The Accounting Process - 1673 Words

AQA AS Accounting ACCN1: Revision notes The accounting process: 1. Source documents: evidence that a financial transaction has taken place. 2. Day books: they are used to record day to day transactions. 3. Ledgers: these are T- accounts that are completed for all transactions. 4. Trial balance: must balance or else a suspense to correct missing figures. 5. Final accounts: Income statement and balance sheet. Source documents: What are source documents? Source documents are evidence that a financial transaction has taken place. Why do we need source documents? To calculate profitability To track movement of products such as inventory purchased from suppliers. To complete the final accounts such as the income statement and†¦show more content†¦Trade payables- This is when the business owner owes money to the supplier for goods purchased and it’s a current liability. Trade receivables- This is when the debtor owes money to business when the debtor is unable to repay the total amount when requested. Working capital- Cash available to run the business on a daily basis. Assets - Liabilities = Capital Questions on source documents and T- accounts 1. Bought Motor Vehicles for  £13,000 by cash. What’s the source document? What are the two T- accounts? 2. Rent and Rates paid via cheque,  £300 What’s the source document? What are the two T- accounts? 3. Lodged cash into bank,  £150 What’s the source document? What are the two T- accounts? Answers 1) Receipt would be th3e source document. 2) Cheque counterfoil would be the source document. 3) Paying slip counterfoil is the source document. Income statement This is a template for the income statement but you have to memorise it for the exam. In an exam they give you a trial balance from that you have to make the income statement. Brackets (around a figure) mean that it’s a negative number. ****** is the cost. Stock means inventory the date tells you if it’s opening or closing inventory. P for purchases, C for carriage in, OI stand for Opening Inventory LPR stands for less purchase returns, LCI stands for less closing inventory LSC stands for less cost ofShow MoreRelatedAccounting Analysis On The Accounting Cycle Process Essay2205 Words   |  9 PagesSummary [1-3 Paragraphs] Accounting relates to all a business does and is seen in every aspect of a business whether it is small or big and general. Whether one is a customer or has a job in a business, when looking into a company and seeing the steps and procedures a business does whether it be externally interacting, or in the books , I can now see how every decision either the customer takes or the business does affects different aspects of the businesses accounts. The accounting topics covered areRead MoreAccounting Techniques For The Manufacturing Process Essay1007 Words   |  5 Pagessystems refer to the accounting techniques used to recognise and record the inputs and outputs values in the manufacturing process (K. Langfield-Smith, Thorne, Hilton, 2009). Job-order costing is about to obtain all costs involved in the basis of individual products. It needs to obtain the exact costs involved in the manufacturing process of a particular unit. This needs to obtain costs incurred for every unit such as materials costs, labour, and manufacturing overhead. Process costing refers toRead MoreThe Costing Method Is An Accounting Process1134 Words   |  5 PagesMethod is an accounting process that assesses itemized input costs of production and fixed costs to determine overall costs of production. (Kucera, n.d.) 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There is however, not one securely agreedRead MoreManagement Accounting : The Process Of Producing Management1667 Words   |  7 PagesManagement accounting is the process of producing management reports and accounts which provide accurate and timely information for the use of internal parties within an organisation, such as departmental managers or chief executive officers. The information collected and produced include financial aspects such as amount of cash in hand, capital, liabilities, recent sales revenues, cost of production and also non-financial aspects such as employee’s performances or efficiency of production. In thisRead MoreAccounting Is The Process Of Identifying, Recording And Communicating Information807 Words   |  4 PagesAccounting is the process of identifying, recording and communicating information to interested users. Financial Statements, such as the balance sheets, income statements, etc. must follow GAAP or United Stated GAAP. GAAP or Generally Accepted Accounting Principles is a set of principles that gives accountants guidance when performing the accounting cycle. The accounting cycle is a lengthy process. The eight steps in the accounting cycle are as follows: identify the transactions, journalize the transactionsRead MoreManagerial Accounting : Financial Data Fo r Internal Process1215 Words   |  5 PagesManagerial accounting provides financial data for internal process which mainly uses by managers, executives and other governing boards of the organization (Buchbinder Shanks, 2012, p. 184). Using the managerial accounting data, I would need to utilize a few department and clinical personnel to get better understanding in analyzing the operating budget process of Happy Town Neurology. In order to start budgeting process I would refer some of the departments and personnel such as, account receivableRead MoreAnalysis of Wal-Mart Managerial Accounting Process2124 Words   |  9 PagesAnalysis of Wal-Mart Managerial Accounting Process Table of Contents Company Description of Wal-Mart Page 3 Budgeting Process Page 3 Management Accounting System Page 4 Costing System Page 5 Capital Decision Making Process Page 6 Capital Structure Page 6 Project Conclusion Page 7 Information Sources and Methodology Page 8 References Page 8 Company Description For the final project of managing finance Wal-Mart StoresRead MoreIntroduction, Review of Accounting Process and Financial Statements2050 Words   |  9 PagesIntroduction, Review of Accounting Process and Financial Statements Abstract This paper explains different types of accounting phrases and how they directly affect the accounting field. Phrases which are included and defined in the paper are Generally Accepted Accounting Principles, Contra-Asset Accounts, Historical Cost, Accrual Basis vs. Cash Basis Accounting, and Accounting Standards Codification. Definitions and examples of these terms are included as well as explanations of how they areRead MoreThe Purpose of Internal Controls in the Accounting Process Essay948 Words   |  4 PagesInternal control is the specific procedures used within a company to safeguard its assets from employee theft, robbery, and unauthorized use and enhanc the accuracy and reliability of its accounting records by making fewer mistakes (Weygandt, Kimmel, and Kieso, 2008). There are six principles that are used throughout the industry as standards for such control. They are: 1. Establishment of responsibility 2. Segregation of duties 3. Documentation procedures 4. Physical, mechanical, and electronic

