Financial Management Essays (Examples)

Financial Management Fundamental Decisions in Financial Management

Financial Management

Fundamental Decisions in Financial Management

In financial management, there are three fundamental decisions, which are central to capital budgeting, capital structure and working capital management. Capital budgeting refers to the process of planning and managing the company's long-term investments. Capital structure refers to the particular mixture of long-term debt and equity a company utilizes to fund its functions. Working capital management refers to the company's short-term assets, which may include inventory, and its short-term liabilities (Parrino, Kidwell and Bates, 2011).

Pros and Cons of the three forms of business ownership

Sole Proprietorship

Advantages

It is easy to start and end a business

There is no sharing of profits

It does not involve any special taxes

Disadvantages

Available funds are limited to what the owner has

There are management issues

There are limited developments

Partnerships

Advantages

The business experiences more financial resources

There is shared management, which enhances growth of the business

Partnerships are likely to succeed when compared to sole proprietorships

Disadvantages

There is unlimited liability

There is division of profits

There are likelihoods of disagreements among partners

Corporations

Advantages

Corporations can raise substantial funds

It has a perpetual life

There is ease of change in ownership

Disadvantages…… [Read More]

Financial Scandals and Management Financial Management Financial

Financial Scandals and Management

Financial Management

Management Financial Actions, Controls, and Decisions

Financial Scandals and Management

Following the rise of financial scandals in the recent past, external and internal audits are carried out to review the management's financial controls and actions, and keep tab of the outside and internal auditors. However, despite the best efforts, accounting scandals like the Cendant Corporation's $300 million bogus revenue indicate that external auditors and managers are not doing their job. It is the perception of management and financial scholars that social and political forces interfere with the ability of auditors and managers to meet their obligation and uncover management misdeeds (Lublin and MacDonald, 1998). This is because an increase in the toughness of external audit committees only increases the chances of bad accounting and shareholder lawsuits. This forms the problem for this review of literature, as the research proposes that for effective financial and audit control, managers must adopt integrated financial and organizational management strategies. To achieve this, this paper will explore the financial scandal of Enron and apply different management strategies as proposed by literature.

Financial scandals are a topic of concern for this research since they greatly affect and reflect negatively on…… [Read More]

Financial Management Is an Important

(2009). Google's Big IPO, Five Years Later. [Article]. Wall Street Journal - Eastern Edition, 254(40), C3.

Davis, H.Z., & Peles, Y.C. (1993). Measuring Equilibrating Forces of Financial Ratios. The Accounting Review, 68(4), 725-747.

Google Inc. (2012). 2011 Annual Report. Mountain View, CA: Google Inc.

Kirby, J. (2009). How Google really does it. (Cover story). [Article]. Canadian Business, 82(18), 54-58.

Lee, M.-j. (2010). Measuring the Usage Effects of Tying a Messenger to Windows: A Treatment Effect Approach. Journal of the Royal Statistical Society. Series A (Statistics in Society), 173(1), 237-253.

Microsoft. (2011). Our Commitment to Our Customers: Microsoft's Business Retrieved March 4th, 2012, from http://www.microsoft.com/about/companyinformation/ourbusinesses/en/us/business.aspx

Microsoft Corporation. (2011). 2011 Annual Report. Redmond, Washington: Microsoft Corporation.

Swallow, E. (2011). Android Captures Nearly 50% of Global Smartphone Market Retrieved March 4th, 2012, from http://mashable.com/2011/08/02/android-market-share/

W3Schools. (2012). Web Statistics and Trends Retrieved March 4th, 2012, from http://www.w3schools.com/browsers/browsers_stats.asp

APPENDIX: FINANCIAL RATIOS

2011

RATIO

FORMULA

VARIABLES

GOOGLE INC. (GOOG)

MICROSOFT CORP. (MSFT)

LIQUIDITY MEASUREMENT RATIO:

Current Ratio

Current Assets/Current Liabilities

Current Assets

52,758,000.00

5.919219118

72,513,000.00

2.8578804240

Current Liabilities

8,913,000.00

25,373,000.00

PROFITABILITY INDICATOR RATIOS

Return on Assets

Net Income/Total Assets

Net Income

9,736,000.00

0.134152726

23,468,000.00

0.209082080

Total Assets

72,574,000.00

112,243,000.00

Return on Equity

Net Income/Shareholder's Equity

Net…… [Read More]

Financial Management for Nurses the Modern Healthcare

Financial Management for Nurses

The modern healthcare industry is extremely labor intensive. To be effective, a modern nurse manager must balance patient care vs. staffing, procedures vs. patient load, and fiscal budgets in line with appropriate levels of care. Nurses are expected not only to understand the organization's fiscal concerns, but to manage them as well. While fiscal dollars spent on human resource management are the larger portion of the health care organization's budget, the use of a cogent and powerful budgetary management tool can help save thousands on an aggregate basis.

The Budgeting Process Cycle

Any budget is essentially a planning process that focuses on expenses and activities of the organization over a given period of time. The budget is designed to help plan for resource allocation and to control expenses when possible, to schedule adjustments or larger capital purchases, and to be used as an operational plan from which to work. To adequately organize a budget, the organization must have clear lines of authority as to responsibility. Managerial support is crucial, as is nursing input. The budget processing cycle is dependent upon the organization and the breadth of responsibility the nurse has. A floor charge nurse might receive…… [Read More]

Financial Management First Student While Nonprofit and

Financial Management

First student

While nonprofit and for-profit organizations may have much similarity, they also have significant differences. From the tax perspective, for-profit organizations are taxed in various ways determined by the structure of the organization. For instance, small companies are treated as partnerships and sole proprietorships. They are monitored by the National Revenue Authority and the owners must be help liable for overall business debts. Their non-profit counterparts have the freedom to register for exception from income tax established by provisions of the tax code (Hyatt & Hopkins, 2012). People contributing towards non-profit organizations are eligible to tax incentives for their donations. Not-for-profit entities are treated as legal corporations for purposes of tax. This leaves the owners of the company not to be liable for debts.

The rationale for selected healthcare organizations to enjoy the tax-exempt status

Possible tax exemptions for selected healthcare organizations include tax exemption on fringe benefits, tax rebate on fringe benefits, imputation credit refunds, tax-deductible gifts, and exception from income tax. The rationale for selected healthcare organizations to enjoy the tax-exempt status is their responsibility to the society. The society expects these organizations to return the financial advantage by acting responsibly, remain true to their…… [Read More]

Financial Management in Order to Determine the

Financial Management

In order to determine the size of equal, annual, end period deposits needed to accumulate a specific future sum at a specific future date, several steps are required. This type of equation involves working backwards from the solution that you wish to find. Thus, if you want to accumulate $2,000,000 in ten years, this is the end result from which the remainder of the equation will be derived.

