Debt Essays (Examples)

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Eurozone Maastricht Treaty Euro Zone Treaty the

Words: 3044 Length: 10 Pages Document Type: Essay Paper #: 71231999

Eurozone Maastricht Treaty

Euro zone Treaty

The European Community established the convergence criteria. These criteria was established in order to allow its EU Member states to take part in the Euro Zone, and using the Euro, as an official currency. The members of the European Union formed the Maastricht Treaty in 1992. The principle goals of the treaty were to establish an economic and monetary union, strengthen the democratic legitimacy of its institutions, better the effectiveness of its institutions, come up with the community social dimension, and also establish a unified foreign and security policy (Charles 1998).

The criteria contain several principles governing inflation rates, government finance, exchange rate, and long-term interest rates. The percentage points for inflation rates should not be 1.5 higher than the average the top three members states in performance of the EU. Government finance covers both the annual government deficit and the government debt. Under…… [Read More]

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Google & Microsoft Google Is the Leading

Words: 2553 Length: 8 Pages Document Type: Essay Paper #: 16377340

Google & Microsoft

Google is the leading search engine in the world, and has used the revenues from this position to both expand on its search capabilities and to enter new businesses as well. Google's main search engine is the world's most-visited website (, 2012). This brand has been expanded both geographically and across multiple product line extensions. The brand is the number one search engine in most major markets, the exception being China where cultural differences and legal troubles have allowed competitor Baidu to become market leader and the world's #5 website. (Li & Womack, 2012). Product extensions include Maps, Translate, Scholar, Books, Images, Video and other similar search-related websites. Google also owns Blogger, one of the world's leading blog sites. Additionally, Google has enjoyed strong growth in recent years as the result of its Android mobile operating system. Android has become the world's largest mobile operating system, with…… [Read More]

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Economic Policy

Words: 908 Length: 2 Pages Document Type: Essay Paper #: 22669470

Economic Policy and the National Debt

Ironically, when governments overspend they typically find ways to refund or restructure debt -- when individuals or corporations within those countries do the same, the consequences are quite different. Money means more than one thing -- usually an object that is traded for payment of goods or services, of exchange. However, when we talk about the government, there is a huge different in the way the money supply works within the economy. In modern capitalism, commodity money (gold and silver) was replaced by representative wealth in that currency is no longer tied to the stores of precious metals. Instead, monetary policy under the Federal Reserve states that the goal of fiscal policy is to "promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates" (U.S. Mint, 2011).

As individuals, we typically live within a budget based on our expenses and…… [Read More]

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Companies Assessment Finance Is One of the

Words: 1339 Length: 4 Pages Document Type: Essay Paper #: 45930407

Companies Assessment

Finance is one of the most important parts of the business operations of any entity. Financial Management has a great strategic role to play in the future of any firm and it is the financial management and strategies that are in turn implicated on all other departments of the entity. The firm's financial management precisely deals with how the allocation of scarce resources will be done throughout the business. In large organizations it can be very complex and tricky and there are various factors that might impact a firm's financial decision. There is no single rule of how finances would be allocated in a firm and thus it varies according to the nature of business operations. It however is mostly fixated on the objective of generating increasing returns to scale as a final result. The backbone of the financial management of any company, big or small lies in…… [Read More]

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Wmt Balance Sheet A the Most Recent

Words: 418 Length: 2 Pages Document Type: Essay Paper #: 83428209

WMT Balance Sheet

a) The most recent balance sheet for Wal-Mart comes from the company's 8-K for the year ended January 31, 2011. The short-term liabilities for Wal-Mart were $58.484 billion. The long-term liabilities were $53.637 billion. Long-term debt is a component of the long-term liabilities and is listed at $43.482 billion.

b) At that point in time, the number of shares outstanding was 3.561 billion. The most recent price per share is $51.96. The market value of the equity in the company therefore is $185.03 billion.

The debt ratio is the total liabilities divided by the total liabilities + equity (aka total assets). This is $112.121 / $180.663 = 62%.

The debt-to-equity ratio is the total liabilities divided by the equity. This is $112.121 / $68.542 = 1.64

I consider these values to be within the acceptable range. They are closer to being too large, however. The company is…… [Read More]

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Bankruptcy in 2004 Interstate Bakeries

Words: 1104 Length: 4 Pages Document Type: Term Paper Paper #: 86033640

Similarly, establishing payment plans with vendors may help reduce monthly costs and free up extra cash. The benefit of such restructuring is that it would allow the company to avoid the highly invasive Chapter 11 process, where there is a loss of control as creditors and a court get to weigh in on company operations. The downside of debt restructuring is that Interstate would still have to pay its debts in full, and quite likely much more in the long run, as interest accrues.

Another option for Interstate would be to find ways to free up or generate extra cash. The company could sell assets, particularly assets that are not critical to core operations, or lay off some of its workforce. The advantage of this process is that it can improve cash flow without accruing additional debt, and Interstate did pursue these options on a limited basis (Twitty). The downside…… [Read More]

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Dollar Depreciation Economic Effects of

Words: 3472 Length: 11 Pages Document Type: Term Paper Paper #: 80386088

However, if one expands their outlook to a global perspective, the is only a correction and will help to strengthen the position of other currencies. As the U.S. dollar grows weaker, other currencies grow stronger. The depreciating dollar may cause Americans to alter their lifestyle, however, from a global perspective; the situation is not that dire.

One of the key concerns for investors has been what will happen to commodity futures. According to Abacus Consulting Services and Los Angeles Chinese Learning Center (2005), commodities will be bullish. Commodity prices will increase as the U.S. dollar decreases. However, there was little to support this opinion. Their opinion is based on past trends that indicate that commodity prices are inversely proportional to whether the U.S. economy is in an inflationary or deflationary mode. They point out that during the Great Depression, commodity prices doubles from 1932 to 1934.

Factors that Could Affect…… [Read More]

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Capital Budgeting a Firm Is

Words: 981 Length: 4 Pages Document Type: Essay Paper #: 5487640

25 / $0.03 = 41.66 times

Thus, we have the ability to analyze the differences between the price/earnings ratio under the equity issue scenario and the forward price/earnings ratio under the debt issue scenario. The equity issue scenario will give the company a price/earnings ratio of 48.44 times and the debt issue scenario will give the company a price/earnings ratio of 41.66 times.

