative data. In addition, this study is to examine the relationship between WCM and profitability which required the quantitative information. 3.2 VARIABES This study had identified key variables that will influence Malaysia firms WCM. Choice of variables is influenced by previous study on WCM and also to further study on the previous study on Belgians WCM by Deloof. CCC will be used as a comprehensive measure of WCM which also used as independent variables. CCC is simply DSO plus DIO  less  DPO. Profitability is measured by gross operating income (GOI), which is defined as sales minus cost of sales, and divided by total assets minus financial assets. Why it was divided by total assets minus financial assets? As from the list of companies that are randomly selected from Bursa Malaysia, their financial asset is a significant part of its total assets, where financial asset include cash and bank balances, stock and securities that can be readily converted into cash. This also the reason why return on assets is not considered as a measure of profitability in this research, as if firm has mainly financial assets in its balance sheet; its operating activities will contribute little to the overall return on its assets. Besides that, sales growth ([this years sales previous years sales]/previous years sales) will be used as control variable in the regression analysis. 3.3 HYPOTHESIS TESTING As the objectives of this study are: Examine the relationship between WCM and profitability. Examine relationship between the DSO, DIO, DPO and firms profitability. Investigate whether the two industries have the same effect on the relations. The following hypothesis will be formulated and attempt to find statistical evidence for the two industries to support those hypothesis. Hypothesis H1: The CCC is negatively related to firms profitability (ROA) higher CCC, lower the firm profitability and vice versa. Hypothesis H2: Shortening the DSO will increased firms profitability. Hypothesis H3: Shortening the DIO will increased firms profitability. Hypothesis H4: Lengthening the DPO will increased firms profitability. 3.4 ANALYSIS USED IN STUDY In this study, two types of analysis are performed; there are descriptive and quantitative analyses. 3.4.1 DESCRIPTIVE ANALYSIS The initial analysis in this study is descriptive statistic, which will provide detailed information of each relevant variable and describe the relevant aspects of cash conversion cycle. All the relevant variables were calculated using balance sheet value, rather than using market value, it is because the firms financial statement did not provided market value on the variables that is required in this study. Besides that, the measurement of profitability GOI could only be based on value in income statement values as there is no way to measure it at so-called market values. In addition, if the market values are used, there will a question on which date the à ¢Ã¢â€š ¬Ã‹Å"market values are referred to. Thus, in this study the book values of the variables in the firms financial statement will be used. 3.4.2 QUANTITATIVE ANALYSIS Two methods had been applied in quantitative analysis. Firstly, correlation analysis is carried out, which specifically to measure the possible linear relationship between different variables under consideration. Secondly, is regression analysis, which is to estimate the relationship between liquidity, profitability and other selected variables. We have used Pooled Ordinary Least Squares and Generalized Least Squares (cross section weights) methods for analysis. We used panel data in a pooled regression, where time-series and cross-sectional observations were combined and estimated. In other words, several cross-sectional units were observed over a period of time in a panel data setting. For this purpose of analysis the E views software was used to analyze financial data and especially in case of pooled data. 4. DATA ANALYSIS AND DISCUSSION The results of the two types of analysis will be discussed below. 4.1 DESCRIPTIVE ANALYSIS Initially, descriptive statistics is the first step analysis in this research. It will provide a useful summary of central tendency; mean and median, and variability such as standard deviation, minimum and maximum. Table 1 and Table 2 presents descriptive statistics for the components of working capital efficiency for eight manufacturing firms and s