The Characters Of Foils In William Shakespeares Hamlet

Foils In Hamlet In fiction, a foil is a character whom contrasts with another character in the story, typically the protagonist. The foil is able to highlight certain aspects of their opposing character. A foil can differ dramatically or be extremely similar but tends to have key qualities that distinguish the two apart from each other. When an author uses a foil in literature they are emphasizing not only strengths and weaknesses the main character poses, but also understanding the obvious as well as hidden aspects of their lives. In the Shakespeares tragedy, Hamlet, William Shakespeares applies foils to explore morality and social ethics and how to answer the overall question of the tragedy, what it means to be a human and†¦show more content†¦The two individuals go about this differently. Unlike Hamlet, Laertes is eager with motivation and wants to find answers right away. However, his personality is extremely superficial, while Hamlet’s is authentic. Laertes and Hamlet bot h pose similarities towards showing their anger. It can be very reckless and impulsive, causing them to bring up more problems than they already had before. The news about Laertes father brought exasperation to Laertes. He quickly jumped to conclusions and pinned the act on Claudius, â€Å"That drop of blood that’s calm proclaims me bastard, cries cuckold to my father, brands the harlot even here, between the chaste unsmirch’d brows of my true mother.† (4.5 115-118) Laertes wanted answers and he wanted them now or else he was going to reverse the act back and kill Claudius. Hamlet also went the same route after he found out Claudius killed his father, but in a more timely manner with a lot of background planning. He turned his anger into actions and attempted to kill Claudius, however he stabbed through the curtain and killed Polonius instead. Another foil in this tragedy is Ophelia, Hamlet’s â€Å"better half†. While Laeretes was a foil t o Hamlet between their actions after their fathers deaths, Ophelia and Hamlet contrasted each other emotionally after their fathers deaths, Ophelia is able to give the audience a deeper look into Hamlet’s heart and how he views certain aspects of his life. Revenge and death is how the readerShow MoreRelatedThe Foils of Hamlet Essay646 Words   |  3 PagesA foil is a minor character in a literary work that compliments the main character through similarities and differences in personality and plot. In William Shakespeares play Hamlet, the main character, Hamlet, has three major foils. These foils are his close friend Horatio, Fortinbras, Prince of Norway, and the brother of his love, Laertes. These three characters contradict and enhance Hamlets major characteristics. Hamlets friend Horatio is a foil for him because he brings out the revengeRead More Foils as Reflections of Hamlet Essay1042 Words   |  5 Pages     Ã‚   Foils are minor characters, that through similarities and differences, set off or accent the main characters of a play. There is a strong connection between the foils in a play and ones final perception of the main characters. In William Shakespeares Hamlet, Prince of Denmark, there is a continuous shifting of the main characters emotions. These emotions range anywhere from madness and rage to grief and sorrow. In Hamlet there is a foil that represents each emotion and behavior that isRead More Ophelia as a Foil to Shakespeares Hamlet Essay875 Words   |  4 PagesOphelia as a Foil to Hamlet  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚      In Shakespeares tragedy, Hamlet, the audience finds a docile, manipulated, scolded, victimized young lady named Ophelia. Ophelia is a foil to Hamlet. Plays have foils to help the audience better understand the more important characters in the play.   The character of Ophelia is necessary so that the audience will give Hamlet a chance to get over his madness and follow his heart.        Ã‚  Ã‚  Ã‚   Similarities are an important part of being a foil. One similarityRead More The Character Horatio in Shakespeares Hamlet Essay1248 Words   |  5 PagesThe Character Horatio in Shakespeares Hamlet In the play Hamlet, by William Shakespeare, the confidant Horatio is created to serve a number of different purposes. Horatio is a flat character. He is a loyal, obedient, and trustworthy companion to Hamlet. His character does not undergo any significant transformation throughout the play, except that he serves as a witness of the death of Hamlet, Claudius, and Gertrude. Horatios role in the play seems to be as a utilitarian character that ShakespeareRead MoreFoils Of William Shakespeare s Hamlet Essay1130 Words   |  5 PagesA foil is a character who acts as the opposite to another character and consequently highlights important features of that character’s personality . A foil character often contrasts with the features of another character. In Shakespeare’s Hamlet , there are obvious foils for the main character, Hamlet. These foils include Horatio, Fortinbras, Claudius, and Laertes. William Shakespeare’s Hamlet, is a an excellent demonstration of character foils. A foil is also known as a literary device that revealsRead More The Foils of Laertes and Fortinbras in Hamlet Essay1031 Words   |  5 PagesThe Foils of Laertes and Fortinbras in Hamlet  Ã‚        Ã‚  Ã‚   William Shakespeare wrote the classic play, Hamlet in the sixteenth century.   Hamlet would be a very difficult play to understand without the masterful use of foils.   A foil is a minor character in a literary work that compliments the main character through similarities and differences in personality.   The audience can identify similarities and differences between any of the characters and Hamlet, however, there are two characters thatRead MoreCause and Effect Hamlet Essay902 Words   |  4 PagesCause and Effect Hamlet Essay William Shakespeare, arguably the greatest language in the English language and England’s national poet, has written numerous histories, tragedies, comedies and poems. Throughout his plays, his use of dramatic irony, immaculate word choice and wording, and his vast imagination has made him a successful playwright even in his time. Shakespeare’s scripts for his theatrical company, needed to pertain to the needs and fascinations of the Elizabethan audience. It is safeRead MoreOphelia in William Shakespeares Hamlet Essay1488 Words   |  6 PagesOphelia in William Shakespeares Hamlet Shakespeares Hamlet is a tale of mortal revenge, lost souls, love and infidelity, and murder in the royal family. Hamlet, his father having recently died, is mourning the marriage of his mother to his uncle. When his fathers ghost appears to him and tells him he must avenge the former kings spirit so