The payments are annual, equal and end of period. This fits the definition of an annuity, so it is the annuity formula that we will use to derive the required interest rate in order to bring the payments to the end result of $2,000,000 in ten years. In this example, the interest rate is to be taken as a given, and the solution derived should therefore be the sole remaining unknown variable, the size of the payment. To derive this solution, an interest rate of 8% will be used.

The formula for an annuity is as follows:

where's is the future value of the annuity; R. is the periodic payment; n is the number of payments and I is the interest rate. Plugging in the values given, the formula would…… [Read More]

Financial Management Financial Markets Are

In addition, the exchange provides an avenue for recourse if some remedy is required for a fraudulent transaction.

Problem 15-12.

The operating asset turnover of 5 times on operating assets of $20 million implies a total sales of $100 million. The return on operating assets being 25% indicates net profit of $5 million. The total costs therefore are $95 million.

DOL = Contribution Margin / Operating Margin

In this case, the operating margin is 5%, so the contribution margin would be 20%. This indicates that COGS is 80% of revenues or $80 million. That leaves $15 million as fixed costs. With a COGS of $8 per unit ($80 million / 10 million) and contribution per unit of $2 the break-even volume would be:

$15 million / $2 = 7.5 million units.

Problem 15-13.

a) the breakeven point in units for the company is as follows:

$180 - $126 = Contribution = $54 per unit. Breakeven = $540,000 / 54 = 10,000 units.

b) Dollar sales to reach breakeven would be 10,000 * $180 = $1.8 million

c) at the different levels the firm's income statement would be as follows:

Output

12,000

15,000

20,000

Revenue

2,160,000

2,700,000

3,600,000

COGS

1,512,000

1,890,000…… [Read More]

Financial Management Firm Organization False The Form

Financial Management

Firm Organization

False. The form of business organization direct affects the taxation structure of the firm, particularly with regard to flow-through taxation on some forms (sole proprietorship, most partnerships) and not on others (most corporations).

Firm Organization

False. The partners in a regular partnership have a high degree of liability.

Partnership

True. Most partnerships remains fairly small due to these constraints.

Proprietorship

True. In a sole proprietorship, the owner holds all the capital, making it difficult to raise from outside sources, and the proprietor has all the liability associated with the business.

Limited Liability

False. The owners do see their risk reduced by limited liability, but the firm still has this risk. Therefore, the firm's value should not be reduced. The firm can still be bankrupted, leaving potential owners with nothing.

Value Maximization

a. True. Earnings per share has a strong correlation with the firm's stock price. A firm that has the objective of maximizing shareholder wealth will also be seen by investors as having good growth potential, all other factors being equal.…… [Read More]

Financial Management Suddenly Gold Isn't Looking'so

Financial Management

"Suddenly, Gold Isn't Looking So Solid"

This article (Sommer, 2011) examines the advisability of including gold in a typical investment portfolio. The article analyzes arguments, both historical and current, in favor of and against investing in gold. The article concludes with a very qualified recommendation, advising investor caution.

Sommer's article debates the question of whether gold, given its high volatility, should be included in a typical investment portfolio. He presents arguments that there is no simple answer.

The popularity of gold is well established, with gold having served as the standard of the global monetary system until the 1970s. Even today, gold maintains a certain appeal during an era of wildly fluctuating financial values. Many consider gold a mainstream investment, as evidenced by the fact that a gold exchange-traded fund, SPDR Gold Shares, was the second-most popular ETF in the U.S. On April 30 (Sommer, 2011).

Yet, for all its popularity, gold behaves in many ways like just any other commodity, like oil, silver, wheat or pork bellies, subject to the vagaries of the markets and, recently, to an unusual level of volatility. It has dropped more than 4% during the month of May, after more than doubling…… [Read More]

Financial Management Calculate or Identify From Each

Financial Management

Calculate or identify from each company's most recent annual report the six (6) specific financial ratios listed and provide as an appendix to the paper.

Liquidity ratios are responsible for measuring a firm's performance regarding the availability of cash to pay its debt obligations (Rashid & Abbas, 2011, p. 9). A common type of liquid ratio is the current ratio. The current ratio is responsible for comparing and contrasting current assets to current liabilities. This information is useful to executives in that they become aware whether or not the firm will be able to pay its current debt as it matures (Kurtz, 2011, p. 540). Dividing current assets to current liabilities gives the liquidity ratio. As a result, Google's liquidity ratio can be calculated by dividing 41,562 into 9,996. The liquidity ratio equals to 4.15. Microsoft's liquidity ratio can be calculated by dividing 49,280 into 27.034. The liquidity ratio equals to 1.82.

Profitability ratios are responsible for measuring the organization's overall financial performance by evaluating its ability to generate revenues in excess of operating costs and other expenses (Kurtz, 2011, p. 542). The return on assets, or the ROA ratio, reveals how well management is employing the total…… [Read More]

Financial Management Decision Understanding Basic Finance Terms

Financial Management Decision

Understanding Basic Finance Terms

Generally, it is beneficial to have a basic understanding of financial concepts and terminology before going into business independently. Financial management refers to the process of calculating anticipated sources of profit and comparing them to anticipated expenses and other variables and contingencies. In principle, financial management is used to determine what prospective ventures are likely to be profitable and to identify those that are too risky to launch without risking the initial investment.

Risk financing refers to the process of identifying and evaluating potential sources of negative consequences known as risks and of calculating the financial resources that would be necessary to mitigate those risks. Generally, that process would include a risk matrix in which the magnitude of every reasonable identifiable potential risk is considered in conjunction with and in relation to its respective likelihood of occurrence. That risk matrix provides data that will assist in determining which risks can be accepted, what the cost of mitigation might be, and to identify those risks that cannot be taken.

