There appears to be a disjointed understanding concerning the functioning of a capitalistic economy and its use of money. Financializaition is a mostly new model of the use of money as a valuable resource in and of itself. Money is essentially fetishized as the most prominent capitalists strive to gain more and more money. Money makes the world go around in many ways, but there lies a question in to how humanity uses the precious inventions of trade and commerce in more reasonable and just manner that excludes the negative aspects that financial institutions and their machinations attempt to dominate the economic progress of a people.
The purpose of this essay is to argue that financializaition and its offspring intermediaries have set the capitalistic world balance off a productive trajectory. The greed of those who seek value in material wealth without any real or substantial backing is at…… [Read More]
An apprenticeship at Fidelity Investments would be a great way to start off your career in finance. The finance industry is always on the lookout for up and coming talent that has both know-how and experience in the field. An apprenticeship offers people the opportunity to immerse themselves in the world of investments by shadowing professional traders, portfolio managers and financial advisors as they interact with clients, plan investment strategies, offer tips and guidance to investors, and focus on achieving positive returns for clients. As the U.S. Department of Labor (2017) points out in ApprenticeshipUSA, “the financial industry, including the banking and insurance sectors, is critical to our country’s economic competitiveness” (p. 1). As such, it is highly important that Fidelity do its part in helping people become talented and trained in this field. The apprenticeship is one great way to ensure that this happens.
At Fidelity Investments,…… [Read More]
Financial Analysis of Morrison's PLC
Morrison's, the UK supermarket may be assessed as a potential investment. The firm may be considered by looking at the way that the share price is performing, comparing it to its past performance as well as benchmarking the performance against the industry
The share price will reflect the market expectations, so as well as looking a past performance it is also necessary to look to the potential future; this is often achieved by looking at the financial ratios of the firm considering the performance both vertically and horizontally.
Morrison's appears to have had a relativity mixed year; the share price stands at 277.60, closing price on the 24th August, 2012 (FT, 2012). The share price has been volatile, increasing and decreasing, over the last 52 weeks the high has been 340.00 and the low has been 261.00 (Yahoo Finance, 2012). Over the year the…… [Read More]
Any Asset Pricing Theory forms the basic foundation of finance theory, in that it deals with the value of any asset under unknown or uncertain circumstances. The relationship between an asset and its price is the mainstay of the asset pricing theory: the lower the price, the poorer the expected performance. The Arbitrage Pricing Theory derives from this theory. The basic idea in the APT theory is that any sort of risk in asset returns must not affect the pricing of the asset in any way; it must depend on the covariance of assets with the risk factors. (Bayesian Approach of the Arbitrage Pricing Theory) The APT originated from Stephen oss, 1976-1978. oss had used a statistical procedure for assets returns, with the belief that there are in existence no arbitrage probabilities. The APT must of necessity involve a lot of risk taking processes, (Definition of Arbitrage Pricing Theory.)…… [Read More]
3) a. If $1.25 represents a 40% dividend payout ratio, earnings per share are $3.13. A six percent return (the required return) would put future earnings at $3.32. ((3.32-3.13)*100)/3.13 = 6.07%
b. 40% (the dividend payout ratio) of $3.32 (future estimated earnings) is $1.33
c. The price of the stock cannot be calculated accurately with the information given, however if its is assumed that the earnings per share (currently $3.13 with dividends of $1.25 and a dividend payout ratio of 40%) represent the 20% return on equity, then the price is simply five times the earnings per share, or $15.65.
d. assuming the dividend payout ratio and return on equity remain constant at 40% and 20% throughout this period, a and the same relationship for the ROE and stock price, in the first year, a dividend of $2 means EPS increases to $5, translating to a stock price of…… [Read More]
Starbucks is engaged in the quick service food industry, primarily focused on coffee and related snacks. The company has come under strong competitive and economic pressures recently, and this has impacted its performance. However, Starbucks has turned around its financial performance in the past year, which has restored investor confidence in the company.
Starbucks is both liquid and solvent. In the past year or so, they have improved their liquidity and solvency ratios. They added long-term debt to their balance sheet in 2007 but have not increased this debt since. The company's margins have slowly eroded over the past five years, mainly due to a decline in customer side pricing power as the result of competition from low price providers. Starbucks has also seen its efficiency erode, likely due to expanding into less-saturated markets around the world in search of growth. Overall, however, the company's financial performance has been…… [Read More]
Coca-Cola and Pepsi are the world's two largest producers of non-alcoholic beverages. Both companies are global in scope, and market hundreds of different products. Each has multiple billion-dollar brands. Yet, there are significant differences between the two. Coca-Cola has typically focused on its soft drink businesses, while Pepsi has sought to build market size through diversification. Corporate restructuring has allowed Pepsi to divest itself of its restaurant businesses and its bottling business, leaving the company in recent years with a structure similar to that of its rival and a focus on the beverage and snack food industry. The intent of this paper is to analyze the two soft drink giants in the context of their finances. The financial performance of these companies derives from their business practices, so some attention will be paid to strategic issues in this report. The bulk of the report, however, will be focused on…… [Read More]
The topic of finance and managerial accounting inclusively, are broad and incorporate a critical skill set in the modern day business student. Finance involves corporate and investment finance and managerial accounting is complimentary as it involves cost accounting and essentially stresses cost management. Together, these topics provide a comprehensive financial analysis skill set yielding capability in solving the day's most critical business financial quandaries. The literature review will seek to narrow down the literature and funnel the topic into the main financial analysis area.
