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Capital Structures
Essentially, there are really only two ways in which organizations can raise money -- debt or equity. The core of this comes down to cash flow for each type of financing. A debt claim, for instance, allows the holder to a set of cash flow, typically principle and interest; an equity claim entitles the holder to any leftover cash after meeting all other claims. Secondly, debt has prior claim on cash flow and assets. This complicates the matter of the way debt is managed and analyzed when looking at different industries. For instance, debt as a percentage of the market value of equity in an airline would be different than one in say, electronics -- all dependent upon a variety of inventory and supply/demand, price elasticity ratios.
Organizations that have high debt-equity ratios seem to be the ones that have longer term, or higher cost-based services; or those that are more fleeting and seasonally driven. Production and marketing costs figure...
Leveraged debt is not necessarily bad; nearly every business has cycles; the less debt that must be serviced, the more likely the business will survive. High leverage is typical for startup and early stage business, too; but companies like construction organizations with long-term projects must leverage and hope that once the project is done, there is money to be made.
c. Equity and equity ratios play a part in the way bankers and stakeholders look at a given business. The longer the track record for a high leveraged business, the more it looks like a good investment. Future earnings are based, as well, on the types of business and the commodities that are used to make up the product. Life cycle, resources, demand, and structure all play a part in the equation and the way future earnings are projected. A hotel chain, for instance, might be highly leveraged and seasonal, but if it has been in business in a popular area for 10…
Rabaasso, C., Briars, M. & Rabasso, J. (2015). Royal family business in Qatar and the Emirates through sports club management: Green washing or a sustainable model? The cases of FC Barcelona and Manchester City. IJES Vol. 23 (2) 5. This paper explores a couple of concepts. The authors look at two examples of sports teams -- FC Barcelona and Manchester City -- that are owned by royal families, one in Qatar
Capital Requirement and Risk Behavior Arab African International Bank Midan ElSaray El Koubra, Garden City Caoro The research will mainly dwell on the capital requirements and risk behavior of banks, more in particular the credit risk. The purpose of this research is to identify and analyze the relationship between capital requirements and the risk behavior of banks in Egypt more in particular the Arab African International Bank, which is the case study for this
Overproduction In a capitalist economy, production is encouraged by the profit motive, not necessarily need. Prior to the capitalist economy, in the agrarian economy, production was roughly in line with need. The reason for this was the high costs -- capital, time and labor -- that were associated with the production of goods. These high costs ensured that production was largely limited to what was needed, or for what there was
Introduction The two board system of directors theoretically presents a way for greater accountability and oversight in corporate governance. The system was developed in Germany with the idea being to have a supervisory board over the management board, the members of the former elected by shareholders. In functional terms, however, the supervisory board can be involved in long-term decisions that impact the corporation—so it is not entirely accurate to define this
Social Capital in Educational Literature" describes two competing theories of social capital. Bourdieu's theory, postulated in the late 1980s, they report as dealing with the way in which class status provides a sort of collective capital, and in which "essentially institutionalized relationships of mutual acquaintance and recognition" provide for the reproduction of class standing in the next generation and its support within the present generation. In general, it seems
While the first chapter was brief, it is important to explain what will be studied and then move forward into the literature review. In Chapter 2, the literature review provides a review of academic literature by way of journals and textbooks. This information is placed into separate sections which allow for ease of understanding. An introduction is made to capital structure, and information is given on the Indian capital structure