The stock market refers to the system of companies issuing public stock in their ventures. The value of that stock is a reflection of complex…… [Read More]

Financial Management Calaveras Vineyards Sits on 220

Financial Management

Calaveras Vineyards sits on 220 acres in Alameda Valley, California. Anne Clemens, a senior vice president at Goldengate Capital, received a loan proposal from Tom Howell, a managing director with NationsBank's investment-banking group. The brochure described the prospective management acquisition of Calaveras Vineyards and solicited Goldengate's participation in the $4.5 million senior financing facility. The facility would consist of a $2 million term loan and a revolving credit of up to $2.5 million. Clemens needed to decide quickly whether the proposed terms were attractive, where to position Goldengate in this credit, and whether to offer a counterproposal on terms.

The Vineyard is the beneficiary of a trend of strengthening brand recognition. The organization used to sale solely through wholesale distribution channels, but being marketed as a premium brand has significant impacts upon potential profitability. However, in its current state, the Vineyard is low on capital and some judgement calls about the feasibility of the financial package must be made. The following analysis focuses on the 5Cs and other relevant decision criteria.

Data Analysis

Character: Good

Character is an estimation of the management's experience, personal, and business credit history. It was determined that the character of the borrower was…… [Read More]

Financial Management Definition of Revenue Cycle in

Financial Management

Definition of revenue cycle in healthcare

A revenue cycle is a process whereby financial progression of the accounts of a business is described.it begins where the business has made acquisition of products until they get paid. Healthcare firms are business oriented organizations. Their survival financially depends on a recurring and consistent flow of money from the services that are provided to patients. Without the existence of adequate stream of revenue then healthcare organizations would be forced to stop their operations. The revenue cycle begins immediately a patient registers to a healthcare institution for care. A revenue cycle that is well managed protects revenue collected and increases the flow of cash. If it is supported by an information infrastructure that is strong it will lead to the standardization of procedures and help in sharing of information across the units of operation ( Hall, s2010).

Complexity of the revenue cycle in health care

There exists a significant degree of complexity when it comes to revenue generation for healthcare organizations. There is no other industry that experiences the same level of complexity in the billing system compared to healthcare organizations. This complexity is due to the importance and nature f the…… [Read More]

Financial Management Case Scenario

Financial Management (case scenario)

The theoretical ex-rights price may be calculating the following way. We have the following known variables:

Fair value of all shares = 12,000,000 * 135 = 1,620,000,000

Total amount received from exercise of rights = 1,500,000*108 = 162,000,000

Number of shares prior to exercise = 12,000,000

Number of shares issued in the exercise = 1,500,000

Then, the theoretical ex-rights price is 1,620,000,000 + 162,000,000)/(12,000,000 + 1,500,000) = 132 cents

Hence, the value of a right is 3 cents..

The Alpha Leisure is issuing at a discount to make the shares more interesting for the investors. However, if we consider an investor from outside the company (one who doesn't have ordinary shares in the company until now), then he will purchase actions at 108 cents, plus the 24 cents per action, representing the 8 rights necessary to buy an action. In this way, the price will arrive at the ex-rights price, which would have been 132.

WACC can be calculated by multiplying the cost of each capital component by its weighting and then summing. As in our case, we have one debt element (debentures stock) and two equity elements (preference shares and common shares). Let's address each…… [Read More]

Financial Management Discussion on the Three Payment-Determination

Financial Management

Discussion on the Three Payment-Determination Basis.

The payment system describes the method by which the healthcare organizations such as Medicaid, Medicare, Commercial Health Plan and others determine the amount to be paid for a certain health program. The three payment determination bases are as follows:

Cost-payment basis

Fee schedule payment basis

Price related basis. (Cleverley, Cleverly, & Song, 2010).

A cost payment basis shows that provider's cost is the underlying method of payments and the rules to determine the costs are the contract between the healthcare provider and payer. For example, cost-payment basis is referred as the cost of provider's ratio multiply by total charges for specific healthcare claims. Payment for the claim reaching $1,000 charge is the 50% of $1,000, which is the cost ratio that providers charge and would be $500 payment, which is equivalent to 50% times $1,000

A fee schedule is the actual payment that is predetermined and unrelated to either provider's actual price or provider's actual costs. For example, Medicare payment for a patient in the hospital for the Reattachment of Lower Extremity or Major Joint Replacement has a predetermined payment such as $14,500. The actual charge or the costs are not relevant…… [Read More]

Financial Management When Bonds Trade

03)^20]]

6. The formula for calculating the price of a zero coupon bond is

P = M / (1 + I )^n

In this case, the interest is priced to 9% and the term to 20 years. These figures are doubled, because the price of zero coupon bonds is based on semi-annual. Therefore, the price of this bond would be 1000 / (1 + .045) ^ 40 = 171.93.

7. We would use the regular bond pricing formula to calculate the YTM for this bond. This is a difficult equation to solve for, so it is typically either estimated by trial and error, or solved on a spreadsheet. Having taken the latter approach, the yield to maturity would therefore be 6.6033% for this bond.

8. To calculate the most I would be willing to pay for this preferred share investment, we must consider that the dividend is a perpetuity. The payment is quarterly, so the discount rate is adjusted accordingly to 2%. The formula for valuing a perpetuity is

P = coupon / discount rate so P = 1 / 0.02 = $50.

9. The basic formula for the dividend discount model is

P = Dividends / ( D --…… [Read More]

Financial Management How Can Financial

owning machinery (Reh 2010).

A financial manager must have a keen understanding of numbers, but he or she must also understand his or her client. When suggesting sources of available funding, for example, the manager must remember some businesspersons wish to retain a high level of control over their organization's vision and decision-making. While venture capitalists can be a valuable source of financing, someone with high ethical standards might shy away from soliciting aid from someone who wishes a controlling interest in the business (Miller 2009). The regular nature of bank payments in exchange for financial independence might be a willing trade-off for someone beginning a new organic bakery, for example. However, a client proposing a very risky e-commerce venture might not be able to find adequate support from a bank at a sufficiently reasonable interest rate.

A financial manager can help the individual or organization balance goals, options, and 'dollars and cents.' Also 'thinking out of the box' for sources of funding, such as using smaller loans, or finding sources of government grants might be feasible in some instances. Knowing when and if it is financially sensible to incorporate and sell shares to shareholders in terms of the risks…… [Read More]

Financial Management in Any Type

This is due to the impact of a change in revenue on profit or cash flow. It arises whenever a firm increases its revenues without a proportionate increase in operating expenses.

