Some Fun Facts About Coins

There are approximately $8 billion worth of coins circulating in the U.S. today. In the past 30 years, the U.S. Mint, who is responsible for designing and producing the nation's coins, has minted over 300 billion coins, worth about $15 billion!

Since its creation in 1972, the U.S. Mint has grown into a large enterprise with more than $1 billion in annual revenues and 2,200 employees. It is by far the world's largest manufacturer of coins and medals, producing coins not only for the U.S. but on behalf of several other countries as well.

It can be interesting to know how coins are minted. In order to make coins, the U.S. Mint purchases strips of metal (rolled into coins) in the proper dimension and thickness.

Zinc metal strips coated with copper plating are used to make pennies. Strips used for nickels are comprised of a 75% copper, 25% nickel metal alloy. Dimes, quarters, half-dollars and dollar coin are produced of strips consisting of three metallic layers fused together. The outer layer of these strips are comprised of the same alloy as that used for nickels with the third (core) layer being comprised of copper.

The first step in the coin making process involves the feeding of the metal strips through what is know as a "blanking" press. This press punches out cut round disc (blanks) about the same size as the finished coin. These blanks are then heated in a furnace to soften them. Subsequently, the softened blanks are placed rotating barrels of chemical solutions to clean and polish the metal. The cleaned and shiny blanks are then washed and dried.

Next, the blanks are sorted to remove any defective ones and the rest are put through as " upsetting" mill which raises a rim around the edges. The rimmed blanks then go to the coining or stamping press where upper and lower dies stamp the designs and inscriptions on both sides of the coin simultaneously. At this point, the blanks become genuine U.S. coins.

Finally, the finished coins are mechanically counted and placed into large canvas bags for shipment to the Federal Reserved Banks. From there they are shipped to local banks on an as-needed basis.

When the U.S. Mint was established the law required that all coins be made of gold, silver or copper. For a considerable period of time afterwards, gold was used in the $10, $5 and $2.50 pieces, silver was used to make the dollar, half-dollar, quarter, dime and half-dime while the penny and half-cent coins were made of copper.

In 1933, during the Great Depression, the U.S. Mint stopped making gold altogether. In 1965, as a result of a severe silver shortage, Congress dictated that silver no longer be used in kaming quarters and dimes. In addition, the silver content of the dollar (previously 90%) was reduced to 40% in 1965 and then eliminated entirely in 1971.

Coin Collections

The old saying goes, "Money makes the world go round." We use it every day. We can't acquired many necessary item in deed in daily life without it. We almost always want more of it, but for coin collectors, money is much much more than a piece of metal. It's a hobby, a learning experience and can be a lifelong obsession.

There really are no hard statistics on the amount of people who collect coins in the world. Some people suggest that 1 out every 10,000 people is an active coin collectors. That's pretty staggering when you think about the population of the world.

People have been collecting coins for years. At one time, it was called the hobby of kings, but today people from all walks of life and of all ages are maintaining coin collections.

Their reasons are varied. Some like the history behind coinage. Some do it to amass a collection worthy of handing down to future generations. Still others are simply businesspeople buying and selling coins to make a living. Collecting coins can be somewhat of a treasure hunt for many. The quest for that one coin to complete their collection can be an obsession.

Whatever the reason, coin collecting is a very popular hobby - one that can be pursued by all age groups. There are actually educational benefits to getting children started as coin collections.

The practice of numismatics - that is, the collection and study of coins, paper money, tokens and medals - offers the collector many different areas to specialize in. With the many specializations of coins, there is a wealth of material out there for coin collectors to concentrate on which makes it such an interesting and diverse hobby.

Limitation of Ratio Analysis

Financial statement analysis is an attempt to work with the reported financial figures in order to assess the entity's financial strengths and weaknesses.

Most analysts tend to favor certain ratios. They may leave out some of those mentioned in this topic and include some not mentioned. Although other ratios may be of interest, depending on one's perspective (i.e., manager, stockbroker, investor, creditor), there is no use in computing ratios of unrelated items such as sales returns to income taxes.

A banker, for example, is concerned with the firm's liquidity position in deciding whether to extend a short-term loan. On the other hand, a long-term creditor has more interest in the entity's earning power and operating efficiency as a basis to pay off the debt at maturity.

Stockholders are interested in the long-run profitability of the firm since that will be the basis for dividends and appreciation in the market price of stock. Management, naturally is interested in all aspects of financial analysis since they are concerned with how the firm looks to both the investment and credit communities.