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Therefore the risk free rate is most likely slightly higher than would be if a ten-year treasury bond was used to determine the risk free rate.
You are having second thoughts about your choice of a proxy company and are concerned that a wrong choice may impact on the investment decision. To alleviate your fears (and those of the board) you run a sensitivity analysis to see how changes in the beta estimate affect your investment choice. You include this analysis in your report to the board and discuss the implications of you analysis.
Since the calculations used in the previous section were based off of a historical figure of beta that represents more of a conglomeration than just a grocer it is necessary to consider what would happen if the beta was incorrect. Since both organizations are at least remotely similar in their scope of operations a…
Bloomberg. (2010, September 20). Government Bonds. Retrieved September 20, 2010, from Bloomberg: http://www.bloomberg.com/markets/rates-bonds/government-bonds/australia/
Reuters. (2010, September 20). Reuters Financial. Retrieved September 20, 2010, from Reuters: http://www.reuters.com/finance/stocks/overview?symbol=WES.AX
The Reserve Bank of Australia. (2010, September 20). Statistical Tables. Retrieved September 20, 2010, from The Reserve Bank of Australia: http://www.rba.gov.au/statistics/tables/index.html#interest_rates
Identify the Components of ealized eturn of Common Stock
The real return on the sale of stock is often referred to as the realized return as this is the true rate of return of the risk of investment. Many often mistake the realized return as the gain from the sale of the stock in the secondary market, or at most, the inclusion of dividends that have accrued over the period of ownership. However, as these are indeed components of the formula, the often overlooked area of the return is the tax.
The function of the realized return for common stock in all markets includes the dividend growth model added to the difference between stock purchase price and stock sales price. Therefore, if the stock paid a .10cent dividend on March 31, and the 1000 shares of stock was sold on April 1st, purchased at $20.00 and sold at…
Eisenberg, L., & Noe, T. (2001). Systematic risk in financial systems. Management Science, 47(2), 236-249. Retrieved from http://search.proquest.com/docview/213173932?accountid=13044
Ford, J. (1998). How to benchmark portfolio risk. Commercial Lending Review, 13(1), 60-62. Retrieved from http://search.proquest.com/docview/229628253?accountid=13044
Painter, M. (1995). Taking a WACC at private companies: CA. CA Magazine, 128(8), 35-36. Retrieved from http://search.proquest.com/docview/203887480?accountid=13044
Vijh, A. (1994). S&P 500 trading strategies and stock betas. The Review of Financial Studies (1986-1998), 7(1), 215-215. Retrieved from http://search.proquest.com/docview/207667850?accountid=13044
Investing money for the future is one of the key components of creating a secure future, and retirement. While many Americans do not plan for future years, other then a company retirement plan and social security retirement benefits, research shows that when a person takes an active role in their retirement planning, they are more likely to create a future which will support their standard of living after they have stopped punching a clock, and commuting to the office.
Regarding the Social Security administration and the SSI benefit program, at its inception during the 1930's the system was based on one beneficiary receiving payments from over 20 contributors. As the population shifted toward longer lives, current estimates are that one beneficiary is receiving payments based on 8 workers paying into the system. In the near future, as the baby boom generation retires and Gen X and Gen Y…
Company overview. 2003. Sunoco.com Accessed 6 Dec 2003. http://www.sunoco.com .
Value Line Stock review services. 2003. Valueline.com Accessec 7 Dec 2003. http://www.valueline.com
Business and company resource center. 2003. Galenet Gale Group.com. Accessec 11 Nov 2003. http://galenet.galegroup.com
There is a significant difference between bonds and stocks, and they should not be treated the same when evaluating a portfolio. There are a handful of similarities, such as the fact that their value derives from the net present value of expected future cash flows, but the two securities are fundamentally different.
A bond entitles the holder to a cash flow from the issuer. Equity represents a share of ownership in the company. From this arises the first key difference -- the risk. Risk refers to the chance that the expected cash flows will be disrupted. With equity, this means that the earnings could drop, reducing not only the dividend but also the future profit potential as well. The value of the company's cash flows is likely to change if the company's performance suffers a downturn. With a bond, the only risk is the risk of default. Default…
Over the past decade, increasing attention has been paid to the issue of corporate governance. As a result of multiple major scandals, new laws have been passed and the role of the SEC has been expanded. Sarbanes-Oxley introduced sweeping corporate governance reforms, and despite its high costs there are many tangible benefits. Many business advocates argue for lower regulatory standards, but there is a strong economic case to be made for higher regulatory standards.
The function of corporate governance is to protect the interests of shareholders. When a scandal occurs on the scale of Enron, billions of dollars of shareholder wealth are wiped out. The fallout from such governance failures has such a wide-ranging impact on the economy that the government must become involved, to preserve the overall health of the economy. The direct impacts of governance failure are on the shareholders. The wealth that they lose is…
FedEx Corporation (FDX) is the stock I have chosen for this exercise. The first page that Yahoo Finance shows has the stock price, last trade, change, previous close, open and bid/ask. There are also daily and annual ranges, volume and average volume, market cap, P/E, and dividend information. A small daily price chart is also there. This is the basic stock information, especially for day traders or short-term investors, or anybody looking for just a quick snapshot.
The "Historical Prices" link reveals a page where past FedEx prices can be found. The daily prices for the past few months are listed in a chart. Also, there is a search function, which enables the user to find the stock price on any given day. This can be sorted by daily, weekly or monthly. There is a sort function called "dividends." When a search for Jan 2, 2008 to Jan…
"Pension reform in several emerging market countries has been associated with rapid growth in assets under management and a positive impact on the development of local securities markets." (Roldos, 2004) Finally, the stability of many international securities, located in Britain, Switzerland, or Germany, to take only a few examples, means that using the diverse potential of international investment opportunities does not necessarily entail a high risk.
However, many international sources of revenue tend to be more unpredictable in their returns. A pension fund's security, especially for an older man or woman with retirement on the horizon must be of primary importance. Secondly, international developments can be difficult to predict in the long-term. And finally, international securities may be less tightly regulated in terms of their ethical scrutiny by the local governments, leading to "price distortions, bubbles," and hence greater investment risks. (Roldos, 2004)
China's Pension Fund to Invest…
China's Pension Fund to Invest Abroad." (10 October 2006) International Business
Times. Retrieved 25 Nov2006 at http://www.ibtimes.com/articles/20061010/china-039-s-state-pension-fund.htm
Roldos, Jorge. (Sept 2004). "Pension Reform, Investment Restrictions, and Capital
Markets." IMF Policy Discussion Paper. Retrieved 25 Nov2006 at http://www.imf.org/external/pubs/ft/pdp/2004/pdp04.pdf
Using values found in a table of factors for calculating the present value of a dollar; the periods one through four have the following present value factors:
Year One= .9259
Year Two= .8573
Year Three= .7938
Year Four= .7350
Next these factors are multiplied individually by the net cash flow generated by the investment in each period.
Year One= $500,000
Year Two= $450,000
Year Three= $350,000
Year Four= $320,000
The multiplication calculation reveals the discounted cash flow values:
Year One= $500,000*.9259= $462,950
Year Two= $450,000* .8573= $385,785
Year Three= $350,000* .7938= $277,830
Year Four= $320,000*.7350= $235,200
The total sum of the cash flows net present value is $1,361,765; as such the net present value as compared to the overall investment of $1,200,000 is positive $161,765, and therefore the projected rate of return on this investment is greater than the eight percent cost of capital, and the investment…
Marshall, D. & McManus, W. (1996). Accounting: What the Numbers Mean.
Third Edition. McGraw Hill.
74). This dearth of information was likely caused by a reluctance to examine investment decisions on the part of investors themselves; nobody likes finding out that their "thought-out" considerations are not any more accurate than gut choices, and in fact, those gut choices likely had more influence than all of their mental work.
In the last decade, however, strides have been made in the study and analysis of investment behavior, revealing surprising details about what goes in to making stock trades. The first important work in the study of individual investment behavior was the realization that human beings do not always act rationally in regards to financial decisions, because according to the previously quoted Brad Barber and his co-author Terrance Odean, "the field of modern financial economics assumes that people behave with extreme rationality, but they do not" (Barber & Odean, 1999, p.41). Although "differences in investor literacy about financial…
Barber, Initials, & Odean, Initials. (1999). The courage of misguided convictions. Financial Analysts Journal, 55(6), 41-55.
Dhar, R, & Zhu, N. (2006). Up close and personal: investor sophistication and the disposition effect. Management Science, 52(5), 726-740.
