Is Vegetarianism the Only Answer - Free Essay Example

Sample details Pages: 6 Words: 1738 Downloads: 8 Date added: 2019/08/06 Category Health Essay Level High school Tags: Vegetarian Essay Did you like this example? In 2014, researchers determined that methane is a particularly potent greenhouse gas (GHG) whichaccounts for 16% of total global GHGs emissions, (GIUBURUNCA, Mihaela, et al.). One of the main reasons for the abundant amount of methane is cattle, specifically ruminant livestock, that produce both dairy and meat, which are contributing to global warming. Their digestive systems go through enteric fermentation that releases methane (CH4), carbon dioxide (CO2), and nitrous oxide (N2O). Don’t waste time! Our writers will create an original "Is Vegetarianism the Only Answer?" essay for you Create order According to the United Nations Global Environmental Alert Service (GEAS), this ruminant livestock makes up 80% of greenhouse gas emissions out of the total agriculture contribution, with methane being one of the biggest culprits (GEAS). Due to the large demand for meat in the US, and globally, as peoples main source of protein, the livestock population has been increasing, causing a positive correlation in methane production. Methane is the main greenhouse gas contributing to the climate change crisis as its produced when ruminant livestock digest food through enteric fermentation. A number of solutions have been proposed and debated, such as adding seaweed to livestock diets (partially cows) or whether grass-fed or grain-fed is ultimately healthier for the environment. However, the only concrete solution that will solve this problem is to reduce the amount of meat eaten, particularly meat from ruminant livestock, and for those who are willing to go vegetarian. Livestock is mass pro duced to provide easy and cheap protein for people around the world. According to the Food and Agriculture Organization of the United Nations (FOA), Meat, milk, and eggs provide 34% of the protein consumed globally (FOA). Many people rely on meat for protein because cattle are easy to raise and they can withstand climate shocks, which is vital with the change in our climate (FOA). Meat can be incredibly cheap as many fast food restaurants, like McDonalds, Burger King, and In-N-Out, serve meat at a cheap price. For low-income families this can become an easy way to feed the family. This cheap meat has turned a food that was an occasional meal†meat†into an affordable, every-day product for many (GEAS). An increase in the demand for meat has caused what used to be a small-farming business that raised cattle on their land into a mass industry that looks more like a factory. However an important detail to acknowledge is while meat can be a great source of protein, high meat diets [can cause diseases such as] bowel cancer and heart disease (GEAS ). Eating meat on a regular basis is not only be harming the planet but it is harming the bodies of those who consistently eat in-expensive meat. With this increased demand for meat, an increase in cattle raising is contributing to climate change because they produce harmful greenhouse gases (GHG). These GHGs, specifically methane, is produced by livestock and emitted into the atmosphere. Ruminant livestock, such as cows, sheep, goats, and buffaloes, are animals that digest food in a process known as enteric fermentation. Enteric fermentation is the digestive process that produces greenhouse gases like methane, that contribute to 44.1% of the total livestock emissions (FOA). Cattle or cows are the biggest contributors as beef is in high demand, with 77% of global distribution of enteric methane emissions from ruminant come from cows alone (Morris). The large desire for meat, specifically beefwhich come from cattleis ultimately leading to the climate change crisis we see today. University of California, Davis has been conducting an experiment that may be a long-term solution for excessive methane production from ruminant livestock. They have found that by adding seaweed to cattle diets can dramatically decrease their emissions of the potent gas methane (Kennedy). The researchers add Asparagopsis armata, a type of algae, into hay and add molasses for taste (since the sa lty seaweed is not a favorite taste for cows) and they examine the effect it has on the amount of methane released by cattle. One of the groups received a high dose of seaweed, amounting to 1 percent of its feed. Another received half that, and the final group received no treatment, so the researchers could identify if adding seaweed to the diet would be successful (Kennedy). They used breathalyzers to determine the amount of methane and other greenhouse gases are on their breaths and immediately found it reduced methane emissions. They feared the seaweed would affect the taste of the milk but it was found that there was no change. The only need for further investigation is the long-term effects and if it changes the taste of beef. The one naysayer they presented was the inadvertent side effects, such as harming ocean ecosystems or creating additional emissions from shipping, all problems that need to be solved before the diet of cattle is switched (Kennedy). This solution, like many others, helps reduce methane but contribute to climate change in another respect, like harming the oceans ecosystem, which doesnt solve the problem indefinitely. Grain (corn) have taken over cattle diets as its cheap and an effective way to get the cows big enough to