The History Of Cnc Machines

The History Of Cnc Machines Before the advent of NC machines, operator had to manipulate the hand-wheels, levers, cams to make parts. This way the ability of the operator to make the parts with required narrow tolerance was limited. There were all possibilities of some variation resulting into variation of the axis dimensions resulting into poor fittings or wastages. The productivity of the worker was low so it was a dire need to operate the machine automatically. Earlier a series of cams were put to use to move the tools as an attempt to automate the process. Though they were tedious to set but once set it gave good precision, which were what later on known as Swiss machines or precision machines. (Wildes 1985) MIT Servomechanisms Laboratory gives a good account of pioneering effort on development of numerical control of machine tools, which is as under (History of the MIT Servomechanisms Laboratory). A significant postwar project that began in 1949 and continued and evolved through the 1950s was the work that led to numerical control of machine tools. Under a contract with the Parsons Company of Michigan, William M. Pease and James O. McDonough designed an experimental numerically-controlled milling machine which received directions through data on punched paper tape. The first working model of a continuous-path numerically-controlled milling machine was demonstrated in 1952. Further research was then carried out under the sponsorship of the U.S. Air Force. Subsequently, the laboratorys Computer Application Group, led by Douglas T. Ross, developed the Automatically Programmed Tool Language (APT), an easy-to-use, special purpose programming language. Eventually, APT became the world standard for programming computer-controlled machine tools. Parsons NC Milling Machine After World War II, Parsons was busy in developing rotor blades for aviation industry. For its complexity involved in shape, it was an uphill task to achieve precision, which was an utmost requirement. With his connections with an IBM computer, he realized that it is quite possible to produce accurate contour guides, which was hitherto difficult with manual calculations. Soon he received a contract with Air force to supply an automatic contour cutting machine for production of large wing section pieces for aircraft. He successfully developed a machine, which produced parts with accuracy and precision required by the aviation industry. Meanwhile, MIT researchers were doing developmental work with various kinds of control processes. They had already done some work with Air Force Projects during World War II. With the active association of MIT, Parsons experimented with servomotors to the x and y axis and successfully controlled them using computer that read punch-cards to process instructions. This made possible to machine complex shapes required for aviation industry. With a manual milling machine it was never possible and that is how he developed the NC milling machine. (Olivo 1987) After most pioneering efforts by Parsons and MIT researchers the ball set rolling for further growth and development of NC/CNC in the later years to come. CNC Generations Broad CNC generations classification can be done with regard to the development of CNC machine as under (CNC-Web-handout): 1952 1st generation NC, The first NC controlled machine for metal processing (relays and electronic tubes) 1960 2nd generation NC, relays and electronic tubes was replaced with transistors. 1965 3rd generation, integrated circuits 4th generation NC CNC (computerized numerical Control CNC Machines) In the first and second generation NC machines, controller received a set of instructions known as programme consisted of alphanumeric characters. Through these instructions, controller regulated the motions of a machine tool such as a lathe, milling machine, cutter. Preparation of programme was done with the very basic computers and then made available to the controller via a tape. At that time, Magnetic tape recorders and floppy disk drives were used for storage and recording purposes for the programme and as such no direct links were provided between the computer and controller. Controllers tape reader used to read these recorded programmes. For the purpose of debugging the programme and correcting the errors, it was necessary to have a new tape and several of such tapes were needed before an error-free programme was made. Further, for any modification or engineering changes one was forced to prepare a new tape and so on. (Siegel 1956) Historical Events in the Evolution of NC/CNC Machines Let us peep into the past for more specific developments in reference to NC/CNC machines, its components and important accessories, which culminated into the modern day CNCs. 1950- MIT servo mechanism lab developed Numerical Control (NC) milling machine 1952-Parsons filed for a patent on Motor Controlled Apparatus for Positioning Machine Tool. The date was 5 May, 1952 1953- Using a magnetic-tape playback system, a digital control system named Numericord was developed in April 1953 by joint effort of GL, MIT and General Electric Co. (Cuttingtoolengineering 2005) 1955- NC machines commercial version was on display at Chicago Machine Tool Show. In the show, several NC machines were on display, which were punched cards or punched paper tapes driven. (Cuttingtoolengineering 2005) 1955- IBM developed automatic tool changer. (Cuttingtoolengineering 2005) 1955-Numericord NC5 was found into operation at GLs plant at Fond du Lac, WI. (History of Computer Aided Manufacturing) 1956- A year of automatic programming of NC machining. 