Porter’s 5 Force Analysis

The Industry Handbook http://www. investopedia. com/features/industryhandbook/ Thanks very much for downloading the printable version of this tutorial. As always, we welcome any feedback or suggestions. http://www. investopedia. com/contact. spx Table of Contents 1) The Industry Handbook: Introduction 2) The Industry Handbook: Porter's 5 Forces Analysis 3) The Industry Handbook: The Airline Industry 4) The Industry Handbook: The Oil Services Industry 5) The Industry Handbook: Precious Metals 6) The Industry Handbook: Automobiles 7) The Industry Handbook: The Retailing Industry 8) The Industry Handbook: The Banking Industry 9) The Industry Handbook: Biotechnology 10) The Industry Handbook: The Semiconductor Industry 11) The Industry Handbook: The Insurance Industry 12) The Industry Handbook: The Telecommunications Industry 13) The Industry Handbook: The Utilities Industry 14) The Industry Handbook: The Internet Industry IntroductionIndustry analysis is a type of investment research th at begins by focusing on the status of an industry or an industrial sector. Why is this important? Each industry is different, and using one cookie-cutter approach to analysis is sure to create problems. Imagine, for example, comparing the P/E ratio of a tech company to that of a utility. Because you are, in effect, comparing apples to oranges, the analysis is next to useless. In each section we'll take an in-depth look at the different valuation techniques and buzz words used in a particular industry, complete a 5-forces analysis on the state of the market and point you in the direction of industry-specific resources. Page 1 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. Porter's 5 Forces Analysis If you are not familiar with the five competitive forces model, here is a brief background on who developed it, and why it is useful. The model originated from Michael E. Por ter's 1980 book â€Å"Competitive Strategy: Techniques for Analyzing Industries and Competitors. † Since then, it has become a frequently used tool for analyzing a company's industry structure and its corporate strategy. In his book, Porter identified five competitive forces that shape every single industry and market.These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry. Figure 1 shows the relationship between the different competitive forces. Figure 1: Porter's five competitive forces This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 2 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. 1. Threat of New Entrants – The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include: o o o o o oExisting loyalty to major brands Incentives for using a particular buyer (such as frequent shopper programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation 2. Power of Suppliers – This is how much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company's margins and volumes, then it holds substantial power. Here are a few reasons that suppliers might have power: o o o There are very few suppliers of a particular product There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers – can't do without it The supplying industry has a higher profitability than the buying industry o o . Power of Buyers – This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company's margins and volumes, then the customer hold substantial power. Here are a few reasons that customers might have power: o o o o Small number of buyers Purchases large volumes Switching to another (competitive) product is simple The product is not extremely important to buyers; they can do without the product for a period of time This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 3 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. om – the resource for investing and personal finance education. o Customers are price sensitive 4. Availability of Substitutes – What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses a serious threat. Here are a few factors that can affect the threat of substitutes: o o The main issue is the similarity of substitutes. For example, if the price of coffee r ises substantially, a coffee drinker may switch over to a beverage like tea. If substitutes are similar, it can be viewed in the same light as a new entrant. 5. Competitive Rivalry – This describes the intensity of competition between existing firms in an industry.Highly competitive industries generally earn low returns because the cost of competition is high. A highly competitive market might result from: o o o Many players of about the same size; there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth; companies can only grow by stealing customers away from competitors The Airline Industry Few inventions have changed how people live and experience the world as much as the invention of the airplane. During both World Wars, government subsidies and demands for new airplanes vastly improved techniques for their design and construction.Following the World War II, the first commercial airplane routes we re set up in Europe. Over time, air travel has become so commonplace that it would be hard to imagine life without it. The airline industry, therefore, certainly has progressed. It has also altered the way in which people live and conduct This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 4 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. business by shortening travel time and altering our concept of distance, making it possible for us to visit and conduct business in places once considered remote. For more on the airline industry, read Is That Airline Ready For Lift-Off? ) The airline industry exists in an intensely competitive market. In recent years, there has been an industry-wide shakedown, which will have far-reaching effects on the industry's trend towards expanding domestic and international services. In the past, the air line industry was at least partly government owned. This is still true in many countries, but in the U. S. all major airlines have come to be privately held. The airline industry can be separated into four categories by the U. S. Department of Transportation (DOT): ? ? ? ? International – 130+ seat planes that have the ability to take passengers just about anywhere in the world.Companies in this category typically have annual revenue of $1 billion or more. National – Usually these airlines seat 100-150 people and have revenues between $100 million and $1 billion. Regional – Companies with revenues less than $100 million that focus on short-haul flights. Cargo – These are airlines generally transport goods. Airport capacity, route structures, technology and costs to lease or buy the physical aircraft are significant in the airline industry. Other large issues are: ? ? ? Weather – Weather is variable and unpredictable. Extreme heat, cold, fog and sno w can shut down airports and cancel flights, which costs an airline money.Fuel Cost – According to the Air Transportation Association (ATA), fuel is an airline's second largest expense. Fuel makes up a significant portion of an airline's total costs, although efficiency among different carriers can vary widely. Short haul airlines typically get lower fuel efficiency because take-offs and landings consume high amounts of jet fuel. Labor – According to the ATA, labor is the an airline's No. 1 cost; airlines must pay pilots, flight attendants, baggage handlers, dispatchers, customer service and others. Key Ratios/Terms Available Seat Mile = (total # of seats available for transporting passengers) X (# of miles flown during period) This tutorial can be found at: http://www. investopedia. om/features/industryhandbook/ (Page 5 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. Revenue Passenger Mile = flown during the period) (# of revenue-paying passengers) X (# of mile Revenue Per Available Seat Mile = (Revenue) (# of seats available) Air Traffic Liability (ATL): An estimate of the amount of money already received for passenger ticket sales and cargo transportation that is yet to be provided. It is important to find out this figure so you can remove it from quoted revenue figures (unless they specifically state that ATL was excluded).Load Factor: This indicator, compiled monthly by the Air Transport Association (ATA), measures the percentage of available seating capacity that is filled with passengers. Analysts state that once the airline load factor exceeds its breakeven point, then more and more revenue will trickle down to the bottom line. Keep in mind that during holidays and summer vacations load factor can be significantly higher, therefore, it is important to compare the figures against the same period from the previous year. Analyst Insight Airlines also earn revenue from transporting cargo, selling frequent flier miles to other companies and up-selling in flight services. But the largest proportion of revenue is derived from regular and business passengers.For this reason, it is important that you take consumer and business confidence into account on top of the regular factors that one should consider like earnings growth and debt load. (For more about the consumer confidence survey, see Economic Indicators: Consumer Confidence Index. ) Business travelers are important to airlines because they are more likely to travel several times throughout the year and they tend to purchase the upgraded services that have higher margins for the airline. On the other hand, leisure travelers are less likely to purchase these premium services and are typically very price sensitive. In times of economic uncertainty or sharp decline in consumer confidence, you can expect the number of leisure travelers to decline.It is also imp ortant to look at the geographic areas that an airline targets. Obviously, more market share is better for a particular market, but it is also important to stay diversified. Try to find out the destination to which the majority of an airline's flights are traveling. For example, an airline that sends a high number of flights to the Caribbean might see a dramatic drop in profits if the outlook for leisure travelers looks poor. A final key area to keep a close eye on is costs. The airline industry is extremely sensitive to costs such as fuel, labor and borrowing costs. If you notice a trend of This tutorial can be found at: http://www. investopedia. om/features/industryhandbook/ (Page 6 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. rising fuel costs, you should factor that into your analysis of a company. Fuel prices tend to fluctuate on a monthly basis, so paying close attention to these costs is crucial. Porter's 5 Forces Analysis 1. Threat of New Entrants. At first glance, you might think that the airline industry is pretty tough to break into, but don't be fooled. You'll need to look at whether there are substantial costs to access bank loans and credit. If borrowing is cheap, then the likelihood of more airliners entering the industry is higher.The more new airlines that enter the market, the more saturated it becomes for everyone. Brand name recognition and frequent fliers point also play a role in the airline industry. An airline with a strong brand name and incentives can often lure a customer even if its prices are higher. 