that it may pass on to Heaven, he decides to put on an antic disposition so that no one will know what he is thinking. As time goes by, he cannot moveRead MoreA Compare/Contrast of Hamlet through his foils - Laertes, Fortinbras and Horatio.1702 Words   |  7 PagesIt is without doubt that William Shakespeare has created many unique, thought - provoking characters. Hamlet is by far Shakespeares most compelling character. In Shakespeares play Hamlet, various character traits, exhibited by Hamlet, can be seen through his foils. Similarities with Hamlet and Horatios education, as well as their levels, can be drawn. However, Hamlets character is in constant change and even philosophical. F ortinbras, without question encompasses many of Hamlets qualities. TheyRead MoreThe Foil Of Shakespeare s The Tragedy Of Hamlet 901 Words   |  4 PagesIn literature, the foil is a person whose traits, by differences and similarities, help to emphasize and enhance the qualities and actions of the protagonist. Many characters, such as King Claudius, Fortinbras, and Laertes, in William Shakespeare’s â€Å"The Tragedy of Hamlet, Prince of Denmark† qualify as foils for Hamlet, the protagonist. However, Laertes is the most appropriate foil for Hamlet. Laertes’ similarities and differences with Hamlet along with his actions and traits allow him to be an effective

Sample Islamic Banking Dissertation Free Essays

string(79) " to take part in the business and decide on sharing profits as well as losses\." The impact of risk management on profitability in Islamic banks against conventional banks Introduction 1.1) Background of the study Since 1970s Islamic banks is developing on the feet and leg. The number of Islamic financial institutions has risen to over three hundred institutions in more than seventy five country all over the world. We will write a custom essay sample on Sample Islamic Banking Dissertation or any similar topic only for you Order Now One fundamental aspect of this fast growth is that most of Muslims who are a quarter of the population on earth want to follow Sharia principles. Another fundamental aspect is the growth of oil wealth with high demand for appropriate investments in the Gulf region. The aim of Islamic financial products is investors who want to follow Sharia (Islamic low). Sharia put forward the guiding principles for all aspects of human being in order to spread the concept of justice in society. Therefore, this includes the economic aspect. Sharia banned Riba which is the interest that comes from loan money and Gharar which is contractual ambiguity. Furthermore, Sharia also banned investing in business that providing services and goods which is forbidden like selling alcohol and gambling. 1.2) Financial Products in Islamic banks Economists who are interested in Islamic banking started to suggest changes in contracts in order to be suitable for the Islamic financial system. These changes in contracts can be classified into four broad types: first, transactional contracts which deal with sale, exchange and trade of services and goods. Second, financing contracts which suggest different ways due to create and extend credit, smooth the progress of financing the transactional contract, and afford channels between investors and entrepreneurs for capital formation and resource recruitment. Third, intermediation contracts which offer agents with group of tools to perform financial intermediation besides providing fee-based services for economics activities. Finally, social welfare contracts which promote the welfare for less advantaged people by contracts between society and individuals. Transactional contracts Simply, there are two exchange contracts, one is sale of an asset and another is sale of rights to utilise an asset. First of all, contracts of exchange and sale apprehensive with trading besides selling and buying activities considering all their derivatives such as sale on order and deferred payment sale. Exchange contracts contain a variety of contracts which are similar to each other in terms of the outcome but are different from one another in terms of the exact legal requirements, obligations, rights and liabilities involved in or associated to them. Here the most popular contracts used by Islamic banks: Bay’ al-Muajjil is a contract that allows for sale a product on the basis of deferred payment in instalments or in lump sum payment. The two parties; sellers and buyers agreed about the price of the product at the sale time and cannot contain any charges for deferring payments[1]. Bay’ al-Salam is a contract between two parties where agreed that buyers have to pay the sellers full negotiated price for specific product that the sellers promise to deliver at particular date in the future. Ijarah means leasing and this contract is similar to sale contract but the different is that Ijarah is more sale of the usufruct for particular period of time rather than sale of a tangible asset. Istisna is a contract that has two parties; one is the manufacturer and another buyer who request manufacturing or construction of an asset or property with specific features and they should agree on fixing price. The transaction of Istisna begins once the manufacturer takes on manufacturing the asset for the buyer. Financing contracts In the world of commercial financing and more particularly, project financing, certain methods are more commonly encountered than others such as Murabaha, Mudaraba and Musharaka. The Murabaha is a contract between the bank and its customer for the sale of goods at a price that includes an agreed profit margin, either a percentage of the purchase price or a lump sum. The bank will purchase the goods as requested by its customer and will sell them to the customer with fixed profit gain usually be over time by instalments. The Mudaraba is a profit-loss sharing contract, with one party providing the capital and the other party providing its expertise to invest the capital and manage the investment project. Profits percentage is agreed and fixed at the beginning and is a way of paying the work of people that did not invest in the project. In case of losses, there is a loss of time from the part that brought their expertise and a loss of capital for the bank. The Musharaka involves a partnership between two parties who both provide capital towards the financing of new or established projects. Both parties share the profits on a pre-agreed ratio, allowing managerial skills to be remunerated, with losses being shared on the basis of equity participation. One or both parties can undertake management of the project. However, financial products can be provided by conventional banks using specific distribution channels such as window, branch, and subsidiary. Window is operating and accounting that separated from the conventional operations such as HSBC amanah, and Lloyds. Whereas, branch similar to the window but using separate branches instead of the