5.1 APT Developed Douglas Ross made pioneering efforts to put automatic programming of NC machining. Being a mathematician at MIT, Ross had gone to the ServoMechanism Laboratory to work with computer systems for high-speed data processing. His research converged to the development of the Automatically Programmed Tool (APT) system. (Upping Input Speed: automating NC. Cuttingtoolengineering 2005,) Ross believed that programmer should be able to convey his or her machining instructions in a simple English kind language, which is at times rational and can be modified based on experience. Thus, Ross had removed the last significant technological impediment to utilization of NC by the manufacturing industry on a broad scale. The development of APT was a major turning point in the evolution of NC, because it settled once and for all the issue of whether or not NC could be made economically viable in the light of programming costs, Reintjes said. Justifiably then, the APT language became the U.S. standard for programming NC machine tools in 1974, and became the international standard in 1978. (Upping Input Speed: automating NC. Cuttingtoolengineering 2005) 1957- GL introduced its first 5-axis Variax NC profilers. (History of Computer Aided Manufacturing) 1957- GLs (Giddings and Lewis Machine Tool Co) produced first miller (History of Computer Aided Manufacturing) 1957- A year of first CAM software system, an NC programming tool named PRONTO. Farnum, Gregory (2005) distinctly quotes contribution of Dr. Patrick Hanratty and term him as a father of CAD/CAM and categorically mentions, Then theres the guy who is often called the father of CAD/CAM, Dr.Patrick Hanratty. Among other contributions to the field, Hanratty, in 1957, developed the first commercial CAM software system, an NC programming tool named PRONTO. Of course, if one can digitally create patterns in space to guide a machine tool, one can do the same thing for other machinery as well, a fact that wasnt lost on the fledgling robotics industry and builders of other types of industrial equipment. Thus, the direct link between CNC and CAM. 1958- The first commercial NC machining centre with an automatic toolchanger and automatic work positioning. The company was Kearney Trecker Corp., Milwaukee and product was Milwaukee-Matic II. (Makely 2005) 1960- First controller with transistor technology introduced. (Groover 2007) 1960- Direct Numerical Control (DNC) eliminated paper tape punch programmes and allowed programmers to send files directly from computer to machine tool controller. (Groover 2007) 1963- A true CAD software, namely sketchpad, evolved. (Cuttingtoolengineering 2005) 1965- CAD drafting and the sculptured surfaces developed (Cuttingtoolengineering 2005) 1967- Use of integrated circuits (ICs) in NC reduced 90 percent components and 80 percent wiring connections. (Groover, 2007) The use of integrated circuits can be considered as a major breakthrough in the evolution of CNC machines as mentioned by Makely (2005) as per the following. But true maturity in NC development, according to Paul Warndorf, vice president of technology at AMT-the Association for Manufacturing Technology, didnt come until the development of integrated circuits replaced vacuum tubes with more efficient, more reliable. (Numbers Take Control: NC machines Cuttingtoolengineering 2005) 1968- First machining centre by Kearney and Trecker (machine tool builders) marketed. (Groover, 2007) 1970s- CNC machine tool developed. (Groover, 2007) Farnum (2005) describes how CAD could make the application of CNC machine tools for variety of applications. He states: As the 70s progressed, the increasing power of computers, and the introduction of lower-cost minicomputers, made CAD accessible to a wider array of users. A host of CAD companies, many of them still in existence today, arose to meet the growing demand. This trend was furthered by the emergence of powerful UNIX workstations and PCs in the early 1980s, along with the growing power of the CAD systems themselves. Today, its hard to imagine a manufacturing firm without a CAD/CAM system or the ability to transfer digital data to CNC machine tools. (Farnum 2005) 1972- Major development of the CAD/CAM machines evolved (Minimizing Movement: multitasking. Controltoolengineering 2005) The development on CAD/CAM made possible multitasking on CNCs, thus improving the productivity to manifold. Jim Cordier, a veteran of 48 years in engineering and customer service at Hardinge Inc., Elmira, N.Y., said multitasking evolved because you wanted to do more and more with one setup. If you do a part complete in one setup, you made a more accurate part and did it quicker. (Numbers Take Control: NC machines. Cuttingtoolengineering 2005) 1976- 3D CAM/CAD systems were introduced (History of Computer Aided Manufacturing) 1980s- Graphics based computer application developed. (Groover, Mikell P.2007) 1989- Expert CAM/CAD systems were developed (History of Computer Aided Manufacturing) 1997- PC window based Open Modular Architecture Control (OMAC) systems introduced to replace firmware controllers. (Groover, 2007) A History of 5-Axis CNC Machines When someone tries to trace the history of 5-Axis Machine, it goes to even before NC as Herrin (1995) tries to convey in his article History of 5-axis machining. The some of the excerpts is mentioned from his above article. The history of 5-axis machining goes back even before NC. My first exposure to it was in 1958 on a project funded by the U.S. Air Force for the purpose of evaluating the feasibility of 5-axis machining. Cincinnati Milacron, then Cincinnati Milling Machine Co., was awarded a contract to build and test an electronic tracing version of a 5-axis vertical mill. He further describes that four major technologies that were critical to the success of 5-axis machines are: machine, control hardware, control software, and part programming software. He further opines that considerable improvement in the computer hardware is the reason that has made CNC designers to provide for advanced capability to meet the requirements of 5-axis applications at a reasonable cost. (Herrin 1995) 6.1 Why 5-axis Machines Three axis CNC machines define its ability to perform the task and movement along the three different axes simultaneously. Those are X, Y, and Z. Axis parallel to the tool spindle is known as Z axis. Three axis CNC machines work on sculptured or tapered surfaces. It is not possible to work on the complex jobs like tapping, internal holes on complex surfaces with variable curvatures. Certain limitations of three axis machine forced the developer to think about the five-axis machine which has varied application in myriad of industries. Five-axis machines are built by adding two axes that rotate around either Y or Z axis. There are mainly three types of 5-axis machines. (A). A Dedicated 5-axis Machining Centre. The biggest drawback with such machines is that their range of motion is limited to +/- 30 degrees. When it is needed to have steeper angle of cut, manual intervention is required. They are