In deciding the most favorable level of leverage, it is a must for the firm to measure its acceptable or tolerable systematic risk/return on every transaction that corresponds with the way the company would like to finance. In measuring the degree of acceptability, the firm may compare the result to the operational leverage of other firms within the same industry. If the company has a very high degree of leverage, it is not a good indication of stability. The company is more susceptible to experience recession in the business. This is because every sale is being contributed to paying for fixed costs. The company will be compelled to continue its business to meet its obligations regardless of the outcome of sales.

As mentioned earlier, any business activity faces an accompanying risk and uncertainty. Since risk in inevitably present in whatever direction, it is a wise strategy to measure the amount of risk the company is able to handle depending on its financial capacity. There are two measures of risk…… [Read More]

Financial Management the Role of

"A balanced fund seeks to provide long-term growth through its equity component as well as income to be generated by the portfolio's debt securities" (Galvin).

3. Factors Generating Changes in the U.S. Secondary Market for Common Stock

The exchange of financial products expanded significantly since the 1960s as a direct consequence of the growing interest in stocks, bonds and other types of investments. Trading financial products is no longer destined only for specialized investors, but also for the general public and the growing interest of the public generated major changes. Then, the volatility of the initially issued securities also increased as these could be sold and purchased more times. This movement also led to the expansion of the secondary market for common stocks, but also to a growing need for a stricter and clearer legislation.

Third, another factor generating change was the growing number of securities that were issues and could be traded. Secondary markets for instance also "exist for other securities as well, such as when funds, investment banks, or entities such as Fannie Mae purchase mortgages from issuing lenders" (Investopedia, 2009). The increasing circulation of these new mortgage securities (and the more recent mortgage-backed securities) led to a…… [Read More]

Financial Management Define the Flow

At the same time, they are holders of contrasting forms of private and public debt. This is used to help fund specific research and development programs. These funds flow from savers to producers via the centralized marketplace. This is where they can see the prices for the different classes of securities offered by corporations and governments. (Bosworth, 2001) (Moore, 2009)

Direct and indirect transfers are when there is a focus on the amount of funds which are sent to a particular country. This can occur directly through corporations repatriating the profits they generate from their operations overseas. At the same time, indirect transfers will take place with individuals who are working inside particular nation and they are sending money home to their families. The way these funds will flow from savers to producers is through them reinvesting a percentage of the profits back into the organization. This helps firms continue to grow and improve the return that investors are receiving. (Bosworth, 2001) (Moore, 2009)

Financial intermediaries are when different banks and other institutions (such as: brokerage firms and insurance companies) will serve as direct or indirect investors in different asset classes of securities. This is providing added amount of liquidity…… [Read More]

Financial Management of Not-For-Profit Organizations Generally Financial

Financial Management of Not-For-Profit Organizations:

Generally, financial management of not-for-profit organizations is similar to the process of financial management in the profit making sector in several aspects. Nonetheless, there are several major differences that contribute to a different focus of a not-for-profit financial manager. In the commercial sector, the for-profit enterprises mainly focus on capitalizing shareholder value and overall profitability. On the contrary, not-for-profit organizations have the basic aim of providing certain socially desirable need on a continual basis instead of increasing shareholder value ("Financial Management of Not-for-Profit Organizations," 2011). The difference in focus between the for-profit and not-for-profit organizations is because the latter does not have financial flexibility of a commercial enterprise since its dependent on resource providers that are not getting involved in an exchange transaction. As a result, the resources provided are channeled towards offering goods and services to a client instead of the actual resource provider.

Important Exercises for Not-for-Profit Organizations:

Since the provided resources are given to clients rather than the resource provider in not-for-profit organizations, the organizations are required to show stewardship of these resources, which implies that finances donated for a particular purpose must be used for that purpose. Therefore, the organization's staff…… [Read More]

Financial Management Differentiating Between the

The financial information these directors and managers require is often highly specific to their functional departments' goals and objectives. The director or senior manager of the operations and production departments will require variance analysis of costing, thorough analysis of supply chain costs and the cost of quality management and compliance management (Kivijarvi, Saarinen, 1995). These costs are critical to each of these directors ensuring a consistent level of conformance to their costing plans and contribution analysis of each department to corporate profitability. The origin of this data is from accounting and financial management systems that are used for tracking each transaction, aggregating the data into consolidated reports. Sales directors rely on the same level of aggregated data to ensure they understand how pipelines are progressing, including the development of new sales plans (Stroud, 1988).

At the analyst and employee level of the organization, specific transaction information is essential for helping them attain specific tasks within departments. The information needs at this level of the organization are often very short-term, tactical, and focused on attaining projects deadlines and timelines quickly

(Kivijarvi, Saarinen, 1995). This is the level of the organization that is also the greatest users of information overall, as they…… [Read More]

Financial Management Content Find Articles Address Financial

Financial Management

Content Find articles address financial reporting practices ethics standards health care finance, including * generally accepted accounting principles * corporate compliance, ethics, and fraud abuse

Financial management: Literature review

Healthcare institutions, like all organizations, are continually confronted with the four basic elements of financial management: deciding what to invest in or produce; how to finance those investments or products; how to manage assets, and how to report those assets in a manner that is useful and also complies with all necessary regulations. This paper will provide an overview of two recent articles, one on the necessity of uniform accounting procedures to ensure ethical and legal compliance amongst healthcare institutions and the other on the financial consequences of failing to do so for the institution itself.

Article 1: Maintaining the strength of your convictions

According to Larry Tyler's 2004 article "Maintaining the strength of your convictions" "Most financial executives can avoid being caught in an ethical maelstrom by maintaining the strength of their convictions. Their gut feeling about what is right or wrong is intact and can provide the needed guidance. Sometimes, however, financial executives might be asked to compromise their convictions. Or they themselves might wish to 'bend'…… [Read More]

Financial Management Nike Has Been

Because of its youth-oriented focus, Nike must constantly innovate, in terms of its products. Examples of such innovation include new shoes like the Nike Free, which are intended to profit off of the new 'barefoot running' craze, shoes that allow for distance to be tracked via GPS, and clothing that allows the users to wear Nike-specific iPods that combine music listening with speed, distance, and workout planning features. Nike's goal is always to have enough money to invest in R&D while still having enough profits to show substantial gain for shareholders. This ensures that it is still viewed as a 'hot' and profitable company in which to invest, according to the financial press.