The price/earnings ratio under the equity issue scenario is higher because the earnings per share is lower. The earnings have remained unchanged in both scenarios, but the number of outstanding shares has changed between the two scenarios.

Under the equity issue scenario, each share will have a lesser amount of the company's earnings ascribed to it. This is because the firm's capital structure is entirely weighted to equity, with no debt component. The use of debt can help a company's shareholders, because the amount of income for…… [Read More]

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Financial Analysis of Costco Company

Words: 1963 Length: 7 Pages Document Type: Research Paper Paper #: 14001981

As a result, this shift would lead to an emphasis on providing various goods and services to customers, in an effort to address changing consumer demand. This would have an impact on the Costco itself, as it would provide stability for the company and help them to be able to take advantage of the shift that was occurring. Evidence of this can be seen by examining the different financial aspects of the company. As the financial statement analysis indicates, that despite various challenges facing retailers over the last five years, Costco is continuing to see sizeable increases in net sales and net income. The different ratios indicate that the company is in strong financial condition, as they have low amounts of debt, high levels of liquidity and profitability. The only problem is that the price of the stock has become more expensive, given the fact that shares have seen such…… [Read More]

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Capital Structure

Words: 704 Length: 2 Pages Document Type: Essay Paper #: 62262983

Capital Structure

For a small business, there are two major forms of financing. Debt is when the company borrows money. Debt for small businesses usually comes from a bank, and it often has a fixed schedule of repayments, and there is interest as well. The other form is equity, which is ownership in the business (Parker, 2012). Each has its advantages and disadvantages. Debt is risky, and indeed it increases the risk to the company because the payments must be made. As a result, the payments come from pre-tax earnings before there is money for reinvestment into the company or for disbursement to the shareholders. This obligation represents risk (Harley, 2013). Debt financing has two attractive advantages, however. The first is that it is cheaper than equity financing, and for a small business might be easier to acquire. The second is that debt financing allows for retention of ownership

With…… [Read More]

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Financial Analysis of Home Depot

Words: 2116 Length: 7 Pages Document Type: Research Paper Paper #: 62526988

Home Depot is a retailer of home improvement supplies, and Lowe's is its biggest rival. Both are very large companies, and they have a lot of similarities. Both companies competes only in this one industry, focused on big box retailing of home improvements and home finishings. These are considered to be category killers, in that once they enter a market few other firms can exist in that market selling the same items. Both companies compete with low prices, and Home Depot especially tries to deliver a high standard of service as well. Home Depot is the larger of the two, and it also has international operations, something that Lowe's does not have at this point. This paper will compare the financials of these two companies. The income statements and balance sheet data will be attached in Appendix A.

It should be noted that all -- all -- financial data used…… [Read More]

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Nike's Current Ratio Slightly Improved Indicating Higher

Words: 1302 Length: 5 Pages Document Type: Term Paper Paper #: 14939823

Nike's current ratio slightly improved, indicating higher liquidity and an improvement in its ability to meet short-term debt obligations. This did not reflect an increase in inventory, because the company's Quick ratio grew by approximately the same percent.


Nike's Quick ratio improved by approximately 3.5%, indicating an improvement in the company's cash position or a decrease in its short-term debt obligations. This might have a lot to do with the fact that Nike derives a significant portion of its income from international sales. Because its revenues are denominated in dollars, money in cash and short-term instruments may have increased in value if they are held overseas in non-dollar currencies. According to Nike's 10-k SEC filing, "Our largest international region, Europe, Middle East and Africa (EMEA), reported 20% revenue growth in fiscal 2003 compared to fiscal 2002. This growth reflected a 15 percentage point improvement due to changes in currency…… [Read More]

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Global Economy

Words: 3911 Length: 10 Pages Document Type: Essay Paper #: 42403534

Global Economy

Key Player & Background

As the spokesperson for an interest group representing an economic think tank, I am issuing this policy statement to detail the implications for the U.S. economy of a sovereign default in the Eurozone. As Reich notes, the financial crisis in Europe is threatening to spread to the United States. If there is a default in Greece, a panic could start in financial markets, spreading to other Eurozone peripheral debt. Such a scenario would endanger European banks, particularly those of France and Germany. While American banks have limited exposure to Greek debt, or indeed to the debt of other peripheral European countries, they are exposed heavily to French and German banks. Thus, American banks have substantial indirect exposure to the European crisis.

Key players in the United States government need qualified economic advice to help them guide their decision-making processes. Strong, sustainable economic growth requires…… [Read More]

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Flags Unfortunately for Six Flags it Looked

Words: 629 Length: 2 Pages Document Type: Essay Paper #: 31388875


Unfortunately for Six Flags, it looked like the heavy debt burden and the challenges of running a seasonal business, would more than likely sink the company. While many positive changes had occurred that indicated a positive future, it is unlikely that Six Flag was going to have any lasting success immediately. It's true that in 2006 more families were returning to parks and spending more money and that the guest approval rating had reached a five-year high, with employees accomplishing a tremendous amount in what was a very transitional year for the company. Heavy discounts for tickets were eliminated and more aggressive sales techniques were adopted as well. Even though there was an increase in guest spending, something which appeared to continue at a strong pace, and the elimination of deep discounts was there to help re-establish the integrity of the brand and to stop teenagers who don't boost…… [Read More]

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Financial Ratio Analysis a Tool That Shows

Words: 1390 Length: 5 Pages Document Type: Research Paper Paper #: 43808160

financial ratio analysis, a tool that shows how figures between the balance sheet and the income sheet are related. Ratios are used to appraise a company's past financial performance and its potential for the future. A company's financial statements are of interest to creditors, investors, financial analysts and internal accountants. Using ratios helps them to analyze the overall financial health of a business. By computing financial ratios, one is better able to evaluate a company's financial status and operating performance for a given time period.

Here are some of the advantages of ratio analysis:

It simplifies the comprehension of financial statements.

It facilitates comparisons between firms.

It highlights the factors associated with strong firms and weak firms.

It provides a helpful tool in investment decisions.

Here are some limitations of ratios analysis:

It is susceptible to personal bias by the people interpreting them.