eat. According to Troy Roush, Vice President of the American Corn Growers Association, 30 percent of our land base is being planted to cornlargely driven by government policyallow[ing] us to produce corn below the cost of productionwere paid to overproduce (Kenner). The reason cattle are now fed corn, a type of grain, is because the United States has an abundance of corn, which is cheap and easy to grow. Also, researchers have now found that grain-fed cows produce less methane, which seems to be a double positive; cheap food for cattle and helps contributes to lower methane production. While this sounds like a collective serendipity, grass-fed cattle are healthier for the animals and for people t o consume even if they produce more methane, they have more benefits than one might think. As Michael Pollan, author of The Omnivores Dilemma states, Cows are not designed by evolution to eat corn. They are designed by evolution to get grass. And the only reason we feed [cows] corn is because corn is really cheap and corn makes them fat quickly (Kenner). Grass-fed cows may produce more methane than grain-fed cows according to Judith Capper, a Washington State University researcher, but even though grain-fed cows produce less methane, use less land and water, there are larger carbon sequestration benefits of raising cattle entirely on grass (Profita). Many believe that since grass-fed beef takes longer to gain weight resulting in more water, more land for grass fields and in general is more expensive, that grain-fed beef has to be better for climate change. However, according to Michael Pollan, grass-fed beef has a lighter carbon footprint because of the fertilizer, pesticides and fossil fuels required to produce the grain for feedlots, (Profita). So, in the end, both sides of the argument are right; Grass-fed beef produces more methane but grain-fed beef produces more carbon. The grass is harder for cows to digest which is why grain-fed cows produce less methane, however, some argue grass that is continually grazed by grass-fed cattle sequesters enough carbon to make up the difference in methane, (Profita). In the end, however, grass-fed cows are healthier for the cows themselves and the meat we get from them is healthier for us. Plus cows that eat grass are more beneficial in all because they keep the soil healthy which keeps carbon dioxide underground and out of the atmosphere as when cattle graze it helps stabilize soil, control weeds and reduce the risk of wildfire (Profita). This idealistic silvopasture system which combine trees, livestock and grazing.provid[ing] shade, timber, and food for livestock[with] carbon captured in soil and trees more than makes up for the greenhouse gases that ruminants emit through belches and flatulence, (Toensmeier), cant be a solution. In order to have all cows grazing on grass pastures, people would be destroying natural forest, to make room for the global beef and dairy demand (World Watch, Toensmeier). Even if cows go back to eating grass and grazing fields, the problem of the emission of GHGs has not been solved completely which is why this solution cant be the ultimate cure for climate change. While the last two proposed solutions (grass-fed cows or seaweed-fed cows) cant become the ultimate solution, becoming a vegetarian or reducing the amount of meat eaten by each individual can solve this problem permanently, without any negative drawbacks to the environment. According to the United Nations Global Environmental Alert Service, each [person should] consume no more than 70-90 grams of meat per day, to help reduce the population of cattle raised (GEAS). However while some argue that by eating meat that doesnt emit as much GHGs as ruminant livestock, like pigs and chickens, others claim that to truly reduce the amount of GHG emissions resulting from ruminant livestock by an individual, doesnt mean substituting one meat product with another that has a somewhat lower carbon footprint (World Watch). Meat consumption in general needs to be reduced in order for emissions to decrease to make a positive impact for climate change, which can be done by eating non-meat meat produces that use fake meat and non-dairy dairy products such as soy milk or almond milk. Grain and soy-products can also contribute to GHG emissions, which means that grass-fed meat and resulting dairy products may be more environmentally friendly than factory-farmed or grain-fed options (GEAS). Some question how to get a sufficient amount of protein in their diet by going vegetarian, which can be done by eating soybeans, quinoa, chia seeds, and tofu, to name a few. A hamburger for lunch doesnt seem like it would affect the climate of our planet, but as the United Nations Global Environmental Alert Service stated, the consumption of 1 kg domestic beef in a household represents automobile use of a distance of ?â‚ ¬? 160 km (99 miles), which means that for every hamburger one eats, climate change is effected (GEAS). The more livestock, especially those who go through enteric fermentation, the more GHGs are emitted into the atmosphere. Livestock has become like automobiles as we are mass producing them to an amount that is not part of pre-human times which is causing a molecule of CO2 exhaled by livestock [to be] no more natural than one from an auto tailpipe(Goodland). The only real way to stop this toxic progression is to cut out meat as much as possible, if not completel y, and to rethink how we feed ruminant livestock and ourselves.