According to Musvoto, (2011), "Studies in accounting measurement indicate the absence of empirical relational structures that should form the basis for accounting measurement. This suggests the lack of objectivity of accounting information. Landmarks in the development of finance theory indicate the use of accounting measurement information as a basis for their development. This indicates that subjective accounting information is incorporated in finance theory. Landmarks…… [Read More]
Finance & Management
The acid test, or quick, ratio adjusts current assets by removing less liquid assets, primarily inventories. It is expressed as coverage of so many times and is used to calculate working capital as the excess of current assets over current liabilities. By subtracting the inventories, or less liquid assets, it adjusts the assets to calculate for a truer working capital picture.
The current ratio measures short-term solvency, the extent current assets are sufficient to cover current liabilities. This ratio relates total current liabilities to cash, marketable securities, and receivables. If the current ratio is less than 1 and a competitor in the same industry is higher than 1, it shows that the company is carrying less inventory than its industry counterparts.
The inventory turnover ratio measures the liquidity of the inventory by calculating the number of times on average a company sells the inventory during…… [Read More]
Wal-Mart would probably not bother merging with another retailer unless it was overseas, but would instead look to acquire a strategic partner with some of its other success factors, like logistics or information systems. A good example of such a company is Magellan Technology, a company specializing if FID technology, something that has been an important part of Wal-Mart's logistics strategy in recent years (Traub, 2012).
Wal-Mart has basically three options for such an acquisition -- equity, cash or a combination thereof. When purchasing a private company, Wal-Mart is more likely to use cash I would suspect, as that company's owners might not want to own stock in Wal-Mart. One of the big reasons is that Wal-Mart is so much larger than Magellan, and Magellan's former owners would probably not benefit much from ownership of Wal-Mart shares since their involvement with Magellan is not going to be a major…… [Read More]
It was also very interesting to note that many large suppliers may actually step in to help their troubled client. Again, this makes sense, especially if the client is a long-term business partner doing a major amount of business with the company. Saving a company actually makes sound financial sense in these cases, and uniting with a group of company creditors is also a good idea. It seems that for the most part, when a company runs into financial difficulties, if they are a viable and respectable company, there are resources available to help them regain their footing and continue business. This shows how important it is to always have excellent relationships with customers, no matter what business you engage in.
Brownstein, Howard and Edward Gavin. "When Bad Things Happen to Good Customers." Business Credit, June 2003, retrieved from ProQuest…… [Read More]
Managing exchange rate risk can be a daunting task for many international firms attempting to expand overseas, acquire new companies, or simply manage its cash flows. Globalization has created a dynamic environment in which competition can arise to disrupt entire industries. Aspects such as technology, pharmaceuticals, banking, and automobiles have all experienced rapid change as a result of globalization and the competitive forces that underline it. As a result, companies, particularly smaller firms, have a higher propensity to experience volatile earnings overtime. Aspects that impact one sector of the globe can have a residual impact on other areas of the individual firm or industry. Managing exchange rates is therefore a viable option for firms to reduce volatility in earnings while subsequently managing its cash flows from operations. Below, is a 5 step program which could be implemented by a firm attempting to manage its exchange rate risk after an…… [Read More]
Sorkin, however, posits no argument per se. ather, his book offers insight into how the financial crisis manifested from a far more personal perspective of those involved than anything else. The book is informative in nature, and give insight into some of the thought processes and activities those on the outside may not otherwise be exposed to or privy to. The title of the book sums it up best, and the book outlines how the banks and the primary players and stakeholders have become too big to fail. The book highlights the self-interest of those in charge of some of the biggest financial institutions in the world and their blatant disregard for Main Street.
The book has a place in the larger academic debates raised within public knowledge because it adds to the public's real knowledge of those involved in the nation's financial industry and government offices. Instead of speculating…… [Read More]
Discuss some of the motivations firms have for setting up production facilities in other countries. Will the effect on the host country differ depending upon the motivation? Explain. Will the effect on the source country differ depending upon the motivation? Explain. What relationship might trade barriers (or the lack of trade barriers) have in determining a company's primary motivation for producing abroad?
The reasons for the foreign investment are high profit returns, and the rate of return is dependent upon the capital invested, the tax reductions and employees' fund. The foreign investment or production company is highly welcomed by the government because the company is expected to bring in foreign exchange. THz enhances the purchasing power of the country in international currency; thereby the nation has to rely minimum on loans and international borrowing.
The major motivation that the international investor has towards foreign investment is that cheap labor…… [Read More]
5x -- 50,000
200,000 / 7.5 = 26,6667 units
1e) the ROE for the first scenario is 140,000 / (0.85*350,000) = 47%
the ROE for the second scenario is 140,000 / (0.65*350,000) = 61.5%
The difference is 61.5 -- 47 = 14.5%
1f) the dividend payout structure is going to be as follows. The taxable income will be as follows:
($200,000 * .35) = $70,000 of debt. The interest will be (70,000)(.105) = $7,350
So taxable income will be $200,000 -- 7350 = $192,650
Tax at 30% is $57,795
Thus, net income is $192,650 - $57,795 = $134,855
The equity needed for the capital budget is (.65)(150,000) = $97,500
The dividends are therefore calculated as $134,855 - $97,500 = $37,355
The payout is therefore $37,355 / $134,855 = 27.7%
2. a) the company faces some risks if it tightens the credit policy. It will reduce its accounts receivable if it…… [Read More]
Flexible Budget for Yum Brands Inc.