conventional branch network. Subsidiary, normally prepare separate annual reports and reports such as Citi Islamic Investment Bank. 1.3)Risk Management Risk management is recognising and evaluating the risks then managing the sources economically in order to minimise, observe and control the probability or effect of the unpredictable events or maximise the realisation of opportunities. Efficient risk management capability is important to allow banks to be in good position in the market by using their capital professionally. This paper discusses the way that Islamic banks faced and managed the risks different from conventional banks. The specific risks analyzed include market risk, credit risk, operational risk, liquidity risk, Sharia low risk, concentration risk and reputation risk. 1.4)Problem Statement Interest is prohibited in Islamic Sharia low which obliged Islamic banks to take part in the business and decide on sharing profits as well as losses. You read "Sample Islamic Banking Dissertation" in category "Free Dissertation Samples" Furthermore, Islamic banks might seem faced more risk in view of the fact that Islamic banks can not charge a fixed return not linked with their customer’s operations. Given that Islamic banks will have more unstable returns on their assets since they have to be the owner of the asset before lease or sale it to the customers. This paper investigates whether Islamic banks are riskier than conventional banks or not and that by looking at the profit compatibility in Islamic banks compared with conventional banks and this relationship is evaluated with respect to the risk management procedures. Gulf Cooperation Council 3.1)Background The Gulf Cooperation Council (GCC) was established in 1981 and located in middle east. GCC contains six member states with total population of 34 million and these countries are Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates and Oman. The objective of GCC is to coordinate policies of various political, economic and social matters among its member countries in order to have similar regulations (Faisal 2005). GCC countries are wealthy due to the large oil reserve which is the largest in the world. In addition to, these countries economy structure rely on oil trading and governments also supporting the local investments in order to reduce the importance role of oil. 3.2)Banking in GCC and Financial Market GCC countries established their central banks between 1950’s and 1970’s and linked them to the USD. GCC countries do not have requirement of local ownership in the foreign banks accept Saudi banking system which lets a maximum of 40% ownership. However, foreign banks have to follow the central banks policy and regulations. Compared to developed countries, the financial market are new in GCC and foreign investments have just been allowed to trade in the stock market in recent years. Moreover, it is common to finance GCC governments projects by providing government bonds and T-bills. Research Methodology 4.1) The Aim This paper introduces the definite risk management procedures of Islamic banks and investigates empirical data to observe whether these procedures are sufficient or not. There will be special focus in this paper profitability ratio in the Gulf banks. The data has been collected to estimate the profitability ratio is the return on equity ROE and the return on asset ROA for Islamic and conventional banks. 4.2) The Data There are 100 banks have been collected from bankScope. The study of profitability compares 37 Islamic banks to 63 conventional banks in the Gulf between 2002 and 2008. However, the number of banks is not the same in the whole period due to the fact that the banks have established in different time during the period. 4.3) The Model ROE and ROA have been used as dependent variables in two models; one model to distinguish among years and another to distinguish among the countries in the Gulf. Each model includes a dummy to distinguish between the Islamic and conventional banks. The dummy gives the value one if the bank is Islamic and gives zero if it is conventional. The model which is for the year has seven dummies, one for each year. For example, if the ROE or ROA is in 2008 then the dummy which is for the year 2008 gives the value one and the other dummies give zero and the same for all the other dummies. This model helps to observe the changes during the period from 2002 until 2008. Where is the coefficient of the year 2002 but it has been used as constant in order to compare it to all the other year to see whether there is an increase or decrease in following years or not. However, there are six dummies in the model which distinguish among the countries; there is one for each country. So, the dummy of Saudi gives only Saudi banks the value one and the other dummies give zero and the same in all the dummies. 4.4) The Dependents Variable 4.4.1) Return on Equity Return on equity (ROE) specifies the profit that the bank earns from investing shareholders money. Additionally, it shows the efficient of the bank management using shareholders investment. ROE calculated by net income divided by equity shareholders. 4.4.2) Return on Assets Return on Assets (ROA) is useful indicator of the bank efficient management on create profits from each monetary unit of investment. ROA is calculated by net income divided by total assets. 4.5) Hypothesis Testing The aim of the hypothesis is to test the efficiency of risk management procedures result in commercial viability of banking activities. Therefore, ROE and ROA for Islamic and conventional banks have been collected in order to see what is the different between the Islamic and conventional banks in the profitability. Then, calculating the variance for ROE and ROA of each bank in order to see whether Islamic banks have the same risk that conventional banks have or different. Findings and Results There is two steps to analyse the differences between the Islamic and conventional banks. The first step is to analyse the profitability for Islamic and conventional banks using ROE and ROA in the period between 2002 and 2008. Then, look at the differences among the Gulf countries in the same period. The second step is to analyse the risk for Islamic and conventional banks by calculating the variance of ROE and ROA in the period between 2002 and 2008 for each of the 100 banks then observe the differences among the Gulf countries. 