Exercise, Strength Training, Stretching And Balance Exercises

The four main types of exercise are aerobic exercise, strength training, stretching and balance exercises. The first type of exercise focuses more on cardiovascular and respiratory endurance. The type of activity where it makes you sweat, and makes you breathe harder and your heart to beat faster. This type of exercise helps improve the circulation of oxygen in the body and, it increases a person’s energy. It also helps reduce stress, anxiety, the risk of heart diseases, and most importantly body fat. Some of the examples for this type of exercise are jogging, walking, indoor cycling and aerobic dancing. The second type of exercise is the strength training which improves muscular strength. It is a period of training in which high levels of†¦show more content†¦Food is a need for us to live but most of the people nowadays consume food excessively, and results to complications. For avoiding this complications diet was discovered and hundreds of it was formulated with di fferent targets. Of all dietary plans created the nine most popular weight-loss diet programs are as follow. First would be the Paleo Diet which is based on the primitive lifestyle of our ancestors. The diet aims to follow the food eaten by the hunter-gatherer ancestor of ours which includes, lean protein, vegetables, fruit, nuts and seeds and restricts processed food such as sugar, dairy and grains. These kinds of food contain less carbohydrates and lots of protein which can lower calorie intake to 300-900 calories per day. Having this kind of diet can reduce heart disease but also eliminates the intake for nutritious food such as whole grains, legumes and dairy. Second type of diet is the Vegan diet that includes only vegetables. This diet removes any possible form of animal exploitation which restricts animal-derived products like dairy, honey, gelatin and meats. In consuming only vegetables which are very low fat food but high fiber content, it makes a person feel not hungry in a long period of time. Dieters often lose more weight that leads to lower body mass index compared to any diet but not effective in losing weight when matched for calories. This type of diet reducesShow MoreRelatedBiography Of De Palma Terrance And It Was A Facility That Has Been Providing Senior Care For Seniors1377 Words   |  6 Pagestheir exercises if it was too difficult. The purpose of this class was to help older adults exercise their bodies and to be interactive with an exercise group. Health/Wellness Triva will help older adults make every day action a normal piece of their life by building the crucial quality that makes all movement simpler and more enjoyable. Older adults in the class started off by walking outside and around the facility. 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Hi-Fi Financial Analysis free essay sample

The question asks us to compare and evaluate JB Hi-Fi’s calculated ratio report, with that of the retail industry ratio report (Potter, Libby, Libby, Short p. 1133). The retail ratio report is comprised of a basket of listed companies which operate under the retail banner, which makes it relevant to use as a comparison to JB Hi-Fi. 1. Liquidity ratios are a class of financial metrics that is used to determine a companys ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. Table 1: Current Ratio Current ratio: This ratio measures whether or not a firm has enough resources to pay its debts over a twelve month period, comparing its current assets, with its current liabilities. | 2010: 1. 25| 2011: 1. 45| Industry: 2. 67| Comparison: The industry average of 2. 67 indicates that for every dollar owed, companies, on average will have . 67 available in assets to convert into cash in the short term. From the JB Hi-Fi data calculated, it is interesting to note that current ratios of 1. 45 in 2011 and 1. 5 in 2010 are significantly below the industry average. However, this is not too concerning because JB Hi-Fi still have a ratio above 1, and therefore would still be able to meet their current obligations. The lower figure may be explained by the fact that JB Hi-Fi may have a high turnover of current assets, such as stock, which if sold before accounts payable become due, would decrease the current ratio. Table 2: Quick Ratio Quick ratio: This ratio examines a firm’s ability to use its quick assets to extinguish its current liabilities immediately. Inventory or stock is generally excluded from this equation in order to produce a more accurate account of the firm’s ability to meet its short term obligations| 2010: 0. 33| 2011: 0. 27| Industry: 1. 92| Comparison: The quick ratio measure’s an organisations ability to meet its current obligations with its most liquid assets. As inventory might not be turned into cash as promptly as other current assets, the quick ratio follows a more conservative approach than the current ratio and excludes inventory from current assets. JB Hi-Fi’s quick ratio declined from 0. 