It analyzes historical data, making its predictive…… [Read More]

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Worry Bout Audience Analysis Word Count 1000-1250

Words: 1385 Length: 4 Pages Document Type: Essay Paper #: 88467511

worry bout audience Analysis Word Count: 1000-1250 words (This word count refers ONLY essay . It include audience analysis Works Cited page. If essay falls short minimum word count, I automatically deduct Writing Informative Essay (Corresponding chapter The Little Seagull Handbook: W-7) General Information An informative essay organized primary functions: report a unfamiliar topic; analyze meaning, pattern connections; explain works; explore questions answers.

Informative essay: The impact of the economic crisis upon young people

Although the consensus amongst economists is that the United States has extricated itself from the worst of the recession of 2008, the impact of the economic crisis is still palpable amongst many demographics within the United States. Recent college graduates are amongst the hardest-hit. Given the sluggish labor market, many new college graduates are struggling for work, while the previous generation was able to find jobs with much greater ease. These workers are burdened by high…… [Read More]

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Nike Financial Analysis the Relevance of Analyzing

Words: 2801 Length: 6 Pages Document Type: Research Paper Paper #: 40837761

Nike: Financial Analysis

The relevance of analyzing the financial stability and health of an entity cannot be overstated especially when it comes to the determination of the future performance of the concerned entity. This text undertakes an in-depth financial analysis of Nike, a well-known footwear, equipment, and apparel designer.

In seeking to conduct an in-depth analysis of Nike, I will amongst other things describe the company and its operations in significant detail, evaluate its vulnerability to financial threats, identify and discuss its financial trends, and discuss how its stock is likely to perform going forward. It is important to note that as I seek to further evaluate the financial performance of Nike, I will also rope in Skechers USA, Inc. A comparison of the two companies in this analysis will help in determining how well Nike is performing in its industry. A Nike competitor, Skechers happens to be in the…… [Read More]

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Goog vs Msft What Is Google's Business

Words: 1451 Length: 5 Pages Document Type: Essay Paper #: 25986123


What is Google's Business Model?

According to its latest 10-K, Google earns over 96% of its revenue from online advertising. The company's advertising programs, such as AdSense, are supported by the power of its search engines, which match keywords from websites or search terms with advertising. The result of this is that Google's results are the most robust on the Internet and its customers derive more value than customers of other advertising engines. It does not hurt that Google's websites are the most used on the Internet, with its core website being the number one ranked site on the Internet by traffic (, 2012).

While Microsoft has a search business, the company is not oriented as strongly towards it. Bing is the search engine and is ranked #26 in the world by Alexa. Bing is affiliated, however, with Yahoo and that site is the #4 ranked…… [Read More]

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Capital Is Described as the

Words: 768 Length: 2 Pages Document Type: Research Paper Paper #: 19565443

Therefore, the specific amount of debt within the firm has a strong impact on the determining the accurate weighted cost of capital. Actually, the determination of a firm's WACC is dependent on the debt value together with the value of equity.

While debt capital is the lower cost source of capital, debt is usually borrowed from sources outside the multinational enterprises since subsidiaries tend to borrow directly from markets. Therefore, multinational enterprises don't highly leverage their capital structure because of the source of debt. Moreover, MNEs don't highly leverage their capital structure because this is one of the most complex aspects of financial decision making that is closely linked to other financial decision variables ("Leverage and Capital Structure," n.d.). These enterprises don't highly leverage because poor capital structure decisions can contribute to high cost of capital, which in turn lowers the net present value of projects and makes them increasingly…… [Read More]

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Finance Financial Assessment of Supervalu

Words: 3480 Length: 12 Pages Document Type: Research Paper Paper #: 94897314

Since 2010 the organization has demonstrated a decline in revenue of 11.08%. However, one would expect some decline as a result of the divestments took place in 2011.

The gross profit for the year ending 2012 was $8,019, which equates to a gross profit margin of 22.21%. However, the operating profit demonstrated a loss of $519, hindered by high ongoing Goodwin and intangible asset charges. However, was a lower operating loss compared to the operating loss in 2011 when it was $976.

The income statement shows the net earnings. In financial ***** earnings may be presented either before or after tax. As Supervalu are struggling and benefited from a negative tax payment in 2011, this report will use the definition of net earnings being earnings after tax. Calculated after provisions for income tax, showed a loss of $1,040, equating to -2.88%. However, it is notable that this is an improvement…… [Read More]

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Trade Issues in Economic Development

Words: 2307 Length: 7 Pages Document Type: Term Paper Paper #: 40744461

The (international debt) crisis offers various faces to the observer according to the nature of the issues involved -- be they purely financial, political, economic and social, or structural -- and according to the role of the actors involved in these issues -- be they debtor countries, multilateral development agencies, creditor governments, or commercial banks." (Kaufman, "Banking And Currency Crises And Systemic Risk: Lessons From Recent Events")

World Banks

Trade requires capital. There are approximately two hundred financial institutions throughout the worldwide that account for more than eighty percent of the world's total international banking exposure. Of these, there are twenty banks that have exposure of more than ten billion dollars and seven of them are from the United States, four are from the United Kingdom, three are from West Germany, three are from France, two are from Japan, and there is one from Canada. "The borrowing countries still have…… [Read More]

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Mattel Corporation Specializes in Creating Lasting Memories

Words: 1534 Length: 5 Pages Document Type: Essay Paper #: 25806801

Mattel Corporation specializes in creating lasting memories for every child the corporation is able to touch through the purchase of their toys. Therefore, the Mattel does not sell toys rather a child's imagination and memories are forged and created respectively, via the purchase of their merchandise. ( Operations have been successful in U.S. markets from the 1950's through 2000. Since however, the lion's share of profits have been generated by overseas markets in Europe. (

The risk factors for Mattel are generally macroeconomic in nature. Generally speaking if the global economy continue to realize marginal GDP growth outside of the ultra-hot Brazil, Russia, India, China (BRIC) region, Mattel's business and financial results are likely to be adversely affected. ( Globalization will force additional forces on multinational corporations such as Mattel thus creating "governance risks inherent in value chains and networks." (Abonyi, Van Slyke, 2010)

Global economic factors hurt financial performance…… [Read More]

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Goodyear Tire and Rubber Company

Words: 580 Length: 2 Pages Document Type: Data Analysis Chapter Paper #: 1429284

61 billion / $1.3 million. In this aspect, CTB is a stronger company in comparison with Goodyear, as they are more effectively using their assets to increase sales. ("Cooper Tire and Rubber Annual Report," 2010)