not as rugged as three-axis machines (B). A Tilting/Rotary Table Type A tilting-rotary table is mounted to the bed of a (three-axis) CNC machine. They are available in the market for several years. Advantage is that they can be used by small and big shops alike for many machining jobs. The good thing is that it provides possibility to tilt the part at various angles and thus machining is possible at various sides of the part resulting to the real five-axis machining. However, tilting-rotary table machines exert limit on workpiece with regard to its width, weight, length, height. Besides, tilting tables are very large and cover up host machines working space in large amount. At times, it reduces the work space by as much as 75 percent. They are good for smaller parts. They pose a difficulty in holding the part when heavy cutting operations are to be carried out. Size of the workpiece and its weight pose a limitation for machining in these types of machines. (C). Spindle Head Attachments Type The major benefit of a spindle head attachment is that it has full access of the machining centres working envelope. There is no restriction on the size of the workpiece required to be machined. They are fully programmable and any three-axis machine can be converted to a real five-axis machining centre. It is possible to add tilting capability of +/- 90 degrees. It can also have full rotary motion of 360-degree. The attachment can convert any 3-axis machine to 5-axis machine in less than 30 minutes. Since this head attachment is portable, it provides flexibility and rigidity of three-axis machine and work well for machining of variety of jobs. Because this unique head is portable and can be mounted in less than 30 minutes, it allows the owner to benefit from the accuracy and rigidity of the three-axis mill for significant metal removal then mount the attachment to complete five-axis profiling, holes, pockets, etc. The cost is similar to that of the larger tilt-rotary tables. 6.2 The Benefits of Machining with Five Axes It eliminates a need to have multiple setups for refitting the workpiece at different angles. This definitely saves time and reduces errors. It also eliminates the need to have costly fixtures, tooling for holding the workpiece in place. The complex jobs like tapping, internal holes on a complex surfaces can be machined that are otherwise not possible. Five-axis technology also eliminates multiple setups required to re-position the workpiece at complex angles. This not only saves time, but greatly reduces errors and costly tooling and fixture expenses required to hold the workpiece in place. It also provides the ability to machine complex parts that are not otherwise possible-including holes, pockets and tapping required to be normal to a complex surface. To a mold maker, it provides following benefits. Machining time greatly reduced by using a flat bottom end mill by using full diameter of the cutter Side milling of the angled surfaces can be done with less number of passes on the complex surface. Much better surface finish can be achieved eliminating ribbing from ball-nose end mills. Cut down time and labour on manual millwork/handwork required to clean up convex or concave kellered surfaces. Why CNC Became so Important? Swamidass (2002) has distinctly defined the need of CNC machines stating: A CNC machine tool is a self-contained machine, where the tool-cutting movements, spindle speeds, tool exchange and other operations are controlled by a part programme executed by the computer controlled based at the machine tool. The machine design which holds the tool used to cut into the work piece. Conventional machine tools (lathes, drill presses, milling machines) are not computer controlled. The operation is done by skilled craftsman. There can be variations to dimensions on parts made on a conventional tool. The elimination of this variation is one objective (benefit) of automating the discreet part production process. The Historic Developments and Its Significance on CNC Machines It is important to understand that why all these mile stone achievements were so significant in overall evolution of CNC machines. Let us take some of them. 8.1 CNC Control A programme is interpreted by CNC Control. It activates the series of commands in given sequence and will initiate required function, set motion for axis and carry out necessary instructions mentioned in the programme. This amply proves that how important controller is in overall functioning of the CNC machines. State-of-the-art present day CNC Controls carry out several other functions like editing the programme due to some error. It also has a dry run to check and verify the correctness of programme. Moreover, it also allows operator to provide certain important inputs separate from the programme such as tool length values. In short, it controls all the functions of the machine and keeps track of it as and when needed. 8.2 Changing the Tool Automatically Centres have capacity to hold many tools in a tool magazine. As per the requirement tool can be automatically placed in the spindle for machining. 8.3 Spindle Speed and Activation The spindle can be turned in a forward and reverse direction and speed can be notified in RPM. When required, it can be turned off. 8.4 CAM System For a simple application, the CNC programme can be developed manually by operator, which is also the best way to develop the programmes. When it comes to more complicate applications, it becomes tedious and difficult to write the programme. There comes a CAM (a computer aided manufacturing) system into picture. CAM is a software programme, which runs on a computer and helps CNC programmer to complete the programming process. It can also work with CAD developed by the companys design and engineering department. Machine operator has to specify the machining operations and based on that CAM will have created the CNC programme as if it is written manually saving time, effort and complexities of the functions. (Momingstar 1993) DNC System Once the programme is developed, it is required to be loaded into the CNC control. But when available memory on CNC controller is not sufficient to accept the programme then the need of DNC (distributive numerical control) comes into the picture. It was like a computer device that used to be connected to one or several CNC