6.1)The Different in the Profitability: First, the ROE model for the years: Table 1 Prob. (t-test) constant 15.07338 (1.351064) 0 Islamic -2.70161 (0.953205) 0.0041 Year08 -0.6461 (1.734848) 0.0166 Year07 5.252066 (1.71731) 0.3614 Year06 4.803732 (1.743603) 0.0115 Year05 6.359871 (1.774068) 0.0365 Year04 1.837861 (1.848711) 0 Year03 -0.58218 (1.868266) 0.0041 R-squared 0.07971 Mean dependent var 16.85381 Adjusted R-squared 0.067439 S.D. dependent var 10.63519 Sum squared resid 55376.72 Prob(F-statistic) 0.000097 The coefficient of the Islamic dummy gives negative sign and t-test shows that the Islamic dummy is significant which means that the ROE in the conventional banks are higher than in the Islamic banks by 2.70%. The relationship between deposits and the ROE explained by Bashir and Hassan (2004) and Faisel (2005), helps demonstrate the results above, which is positive for conventional banks and negative for Islamic banks. Additionally, Islamic banks do not have variety of financial instruments in the short term like the conventional banks which force them to have high liquidity. The constant coefficient representing the year 2002 where the ROE was 15.07%. By making the coefficient of the year 2002 constant we can just concentrating on the changes during the period from 2003 to 2008. The coefficients of the year 2003 show that ROE in most of Islamic and conventional banks decreased by 0.58% and one possible explanation for this fall is that banks were cautious of the war in Iraq. Then, started to recover in 2004 – after the war has finished – with 1.83% and this is due to the increase in the oil price and the stock markets in the Gulf. The coefficients of the year 2005 and 2006 show that there were high increase in the ROE (6.35% in 2005 and 4.80% in 2006) and they are significant statistically under t-test. This is refer to the increase in the governments spending in the Gulf due to the increase in the oil price which is reflect in ROE of the banks and the stock markets in the Gulf. The coefficients of the year 2007 shows that there was an increase by 5.25% in ROE but this coefficient is insignificant under t-test and this gives an idea about the changes in the income of banks which appear clearly in 2008. The coefficients of the year 2008 show the decrease in the ROE due to the fact that Gulf banks activities have been affected by the financial crisis in 2008. This also gives an idea about the banks investments outside the Gulf. The period has been separated to two sub-periods in order to examine the robustness of the Islamic dummy and to check whether the results would be the same or not. One of the sub-periods starts from 2002 to 2005 and another from 2006 to 2008: Table 2 Prob. (t-test) constant 18.25633 (0.737579) 0 Islamic -2.788691 (0.967584) 0.0041 Year05 3.20889 (1.335078) 0.0166 Year04 -1.319631 (1.444487) 0.3614 Year03 -3.744061 (1.475989) 0.0115 Year02 -3.165236 (1.509765) 0.0365 R-squared 0.047673 Mean dependent var 16.85381 Adjusted R-squared 0.038637 S.D. dependent var 10.63519 Sum squared resid 57304.5 Prob(F-statistic) 0.000097 Table 3 Prob. (t-test) constant 17.1756 (0.696724) 0 Islamic -2.31887 (0.964229) 0.0165 Year08 -2.90314 (1.283861) 0.0241 Year07 3.005798 (1.260971) 0.0175 Year06 2.559091 (1.297937) 0.0492 R-squared 0.044414 Mean dependent var 16.85381 Adjusted R-squared 0.037174 S.D. dependent var 10.63519 Sum squared resid 57500.59 Prob(F-statistic) 0.000079 The tables above proved that the coefficients of Islamic dummy in sub-periods are almost the same as in whole period which means it is robust. Furthermore, the other coefficients in the sub-periods give the same result as in whole periods and there is no changes in R-squared and adjusted R- squared or in the tests. Second, the ROE model for the countries[2]: The test results are similar to the one for years and the coefficient of the Islamic dummy almost the same. The range of ROE of Gulf banks is between 14.70% and 19.34%. Kuwaiti banks had the highest ROE (19.34%) followed by Qatari banks with 19.16% Then Saudi banks with 18.33%. Afterwards, Emirates banks had 16.91% and we can see clearly the gap between Saudi and Emirates banks in ROE. Bahrain came next with 15.37% then Omani banks which got the lowest ROE in the Gulf by 14.70%. The t-test shows that all coefficient are significant. Table 4 Prob. (t-test) Islamic -2.47002 (1.052489) 0.0193 Saudi 18.33551 (1.254086) 0 Oman 14.70265 (1.874979) 0 Qatar 19.16886 (1.441722) 0 Kuwait 19.34724 (1.445981) 0 Emirates 16.91736 (0.917708) 0 Bahrain 15.37403 (1.039737) 0 R-squared -0.04485 Mean dependent var 16.85381 Adjusted R-squared -0.05677 S.D. dependent var 10.63519 Sum squared resid 62872.03 Durbin-Watson stat 1.562729 This differences between the Gulf countries is due to the different policy they have used. For example, we can see that Saudi banks did not affected by the financial crisis like Emirates and Bahraini banks. This because of the close economy policy that Saudi central bank use whereas Emirates and Bahraini central bank use open economy policy. Furthermore, the Saudi government spending was very high comparing with the other Gulf countries. Third, the ROA model for years: Table 5 Prob. (t-test) constant 1.983087 (0.548057) 0.0003 Islamic 2.241809 (0.389) 0 Year08 -0.92146 (0.699029) 0.188 Year07 1.788613 (0.695931) 0.0104 Year06 1.894682 (0.715132) 0.0083 Year05 2.062882 (0.723348) 0.0045 Year04 0.922792 (0.745526) 0.2163 Year03 0.148001 (0.750172) 0.8437 R-squared 0.121093 Mean dependent var 3.588051 Adjusted R-squared 0.109825 S.D. dependent var 4.492388 Sum squared resid 9808.95 Prob(F-statistic) 0 The coefficient of the Islamic dummy gives positive sign and t-test shows that the Islamic dummy is significant which means that the ROA in the Islamic banks are higher than in the conventional banks by 2.24%. This is can be explained by the relation between total asset and profitability, the relation between total equity and profitability, and the relation between total expenses and profitability in the Gulf banks that figured by Faisal (2005) which is negative for conventional banks and positive for Islamic banks. So, when total expenses, capitalisation, and size of a bank increase the profitability increase in if it is an Islamic bank and decrease if it is conventional bank. In other words, Islamic instruments such as Istisna, Ijarah, Mudaraba and Musharaka accounted as assets which means the increase in these types of financing lead to higher ROA. The year 2002 used as constant coefficients in order to compare 2002 among the whole period and focusing on the changes in the ROA. The coefficients of the year 2003 and 2004 show slight increase in the ROA in the Gulf by 0.14% and 0.92 respectively, but they are insignificant. Then, ROA increased rapidly in 2005, 2006 and 2007 by 2.06%, 1.89 and 1.78% and became statistically significant. This increase due to the rise in the oil prices. However, the coefficient of the year 2008 shows decrease in ROA by -0.92% in the Gulf banks because of the financial crisis. The same technique of separating to two sub-periods has been used in order to examine the robustness of the Islamic dummy. One of the sub-periods starts from 2002 to 2005 and another from 2006 to 2008: Table 6 Prob. (t-test) constant 2.874444 (0.300776) 0 Islamic 2.242753 (0.397574) 0 Year05 1.171183 (0.549906) 0.0336 Year04 0.031175 (0.584339) 0.9575 Year03 -0.74357 (0.593025) 0.2104 Year02 -0.891543 (0.616993) 