33 to 0. 27 in 2010 to 2011 which are both alarmingly low from that of the industry’s quick ratio of 1. 92. The organisation is clearly lacking in meeting its prompt liquidity requirements. 2. Activity ratios assess a firm’s ability to convert different sectors of the balance sheet into cash or sales. Table 3: Inventory turnover Ratio Inventory turnover: This ratio measures the flow of stock within a certain time period. It assesses how long it takes for stock to be sold within a business. In this case, the industry report indicates an average of 50 days inventory turnover throughout the retail industry. This is in comparison to 58. 67 (2011) and 56. 30 (2010) days it took JB Hi-Fi to move on stock within the business. These numbers hold up quite well to the industry average when taking into consideration the number of 45 firms used in the calculations. JB Hi-Fi takes approximately 7 days longer than average to move on their inventory, which in the scheme of things is a relatively insignificant difference. Table 4: Accounts Receivable Ratio Accounts receivable: This ratio measures a firm’s effectiveness in extending credit as well as being able to collect debts| 2010: 1. 45| 2011: 1. 34| Industry: 25. 78| Comparison: In this situation, the retail sector average is 25. 78 days taken to receive cash from customers, compared to 1. 34 (2011) and 1. 45 (2010) days for JB Hi-Fi to collect its money from its debtors. This is positive for JB Hi-Fi as it indicates that it performs extremely well when it comes to collecting from debtors. The company’s figures are well below that of the industry average which is a positive achievement for JB Hi-Fi, as they are able to receive money quickly for credit sales. Table 5: Fixed Asset turnover Ratio The fixed-asset turnover: This ratio measures a companys ability to generate net sales from fixed-asset investments| 2010: 11. 03| 2011: 11. 25| Industry: 5. 26| Comparison: Here the industry average is 5. 26 times, compared to JB Hi-Fi’s figures of 11. 25 (2011) and 11. 03 (2010) times. This indicates that JB Hi-Fi is able to generate greater sales from its fixed assets, when compared to the market average. Generally, firms with a higher fixed asset turnover are successful in getting the most out of their assets, and in turn are able to generate higher revenues. Here JB Hi-Fi outperforms its sector, and this indicates that it is in a strong position to generate sales from the assets it has available. Table 6: Total Asset Turnover Ratio Total asset turnover : This ratio measures the efficiency of a company’s use of its assets| 2010: 3. 97| 2011: 4| Industry: 3. 17| Comparison: This ratio calculates the amount of sales generated for every dollar worth of assets. The retail average is 3. 17 times whilst JB Hi-Fi is slightly higher at 4. 00 (2011) and 3. 97 (2010) times. This indicates that JB Hi-Fi may have lower profit margins, when compared to the rest of the industry. This may be explained by the fact that JB Hi-Fi is more cutthroat and competitive when it comes to pricing, trying to gain as many sales as possible. Table 7: Days Payables Ratio Days payables: This is a ratio which examines the swiftness of a company in paying their creditors or suppliers. | 2010: 48. 09| 2011: 46. 73| Industry: 58. 83| Comparison: Days payables are a ratio which examines the swiftness of a company in paying their creditors or suppliers. The industry average for this ratio is 58. 83 days, indicating it takes this long on average for the retail industry to pay for its supplies. In comparison, JB Hi-Fi took 46. 73 (2011) and 48. 09 (2010) days on average to pay its creditors, in the given years. This represents a different of almost two weeks, which, when considering companies want their money as quick as possible, leave JB Hi-Fi with a positive reputation amongst its suppliers. The benefits of having a lower ratio in this situation may be that JB Hi-Fi receives a discount on credit deals for having paid in a shorter period. However, companies must be careful to avoid letting cash flow out of the business too quickly, if there is no reasonable gains to be made. This can be viewed as an advantage and a disadvantage as the company can hold off paying the creditors’ this quickly and invest the funds in generation of more revenue. 3. Profitability ratios are important when assessing the profitability of a business. They give management useful insight into where and how they can improve the operations of a business. Table 8: Net Profit Margin Ratio The net profit margin: This ratio show the proportion of every dollar of sales that is left after all expenses has been paid, and remains as net profit. | 2010: 4. 34| 2011: 3. 