Grinblatt, M, & Keloharju, M. (2001). What makes investors trade?. The Journal of Finance,
Investment in Higher Education as a Tool for Promoting a Stronger Economy: Examining the Literature eviews of Previous Dissertations
The following research is an exercise where three dissertations under a similar topic were mined in order to better understand their organizational structure, thematic content, and approach to examining the current discourse. The primary topic here is going to highlight how reinvestment into higher education can help facilitate for a stronger, more stable economy based on a number of factors and indicators. The research which follows explores three similar dissertations that show a clear connection between investment in higher education and positive economic factors.
Carnoy, Martin. (2006). Working paper no. 297: Higher education and economic development: India, China, and the 21st century. Stanford Center for International Development. Web. http://www.stanford.edu/group/siepr/cgi-bin/siepr/?q=system/files/shared/pubs/papers/pdf/SCID297.pdf
I. Education and Economic Growth
A. Macroeconomic Approaches to the Education-Economic Growth elation
i. Previous studies have shown that when there…
Carnoy, Martin. (2006). Working paper no. 297: Higher education and economic development: India, China, and the 21st century. Stanford Center for International Development. Web. http://www.stanford.edu/group/siepr/cgi-bin/siepr/?q=system/files/shared/pubs/papers/pdf/SCID297.pdf
Howe, Caroline. (2009). The Role of Education as a Tool for Environmental Conservation and Sustainable Development. Imperial College London. Web. http://www.iccs.org.uk/wp-content/thesis/phd-howe,caroline09.pdf
Lundvall, Bengt-Ake. (2007). Higher education, innovation and economic development. Department of Business Studies Aalborg University, Denmark. Web. http://dimaricerca.univpm.it/EconInno/Economics%20of%20innovation/BengtAkeLundvall_higher_educ.pdf
In the future, this could result in some kind of major restructuring to deal with these issues. The problem is that these changes will occur when the company is facing greater challenges. This will hurt their competitive position, profit margins, stock performance and brand image. The above information will impact an investor's decision, by making them more cautious about purchasing the company over the long-term. ("The Coca Cola Company," 2012) ("Pepsi Co," 2012)
As far as Pepsi Co is concerned, the management has taken a continuing focus on expanding into new areas. This has resulted in the company owning different food, beverage and snack manufacturers. In these situations, the firm is concentrating on the impact that key acquisitions will have on Pepsi and its ability to enter new markets. ("The Coca Cola Company," 2012) ("Pepsi Co," 2012)
This strategy has proven to be highly successful. As the company is able…
The Coca Cola Company. (2012). Yahoo Finance. Retrieved from: http://finance.yahoo.com /q/pr?s=KO+Profile' target='_blank' REL='NOFOLLOW'>
83% in 2008 compared to 2007, but by 127.10% when compared to 2004. Shareholder equity is also included in the ascendant trend revealed by Apple for all financial highlights. By 2008, it had increased by 314.30% relative to 2004. Compared to the previous year, the growth was of 44.71%.
The final row of the table deals with the net cash provisions used by the investing operations. These do not reveal a trend, increasing in some years and decreasing throughout others. They however show that Apple has been active in seizing investment opportunities, and that, while some project have returned a significant return on investment, in other cases, the benefits have yet to materialize. In 2008 as compared to 2007, the cash provisions used by the investment operations met an increase of 152.04%. This is the single sign in the financial analysis which may suggest that Apple should not invest any…
2009, Website of Apple Inc., http://www.apple.com/last accessed on February 11, 2009
2009, Website of Dell Inc., http://www.dell.com/last accessed on February 11, 2009
2009,Website of the IBM Corporation, http://www.ibm.com/us/last accessed on February 11, 2009
2009, Investopedia, http://www.investopedia.comlast accessed on February 11, 2009
This would play a role in helping to bring the Czech Republic into the EU in 2004. The effect that this would have on the Prague Stock Exchange is that it would cause it to rise to 1,940. At which point, it would have a severe down trend economy during 2008 and into 2009. The only difference is: that the various reforms and economic policies that the government was using at the time, helped to contribute to mitigating the effects of the slowdown (as the economy would experience a less severe economic contraction of 3.4%). ("Czech Republic")
The price movements of the Slovak equity market in the last 10-15 years
The ratislava Stock Exchange was founded in 1991 and has been in operation since 1993. ("asic Information") Like what occurred in the Czech Republic the Slovak stock market went through two bear markets that would last until 1998 -- 1999.…
"Basic Information." Bratislava Stock Exchange. 2010. Web. 24 Apr. 2010
"Czech Republic." State Department. 2009. Web. 24 Apr. 2010
"History of the Exchange." Prague Stock Exchange. 2009. Web. 24 Apr. 2010
41 in the next three years. The current price for al-Mart implies strong growth prospects. The company does have a sound strategy to retain its new customers and refocus growth efforts on less-saturated markets overseas.
In short, while there can be little doubt as to al-Mart's operational excellence, it is not necessarily a great investment. Growth has in recent years been of the slow and steady variety. The company's present valuation may be symptomatic of its status as a safe haven for investors during tough economic times. This means that the growth implied by its current share price may not be justified. Therefore, while al-Mart is a great company to own, it may not be the best investment at its current price and with the market beginning to show signs of recovery. The 0.20 beta and historic low volatility mean that al-Mart shareholders will not reap the benefits of market…
Wal-Mart 2009 Annual Report. Retrieved June 7, 2009 from http://walmartstores.com/sites/AnnualReport/2009/
Some financial data and ratios from MSN Moneycentral. Retrieved June 7, 2009 from http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=WMT
Cheng, Adriana. (2009). Wal-Mart needs to prove it's more than a recession play. Marketwatch. Retrieved June 7, 2009 from http://www.marketwatch.com/story/wal-mart-needs-to-show-legs-beyond-recession-play
Loth, Richard. (n.d.) Financial Ratio Tutorial. Investopedia. Retrieved June 7, 2009 from http://www.investopedia.com/university/ratios/
Investment in South Africa
In your judgment, were the possible utilitarian benefits of building the Caltex plant in 1977 more important than the possible violations of moral rights and of justice that may be involved? Justify your answer fully by identifying the possible benefits and the possible violations of rights and justice that you believe may be associated with the building of the plant, and explaining which you think are more important.
The possible utilitarian benefits of building the Caltex plant in 1977 were not more important than the possible -- or actual -- violations of moral rights and justice involved. The violations of moral rights and justices should have been prioritized. Looking back on the situation, of course, we have the benefit of knowing history, and the case of the South African apartheid is an exemplary case for the power of socially responsible investment movement.
In 1977, when the…
1. Jack Magarrell, "U.S. Adopts Stand on Apartheid: Backed on Many Campuses," The Chronicle of Higher Education, 12 March 1979.
2. See Herman Nickel, "The Case for Doing Business in South Africa," Fortune, 19 June 1968, p. 72.
3. Investor Responsibility Research Center, Analysis E-Supplment No. 9, 7 April 1977, p. E 114.
4. Texaco Proxy Statement, 1977, item 3.
Take for example investments in quality management as part of the industry-wide supply chain. Process re-engineering of these areas could dramatically reduce the amount of shortages and overages in the supply chain of not only gasoline but the key chemicals and raw materials necessary for its production. Second, the processes of gasoline refining could be made more efficient through process re-engineering and then automated to make them more cost effective over time. The bottom line is that the fluctuations in gasoline prices should not be a decision factor in investing in improving gasoline production efficiency. Rather, the continual pursuit of greater efficiencies in the entire process of gasoline production must first be considered if the entire industry is going to stay profitable and have the potential for longer-term growth. (Lin, Fan, Newman, 2009)
Huiping Lin, Yushun Fan, Stephen T. Newman. (2009). Manufacturing process analysis with support of workflow modelling and…
Increasing Investment in Gasoline Production
As a leader of any corporation or organization that faced the decision of whether or not to invest in the continual improvement of processes and systems that would make gasoline production more efficient, I would. In making this decision, the fluctuation in gasoline prices attributable to the unique oil market dynamics would be of secondary concern relative to the streamlining of the value chain the entire industry is based on. From the initial mining and exploration to the refining and sales of oil-based products including gasoline, there is significant room for improvement at the process and system level. Concentrating on process flow-based manufacturing analysis there are many opportunities in any company to see significant gains from business process management and business process re-engineering (Lin, Fan, Newman, 2009). These gains in efficiency can be driven first through process improvement and re-engineering with technologies integrated into these processes secondarily. By taking this approach the processes themselves will be as efficient and automated as possible. Take for example investments in quality management as part of the industry-wide supply chain. Process re-engineering of these areas could dramatically reduce the amount of shortages and overages in the supply chain of not only gasoline but the key chemicals and raw materials necessary for its production. Second, the processes of gasoline refining could be made more efficient through process re-engineering and then automated to make them more cost effective over time. The bottom line is that the fluctuations in gasoline prices should not be a decision factor in investing in improving gasoline production efficiency. Rather, the continual pursuit of greater efficiencies in the entire process of gasoline production must first be considered if the entire industry is going to stay profitable and have the potential for longer-term growth. (Lin, Fan, Newman, 2009)
Huiping Lin, Yushun Fan, Stephen T. Newman. (2009). Manufacturing process analysis with support of workflow modelling and simulation. International Journal of Production Research, 47(7), 1773. Retrieved March 6, 2009, from ABI/INFORM Global database. (Document ID: 1645330821).