machines. However, with the advent of PCs during the 1990s ended the utility of DNC controls. (Momingstar 1993) Current CNC Machines Todays CNC are much faster and offers automation features, which were never heard before. With modern machining centre axis-positioning requirements have specifically increased and tool management functions have become more complex. This forces to have far greater processing power to manage many complex functions. Caussin (1999) has given a very good account of the controls that CNCs are capable for and they are described as under: 9.1 The Heart of CNC-Motion Control CNC machines are known for their automation, precision and consistent motion controls. CNC machines use motion control in a way, which can be called as revolutionary. Motions could be either linear or rotary. In conventional machine tools, these motions are caused by the use of cranks and handwheels. But the programmed commands initiate the motion in CNC machines. The motion type, motion rate (feed rate), motion type and which-axis-to-move all that are programmed with CNC machine tools. A CNC command conveys the drive motor to rotate specific number of times, which causes the rotation of the ball screw. The ball screw, in turn, moves to the linear axis. A feedback device confirms that specified number of rotations have taken place. . 9.2 CNC Speed and Feed Rates Now a days, dual processors or even parallel processors are in demands to increase the processing speed. It can notify the broken tools and necessary inspection can be done at machine centre itself. Parallel processors are employed to increase the speed of complex task. It is capable to change the feed rates based on the spindle load parameters. This reduces the required processing time. Further, depending upon the actual tool load, it can control and monitor the feed rate so as to avoid any damage to the tool. A feed rate will also determine when to change the tool when it reduces to the less than certain percentage of the normal. 9.3 Voltage Fluctuation and Loads They can also monitor voltage fluctuations to decide if a tool has broken. CNC can locate if some catastrophic problem is there with the tool and it will shut down the process. 9.4 Probing It can probe in a variety of ways to reduce setup time, as many controls have number of setup features like diameter offsets and tool length. That is to say that with an automated tool offset feature, it can set offsets for number of tools in a few minutes. Probes also facilitate setting the Z fixture offset automatically for speedy processes. It also allows setting for the X-Y axes automatically by imparting an appropriate programmeme. While machining a casting, it is required to verify the datum point and there also a probe will save considerable time. A feature known as rotation searching will probe the casting and work out the angle of difference and rotate the programme accordingly. Off line inspection of parts is a time consuming process but here also CNC will allow the use of a probe and verify its measurements. By probing a part it can also ascertain tool wear for its replacement. CNC can be programmed so that the tool will be probed as part of the machining cycle. It is so automatic that as the tool touches the probe, the next tool is loaded and the machining goes on. If it does not touch the probe then programme stops further machining. 9.5 Better Axis Synchronization State-of-the-art technology of the present day CNCs offer better control and make possible the synchronization of the Z axis with the spindle and rest of the system. That results into the possibility of rigid tapping which delivers high level of accuracy. Perfect synchronization between X-Y and Z axes makes helical interpolation possible so that very cost-effective threading on holes over 1 inch can be carried out. It also makes possible threads in blind holes, pipe threads and threads in holes in odd-shaped parts. 9.6 Connectivity Present day CNCs offer possibility to communicate with other processors. This saves a lot of time of the operator to set communication parameters from his PC to the machining centre. Nowadays CNCs offer the capacity to connect to the internet. Companies with global operations are greatly benefitted from this so that they can transfer their programmers to other locations. So todays CNCs provide a very high level of automation. Any skillful operator can use all the the features to increase his own and companys productivity. The Future of CNC The future development of CNCs will always depend upon the other technologies, which are developing simultaneously. Even innovators like John Parsons and others never thought of the present day achievements of CNC machines. At that time, they could not have visualized in their dreams that we would have colour graphics, high speed mega hertz microprocessors, touch screen CRTs and so on. Similarly it is difficult to visualize for us now how new technologies will develop in the next 20-30 years. However, one common factor that can be described is a need based development and innovation, which will not only continue but will have an accelerated pace. Vonasek (2009) interviewed many industry experts and described some of the possible future developments, which can be listed as under. CNC machines with more integration toward loading and unloading systems. Integration between CAD programmes and the CAM software for the machine, making connection between workpiece production and actual product development more feasible. More energy efficient and increased productivity. Faster and more powerful drive systems with even greater accuracy. CNC routers with more application Conclusions As science will make inroads in artificial intelligence, it is quite likely that future CNC machines will turn more and more user friendly but that will come with a cost attached to it. The sophistication will bring many new features but affordability will be a big question for many small and medium sized companies. However, in all likelihood basic CNC machines with 3-axis movements will be a preferred choice for common applications, which do not come under purview of high-tech areas. The future of CNCs is extremely exciting and rewarding. It can be said that CNCs have always been the back bone of engineering industries and will remain like that for future years to come.