Flexible budgeting allows a firm to look at different potential scenarios, often this may be undertaken for an optimistic, pessimistic and most likely scenario. Firms will often undertake forecasting exercises; these may be based on complex approaches to assess likely demand, for example, considering past patterns of sales, the impact advertising they will have and other factors such as the influence of the economic climate, competition and social factors. However, forecasts are unlikely to be fully accurate, the development of a flexible budget allows the firm to look at different scenarios, and create a more flexible approach towards planning. This can be particularly important when the firm is planning for a longer period of time, such as a full financial year, this can be seen by preparing a flexible budget for a well-known company. Yum! Brands is a large corporation which develops, operates…… [Read More]
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]
An investor choosing between two different companies must undertake several steps in order to determine the best investment. In addition to understanding the industry of the company from a strategic perspective, a thorough financial analysis should be conducted. The strategic analysis will help to understand the underlying trends of the financial assessment. The financial analysis should include a ratio analysis, and should focus on the key areas of liquidity, solvency, leverage and profitability. In addition, the performance of the company's equity should be analyzed, particularly in relation to the company's financial performance. This will help to determine if the current share price is good value. This report will analyze two different companies -- Marks & Spencer and Tullow Oil -- using these criteria. There will also be a brief corporate social reporting analysis.
Marks & Spencer Overview
M&S is a department store retailer based in the UK, but operating…… [Read More]
3. James Flanigan's article "Biotech Tries to Shrug off Setbacks," from the New York Times and found here: http://www.nytimes.com/2009/09/17/business/smallbusiness/17edge.html?_r=1 outlines the difficulties that biotech firms have had recently with respect to securing financing. The investment climate is different for several reasons. The first is that the traditional providers of venture capital to biotechs have seen their asset values plummet along with the stock market. As a result, industry insiders are pessimistic with respect to the availability of venture capital in the coming years. The remainder of the article explains that despite the gloomy outlook, there are players in the industry that are optimistic, in part because they perceive the industry as sufficiently strong to attract capital even in a tight VC environment.
The article's guardedly optimistic finish leaves the question unanswered as to the consequences of the current sluggish VC environment being sustained for the next several years. This is…… [Read More]
The guiding hand of Palamon could add eal value hee, inceasing the oppotunities fo gowth.
Moeove, the apid pace of technological change the industy is facing povides stong gowth oppotunities. Should TeamSystem be poactive and take a leading ole in the adoption of new technologies, they can steal maket shae fom slowe competitos. That they need to do an ovehaul on many of thei pogams to bing them to moden platfoms seems like a geat time to move diectly into a leadeship position - the money will be spent anyway.
Thee ae stong oppotunities fo exit. If TeamSystem can capitalize on oppotunities fo gowth, they can position themselves fo eithe a sale o an IPO. In tems of an IPO, TeamSystem is expected to show steady gowth. The maket is kept elatively closed by the complexity of the Italian taxation system. Futhemoe, the company has a stong leade.
The oppotunity…… [Read More]
("On the Ground Floor of Global Growth," 2010)
The average rate growth in net income is 6.5%. The below table is illustrating the different projections over the next three years.
Net Income Estimates
("On the Ground Floor of Global Growth," 2010)
These figures are highlighting how the net income will be consistently increasing between 2011 and 2013.
Earnings Per Share
("Yum rands," 2010) ("On the Ground Floor of Global Growth," 2010)
The average rate of growth for the EPS is 15.05%. The below table is: showing how these numbers are expected to increase in the future.
Earnings Per Share Estimates
("On the Ground Floor of Global Growth," 2010)…… [Read More]
This company is well positioned to capitalize on the growing population of older Americans whose children have moved out and are in search of more efficient and cost-effective homes. Like the business model adopted by NVR, Toll also takes advantage of efficiencies in its value chain by developing its properties on land that the company has either acquired and/or developed.
For the 5-year period ended October 31, 2004, Toll had completed 24,271 homes in 456 communities, including 6,627 homes from 273 communities during the fiscal year ended October 31, 2004 (Toll 2).
Toll also operates its own land development, architectural, engineering, mortgage, title, security monitoring, landscape, cable television, broadband Internet access, lumber distribution, house component assembly and manufacturing operations, as well as owning and operating golf courses and country clubs in connection with a number of the company's master planned communities (Toll 3). hile Toll's stock performance cannot compare with…… [Read More]
% Earnings Retained
Materiality of options
There was no book value data provide for 2008 & 2007. No data was provided on options expense, so materiality of options could not be calculated. From the perspective of an investor, this company appears to have fairly low leverage, trades at a low multiple, has a very stable business value and pays out most of its earnings as dividends, so you are buying the NPV of future dividends and should have relatively little expectation of capital gains. Like a lot of companies, it took a hit in 2009 and has been building up to normal operating levels ever since.