By fusing its brand image and marketing strategies, Nike has been able to manage its finances effectively. A youth-oriented, direct-to-consumer model is reinforced by its emphasis on Nike-specific stores and online retailing. Online retailing allows consumers to 'tailor' the Nike experience to their needs, ensuring that Nike's international expansion goals are met. For example, a net-surfer from Latin America can buy European football gear, even though this might be of little interest to an American teen. Nike creates a different image for every facet of the website,…… [Read More]

Financial Management Reed's Current Ratio

This would have a positive impact on sales. Other moves to reduce working capital, such as tightening the receivables turn, would not affect sales at all.

4.

1995 Pro-Forma

Net Sales

1938

COGS

Gross Profit

SGA Exp

Dep

32

Interest

63

EBIT

Tax

65.376

Net Income

5. I would suggest that Reed control his inventory with computerized tracking using SKUs. He should know exactly what is inventory level is at all times. This would allow him to have sales when levels are too high, improving his inventory turnover.

6. Accounts receivable should be controlled with incentives. Jim can provide discounts for early payment that encourage customers to pay more quickly. Currently, payment should be reduced by about one month in order to achieve the industry average, and there is no reason why customers cannot pay within a month. Delinquent customers should be charged interest, as would happen if Reed had a store credit card. This would provide Reed with the ability to earn in interest what he would otherwise earn by reinvesting monies from slow-paying accounts.

7. An increase in sales does not necessarily mean an increase in inventory. An increase in sales with a corresponding higher inventory turnover would…… [Read More]

Financial Management Hanft Adam Oct

The lessons of Suarez's career seem especially apt for entrepreneurs in the hospitality industry, where consumer's tastes may be very fickle. Once upon a time, not so long ago, the idea of upscale Asian food, as opposed to take-out, would have been unthinkable. However, Suarez, despite his innovation and emphasis on the unique, is not averse to altering even his 'whatever' approach, given the demand for franchising upscale restaurants, as people everywhere want to sample a bit of elegance and luxury. According to the article, one day Suarez suddenly though: "Imagine if we had one formula.' Suarez recognizes that a standardized, scalable restaurant is more saleable than a collection of quirky, individualistic culinary marvels," hence his new idea of embarking into hotel chains as well as chains of his most popular restaurant Prime " (Hanft, 2003).. His willingness to constantly shatter his own old paradigms demonstrates why Suarez has sustained cranky restaurant reviewers and the upswings and downswings of a volatile industry.… [Read More]

Financial Management in Multinational Organizations

Aside the attraction of customers, the money invested in marketing have created the desired outcome of a strong and reputable brand. Another pivotal element in the financial strategies has been that of maximizing the efficiency of managing inventories. This was necessary in order to continually strengthen the brand as well as achieve the profitability goals. Alongside with operating principles, supply-chain renovation and inventory management, financial management represents the pillar of the Nike business model (Filbeck, Krueger and Preece, 2007).

7. Discussion

It is extremely difficult to generalize the approaches of multinational organizations to financial management as each individual entity will employ those courses of action which best suit its needs as well as its characteristics. Whilst Ford continued to invest its resources in the manufacturing of large and luxurious vehicles in an attempt to drive the market, McDonald's has recognized the necessity in satisfying customer needs and has as such made financial decision based on market demands. It can be argued that Ford's approach failed in the current context of growing environmental concerns and the internationalized financial crisis, and that given a different macroenvironment, its business model would have succeeded. This is possible, but in the current context, it becomes…… [Read More]

Financial Management Ratios Risk and Diversification Financial

Financial Management: Ratios, Risk and Diversification

Financial Ratios Relevant to Small Businesses and Large Corporations

In an attempt to determine the performance of his or her business, a small business owner can utilize ratios such as the current ratio and the profit margin ratio. The profit margin in the words of Needles and Powers (2010) "shows the percentage of each sales dollar that results in net income." For a small business owner, this ratio would be an appropriate measure of the profitability of his or her business. The current ratio as Stickney et al. (2009) point out helps in the measurement of a firm's ability to settle its short-term debts/obligations. A small business owner interested in determining the ability of the business to settle its everyday bills and other obligations would find this ratio useful. On the other hand, a manager of a large corporation would be interested in ratios such as return on equity (ROE) and debt-to-equity ratio. The debt to equity ratio in the opinion of Needles and Powers (2010) "shows the proportion of a company's assets that are financed by creditors and the proportion financed by stockholders." This ratio is critical for large corporations interested in determining…… [Read More]

Financial Management Both Economics and

The ratios that derive from the financial accounting statements are used frequently in finance to determine the health of a company (Russo, n.d). When a lender wants to know what interest rate to charge a borrower, it looks at the liquidity and solvency ratios of the company to determine the likelihood of default, and assigns the interest rate based on that analysis. This is just another example of how the information that accountants compile and audit is used in financial management.

The same can be said for the investments side of finance. For example, when one wants to invest in a company, or in derivatives relating to that company, accounting information is critical. Usually this is financial accounting information, but if managerial accounting data can be found then that is also sometimes used. Formulas such as Black-Scholes are used to value derivate holdings of companies for the production of financial accounting statements, further highlighting the link between finance and accounting in the field.

With the same concepts relating to each discipline, and the use of skills from each discipline to enhance the work in the other disciplines, it is clear that there is a high degree of interrelationship between finance,…… [Read More]

Financial Management Weaknesses of Ratio

e. they ignore other key indicators and measures of financial performance. Other equally important measures and/or indicators of performance in this case include but they are not limited to employee morale, client service and satisfaction, quality of goods or products, etc.

Another key limitation of ratios is that they are only useful when it comes to the comparison of firms operating in the same industry. Utilizing ratios in the analysis of financial statements of companies in different industries could lead to a distortion of the information desired. This is more so the case given that entities in different industries are more often than not exposed to different regulations, market conditions, etc. In practice, finding two companies that are identical in every way is impossible.

Ratios could also be affected by changes in price levels. According to Lasher (2010), financial statements are often distorted by inflation. In the author's words, "during periods of rapid inflation, inventory, cost of goods sold, and depreciation can badly distort true results" (Lasher, 2010). Such changes effectively affect the comparability of financial ratios.

Further, it is also important to note that financial ratios are not immune to manipulation. For instance, as Siegel and Shim (2006) point…… [Read More]

Financial Management the Universal Direction

It is hoped that the value added by the UDA system will help to increase sales of the core product. The division manager of Gadgets has a valid point in regards to the overall impact on the Division's profits. He had a valid reason for requesting this exception to the rules. It may at first appear that the Gadget Division manager is acting out of self-interest and protectionism. However, it may be that he truly does have the best interests of the entire organization in mind.

