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Working capital provides an important indication of a firm's short-term financial health. Calculated as the difference between current assets and current liabilities, working capital tells whether an organization is able to cover its short-term liabilities (Sagner, 2010). If current liabilities exceed current assets, then it means a firm may have difficulty meeting its financial obligations in the next 12 months. Firms avoid such a scenario by effectively managing cash flow, cash balances, inventory, accounts payable, and accounts receivable. In this paper, the working capital structures of two companies are compared: Costco Wholesale Corporation (Costco) and Microsoft Corporation (Microsoft). The former is a retailer while the latter is a technology firm.
Working capital has three major components: accounts receivable, inventory, and accounts payable (Sagner, 2010). Accounts receivable are part of the company's current assets. They basically denote cash the company expects to receive in the short-term as a result of products…
The company purchases smaller brands and then turns them into Starbucks at a fraction of opening up a location from scratch.
My personal favorite tool for analysis is the regression test. This allows the research to see in-depth and thorough relationships between multiple variables, as well as see how relationships would change if circumstances evolved. Regression also allows for future forecasting, which can be a very valuable tool for financial analysis. On the other hand, my least favorite analysis tool is the standard ROI analysis tool. I find this analysis needs a ton of information and a large span of data in order to be useful in financial analysis. Moreover, this does not allow for very good forecasting measures, as regression analysis does.
Venture capital is essentially a type of financial capital that is given to higher risk start up businesses. It is a type of…
George has the sort of basic working capital practises one might expect from a small business. He keeps his inventory levels low during the slower months, but then ramps up inventory a little bit in advance of the busier months. George does seem to understand that the business is a little bit cyclical, and that he does not need to have massive inventories of any given item. So his working capital practices are designed to be able to pay the bank back month to month, more than anything else. These are sound and reasonable practices.
One of the biggest things is that the company basically goes month to month with its working capital. There is not a lot of flexibility with respect to the working capital needs, even though the cash flows appear to fluctuate for the business. The reality is that the business has done well, and…
Management System -- Working Capital Management
Working Capital: Theoretical Construct & Contribution to the Effectiveness to Advance Financial Management Practice
This work examines working capital and its theoretical constructs and contributes to the Effectiveness to Advancce Financial Management Practice. The term 'working capital' is reported in the work of Seidman (2004) to have several meanings "in business and economic development finance. In accounting and financial statement analysis, working capital is defined as the firm's short-term or current assets and current liabilities. Net working capital represents the excess of current assets over current liabilities and is an indicator of the firm's ability to meet its short-term financial obligations." (Seidman, 2004)
The objective of this study is to conduct a critical review of the relevant literature in terms of its theoretical construct and its contribution and effectiveness in advancing financial management practice. The term 'working capital' is stated in the work…
Fisher, Lawrence M. (1998) Inside Dell Computer Corporation: Managing Working Capital. 21 Dec 1998.
Seidman, (2004) Working Capital Finance. The Basics of Business Finance.
U.S. Department of Liberty Working Capital Fund: Guidebook for Creation and Managing a Working Capital Fund Business. (2003) February.
Padachi, Less even )2006) Trends in Working Capital Management and its Impact on Firms' Performance: An Analysis of Mauritian Small Manufacturing Firms International Review of Business Research Papers International Review of Business Research PapersVo.2 No. 2. October 2006, Pp. 45 -58
orking capital is the current assets less the current liabilities (Kennon, 2012). The working capital is an important metric because it can have a significant effect on the company's short- and long-term decision making. The working capital is affected by the cash position, the inventories and the receivables, along with the short-term liabilities. The current ratio is simply the working capital in ratio format, the current assets divided by the current liabilities (Loth, 2012). If a company has insufficient working capital, this can represent a constraint on operations. The company may need to plow all capital it earns into servicing the liabilities, leaving little for capital projects. Additionally, working capital and current ratio are measures that creditors use to evaluate how much credit to give a company. Often, these measures are also used in the company's restrictive covenants in loans as well.
Aside from the current ratio, there…
Kennon, J. (2012). Working capital. About.com. Retrieved February 28, 2012 from http://beginnersinvest.about.com/od/analyzingabalancesheet/a/working-capital.htm
Loth, R. (2012). Liquidity measurement ratios. Investopedia. Retrieved February 28, 2012 from http://www.investopedia.com/university/ratios/liquidity-measurement/ratio1.asp#axzz1ngRuHybg
Net Working Capital May Be Defined as:
A firm's current assets minus current liabilities.