The Debt Ratio

The debt ratio is used by investors to determine the overall risks to the business from: various loans and other financial obligations they have. During times of financial challenges, the total amounts of debt could have an impact on future company's revenues (which may affect the financial strength of the business itself). This ratio is calculated by dividing the total debt into the total amount of assets. Any kind of reading higher than 1.0 indicates that the company has more than enough assets to meets its financial obligations. ("Debt Ratio," 2011) In the case of GT, the company has a debt ratio of .28. This was determined by dividing $4.475 billion into…… [Read More]

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Dell Computers Evaluating Dell Inc

Words: 4041 Length: 11 Pages Document Type: Term Paper Paper #: 35937508

As far as regional sales are concerned, U.S. business sales comprise the most sales (Annual Report, p. 58). This is not surprising because Dell's home country is the U.S. The other markets represent emerging markets and represent excellent chances for growth in the future. However, they are not yet established. Dell established its core business in the U.S. before it began to branch out into other markets. These secondary markets were established due to a maturing, and rather saturated market in the U.S. They represent a way to continue growth as the U.S. market becomes mature.

At the current time, storage solutions represent only about 2% of total revenue. However, storage solutions are not a part of their core business. They were an additional service that was added after the establishment of the PC business. Their branding is not established on storage solutions. They must evaluate their position regarding this…… [Read More]

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Public Economy the Percentage of

Words: 970 Length: 3 Pages Document Type: Term Paper Paper #: 12521585

The government of Canada has outstanding debt of approximately $550 billion. To service the debt, it issues bonds. The government has also announced previously that it is committed to fighting inflation. Please explain clearly how government debt management policy can lend credibility to the government's fight against inflation. In doing so, provide a clear explanation of the key differences between indexed and nominal debt.

When a government wishes to curb inflation, one of the most effective ways to use the monetary supply to do so is to sell securities, in short through the sale of government bonds. By selling government securities, the government takes money or liquid capital out of the economy, and makes it more attractive to save rather than to spend money. Also, selling government bonds can reduce government debt. Reducing government debt is an important goal for any administration because the higher the debt, the less that…… [Read More]

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Asian Currency Crisis the Objective

Words: 2684 Length: 8 Pages Document Type: Term Paper Paper #: 62844583

Resulting from the devaluation of China's currency was an exacerbation of problems throughout Asia.


In the summer of 1995, the reversal of the chronic weakness of the dollar resulted in the depreciation of the Japanese yen, which had been approaching an acute deflationary crisis with a steep fall in the stock market. (Makin, 2000; paraphrased)


The work of Williamson (1999) entitled: "Implications of the East Asian Crisis for Debt Management" relate that a countries debt can be viewed from four different external perspectives in terms of debt composition which include: (1) FDI; (2) Portfolio Equity; (3) Long-term loans; and (4) short-term loans. This is the ideal composition of a countries debts however the debt profile of countries in East Asia are known to profoundly differ from the foregoing profile in that they had too…… [Read More]

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Annual Report for Dell Corp

Words: 1642 Length: 6 Pages Document Type: Thesis Paper #: 9315128

The company shares are currently trading at 21.73, a decrease of 0.23% from the previous day. The strong financial performances in the second quarter of 2008, published at the end of August 2008, will most likely increase the stock prices in the next coupe of weeks. The 52 weeks range for Dell stock was between $18.13 and $30.77, with a one year target estimate aimed at $26.53. The earnings per share ratio was $1.34.

In order to calculate the weighted average cost of capital, we will use the following formula: WACC = Wd (Kd)(1-t)+(Wpfd)(Kpfd) +(We)(Ke), where Wd= the proportion of the financing taken on by debt; Wpfd= the proportion of the financing taken provided by preferred stock; We= the proportion of the financing provided by equity

Kd= the interest rate that the bank requires (we will use the average yield for the debt); Kpfd= dividend/share price; Ke= R (r)+ Beta…… [Read More]

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Competitor Comparison the Companies the

Words: 2116 Length: 8 Pages Document Type: Thesis Paper #: 73219615

This is especially unusual given that the FedEx appears to be weathering the current economic crisis much better than UPS is. They have better control over their cost structure and have been able to reduce their debt. UPS, on the other hand, has more volatile earning and cost figures and has seen a dramatic increase in leverage in recent years. The most likely factor is that UPS pays a much higher dividend. This gives the impression of greater cash flow stability. Yet FedEx has enjoyed a steady rate of dividend increase (2 cents per year). That they do not pay as much as UPS reflects their youth but it is a fallacy to assume that FedEx's future cash flows are less certain. Indeed, their dividend rates going in to the future are entirely predictable.

Despite this, the market appears to prefer UPS' business model to that of FedEx. The latter…… [Read More]

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Argentina Crisis the Argentine Crisis

Words: 2673 Length: 10 Pages Document Type: Thesis Paper #: 56315423

S. dollars.

Although the plan had its share of supporters, it failed to be implemented because of the lack of political support. As a consequence, Rodriguez Saa resigned, and was followed by Eduardo Duhalde.

Factors Contributing to the Crisis

The crisis that affected Argentina was due to a combination of factors. Also, some of the factors that determined the crisis have their roots in the previous decades, increasing their effects and combining them with the effects of newer events that were not efficiently managed.

One of the most important causes that determined the crisis is represented by the political factor. The military dictatorship that ruled the country decades before the crisis has had its significant negative impact on Argentina's economic, social, and political evolution. The public management system developed and implemented by the dictatorship has taken the country off track of a country's normal evolution towards economic development in accordance…… [Read More]

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Unihost Industry Analysis the Canadian

Words: 1669 Length: 5 Pages Document Type: Case Study Paper #: 49583382

9 million beyond the First Mortgage loan. In order that the company does not dilute its equity, it is recommended that the convertible and debenture issues are made. If the convertibles are taken as equity, the capital structure will be around 28.6% in two years not counting new retained earnings, and this is close to the target capital structure that UniHost has. It is recommended therefore that those two options are undertaken in order to finance the expansion of UniHost. The convertible will need to be more than the $75 million -- more is possible so a this issue should net around $85 million. The company is unable to finance with just equity and convertibles, so some amount of debenture will be required, so it would be difficult for UniHost to undertake its growth strategy and avoid the restrictive covenants that will prohibit it from further growth. Future expansion needs…… [Read More]

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Financial Decision the Company Is

Words: 1409 Length: 5 Pages Document Type: Research Paper Paper #: 72508591

If this investment was financed entirely with debt, the new capital structure would be 67.2% debt and 32.8% equity. If this investment was financed entirely with equity, the new capital structure would be 30.5% debt and 69.5% equity.