If Gadgets fails to produce a product that will increase sales of the core product then the entire organization may be in jeopardy. If the exclusion is allowed, then the Gadget Division would have more money at their disposal for better research and development. The Gadget Division has to get it right the first time. Therefore it seems reasonable to allow the Gadget Division to be excluded from the normal cost sharing practices of the company. The Gadget Division realizes the importance of this project and wishes to make certain that their. Although this move may serve to alienate other Division managers, it is felt that this move will be necessary However, if the…… [Read More]

Financial Management Significance of Interest to the

Financial Management

Significance of Interest to the economy:

Interest rates keep on changing with the passage of time; the rates which were present a month ago are quite different from the current rates. This is because the interest rates change with the change in the growth of the economy. The expectations of lenders and borrowers regarding the future prices also affect the interest rates (Trainer, 2012).

The interest rates in U.S. are affected by the values of the dollar, by foreign interest rates and also by the close examination of the monetary policy actions which are taken by the Federal Reserve. In our market economy a great role is played by the interest rates. Interest rates work just like traffic signals. The way in which the signals direct the traffic on intersecting roads, similarly interest rates manage the flow of money to borrowers from savers. Usually in the fund movement, other intermediaries like banks and insurance companies are also involved (Trainer, 2012).

How risk is considered to business and economic activity

Fluctuating interest rates have great impact on the economic value and the earnings of the banks. This thus gives rise to two separate perspectives for the purpose of assessing…… [Read More]

Financial Management Dupont Analysis the

In the words of Gallagher and Andrew (2007), "the equity multiplier indicates the amount of financial leverage a firm has." In regard to asset turnover, Wal-Mart seems more efficient than Target in the utilization of assets to generate revenues.

Part 2

Common size analysis completed using a spreadsheet.

Discussion

From the analysis, several conclusions can be drawn. For instance, Wal-Mart should consider reducing its cost of revenue. This is more so the case given that in comparison to Target, a significant chunk of Wal-Mart's total revenue is 'shaved-off' by the said costs/expenses. From the analysis, it is also clear that Target's net income in relation to total revenues is significantly higher than that of Wal-Mart. In that regard, Wal-Mart should consider reducing its expenses so as to enhance its bottom line.… [Read More]

Financial Management There Are Many

For example, if spending is encouraged, in the form of lower interest rates, then inflation is likely to grow, at least in the short-term, before the government has a chance to regulate this problem and move interest rates in a different direction. With higher inflation, the purchasing power of the individuals is affected, which might, in turn, lead to a decrease in aggregate demand over time.

At the same time, interest rates are also important because of the impact they can have on other rates, such as the currency exchange rate. If the Central Bank increases the interest rate, then investors may move towards that particular currency that offers a higher return on their investment (due to the higher interest rate). They may decide to sell the currency or currencies they are investing in at the present time in order to move towards this more profitable currency.

The fact that the financial markets (and economies in general) are globalized means that the effects of any national changes, such as the change in interest rate, can be felt at an international level in a significant way. This also means that the importance of interest rates in the economy is amplified.… [Read More]

Financial Management Assets Current Assets

b. If 2006 is considered 100%, the total current assets in 2007 amounted to 137%, a 37% increase from the previous year. At the same times, with 2006 as 100, 2007 total assets were 114%, a small increase compared to the previous year. The same is noticeable for total liabilities.

c. The trend showed gradual increases for all components of the balance sheet, showing a regular and sustained development of the company. Some of these however had a more sustained ascending trend.

5-4. a.

Revenue from services

Net earnings b. As compared to the 2004 base, net earnings have increased in 2006 with almost 200%, similar figures being noticeable in comparison with 2004 to many of the other figures on the statement of earnings.

6-2. a. days' sales in receivables 2007 =

220,385/$3,233 = 68.17 days' sales in receivables 2006 =

240,360/$6,027 = 39.88 b. accounts receivables turnover 2007 =

1,180,178/220,385 = 5.355 accounts receivables turnover 2006 =

2,200,000/240,360 = 9.15 c. Both ratios show that the company's liquidity has decreased, mainly due to bad collection policies.

6-6. a. The days' sales in inventory = ($360,500/$2,100,000) * 365 = 62.65 b. This is probably just a preliminary measure in actually…… [Read More]

Financial Management Define Progressive Taxes

For a corporation, this increased their bottom line results and the total amounts of income they are generating. When this happens, investors are pleased with the direction of the firm and will reward the managers with lucrative pay packages and other benefits. ("Romney Forgoes Full Charity," 2012)

The reason why this is important is because corporations' can avoid having to pay the same taxes twice under the progressive system. The way that this occurs is the company can take a write off for operations they have overseas. This is because they can argue that the income was not generated within the United States. When this happens, they will be taxed at a lower rate for any kind of profits from these locations. ("Romney Forgoes Full Charity," 2012)

If a firm is generating a certain percentage of their earnings using this strategy, they can reduce their tax liabilities dramatically. This is from not having to pay the progressive taxes in U.S. And the country where they have established operations. When they are reporting their earnings, this will lead to an improvement in their costs and operating margins. ("Romney Forgoes Full Charity," 2012)

As a result, most corporations will view progressive taxes…… [Read More]

Financial Management Question 1 Company

Question

Diversification is a technique that reduces risks in an investment portfolio. By spreading out the types of investments in your portfolio, you protect yourself from the losses incurred by any one investment suddenly tanking. Diversification can be done in a several different ways. One common way is to vary investment vehicles; stocks, bonds, and cash. Another way is to take on stocks of different risk levels. You might hold a mix of large cap, small cap, and growth fund investments. Again, a crash in one area will be offset by stability or even gains in another. Another diversification strategy is holding companies of different industries or geographies. You might hold companies from steel, agribusiness or toys. You alternatively might hold companies from, China, India, and Canada. This is why diversification is called "a free lunch"; you are always protected from loss without automatically reducing returns on your investments.

Question

The Price-Earnings ratio compares the price of a company's stock to its earnings per share. In short, it uses a company's earnings to value its stock. It is based on the belief that the price of stock should be a reflection of a company's profit. Calculations for profit use net…… [Read More]

Financial Management Commercial Lenders Lend Money With

Financial Management

Commercial lenders lend money with the intention of making money in return; they also carry out a kind of business. But when a government sponsored body lends money, then the reasons behind existence are slightly different. Government usually lends money to those businesses which are facing financing issues. Such businesses are often those which are considered by the government officials as potential enough to bring in economic benefits in the area (Bizcoach, 2013).