71| Industry: 2. 45| Comparison: Although it is difficult to accurately compare profit ratios for different entities, as financial arrangements and expenditure vary greatly from business to business, it is valuable to compare how JB Hi-Fi stands up to the rest of the retail sector, in terms of profitability. The net profit margin is 2. 45% for the retail sector, whilst JB Hi-Fi operates at 3. 1% (2011) and 4. 34% (2010), which indicates a reasonably higher net profit margin. This may indicate that JB Hi-Fi carries a higher margin of safety and less risk, compared to the average retail sector net profit, as a decline in profits would leave less of a strain on JB Hi-Fi. Having a higher net profit margin than the sector average leaves JB Hi-Fi in a good position to be a strong performer within the industry. Table 9: Return on equity Ratio Return on equity: This ratio indicates the amount of net income returned as a percentage of shareholders’ equity| 2010: 45. 1| 2011: 49. 23| Industry: 16. 8| Comparison: Return on equity measures a corporations profitability by revealing how much profit a company generates with the money shareholders have invested. The sector average for return on equity is 16. 8%. Return on equity ratio measures the corporations profitability by revealing how much profit a company generates with the money shareholders have invested. In the case of JB Hi-Fi this ratio is very high compared to that of the industry. With 45. 41 in 201 0 the ratio increased to 49. 23 in 2011. Table 10: Return on assets Ratio Return on assets: This ratio shows how profitable a companys assets are in generating revenue. | 2010: 25. 45| 2011: 21. 95| Industry: 7. 77| Comparison: Here the retail average is 7. 77% whilst JB Hi-Fi is almost triple at 21. 95% (2011) and 25. 45% (2010). This shows that JB Hi-Fi is superior to its industry average and its assets are highly successful in generating revenue. It shows that JB Hi-Fi management is successful in utilising assets correctly and gives them an advantage over the competition within the retail industry. Return on Assets ratio gives an idea as to how efficient management is at using its assets to generate earnings. This ratio declined from 25. 45 to 21. 95 in the case of JB Hi-Fi but was still high in comparison to that of the industry’s ratio of 7. 77. The higher the ROA number, the better, because the company is earning more money on less investment. Table 11: Quality of income Ratio Quality of Income: This Ratio is computed by dividing Cash Flow from Operating Activities by net income. | 2010: 128. 19| 2011: 100. 23| Industry: 7. 03| Comparison: As the ratio indicates the proportion of income that has been ealized in, high levels for this ratio are desirable. In the case of JB Hi-Fi these ratio showed a decrease but they still remained well above the industry ratio. 4. Leverage ratios are ratios used to calculate the  financial leverage of a company to get an idea of the companys methods of financing  or to measure its ability to meet financial obligations. Table 12: Times interest earned Ratio Times Interest earned: This ratio indicates the number of times a company can cover its interest charges on a pre-tax basis| 2010: 25. 17| 2011: 25. 94| Industry: 64. 2| Times interest earned or interest coverage ratio is a measure of a companys ability to honour its debt payments. It may be calculated as either EBIT or EBITDA divided by the total interest payable. In this case, the sector average is 64. 72 times whereas JB Hi-Fi had the figures of 25. 94 (2011) and 25. 17 (2010) times. Clearly, JB Hi-Fi differs significantly from the sector averages, however both figures are significantly greater than 1 and therefore there does not seem to be a problem for JB Hi-Fi to meet its obligations. Table 13: Asset/equity Ratio The asset/equity ratio shows the relationship of the total assets of the firm to the portion owned by shareholders, also known as owner’s equity. | 2010: 2. 63| 2011: 3. 32| Industry: 2. 16| Comparison: Assets/Equity leverage ratio measures the company’s capacity to generate assets from its shareholders equity. Both in 2010 and 2011, the Asset/Equity ratio was higher than the industry ratio. However the difference between these ratios is only minimal. 5. Dividends identify the percentage of earnings (net income) per common share allocated to paying cash dividends to shareholders. Table 14: Dividend Yield Ratio Dividend yield Ratio: This is the companys total annual dividend payments divided by its market capitalization, or the dividend per share, divided by the price per share. | 2010: 3. 29| 2011: 4. 75| Industry: 4. 