The total amount of liquid resources available to a business. ("Net working capital" 2005).
The above stated definitions are, in fact, two sides of the same coin since "the total amount of liquid resources available to a business" is actually its "current assets minus its current liabilities."
Net Working Capital is important for businesses because it represents the amount of current assets a firm would be left with if it was liquidated to pay the company's short-term debt. The amount of net working capital that a business decides to have available is a trade-off between profitability and risk. In other words, a large amount of net working capital means reduced profitability for a firm but a precarious working capital position puts it at greater risk. This is because holding of current assets is not very…
Danh, V.T. (1999). "Working Capital Policy: Chapter 10." Financial Management. Retrieved on October 14, 2005 from http://www.ctu.edu.vn/coursewares/kinhte/qttc/abstract/ch10.htm
"Net working capital" (2005). Investor Dictionary.com. Retrieved on October 14, 2005 from http://www.investordictionary.com/definition/net+working+capital.aspx
Current Assets are the cash and other assets such as accounts receivable that are capable of being converted into cash within a short time period, usually one year or less; while current liabilities are the business obligations such as debts, taxes, interest payments that are due within one year.
Lawrence Sports Working Capital Management
Lawrence Sports is a manufacturer of sporting goods facing a fiscal dilemma in the early spring of 2011. Between the months of March and April, the company would experience an impasse within the context of its Current Cash Conversion Cycle. Here, an improved strategy for working capital management is called for.
First, with respect to the cash conversion cycle, Lawrence Sports largely draws is working capital from two sources. The first of these is its partnership with Mayo, the largest retailer in the world and buyer of 95% of all goods from Lawrence. The second of these is the Central Bank, which maintains the company's account balance at $50,000 through a system of automatic loans that are invoked any time the company's cash availability slips beneath this margin. Historically, Lawrence has employed an Aggressive approach to its capital management by relying on a wealth of…
To counter this dependence, Lawrence Sports should create a three to six-month grace period before the price changes go into effect and increase marketing efforts to other retailers during this period. This will give the Lawrence Sports advance notice of any problems that might arise in implementing this plan as well as reducing its exposure to the Mayo Stores retail outlets, allowing for greater latitude in capital management.
In order to determine whether the new working capital management plan is working for the company, certain performance measures will be put into place. A dedicated individual in the accounts receivable department can track the changes in revenue that are created by the plan will be able to determine how the incoming cash flow compares to that which existed prior to the implementation of the working capital management plan, forming an effective means of measuring the success of this plan (Gass 2005).…
Bush, S. (2010). "Working capital loans and Plan-B contingencies." Accessed 21 October 2010. http://ezinearticles.com/?Working-Capital-Loans-and-Plan-B-Contingency-Financing&id=1373160
Emery, D., Finnerty, J., & Stowe, J. (2007). Corporate Financial Management (3rd ed.). New Jersey: Pearson-Prentice Hall.
Gass, D. (2005). "How to improve working capital management." Accessed 21 October 2010. http://www.articlesbase.com/management-articles/how-to-improve-working-capital-management-50163.htmlhttp://www.articlesbase.com/management-articles/how-to-improve-working-capital-management-50163.html
University of Phoenix. (2009). Scenario: Lawrence Sports Simulation. Accessed 21 October 2010. https://ecampus.phoenix.edu/classroom/ic/classroom.aspx
chief financial officer must pay close attention to receivables is no surprise to anyone. eceivables are an important potential source of money that can easily be converted into profit, just as easy as it can be lost forever. Management or recovery costs are also to be considered, since they can have a significant impact on the cash-flow creation process.
Beside well-known financial aspects, there are also other effects inefficient accounts payable/receivable management policies may produce on a company: Excessive receivables can both highlight and mask an insidious series of conditions that affect the health and growth of the business. (Sklar, 1998)
In every company there is some sort of conflict between the credit and the sales department. The credit department is responsible for collecting receivables in a swift manner and for not allowing sales that would later cause the company to have collection difficulties. On the other hand, the sales…
1. Leonard Sklar, "Why your accounts receivable may be too high and what you can do about it," Business Credit, New York, Oct 1998,Vol.100, Iss. 9; pg. 20
2. Leonard Sklar, "Use role playing to advance collector training," Business Credit. New York, Oct 1993,Vol.95, Iss. 9; pg. 35
3 Robin Schwill, Payback Time, Canadian Business, 00083100, 9/3/2001, Vol. 74, Issue 16
If Starbucks has an increase of 20% in its revenue next year, this will affect a number of other elements of the financial statements. Often in budgeting, other line items are assumed to increase roughly in line with revenues. Thus, the company will see revenues of $11,558.4 million next year. Operating expenses will increase by the same percentage, so that the operating profit will also be increased by 20% to $2,073.6 million. However, the assumptions need to build in how much of an increase is expected in same-store sales, because that increase will not translate to certain cost increases. For example, a 20% increase in revenue with 10% coming from an increase in same store sales means that some administration expenses might only have increased 10% in the year. Thus, increases in efficiency will need to be taken into consideration when setting a budget based on an increase…
The absolute value represented by the working capital is largely irrelevant for comparison between two different firms because of the different sizes of the firms. Current ratio is the better measure to compare between two different firms. Wal-Mart's current ratios for 004-006 were 1.70, 1.69 and 1.6 respectively. Target's current ratio over these three years was inconsistent, and Wal-Mart's declined. Target's was generally the weaker of the two.
