When operating any type of heavy-duty equipment, safety should always be a top priority, especially when the equipment being used is a massive extracting machine such as a vacuum truck. These vehicles are particularly useful since they are a very powerful machine that can remove just about any kind of debris. It must be noted that, while the ability to create a very powerful suction makes the job of an operator much faster, it also makes the job much more dangerous. One small error in the placement of the extraction hose can lead to serious work-related injuries.
Potential Injuries
In order to have a picture of how this equipment can become potentially lethal when misused, listed below are some real life stories of workers who encountered near-death experiences when operating this powerful vehicle:
Vacuumed Limb - A vacuum truck operator had already begun extracting debris when the hose encountered a blockage. The worker manually removed the blockage with his arm; however, he did not turn the equipment off while removing the obstruction. When the debris that was stuck dislodged, the pressure that had built up in the hose removed the worker's limb by the greater vacuum power before the worker could remove it.
Toxic Fume Mishap Three vacuum truck workers were removing waste water from a well. The workers did not know that the storage tank of the truck contained sludge that did not mix well with water. As the workers extracted the waste water, it combined with the sludge inside the tank and caused a chemical reaction which generated toxic fumes. One of the crew members became disoriented while another completely passed out from the toxic gas. Thankfully one was able to seek medical assistance before something more serious happened.
These accidents were not caused by poor design. In fact, vacuum trucks are equipped with numerous safety features designed to protect the workers; however, accidents still occur due to the lack of knowledge on the part of operators regarding work-site safety hazards as well as a lack of proper implementation of safety features.
Important Safety Guidelines
Use Only Certified Vacuum Truck Operators - Due to the variety of liquids that vacuum trucks handle, every operator should know the proper way of handling various types of liquids in the safest manner possible. Only proper training and certification can provide these workers with the knowledge they need to operate the equipment safely and under all conditions.
Use Personal Protective Equipment - During training, some of the important knowledge that operators learn about is the proper way to use personal protective equipment such as personal alarms and air-supplied respirators. Workers must also learn the hazards involved in handling toxic fluids and the possibility of a gas explosion. Equally important, they need to learn how to respond if such an emergency should arise.
Conduct a Pre-Operation Inspection - Before taking the vehicle on the road, it is important for operators to conduct a thorough inspection of the vehicle to ensure that all of its components are in good operating condition. They should inspect every part of the equipment from top to bottom.
Carefully Check Vacuum Components - The vacuuming components of the vehicle should also be checked daily. Operators should be sure that: all removable components are in place; all water tanks are full; and no crack or puncture is present in the hose. The storage tank, filter bag house, and cyclone separators should be free from any substance that might react to the fluid to be extracted.
Conduct Site-Specific Orientation - Before starting the job, all employees should first be provided with specific information about the job site including the material to be handled. Workers should be informed about the risks involved and how the material should be handled in the safest manner. Employees should also be briefed on what to do in case an emergency arises.
Maintain a Log of Transported Fluids - Operators should always fill out a log for each vehicle regarding all fluids that were transported and it should always be readily available. Maintaining a log should help to prevent any chemical reactions from occurring by creating awareness of any previously transported fluids.
Operating a vacuum truck can be potentially dangerous, especially when handling various types of fluid on a regular basis. There is always a possibility of being exposed to toxic chemicals. These dangers can be avoided if workers have been properly trained on all safety guidelines when operating a vacuum truck and are aware of work-site safety hazards and how to avoid them!
Showing posts with label Operating. Show all posts
Showing posts with label Operating. Show all posts
Thursday, August 9, 2012
Tuesday, July 10, 2012
What Net Operating Income is and How to Calculate
Net operating income (NOI) is one of the more important real estate investment calculations. Primarily because it represents the property's potential income after subtracting vacancy and operating expenses. In other words, net operating income represents a property's productivity, or measure of cash flow.
To help plant the idea, consider net operating income in one of the following two ways, depending on whether or not a mortgage exists.
The investor pays all cash for the property. In this case, since the investment property has no debt, NOI virtually becomes the rate of return expected from a property for any given annual period before taxes and depreciation are considered. In other words, given no deduction for debt service (loan payment), you can regard net operating income as the annual cash flow (cash flow before taxes, or CFBT).
The investor finances the property. Here, since the property has a mortgage, NOI should be regarded as the anticipated amount of cash flow available to pay the mortgage. In this case, only the remainder of NOI (net operating income less annual loan payment) becomes the annual cash flow before taxes (or CFBT).
How to Calculate Gross Scheduled Income Less Vacancy and Credit Loss = Gross Operating Income Less Operating Expenses* = Net Operating Income
Example: Assume that the income property you're analyzing has a GOI of 0,000 and Operating Expenses of ,000. What is the NOI?
0,000 Less ,000 = ,000
*Mortgage payments, depreciation, and capital expenditures are not considered operating expenses and therefore have no impact on net operating income.