Investment spending is very significant because it is an essential ingredient in economic development and growth. The decrease in the level of investment spending may cause a recession. Most recessions occur as a result of fall in investment spending (Paul & Krugman, 2007). Swings in investment spending are very dramatic than those in customer spending. eduction in consumer spending is normally a result of a progress that starts with a slump in investment spending. The most significant factors that determines investment spending are the rate of interest and anticipated future real GPD. To understand the kind of reasoning, first there is a need to note that planned investment spending is the investment spending that firms intend to pass through over a given period, in contrast to investment spending that happen but is not planned (William & Greene, 2008). Planned spending on investment projects is negatively the same as the interest…
William H. Greene, Econometric Analysis, 5th Edition, Pearson Education, 2008, Table F3.1, U.S. Investment Data, 1968-1982
Paul R. Krugman, Robin Wells, Kathryn Graddy, Economics: European Edition, Worth Publishers, 2007
N.E. Savin and Kenneth J. White, The Durbin-Watson Test for Serial Correlation with Extreme Sample Sizes or Many Regressors, Econometrical, Vol. 45, No. 8 (Nov., 1977), pp. 1989-1996
R.W. Farebrother, The Durbin-Watson Test for Serial Correlation when there is no Intercept in the Regression, Econometrical, Vol. 48, No. 6 (Sep., 1980), pp. 1553-1563
usinesses experience profit cycles implying that market fluctuations are inevitable in an economy. Market demand plays a crucial role in the profitability of an enterprise and consequently affects the investment trend. A profitable firm is more likely to invest money to improve production facilities or to extend its business into other domains. Investors will analyze the profitability of any undertaking and only if the expected revenue is greater than the cost of capital will they invest in the project. Keynesian theory also states that the Marginal efficiency of Capital is inversely related to investment. "[t]o induce new investment 'the rate of return over cost must exceed the rate of interest'. [Richard C.. Johnsson] For all businesses profit is the ultimate motivation and any new venture is undertaken only if the internal rate of return is above the cost of capital defined by the prevailing rate of interest. Hence…
J. Bradford DeLong, From Investment Demand to the IS Curve: Low Interest Rates," Accessed on June 7th 2004, http://www.j-bradford-delong.net/multimedia/ISLM2.html
Richard C.B. Johnsson, 'The Liquidity-Trap Myth', Accessed on 7th June 2004, http://www.mises.org/fullstory.asp?control=1226
Investments are the assets or items purchased with the anticipation to generate the income in the future. In the economic sense, investments refer to the goods and services purchased and not consumed today for the purpose of generating wealth in the future. Similarly, going to a university or building a factory to produce goods and services are the examples of investments. Within a financial environment, investors purchase assets with the hope that they will appreciate in the future, thus, creating wealth for the investors. Examples of investment in the financial circle include purchasing of stocks, or real estate property with the anticipation that they will appreciate in the future. Despite the benefits that can be derived from the investment purpose, the investment is not something an individual can take lightly. Investors are to implement a careful planning to reap the benefits of an investment. Typically, an investor can lose his…
Costa, D. (2011). The Portable Private Banker Investing Efficiently through Mutual Funds and ETFs. UK. CreateSpace Independent Publishing Platform.
Morningstar (2014). Exchange Traded Funds, Morningstar website. Avaliable from:
Morningstar (2014). ProShares Ultra Nasdaq Biotechnology BIB, Morningstar website. Avaliable from: http://performance.morningstar.com/funds/etf/total-returns.action?t=BIB®ion=usa&culture=en-U.S .
" Investment banking is not for the weak minded or the soft hearted and I must continue to develop my emotions towards this way of thinking.
I know there is much more to learn in the realm of investment banking. The profession itself demands knowledge of more than just business and economic jargon. Good investors know how to spot trends and cycles that others cannot do as easily. This ability, to more or less predict the future, must continually be honed in order to become successful at this profession. Keeping an open mind is absolutely imperative in sustaining a solid development towards understanding and success in this field. Practicing entertaining new ideas, that may seem strange or odd at first should be kept in mind when approaching new subjects for the first time.
Where I Am Going: Short- and Long-Term Plans
My first priority is to finish my MBA program…
Casparie, J. (2007). What Exactly is an Investment Banker? Entrepreneur, 12 June 2007. Retrieved from http://www.entrepreneur.com/article/179958
King, M. (2012). How to get into investment banking. The Guardian UK, 20 April, 2012. Retrieved from http://www.guardian.co.uk/money/2012/apr/20/how-get-into-investment - banking
Rosenthal, J. (2013). Who wants to be an investment banker? The Economist, 21 Nov 2012. Retrieved from http://www.economist.com/news/21566442-dinner-party-problem-who - wants-be-investment-banker
Stephenson, D. (2012). A Career in Investment Banking: Worth the Investment? Firmex, 3 Oct 2012. Retrieved from http://www.firmex.com/blog/a-career-in-investment-banking - worth-the-investment/
Investment boils down to the very simple concept of risk versus reward. Investors, in aggregate must be compensated for the risks embedded within a particular security. lthough risk is subjective and varies die to differences in valuation technique, reward is universal. Investors are constantly seeking investments that offer the highest returns given the risk. In particular, due to market inefficiencies investors are often looking to achieve "lpha." lpha is simply a return achieved above the required return. In this pursuit of higher returns, investors risk losing large sums of money as unforeseen events occur. Chart 1 provides a visual representation of this concept.
Investors, seeking higher return must unfortunately take higher risk. Risk in this instance is NOT defined as Beta as many academics use. Instead, here risk is defined as the propensity for permanent capital loss. s investors move further left, notice the variance of returns becomes larger. lthough…
A second comment should be made about the dynamics of the startup industry and how it relates to individual investors. In the introduction, I mentioned that all investors are looking for high return investments that offer Alpha. I then went on to define Alpha and its relation to startups. One aspect that was omitted was that of industry dynamics. Although this is partially represented in the required return, changes in industry dynamics can often discourage investment in startups. In particular, unforeseen changes can quickly halt or change progress of a startup. For example, within the technology space, change occurs so rapidly that an industry leader quickly becomes an industry laggard. These changes can cause expected returns to decline to below the cost of capital. Investors realizing this will therefore become discouraged to continue the investment required to maintain the operations of the startup.
Thorp, Edward (2010). Kelly Capital Growth Investment Criterion. World Scientific. ISBN 9789814293495. Pg 3-56
company's investment success especially in relation to other companies. The paper aims at establishing how a company's competitiveness can be calculated in relation to others in the same industry and the factors that hinder the calculations or hinder a true picture of the same
Compare industry average and a main competitor
For convenient comparison of industry average, majority of companies place Industry average values next to a company's financial measures for convenient comparison. To get a clear picture, a company can obtain industry average from its competitor by carefully examining (its competitors) stock screen results. (Gray, 2004)
However it is notable that various industries have their peculiarities with some operating under very heavy debts which would companies in other industries. For instance, software companies enjoy high profit margins that other companies envy and that all software companies must attain to stay in the game.