Wal-Mart's asset turnover for 004, 005 and 006 respectively was .58, .49 and .39 based on the following calculations:
004: 56,39 / 99,15.5 = .58
005: 81,488 / 11,979.5 = .49
006: 308,945 / 19,170.5 = .39
Target's figures showed improvement over the three years in this area, but the figures are much lower than those of Wal-Mart. Thus, even though Wal-Mart's numbers are declining, they are stronger than Target's.
I would not invest in Target. The evidence presented here indicates that…
2006: 308,945 / 129,170.5 = 2.39
Target's figures showed improvement over the three years in this area, but the figures are much lower than those of Wal-Mart. Thus, even though Wal-Mart's numbers are declining, they are stronger than Target's.
I would not invest in Target. The evidence presented here indicates that Target is not as good an investment as its close competitor Wal-Mart. Wal-Mart's working capital indicates that the company has a much larger size than does Target. While Target's figures for current ratio and asset turnover are perfectly healthy numbers, they are inferior to those of Wal-Mart. It could be argued that Target has the better trend with respect to asset turnover, however, improvements should be expected when the firm underperforms. Wal-Mart's track record of superior performance is only slightly diminished by the shrinking spread between its asset turnover and that of Target. Overall, Wal-Mart's financials are almost entirely superior to those of Target. While Target would not make a bad investment, Wal-Mart would be a better one.
But even with no cost savings whatsoever, this project has a positive NPV.
e can see, therefore, that the greatest area of sensitivity is with the terminal value. The terminal value at present is worth $143 million of the NPV. If we break down the variables that go into the terminal value, however, we notice that the cost savings are critical. If SGA expense is not reduced, then the terminal value is reduced to $67 million and the total NPV for the entire project ends up being $98 million. This figure is less sensitive to the change in cost of goods sold.
e should also consider testing combined sensitivity of our shakiest projections. Sales may not live up to expectations and cost savings might not occur. If we assume no net income and no additional cost savings, the project will have an NPV. If we assume that our expectations for…
No author. (2009). Free Cash Flow. Investopedia. Retrieved May 13, 2009 from http://www.investopedia.com/terms/f/freecashflow.asp
Ely, Bert. (2008). Savings and Loan Crisis. Concise Encyclopedia of Economics. Retrieved May 13, 2009 from http://www.econlib.org/library/Enc/SavingsandLoanCrisis.html
Damodaran, Aswath. (no date). Closure in Valuation: Estimating Terminal Value. Stern School of Business. Retrieved May 13, 2009 from http://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/dcfstabl.pdf
Breierova, Lucia & Choudhari, Mark. (1996). An Introduction to Sensitivity Analysis. MIT. Retrieved May 13, 2009 from http://sysdyn.clexchange.org/sdep/Roadmaps/RM8/D-4526-2.pdf
The aim of hospitals is to measure and improve the quality of health care service for the patients. Patient satisfaction is the foremost concern. However, to run a hospital, there are a lot of other factors are also involved; e.g. managing cost, budgeting, optimizing operations and increase patient satisfaction level. In order to achieve the desired level of performance, the hospital needs to be up-to-date with the latest technology.
In this era of technological advancements, every company has to maintain all their records on computer because it saves time and needs less effort than manual work. Our hospital has digitalized their data but every department has its own data base. In order to optimize the operations, hospital requires having a central data base system.
As Schuhmann (2009) stated in his article that the recent economic crisis has made it difficult for hospitals finance their capital expenditures. The capital…
Bailey, C. (2012). The Cost Reduction Imperative. Becker's Hospital Review.