% Earnings Retained
Common Stock Auth
Common Stock Issued
Common Stock out
$22.43…… [Read More]
Yet, it is difficult to quantify the true value of intellectual property. In theory, the value of intellectual property derives from the degree to which the firm can convert that property into wealth. In some cases -- pharmaceutical patents, for example -- this can be relatively easy to calculate. In other cases -- the good vibes consumers get from seeing the Geico gecko -- quantification becomes more challenging. Yet that gecko character does have value for the insurance company, and if the character was licensed to another firm there would be a high cost attached. Kossovsky (2002) proposed a valuation method for IP loosely based on the Black-Scholes model of option pricing, and the FASB has also issued guidelines with respect to IP valuation. Yet in practice, valuing IP remains one of accounting's dark arts.
Prior to the mid-1990s, there was little consideration for the value of intellectual property. Firms…… [Read More]
Target's chart, however, shows that the company has tracked the market and GDP fairly closely, indicating that perhaps it does not trade the way a discount retailer should.
Johnson & Johnson
JNJ is a pharmaceutical and consumer products company. It competes in pharmaceuticals, consumer products in the health and beauty segment and in medical devices. The company was founded in 1886 and today is a multinational conglomerate with operations in 57 countries and with approximately 250 subsidiaries.
To a certain extent, JNJ's product line is price inelastic. Pharmaceutical demand is tied to overall consumer demand and the state of the economy, but not to the same extent that many other consumer products are. As a result, JNJ would be expected to have less significant swings in its stock price relative to the GDP, other macroeconomic indicators, or the Dow Jones. The stock, however, has traded roughly in line with the…… [Read More]
The algorithm can be your market eyes. it's effectively a trading assistant - a very diligent trading assistant... The downside is that it is also a very obedient trading assistant, so if you tell it to do something it might not have the intuition or the ability to veto you... obviously there are checks and balances to prevent anything bad from happening, but you do hear stories about people putting an order in with the wrong instruction, it moved the stock 10 per cent and then you get a call from the regulator" (Dey, 2006) in 2007, the Economist attributed a financially significant "wobble" suffered by the New York Stock Exchange on February 27, 2007 to the ad hoc combination of increasing capacity by adding more scalable hardware to a system that still relies substantially on floor-based trading, yielding a "hybrid" system with significant vulnerabilities. According to that journal, the…… [Read More]
An even less ethical practice is the idea of cash rebate credit cards, where consumers are encouraged to charge in exchange for rebates on their purchases -- this surely encourages the habit of spending plastic money rather than paper money, and thus facilitates a debt culture.
Even from a company's marketing and advertising point-of-view, cash rebates can appear to be a desperate measure, as when Ford recently offered a misguided $1,000 rebate on its new line of trucks. (Reuters, 2003) Instead of garnering new sales and praise, this effort only drew attention to Ford's persistent reliance on high-fuel use cars, causing industry analysts to question how much profit Ford could get from its trucks given higher assembly costs and cutthroat competition in the U.S. market.
Reuters. (5 Dec 2003) "Ford puts Cash Rebate on New Pickup." USA Today. Retrieved 17 Apr 2005 http://www.usatoday.com/money/autos/2003-12-05-f150_x.htm… [Read More]
Bush, who declared that corporations which jeopardized the investments and jobs of millions of individuals should pay their dues. The United States Senate and the House of epresentatives also became involved and proposed numerous modifications.
The pillar of the changes occurred in financial reporting after the accounting scandals is based on increased transparency and more support in conducting audit operations. The XBL system for instance will allow the Securities and Exchange Commission to conduct analyses in a more efficient manner. All efforts to improve the financial reporting system have been condensed into the Sarbanes-Oxley Act. It represents the most important regulatory act of the past 70 years and it is applicable all around the world; it addresses issues that refer to all players in the corporate reporting chain.
Bautista, L.., 2004, Implications and Effects of Sarbanes-Oxley Act, Securities and Exchange Commission, etrieved at http://www.adbi.org/conf-seminar-papers/2006/03/30/1739.implications.effects.sarbanesoxley/onMarch 13, 2009
Cooper, C., 2007,…… [Read More]
Therefore, while pricing strategies are different, most firms are seeking to differentiate themselves with features they believe will attract their target market, and the pricing reflecting the target market.
If a firm such as Samsung wishes to reduce costs there are a number of approaches which may be utilized. Most manufacturers are already using outsourcing for manufacturing either the handsets or some of the components. Costs are often saved by going to firms in countries where there is the ability to makes gains of comparative advantages, especially in areas where wages and overheads are lower. China is particularly well-known as a manufacturing base, but to save costs it would be possible to move to even lower cost countries, such as the African states where there is a lower level of economic development. However, this may also have costs, as the staff may not be as skills and quality…… [Read More]
ehavioral Finance and Human Interaction a Study of the Decision-Making
Processes Impacting Financial Markets
Understanding the Stock Market
Contrasting Financial Theories
Flaws of the Efficient Market Hypothesis
Financial ubbles and Chaos
The stock market's dominant theory, the efficient market hypothesis (EMH) has been greatly criticized recently for its failure to account for human errors, heuristic bias, use of misinformation, psychological tendencies, in determining future expected performance and obtainable profits.