Calculating the finance requirement is a great challenge for the managers of the organizations. The institutions which are of complex nature face difficulty in calculating the exact finance requirement. An example of such institution would be capital markets which are quite complex. The sum of external financing depends on the operating budget of the business and on the existing capital resources. If a company has a solid operating budget, then it would be easier to calculate the amount of external finance required (ehow, 2013).

A company should project the sales that it expects to generate in the coming year. By using the annual sales growth over the recent five years, sales can be projected. Like for instance, if an organization's growth rate is 5% over…… [Read More]

Financial Management Personal Investment

Financial Management - Personal Investment Decision for a Public Company

Financial Statistics

Rationale for Toyota

Ratio analysis

Stock price analysis

Foreign Interests

Toyota Motor Corporation, which is recognized as is one of the most exhilarating productions in the automobile business these days. The company is one of the most economical corporations all over the world and has appreciated a record setting achievement for a very long time. In the previous years, the worldwide automobile industry has been overwhelmed by soaring gas prices, and hard-hitting environmental protection laws. With that even being said, it has not been a walk in the park for Toyota, but to no gain the company has been one of the most effective establishments so far. Toyota Motor Corporation has also been one of the manufacturing leaders in creating new and innovative technologies that take advantage of the productions existing barriers. There are a lot of things that are amazing about Toyota and one of those things is the scale, and the international footprint that they presently bring about. "Toyota is one of the world's representative automobile manufacturers, manufacturing cars in 30 nations and districts and advertising automobiles in over 180 nations and regions. In economic 2013,…… [Read More]

Financial Management in Health Care

Financial Management in Healthcare

Medicare and Medicaid are programs run by the government and which provide medical services as well as services that are health care related to particular groups of individuals in the United States. It is imperative to note that these two programs are exceedingly dissimilar but are supervised and overseen by the Centers for Medicare and Medicaid Services which is a department that is found within the Department of Health and Human Services of the United States. The origin of these two programs dates back to the year 1965 when they were created after President Lyndon B. Johnson signed changes to the Social Security Act (Crosta, 2015) for the national health care program. This program was principally created at the time when individuals who were aged 65 years and above found it impossible to obtain private coverage for health insurance. In particular, this was a time when the major financial and economic concern was that an illness might send someone to the hospital and thereafter bring about immense bills. In addition, at the time there was no extensive use of prescriptive medication to cure illnesses., Medicare, on the other hand, has created accessibility to healthcare a basic…… [Read More]

Financial Management at Mayo Clinic

Financial Management

A major part and linchpin of any medical and/or research firm is the financial management aspects of the organization. Financial management of any major medical outfit would be overseen by the officers of the treasury and finance departments. They would, by extension, also direct the financial activities of the clinic. The activities completed would include bookkeeping, investing, and developing projects. The depth and breadth of these operations would touch upon a number of important things such as the methods of funding to be used, research issues, quality control, ethics, accreditation, awards, regulation, marketing, strategic management choices, branding and involvement with the employees and community. All of the above applies to the organization that is being focused on in this report, that being the Mayo Clinic. While all businesses and organizations have to focus on financial matters of some degree or form, the complexities and intricacy of the Mayo Clinic and their financial operations is staggering and vast.

Financial Management Aspects

The Mayo Clinic is a non-profit organization, so all funding comes from donations. The revenue it does collect through services (current activity puts revenue at more than $10 billion, with income generated through services being at $526 million…… [Read More]

Financial Management Criticisms of Medical

To demonize the concept of universal healthcare with the word 'rationing' "buys into the myth that we don't have rationing of medical services now. But we do. It takes many different forms. It is commonplace for health insurance companies and HMOs to deny patients beneficial treatment. They find a variety of excuses for doing so, and may not openly admit it, but we all know that it happens. Medicare rations drugs by requiring co-payments that many patients can't afford. Emergency rooms ration care by making people wait so long in line that some just give up and go away" (Singer 2011).

Question 3

The recent decimation of many retirement funds means that more and more members of the elderly are eligible for both Medicare and Medicaid. The elderly on fixed incomes often struggle to afford medications not currently covered within the provisions of Medicare because of the "doughnut hole" in prescription drug coverage in the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The most logical solution is one which is currently experiencing tremendous political resistance, however, namely to add new individuals to the insurance who are not chronically ill or elderly. One of the advantages of national healthcare,…… [Read More]

Financial Management Methods Concepts and Techniques Are

financial management methods, concepts and techniques are explained, their uses are analyzed and explained in detail. This paper also highlights the importance of these methods in the financial management and financial manager's decision making process. The case of Suarez Manufacturing is used to further explain the use of these methods.

Financial management is all about managing the finance of the company by making various investing, financing (debt financing or equity financing) or distributing (Dividend) decisions. The finance managers of a company are constantly involved in making various financial calculations so as to come up to those fundamental financial management decisions. (Correia et al., 2007)

Financing the projects of the company can be done by debt financing, equity financing or a combination of both types of finances. Debt and Equity finance can be obtained in many ways and the valuation of both debt and equity market values of the company can be done using various methods. Each of the method used is based on equations containing certain variables, one of which is definitely market value of equity. These equations analyze and use the relationship between certain variables, (for instance the relationship between earnings of a company, dividends paid by the company…… [Read More]

Financial Management Performance Measures

Transfer Pricing-SLP

The relevance of financial ratios cannot be overstated when it comes to the measurement of an entity's performance. It should, however, be noted that not all performance measures can be expressed as a ratio. This text concerns itself with various other performance measures: operating leverage, Return on Investment (ROI), EVA, and gross profit margin.

Transfer Pricing-SLP

Operating Leverage

According to Shim and Siegel (2008, p. 198) "operating leverage, a measure of operating risk, arises from the company's use of fixed operating costs." As the authors further point out, a simple indication of the said financial measure would be the "change in sales on earnings before interest and taxes" (Shim and Siegel, 2008, p. 198). It is important to note that a high degree of operating leverage is seen as an indicator that small changes in sales result in significant changes in not only EBIT, but also return on equity, return on assets and return on capital invested (Brigham and Ehrhardt, 2013). The degree of operating leverage could be computed by dividing the change in operating income/change in EBIT with the change in sales, in percentage terms (Shim and Siegel, 2008).