For that case, to see whether…
Gray, A. (2004) Introduction to Marketing, 7th Edition, New York, Prentice Hall
Riahi, A. (2003) The Capital Structure Paradigm: Evolution of Debt? Equity Choices; New York, Praeger
Riahi, A. (1999) Capital Structure: Determination, Evaluation and Accounting
Titman, S (1988) Journal of Finance, Volume 43, Issue: 1, Publisher: American Finance Association; Blackwell publishing
Financial Analysis of Mcdonald
A financial analysis McDonald's Cor
McDonald Corporation is a global company that conducts business in 117 countries. McDonald operates 32,737 restaurants and 26,338 franchises in the highly competitive fast food industry. Since 1940, McDonald has built a loyal customer base by continuing dedicating to customer service and providing high quality fast food for customers. Presently, McDonald could boast of over 60 millions customers and the company serves average of 64 millions customers daily. In the United States, and other countries where McDonald is operating, fast food business is very competitive. Despite the competition that McDonald is facing, the company has been able to record revenues of more than $16 billions in restaurants and revenues of more than $7 billions in franchise restaurants business. McDonald operates in six geographical locations. The company business operations are in the U.S., Europe, Middle East, Asia-Pacific, Latin America and…
Infinancials (2011). McDonald's Corp. Market valuation multiples. Infinancials.
Mizen, P. (2008). The Credit Crunch of 2007-2008: A Discussion of the Background, Market Reactions, and Policy Responses. Federal Reserve Bank of St. Louis Review. 90(5):531-67.
Putilina, I. (2010). A Financial Analysis of McDonald's Corporation. Economic Research Center.
Stapleton, R.C & Subrahmanyam, M.G.(2009). Interest Rates and Foreign Exchange Risks: An Overview of Hedging Instruments and Strategies. University of Lancarster.UK.
Apple Inc. Investment Analysis and Recommendations
Apple Inc. is an American multinational company specializing in designing and producing mobile telecommunication devices that include iPhone, computer software and hardware, Apple TV, Apple Watch, iPod, and other electronic devices. Apple was incorporated and publicly registered in 1977. Headquartered in California, Apple is one of the most successful American companies in term of revenue with the annual revenue reaching $233.7 billion at the end of 2015 fiscal year. On February 2016, Apple recorded $521.3 billion worth of market capitalization. While Apple designs the bulk of their products in the United States, the company's manufacturing plants are located in China. Apple also operates in Europe, Japan, Canada, and Latin America. (Apple Inc. 2015).
Board of Directors
Apple Inc. Board of Directors is overseeing by the company CEO (Chief Executive Officer) and other competent senior management. The Board oversees the day-to-day operations of the company…
According to the AMA, capital budgeting is "the decision-making process used by companies to evaluate long-term investments in large capital assets" (Hampton, 2011). Zeit (2013) makes the point that construction projects are included in the category of capital investment decisions, and that designers and architects are often involved. eiter et al. (2000) argue that because of their size and critical strategic nature, "capital investment decisions are among the most important decisions made by firms."
What this means is that capital projects tend to be large-scale projects that have several key characteristics. They require a lot of money, to the point where that money may need to be acquired through financing. So construction projects in particular like new buildings or new wings would qualify. There is some ambiguity in the research if a takeover or merger would qualify as a capital project when financed with cash, but a small-scale…
Cleverley, W., Song, P, & Cleverley, J. (2011). Essentials of Health Care Finance. Sudbury, MA: Jones & Bartlett Publishing.
FASB. (1985). Statement of financial accounting concepts No. 6. Financial Accounting Standards Board. Retrieved October 12, 2013 from http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175822102897&blobheader=application%2Fpdf
Hampton, J. (2011). The AMA handbook of financial management. AMACOM. Chapter 10.
Reiter, K., Smith, D., Wheeler, J. & Rivenson, H. (2000). Capital investment strategies in health care systems. Journal of Health Care Finance. Vol. 26 (4) 31-41.
Financial Analysis of Lehman rother
The history has been full of financial collapses and financial scandals and one of the biggest financial collapses that a company has ever seen was that of Lehman brother. The collapse of a firm as huge as Lehman rother and a firm which has such great experience of over a hundred years lead the world into a shock. It created doubts in the minds of people regarding the condition of other financial institutions. The history of Lehman rother is rich which is further discussed.
The history of Lehman rother dates back to 1844, when a boy named Henry who was a 23-year-old son of a cattle merchant who immigrated to the United States from Germany and he settled in Alabama State of the United States where he opened dry goods store. In 1847, when Henry Lehman's elder brother arrived to Alabama, the firm…
1. Bebchuk, L.A., Cohen, A., & Spamann, H. (2010). The Wages of Failure: Executive Compensation at Bear Stearns and Lehman 2000-2008. Yale Journal on Regulation,27(2), 257+.
2. Blake, D. (2000). Financial Market Analysis. New York: Wiley. Cetorelli, N., Mandel, B.H., & Mollineaux, L. (2012). The Evolution of Banks and Financial Intermediation: Framing the Analysis. Federal Reserve Bank of New York Economic Policy Review, 1+.
3. Dwyer, G.P., & Tkac, P. (2009). The Financial Crisis of 2008 in Fixed Income Markets.Federal Reserve Bank of Atlanta, Working Paper Series, 2009(20), 1+.
4. Fitzpatrick, T.J., & Thomson, J.B. (2011). How Well Does Bankruptcy Work When Large Financial Firms Fail? Some Lessons from Lehman Brothers. Economic Commentary (Cleveland), (2011-23), 1+.
Global Business Cultural Analysis: Brazil
Cultural backgrounds reflect the ways and standards of living, which is unique and different for each country. In fact, the business world is also profoundly influenced by the cultural differences of the counties. This focus of this research paper, in this regard, is to analyze the cultural perspectives of doing business in Brazil. Therefore, major elements and dimensions of Brazilian culture such as business structures, management styles, communication, ethics, values, and customs are discussed comprehensively.
Moreover, the discussion has also been made on how the local businessmen integrate these cultural dimensions and elements. Indeed, a detailed comparison United States business has been made with that of Brazilian culture and business elements by means of Hofstede's dimension tool (that is particularly used for measuring cultural differences). Finally, the paper concludes with the implications for the U.S. businesses that plans and desires to conduct business in Brazil.…
Aswathappa. (2010). International Business 4E. India: Tata McGraw-Hill Education.
Beekun, R.I., Stedham, Y. & Yamamura, J.H. (2003). Business Ethics in Brazil and the U.S.: A Comparative Investigation. Journal of Business Ethics, 42(3), 267-279.
Boraas, T. (2001). Brazil. USA: Capstone.
deVries, A. & Blore, S. (2010). Frommer's Brazil. 5th Edition. USA: John Wiley & Sons.
investment management in the financial sector. The paper highlights the world's present macroeconomic situation. It further details the macro economic situation and the way it affects investment decisions in several investors. In addition, the paper describes a sample investment programme and provides critical decisions to investors as well as investment vehicles used by the investment moguls. The paper summarises practical exercises in compound investment management growth and the use of capital investment.
Investment management is an important part of the global financial sector, which is key in financing vast business empires. Investment management is incorporated under state laws employing several individuals and creating revenue to key players in the financial market. It is the management of several securities and assets to meet specific objectives for the benefit of the investors. The products used known as investment vehicles can be of minimal risks such as government bonds; carry high risks such…
Development Policies and Anaysis Division. (2012). World Economic Situation and Prospects. Retrieved May Friday, 2012, from www.un.org: http://www.un.org/en/development/desa/policy/wesp/index.shtml
B.P.Eregha. (2010). Interest Rate Variation and Investment Determination in Nigeria. International Business Management Journal, 41-46.
Blume, M. (1978). Inflation and Capital Markets. Cambridge: Ballinger.
Contrarian Investor's Journal. (2008, July 6). Effects of inflation on value of investment. Retrieved May Friday, 2012, from www.cij.com: http://cij.inspiriting.com/?p=482#
Determining the ranking of mutually exclusive projects is another step used by firms in the decision making process. Investments are determined on an annual basis by a business's board in agreement with and limited by the company's spending budget for the year. Once the capital budgeting and sensitivity analysis reports are complete on all projects, the projects are then reviewed on additional factors such as overall purpose within the company, and are ranked from best to worst (Bacon, 1977). Those projects that fail to meet certain numerical hurdles are simply eliminated from the list and not considered by an investment board. Some decisions may be close to certain numerical hurdles but also have other overarching reasons for acceptance. Some examples may include investments for improvements in compliance with legislation. These investments must be done regardless of their overall worth, and typically are more beneficial to a company if done sooner…
Bacon, Peter (1977). The Evaluation of Mutually Exclusive Investments. Financial Management. Vol 6.2, 55-58.
Barney, Dwayne; Danielson, Morris (2004). Ranking Mutally Exclusive Projects: The Role of Duration. The Engineering Economist. Vol 49.1, 43-61.