2. Power of Suppliers. The airline supply business is mainly dominated by Boeing and Airbus. For this reason, there isn't a lot of cutthroat competition among suppliers. Also, the likelihood of a supplier integrating vertically isn't very likely. In other words, you probably won't see suppliers starting to offer flight s ervice on top of building airlines. 3. Power of Buyers.The bargaining power of buyers in the airline industry is quite low. Obviously, there are high costs involved with switching airplanes, but also take a look at the ability to compete on service. Is the seat in one airline more comfortable than another? Probably not unless you are analyzing a luxury liner like the Concord Jet. 4. Availability of Substitutes. What is the likelihood that someone will drive or take a train to his or her destination? For regional airlines, the threat might be a little higher than international carriers. When determining this you should consider time, money, personal preference and convenience in the air travel industry. 5. Competitive Rivalry.Highly competitive industries generally earn low returns because the cost of competition is high. This can spell disaster when times get tough in the economy. Key Links ? ? ? Federal Aviation Administration – Get the latest regulation news, airport delays , etc. AviationNow. com – Information and news on the airline/aerospace industry. AirWise. com – Airport and aviation news This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 7 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. The Oil Services Industry There is no doubt that the oil/energy industry is extremely large.According to the Department of Energy (DOE), fossil fuels (including coal, oil and natural gas) makes up more than 85% of the energy consumed in the U. S. as of 2008. Oil supplies 40% of U. S. energy needs. (Visit the U. S. Department of Energy's Energy Sources information page for more insight. ) Before petroleum can be used, it is sent to a refinery where it is physically, thermally and chemically separated into fractions and then converted into finished products. About 90% of these products are fuels s uch as gasoline, aviation fuels, distillate and residual oil, liquefied petroleum gas (LPG), coke (not the refreshment) and kerosene. Refineries also produce non-fuel products, including petrochemicals, asphalt, road oil, lubricants, solvents and wax.Petrochemicals (ethylene, propylene, benzene and others) are shipped to chemical plants, where they are used to manufacture chemicals and plastics. (For more insight, read Oil And Gas Industry Primer. ) There are two major sectors within the oil industry, upstream and downstream. For the purposes of this tutorial we will focus on upstream, which is the process of extracting the oil and refining it. Downstream is the commercial side of the business, such as gas stations or the delivery of oil for heat. Oil Drilling and Services Oil drilling and services is broken into two major areas: drilling and oilfield services. ? Drilling – Drilling companies physically drill and pump oil out of the ground. The drilling industry has always be en classified as highly skilled.The people with the skills and expertise to operate drilling equipment are in high demand, which means that for an oil company to have these people on staff all the time can cost a lot. For this reason, most drilling companies are simply contractors who are hired by oil and gas producers for a specified period of time. (For related reading, see Unearth Profits In Oil Exploration And Production. ) In the drilling industry, there are several different types of rigs, each with a specialized purpose. Some of these include: o Land Rigs – Drilling depths ranges from 5,000 to 30,000 feet. o Submersible Rigs – Used for ocean, lake and swamp drilling.The bottom part of these rigs are submerged to the sea's floor and the platform is on top of the water. o Jack-ups – this type of rig has three legs and a triangular platform which is jacked-up above the highest anticipated waves. This tutorial can be found at: http://www. investopedia. com/fe atures/industryhandbook/ (Page 8 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. o Drill Ships – These look like tankers/ships, but they travel the oceans in search of oil in extremely deep water. (For more information on the drilling industry, check out on the Rigzone website. ) ? Oilfield Services – Oilfield service companies assist the drilling companies n setting up oil and gas wells. In general these companies manufacture, repair and maintain equipment used in oil extraction and transport. More specifically, these services can include: o Seismic Testing – This involves mapping the geological structure beneath the surface. o Transport Services – Both land and water rigs need to be moved around at some point in time. o Directional Services – Believe it or not, all oil wells are not drilled straight down, some oil services companies s pecialize in drilling angled or horizontal holes. The energy industry is not any different than most commodity-based industries as it faces long periods of boom and bust.Drilling and other service firms are highly dependent on the price and demand for petroleum. These firms are some of the first to feel the effects of increased or decreased spending. If oil prices rise, it takes time for petroleum companies to size up land, setup rigs, take out the oil, transport it and refine it before the oil company sees any profit. On the other hand, oil services and drilling companies are the first on the scene when companies decide to start exploring. Oil Refining The refining business is not quite as fragmented as the drilling and services industry. This sector is dominated by a small handful of large players. In fact, much of the energy industry is ruled by large, integrated oil companies.Integrated refers to the fact that many of these companies look after all factors of production, refinin g and marketing. For the most part, refining is a slow and stable business. The large amounts of capital investment means that very few companies can afford to enter this business. This handbook will try to focus more on oil equipment and services such as drilling and support services. Key Ratios/Terms BTUs: Short for â€Å"British Thermal Units. † This is the amount of heat required to increase the temperature of one pound of water by one degree Fahrenheit. This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 9 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. om – the resource for investing and personal finance education. Different fuels have different heating values; by quoting the price per BTU it is easier to compare different types of energy. Dayrates: Oil and gas drillers usually charge oil producers on a daily work rate. These rates vary depending on the location, the type of rig a nd the market conditions. There are plenty of research firms that publish this information. Higher dayrates are great for drilling companies, but for refiners and distribution companies this means lower margins unless energy prices are rising at the same rate. Meterage: Another type of contract that differs from dayrates is one based on how deep the rig drills.These are called meterage, or footage, contracts. These are less desirable because the depth of the oil deposits are unpredictable; it's really a gamble on the driller's part. Downstream: Refers to oil and gas operations after the production phase and through to the point of sale, whether at the gas pump or the home heating oil truck Upstream: The grass roots of the oil business, upstream refers to the exploration and production of oil and gas. Many analysts look at upstream expenditures from previous quarters to estimate future industry trends. For example, a decline in upstream expenditures usually trickles down to other are as such as transportation and marketing.OPEC: The Organization of Petroleum Exporting Countries is an intergovernmental organization dedicated to the stability and prosperity of the petroleum market. OPEC membership is open to any country that is a substantial exporter of oil and that shares the ideals of the organization. OPEC has 11 member countries. Output quotas placed by OPEC can send huge shocks throughout the energy markets. Below is a chart of the world's top exporters of petroleum. OPEC members are denoted by â€Å"*†. Indonesia and Qatar are also members, but they don't make the top twelve. Top World Oil Net Exporters, 2006 Country 1) Saudi Arabia* 2) Russia Net Exports (million barrels per day) 8. 65 6. 57 This tutorial can be found at: http://www. investopedia. om/features/industryhandbook/ (Page 10 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. 3) No rway 4) Iran* 5) United Arab Emirates* 2. 54 2. 52 2. 52 2. 20 2. 15 2. 15 1. 85 1. 68 1. 52 6) Venezuela* 7) Kuwait* 8) Nigeria* 9) Algeria* 10) Mexico 11) Libya* 12) Iraq* 1. 43 Source: Energy Information Administration Analyst Insight Analysts and investors often disagree on specific investment decisions, but one thing that they do agree on is their approach to analyzing energy companies. A top down investment approach is almost always the best strategy. We will go through the top down steps below. For more insight, read A Top-Down Approach To Investing. ) Economics/Politics The oil industry is easily influenced by economic and political conditions. If a country is in a recession, fewer products are being manufactured, not as many people drive to work, take vacations, etc. All of these variables factor into less energy use. The best time to invest in an oil company is when the economy is firing on all cylinders and oil companies are making so much money that using excessive amoun ts of energy themselves has little effect on their bottom line. Some analysts believe that rather than analyzing energy companies, you should just predict the trend in energy prices.While more analysis is needed for a prudent investment than simply looking at price trends in oil, it's true that there is a strong correlation between the performance of energy companies and the commodity price for energy. Supply and Demand Oil and gas prices fluctuate on a minute by minute basis, taking a look at the historical price range is the first place you should look. Many factors determine the price of oil, but it really all comes down to supply and demand. Demand typically does not fluctuate too much (except in the case of recession), but supply shocks can occur for a number of reasons. When OPEC meets to determine oil supply for the coming months, the price of oil can fluctuate wildly.Day-to-day This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 11 o f 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. fluctuations should not influence your investment decision in a particular energy company, but long-term trends should be followed more closely. You can find the latest energy supply/demand statistics at the Energy Information Administration. Rig Utilization Rates Another factor that determines supply is the rig utilization rates; its close relationship to oil prices is not a coincidence. Higher utilization rates mean more revenue and profits.For drilling companies, it is important to take a close look at the company's rig fleet, because