Existing evidence indicates that past confidence in the EMH may have been misdirected, as the theory's models do not show a thorough understanding of trading operations in a realistic light.
Researchers have suggested that a variety of anomalies and inconsistent historical results demand that traditional financial theories, namely the EMH, be reconstructed to include human interaction as a key decision-making process that directly affects the performance of financial markets.
This research paper aims to determine whether or not there is a…… [Read More]
This in turn gives the financial professional better idea of the stock's risk behavior.
The equation used in this security market line relationship is as follows:
Mathis, CAPM, par. 3)
The measure of systematic risk is considered Beta or bi while E[Ri] is equal to the expected return on asset I and Rf is the risk-free rate. E[Rm] is the expected return on the market portfolio and E[Rm] - Rf is the market risk premium for the stock. Once the Beta is known then the risk and rate of return can be found.
APT is different because not only can forecast for the long-term, it can also work for the short-term scenario. This fact makes it the better of the two theories because it gives the financial professional more tools to assess risk and the rate of return. APT does this by using a model that captures all the data.…… [Read More]
Stories detailing the rise and fall of the Egyptians, the Roman Empire and other great nations proved mesmerizing and intriguing.
My interests in other areas have also been diversified; I have pursued many adventures, participated as president of many clubs, and won many competitions in music, sports, dance and more. My strength has always been academics however. During high school I was presented the unique opportunity to come to the United States and continue my education. It was here that I decided to study history initially. Though my parents pressured me to study finance or business, I found such work tedious at least initially. I did however entertain my parents and begin taking more classes in finance. This was probably the best decision I have ever made and helped create the professional I am today.
The more I learned the more I came to understand that finance was more than…… [Read More]
The business case is a living document that drives program activity in light of the changes in the business' external environment and lessons from the program scope. These factors are used in preparing the business case to ensure that the program is and will continue to be viable, desirable, and achievable. Therefore, the main goal of the business case is to direct program activity towards the ultimate realization of the vision and to provide mechanisms from periodic evaluation of several aspects of the program. These evaluations provide information on whether the program should progress to the next stage, be suspended until further review is carried out, or be terminated. This implies that the development of the business case is an important practice in promoting the success and effectiveness of the business. It's a process that should not be taken lightly but accorded the necessary consideration and attention it deserves.…… [Read More]
I think that proper networking and research on who is making quality products, and finding a vendor with a good track record of customer satisfaction would be crucial in getting a positive consumer reaction.
Networking is invaluable when you do not miss opportunities that are available just from people talking about your product. Some of the smaller stores are involved in fairs and events where products can be introduced to the public without the burden of larger brand name competition.
Additionally, my variety of personal strengths will help me succeed when I launch my new business. I am not intimidated by the possibility that my business might fail. I know that I will work very hard to make my business successful, and if the business is not successful, I will know that I would have done everything possible to make the business succeed.
I am not afraid or intimidated…… [Read More]
(McLaughlin, 2006, pp. 600 -- 610)
Greater amounts of coordination, is when you are working on: improving relations with the community and outside donors. This will allow the hospital to be able to have increased access to additional sources of funding (i.e. foundations and wealthy individuals). They could help to: refocus the kinds of treatment options that are delivered at the facility and the culture inside the organization itself. Once this occurs, it means that the overall quality of care that patients are receiving will increase dramatically. If these different resources can be used as a part of the financing and reimbursement strategy; this will help to address the long-term challenges facing the facility. (McLaughlin, 2006, pp. 600 -- 610)
How will the effectiveness (success) of your plan be measured?
The effectiveness of our plan will be measured using two different types of tools to include: surveys and outside consultants.…… [Read More]
industry in America are a varied lot, ranging from self-righteous and mean-spirited individualists to community-minded altruists. The tensions among these capitalist types is as evident today as it was in the days when Ayn Rand first penned The Fountainhead. Since Rand was a Russian immigrant, it is not particularly surprising that her experiences with socialist and communist societies colored her perspective of capitalism, to a degree reminiscent of a defensive reaction formation. The protagonists in the film Atlas Shrugged engage in a capital strike that is intended to bring the economy to a standstill in order to emphasize the rightness and importance of laissez-faire capitalism. The decline of the transcontinental railway stands in for the future of America if it practices communism and upholds the values of moral relativism. The fundamental tenant of these industrialists was that they were entitled to function according to a natural order that encouraged individuals…… [Read More]
finance and financial entrepreneurship. The basis of the article is on a discussion that was held on this subject among four leading lights of financial entrepreneurship in the United States - Michael Milken, Lewis Ranieri, Richard Sandor and Myron Scholes. These people are famous in their own right and have had a sizeable role in financial entrepreneurship in the U.S. over the last 20 years. We have first discussed their achievements to get a clear idea about their personal achievements. This would certainly give a clear idea of what is possible in the U.S. today. They are of course interesting characters and one has to remember that the ideal entrepreneur of the 21st century cannot be thought of as an updated version of Henry Ford. After the discussion of the people, the meeting and the discussions held there are summarized. ased on the total information collected, we have come to…… [Read More]
In assessing which of these models of a market would be most beneficial to the interest of a business, the most obvious choice is a pure monopoly. Although this model does not necessarily provide the best option for operations in terms of many aspects regarding society as a whole, in terms of business sense, it is the most beneficial and profitable model for a firm to operate in. As a business owner, if the product or service provided by a firm does not face competition from any other firm, the costs of providing the product can be lowered, supply can be determined at the full discretion of the firm, and pricing can also be fully left up to the firm.