Mills, Geofrey (1996). The Impact of Inflation on Capital Budgeting and Working Capital. Journal of Financial and Strategic Decisions. Vol 9.1, 79-87.
Pannell, D.J. (1997). Sensitivity analysis of normative economic models: Theoretical framework and practical strategies. Agricultural Economics. 16, 139-152.
In general, Product Development at Ford involves three major stages, all leading up to the manufacture of the vehicle: Plan, Design, and Verify -- then manufacture. To do this, though, functional areas need to manage costs, plan marketing programs, ensure that needed parts are available, plan manufacturing schedules, hiring (if needed), shift changes, and numerous other data (a/p, a/r, payroll, etc.). The model for Ford is:
(ource: Murthy and Desai)
Thus, on a daily, or ongoing basis, employees in numerous functional areas are able to pull up historical data on models, features, issues; find out stages of development for new models or new programs; chart advertising effectiveness using detailed database parameters, preplan tooling, resource, and supplier needs; access accounting and invoice functions, and, system wide, use the available information for appropriate levels of knowledge management (Maynard 2004).
By department, a needs analysis shows that each individual department has both similar…
Sources: Ford Motor Annual Reports: www.ford.com; http://online.wsj.com/mdc/public/page/2_3022-autosales.html ).
investment banker is a person working for an investment bank. Investment banks finance both public and private companies. They arrange for debt financing and they can help put together equity deals as well. A startup company will often seek partnerships with investment bankers in order to secure the financing needed to expand or to make acquisitions. Investment bankers do not normally work with companies that only have an idea.
The stock market is a secondary market where equities are traded. A company does not turn to the stock market per se to acquire capital. The company gets its equity financing from an investment banker, who may then place the shares on the stock market. The company only sees money from the issue of the stock -- the price on the stock market does not go to the company. Investors on the stock market, however, have votes on aspects of the…
Honolulu International Airport (HNL) is one of the world's largest, oldest, and most beautiful airports.
As the principal aviation gateway of the city and county of Honolulu on Oahu in the State of Hawaii, HNL is also identified as one of the busiest airports in the United States. Total traffic now exceeds 21 million passengers a year and is rising (Honolulu International Airport, 2016).
Owned and operated by the State of Hawaii Department of Transportation, HNL covers 4,520 acres of fast and submerged land. The airport itself is larger than the major resort destination of Waikiki, which is located 10 miles to the south (Honolulu International Airport, 2016).
HNL has four active runways, including the 12,000-foot Reef Runway. When it was built, the Reef Runway was the world's first major runway built entirely offshore (Honolulu International Airport, 2016). The airport is served by 27 international and domestic carriers, two interisland…
After the economic Collapse, precious metals like Gold and Silver have become the safe heaven investment for the investors. Investors know that they will get a high return by investing in these precious metals. The performance of the Gold can be judged from the below mentioned Gold graph.
The red line indicated that the Gold has completed almost a 100% ride in just 3 years because of the intentions of the people to get out their money from other investment option and park in the precious metals. There are risk provisions attached with the investment in these precious metals. Actually the price of the precious metals has been overbought now after the factor of safe heaven investment associated with it. Cautious must be taken by the investors while taking a buying position in the precious metal's investment. Tool like performance indicator of the precious metal will be used by the…
Chance, D & Brooks, R (2009), Introduction to Financial Institutions, Prentice Hall Publications
Chisholm, A, (2010), Introduction to Financial Instrument, Pearson Group Publications
Donald, J, (2004), Commodity Prices and Precious Metals Analysis, Oxford University Publications
Zain Telecommunications Kuwait
The purpose of this group project is to provide an opportunity for students to make the application of concepts covered in this course to a real Kuwaiti firm. The firm considered in the project is Zain Telecommunications Kuwait. Zain is a top mobile telecommunications provider in the Middle East and North Africa. The company was initially established in the year 1983 in Kuwait and was known as Mobile Telecommunications Company (MTC). The company made major strides by becoming the first mobile operator in the Middle East region. As the company instigated its expansion approach in 2003, Zain experienced immense growth rate in not only the Middle East, but also in Africa. This is predominantly owing to the acquirement of numerous mobile operators across the region. Four years later, Mobile Telecommunications Company underwent a rebranding to become Zain. This was purposed to better mirror the company's improving position…
There are several issues to consider when selecting an investment banker for an IPO. First of all, the respective bank (or the banker himself) needs to have an established track record that can be proven with concrete figures and performance thresholds. It is important to have relevant data to back assumptions that guarantee the bank's relevance in the industry, particularly in terms of previous successful IPOs and connections in the field. Another important issue will be the investment bank's capabilities: does it have sufficient resources to properly handle an IPO?
At the same time, it is important for the investment bank to match the profile of the company undertaking the IPO: it is useful to have an investment bank that understands the particularities of the business, not only of the financial perspective on things. It will thus also be able to build easier connections related to the IPO in…
1. Lainee, Francois, Plantier, Eric. 2006. Selecting (an) Investment Bank(s) for the Initial Public Offering of a Venture Capital-backed Company. An EVCA Venture Capital Committee Paper. On the Internet at tblueprint.pe/docs/IPO_Manual_2006.pdf. Last retrieved on July 24, 2014
Value (NPV) Process for a Company's Human Resource Program Investments
Re: Instructional Document: Evaluating Needs Present Value (NPV) process for HR Resource program's investments
We have implemented a new Needs Present Value analysis process that will be used on all current and future HR projects as of Thursday, 12/25/2003. Please become familiar with the NPV pamphlets provided and if you have additional questions, contact me at extension 9999.
NPV is an approach used in capital budgeting where the present value of cash inflow is subtracted from the present value of cash outflows. If the NPV of a prospective project is positive, then it should be accepted. However, if it is negative, then the project probably should be rejected because cash flows are negative.
The changing value of money over time is easily seen in the classic bank savings account.
If someone deposits $100 in a bank…
The company selected is Dar Almanthour for Fragrance. The company was established in the year 2000 by the owner, Mr. Therar AlTararwa. The key products retailed by the company comprise of Bakhour, perfumes, scents, perfume oil and designed boxes for formal events. It started off with his friend at work wanting to sell his own made up fragrance and offered Mr. Therar AlTararwa to sell these fragrances to his family and when he did Mr. Al Tararwa saw an opportunity that selling these fragrances made money and so he wanted to get in the game he bought dozens of fragrances from his friend and made a guy sell them and he had his percentage of the sales. So then and there, Mr. Al Tararwa saw an opportunity and offered his friend money to sell him the mixture ingredients of the fragrance so he can open up a fragrance…
Indicate the type of debt Disney offers to the public for sale and discuss the various approaches Disney incorporated to ensure successful marketability of these securities
The type of debt that Disney offers to the public for sale include the company's debt securities, in one or more sequences, which might be senior debt securities or subordinated debt securities. In each of the aforementioned debt securities, it can consist of notes or other unsecured proofs of indebtedness. Another kind of debt offered to the public is the shares of the company's preferred stock. This stock might be issued to the public in the form of depositary proceeds, signifying a portion of a share of preferred stock. There is also the offer of the shares of Disney's common stock. There are also the offerings of warrants to buy any of the other securities that may be sold under the company's…
Disney Company. (2007). Prospectus Supplement.
Hoovers Inc. "The Walt Disney Company." Retrieved 27 November 2015 from: http://premium.hoovers.com/subscribe/co/overview.xhtml?ID=ffffrrjfysytjjfykj
Walt Disney Company. (2010). Form 10 Q. Retrieved 27 November 2015 from:https://thewaltdisneycompany.com/sites/default/files/reports/q1-fy10-form-10q.pdf
Beacon Lakes Case Analysis
Armando Codina is the chairman and CEO of Armando Codina Group of Company, which is one of the most active developers in Florida. However, Armando Codina is facing a challenging decision whether to abandon the Beacon Lakes development project worth $220 million or go ahead with the project. However, Codina has already spent $2 million to obtain the necessary approval to develop the 6.6 million square foot warehouse project Despite the approval, Codina is facing various obstacles making him considering whether to go ahead with the project or abandon the project. Codina feels that an unsuccessful project such as the Beacon project can affect his untainted career. Among the problems facing Codina is the uncertainty regarding the getting an approval for the project and expansion to the UDB (Urban Development Boundary) towards the west that is currently zoned to prohibit further development. (Segel, Barlick, & Gonzalec,…
Segel, A.I. Barlick, R. & Gonzalec, J. (2008). Beacon Lakes. Harvard Business Review.