Compare and Contrast Poems ‘Still I Rise’ and ‘I Shall Return’ Essay

The poems I am comparing and contrasting are ‘Still I Rise’ and ‘I Shall Return.’ The main similarity between these poems is to do with the theme. They both talk about confidence and mental strength. The poets both have had very different upbringings, but have both been depressed at one point in their lives. The woman who wrote ‘Still I Rise’, Maya Angelou, was born in Saint Louis. Maya was sent to live with her grandmother after she was raped by her mother’s boyfriend. Soon after, she moved to San Francisco, to try to forget about her troubled childhood. She wrote the bestseller â€Å"I Know Why the Cage Bird Sings† as she travelled, and can now speak fluently in lots of languages. ‘Still I Rise’ is based on Maya’s childhood; being treated unfairly, but still coming back with confidence. The other poet was a man, Claude McKay, who was born in Jamaica. He moved to America and founded ‘African blood brothers.’ Shortly after, he moved to London where he died of a heart attack. His poem, ‘I Shall Return’ shows he wanted other people to be grateful for what they had, and to show he had happier times in his childhood. Also, it’s the start of your life; the only time you can control your future, which is a very important thing in this poem as I feel he wishes that he could have stayed in the happy place of his childhood, and that it could have changed his whole life. The way he talks about his recent pain â€Å"To ease my mind of long, long years of pain† and the way he uses repetition emphasises the fact he couldn’t get away from the pain. ‘Still I rise’ is about Maya Angelou’s history. When you read the poem, you feel she has had a bad past, even if you do not know anything about her. The main themes in the poem are about discrimination, and being ill-treated but still coming across as the stronger one. She repeats â€Å"I’ll rise† throughout the poem, showing she has high hopes for herself. Towards the end of the poem, she starts to say â€Å"I rise,† which shows she is happy with how she is now, and possibly happy with the way people treat her. The point in this poem is to show that Maya had personal problems, but wanted to show she had enough inner strength to write about them, and that she wanted someone to listen to what she had to say. The way ‘I Shall Return’ is written helps with how you interpret the poem. McKay wrote the poem in present tense â€Å"To laugh and love and watch with wonder-eyes†, but explains his dreams in the future tense â€Å"I Shall Return to hear the fiddle and fife†. This makes it obvious that his dreams aren’t yet fulfilled, but he hopes they will eventually. The theme is clear all the way through the poem. He repeats â€Å"I shall return, I shall return again,† to show his desire to return to the place of his happy childhood memories. McKay idealised his childhood, he ignored any imperfections and suggests his childhood was perfect. When he went to America, he noticed how much people didn’t respect their life, but this just made him realise how much he had, and he just let it go. The repetition he uses in the poem emphasises his longing to make people appreciate what they have. Another of the main comparisons is that both poems are very personal; they decipher the poets’ childhoods and longings in life. The poems uncover the poets’ history, present lives’, and what they desire in the future. The poems both have pastoral and natural imagery amongst them, â€Å"The forest fires burn† from ‘I Shall Return,’ and â€Å"Just like moons and suns† from ‘Still I Rise.’ This is a comparison; however, they explain them in a completely different context, Maya describing them as ‘on her side’ as she compares them with herself, turning the words into metaphors and using personification. Whereas McKay uses the natural imagery as a relaxing thing as he uses calm words such as ‘loiter’ and ‘bathe’ which makes this a contrasting point. The way the poets have done this is a brilliant way to get the poem flowing with different moods, whilst still getting their purpose across. Angelou talks in a relaxing style, but uses rhetorical questions. This makes her sound challenging and possibly even angry. McKay uses slight aggression and anger in ‘I shall return.’ He uses bold imagery to do this. He also talks about natural things like â€Å"forest fires burn† and â€Å"blades of the bending grasses† and uses personification to make them seem like bad things, like blades of knives, and the burning of flames. However, he does also express his ‘washed away’ feeling vaguely, â€Å"†¦the streams that bathe the†¦Ã¢â‚¬  shows he has a lot of respect for things that happen everyday and shows how much beauty they actually have. The poets make points and raise ideas about confidence whilst they talk about their childhood â€Å"Did you want to see me broken?† (‘Still I Rise’) makes a point of something that hurt her in the past, but now she shows she has enough strength to ask those questions she always wanted to know. That is similar in both poems, but talk in completely different attitudes, whilst explaining similar things. In my opinion, both poems are equally as good. ‘Still I rise’ uses very strong metaphors to bring back how Maya feels about black female history. â€Å"I’m a black ocean, leaping and wide, welling and swelling†¦Ã¢â‚¬  is a brilliant phrase, using strong personification. A â€Å"black ocean† takes the biggest thing on the planet, and uses black to make it seem mysterious. â€Å"Welling and swelling† could be annotated in two different ways; that black history is becoming more recognised as a big thing, or, the â€Å"welling and swelling† of a woman’s stomach when she is pregnant, emphasising the fact women play a big part in the world, that they are the ones who bring children into the world, and happiness. ‘I shall return’ is short but to the point. Claude takes beautiful things and ‘twists’ them, to make them seem they have a strong personality of their own. This poem is very effective with the way Claude uses very bold imagery. He takes things that people come across every day, but don’t take them into consideration in the way they should.