older rigs lack the ability to drill in remote locations or to bore deep holes. Some other factors to consider are the depth of water that the offshore rigs can drill in, hole depth and horsepower. Higher quality rigs will have higher utilization rates, especially during weak periods. This w ill lead to higher revenue growth. Sometimes this is a double-edged sword; while higher utilization is better, a company that is at its capacity will have difficulty increasing revenues further. Contracts The contracts through which an oil services company is paid also play a large role in supply. Pay close attention to the dayrates, as falling dayrates can dramatically decrease revenues.The opposite is true should dayrates rise. This is because many of the drillers' costs are fixed. Financial Statements After these wide scale factors have been considered, it's time to get down to the nitty gritty – the financials. And when it comes to the financials, the same old rules apply to oil services companies. Ideally, revenues and profits will be growing consistently, just as they do in any quality company. It's worth digging deeper to see if there are any one-time events that have dramatically increased revenues. Also, the P/E ratio and PEG ratios should be comparable to others wit hin the industry. On the balance sheet, investors should keep an eye on debt levels.High debt puts a strain on credit ratings, weakening their ability to purchase new equipment or finance other capital expenditures. Poor credit ratings also make it difficult to acquire new business. If customers have the choice of going with a company that is strong versus one that is having debt problems, which do you think they will choose? To do a test for financial leverage, take a look at the debt/equity ratio. The working capital also tells us whether the company has enough liquid assets to cover short term liabilities. Rating agencies like Moody's and S&P say 50% is a prudent debt/equity ratio. Companies in more stable markets can afford slightly higher debt/equity ratios.If profits are of the utmost importance, then the statement of cash flow is a close second. Oil companies are notorious for reporting non cash line items in the This tutorial can be found at: http://www. investopedia. com/fe atures/industryhandbook/ (Page 12 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. income statement. For this reason, you should try to decipher the cash EPS. By stripping away all the non-cash entities you will get a truer number because cash flow cannot be manipulated as easily as net income can. (For further reading, see Advanced Financial Statement Analysis. ) Porter's 5 Forces Analysis 1. Threat of New Entrants.There are thousands of oil and oil services companies throughout the world, but the barriers to enter this industry are enough to scare away all but the serious companies. Barriers can vary depending on the area of the market in which the company is situated. For example, some types of pumping trucks needed at well sites cost more than $1 million each. Other areas of the oil business require highly specialized workers to operate the equipment and to make key d rilling decisions. Companies in industries such as these have higher barriers to entry than ones that are simply offering drilling services or support services. Having ample cash is another barrier – a company had better have deep pockets to take on the existing oil companies. 2. Power of Suppliers.While there are plenty of oil companies in the world, much of the oil and gas business is dominated by a small handful of powerful companies. The large amounts of capital investment tend to weed out a lot of the suppliers of rigs, pipeline, refining, etc. There isn't a lot of cut-throat competition between them, but they do have significant power over smaller drilling and support companies. 3. Power of Buyers. The balance of power is shifting toward buyers. Oil is a commodity and one company's oil or oil drilling services are not that much different from another's. This leads buyers to seek lower prices and better contract terms. 4. Availability of Substitutes.Substitutes for the o il industry in general include alternative fuels such as coal, gas, solar power, wind power, hydroelectricity and even nuclear energy. Remember, oil is used for more than just running our vehicles, it is also used in plastics and other materials. When analyzing an energy company it is extremely important to take a close look at the specific area in which the company is operating. Also, companies offering more obscure or specialized services such as seismic drilling or directional drilling tools are much more likely to withstand the threat of substitutes. (For more on oil substitutes, see The Biofuels Debate Heats Up. ) 5. Competitive Rivalry. Slow industry growth rates and high exit barriers are a particularly troublesome situation facing some firms.Until quite recently, oil refineries were a particularly good example. For a period of almost 20 years, no new refineries were built in the U. S. Refinery capacity exceeded the product demands as a result of conservation efforts followin g the oil shocks of the 1970s. At the same time, exit barriers in the This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 13 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. refinery business are quite high. Besides the scrap value of the equipment, a refinery that does not operate has no value-adding capability.Almost every refinery can do one thing – produce the refined products they have been designed for. Key Links ? ? ? Department of Energy – Get the latest regulation news and statistics. You name it, this site has it. ODS-Petrodata – Both free and fee-based data on rig counts and other key figures in the oil services industry. Rigzone. com – News and statistics on the oil and gas industry. Precious Metals The precious metals industry is very capital intensive. Constructing mines and building produ ction facilities requires huge sums of capital. Long-term survival requires heavy expenditures to finance production and exploration. Technology has played a big role in the computer and internet industry, but t has also greatly changed the mining industry. Gold is the most popular precious metal for investors. As you may know, gold is a commodity, and, as such, the price for gold fluctuates on a daily basis in the commodity markets. While there is a lot of overlap between the basics of mining gold and silver, the primary focus of here is on the gold market. Silver is less valuable than gold, and, as such, it is usually discovered either by accident or as a byproduct of gold/lead/copper mining. Gold prices are influenced by numerous variables that include fabricator demand, expected inflation, return on assets and central bank demand. Gold is strongly pegged to supply-and-demand patterns.In general, low prices result in low production, and high prices result in high production. Mark et forces determine price. A company's attempt to control costs is critical to maintaining financial health and production levels in the face of declining gold prices. (For related reading, see Does It Still Pay To Invest In Gold? ) The metals industry is not vertically integrated like other industries such as oil and energy. In the metals industry, the companies that mine the gold typically do This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 14 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. ot refine it, and refiners rarely sell it directly to the public. The industry encompasses three types of firms: 1. Exploration. These companies have very little in the way of assets. They explore and prove that gold exists in a particular area. The only major assets owned by exploration firms are the rights to drill and a small amount of capital, which is needed to conduct drilling and trenching operations. 2. Development. Once a gold deposit is discovered by exploration companies, they either try to become development firms, or they sell their gold find to development firms. Development firms are those operating on explored areas that have prove to be mines.The only real difference between development and exploration is that, for development firms, their area has proved to be a gold deposit. 3. Production. Producer firms are full-fledged mining companies that extract and produce gold from existing mines; this production can range from a hundred thousand ounces to several million ounces of gold production per year. Each operator in the supply chain has its own strengths and weaknesses. Some companies do well at extracting the metal from the earth, some refine, while others smelt and transform the commodity into a finished product. Most gold that is mined today is used for jewelry, perhaps because of its beauty, or perhaps because it doesn't rust or corrode.Other uses for gold include tooth filings, electronics manufacturing and collectibles, but these make up a very small portion of overall demand. Unlike other industries, companies in the mining industry come in all shapes and sizes. Much of the production is done by large blue chip companies, but the exploration side of the industry is full of junior companies looking to hit a home run with a large gold find. The mining industry has plenty of opportunities for speculators and others for income investors. (To learn more, read Getting Into The Gold Market. ) Key Ratios/Terms Mine Production Rates: Serious gold investors follow the Gold Survey very closely, published by Gold Fields Mineral Services. Each year, it lists the worldwide mine production statistics.Increasing production rates means more supply, which ultimately means a lower price for gold – if demand remains stable. Scrap Recovery: Another statistic published in the Gold Sur vey, scrap This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 15 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. recovery refers to the worldwide supply of gold from sources other than mine production. This includes recovered old jewelry, industrial byproducts, etc. Throughout the 1990s, more than 15% of the world's gold supply came from scrap recovery. Futures Sales by Producers As you probably know, gold trades in the futures markets.Gold producers are constantly monitoring the prices in the futures markets because it determines the price at which they can sell their gold. The Gold Survey lists statistics on producer sales. If producers are selling an increasing amount in the futures market, it could mean that prices will fall very soon. By purchasing futures contracts the producer â€Å"locks-in† a price. Therefore, if the price of gold falls in future months, it won't affect the producer's bottom line. Conversely, if prices continue to rise after the producer locks in, they won't be able to capitalize on the higher prices. Bullion: This denotes gold and silver that is refined and officially recognized as high quality (at least 99. 