0.149 R-squared 0.078455 Mean dependent var 3.588051 Adjusted R-squared 0.070047 S.D. dependent var 4.492388 Sum squared resid 10284.8 Prob(F-statistic) 0 Table 7 Prob. (t-test) constant 2.81072 (0.277333) 0 Islamic 2.366673 (0.389844) 0 Year08 -1.79641 (0.509244) 0.0005 Year07 0.914638 (0.505101) 0.0707 Year06 1.018571 (0.531234) 0.0557 R-squared 0.103778 Mean dependent var 3.588051 Adjusted R-squared 0.097249 S.D. dependent var 4.492388 Sum squared resid 10002.19 Prob(F-statistic) 0 The tables above proved that the coefficients of Islamic dummy in sub-periods are approximately the same as in whole period which means it is robust. Furthermore, the other coefficients in the sub-periods give the same result as in whole periods and there is no changes in R-squared and adjusted R- squared or in the tests. Fourth, the ROE model for the countries: the coefficient of the Islamic dummy almost the same. The range of ROE of Gulf banks is between 3.86% and 2.04%. Bahraini banks had the highest ROA (3.86%) followed by Qatari banks with 3.02% Then Kuwaiti banks with 2.73%. Afterwards, Emirates banks had 2.60% then Saudi came next with 2.33%. Omani banks had the lowest ROA in the Gulf by 2.04%. The t-test shows that all coefficient are significant. Table 8 Prob. (t-test) Islamic 2.029741 (0.415863) 0 Saudi 2.33044 (0.500783) 0 Oman 2.044595 (0.712912) 0.0043 Qatar 3.022825 (0.566836) 0 Kuwait 2.73999 (0.556167) 0 Emirates 2.601632 (0.357261) 0 Bahrain 3.862964 (0.409867) 0 R-squared 0.078317 Mean dependent var 3.588051 Adjusted R-squared 0.068207 S.D. dependent var 4.492388 Sum squared resid 10286.34 Durbin-Watson stat 0.976295 The table above shows that there are no significant differences between the banks in Gulf countries in ROA. Moreover, the different between Bahraini banks which were the highest and Omani banks which were the lowest is less than 2%. 4.2.The Different in the Risk Analysing the profitability is not enough to say whether the Islamic or the conventional banks have effective risk management procedures or not without analysing the risk. The variance for each bank during the period have been calculated in order to see the whether Islamic and conventional banks have the same or different risk. First: calculating the variance of ROE for Islamic and conventional banks: Table 9 Prob. (t-test) Islamic -42.4969 (17.63172) 0.018 Saudi 93.67778 (23.59077) 0.0001 Oman 34.00545 (32.77482) 0.3022 Qatar 65.8434 (26.34869) 0.0143 Kuwait 99.83715 (23.19668) 0 Emirates 67.42153 (16.44457) 0.0001 Bahrain 81.53135 (16.80893) 0 R-squared 0.08429 Mean dependent var 62.20235 Adjusted R-squared 0.023913 S.D. dependent var 81.25905 Sum squared resid 586507.1 Durbin-Watson stat 2.087805 The sign of the coefficient of Islamic dummy is negative which means that Islamic banks have less risk in ROE than conventional banks in the Gulf. This is because of the PLS system that Islamic banks use which allow them to share the profit and losses with the depositors which decrease the risk Islamic bank taking. This findings agree with the relation between deposits to assets and ROE that explained by Bashir and Hassan (2004), and Faisel (2005) which is positive in conventional banks and negative in Islamic banks. Moreover, the findings illustrated why conventional banks receive higher ROE than Islamic banks in the Gulf. From the table above it is observed, Kuwaiti banks were the most risky banks in the Gulf followed by Saudi, then Bahraini banks. The banks, however, had high risk due to the massive changes in the ROE that they received every year during the period. This indicates that their ROE was instable and more risky during the period. Comparatively, Emirates and Qatari banks faced less risk then the banks in the previously mentioned banks. Among all the banks, mentioned in the above table, Omani banks were the most stable banks and, thus, faced the least risk. However, the t-test result, found for Oman is not statistically significant. Second: calculating the variance of ROA for Islamic and conventional banks: The positive sign of the coefficient of Islamic dummy show that Islamic banks have higher risk in ROA than conventional banks in the Gulf. This is due to the fact that Istisna, Ijarah, Mudaraba and Musharaka finance have high risk because banks are in ownership and they share the risk as well as the profit and these types of finance appear as assets in the balance sheet. The table below shows that Kuwaiti banks were the most risky banks in the Gulf then Bahraini banks came next. After that, Emirates and Omani banks came next with much less risk then the previously mentioned banks. The gap between Bahraini and Emirates is enormous which gives us an idea about the instability in the ROA that Kuwaiti and Bahraini banks received. In contrast, Among all the countries, mentioned in the above table, Saudi and Qatari banks faced the least risk due to the stability they have in the ROA. However, the results of all previously mentioned banks are insignificant. Table 10 Prob. (t-test) Islamic 21.57855 (10.44977) 0.0417 Saudi -3.97466 (14.14604) 0.7794 Oman 1.989429 (19.66142) 0.9196 Qatar -6.86578 (15.79286) 0.6648 Kuwait 24.89889 (13.62678) 0.0709 Emirates 2.439974 (9.855151) 0.805 Bahrain 15.46982 (10.01932) 0.126 R-squared 0.109403 Mean dependent var 16.10476 Adjusted R-squared 0.051945 S.D. dependent var 49.46225 Sum squared resid 215706.9 Durbin-Watson stat 1.759712 The reason behind the high risk in Bahraini banks is due to the fact that Bahrain is the fastest growing financial centre in 2008 according to the City of London’s Global Financial Centres Index. The high increase means that there is great changes every year in the ROE and ROA. However, most of Kuwaiti banks are international and have presences in many countries, such as the national banks of Kuwait who has more than 12 presence all over the world, which effected by the financial crisis. Emirates attract the investors all over the world by the open economy policy. Therefore, Emirates banks have been effected by financial crisis but less than Kuwait due to that Emirates banks focusing more in financing investments rather than housing. In contrast, Saudi, Qatar and Oman are less free market and open economy than previously mentioned countries. Consequently, Saudi, Qatar and Oman are much less effected by the international economy than Bahrain, Kuwait and Emirates. Conclusion 5.1) The different between Islamic and conventional risk management procedures This paper concentrating on studying efficiency of the risk management procedures for conventional and Islamic banks result in commercial viability of banking activities in the Gulf. The paper started by analysing the profitability for conventional and Islamic banks using ROA and ROE in the Gulf between 2002 and 2008. Then, analyse the risk in conventional and Islamic banks by calculating the variance for ROA and ROE between 2002 and 2008. The results show that Islamic