Stock and Berkshire Hathaway

1. What is the possible meaning of the changes in stock price for Berkshire Hathaway and Scottish Power plc on the day of the acquisition announcement? Specifically, what does the $2. 17-billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? The significant change in stock prices for Berkshire Hathaway and Scottish Power plc is partially due to the wide variety of products produced under these names. The approval of these investments and products are indicated by the overall market because they are creating value for both the buyer and the seller. Berkshire Hathaway is responsible for eight different types of product ranging from insurance and financial products to retail including wholesale distributing and apparel along with an array of smaller businesses. Warren Buffett’s name goes a long way based on the type of work and success he has had in the past. His decision to run the company in the interests of the shareholders has proven to be successful. â€Å"In 1977, Berkshire Hathaway’s year-end closing share price was $102; on May 24, 2005 the closing price on Class A shares reached $85,500†. It seems that Warren Buffett refuses to ‘split’ the firm’s share price in order to make it more accessible to everyday investors is because of the value of the company and the contribution that these investors have made to Berkshire Hathaway. They make risky decisions and expect a successful outcome which in turn results in a profitable project. The $2. 17-billion gain in Berkshire’s market value implies that the intrinsic value of PacifiCorp is increasing as well. The market value may be different than the intrinsic value however the intrinsic value is the actual value of the company including assets and the underlying perception of that value. Both tangible and intangible factors may be included. Therefore the intrinsic value of the PacifiCorp is on the rise with the amount of revenue they are generating. 1. Based on the multiples for comparable regulated utilities, what is the range of possible values for PacifiCorp? What questions might you have about this range? PacifiCorp |Revenue |EBIT |EBITDA |Net Income |EPS |Book Value | |Median |$6. 252B |$8. 775B |$9. 023B |$7. 96B |$4. 277B |$5. 904B | |Mean |$6. 584B |$9. 289B |$9. 076B |$7. 553B |$4. 308B |$5. 678B | | For the most part, the means are higher than the medians for the enterprise financial value of PacifiCorp. 2. Assess the bid for PacifiCorp. How does it compare with the firm’s intrinsic value? As an alternative, the instructor could suggest that students perform a simple di scounted cash flow (DCF) analysis. Warren Buffett and Berkshire Hathaway’s bid of $5. 1 billion for PacifiCorp was a risky yet profitable move for the pair. With the average revenue earning of $6. 584 billion and an average net income of $7. 53 billion, the earnings seem to exceed the overall cost of purchasing this corporation. PacifiCorp had steady returns for numerous years as presented below. 5. 4 percent of their stock was preferred stock for two consecutive years with dividends of $1. 35 per share. With the wide range of businesses under their belt including, insurance, apparel, building products, finance and financial products, flight services, retail, grocery distribution and carpet and floor coverings along with an assortment of smaller businesses, PacifiCorp would just be another notch in the belt of Warren Buffet. His investment strategies have proven to be profitable and his decisions have proven to be knowledgeable and successful. The intrinsic value of the corporation will definitely be of value to Warren Buffett and Berkshire Hathaway based on PacifiCorp’s earnings, financial worth and the value of their assets in years prior to Warren Buffett’s acquisition. [pic][pic] 3. How well has Berkshire Hathaway performed? How well has it performed in the aggregate? What about its investment in MidAmerican Energy Holdings? Berkshire Hathaway has become an investing empire. Their enterprise value in 2005 was nearly $520 billion. Taking a look at their current value is no different. According to Berkshire Hathaway’s most recent 10K report (2010), they had 1,648,000 outstanding shares of class A stock. At the end of 2010 the price of the class A stock was $120,450 per share. If we use the formula for market capitalization we get: Market Capitalization = Outstanding shares * share price Market Capitalization = 1,648,000*120,450 Market Capitalization = 198,501,600,000 We then use the 10K to find their cash, cash equivalents and debt for 2010. According to their annual report they had cash and cash equivalents of $2,673,000,000 and a reported debt of $6,621,000,000. We then use these numbers to find the current enterprise value: Enterprise value = 198,501,600,000-2,673,000,000+6,621,000,000 Enterprise value = 202,449,600,000 These estimates from 2005 and 2010 show us that Berkshire Hathaway did lose some value; however they still have an enterprise value of over $200 billion. This shows us that even through the last few years when the United States has been in an economic recession overall they have remained strong. Using Yahoo Finance we see that there was a slight drop in stock A prices in February of 2009 when it reached a low of about $78,000 per share. But by the end of 2009, prices rose back to above $100,000 per share and have remained, showing consistency and continuing to build shareholder confidence. Berkshire Hathaway has increased its interest in MidAmerican from 88. 6% to 89. 8% since 2005. By doing this it only adds even more value to Berkshire Hathaway as MidAmerican is a leading provider of natural gas for more than 2. 4 million customers. The investment has surely paid off as the 2010 annual report showed 1. 13 billion dollars of earnings for Berkshire from MidAmerican. 4. What is your assessment of Berkshire’s investments in Buffett’s â€Å"Big Four†: American Express, Coca-Cola, Gillette (now part of Procter and Gamble), and Wells Fargo? With a little more than 150,000,000 shares of American Express, Berkshire Hathaway owns about 12. 6% of the company. It initially cost about $1,300,000,000 to invest in these shares. As of today the market value is right around $7,500,000,000. As you can see, Investing in American Express has turned out to be a smart move for Buffet as they have seen over $6. 2 Billion in profit. American Express shows a consistent trend year after year of making a profit and continues to be a safe and attractive purchase. Berkshire owns around 200,000,000 shares of Coca-Cola coming out to be about 8. 