The relevance of operating leverage cannot be overstated.…… [Read More]

Financial Management Analysis

Financial Analysis

Assumption Use in the Financial Plan

Additional Assumption in Sensitivity Analysis

FIRST TWELVE MONTH CASHFLOW RESULT

HOW MUCH SHOULD NORMAN PAY FOR THE EXCLUSIVE RIGHT?

FORECASTED CASHFLOW FOR THE NEXT FIVE-Year

CASH FLOW WITH A LOAN AT 8% PER ANNUM

SENSITIVITY ANALYSIS

THE SALES PRICE AND kg SALES GRADUALLY INCREASE AT 5%

THE SALES PRICE PER kg INCREASE AT 10% BUT THE UNIT SALES REMAIN AT 5%.

Investment Value Using At Discounted Rate 5%

Best Financial Plan and Option

Assumption Use In The Financial Plan

Additional Assumption in Sensitivity Analysis

It is further assumed that price will increase gradually at the rate of 8% per annum and sales will increase at 7% per annum.

For the purpose of analysis, both the sales price and Kg sales will gradually increase at 5%.

Another scenario will be that the sales price per Kg increase at 10% but the unit sales remain at 5%.

Best-case scenario assumption, Norman did not exercise his plan to borrow $100,000 at 8% per annum. We will look into what is the cash flow outlook if Norman did not exercise this option.

5. Norman believes that he could borrow up to $100,000 at 8% per annum.…… [Read More]

Kuali Foundation Kuali Financial Management System Horizontal

Kuali Foundation

Kuali Financial Management System

Horizontal Flow

The horizontal flow refers to the horizontal flow of information (Lamb, 2009), that transmits information across the organization, or in the case of the Kuali Financial Management System, across different organizations. According to Lamb (2009), "Horizontal flow of information refers to the flow of information across various firms colleges and universities. Since, many colleges and universities would not like to disclose all the information that they hold, Kuali information systems make sure that whatever is freely available from a particular college or university is also made available to all the other members. At the same time, it ensures privacy and security of data by not broadcasting private or sensitive information." (Lamb, 2009)

According to Haag, Cummings, McCubbrey, Donovan, Ponsonneault (2006), the horizontal flow of information is a function of divisions, the internal units, and teams or groupings of individuals, which work in unison with the objective of accomplishing an organizational goal or objective. The implication is the information is transferred internally between decision-makers with equal responsibility and authority.

Horizontal flow therefore, involves the movement of information, and not data from one decision-maker to the next within a system where key organizational identifying…… [Read More]

Healthcare Financial Management to Quote Jonathan Clark

Healthcare Financial Management

To quote Jonathan Clark at the beginning of his article, "Improving the revenue cycle can be a daunting task due to the scope and complexity of the interdepartmental process." Of the suggestions offered by the authors, which concept(s) give you the greatest insight into creating an improved Revenue Cycle process in the organization where you work (or one in which you are familiar)? Be sure to identify which article or author you are referencing.

In his comprehensive advisory article to improve the medical industry's revenue capturing capabilities, entitled Strengthening the Revenue Cycle: A 4-Step Method for Optimizing Payment, Jonathan Clark provides a series of sensible solutions to the ongoing dilemma of payment optimization. David Hammer also provides guidance to healthcare finance professional in his article The Next Generation of Revenue Cycle Management, by reminding them that the key performance indicators (KPIs) which dictated policy in previous years have been fundamentally altered by the shifting healthcare landscape. One component of Clark's four-pronged approach to optimizing revenue within large hospitals that appealed directly to my own experience working within the medical industry was his directive to Enhance Workflow Processes. After witnessing firsthand the ineffective and wasteful deployment of resources…… [Read More]

Flows and Financial Management Overview

This is important, because it is showing how there is an effective system. For evaluating, the overall scope of the decisions that are being made. However, after a stated amount of time is when everyone will become friendly with all of the applications. This is when you would want to be evaluating the effectiveness of these changes. These different elements are important, because they are illustrating how the Kuali protocol can study and improve upon these transformations. (Hollwaman, 2011) (McNeally, 2011)

Clearly, when using Kuali solutions there will be an emphasis on having everyone work together. In the case of the University of Arizona, they have been utilizing this as a tool to effectively integrate the various departments. The reason why, is because a more gradualist approach is being used to deal with these challenges. This is the point that the various staff members can be integrated as a part of the solution. To effectively implement these changes requires taking more gradualist approach. The way that this is accomplished is through introducing everyone to the different applications. While this is occurring, these tactics are building the confidence of employees when they are using these applications. As the continuing exposure, will…… [Read More]

Healthcare Financial Management in Practice

Some hospitals create a "contingency" budget, which can be offset by a few of these patients.

The percentage of non-paying patients can vary a good deal, particularly in a city- or county-owned hospital. This number may not vary, and typically in a budget the hospital CEO and/or CFO negotiates with the governmental bodies for regular subsidies to cover.

The billing cycles can be difficult to predict, particularly for Medicare and Medicaid patients, where there are famous irregular delays on payment. It is possible, as noted above, to go to outside banks or other bodies to get a/R funding to cover these contingencies

Particularly in older hospitals, the amount in the depreciation account may not be enough to cover unforeseen expenses, such as asbestos removal or deterioration. Hospitals can address this by auditing their depreciation accounts and making a better assessment of what might be needed in coming budgets.

Many organizations use a leveraged buyout vs. A merger or other type of acquisition strategy. Compare and contrast the different "purchasing" methods. Which is the best? Does one work better in a different situation than another? Explain your rationale.

An LBO must have good cash flow to cover the cost of the…… [Read More]

Healthcare Financial Management Agency Problems

It may be most appropriate when there is a question of adding a new service or getting rid of a current service, but makes less sense for a department which is expected to continue in service.

Incremental budgeting is a part of the rolling forecast system. If there is a sudden spike in revenue, for example, it may make sense to do an incremental budget to take into account the new variable.

-down budgeting means that the CEO or CFO dictates how much money is present, and allocates it to each department. This has the benefit of control of expenditures, but the drawback that the department managers feel no responsibility to hew to a budget in which they had little or no input.

A s-up: This method starts at the department level and builds to an overall picture. While each department may want to have its needs fulfilled, there needs to be a subsequent tops-down evaluation in order to adequately distribute resources; also, only the tops-down analysis can compare the relative value of investments in various departments.

8. Explain in detail why it is difficult for investors to consistently beat the market" and earn returns in excess of that required…… [Read More]