One rule of thumb for making such a decision is to match the asset type with the financing. Therefore, an asset that is expected to have a service life of five years would be financed with a five-year bond issue, so that the cash flows from the asset can be used to cover the costs of financing. In this case, the asset life is not known, so any financing type can be used.

Internal cash is not possible because the firm likely does not have $10 million in cash if it only has $17.2 million in assets and $17.5 million in annual revenues. A debt issue will leave the firm with a…… [Read More]

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Public Administration Capital Budgeting the

Words: 1051 Length: 3 Pages Document Type: Term Paper Paper #: 84928685

Private-label securitization has basically ended, and Fannie and Freddie were positioned into conservatorship by their controller subsequent to working in a dangerous and unsteady way. The job currently is to figure out how best to restore a connection between homebuyers and capital markets in a manner that deals with the problems of the old arrangement (Bernanke, 2008).

One alternative that has been talked about is that of privatizing the GSE's and letting them contend in the marketplace as private mortgage insurers and securitizers. In order to get rid of the assumption of government backing and to arouse competition, some suggestions supporting privatization call for collapsing the corporation into less significant components prior to privatizing them. Privatization would resolve a number of troubles connected with the present GSE model. It would get rid of the disagreement amid private shareholders and public policy and probably reduce the total dangers as well (Bernanke,…… [Read More]

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Canada's Federal System Affect Economic

Words: 1705 Length: 4 Pages Document Type: Term Paper Paper #: 25918488

Mediocre material will, likely, thus be introduced into the market, and fledgling authors discouraged. This may in a matter of fact not only prove detrimental for general culture but also for the store itself, since discouraged with the level of prevalent reading matter, potential customers may frequent other locations for their desires.

Conclusively, as an example of Mr. Flaherty's impact on the book-selling business, relaxation of tax demands on private investment may profit the business depending on its projects and ambitions. The more ambitious its projects, likely the more it may profit. I am unsure, however, how much 3 R's Used Books can make itself independent from dealing with the U.S. Or with other countries; a bookstore, by nature, has to have international dealings in order to succeed. As regards the economic policies, particular to Ontario, passed in 2009, the bookstore, can with provisos, mostly benefit form their implementation.

References…… [Read More]

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Starbucks Financial Assessment

Words: 4054 Length: 10 Pages Document Type: Essay Paper #: 80392345

1. Introduction

Firms may be successful by satisfying customer needs, but their ultimate accountability for financial performance is to the owners of the firm. Actions undertaken by quoted firm will usually have the direct, or indirect, aim of generating revenues and profits for the firm, and therefore the owners (Tarraf, 2012). When investors assess a potential investment they will look at the financial performance of a firm, assessing the past performance, with consideration of the way current and expected strategies will impact on the organizations performance, in the context of the expected macro-environmental conditions (Bodie, Kane, & Marcus, 2014). The investors will assess the share price of the firm, being more likely to make a purchase if they believe the value of the share is likely to increase with a significant amount of the assessment based on assessments of past performance (Hens & Rieger, 2016; Nellis & Parker, 2006). This…… [Read More]

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Financial Leverage

Words: 684 Length: 2 Pages Document Type: Term Paper Paper #: 12062134

Financial Leverage

There are many ways that one can finance a project. Either a company can use its investors own funds, that is equity, or borrowed money, meaning debt can be used. Generally, the two are used in a combination depending on the risk preference of the investor. Financial leverage is financial leverage "The degree to which an investor or business is utilizing borrowed money" ( There are many views on using debt to finance a company. Some would say that it is a bad thing, and that it feeds on itself, but then again, it could be used to boost up return on equity very easily. This is because it can be used to increase the asset base of the company, and hence increasing the earning power of the company, without actually increasing the amount of equity. The reason is that an equity investor is entitled to a share…… [Read More]

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Law of International Banking

Words: 6320 Length: 15 Pages Document Type: Essay Paper #: 44268359

Regulation of Banks

Banks are an important aspect of any modern economy. They provide financing for commercial businesses, access to payment systems and a variety of financial services for the economy as a whole. The integral role that banks play in the national economy is demonstrated by the need for and practice of banking regulation and as part of the lessons learnt from the recent global financial crisis, provides a government safety net to compensate depositors when banks fail thus providing depositor protection.[footnoteRef:1] One of the main reasons why banking regulation is vital is because of systemic risks; the risk that financial difficulties at one or more banks spill over to a large number of other banks or the financial system as a whole. Systemic risks were traditionally bank -- based. Bank regulators traditionally focused on systemic risk in the banking sector while securities regulators traditionally focused on investor protection…… [Read More]

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WACC Bender Initial Investment 450 000 the

Words: 362 Length: 1 Pages Document Type: Research Paper Paper #: 76645967

WACC Bender

Initial Investment = $450,000

The Present Value = -$457,630

Net Present Value= -$672,409

Payback = $1,130,039

Annual Depreciation costs = $90,000/year

It appears that Bender should not go ahead with this expansion as they will appear to lose nearly $130,000 on this investment. The net present value decision suggests that this project does not stand to make any significant amount of money. If the facility could somehow be salvaged at the end of five years, this move would make more sense .

WACC = E/V x Re + D/V x Rd x (1 - Tc)

Re = cost of equity

Rd = cost of debt

E = market value of the firm's equity

D = market value of the firm's debt

V = E + D = firm value

E/V = percentage of financing that is equity

D/V = percentage of financing that is debt

Tc = corporate…… [Read More]

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Finance Cost of Capital the Capital Which

Words: 807 Length: 2 Pages Document Type: Essay Paper #: 39569548


Cost of Capital

The capital which is used by a firm, and shown n the balance can be divided into two main classifications; debt and equity. When a firm assesses its total cost of capital, this will usually be calculated on a weighted basis, using the costs of the different types of capital (Elliott and Elliott, 2011). An understanding of this can be appreciated by looking at some of the main sources of capital and the costs associated with each type of capital.