6% ownership of the company. The cost of these shares was about $1,300,000,000 and the market value of the shares today has grown to be almost $13,400,000,000. Again we see a smart investment, with Coca-Cola producing a $12. billion dollar profit for Berkshire. Coca-Cola continues to be a leader in effectively running their finances as it seems their stock prices rises every year. They carry low debt and our consistent fitting perfect into the Berkshire mold. Berkshire Hathaway owns close to 73,000,000 shares of Procter and Gamble. These shares are equal to a 2. 6% ownership of Procter and Gamble. When they invested this cost them $464,000,00 0. Today these shares are worth around $4,800,000,000. Again we see that this investment has worked out in favor of Buffet and Berkshire Hathaway. Proctor and Gamble carries a low amount of debt and produces a high net income and continues to grow year in and year out making Buffet and other investor’s very happy shareholders. The last company Wells Fargo, Berkshire has about a 6. 8% ownership of or roughly holds around 360,000,000 shares. The cost of the Wells Fargo stock to Berkshire was estimated at around $8,000,000,000. In today’s market these shares hold a value of about $10,600,000,000. Even though this is a profit of about $2. 6 billion I’m not sure if Buffett is extremely happy with this investment. Proctor and Gambles stock price is relatively low giving it much room to grow however over the last couple of years it has fluctuated quite a bit. Out of the four investments this is definitely the least effective and efficient. 5. From Warren Buffett’s perspective, what is the intrinsic value? Why is it accorded such importance? How is it estimated? What are the alternatives to intrinsic value? Why does Buffett reject them? As I already stated, intrinsic value is found by using a company’s stock price and their earnings per share. People tend to buy the stocks that they feel are worth more than what the market claims they are worth adding to the notion of a company’s intrinsic value. Warren Buffet obviously does much more than the average person when he chooses stocks to invest in as we can see from the amount of money he and Berkshire Hathaway have. When deciding whether or not to invest in a company he looks at the return on equity of a company to see the consistency of a company’s performance and how much equity they are able to generate for their shareholders. Buffet performs this calculation year after year to be sure that the company is consistent. Next, he looks at the company’s debt to equity ratio to be sure that the company is avoiding large amounts of debt. None of the companies he invests in have higher liabilities than assets as he believes that debt in large amounts is a bad thing. In order for him to be willing to invest he must see that the company is or will be highly profitable for years to come. If the company hasn’t been publically traded for at least 10 years more times than not, he won’t even consider investing. He does not believe in short-term success; he claims that â€Å"in the short-term, the market is a popularity contest. He chooses stocks by looking at the overall ability and potential of a company rather than how they perform in the short-term ignoring the supply/demand attraction. When Buffet considers companies for the long-term, he looks at them more as an owner than a shareholder concerned with receiving capital gains. He is concerned with the individual company and their abili ty to make money over the long-term. He prefers to act as almost an owner and less of a shareholder concerned with receiving capital gains. 6. Critically assess Buffett’s investment philosophy. Be prepared to identify points where you agree and disagree with him. . Economic reality, not accounting reality. When looking at a business, Warren Buffet looks at the economic reality as opposed to the accounting reality. Accounting reality looks at a company using the generally accepted accounting principles (GAAP) to determine the value of the company. GAAP covers revenue recognition, balance sheet item classification, and outstanding share measurements. Economic reality is broader than accounting reality and includes intangible assets, such as patents, trademarks, special managerial expertise, and reputation of the company. When looking at the value of a company looking at the economic reality makes more sense because it includes intangible assets that can’t be computed, but are an important factor for the value of a company. For example, the reputation of a company cannot be quantified, but reputation is valuable in the sense that a company with a good reputation will draw more favor from customers and investors while a company with a bad reputation will drive away customers and potential investors. 2. The cost of lost opportunity. This compares an investment opportunity against the next best alternative. What this means is that when making a decision as to whether to invest in one company or the other, choices are made as either/or decisions rather than yes/no. By looking at companies this way, Buffet is able to see how investing in one company would compare by looking at the potential returns on common stock from investing in another company. 3. Value creation: time is money. In terms of value creation, Buffet believes that intrinsic value is a better indicator of future expected performance as opposed to using book value. Intrinsic value is the discounted value of the cash that can be taken out of a business during its remaining life while, book value is the number of total assets a company has minus intangible assets and liabilities. What makes the intrinsic value a better indicator of future expected performance is the fact that book value may not reflect the economic reality because depending on the relationship between expected returns and the discount rate; value can either be gained or lost. What this means is that the estimates of the return on equity can drastically change whether or not a company is seen as valuable. . Measure performance by gain in intrinsic value. Performance is measured by gain in intrinsic value as opposed to accounting profit. Warren Buffet says that Berkshire’s performance is not measured by the size of the company, but by the companies per share progress. The gain of intrinsic value is modeled as the value added by a business compared to the cost for the use of capital in that business. Other forms of measuring performance look at the ability to earn returns in excess of the cost of capital. By looking at per share progress, it is easier to see growth in a company than by looking at how large it is because a large company does not mean that it is a profitable company or that their growth is related to an increase in profit, if anything their growth could just be related to a large number of acquisitions. 