Cost of Land acre
Cost Benefit Analyses of a Computer Purchase
In today's commercial environment, it is necessary that small as well as large businesses are able to remain competitive. For every investment there will be an opportunity cost, so it is essential that potential investment are assessed to help with the maximization of value creation. One approach that is frequently used is the cost benefit approach. he cost benefit model measures the costs and the benefits, with the underlying principle that an investment or project should only proceed if the benefits are greater than the costs which will be incurred. If a small business is considering investing in a computer, a cost benefit analysis may help with the assessment to determine if the investment is likely to be beneficial. his will start with the assessment of the costs that will be incurred, and the potential benefits. In this case it is…
This shows that there is still a positive outcome; the benefits are greater than the costs. However, the benefits are not as great as the first calculation due to the time cost of money. It is also important to remember that this net present value is speculative as it is making the assumption of a 5% inflation rate or cost of capital. This can change, and as such there is also the ability to apply a higher level to ensure that there would remain a positive value.
Overall, it would appear that, as long as the increased profit projections are correct, that this would be a wise investment and produce benefits that are far greater than the costs.
The type of business may be changed to suit the students needs www.dell.com, correct on the 12th Jan 2015
eturn on Investment Health Management
Health Management and Services: eturn on Investment Strategy,
Solutions and EM as an Incentive for Increased OI
As the medical field continues to grow and therefore continues to become more and more complex and complicated -- especially in viewing the integration of health services and cost analysis -- one can understand the need for critical improvements in the area of health management and services in order to ensure that companies receive the full benefit of the health management solutions which they employ. Healthcare organizations and the physicians they support are vital to the well-being of the human race, yet, when it comes to the balance sheet, many of these entities are facing real emergencies of their own, as costs for medicine, equipment, and indigent care are increasing -- all while reimbursements are going down (Mannino, 2009, p.2).
With increasing costs and diminishing profits, health systems…
Bigelow, J., Bower, A., Giorsi, F., Hillestad, R., Meili, R., Scoville, R. And Taylor, R.
(2005). Can electronic medical record systems transform health care? Potential health benefits, savings and costs. Health Affairs. 24(5): 1103-1117. Web. Retrieved from http://content.healthaffairs.org/content/24/5/1103.full.pdf+html . [Accessed on 7 February 2012].
Davies, N. (2006). Making IT happen: strategies for implementing the EMR-EHR.
Healthcare Information and Management Systems Society. Web. Retrieved from: http://www.himss.org/content/files/davies/Davies_WP_Implementation.pdf . [Accessed on 7 February 2012].
This is significant because it shows how some critics of contrarian investing will often point to the various instances of speculation and assume that it is contrarian investing. In some cases the psychology of consumers can become so extreme, that the definition of what is speculative expands greatly. As a result, using contrarian investing in conjunction with other indicators / tools can help prudent investors and traders, be able to identify when the market condition are becoming more extreme.
Contrarian Indicators and Tools
When using the different contrarian indicators / tools in conjunction with one another, you can begin to see how this strategy can be used, to effectively determine if the market conditions are overbought or oversold. There are number of different tools that can be utilized to indentify major changes that are occurring in the trend of a stock or the market averages. These would include: headlines…
"3M Historical Prices," Yahoo Finance, http://finance.yahoo.com /q/hp?s=MMM&a=00&b=2&c=1970&d=04&e=25&f=2010&g=v&z=66&y=0
"3M Reports First Quarter Results," 3M, http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjA2NjEwOHxDaGlsZElEPTMzNDE0MXxUeXBlPTI=&t=1
"3M Reports Fourth Quarter and Full Year 2008 Results," 3M, http://library.corporate-ir.net/library/80/805/80574/items/322063/054431D4-6347-45F1-AF4D-85CCA5F89C52_mmmQ4release.pdf
"American Depository Receipt." Investopedia, http://www.investopedia.com/terms/a/adr.asp
This also implies inadequacies in fiscal sustainability, which influences investments in private sectors.
The second channel happens through the level, composition and quality involved within the public investment, which shows the level at which the public investment replaces the private investments (Schmidt- Hebbel, Serven, & Solimano, 1996).
The final channel regards the level of taxation on the corporate earnings and the rules applicable in depreciations.
There have been arguments that fiscal policy and public expenditure reduces the private investments in two different manners. These include increasing the interest rates or lowering the private funds involved in financing the investments.
According to the neoclassical theory, the interest rate is also an imperative variable in finding the level of investment. Consequently, it results into a negative effect because it upsurges the interest payable in investments. Concurrently, McKinnon and Shaw, contends that this is likely to cause a positive relationship between the investment…
Shrestha, M.B. (2005), "ARDL Modelling Aproach to Cointegration Test," Proceedings of the 46th Annual Conference of New Zealand Association of Economists, Paper
No. 13, Wellington, July 2005.
Keynes, J.M. (1936). General Theory on Employment, Interest and Money., London,
Financial Analysis of Bestwish Limited
Bestwish Limited produces extensive range of quality products such as gift dressing, greetings cards, and plush merchandise of more than 50,000 stocks. The production of different categories of products involve between 2 and 15 processes. The company produces standardized products and custom designed products ordered from customers on contract basis. However, Bestwish Limited is facing challenges to control the costs because of varying production process, reliance on indirect costs and large number of stock keeping units.
Bestwish Limited has just closed the 2010 fiscal year account and the company is finalizing the 2011 budget. Bestwish intends to analyze the 2010 financial statement to present the accurate picture of the company financial performances.
Objective of this report is to analyze 2010 financial statements to assess the viability of Bestwish Limited.
Audit Committee of the Board
Subject: Financial statement Analysis
Drury, C. (2009). Management Accounting for Business, 4th Edition (Cengage Learning EMEA, ) ISBN 1408017717.
Harris, R. And Sollis, R. (2003).Applied Time Series Modelling and Forecasting (John Wiley and Sons) ISBN 0470844434
Glynn, J. Perrin, J. Murphy, M. And Abraham, A. (2003).Accounting for Managers, 3rd Edition.(Thomson Learning) ISBN 186152904X
The Times 100, (2012). Financial statements and reporting A Cadbury Schweppes case study. The Times 100 Business Case Studies.
Analysis of each company
Apple is a designer and marketer of consumer electronic devices and software. The company is also vertically integrated with respect to retailing, operating its own stores and functioning as one of the biggest online retailers in the world. Apple's primary products are the iPhone ($80.4 billion), iPad ($32.4 billion) and portable computers ($17.1 billion). Other billion-dollar products are desktop computers, iPod music players, iTunes, peripherals and software (Apple 2012 Annual Report). Apple's customers are primarily consumers who purchase through retail channels, either from Apple or authorized third party retailers. Customers also include small and medium-sized businesses, educational institutions and government. Geographically, Apple is geographically diversified. Leading regions are the Americas (36%), Europe (23.2%) and Asia-Pacific, ex-Japan (21.2%). Suppliers to Apple include manufacturers like Foxconn that assemble the products and the different component suppliers, of which they are dozens for any given device. Most suppliers…
Gustin, S. (2013). In major victory, Google dodges federal antitrust suit with FTC deal. Time Magazine. Retrieved March 15, 2013 from http://business.time.com/2013/01/02/google-set-to-dodge-federal-antitrust-lawsuit-with-ftc-deal-report/
Alexa.com. (2013). Top sites. Alexa.com. Retrieved March 15, 2013 from http://www.alexa.com/topsites
MSN Moneycentral: Apple. (2013). Retrieved March 15, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=AAPL&ocid=qbeb
MSN Moneycentral: Google. (2013). Retrieved March 15, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=GOOG&ocid=qbeb
Application of Cost Benefit Analysis
EU Proposed Project Overview
Positive Impact of the Project
Economic Net Present Value (ENPV)
Cost benefit analysis (CBA) is a systematic process of comparing and calculating the cost benefit of a project. Recent business uncertainties within business environment make increasing number of businesses to implement cost benefit analysis to make a sound investment decision. Cost-benefit analysis is also an explicit or implicit method to assess the benefits and costs of a project. Typically, an organization is likely to go ahead with a project if the Benefits (B) > Costs (C). Cost-benefit analysis is often used by private organizations or government to evaluate the desirability of a project. (Anthony, David, Aidan.). The CBA is used to analyze the expected benefits and costs. However, cost effectiveness analysis is closely related to cost benefit analysis. Although both concepts attempt to achieve the…
Anthony Boardman, David Greenberg, Aidan Vining. Cost-Benefit Analysis: Concepts and Practice, 4/E. 2010.