5% pure). It is usually in the form of bars rather than coins.When you hear of investors or central banks holding gold reserves, it is usually in the form of bullion. Ore: This refers to mineralized rock that contains metal. Gold producers mine gold ore and then extract the gold from it using either chemicals, extreme heat, or some other method. There are different types of ores, of which the most common are oxide ores and sulphide ores. Analyst Insight The price of gold fluctuates on a minute-by-minute basis, so taking a look at the historical price range is the first place you should look. Many factors determine the price of gold, but it really all comes down to supp ly and demand. Demand typically does not fluctuate too much, but supply shocks can send prices either soaring or into the doldrums.The difference between production costs and the futures price for gold equals the gross profit margins for mining companies. Therefore, the second place you want to look is the cost of production. The main factors to look at are the following: ? ? Location – Where is the gold being mined? Political unrest in developing nations has ruined more than one mining company. Developing nations might have cheaper labor and mining costs, but the political risks are huge. If you are risk averse, then look for companies with mines in relatively stable areas of the world. The costs might be higher, but at least the company knows what it's getting into. Ore Quality – Ore is mineralized rock that contains metal.Higher quality ore will contain more gold, which is usually reported as ounces This tutorial can be found at: http://www. investopedia. com/featur es/industryhandbook/ (Page 16 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. ? of gold per ton of ore. Generally speaking, oxide ores are better because the rock is more porous, making it easier to remove the gold. Mine Type – The type of mine a company uses is a big factor in production costs. Most underground mines are more expensive than open pit mines. Cost of Production The cost of production is probably the most widely followed measure for analyzing a gold producer.The lower the costs, the greater the operating leverage, which means that earnings are more stable and less volatile to changes in the price of gold. For example, a company that has a cash cost around $175/ounce is, for obvious reasons, in a much better position than one whose cost is $275/ounce. The low-cost producer has much more staying power than the marginal producer. In fact, if the price o f gold declines below $275/ounce, the higher-cost producer would have to stop producing until the price goes back up. Producers usually publish their cost of production in their annual report; this cost includes everything from site preparation to milling and refining.It doesn't include exploration costs, financing, or any other administrative expenses the company might incur. Aside from looking at costs, investors should carefully look over revenue growth. Revenue is output times the selling price for gold, so it may fluctuate from year to year. Well-run companies will attempt to hedge against fluctuating gold prices through the futures markets. Take a look at the revenue fluctuations over the past several years. Ideally, the revenue growth should be smooth. Companies with revenues that fluctuate widely from year to year are very hard to analyze and aren't where the smart money goes. Debt Levels Investors should keep an eye on debt levels, which are on the balance sheet.High debt p uts a strain on credit ratings, weakening the company's ability to purchase new equipment or finance other capital expenditures. Poor credit ratings also make it difficult to acquire new businesses. (For related reading, see Debt Reckoning. ) P/E As a final caveat (beware), never analyze a precious-metals company based on the price-to-earnings ratio. In general, a high P/E means high projected earnings in the future, but all gold stocks have high P/E ratios. The P/E ratio for a gold stock doesn't really tell us anything because precious metals companies need to be compared by assets, not earnings. Unlike buildings and machinery, gold companies have large amounts of gold in their vaults and in mines throughout the world.Gold on the balance sheet is unlike other capital assets; gold is seen This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 17 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com â€⠀œ the resource for investing and personal finance education. as currency of last resort. Investors are therefore willing to pay more for a gold company because it is the next best thing to physically holding the gold themselves. There are a few valuation techniques that analysts use when comparing various precious metal companies. The most popular and widely used ratio is market capitalization per ounce of reserves (market cap divided by reserves).This indicates to investors what they are paying for each ounce of reserves. Obviously, a lower price is better. Porter's 5 Forces Analysis 1. Threat of New Entrants. Financing is a principal barrier to entry in the precious-metals industry, which is heavily capital intensive. Constructing mines, production facilities, exploration and development and mining equipment all require large sums of capital. This capital is required before the mine is in production. Therefore, favorable financing terms are extremely important. In short, long-ter m survival in the precious-metal market requires significant capital. 2. Power of Suppliers. The only supply-side issues that miners face deal with government regulations and rules.The supply of land is plentiful, but gaining approval and permits to mine the land can be difficult, especially if environmental risks are high. 3. Power of Buyers. Gold is a commodity-based business, so the gold from one company is not that much different from another's. This translates into buyers seeking lower prices and better contract terms. 4. Availability of Substitutes. Substitutes for the precious metals industry include other precious metals such as diamonds, silver, platinum, etc. These are worthy substitutes for gold, but they are not as widely accepted as gold. Gold has the advantage of being standard for a world currency, so a gold bar in the U. S. s worth the same as it is in Ecuador. As other forms of precious metals such as diamonds gain popularity, they may also become more threatening a s substitutes. 5. Competitive Rivalry. Gold companies don't compete on price, mainly because the prices are determined by market forces. But gold companies do compete for land. The backbone of a precious metals company is its reserves, and the only way to beef up reserves is to explore for good mining areas. Companies go to great lengths to discover gold deposits, and the discovery is on a first-come-first-serve basis. Key Links ? InfoMine. com – Get the latest news and statistics on mining companies. Mining USA – Here is more data and information on mining. This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 18 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. ? Mining Glossary – When you are analyzing a mining company you are bound to come across industry-specific terms you don't understand Automobiles Simila r to the invention of the airplane, the emergence of automobiles has had a profound effect on our everyday lives. The auto manufacturing industry is considered to be highly capital and labor intensive.The major osts for producing and selling automobiles include: ? ? ? Labor – While machines and robots are playing a greater role in manufacturing vehicles, there are still substantial labor costs in designing and engineering automobiles. Materials – Everything from steel, aluminum, dashboards, seats, tires, etc. are purchased from suppliers. Advertising – Each year automakers spend billions on print and broadcast advertising; furthermore, they spent large amounts of money on market research to anticipate consumer trends and preferences. The auto market is thought to be made primarily of automakers, but auto parts makes up another lucrative sector of the market.The major areas of auto parts manufacturing are: ? ? ? Original Equipment Manufacturers (OEMs) – Th e big auto manufacturers do produce some of their own parts, but they can't produce every part and component that goes into a new vehicle. Companies in this industry manufacture everything from door handles to seats. Replacement Parts Production and Distribution – These are the parts that are replaced after the purchase of a vehicle. Air filters, oil filers and replacement lights are examples of products from this area of the sector. Rubber Fabrication – This includes everything from tires, hoses, belts, etc. In the auto industry, a large proportion of revenue comes from selling automobiles.The parts market, however, is even more lucrative. For example, a new car might cost $18,000 to buy, but if you bought, from the automaker, all the parts needed to construct that car, it would cost 300-400% more. Over and above the labor and material costs we mentioned above, there are other developments in the automobile industry that you must consider when analyzing an automobile company. Globalization, the tendency of world investment and businesses to move from national and domestic markets to a This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 19 of 65) Copyright  © 2010, Investopedia. com – All rights reserved.Investopedia. com – the resource for investing and personal finance education. worldwide environment, is a huge factor affecting the auto market. More than ever, it is becoming easier for foreign automakers to enter the North American market. (To read more about this issue, see The Globalization Debate. ) Competition is the other factor that takes its toll on the auto industry; we will discuss this in more detail below under the Porter's 5 forces analysis Key Players In North America, the automobile production market is dominated by what's known as the Big Three: ? ? ? General Motors – Produces Chevrolet, Pontiac, Buick and Cadillac, among others.Chrysler – Chrysler, Jeep and Dodge. Ford Motor Co – Ford, Lincoln and Volvo. Two of the largest foreign car manufacturers are: ? ? Toyota Motor Co Honda Motor Co Key Ratios/Terms Fleet Sales: Traditionally, these are high-volume sales designated to come from large companies and government agencies. These sales are almost always at discount prices. In the past several years, auto makers have been extending fleet sales to small businesses and other associations. Seasonally Adjusted Annual Rate of Sales (SAAR): Most auto makers experience increased sales during the second quarter (April to June), and sales tend to be sluggish between November and January.For this reason, it is important to compare sales figures to the same period of the previous year. The adjustment factors are released each year by the U. S. Bureau of Economic Analysis. Sales Reports: Many of the large auto makers release their preliminary sales figures from the previous month on a monthly basis. This can give you an indication of the cur rent trends in the industry. Day Sales Inventory = Average Inventory Average Daily Sales The sales reports (discussed above) are released monthly. Most automakers try to make dealerships hold 60 days worth of inventory on their lots. Watch out This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 20 of 65) Copyright  © 2010, Investopedia. om – All rights reserved. Investopedia. com – the resource for investing and personal finance education. if