One of the most common forms of capital is debt. Debt is capital that is obtained through borrowing. There are many kinds of debt, which may include long-term debt such as structured loans from banks or other financial institutions, and short-term debt, such as overdraft facilities and credit agreements with suppliers. The cost of debt is relativity simply to calculate, with most debts having an…… [Read More]

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Superior Living Final CEO CFO Superior Living

Words: 1194 Length: 4 Pages Document Type: Essay Paper #: 88426647

Superior Living Final

CEO, CFO, Superior Living

New Production Facility Proposal and Initial Public Offering (IPO)

This report will address a few of the different strategic issues that the company faces going forward. We know that the company is proposing to build a new production facility, and there are a lot of concerns internally about that proposal. This proposal must be considered from a financial and strategic perspective. From a financial perspective, there are a number of metrics that can be used to help evaluate this project. A common metric is payback period, and I know that some on the Board want to see the payback period for this project. However, if we are taking the firm public, our investors will want to see that we are undertaking the strategies that will increase firm value. Thus, we have to base our decisions on the metrics that actually measure the impact…… [Read More]

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Financial Analysis This Report Will

Words: 2275 Length: 8 Pages Document Type: Term Paper Paper #: 93675121

5 times the actual value of equity.

The return on investment is calculated by dividing the total net profits by the total assets value and shows the "overall effectiveness to generate profits from total investment in assets." At the Colorado Group, the return on investment amounted to 20.4% in 2006 and 21.5% in 2005. The small decrease from 2005 to 2006 can be explained by the fact that that the net profits decreased significantly during this period of time and that the decrease of the total assets value was by no means similar in value.

The gross profit margin is calculated by dividing the net sales minus the cost of goods sold by the net sales value and shows the "profitability of a company's sales after the cost of sales has been deducted." In this case, in 2006 this ratio was equal to 54.4%, as compared to 55.9% in 2005.…… [Read More]

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American Superconductor Case Study Founded in April

Words: 870 Length: 3 Pages Document Type: Essay Paper #: 97936238

American Superconductor Case Study

Founded in April 1987 with $4.5 million in seed capital from an investment consortium (Google Timeline. American Superconductors. 2010); American Superconductor has grown into a "global leader in renewable energy, providing proven, megawatt-scale wind turbine designs and electrical control systems" (American Superconductors: Investors. 2010). The company works to "develop solutions and manufacture products to dramatically improve the cost, efficiency and reliability of systems that generate, deliver and use electric power" (AMSC. Annual Report 2003). Throughout its two decades of operation the company has needed capital to expand its operations, develop innovative technologies, and invest in capital projects with a design on profitability for the company and its shareholders; a feat the organization achieved for the first time with "$16.2 million, or $0.36 per diluted share, in net income for full year fiscal 2009" (AMSC. Annual Report 2010). The long road to profitability though is marked by…… [Read More]

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Gulf Cement Company Psc GCC

Words: 810 Length: 3 Pages Document Type: Term Paper Paper #: 21450638

A higher figure reflects a better position of a given company.

2008 Quick ratio = 5.95

2009 Quick ratio =6.83

2010 Quick ratio =7.23

The trend in quick ratio generally indicates an improvement or good trend in the company's ability to effectively meet its various short-term obligations using most of its liquid assets.

Profitability ratios

Return on investment (ROI)

A performance measure is employed in evaluate the efficiency of a given investment. It can also be used in comparing its efficiency to several other investments.

Return on Investment = Net Income after taxes/Shareholder's Equity (Total Assets-Total Liabilities)

2008 Return on investment = 2,118,827/( 1,810,626,071- 246,564,395)= 2,118,827/1,564,061,676 = 0.14%

2009 Return on investment = 36,165,310 / (1,649,954,411-172,891,948) = 36,165,310/1477062463= 2.5%

2010 Return on investment =73,636,501 / (1,592,528,763-123,488,012) =73,636,501/1,469,040,751=5%

The ROI trend indicates that the company is performing well through the years. It is experiencing an impressive growth in its ROI

Gross…… [Read More]

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Financial Ratio Analysis Liquidity Apple

Words: 1702 Length: 4 Pages Document Type: Research Paper Paper #: 31298934

This means that Apple is generating more cash internally than Google. Further, given the increase in cash flows from operations in the case of Apple means that the company could have an enhanced value of net income in future. When it comes to cash flows from investing activities, there is an increase in the same in the case of Apple in the current financial year in comparison to the previous financial year. This means that the company is using more cash to enhance its competitiveness and facilitate efficient operation. Further, given that this figure is higher than that of Google in both years under consideration, it is clear that Apple is spending more on capital expenditures and/or other monetary investments than Google. In comparison to the previous financial period, Apple has also registered an increase in the figure for cash flows from financing activities. However, using the company's latest financial…… [Read More]

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Ratio Analysis Etc On Apple Inc

Words: 1666 Length: 4 Pages Document Type: Research Paper Paper #: 54026532

Apple: Ratio and SWOT Analysis

Financial Trend Comparison

Ratio Category: Liquidity Ratios

In basic terms, liquidity ratios demonstrate a company's ability to settle its obligations (short-term) if and when they fall due. To begin with, from the computations, it is clear that Apple's current ratio has consistently been less than the industry average. Hence for short-term creditors, this could be an issue of concern as the trend increases their risk. Further, a look at the company's cash ratio shows that the firm could have difficulties settling its current obligations if payment for the same was demanded immediately. Generally, most (if not all) the company's relevant liquidity ratios fall below the industry average. Hence going forward, the company could find it hard accessing short-term-credit from creditors.

Ratio Category: Asset Ratios

Asset turnover ratios are basically used as pointers of a company's level of efficiency when it comes to asset utilization. Apple's…… [Read More]

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Air Tran Airways Is a

Words: 3295 Length: 13 Pages Document Type: Term Paper Paper #: 24119577

Another is high labor productivity, yet another is high asset utilization. The net result is that AirTran has one of the lowest levels of cost per ASM in the industry.

In terms of weaknesses, one major weakness is that AirTran has no discernable source of sustainable competitive advantage. Its success to date has been based on its ability to combine many small sources of advantage into a single airline. Yet, none of these sources can be considered sustainable in the long run. The industry is highly competitive. Competition comes from all manner of airlines both domestic and international. Any or all of these competitors and potential competitors, including new entrants, could replicate AirTran's success factors.