Cleverly, W.O., Cleverly, J.O., & Song, P.H. (2010). Essentials of Health Care Finance. Jones & Bartlett Learning.
Devraj, S., & Kohli, R. (2000). Information Technology Payoff in the Heath-care Industry: A Longitudinal Study. Journal of Management Information Systems, 41-67.
Finkler, S.A., Kovner, C.T., & Jones, C.B. (2007). Financial Management for Nurse Managers and Executives W.B. Saunders Company.
South Coast Railway is evaluating a proposal for a five-year franchise from the UK government. This proposal would be to operate a high speed commuter rail service from 2018 to 2022. The following report will examine the financials relating to this decision, and the decision-making heuristic.
The decision at hand is essentially a capital budgeting decision. There are a few different ways to evaluate a capital budgeting decision. The most common is the net present value (NPV) technique. This relies on discounted future cash flows to make the decision. The principle behind the use of discounted cash flows is that money earned today can be reinvested, and because of that, a pound earned in the future is inherently worth less than a pound earned today. The value of future money decreases over time. The NPV method discounts those future cash flows back to present value, and compares then…
a) The free cash flow model implies that the value of the firm is the present value of the expected future free cash flows. Under this model, capital structure can affect firm value. The free cash flow model is as follows (Cherewyk, 2015):
FCF = EBIT (1-t) + depreciation -- CAPEX -- ? working capital -- ? other assets
In this portion of the model, the free cash flow is not affected by the capital structure. Interest on debt is not included in the free cash flow, nor is the tax effect of this interest. However, when the free cash flow is discounted, it is discounted using the weighted-average cost of capital, and that is affected by the level of debt and the cost of debt. By changing the WACC, the firm changes the rate at which the free cash flow is discounted, thereby affecting firm value. Generally,…
Cherewyk, P. (2015). Valuing firms using present value of free cash flows. Investopedia. Retrieved August 31, 2015 from http://www.investopedia.com/articles/fundamental-analysis/11/present-value-free-cash-flow.asp
Soliciting funding for a company investment is normally an uphill task for the company. The ideal company must convince the investors that it can repay the money. For this reason, there is a necessity to determine the company's capital structure. Capital structure guides the company agitation on funding. In fact, through the capital structure, the company achieves debt capital, equity capital, and other hybrid securities like vendor financing. The commencing report will examine Microsoft Capital structure. The report will prove that Microsoft can achieve a coherent financial liberation if it pursues capital-funding mechanisms that are investment conscious.
Microsoft Capital Structure
Microsoft capital structure comprises of residual distribution model in practice. Berg Aspelund and Sorheim (2008, pp. 33) joins this analysis by arguing the residual distribution facilitates determination of estimates returns and investment. Microsoft assesses its opportunities assessed on the average for the next five years. In addition, the…
Berg, M.S., Aspelund, A., & Sorheim, R. (2008). The hybrid structures of international new ventures: A social capital approach and research agenda. The International Journal of Entrepreneurship and Innovation, 9(1), 33-42.
Bertomeu, J., Beyer, A., & Dye, R.A. (2011). Capital Structure Cost of Capital, and Voluntary Disclosures. The Accounting Review, 86(3), 857-886.
Porteous, B.T., & Tapadar, P. (2008). The Impact of Capital Structure on Economic Capital and Risk Adjusted Performance. ASTIN Bulletin, 38(1), 341-380.
Wang, S. (2010). An Application of Fuzzy Set Theory to the Weighted Average Cost of Capital and Capital Structure Decision. Technology and Investment, 01(04), 248-256.
In a firm, most of the capital source comes from accumulation. This concept of capital accumulation defines how wealth is generated for the company by adding up amount in cash or other forms of asset into the capital account. Capital accumulation is solely for increasing the profits on the possession of the firm and no other aims are attached with it other than bolstering the revenue holdings of the company. Capital accumulation is not connected with increment in labor input or output. It is dependent upon the existing company profits that the firm uses to maximize the existing capital. Assets that are in possession of the firm can be used to increase the capital by appreciating in their value or acquire assets that can be used to create further wealth. Other ways firms bring accumulation of capital into process is through acquiring shares or mutual funds. Capital accumulation…
Giddens, A. (1996). Capitalism and Modern Social Theory. Cambridge [u.a.]: Cambridge Univ. Press.
Hunt, E.K., & Lautzenheiser, M. (2011). History of Economic Thought: A Critical Perspective. Armonk, N.Y.: M.E. Sharpe.