European Union. Guide to Cost-Benefit Analysis of Investment Project. Regional European Union. 1997, Retrieved March 25, 2013.from http://ec.europa.eu/regional_policy/sources/docgener/guides/cost/guide02_en.pdf
European Commission. EVA-TREN: Improved decision-aid methods and tools to support evaluation of investment for transport and energy networks in Europe, Deliverable 2, Brussels. 2007.
Levin, Henry and McEwen, Patrick. Cost-Effectiveness Analysis 2nd Edition Sage Publications 2001.
Decision Analysis System Modeling
"DATA DECISION ANALYSIS SYSTEM MODELING USING SPEADSHEETS"
"Data Decision Analysis System Modeling Using Spreadsheets."
Spreadsheet is one of the most popular software packages on the planet. Daily, million of business people, students and individuals use spreadsheet program to build models to assist in solving decision problems they face on their work activities. Thus, employers generally look for individuals having experience and skills with spreadsheets. Typically, spreadsheets assist in developing varieties of management techniques in modeling environment. More importantly, spreadsheets assist in developing models and make decision within a business environment.
Within the present contemporary business environment, many business managers face daunting tasks to make effective decisions. With the fast-paced and dynamic changes within a competitive business environment, business people are often faced with extremely complex business alternatives. Evaluation of the alternatives and choosing the best option from these alternatives has become a daunting task…
Evans, M.H. (2010). Course 3: Capital Budgeting Analysis. Continuing Professional Education
Lin, G.C.I. & Nagalingam, S.V. (2000). CIM justification and optimization. London: Taylor & Francis.
Ragsdale, C.T.(2010). Decision Analysis and Spreadsheet Modeling. A Practical Introduction to Management Science (4th edition). Cengage Learning.
financial analysis of Chevron from the perspective of a potential creditor. The issue surrounds primarily the creditworthiness of Chevron rather than the type of credit that would be issued. Specifically, the issue is whether "we" would lend Chevron 10% of its net assets. The net assets for Chevron are $209.474 billion, so the amount in question is $20.9 billion in new debt. The report will first analyze the financial statements of Chevron in general terms, focusing on trends and ratios, and drawing conclusions about the overall financial health of the company based on that analysis. The second part of the paper will outline some of the criteria that a lending institution would have for lending to a company, and then that criteria will be applied to Chevron specifically.
Chevron operates in the hydrocarbon industry, where it is one of the world's largest companies with sales of $241.9 billion and net…
2011 Chevron Annual Report. Retrieved February 25, 2013 from http://www.chevron.com/annualreport/2011/
Chevron. (2013). Corporate officers. Chevron.com. Retrieved April 20, 2013 from http://www.chevron.com/about/leadership/corporateofficers/
MSN Moneycentral. (2013) Chevron. Retrieved February 25, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=CVX&ocid=qbes
Moffat, M. (2013). What is the price elasticity of demand for gasoline. About.com. Retrieved February 25, 2013 from http://economics.about.com/od/priceelasticityofdemand/a/gasoline_elast.htm
Technical Analysis in the Implication of Efficient Market Hypothesis on Silver Market
The thesis is for the study of simple commonly used technical trading rules, which are applied on silver market. It covers years 1989 to 2005. A famous study carried out by Lakonishok, Lebaon and in year, 1992 has clearly shown that technical analysis can lead to abnormal prices when compared with buy-and-hold strategy. Other studies have been carried out and found out that technical trading rules cannot over-rule passive investment management strategy. The study uses Brock et al.'s methodology. Several trading rules are discussed (Dawson & Steeley 2003).
In financial theory, efficiency of financial silver market is highly disputed. This has led to many attempts to explain efficiency of silver markets. Eugene.F. Fama formulated the most famous definition in 1970 referred to as the, Efficient Silver market Hypothesis (EHM). The basis of the hypothesis is that…
Alexander, S.S. (1964) 'Price Movements in Speculative Markets: Trends or Random Walks'. Industrial management Review 5 (2), 25-46
Brock, W., Lakonishok, J., & LeBaron, B. (1992) 'Simple Technical Trading Rules and the Stochastic Properties of Stock Returns'. Journal of finance 4, (5), 1731-1764
Chang, P.H., & Osler, C.L. (1999) 'Methodical Madness: Technical Analysis and the Irrationality of Exchange Rate Forecasts'. Economic Journal 109 (458), 636-661
Dawson, E.R., & Steeley, J. (2003) 'On the Existence of Visual Technical Patterns in the Uk Stock Market'. Journal of Business Finance and Accounting 30 (1-2), 263-293
Dimensional Fund Advisors Analysis
Philosophy of DFA
Dimensional Fund Advisors (DFA) was an investment firm based in Santa Monica, California that was dedicated to the principle that the stock market was "efficient," therefore implying that while over any given period some investors by luck would outperform the market and others would underperform, no one had the ability to consistently pick stocks that would beat the market (Cohen 2002, pp.1). In addition to this initial philosophy, DFA founders believed strongly that the value of sound academic research and the ability of skilled traders to contribute to a fund's profits even when the investment was inherently passive would not only prove to be a successful business model amongst other firms, but would allow DFA to foster a unique quality of investing that singled it out from competitors.
DFA investments counted on market behavior involving the purchasing and holding of small stocks, accounting…
Akasie, J. 2011. Who provides the lowest transaction costs? Institutional Investor.
October 2011 Ed.: pp. C3. Web. Retrieved from: ProQuest Database.
Cohen, R. 2002. Dimensional fund advisors, 2002. Harvard Business Review. 9-203-
026. pp. 1-21. Print.
Expenditure Revenue Analysis
NY PA Expenditure
hile governmental entities must strive to serve the public good to the best of their abilities, public administrators must navigate an environment of extreme complexity in which the allocated capital funds are put to their best use. The administration of the capital budgeting process can be extremely time consuming, confusing, and expensive. This research will discuss capital budgeting policies and procedures in the states of New York as well as Pennsylvania for the fiscal years of 2009 and 2010. These governmental entities generate funds through taxes, public debt, inter-governmental transfers and various businesses owned by the government and capital projects represent a significant portion of the state's responsibilities. ith the use of a prepared financial analysis, this paper will describe current practices and examine how debt ratio affects borrowing and investment opportunities for the two governmental entities.
Much of public spending on capital projects…
Aschauer, D. (1989). Does public capital crowd out private capital? Journal of Monetary Economics, 171-188.
Borio, C., & Zhu, H. (2011). Capital regulation, risk-taking and monetary policy: A missing link in the transmission mechanism? Journal of Financial Stability, In Press.
Bronzini, R. (2009). Determinants of long-run regional productivity with geographical spillovers: The role of R&D, human capital and public infrastructure. Region Science and Urban Economics, 187-199.
Butler, A. (2009). Corruption, Political Connections, and Municipal Finance. The Review of Financial Studies, 2873-2905.
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…
No author. (2012). How to value stocks. Motley Fool. Retrieved November 11, 2012 from http://www.fool.com/investing/beginning/how-to-value-stocks.aspx
No author. (2012). Stock-picking strategies: Introduction. Investopedia. Retrieved November 11, 2012 from http://www.investopedia.com/university/stockpicking/#axzz2Btw9KNL9
Skariachan, D. (2012). Permanent fix of U.S. housing to take time: Home Depot CEO. Reuters. Retrieved November 11, 2012 from http://www.reuters.com/article/2012/10/11/us-homedepot-ceo-plans-idUSBRE89A1M420121011
Yahoo! Finance. (2012). Home improvement stores. Retrieved November 11, 2012 from http://biz.yahoo.com/ic/736.html
ental Investment May Seem Safer than it eally Is" offers counsel regarding the pros and cons of venturing into rental property investments (Bernard, 2013). The article explains the appeals of using rental investments to create a new profit stream -- low interest rates, low home prices, potential for supplemental income and the potential for rents to rise in the future. With a turbulent stock market and fickle returns on mutual funds and other investments, many people have come to view owning and operating rental properties as a safer alternative.
However, the piece also warns about the other considerations that many fail to take into account -- tenant issues, unforeseen expenses and competition for the best deals. Many new investors may underestimate the amount of work required to successfully manage and maintain a property. As the article points out, screening tenants, collecting rents, or evicting when a tenant loses a job…
Bernard, T. (2013, March 30). Rental Investment May Seem Safer That It Really Is. New York Times. pp. B1-B5.
