Chapter 2

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDhVXr9oTkJE

Summary:
With the recession drawing to an end, the economy and many businesses are slowly starting to get back on its feet. Unfortunately this is not the case for McGraw Hill. McGraw is known for its education text books and financial services. However, the company also owns BusinessWeekly magazine. The company has been in a slump ever since the recession. The company's revenue fell more than 30% from $164.4million to $112.6million until September 2009. Now Bloomberg is seeking to buy the small section of BusinessWeekly from McGraw Hill, promising to rebuild the magazine and to transform it into best global business newsweekly.

Connection:

This relates to chapter 2 in two ways. Firstly is the profit margin ratio, a ratio that compares the net profit during an accounting period with the related revenues. However, according to Publishers Information Bureau, McGraw is clearly suffering from net loss for more than a fiscal period. Then why would a big company like Bloomberg want to buy a tiny section. I believe Bloomberg hopes that under their company name, BusinessWeekly will gain more popularity. Also the soon to be chairman of new BusinessWeekly, Norman Pearstine claims Bloomberg will transform the new division into best global business newsweekly, which hopefully will turn that net loss into a net income. Secondly, the buy out can be considered as a investing activity, it will ultimately affect the cash flow statement.

Reflection:
Personally, i believe BusinessWeekly will continue to be a liability. Unless Bloomberg is trying to be like Warren Buffett, magically renovate and improve the performance of the company, then selling it making millions. The downside to this buyout, is that there will be employees who will be fired or lay-offed, and at times like these, people cannot afford to lose their jobs. However, it is not up for me to decide what is best for both companies, and the negotiation of the two companies is scheduled to close on December first. which gives both companies plenty of time to rethink the deal.

Chapter 1

http://www.cbc.ca/canada/story/2009/09/15/white-collar-crime015.html

Summary:
The article I finished reading is about sentencing tougher jail time and penalties for criminals convicted of serious fraud targeting at white collar crime. Justice Minister Rob Nicholson plans to enforce mandatory penalties for frauds, allows the court to approve longer sentence if the case is serious and also give compensation for the victims, some who lost all fortune to fraud. Current law allows people who are convicted with fraud escape with only having to serve one sixth of their sentences. If this plan is passed by the house of commons, i believe it will extraordinary decrease frauds in Canada.

Connection:
In chapter 1, the two primary sources of funds are from creditors and investors. Hypothetically, a person is trying to scam investors and creditors by creating a company, a fake corporate profile and financial section. The crook can easily disappear without a trace, taking millions of hard earning from families, leaving them to file bankruptcy. But say if the scammer is caught and sentenced with six years in jail and a slap on the wrist. It is possible for the criminal to be released after only serving one year in jail, because of our tolerate and relaxed law. However, the scenario would be much different if our government have had passed the law. The criminal would be locked up for a longer period of time and the poor families would not have to file bankruptcy, because they received compensation from government.

Reflection:
Many voters online have voted "Too lax"(81%, 929). They find the law is still too soft on the criminals. In my opinion, i believe the law is in the middle of too lax and just right, because i agree with depending on the serverity of the case, different people, will get different sentenses. However, i think the jail time should be extended and a massive fine should be given.