Additionally, in some industries, a pure monopoly serves the purpose of providing stability and uniform standards. The Microsoft case is one in which this is a strong argument, as…… [Read More]
nature of a firm's business and its environment are big factors in determining what the firm's financial statements look like."
Industries vary wildly in terms of how they account for profits, losses, depreciation of assets, and other critical components that affect the appearance of their financial statements. Some industries are more apt to operate on credit on a regular basis than others; some industries make the bulk of their profits on a seasonal basis (such as retailers which make most of their money at Christmas) or have profits which vary markedly from year to year. For example, a pharmaceutical company may experience a notable drop in revenue when one of its most popular drugs loses its patent; it may gain sharp windfall that lasts for a fixed period of time while it can exclusively profit from a new drug. Some industries are extremely risky to invest in because of innate…… [Read More]
business strategy commonly refereed to as Just-in-Time has become more and more dominant in many aspects of business. Corporations like Hewlett-Packard have begun to use the system to improve efficiency and customer service. Although the system has been criticized as a lofty idea or a theory rather than an attainable business practice, the company that have implemented the idea have profited form it. Moving ideas from boardrooms and ivory towers to the sales floors and manufacturing plants can be a tricky task. The growing popularity of Just-In-Time in theory and in practice demonstrates how these difficulties can be overcome when new business ideas are brought to bear upon business practice. There are several hindrances to the implementation of new ideas. The time and money it takes to develop a new idea is certainly one difficulty in implementing new ideas.
Another hindrance to implementing new ideas is the mentality of old-guard…… [Read More]
The financial manager of a firm deals specifically with the acquisition, financing, and management of assets with the overall financial security and profitability of the firm as his goal. Decisions concerning what are the best types of financing, the best financing mix; the appropriate dividend policy and how the funds will be physically acquired are all the responsibility of the financial manager. The financial manager has different degrees of operating responsibility over the firm's assets with a greater emphasis on current asset management rather than fixed asset management.
Responsibilities of the financial manager also include capital budgeting, cash management, credit management, dividend disbursement, financial analysis and planning, pension management, insurance/risk management, and tax analysis and planning through cost accounting, cost management, governmental reporting, internal control, the preparation of financial statements, and preparing budgets and financial forecasts.
The overall goal of the firm is the maximization of shareholder wealth and…… [Read More]
Finance: Financial Investment
Today's investment environment is more dynamic than it was a decade ago. This is particularly the case given that today's global economy is much more complex. Further, with information moving faster than it used to, the ripple effects of events happening in any given place are often felt in far away economies. Essentially, some of the challenges investors encountered a decade or so ago are not the same ones they encounter today. One of the key challenges in today's investment environments is sluggish global economic growth. As Connolly (2014) points out, although the trend could be changing (going by recent performance), "the U.S. economic growth rate has been relatively sluggish." Slow rate of economic growth causes significant uncertainty which is not ideal for investment. Next, it is also important to note that the volatility of equity markets has been rather extreme in the recent past. This…… [Read More]
Describe the following 4 types of costs:
Fixed- fixed costs are business costs, that are constant given a certain level of production
Variable- variable costs are cost that vary as output increases or decreases
Semivariable- an expense that contains a fixed component and a variable component.
Semifixed- costs that are constant within a defined level of activity but that can increase or decrease when activity reaches upper and lower levels
Dynamic Medical Suppliers, Inc. has sales of $300,000 for the calendar year of 2010. Its total variable costs equal $107,700. Calculate the contribution margin ratio, and determine whether it presents profit or loss to the organization
CM Margin Ratio= Contribution Margin/Sales
Sales of $300,000- Variable costs of $107,700= $192,300 Contibution Margin
Profit= ($300,000 x .641)- $115,000= Profit of $77,000 to the organization
You create the schedule for the nursing staff in the pediatric intensive-care unit. Your daily…… [Read More]
Fixed Asset Turn
P/E* as of today
There is little to choose from, between Coca-Cola and PepsiCo, based on the cash flow indicator and the investment valuation ratios. The cash flow indicator is the dividend payout ratio, and these companies are quite similar. Pepsi's is a tiny bit higher, but not higher in a significant way. Likewise, the P/E for these companies is in the same range. Coca-Cola's is the higher of the two. Both of these companies are in the same mature business, where there is limited growth upside. Thus, investors are likely looking for stability in either one. The both have roughly the same financial and investment characteristics. The primary differentiating factor is that the market has priced Coke a bit higher. Whether this means that Coke is trading high and will regress to the…… [Read More]
The firm's balance sheet, however, is very healthy, with great liquidity and no long-term debt.
The fourth largest company in the industry by market cap is Builders FirstSource. This company has a stock price of $5.31. It has no P/E, since it is losing money. The company is focused on products for residential construction in the southern and eastern states, so the housing recovery needs to be in those regions for this company to benefit. The consistent losing of money, however, makes this company a risky investment, as does the high level of long-term debt. The beta is 2.3, which is highly volatile.