sales inventory climbs significantly above 60 days worth. Sales fluctuate month-to-month, but you shouldn't see sustained periods of high inventory. Analyst Insight Automobiles depend heavily on consumer trends and tastes. While car companies do sell a large proportion of vehicles to businesses and car rental companies (fleet sales), consumer sales is the largest source of revenue. For this reason, taking consumer and business confidence into account should be a higher priority than cons idering the regular factors like earnings growth and debt load. For more about the Consumer Confidence Survey, see Economic Indicators: Consumer Confidence Index. ) Another caveat of analyzing an automaker is taking a look at whether a company is planning makeovers or complete redesigns. Every year, car companies update their cars. This is a part of normal operations, but there can be a problem when a company decides to significantly change the design of a car. These changes can cause massive delays and glitches, which result in increased costs and slower revenue growth. While a new design may pay off significantly in the long run, it's always a risky proposition. For parts suppliers, the life span of an automobile is very important.The longer a car stays operational, the greater the need for replacement parts. On the other hand, new parts are lasting longer, which is great for consumers, but is not such good news for parts makers. When, for example, most car makers moved from using rolled steel to stainless steel, the change extended the life of parts by several years. A significant portion of an automaker's revenue comes from the services it offers with the new vehicle. Offering lower financial rates than financial institutions, the car company makes a profit on financing. Extended warranties also factor into the bottom line. (To read more about this, see Extended Warranties: Should You Take The Bait? Greater emphasis on leasing has also helped increase revenues. The advantage of leasing is that it eases consumer fears about resale value, and it makes the car sound more affordable. From a maker's perspective, leasing is a great way to hide the true price of the vehicle through financing costs. Car companies, then, are able to push more cars through. Unfortunately, profiting on leasing is not as easy as it sounds. Leasing requires the automakers to accurately judge the value of their vehicles at the end of the lease, otherwise they may actually lose money. If you think about it, the automaker will lose money on the lease if they give the car a high salvage value.A car with a low salvage value at the end of the lease will simply be bought by the consumer and flipped for a profit. This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 21 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. Porter's 5 Forces Analysis 1. Threat of New Entrants. It's true that the average person can't come along and start manufacturing automobiles. Historically, it was thought that the American automobile industry and the Big Three were safe. But this did not hold true when Honda Motor Co. opened its first plant in Ohio.The emergence of foreign competitors with the capital, required technologies and management skills began to undermine the market share of North American companies. 2. Power of Suppliers. The autom obile supply business is quite fragmented (there are many firms). Many suppliers rely on one or two automakers to buy a majority of their products. If an automaker decided to switch suppliers, it could be devastating to the previous supplier's business. As a result, suppliers are extremely susceptible to the demands and requirements of the automobile manufacturer and hold very little power. 3. Power of Buyers. Historically, the bargaining power of automakers went unchallenged.The American consumer, however, became disenchanted with many of the products being offered by certain automakers and began looking for alternatives, namely foreign cars. On the other hand, while consumers are very price sensitive, they don't have much buying power as they never purchase huge volumes of cars. 4. Availability of Substitutes. Be careful and thorough when analyzing this factor: we are not just talking about the threat of someone buying a different car. You need to also look at the likelihood of pe ople taking the bus, train or airplane to their destination. The higher the cost of operating a vehicle, the more likely people will seek alternative transportation options.The price of gasoline has a large effect on consumers' decisions to buy vehicles. Trucks and sport utility vehicles have higher profit margins, but they also guzzle gas compared to smaller sedans and light trucks. When determining the availability of substitutes you should also consider time, money, personal preference and convenience in the auto travel industry. Then decide if one car maker poses a big threat as a substitute. 5. Competitive Rivalry. Highly competitive industries generally earn low returns because the cost of competition is high. The auto industry is considered to be an oligopoly, which helps to minimize the effects of pricebased competition.The automakers understand that price-based competition does not necessarily lead to increases in the size of the marketplace; historically they have tried to avoid price-based competition, but more recently the competition has intensified – rebates, preferred financing and long-term warranties have helped to lure in customers, but they also put pressure on the profit margins for vehicle sales. This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 22 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. (For further reading, check out Analyzing Auto Stocks. ) Key Links ? ? ? ? Ward's Automotive Reports – A popular publisher of automotive data.The Alliance of Automobile Manufacturers – Get the latest industry facts, developments, and technological innovations. Automotive Industries – A magazine covering several areas of the auto industry. US Council for Automobile Research – The umbrella organization of Daimler Chrysler, Ford and General Motors created to str engthen the technology base of the domestic auto industry. The Retailing Industry All businesses that sell goods and services to consumers fall under the umbrella of retailing, but there are several directions we can take from here. For starters, there are department stores, discount stores, specialty stores and even seasonal retailers.Each of these might have their own little quirks; however, for the most part the analysis overlaps to all areas of retailing. This section of the industry handbook will try to focus more on general retailers and department stores. (For background reading, see Analyzing Retail Stocks. ) Over the past couple decades, there have been sweeping changes in the general retailing business. What was once strictly a made-to-order market for clothing has changed to a ready-to-wear market. Flipping through a catalog, picking the color, size and type of clothing a person wanted to purchase and then waiting to have it sewn and shipped was standard practice. At the turn of the century some retailers would have a storefront where people could browse.Meanwhile, new pieces were being sewn or customized in the back rooms. In some parts of the world, the retail business is dominated by smaller family-run or regionally-targeted stores, but this market is increasingly being taken over by billion-dollar multinational conglomerates like Wal-Mart and Sears. The larger retailers have managed to set up huge supply/distribution chains, inventory management systems, financing pacts and wide scale marketing plans. Without getting into specific product categories within the retailing industry, the overall segments can be divided into two categories: ? Hard – These types of goods include appliances, electronics, furniture, sporting goods, etc.Sometimes referred to as â€Å"hardline retailers. † This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 23 of 65) Copyright  © 2010, Investopedia. com – Al l rights reserved. Investopedia. com – the resource for investing and personal finance education. ? Soft – This category includes clothing, apparel, and other fabrics. Each retailer tries to differentiate itself from the competition, but the strategy that the company uses to sell its products is the most important factor. Here are some different types of retailers: ? ? ? Department Stores – Very large stores offering a huge assortment of goods and services.Discounters – These also tend to offer a wide array of products and services, but they compete mainly on price. Demographic – These are retailers that aim at one particular segment. High-end retailers focusing on wealthy individuals would be a good example. Each of these has its own distinct advantages, but it's important to know how these advantages play out. For example, during tough economic times, the discount retailers tend to outperform the others. The opposite is true when the economy is t hriving. The more successful retailers attempt to combine the characteristics of more than one type of retailer to differentiate themselves from the competition. Key Ratios/Terms Same Store Sales: Used when analyzing individual retailers.It compares sales in stores that have been open for a year or more. This allows investors to compare what proportion of new sales have come from sales growth compared to the opening of new stores. This is important because although new stores are good, there eventually comes a saturation point at which future sales growth comes at the expense of losses at other locations. Same store sales are also commonly referred to as â€Å"comps. † Sales per Square Foot: Sales Square Footage Store space is considered to be a productive asset and the key to profitability. Successful companies generate as much sales volume as possible out of each square foot of store space.More recently, analysts have created modifications of this concept by looking at a re tailers' gross margin per square foot. Inventory Turnover: This ratio shows how many times the inventory of a firm is This tutorial can be found at: http://www. investopedia. com/features/industryhandbook/ (Page 24 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com – the resource for investing and personal finance education. sold and replaced over a specific period. Generally calculated as: Sales Inventory Cost of Goods Sold Average Inventory But, may also be calculated as: Although the first calculation is more frequently used, COGS may be substituted because sales are recorded at market value while inventories are usually recorded at cost.Also, average inventory may be used instead of the ending inventory to help minimize seasonal factors. This ratio should be compared against similar retail companies or the industry average. A low turnover might imply poor sales and, therefore, excess inventory. A high ratio implies either strong sales or ineffective buying from suppliers. (For related reading, see Consumer Confidence: The Consumer Confidence Index (CCI) is put out by the Consumer Confidence Board around the middle of each month. The Consumer Confidence Survey is based on a sample of 5,000 U. S. households and is considered to be one of the