AirTran also has a high level of debt, the bulk of which derives from debt and lease obligations on their fleet. They presently hold over $800 million in debt on their balance sheet. The debt-to-equity…… [Read More]

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Capital Structure the Three Companies

Words: 881 Length: 3 Pages Document Type: Research Proposal Paper #: 58787693

The cyclicality of Choice, evidenced by their beta, and the intense competitive pressures, means that the firm is at risk for periods of difficulty. If they are too highly-leveraged, these periods could cause irreparable harm to the company. Ideally, Choice would limit the downside damage caused by the inevitable turbulent times. The medium debt ratio achieves this.

The ideal capital structure for Dell Computers is a high debt ratio. Dell's business is growing. From their beta we can infer that Dell itself is relatively stable, since they have such a broad customer base. They sell to both businesses and consumers, with several of their product lines being business only. Thus, the bulk of their risk is market risk.

The high debt ratio gives Dell sufficient leverage to participate in their industry's growth. Without a strong cyclical downside, they are in a good position to take on a higher debt ratio,…… [Read More]

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Financial Analysis for Lufthansa Financial

Words: 1535 Length: 6 Pages Document Type: Research Paper Paper #: 45912774

7. Overall Performance

Lufthansa is one of the strongest corporations of the globe and a major player on the European airline market. Its success is obvious in the satisfaction of their customers or the fact that their employees love working for the company, and it often materializes in opportunities for growth and development. Throughout the past recent years, the German airline organization has managed to increase its customer base, its fleet as well as its product offering. But these are not the sole indicators of prosperity. The financial analysis of Lufthansa revealed a strong economic agent. Despite the existence of some few issues which…… [Read More]

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Accounting - FedEx and UPS

Words: 3140 Length: 9 Pages Document Type: Research Proposal Paper #: 69265327

Another factor that should be taken into consideration is that of overall strategy. Financial statements are snapshots, and sometimes it can be difficult to discern from looking at a small sample of them the firm's overall direction. Key strategic decisions can have a significant impact on the financial statements for a limited period of time. For example, during the period studied FedEx was having trouble absorbing Kinko's which it had purchased. These difficulties are not fully reflected on the income statements for 2005 and 2006. Instead, they appear as an unusual item (a writedown) in 2008. Likewise, UPS took a $6.1 billion writedown in 2007, which made the financial figures for that year look terrible. There is always strategic context in financial statements. That context is not always readily apparent, but it should be taken into consideration when analyzing the financial statements.

The potential impact of mergers and acquisitions should…… [Read More]

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Investing in a Company the

Words: 1410 Length: 5 Pages Document Type: Thesis Paper #: 24999831

The slight decline in the cash ratio is not considered to be of significance in light of the generally solid current and quick ratios. The improvement in times interest earned comes in the face of a significant increase in long-term debt at PepsiCo. The company's debt ratio increased to 50.2% from 48.6%. This was largely a consequence of a nearly 65% increase in long-term debt.

Pepsi's operating margin is 18.1%, down slightly from 18.5% in 2006 and 18.37% in 2005. The company's ability to maintain margin stability illustrates strong managerial control over the company's cost structure. This is because Pepsi has little control over costs in the ultra-competitive segments in which they operate. They also have little control over factor costs such as high fructose corn syrup, the cost of which is based on commodity costs. The company's net margin declined slightly in 2007 to 14.3% from 16.05% in 2006,…… [Read More]

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Finance Questions on Capital Raising

Words: 1282 Length: 3 Pages Document Type: Term Paper Paper #: 15500782

For example, many of the large investment banks may choose to deal only with large deals will have minimum transaction sizes. Therefore, the first consideration may be the suitability of the bank given the size of the organization. There may also need to be consideration of the degree of attention and expertise that the investment banker direct with the company, even if the minimum is met, large organizations with a large number of clients may have a higher level of expertise that can be directed, but they may also be more focused on large clients. This can only be assessed by talking to the relevant investment bank.

Prior to taking on any investment bank it will be necessary to allow the investment banker to make a pitch. Ross details of the organization's financial position may be given prior to this pitch, but an investment banker should be willing to sign…… [Read More]

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Lending Institutions Health Care and Human Capital

Words: 1136 Length: 3 Pages Document Type: Term Paper Paper #: 46576713

Nigeria: Economic and Human Health

Lending Institutions, Healthcare, and Human Capital

Nigeria is the largest country in Africa and is home to 47% of the continent's population (World Bank, 2013). Nigeria is the largest oil exporter and holds the most natural gas reserves of any African country. According to the World Bank, these human and natural resources gives Nigeria the necessary ingredients for becoming one of the more prosperous nations in Africa and globally. Fueled primarily by oil exports, the Nigerian economy seems to be meeting this expectation by growing an average of 7.6% between 2003 and 2010; however, a recent softening of the oil market, which represents 75% of state revenues, has restricted the ability of the government to stabilize economic growth. Yet, foreign debt represents only 3% of the nation's gross domestic product (GDP).

Despite the apparent success of Nigeria's economy the levels of poverty and unemployment remain…… [Read More]

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Environmental Finance

Words: 4106 Length: 10 Pages Document Type: Essay Paper #: 23136493

CEFC and the Future of Environmental Finance

The Clean Energy Finance Corporation (CEFC) represents the most aggressive environmental finance initiative sponsored by the Australian Government to date. The CEFC is an independent entity established as part of the Clean Energy Future Policy by the Australian government. As of March 2012, funding for the program totaled AUS $10 billion in government backed investments for the commercialization and deployment of clean energy technologies. This research will explore the CEFC and its role in the development and deployment of environmentally friendly energy sources and alternatives.

Governments around the world recognize the need for developing clean and renewable energy sources that reduce their environmental impact. The topic of global warning and climate change has increased the need for the development of less energy intensive and environmentally damaging energy sources. Although the role of human beings in these changes is a topic of debate, it…… [Read More]

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Student Aid Programs Student Finance Aid Can

Words: 1737 Length: 5 Pages Document Type: Essay Paper #: 71725722

student aid programs.

Student finance aid can be described as funds given to the student to make it easy for them to fix cost of education such as fee and tuition, room and board, supplies and books where the students are undertaking their education like in universities, colleges or private schools.The funds which is being given out to public educations by government in general is known as financial aid meaning that it is being given to particular students, Financial aid can also be referred to as scholarship, although scholarship has some other components like students loans and grants.Loans are finance that one lend and must be paid back with an intrest after a period of time.In the case of student loan the money will be taken back after graduating.Aid is the help one is given.