The fifth-largest company by market cap is Orchard Supply Hardware Stores, which is a California-based competitor to Home Depot and Lowe's. Its stock is priced at $10.11. The company lost $8.08 per share last year and is on a downward trend in revenue, gross income, operating income…… [Read More]
Master's degree in Finance from MIT Sloan. I have embarked on a number of high-level internships that have given me significant financial industry experience. This has been built on a foundation that includes a high-quality undergraduate education, along with several years of working experience.
In terms of competencies, I have the necessary mathematical skills in order to excel in the Finance program. I achieved my B.Sc. In mathematics at Bogazici University in Istanbul, which is one of the top universities in Turkey. I know that advanced-level finance requires not only mathematics but also extensive work with computer software, and I have built my skills in that area as well. Additionally, I have worked to become a talented writer, able to express my ideas with clarity and concision.
One of my greatest strengths is in leadership. I have worked to build my leadership skills as well over the past few years.…… [Read More]
This can subsequently result as the massive benefits to the commercial contestants devoid of the incurring of the extra cost that pertaining to such commercial participants. The participation of the export credit agencies accompanied by the existing multilateral developments institutions normally results to the lofty stage of the ecological, employment and other supplementary social standards, which are extremely expensive and cumbersome to, accomplished.
The application these existing social standards are normally highly significant to these multilateral institutions concerning the outline policy perspectives accompanied by the chief structures and the existing projects.
These policies perspectives and the chief aims enhance the best practice that pertains to the execution of communications and the whole projects. Numerous leading private sponsors and the existing commercial lenders have finally commenced the process of incorporating of these standards. These standards include the equator principles and the other existing ecological requirements that are aimed at safeguarding of…… [Read More]
Intra-Industry International Trade: Benefits and Costs
Trade is brought about by specialization. People specialize in those goods and services that they can produce effectively, and since they cannot survive on only these, exchange their surplus production for other items that they need, but do not produce. There are mainly two types of trade in this regard; international and domestic. The domestic form of trade refers to the exchange of trade items (services and goods) within a country's borders. International trade, on the other hand, can be defined as "the exchange of goods and services among residents of different countries" (Chacholiades, 2006). International trade can take either of two forms; intra-industry or inter-industry forms of trade. Inter-industry trade is trade between industries, whereas intra-industry trade takes place within industries. Intra-industry trade, therefore, refers to the importation and exportation of same-industry items of trade (Gandolfo, 1998).
International trade has been on…… [Read More]
Asset Allocation and Industry Sectors:
There are several economic concepts that affect an individual's daily finances and investments such as asset allocation and industry sectors. Asset allocation is primarily described as the manner with which an individual divides his assets among various asset categories like cash, bonds, stocks, and real estate. This fundamental principle also refers to an investment strategy with which an investor can lessen risks through diversification. One of the major goals of asset allocation is that it seeks to balance risk and reward through distributing a portfolio's assets based on a person's goals, investment horizon, and risk tolerance. Notably, the process of determining which combination of assets to retain in a portfolio is usually a very personal one ("Beginner's Guide to Asset Allocation," 2009).
The other common financial term or concept is industry sector where the two words have been used interchangeably to refer to a group…… [Read More]
intra-industry international trade within the standard international trade classification SITC6, which represents manufactured foods classified chiefly by material. The scope of this paper is limited to processed foods, and includes analytical frameworks from the gravity model, and classic approaches to product differentiation, product commoditization, pricing, and market structure.
eferences to market structures in the literature typically oversimplify the dynamics influencing the development of market types -- perfect competition, monopolistic competition, oligopoly, and monopoly -- and this tendency is exacerbated when the focus is on intra-industry trade. Further, the distinctions become considerably more obfuscated when companies that are in the same trade do business in both domestic and international markets. A global manufacturing strategy is the goal of most multinational companies, and rationalizing manufacturing strategies is an objective for nations, as well (Lee, 1984). For instance, assume that a country has the industrial infrastructure to produce canned beverages, but there are…… [Read More]
Intra-Industry International Trade
Standard trade theory and its deviations
The classical theory of international trade can be traced back to the founding father of capitalism Adam Smith: Smith's 1776 Wealth of Nations theorized that free trade would be beneficial to all nations. Smith stated that much like merchants, nations should specialize in the particular goods and services which they could produce most efficiently and trade with other nations who could produce alternate goods and services equally efficiently. Thus free trade resulted in advantages for both trading parties. Smith's theory was later fleshed out by David icardo in his Principles of Economics. iccardo stated that free trade could optimize efficiency for every country on a global level by reducing the inefficiencies generated by the excess resources involved in producing the goods and services the nation was not suited to produce (Sen 2010: 2).
This common wisdom remained relatively consistent…… [Read More]
It was irresponsible for banks to operate from a position of absentee management, and the careless ownership enabled reckless conduct from their "agents" who ran the day-to-day operation. While some blame must be placed on the public for continuing to spend at outrageous rates, the bank itself promoted and enabled such activity. Blankfein's argument that no one had been arrested is irrelevant since the issue at hand is whether the financial industry was responsible, not whether bank officials should be arrested. Banks made profound miscalculations concerning interest rates and loans, and should have been aware that their business practices were not feasible toward long-term success (Murphy).