5. Risk and discount rates. When looking at risk and discount rates, instead of using the traditional capital asset pricing model (CAPM) to estimate discount rates, Buffet chooses to use the rate of return on the long term treasury bond to discount cash flows. The CAPM model of estimating discount rates adds in a risk premium to the long term risk free rate of return, while Buffet’s method avoids risk altogether and uses a risk-free discount rate. The reason behind this is that Buffet likes to invest in companies with predictable and stable earnings and avoid financing his firm with debt. Overall this is a smart strategy because if there was ever an economic crisis, like there was a few years ago, a company not financed with debt and low risk would pull through better than a company who had many high risk investments and was financed by debt. . Diversification. Buffet’s view on diversification is that it is an unnecessary precaution, and that instead of inventing in many stocks to avoid risk, it would be more profitable to wait for one exceptional company to invest in. The logic behind this makes sense, but the execution is difficult because of the fact that the stock market is so volatile and investors do not have all of the information necessary to make an informed decision with 100% confidence that there investment will pay off. There is also the fact that some investment opportunities may be missed if companies wait too long to find that one exceptional company to invest in. 7. Investing behavior should be driven by information, analysis, and self-discipline, not by emotion or â€Å"hunch†. Buffet believes that stock prices have become unreliable measure of intrinsic value of a company because they are influenced by the fear and greed of investors. He also doesn’t believe in the efficient markets hypothesis (EMH), which states that stock prices are fair in reflecting what was known about a company. Buffet disapproves of this theory because he believes that stock prices do not accurately portray the intrinsic value of the company and believing in this theory prevents investors from seeing the bigger picture on how the stock market really works. It is important to use information and analysis of companies when making an investment decision because you can’t always trust the information that is given and the information given may not give the whole picture on the value of a company. 8. Alignment of agents and owners. When it comes to investing Buffet believes that an alignment of agents and owners is important. This means that the needs of the company are that of the needs of the shareholders. Keeping the needs of the shareholders first is important to having a successful business. If shareholders are happy, businesses can expect to receive a good supply of cash flow from investments. Shareholder wealth can also lead to more profits in the company as well as the company will be focused on long term profit maximization and not just the short term. 7. Should Berkshire Hathaway’s shareholders endorse the acquisition of PacifiCorp? While looking at PacifiCorp’s Consolidated Financial Statement (Exhibit 7) PacifiCorp’s income from operations before tax fits the criteria 1 presented in Berkshire Hathaway’s acquisition criteria (Exhibit 8) by having more than $75 million in pretax earnings, (PacifiCorp has $4. 2 billion. ) However, they do carry about $3. 92 billion in long-term debt, which fails criteria 3 in Exhibit 8. They do however, fill criteria 2 in Exhibit 8 by bringing in about $3. 6 million more in net income from 2005 to 2004 (Exhibit 7) although more data would be needed to see if PacifiCorp was consistently earning a profit. Compared to 6 other companies in the same field in Exhibit 9, PacifiCorp doesn’t seem like the best investment. PacifiCorp is number 2 for total assets, but also number 2 for total liabilities. This goes in hand with their total long-term debt as they are also number 2, but for short-term debt they are number 5. For total debt they are number 2. For total revenue before taxes, PacifiCorp is number 4. What these numbers mean is that compared to other companies, it seems that PacifiCorp is a more risky investment. PacifiCorp generally has more debt and is not bringing in as much revenue, though they still have positive growth in net income. Another source of concern is that PacifiCorp has very low earnings per share with a EPS of just $0. 81 with the next competitor having an EPS of $1. 42 (Exhibit 10). From looking at the data presented in the tables, shareholders should not endorse the acquisition of PacifiCorp because the company fails several criteria that were established by Berkshire Hathaway as guidelines for acquiring corporations, and it is unlikely that the acquisition will result in the 15% annual growth of the intrinsic value of the firm.

Literature On Teacher Professionalism And The Vocational...

What does it mean to be a ‘good’ teacher’? Discuss in relation to the literature on teacher professionalism and the vocational culture of teaching Introduction Teachers are role models who share their knowledge and passion for a subject to their students. They do not only have the technical ability to teach but they also have the mental capacity to deal with many challenging students to assess each situation in a pragmatic manner. Teachers have collective attributes which help the students to learn and excel during their academic years. One of this is that they challenge the students by giving them extra work in order for the students to develop more skills to help them in their academic years. This will able the teachers to get feedback†¦show more content†¦Also the governments and the teachers’ perspectives on the notion of an ideal teacher? In the first section of the essay, it will be an outline of what is ‘identity’, how people form an identity and how identity is a crucial part of teaching as a profession. Teacher Identity ‘It is not entirely possible to answer the question what is identity?’ (Lawler, 2008). Identity as a term is quite difficult to define adequately in the sense that it is a contradictory phrase explaining both sameness and uniqueness. Many theorists such as Marcia and Erikson have attempted to answer this difficult question but rather define the process and identified the influences as there is not an exact definition for this complex process. The word itself derives from a Latin lexes item which means identical, supporting the fact that people often express who they are through common identities with others. Such as women, men even teachers. However in a contradicting sense people also achieve a sense of identity through uniqueness, relying on ‘not being something else’ (Lawler, 2008). This combination ultimately represents a ‘balance between self and others’. Identity is believed to form adolescents influenced by both social and individual elements, as one tries to identify themselves striving for self-satisfaction. Also the desire to achieve certain criteria or profile in order to feel as they belong to a particular niche. ‘For the child whose earlier years have been deprived –