75| Comparison: The dividend yield or the dividend-price ratio on a company stock is the companys total annual dividend payments divided by its market capitalization, or the dividend per share, divided by the price per share. This ratio reflects how much a company pays out in dividends each year relative to its share price. The dividend yield ratio was relatively the same for JB Hi-Fi in comparison to that of the industry. Table 15: Price Earnings Ratio Price Earnings Ratio: This ratio is a valuation ratio of a companys current share price compared to its per-share earnings. | 2010: 17. 18| 2011: 16. 77| Industry: 12. 16| Comparison: Price/earnings ratio is the valuation ratio of a companys current share price compared to its per-share earnings. This ratio was high in 2010 which decreased in 2011. Both of these ratios, however were high than the industry ratio. In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. Investor recommendations Looking at both the liquidity and activity of JB Hi-Fi, we can make a determination of the stability of the business through their ability to pay debtors and their earnings through everyday operations. JB Hi-Fi’s liquidity to repay short-term debts is positive; however, looking at the quick ratio, they are unable to meet their obligations in the short-term. Because they operate with high levels of stock, up to $400 Million at the end of the financial period, this may paint JB Hi-Fi in a negative light. When looking at collection of debts, JB Hi-Fi’s business model ensures that debts from customers are collected within a staggering 2 days. This is perhaps reliant on the financing institutions JB Hi-Fi has partnered with that enable a quick turn around in collecting sales on credit. This is an extremely positive aspect of the business and management of JB Hi-Fi to remain liquid. The generation of sales from assets shows that JB Hi-Fi is able to move vast quantities of stock, resulting in net sales of $3 billion. Such a figure enhances the fixed asst turnover, yet remains steady in comparison to the industry total asset turnover. The total asset turnover ratio suggests that JB Hi-Fi is generating huge sales, yet their profit margins remain low. JB Hi-Fi’s net profit has remained higher than industry averages, and indicates management’s ability to generate sales from the assets it has at their disposal. JB Hi-Fi’s profitability, although waning in 2011, shows that they are a strong performer in the current climate. Quality of income shows that the proportion if income that has been realised as cash. As for JB Hi-Fi, they have a very high cash turnover, and their ability to generate cash flows is extremely strong as compared to the industry average. The ability to repay debtors is relatively on par with the industry average. Yet, it shows JB Hi-Fi still have substantial cash flow in paying creditors, as there is a substantial difference in COGS and accounts payable, to the order of $2 Billion paid to suppliers and other creditors throughout the period. JB Hi-fi’s ROE and ROA ration is almost triple the industry average. It shows that JB Hi-Fi management is highly successful in generating revenue and utilising assets correctly. However, in terms of leverage, times interest earned was only 40% of the industry average and its financial leverage is almost 50% higher than the industry average. It is suggested that JB Hi-Fi should not extend its finance liabilities from the creditors to finance its further investment as the currently level is already high. But, according to Bell (2012), management is persisting with the store rollout 16 will open in 2012, while the meantime the margin has been squeezed due to industry changes. There is no more serious threat, that the company will become a high-volume, low-margin retailer. Investing capital in to a declining business such like this will only things worse. However, if they stop rolling out more stores, the leverage will not become a major concern at this point of time as their earnings can cover 25 times of its interest. Evidence can be seen from positive financial leverage percentage (ROE-ROA0). JB Hi-Fi’s price earnings ratio is higher when compared with the industry average. However, this ration decreased in 2011. Which suggest that investors are expecting lower earnings growth in 2011 than 2010. The dividend yield for JB Hi-fi is the same as the industry average in 2011 which increased from 2010’s 3. 29% to 4. 75% and annual dividend increase from 2010’s 62c to 81c in 2011. Its shows, that the JB Hi-Fi has adopted the policy to increase its dividend for shareholders, as the lower growth expectation from investors. This made the company more attractive for investors who looking for regular cash flow. Based on the financial analysis, we believe that JB Hi-Fi will keep performing in the areas of business activity, profitability and paying an attractive dividend. However, investors have to pay attention to its financial leverage and liquidity to pay its creditors to avoid the risk that the company may become insolvent.