Issue 7 places the theories of authors oger Lowenstein and obert Samuelson against one another. Lowenstein contends that government should bail out economic institutions; however, he does not argue that bailouts are necessary in order to assist the careless companies, but instead asserts that…… [Read More]
Adult Day Care Industry
ABC Adult Day Care will be a mid-sized company, which will provide adult day care services to the residents of Boston. This mid-sized adult care facility will serve adults aged fifty years and above. It will provide community-based day health services for the elderly and disabled. Services offered include living assistance, nursing, therapy, meals, and social activities. Their services will be secure and safe, presenting the elderly with an excellent place where their caring services will be met. ABC Adult Day Care will be a privately held organization headed by its founder, Ben Stevenson. Mr. Stevenson has extensive experience in strategic business planning. His advanced knowledge and interest in business are the driving force behind his business. A few employees who have extensive experience in adult care fields will support the daily operations of the facility. With the rising rate of inflation, many American families struggle…… [Read More]
The most difficult task for individuals starting business is raising the initial capital required to kick-start the business. A budding entrepreneur may have the necessary ideas about starting a successful business empire but without initial investment, the idea may as well be dead and gone. For this reason, this report outlines several sources of finance a business can source from, their implications, cost as well as appropriateness. These sources include venture capital, bank loans, friends and family, savings and credit cards among others.
Risk of Loss
Friends & Family
Usually good rate or none
Flexible, best value
Can create friction
Home Mortgages - Traditional or Seconds
8-14% on equity loans
Very long and flexible
80-100% + of home equity value
Cheapest, longest term
Your house is at risk in the event of non-payment
Credit…… [Read More]
The house would still be capable of customization but would not necessarily have to be. This could lead to more profitability to the builders and a less likely chance of sloppy workmanship. The home building industry has the opportunity to show that it can react to adversity and with the situation as it currently stands, builders may have the desire to lower expenses, while not cutting corners, as much as possible.
The home building industry, therefore, seems to be one that can provide the economy with a boost when it is needed, with a foundation at all times and with overall growth that can lead to a robust job market, growth in the GDP and financial independence for those builders that are willing to commit to the hard work necessary to succeed. There are relatively few industries that provide individuals with that type of opportunity and even fewer industries that…… [Read More]
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:
e (Re) + d (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]
Campaign Finance and its effect on Outcomes of Elections
In this paper, we are examining the underlying trends in campaign finance. To do this we will look at four different gubernatorial campaigns. Once this takes place, is when we will be able to see what patterns are developing in how campaigns are financed.
Over the last several decades, the issue of campaign finance and its outcome on elections has been increasingly brought to the forefront. Part of the reason for this, is because the relationship between politics and special interests will come together during an election. As political candidates, are forced to run for office through spending massive amounts of money. While having to accept funds; from a number of special interest groups that have active memberships throughout the country. This has led to a host of scandals with names such as Watergate, illustrating how this relationship between political and…… [Read More]
Significance of the Study
This study is significant because it sheds light on a very important contributor to local and international trade. Trade fairs have a long history in providing a meeting place for buyers and sellers. They are an important channel of communication for B2B buyers and sellers. This is a significant area for study because there are limited channels of communication between B2B buyers and sellers. The previous sections have diversified the importance of communication to trade. B2B buyers and sellers cannot use mass channels of communication such as television advertising or newspaper advertising. In this market usage of personal visits and demonstrations are the common channels of marketing and communication. The B2B selling and marketing activities are less highlighted in research than B2C activities. Therefore, this study is significant because it explores a very important channel of marketing and communication in the B2B market.
The study is…… [Read More]
building industry. The building industry is a cyclical business based on residential and business construction. The industry has faced several years of constrained demand, despite low interest rates. Two firms within the industry are Eagle Materials (EXP) and Apogee Enterprises (APOG). These two firms will be compared with one another in terms of their finances and their recent news in this paper. First, Eagle will be studied including its key financial ratios and recent news, and then the same treatment will be given to Apogee. The conclusion of the paper will discuss the future of the industry and which of the two firms would make a better investment for someone looking to put money in the building industry today.
The Building Industry
The building industry is a cyclical business based on construction. Both construction firms and their suppliers are part of this industry. The two companies being studied are industry…… [Read More]
Accounting and Finance
Henkel AG is a multinational company focusing its brand and technologies in three business areas that include Beauty Care, Laundry & Home Care and Adhesive Technologies. Established in 1976, the company holds its global market positions in both the consumer and industrial products with well-known brands that include Lactate, Persil, and Schwarzkopf. Henkel's headquarter is in Dusseldorf in German and the company has over 47,000 employees globally. Typically, the company is considered among the most "internationally aligned German-based companies in the global marketplace." (Henkel 2012).
Objective of this paper is to use various financial models to carry out financial analysis and valuation of financial Henkel AG.
One of the methods to carry out the valuation of a company is to use enterprises discounted cash flow (DCF). The DCF could be carried out using WACC (weighted average cost of capital) that represents the opportunity costs that…… [Read More]