most accurate indicators of confidence. Increasing confidence means more spending and borrowing for consumers – a positive for retailers. To learn more about this measure, see Economic Indicators To Know: Consumer Confidence Index. ) Personal Income & Disposable Income: Every quarter, the Bureau of Economic Analysis releases the latest income data for U. S. citizens. There is a high correlation between retail sales data and the changes in personal income. (For more insight, see Economic Indicators: Personal Income and Outlays. ) Analyst Insight As we mentioned earlier, the store type and the strategy that retailers use plays a big role in how well the company perfo rms. The first thing to take a look at is what segment of the retail industry the company is situated in. Is the company a discounter? Department store? Specialty retailer?The retail category to which the company belongs also helps determine the following details about the company: ? Competitors – The number and size of direct competitors is important. Ideally, you want the company to have as little competition as possible, but this rarely happens. Determine who the direct competitors are and how they are all positioned in the market. A smaller regional discount store might find it tough to compete with new Wal-mart stores opening up every month. Take a look at the big picture, find out what differentiates the company from its competitors. Do they have better prices, service, or offer This tutorial can be found at: http://www. investopedia. om/features/industryhandbook/ (Page 25 of 65) Copyright  © 2010, Investopedia. com – All rights reserved. Investopedia. com â₠¬â€œ the resource for investing and personal finance education. ? ? higher quality goods than their competition? Grocery stores might find it hard to differentiate themselves from competitors: after all, an apple is an apple. Higher-end retailers, however, may have an easier time as they try to compete on service or quality. Size of the Market – Determining the overall size of the market gives us an indication of the potential for the market. If you had the choice between a company with a 25% share of a $10 million market or a 25% share of a $1 billion market, which one would you chose?Other Factors – Some analysts even go as far as evaluating the retail strategy that the companies use. For example, does the company have a fresh look? Are their stores clean, bright and fun to shop in? Swedish retailer Ikea has done an excellent job of designing their stores for visual appeal, and quite possibly it has equated to very strong sales. Also, what are the store demographics? Does the retailer appeal more to younger people (who don't have the money), or does it appeal to the parents (who do have the money). The performance of the economy as a whole obviously has a great impact on the retailing industry. Retailer profits have a close correlation with the overall performance of the economy.Looking at the trends for growth in gross domestic product (GDP), inflation, consumer confidence, personal income and interest rates are extremely important when thinking about investing in the retail industry. You might not think that your shopping habits are sensitive to interest rate fluctuations, but they are. While a 50-basis-point drop in interest rates might not give you the sudden inkling to go drop $1,000 at Macy's, for the economy as a whole, it has a big effect on spending patterns. (For more insight on this effect, see How Interest Rates Affe

Pathophysiology Paper

Running Head: Integrated Pathophysiology Integrated Pathophysiology Paper Confidential RNSG 2463 Instructor Date Integrated Pathophysiology 2 Patient Data Mr. F. is a seventy-three year old Caucasian male who is twice divorced and lives alone in Sweetwater, Texas. He has two children living, and two deceased children. Both of his parents are deceased; his father died at the age of sixty-nine of prostate cancer, his mother at the age of seventy-two of a stroke. He is self-employed, owning a local dirt contracting company for about thirty years now. Mr. F. tands five-foot and nine inches tall and weighs two hundred sixty pounds, exhibiting moderate obesity and has been for the past twenty-five years. He has a longstanding history of hypertension; approximately twenty years as well as a history of diabetes mellitus type two for twelve years, never having been insulin dependant. He has a smoking history of about fifty years smoking two packs per day and has been diagnosed a few years ago with chronic obstructive pulmonary disease, making him oxygen-dependant for two years. He claims to only drink alcohol on a social basis.Prior to his current admission, he stated that he has not been compliant with his diabetic diet, that he does not check his blood glucose regularly nor has he been following his medication regimen as he should. His last doctors appointment was two years ago. On July 6, 2008, Emergency Medical Services was called to Mr. F. ’s residence by a friend who found him in bed, conscious, but speaking incoherently. He had a nasal canula in place at three liters per minute. His glucometer done by emergency personnel showed a blood sugar of thirty-six.He was then given a bolus of dextrose fifty percent; he then returned to consciousness, but complained of some right arm and leg weakness. He had 3+ pitting edema bilaterally to lower extremities as well as 1+ presacral edema. He was then transported to Rolling Plains Memorial Hospital emergency room. Upo n arrival to the hospital, his vital signs were as follows; blood pressure- 200/103, heart rate- 80, respirations- 18, and oxygen saturation at 95% on oxygen via nasal canula at 3 liters per minute. His right sided weakness seemed to resolve per patient.He denied headache, vertigo and tinnitus. Diagnostics done at the emergency room showed a white blood cell count of 7. 8, hemoglobin of 12. 4, hematocrit of 37. 2, MCV of 95, and the platelet count along with coagulation studies showed to be normal. His renal function was abnormal at a BUN of 68 and a creatinine of 6. 1. His potassium level was 5. 4 and CO2 was 22. 3. His sodium level was 133, phosphorus levels were elevated at 6. 1, globulins were elevated at 4. 3, troponin level was slightly elevated at 0. 14 and CPK was normal. His BNP NT-Type was extremely elevated at 9674. along with his hemoglobin A1C was at 5. 8. Thyroid studies were Integrated Pathophysiology 3 found to be normal. The total cholesterol was 127, with HDL only at 24, LDL at 79 and triglycerides at 136. A further diagnostic study revealed by way of chest x-ray has shown cardiomegaly with mild venous congestion. The EKG shows poor R wave progression and nonspecific ST wave changes from previous. The echocardiogram showed 2+ mitral valve regurgitation with mild aortic stenosis and also an ejection fraction of over 50%. A renal sonogram shows diffuse cystic changes.A CT scan of his head revealed mild white matter changes but no other abnormalities. The 24 hour urine shows a urinary creatinine of 1449 and a urinary protein of 190. 3. The patient denied problems with urination such as frequency, urgency, dysuria, recurrent urinary tract infections or renal stones. Home medications included; Potassium chloride 10 mEq t. i. d. daily, Metformin 500 mg daily, Nifedipine 90 mg daily, Ramipril 10 mg b. i. d. for a total of 20 mg daily, Albuterol inhaler, Furosemide 80 mg in the am and 40 mg in the pm. Mr. F. was admitted into the intensive care unit from the emergency room.Diseases/Pathophysiology Mr. F. ’s current disease processes are long-standing hypertension, obesity, COPD, Diabetes mellitus, chronic renal failure, and congestive heart failure. Hypertension is defined as a blood pressure greater than 140/90 mm Hg (Ignatavicius & Workman, 2006). It is caused by increases in cardiac output, total peripheral resistance, or both. The cardiac output is the volume of blood that is ejected by the heart each minute. Peripheral resistance is a resistance to the flow of blood out side of the heart. It can be considered either primary or secondary.Primary hypertension has no known causative factors other than relation to genetic predisposition, obesity, stress, increased alcohol intake, diabetes, and or sodium and water retention in which all increase the total workload of the heart and increase fluid volume with in the vascular space (Zerwekh, Claborn & Gaglione, 2006). Secondary hypertension is elevated blood pressure with a n identifiable cause that may include but not limited to; renal stenosis, congenital heart defects, Cushing’s syndrome, pheochromocytoma, untreated sleep apnea, MAOIs, chemical stimulants such as cocaine, methamphetamines etc. or pregnancy induced (Zerwekh, Claborn & Gaglione, 2006). Obesity is a disease within many diseases with many varying causes. According to Ignatavicius and Workman (2006), an obese person weighs at least 20% above the upper limit of the normal range for ideal body weight and refers to an excessive amount of body fat in which can be distributed differently and cause an array of problems according to the distribution, Integrated Pathophysiology 4 especially android obesity with excess fat at the waist and abdomen; this pattern carries the greatest health risk.Chronic Obstructive Pulmonary Disease is a progressive and irreversible condition characterized by diminished inspiratory and expiratory capacity of the lungs (Mosby’s, 2002). Emphysema along with chronic bronchitis is complications that lead to COPD. The etiology is more often than not, a long history of smoking cigarettes or other forms of smoking tobacco. The lungs lose elasticity and tend to cause hyperinflation due to the alveoli in the lung losing its elastin, in which then narrows and produces a surface area that decreases and is no longer functioning properly for adequate gas exchange.The accumulated air that is unable to be absorbed properly becomes trapped and causes the collapse of the smaller airways called bronchioles. With the lungs hyperinflated, this flattens the diaphragm, thus causing the individual to utilize accessory muscles to breath, increasing the respiratory rate to compensate. Patients with COPD have bouts with chronic bronchitis which is an inflammation of the bronchi and bronchioles triggered usually by tobacco smoke.The irritants from the smoke cause inflammation, with vasodilation, mucosal edema, and bronchospasms; the increased inflammation increases the size of the mucosal glands and produce large amounts of thick mucus, causing the bronchial walls to thicken and impair airflow (Ignatavicius & Workman, 2006). Diabetes Mellitus comes in many forms; the main characteristic is elevated blood glucose due to complications in the insulin secretion or action or both (Ignatavicius & Workman, 2006).When diagnosed with diabetes other than type one, the beta cells in the islets of Langerhans that produce insulin and the alpha cells that produce glucagon, which counteract one another, either decrease in production of these hormones or can possibly produce at a normal balance. If there is normal production of these hormones, mainly insulin (the hormone that transports glucose into the cells), it is usually cellular resistance to insulin that is causing