banks have higher profit in ROA than the conventional banks and by calculating the variance for ROA it has been noticed that Islamic banks have higher risk in ROA than conventional banks. This is due to the fact that Istisna, Ijarah, Mudaraba and Musharaka accounted as assets which gives positive relation between total asset and profitability. Moreover, that Istisna, Ijarah, Mudaraba and Musharaka finance have high risk because banks are sharing the risk as well as the profit and Islamic banks have to balance the management and control rights in order to be in save. However, Islamic banks have lower profit in ROE than the conventional banks. This is due to the relationship between deposits and the ROE which is positive for conventional banks and negative for Islamic banks. Additionally, Islamic banks do not have variety of financial instruments in the short term like the conventional banks which force them to have high liquidity. On the other hand, is Islamic banks have less risk in ROE than conventional banks because of the PLS system that Islamic banks use which. The findings shows that both Islamic and conventional banks in the Gulf have adequate risk management procedures. Furthermore, both Islamic and conventional banks are profitable, however, the ROA and ROE is different Islamic and conventional banks. This different is due to the different risk they face. 5.2)The different between the Gulf countries Qatari banks seems to had the best economic environment because they were the most profitable and the least risky. Then, Saudi and Emirates banks came next. Saudi banks had higher profitability in ROE and less risk in ROA than Emirates banks. Whereas, Emirates banks have higher profitability in ROA and less risk in ROE than Saudi banks. Bahraini and Kuwaiti banks had very high profitability and risk in both ROA and ROE comparing with banks from other countries. However, Omani banks have very low risk and profitability comparing with banks from other countries. The reason behind the difference between the Gulf countries is due to the difference policies they are using, whether they have international banks and if they effected by the financial crisis or not. 5.3)The different between the year The profitability had the highest increase in the year 2005 and this is due to the increase in the financial market in the Gulf, oil prices and government spending. In contrast, profitability had increased two times; one in the year 2003 because of the war in Iraq and another in the year 2008 due to the financial crisis. [1] Iqbal Z. Mirakhor A., (2007), â€Å"An introduction to Islamic finance†, John Wiley Sons, Asia. [2] There is no Islamic banks in Oman but it has been included because it is one of the Gulf countries. 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Questions: 1.Consider the three key forces driving the New Marketing realities. How are they likely to change in the future? What other major trends or forces might affect Marketing? 2.What brands and products do you feel successfully speak to you and effectively target your age group? Why? Which ones do not? What could they do better? Answers: 1.New Marketing Realities In todays business environment, marketplace is continuously changing. Hence, the marketers should join and respond to several important developments, which are occurring in the market. Small and large businesses are impacted by the internal and external environment factors. These environmental factors that the businesses have no control over are taken into consideration while making marketing decisions for creating a correct representation of where the organization stands in marketplace. Present marketplace is in more constant situation of changes than in past decades. With this transformation, there will be some new challenges, opportunities and development of new models and frameworks. The term new market realities state the changes during last 10 years and it is given by Kotler and Keller. The New Marketing Realities is the computerized improvements, creative and innovative and categorized small scale media and markets, which the service the local influent targeted, market nets[1] . There are various forces, which are driving the new marketing realities. These forces have created new marketing opportunities, behaviors and challenges for the market and its people. Due to these forces, the market place today is very different, because it has resulted several new company and consumer capabilities. It has transformed the marketing management significantly. To deal with the effect of this, the organizations look for the right balance of effective methods with discovering new and innovative approaches to attain the marketing excellence[2]. Figure 1: New Market Realities Three of these forces, which are driving new marketing realities, are stated below; Globalization Globalization is a primary process of integration and interaction among companies, people and governments of different countries. It is a force or process that is driven by global trade and investment and supported by advanced information technology. In todays marketplace, several organizations have become dissatisfied with the sales and revenues on domestic level. So, they are making efforts to expand their business in international markets. There are various factors, like; technology advances in the shipping, transportation and communication, which have made it easier for these organizations to expand business and market in, and customers to purchase from, almost any nation all over the world[3]. Traveling to international countries and markets has grown continuously, because most of the people work and operate their business in other countries. Figure 2: Forces driving New Marketing Realities It is creating different market realities and company capabilities. Globalization is the major force that is providing various new opportunities to the companies, like; business expansion, partnership with international organizations etc. It will improve the market geographical reach for promoting the products and services worldwide. Apart from these opportunities, the companies may face some challenges and risks, like; legal risks, political risks, entry barriers etc. Technology Development of technology is one of the major forces that are driving new realities in todays market. There is a significant revolution in the digital technology. This revolution in technology has developed an Information Era, which commits to direct to more precise levels of manufacturing and production, more targeted interactions and more appropriate and competitive pricing. In the terms of marketing, technology is defined as a medium that assists the marketers circulate his/her deliverables to the end users. The best result of bringing in technology has been innovation[4]. This technology has been vibrant throughout right from the television advertisement to internet marketing. Technology is the