It's Role in Real Estate Investing
Net operating income plays a large role in a variety of real estate investment and holding period decisions. For instance, capitalization rate (cap rate) is calculated by dividing NOI by sale price. Likewise, property value (or the property's sale price) is calculated by dividing NOI by the cap rate.
Example: Let's continue to assume a net operating income of ,000 (as in our example above) and a sale price of 0,000. What is the property's capitalization rate?
Net Operating Income Divided by Sale Price = Cap Rate
,000 Divided by 0,000 = 10.0%
Okay, now let's assume an NOI of ,000 of and a cap rate of 8.0%. What is the property value?
Net Operating Income Divided by Cap Rate = Property Value
,000 Divided by 10.0% = 0,000
Net operating income also plays a large role with lenders. For example, Debt Coverage Ratio (DCR) is calculated by dividing the net operating income by loan payment.
Net Operating Income Divided by Annual Loan Payment = Debt Coverage Ratio
,000 Divided by ,000 = 1.26
How Credible Is It?
Conceptually, NOI is important because of its use in numerous calculations surrounding property performance. Because it's used to estimate property value and cap rate, as well as useful to lenders, NOI has become an essential component of real estate investment analysis. As a real estate investor, therefore, you should understand net operating income, and recognize what it means to your potential investment valuation.
But be careful.
Bear in mind that NOI is not unlike any other calculation used for real estate investing purposes. The result is only as good as the numbers are credible, and numbers can be manipulated. Sellers have sometimes been known to become very creative in order to make the relationship between the price and NOI to come out right.
So here's a tip. When a property appears to have a favorable NOI and in turn positive rates of return, don't simply accept the numbers. Spend the time to validate the numbers. Reconstruct the owner's representations for income and operating expenses if necessary, and compute your own NOI. Whatever you do, rely on nothing less then the most credible net operating income possible. You can't afford not to.
To help plant the idea, consider net operating income in one of the following two ways, depending on whether or not a mortgage exists.
The investor pays all cash for the property. In this case, since the investment property has no debt, NOI virtually becomes the rate of return expected from a property for any given annual period before taxes and depreciation are considered. In other words, given no deduction for debt service (loan payment), you can regard net operating income as the annual cash flow (cash flow before taxes, or CFBT).
The investor finances the property. Here, since the property has a mortgage, NOI should be regarded as the anticipated amount of cash flow available to pay the mortgage. In this case, only the remainder of NOI (net operating income less annual loan payment) becomes the annual cash flow before taxes (or CFBT).
How to Calculate Gross Scheduled Income Less Vacancy and Credit Loss = Gross Operating Income Less Operating Expenses* = Net Operating Income
Example: Assume that the income property you're analyzing has a GOI of 0,000 and Operating Expenses of ,000. What is the NOI?
0,000 Less ,000 = ,000
*Mortgage payments, depreciation, and capital expenditures are not considered operating expenses and therefore have no impact on net operating income.
It's Role in Real Estate Investing
Net operating income plays a large role in a variety of real estate investment and holding period decisions. For instance, capitalization rate (cap rate) is calculated by dividing NOI by sale price. Likewise, property value (or the property's sale price) is calculated by dividing NOI by the cap rate.
Example: Let's continue to assume a net operating income of ,000 (as in our example above) and a sale price of 0,000. What is the property's capitalization rate?
Net Operating Income Divided by Sale Price = Cap Rate
,000 Divided by 0,000 = 10.0%
Okay, now let's assume an NOI of ,000 of and a cap rate of 8.0%. What is the property value?
Net Operating Income Divided by Cap Rate = Property Value
,000 Divided by 10.0% = 0,000
Net operating income also plays a large role with lenders. For example, Debt Coverage Ratio (DCR) is calculated by dividing the net operating income by loan payment.
Net Operating Income Divided by Annual Loan Payment = Debt Coverage Ratio
,000 Divided by ,000 = 1.26
How Credible Is It?
Conceptually, NOI is important because of its use in numerous calculations surrounding property performance. Because it's used to estimate property value and cap rate, as well as useful to lenders, NOI has become an essential component of real estate investment analysis. As a real estate investor, therefore, you should understand net operating income, and recognize what it means to your potential investment valuation.
But be careful.
Bear in mind that NOI is not unlike any other calculation used for real estate investing purposes. The result is only as good as the numbers are credible, and numbers can be manipulated. Sellers have sometimes been known to become very creative in order to make the relationship between the price and NOI to come out right.
So here's a tip. When a property appears to have a favorable NOI and in turn positive rates of return, don't simply accept the numbers. Spend the time to validate the numbers. Reconstruct the owner's representations for income and operating expenses if necessary, and compute your own NOI. Whatever you do, rely on nothing less then the most credible net operating income possible. You can't afford not to.
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