the diabetes.When the cells are not receiving the necessary glucose needed for cellular function and metabolism, the body is unable to utilize the glucose, store carbohydrates, fat s and proteins; therefore the unused glucose remains in the blood causing hyperglycemia and regulatory mechanisms in the body tend to cause the release of more glucagon which cause the release of stored glucose in the liver into the bloodstream as well, therefore increasing the blood glucose level even more. Homeostasis is Integrated Pathophysiology 5 nterrupted, systemically causing damage. The etiology of type two diabetes can be a combination of many factors; however the well known contributor is obesity. Chronic renal failure is a progressive, irreversible kidney injury, and kidney function does not recover (Ignatavicius & Workman, 2006). The kidneys are in charge of filtering the metabolic wastes in the bloodstream that comes from cellular metabolism throughout the body as well as reabsorption of necessary electrolytes.When long-term damage is sustained in the cells of the kidneys (nephrons) by factors such as longstanding hypertension, function is progressively altered exhibit ed by the inability to excrete the nitrogenous wastes; therefore they accumulate in the kidneys and blood stream. Altered glomerular filtration rate, abnormal urine production, poor water excretion, electrolyte imbalances, and metabolic abnormalities occur as a result of renal failure. The body’s ability to dilute urine is decreased; therefore urine output decreases causing fluid overload.The failure occurs in stages with the last being end-stage renal disease in which all renal function eventually ceases. Congestive heart failure also known as left-sided heart failure may result from hypertensive coronary artery and valvular diseases arising particularly from the mitral and aortic valves. When CHF occurs from any etiology such as systemic hypertension and structural changes, the ventricles of the heart are unable to contract and or relax properly causing blood to congest around the heart.As a result of this congestion in and around the heart, tissue perfusion diminishes and blood accumulates in the pulmonary vessels. Cardiac output eventually decreases and compensatory mechanisms such as sympathetic nervous system stimulation, the renin-angiotensin system activation in the kidneys (RAS), other neurohumoral responses and myocardial hypertrophy will occur (Ignatavicius & Workman, 2006).The hypoxic state of the tissues stimulate the nervous system which increases the heart rate and blood pressure due to vasoconstriction and this stimulation increases venous blood return to the heart, which in turn stretches the myocardial fibers causing dilation and eventually thickening of the walls of the heart and chambers within it, consequently causing enlargement (cardiomegaly). The heart then tries to contract harder and eventually exhausts and reduces the force of the contractions; therefore decreasing cardiac output.The vasoconstriction of the arteries increases the afterload which is the resistance that the heart must pump. This low output causes a decrease in b lood flow to the kidney’s which results in the activation of the RAS in turn causes sodium and water retention. Cardiac preload and afterload increase causing contractile dysfunction. Integrated Pathophysiology 6 Integration Mr. F. reported that he has been obese for approximately twenty-five years. A few years after the significant weight gain, he was diagnosed with hypertension.At his own admission, his lifestyle of high fat, cholesterol, salt and sugar intake as well as a long history of smoking cigarettes left little to be desired and have contributed significantly to his current condition. Several years after having been diagnosed with hypertension, he was told he had diabetes and COPD. Upon his recent hypoglycemic episode, he was diagnosed then as having chronic renal failure with congestive heart failure. All of these diagnoses tie well in together, starting with obesity. When a person is obese, the excess weight, especially around the waist and abdomen as seen in Mr.F . causes the workload on the heart to increase due to the excess adipose tissue surrounding the visceral organs and weight in general. Being obese puts one at high risk factors for developing hypertension and heart disease as Mr. F. has. Obesity also places one at high risk for developing diabetes type two due to the fact that adipose tissue and cells that accumulate have a high tendency to become insulin resistant as well as the surrounding cells and tissue; therefore the body can not utilize the glucose and hyperglycemia occurs.A prolonged period of insulin resistance eventually leads to the beta cell failure causing decreased insulin production. The same high fat, cholesterol, and sodium diet that contributed to the patient’s obesity in the first place, causing his heart to have to work harder, more than likely caused him to develop hypertension. The fact of his non-compliance with his medication regimen for hypertension and diabetes, 100 pack per year smoking habit as wel l as noncompliance with prescribed diabetic diet, lead to his further complications of renal failure and lastly CHF.With prolonged hypertension and particularly uncontrolled diabetes mellitus, diabetic nephropathy changes the kidneys in a way that reduces kidney function and eventually, renal failure. Chronic high blood glucose levels cause hypertension in kidney blood vessels and excess kidney perfusion (Ignavicius &Workman, 2006). This increase in pressure within the kidneys cause the blood vessels to leak out that allows large particles such as albumins and proteins to form deposits in the kidneys and their blood supply.This narrows the vessels and decreases oxygenation to surrounding kidney tissue; therefore causing hypoxia and eventually irreversible cell death. As this progresses, scarred tissue forms and the ability to filter urine from the blood ceases causing renal failure. Once in renal failure, the patient’s kidneys were not able to regulate the fluid volume by ade quate excretion, therefore the excess fluid was pooled back into the vascular Integrated Pathophysiology 7 space. This fluid volume overload caused an increased cardiac workload which eventually leads to congestive heart failure.Mr. F. ’s smoking history was the primary cause of his COPD; however it is exacerbated by the collection of fluid in his vascular space due to renal failure, the loss of elasticity of vascular system and congestive heart failure. The medication prescribed for Mr. F. ’s diabetes was Metformin 500 mg daily. This medication primary action was to decrease hepatic glucose production. The excess insulin in the blood triggers production of glucagon in which signals the liver to release stored glucose, in turn hyperglycemia results. This medication was changed due to Mr. F. s elevated BUN and creatinine which is where this medication is metabolized and excreted as well as his state of CHF. Continuing this medication could cause toxicity. The new medica tion he was placed on was a low dose of Actos which is metabolized in the liver and does not cause hypoglycemia as Metformin may. To treat his hypertension, Nifedipine was prescribed and it acts to lower blood pressure by inhibiting calcium transport into myocardial cells and smooth muscle cells within the vascular space resulting in vasodilation counteracting the vasoconstriction caused by hypertension.In addition to Nifedipine, the patient is prescribed an ACE inhibitor named Ramipril. This ACE inhibitor works on the renin-angiotensinogen system ultimately causing systemic vasodilation. This medication not only decreases the blood pressure, it decreases cardiac afterload in patients with CHF. Ramipril is metabolized in the liver, therefore indicated for patients at risk or in renal failure. Furosemide is a loop diuretic that is especially helpful in patients with edema due to hypertension, renal disease as well as CHF.Furosemide increases the renal excretion of water as well as so dium and other electrolytes, thus reduces the fluid volume in the vascular space. It also has a vasodilating effects that are beneficial in this patients regimen; however a potassium supplement must be given due to the potassium wasting caused by this loop diuretic. This patient’s dose of Furosemide was significantly increased due to the necessity of ridding his body of the accumulating fluid and stabilizing his blood pressure which in turn will prevent further damage to his kidney’s. Potassium is necessary for proper contractility of the heart.Mr. F. is on Potassium chloride 10 mEq t. i. d. to make up for the loss due to the loop diuretic effects. The Albuterol inhaler is used to dilate the bronchi thus increasing surface area of the air ways to enable oxygen and CO2 exchange. This inhaler can exacerbate hypertension, palpitations and have a negative cardiac effect as well as cause hyperglycemia; therefore must be used cautiously. Integrated Pathophysiology 8 Predicti on of Outcomes Although Mr. F. ’s acute condition was stabilized, his prognosis appears poor at this point due to his history of noncompliance.Even though he has decreased his cigarette habit to one pack per day, his condition will probably deteriorate unless he could totally abstain from smoking. While speaking with the patient, he assures that this has got his attention and he will remain compliant from here on out. The damage at this point is irreversible; therefore maintaining remaining function as it is now becomes a new priority, meaning that compliance is necessary at this point for this patient as continuing to be noncompliant will definitely lead to his demise.Aggressive diabetic counseling as well as reinforcement of adhering to his current medication regimen is crucial for this patient’s survival. Other disciplines that should be involved to ensure a better prognosis for Mr. F. are ones such as a dietician to help with meal and snack planning per diabetic pr otocol, continuing respiratory therapy to aid in oxygenation and supplies, physical therapy to build the patients strength and prevent venous stasis hence blood clots, and maybe even occupational therapy to assist him with maintaining independent activities of daily living.Routine follow up appointments with his physician as well as specialist for cardiac and pulmonary function are essential to his outcome. A diabetic support group would be ideal for this patient as he appears to be a person in need of a support team. Lifestyles are hard to modify, but when one gets backed into a corner, it can be done, even in the most noncompliant patients otherwise death is imminent. Integrated Pathophysiology 9References Deglin, J. H. & Vallerand, A. H. (2007). Davis’s Drug Guide, Tenth Edition. Philadelphia: F. A. Davis Company. Ignatavicius, D. D. & Workman, M. L. (2006). Medical Surgical Nursing, Critical Thinking for Collaborative Care. St. Louis: Elsevier Saunders. Mosby’s Med ical, Nursing, & Allied Health Dictionary (6th ed. ). St. Louis: Mosby, Inc. Zerwekh, J. , Claborn, J. C. & Gaglione, T. (2006). Mosby’s Pathophysiology Memory Notecards, Visual, Mnemonic, and Memory Aids for Nurses. St. Louis: Mosby, Inc.