Birger, J., Caplin, J., & Feldman, A. (2004). Getting Real About Real Estate Investing. Money, 33(12), 122-128.
Neuman, W. (2005, April 17). Seeking Nest Eggs, Investors Buy Nests.New York Times. pp. 1-5.
The Big Long. (2012). Economist, 405(8813), 77-78.
Fidelity Investments- Human esources
Fidelity Investments- T&D Program
H Transformation strategy- Fidelity Investments
Key Issues identified in interview
Business Case: Context of program application
Table 1- Implementation and Accountability of L&D program
Figure 2 Business Case ationale for T&D program at Fidelity
Figure 3- H edesign Elements
This H Learning and Development (L&D) program proposed for Fidelity Investments is aimed at addressing the key challenges faced by the firms in its human resource management. There are several instances when H function has contributed to the bottom line of firm as well as pursued an egalitarian culture of society. Present program is spanned over 5 weeks and will be implemented in Americas & Canada region initially. With successful implementation of this L&D program in one region (Americas & Canada), further implementation will be recommended in…
Ahadi, H.R. (2004). An examination of the role of organizational enablers in business process reengineering and the impact of information technology. Information Resources Management Journal (IRMJ), 17(4), 1-19.
Bontis, N., & Fitz-Enz, J. (2002). Intellectual capital ROI: a causal map of human capital antecedents and consequents. Journal of Intellectual Capital, 3(3), 223-247.
Deloitte. (2013). 2013 Financial Services Industry Outlook. Retrieved from Deloitte: [ http://public.deloitte.com/media/0146/us_fsi_OutlooksConsolidatedDocument_021813.pdf ]
Fidelity Investments. (N.d.). Our Business. Retrieved from Fidelity Investments: [http://www.fidelity.com/inside-fidelity/about-fidelity/our-businesses]
alternative investment vehicles have been using by the investors to reduce the risk and maximize the profit. In this paper, we will discuss alternative investments opportunities and reducing the risk of portfolio by using the stock index future. Buying or selling the stocks is highly risky because of weak economic conditions. Investors should include various types of assets in the portfolio so that portfolio will not suffer the impact of a decline of any one security. For example; if an investor uses stocks and bonds in his/her portfolio, if stock price decline due to market fall then, the bonds would get higher return and it will eliminate the risk of decline. In the portfolio management it says that "not putting all eggs in one basket," it means investor should not invest in only one asset; they should construct the portfolio containing various types of assets. Thus, the portfolio must be…
Sushant, Portfolio management, "Tips for diversifying your portfolio," retrieved through; http://www.portfoliomanagement.in/tips-for-diversifying-your-portfolio.html
Hedged your portfolio using stock index future (2002), published by Chicago Mercantile Exchange (pp-1, pp23).
"The Case for Hedge funds," Tremont Advisors Inc. & Tass Research, 3rd edition, Feb 2003 (pp 9)
Absolute Returns: The Risks and Opportunities of Hedge Fund Investing," byAlexander M. Ineichen, published by John Wiley & Sons, 2002,-Page 36.
Brand equity of trusted advisor for CM application delivery.
Source: Framework based on the concepts presented in (Yoo, Donthu, Lee, 2000)
Aaker, D.A. (2012). Win the brand relevance battle and then build competitor barriers. California Management eview, 54(2), 43-57.
Aremu, M.A., & Bamiduro, J.A. (2012). Marketing mix practice as a determinant of entrepreneurial business performance. International Journal of Business and Management, 7(1), 205-213.
Friedman, H.H., & Friedman, L.W. (1987). Marketing methods for software. The Journal of Systems and Software, 7(3), 207-207.
Ghose, K. (2009). Internal brand equity defines customer experience. Direct Marketing, 3(3), 177-185. D
Katzmarzik, a. (2011). Product differentiation for software-as-a-service providers. Business & Information Systems Engineering, 3(1), 1-31.
Joseph, J.V. (2009). econciling marketing vs. branding return on investment. ochester, ochester, NY.
Aaker, D.A. (2012). Win the brand relevance battle and then build competitor barriers. California Management Review, 54(2), 43-57.
Aremu, M.A., & Bamiduro, J.A. (2012). Marketing mix practice as a determinant of entrepreneurial business performance. International Journal of Business and Management, 7(1), 205-213.
Friedman, H.H., & Friedman, L.W. (1987). Marketing methods for software. The Journal of Systems and Software, 7(3), 207-207.
Ghose, K. (2009). Internal brand equity defines customer experience. Direct Marketing, 3(3), 177-185. D
The above table indicates that the sales volume which is required in order to achieve a $100 M. profit at a price of $245 with an &D investment of 30% is 1,676,190 units. This is calculated by dividing the total revenue accrued by the unit price.
The product X6 has been in the market for a total of 2 years. Unlike the product x5, the customers take great consideration of the product quality while making the purchase decision. The provision of a better quality can be achieved by increasing the &D investment for the product. There is also a need for a price increase in order to take advantage of the investment. The expected target profits is considerably higher than the one for X6 due to the fact that the product would soon reach its peak moments and then roll into maturity phase.
The X6 product will attract a…
Cafferky, M and Wentworth, J (2010.Break Even Analysis. Business Expert Press, 2010
Horngren, CT., Datar, SM., Foster, GM (2006).Cost Accounting: A Managerial Emphasis, Twelfth Edition, Pearson Education, Inc.
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
THE SALES PRICE AND kg SALES GRADUALLY INCREASE AT 5%
THE SALES PRICE PER kg INCREASE AT 10% UT THE UNIT SALES REMAIN AT 5%.
Investment Value Using At Discounted Rate 5%
est 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…
Saltelli, A., Ratto, M., Andres, T., Campolongo, F., Cariboni, J., Gatelli, D. Saisana, M., and Tarantola, S., 2008, Global Sensitivity Analysis.The Primer, John Wiley & Sons.
Sensitivity analysis. (2014). Retrieved Janaury30, 2014, from http://en.wikipedia.org/wiki/Sensitivity_analysis
€ Exchange Rate $
Featuring an Analysis of a Corporation
Starbucks Company Analysis
In the year 1971, Starbucks opened its first store in Seattle's Pike Place Market. At the time, it engaged in selling ground beans over a small counter. In addition, the location was an open-air market, and its beginning, was more or less similar to a hobby. The friends, who started the now renowned global company, were not profit oriented. However, the joining of Howard Schultz is the primary cause of its current growth. He first expanded to Italy, and in the year 1990, the firm began expanding in the United States. The company expanded its headquarters in Seattle, built other plants, including stores in renowned cities in nationwide (Green).
Its growth was partly because of the contracts the director negotiated with the United Airlines, Nordstrom, Barnes and Noble, and the Sheraton Hotel. In addition, the director made efforts to expand beyond…
Baker, Rosie. "Starbucks' reputation grinds to a halt over tax decision."Marketing week,
35.52(2012): 5. Print.
Bose, Nandita,"Starbucks signs pact to enter India."Reuters.com. 13 January 2011.
Web. 16 March 2014. Retrieved from Colchester, Max, "Starbucks Resumes Tax Payments in Britain."Wsj.com.
Models for Analysis
There are a number of different models by which the company's strategic options can be analyzed. Two of the best are the SOT Matrix and the BCG Matrix. The SOT matrix focuses on the internal strengths and weaknesses of the organization, and its external opportunities and threats. By analyzing these variables, the best strategy for the company can be revealed. Strengths can be used to defend against threats or to take advantage of opportunities. eaknesses can prohibit taking advantage of opportunities, and they can open the company up to competitive threat. So the company will need to understand all of these dynamics in order to determine if it should shore up weaknesses or leverage strengths as the main part of its strategy.
The BCG Matrix holds that there are basically four categories for a company's product/service offerings. These are either cash cows, stars, dogs or question…
2012 Tesco Annual Report. Retrieved February 27, 2013 fromhttp://www.tescoplc.com/files/reports/ar2012/files/pdf/tesco_annual_report_2012.pdf
Stern, C. & Stak, G. (2013). The BCG Matrix. Value-Based Management.net. Retrieved February 27, 2013 from http://www.valuebasedmanagement.net/methods_bcgmatrix.html
MindTools.com. (2013). SWOT Analysis. MindTools.com. Retrieved February 27, 2013 from http://www.mindtools.com/pages/article/newTMC_05.htm