All the U.S. states governments and The United States government offer loans, grants and work…… [Read More]

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Macroeconomics Budget Deficits Today Will Tend to

Words: 1459 Length: 5 Pages Document Type: Essay Paper #: 98574881


Budget deficits today will tend to lower the rate of growth in the economy in the future. Budget deficits result in higher rates of public debt. While the U.S. borrows at very low rates, it nevertheless must pay interest on its debt, and it is that interest that represents a burden on future growth. What happens is that future tax receipts must be used to pay interest and principle on debt created by today's deficits, instead of being invested back into the country in the future. Thus, while running a deficit may create positive economic growth today, it does work to constrain future growth, but placing constraints on the amount of future national income that can be dedicated to growth in the future.

The reasons for the budget deficit definitely matter. As with any spending, there is a difference between spending on things that will build revenue growth for…… [Read More]

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People's United Bank the Market Value of

Words: 632 Length: 2 Pages Document Type: Essay Paper #: 11161108

People's United Bank

The market value of People's United Financial (NASDAQ: PBCT) is $11.94 (current stock price) * 358.06 million shares outstanding = $4.275 billion. The book value of the debt is $19.802 billion. This gives People's United a total worth of $24.077 billion, weighted as 17.75% equity and 82.25% debt. The beta for the equity is 0.27. The risk free rate is 0.352% (Yahoo! Finance, 2011) and the traditional 7% market risk premium can be used. Using CAPM this gives a cost of equity of The cost of debt must also be calculated in order to determine the weighted average cost of capital of People's United. Being a retail financial institution, the vast majority of People's United's liabilities (90.5%) come in the form of deposits. Some of these pay no interest, and others pay out in savings, interest-bearing checking and money market accounts. Total interest expense for 2010 was…… [Read More]

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Indian Stock and Bond Markets Do You

Words: 664 Length: 2 Pages Document Type: Essay Paper #: 87852972

Indian Stock and Bond Markets

Do you think an investment in the Indian stock market is a good long-term investment?

The Indian stock market has experienced a number of fluctuations over the past 20 years or so that would suggest that investors might want to adopt a "wait-and-see" approach before making the plunge into these financial waters. For example, Schmidt and Hersh emphasize that, "The history of the operation of the Indian stock market has been dotted with brokers often unable to meet their commitments, allegations and proved instances of insider trading, and deliberate manipulation of stock prices by bears and bulls" (2000, p. 131). The prices for stocks listed on the Indian stock have experienced a number of highs and lows, with the most significant boom taking place during the period 1993 to 1995; however, although there have been some spikes, there has been a downward trend experienced since…… [Read More]

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Financial Ratios Calculation & Interpretation

Words: 899 Length: 2 Pages Document Type: Application Essay Paper #: 28373990

This ratio eliminates the stock figure from that of current assets and like the current ratio; it is used to measure the liquidity of a firm. The quick ratio may in some instances be preferred over the current ratio as it is inherently difficult to turn some assets into cash. In regard to the two companies, the quick ratio brings out Plume Inc. As being more risky as it is more likely to default on its short-term obligations. According to Tracy (2009), the quick ratio of a firm should ideally be grater than 1.

Part B: Health and Risk Analysis in Brief

Looking at the debt to asset ratio, Arrow Company comes across as being more risky than Plume Inc. This is basically because its higher debt to assets ratio exposes it to a larger amount of debt which both investors and creditors may be wary of. Further, the higher…… [Read More]

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Financial Analysis Performance Task

Words: 1124 Length: 4 Pages Document Type: Essay Paper #: 55129214

Financial Analysis


Alimentation Couche-Tard



Gross Profit

Depreciation + Exp

Operating Profit

Investment Income



Tax Exp

Net Income




Prepaid Exp

Current Assets


Capital Assets


Future Income Tax


Total Assets

Taxes payable

Current LT Debt

Current Liabilities

LT Debt

Other LT Liabilities

Total Liabilities


L + E

Reitmans was able to improve its profitability in 2005, compared with 2004. The company's gross profit improved to 13.55% from 9.99%; its operating profit improved to 9.7% from 5.98%; and its net profit improved to 7.33% from 4.7%. This shows that the improvement in the company's profitability is largely attributable to the improvement in the top line, with the cost of goods sold being a lower percentage of revenues in 2005 than 2004. Whether this is a function of driving down costs with suppliers or increasing prices to consumers cannot be ascertained from…… [Read More]

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Managerial Finance as of the

Words: 855 Length: 3 Pages Document Type: Thesis Paper #: 62398341

33% on the 2013s; 27.78% on the 2018s 16.67% on the 2028s and 22.2% on the 2038s.

Using market value the weighted-average cost of debt is 6.798%. The weights are 35.42% on the 2013s; 28.39% on the 2018s; 16.14% on the 2028s and 20.03% on the 2038s. Thus, it does make a difference if book or market value weights are used. In this case, the market value weights skew more towards the short maturities, which have the lowest yields. This gives the weighted-average cost of debt for market value weights a slightly lower figure.

5) by book value, the weight for debt is 30.85% and equity 69.45%. This gives a weighted average cost of capital of:

We (Re) + Wd (Rd) (1 - T) =.6945(9.94) + (.3085)(6.854)(.65) = 8.277%

By market value, the weight for debt is 7.345% and the weight for equity is 92.645%. This gives a weighted average…… [Read More]

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Finance Financial Projections for Touch My Knuckles

Words: 870 Length: 3 Pages Document Type: Essay Paper #: 55233735


Financial Projections for Touch My Knuckles

Touch My Knuckles, a firm selling mixed martial arts appeal, including shirts, fleeces, hats and sweatshirts will provide a great potential for investment. The aim of this paper is to look at the financial statements for the first three years of operating, including start-up costs, cash flow, income statement and balance sheet. Following the financial analysis consideration will be given to the way in which the may be raised an issue of capital structure.

Financial Statements

The following financial statements indicate potential of the business. The financing being requested in $248,560, this can been calculated with reference to the start up costs, less the available capital, with an allowance of the operating loss that will be made in the first month.

The start up costs are relativity modest due to the use of outsource suppliers who will send the goods directly to the…… [Read More]