major factor that assists the organization and marketers in generating new company capabilities like; they can utilize the internet as a most strong channel for information and sales. They can gather the information about the customers, prospects, markets and competitors. Furthermore, thes e marketers can tap into social media to intensify their brand message. Social Responsibility In todays business environment, social responsibility is another force that is driving new marketing realities, because people are becoming very concerned about the welfare of environment and themselves. So, the organization needs to include social responsibility in their practices. In marketing, it is very important as it includes emphasizing on enticing the customers, who wish to make a positive experience with their purchases. There are so many companies, which have implemented social responsibility strategies in marketing process because it assists the community and manufacture the products, which benefit the targeted society[5]. Engaging in corporate social responsibility also offers new company capabilities, like; it will promote the brand image and reputation of the company that can primarily affect profitability and productivity positively. The above given factors may change in the future with new developments. In the future, technology can be improved with the up-gradation and advancements. It may affect the business operations as all of the employees will not be familiar with advanced technology. Under globalization, there may be some challenges, which may force the organization to make changes in global trade[6]. Apart from these factors, there are some other factors, which may impact the marketing, such as; privatization, increased competition, retail transformation, de-regulation, consumer purchasing power etc. 2.Brands and Products, which are successful and not successful in target marketing There are many brands and products, which successfully speak to the people and effectively target the age group. Targeting an appropriate market is very important, when an organization wants to communicate its products to maximum customer base. For this, marketers divide the overall population into different age groups to dividing by targeting the levels of age, needs of different age groups etc. So, these marketers try to manufacture the products, which will be preferred to purchase. They will make efforts to attract the target customers by the products, which can satisfy their desires and needs[7]. In modern business environment, each and every brand targets the different customers market as they provide different benefits accordingly. Here is the discussion about two brands and their products, which are successfully targeted appropriate age groups. First brand is Apple that has offered different premium brands under its different segments, like; iPhones, Mac and iPad, which have successfully covered the people in appropriate age group. The company has introduced its iPhones with IOS operating system and targeted the people with the age group between 18 and 35 years. This age group includes the young people, which cover students and working professionals. The company has also targeted the children as their parents can download and install learning game apps on their devices[8]. The company has successfully introduced its specifications, which were actually aligned with the needs and expectations of targeted market, i.e. youth population. In addition to Apple, Starbucks is another brand, which has successfully placed its products among its target age groups, i.e. students. This company has strategically positioned its outlets and products in the locations, where the students are likely to explore, like; cafes, Universities, college canteens, town centers etc. It has provided its products in the areas, which are arranged and well-established to enhance the social interaction among people. Moreover, the company is offering variety of coffee and other soft drinks, which provides choices to consumers and assists in creating youth uniqueness in choice of coffee and other beverages. Thus, the company was completely successful in targeting this age group and providing the quality services, which were committed by Starbucks in its promotion and advertising campaign[9]. Apart from these products, Xbox 360 is also a home video game, which provides students ability to communicate and play games against friends online and it offe rs the design, iPod and multimedia capabilities to the users. Thus, this was also a very successful product in targeting best suitable market. These above-mentioned players are successful because they are able to understand and fulfill the needs and wants of customers. They implemented effective strategies, so that they could attract the people towards their products. Apart from this, Apple can also be included in the category that is failed in satisfy the target market. It was in the case of its iPod, where company was not able to include the specification required by students and their age group. There are various reasons behind it, like; Apple iPod just represented just as a fashion accessory that has the customizing ability in terms of music and color. It is highly portable and suitable for the high paced lifestyles. The students face the issues as it was not easy to operate. Apple could make their iPod a bit user friendly. For example; Microsoft has an option of folders on window, but iPod has so many sub-levels. Sometimes, students feel it very difficult to search the songs[10]. The company can enhance its marketing by targeting the Generation X in addition to millennia people. It could make the iPod look more professional, so that young professional could use them. Under this category, one more example is of Nokia, which was not able to und erstand the needs and preferences of people and stayed with its older operating system. It just focused on the battery life of its phone more than proving some innovative and entertaining features[11]. The company could do better by conducting market research and understanding the expectations of customers. Thus, the companies were failed to target appropriate market in above specific cases. 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Ransbotham, Social media and customer dialog management at Starbucks.MIS Quarterly Executive,9(4), 2010. S.A. Park, Consumer health crisis management: Apple's crisis responsibility for iPod-related hearing loss.Public Relations Review,34(4), 2008, pp.396-398. V. Venkatraman et al, Predicting advertising success beyond traditional measures: New insights from neurophysiological methods and market response modeling.Journal of Marketing Research,52(4), 2015, pp.436-452. A. Chang, 5 Reasons Why Nokia Lost Its Handset Sales Lead And Got Downgraded To 'Junk, 2012, Retrieved From Https://Www.Wired.Com/2012/04/5-Reasons-Why-Nokia-Lost-Its-Handset-Sales-Lead-And-Got-Downgraded-To-Junk/.