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Write about your reactions to the final part of Hamlet Essay At the start of the play we see Hamlet returning to Denmark from university, as he has heard the news of his farther, Old-Hamlets death. He arrives home perhaps thinking that he shall now take the place as the king of Denmark, only to discover that while he was away Claudius, his uncle and Gertrude, his mother have been wed. Therefore Claudius, not Hamlet, takes the place as King of Denmark. When Hamlet discovers this he becomes almost deranged, especially when Old-Hamlet appears to him in a form of a ghost, revealing that Claudius killed Old-Hamlet. This knowledge forces him to feel betrayed by all around him, such as the politicians that once supported his father and now show that same respect to Claudius. He feels that he can not trust his mother or Ophelia, his girlfriend. When travelling actors arrive Hamlet decides to put on a play to draw Claudius out, by seeing if he would react to a play about a brother killing a king to steal the crown. Claudius rushes out when the play is acted, showing that he is responsible for the killing of old-Hamlet. Hamlet follows quickly behind him and is about to strike Claudius down when he hears him committing his acts to god. Hamlet decides not to kill him, as when old-Hamlet was killed he did not have to commit his sins to god, so he was stuck in purgatory, a place where what you have done is weighted up, in good and bad to decide what will happen to them. Instead of killing Claudius he then proceeds to his mother to tell her of what he has found, hearing a sound he turns and thrusts a sword into a curtain, thinking that it was Claudius, only to discover that it was Polonius, Ophelias father, whom then dies. Claudius decides to send Hamlet to England to be killed, only to have Hamlet foil his plan. Hamlet returns to find while he has gone Ophelia has gone mad and has drowned her self, grief stricken he leaps into her grave. Laertes, Ophelias brother and Poloniuss son then challenges Hamlet to a duel which he Hamlet accepts. Laertes is then approached by Claudius who offers to fix the fight by poisoning his foils tip, Laertes grief stricken accepts this offer to revenge the two deaths in his family. The Ending of Hamlet sees the deaths of Laertes, Claudius, Gertrude and most importantly Hamlet. We also witness a change in the character of Hamlet, as he is now thinking less and acting more. He even mocks Laertes: Ill be your foil Laertes, in my ignorance your skill shall like astar i th darkest night stick fiery off indeed. In this scene we as an audience feel the dramatic tension, as we know all the traps lay in front of Hamlet, the poisoned foil of Laertes, and the cold goblet of wine poured by Claudius. Yet you find your self thinking that perhaps Hamlet knows that something is going on when he asks: These foils have all a length This is to command the attention of the audience to the poison tip of Laertes foil, which within the duel is held of to prolong the dramatic tension. This is the same way Hamlets action is held of with his obsession with procrastinating about the action which is to be taken to revenge his fathers death. This scene is made more dramatic by the frequent use of trumpets and kettle drums. The use of musical instruments in this way makes the environment appear more exciting. Hamlet tries to explain his actions of his recent self by asking give me your pardon sir, for I have done you wrong, but goes on to say it was not Hamlet, was his madness and also admits that his madness is poor Hamlets enemy. This excuse is not accepted by Laertes for in his terms of honour I stand aloof the only reason he is going along with the duel is to keep his name ungored, and also to revenge his fathers and sisters deaths. The use of language is of a high-class because the word ungored reminds us of the poisoned tip of the foil and what Laertes planes to do with it. Before the duel can start, Claudius plans to drink to Hamlets better breath, this is ironic as Claudius has already planed to poison Hamlets goblet of wine with a pearl. Claudius refers to this as a union, which could refer to the way in which old-Hamlet and Hamlet are to be killed, as old-Hamlet was also killed with poison that Claudius gave him. Claudius also performs this task to show the people around him that he is supporting Hamlet, so he is not thought to be guilty of Hamlets death. After the king drinks to Hamlet there is another out burst of sound as the trumpets are blown, this is also to add to the already excited atmosphere to start the duel. This leaves the audience knowing more than the victim. The next part of the text is split a series of short sentences, this is to create the speed of the duel and how the points are awarded by touches. The style of writing is used to build the dramatic tension between the two competitors. As you see Hamlet gaining the hits over Laertes, and with one hit left you start to think that Hamlet has foiled Claudiuss plan, and even avoids the poisoned goblet on two accounts. Mean while Claudius shows in this scene that he is now completely taking the place of his brother, as he speaks aside to Gertrude our son shall win. This small sentence shows what a twisted man he really is, as the words our son show as Hamlet is his brothers son and Claudius is only his uncle. Furthermore this shows that he is comfortable that his plan to poison Hamlet will be successful. Claudius is therefore shocked when Gertrude takes up Hamlets goblet to drink to him, Claudius then shouts to Gertrude, Gertrude do not drink. This line is probably by best line as it creates an atmosphere within the hall, as Claudius is pulled between saving his wife and not letting the hall of people know that he has poisoned Hamlets goblet of Hamlets wine, but in the end he is out for himself, as he does not take the goblet away from Gertrude. At this same point I think Gertrude believes all the things that Hamlet has told her earlier in the play and feels so bad that she drinks the poison, in a way this makes up for the betrayal that she committed towards her family and also the memory of Old-Hamlet. Again Hamlet dare not drink from his goblet as he wants to finish the duel first. This saves him from the poisoned goblet, therefore he only has one problem before him and thats Laertes revenge. Before the third round is started Laertes strikes out violently and wounds Hamlet, therefore poisoning him, yet to do so is almost against his conscience. In the incense of the fight, as it is no longer an honourable duel, the foils are swapped and Laertes tastes his own venom, he is justly killed by his own treachery. The Queen mean while is laid out on the floor with Claudius attending to her; she then calls out the truth about the drink! I am poisoned. At this point Hamlet knows that some treachery is around and he calls for all the doors to be locked and to seek it out. This again changes the mood of the hall and creates a room full of panic, as people are screaming and talking in worried voices. Laertes is the first to commit that he has wronged, Hamlet, thou art slain and that the treacherous instrument is in thy hand. Laertes also names who the blame should rest upon the King, the Kings to blame. At this point in the Branna film Hamlet troughs the foil at Claudius and wounds him. This causes another wave of panic to throng through the witnesses. Claudiuss last thought is for himself O yet defend me friends. This makes Hamlet angry and starts to make Claudius drink the poisoned goblet while saying all the sins Claudius has committed, incestuous, murderous, damned Dane. Again union is used to link Claudiuss death to Gertrudes, as he is united with her in death. This could also refer to the way both the brothers were killed with poison. The anger of Hamlet changes the atmosphere into a mute. Laertes then exchanges forgiveness with Hamlet, as Laertes dies. Hamlet is also feeling the poison within him as he admits to Horatio I am dead. He next turns to the rest of the witnesses in the hall; this is a much more kingly way to die thinking of his country and giving blessing to Fortinbras as the next king. When Fortinbras arrives there is once again a burst of sound, but this is not to stir excitement, it is more to command respect. When he enters he is met with the dead bodies of the royal family. When Hamlet is taken away he is carried like a soldier to the stage, as Fortinbras believes that Hamlet would have been a mighty king. I think this ending to Hamlet is a fitting ending to the play as it contains a lot of dramatic tension and a lot of action. This ending also contains a lot of honour with every thing that was wrong being righted.