TR Jain, A.M. (2009). Development Economics. Chicago: FK Publications.
Capital Gains Tax in Australia
Capital gains tax refers to a type of tax levied on capital gains incurred by organizations or individuals. The capital gains refer to the profits that an organization or individual selling a capital asset obtains through selling an asset at a price higher than the original price. In many countries, the amount of capital gains tax takes into consideration the type of investment and the holding period of the asset. Australian capital gains tax takes a proportion of all achieved capital gains. Capital gains are not separate tax but part of the income tax on individuals and corporations upon disposing of capital assets. Australian capital gains tax exempts personal properties such as home, car, and furniture. Australian residents in any part of the world are subject to capital gains tax.
Issue 1. Moodly's Conversion of her main residence.
Moodly being a childcare worker, wishes to…
OECD Tax policy studies. 2006. Taxation of Capital Gains of Individuals: Policy
Considerations and Approaches. No.14. Paris: OECD Publishing.
Pricewaterhouse Coopers. 2006. Mergers and acquisition: A global Tax Guide. New Jersey:
John Wiley and Sons Inc.
esults and acceptability of the item for key stakeholders
Da Vinci is a lucrative product that has immense contributions to the delivery of health services in many health centres globally. The effectiveness of the product lies on its new entry into the modern market. Da Vinci production and use have enlightened the public and hospital fraternities on new approaches of managing surgery operations. The resultant effects that are going to be felt after using the product are more increasing and beneficial than using the old mechanisms. The innate objective of the tool will improve on delivery of surgery services in ways that are more safe, effective, and affordable to the public. Da Vinci was first introduced as a safe way of improving surgery operations in the hospitals. Moreover, the use of the product had not been made public. Now that the machine will be available in many health…
Athanasiou, T., Debas, H.T., & Darzi, A. (2009). Key topics in surgical research and methodology. Berlin: Springer.
Bahouth, M.N., Bahouth, M.N., Blum, K., & Simone, S. (2013). Transitioning into hospital-based practice: A guide for nurse practitioners and administrators. New York, NY:
Springer Pub. Co.
Gitman, L.J., & McDaniel, C.D. (2009). The future of business: The essentials. Mason, OH:
To solve these emerging needs of the company to satisfy the demand in the market, it is necessary to invest into expanding of the services offered and shifting the existing concept of the club. Firstly, it is necessary to expand the space occupied by renting out additional premises and organizing Spa procedures there. This will require also investment into necessary human resources, such as hiring Spa administrative and consultants specialists offering services for both women and men, and for both facials and body treatment to maximize the services mix. Costs for occupying this space, purchasing necessary equipment and hiring adequate staff so can exceed the current costs by ?450,000, so this is the incremental expense from proceeding with this services expansion programs. Cost to organize the fitness and Spa cafe, which is proposed to call at EnerGi Box, will amount to another ?100,000 annually. The final improvement step is investment…
Brayley, R.E., McLean, D. (1999). Managing Financial Resources in Sport and Leisure Service Organizations, Sports Publishing.
Mitchell, D. Coles, C. (2004) Establishing a continuing business model innovation process, Journal of Business Strategy, 25 (3), pp. 39-49.
D. Mitchell, C. Coles, Establishing a continuing business model innovation process, Journal of Business Strategy, Volume 25, No. 3, 2004, pp. 39-49.
Capital Requirement and Risk ehavior
Arab African International ank
Midan ElSaray El Koubra, Garden City Caoro
The research will mainly dwell on the capital requirements and risk behavior of banks, more in particular the credit risk. The purpose of this research is to identify and analyze the relationship between capital requirements and the risk behavior of banks in Egypt
more in particular the Arab African International ank, which is the case study for this research. Secondly, the research will seek to investigate the impact of capital regulation on the banking behaviors and particularly on the levels of credit risk of banks operating in Egypt
The findings of the research show that there is negative relationship between capital requirement and banks' risk behavior; the findings also show there is empirical evidence to prove that capital regulations have a negative impact on credit risk of banks levels of credit risk of banks…
Aggarwal, R. And K. Jacques, (1998), a Simultaneous Equation Estimation of the Impact of Prompt Corrective Action on Bank Capital and Risk, New York, 12-23
Avery, R.B. And A.B. Berger, (1991), Risk-based capital and deposit insurance reform, Journal of Banking and Finance pp 847-874
Berger, A.N., Herring R.J. And Szego, G.P. (1995), the Role of Capital in Financial
Institutions, Journal of Banking and Finance pp 19, 393-430.
D 20 Lev
D 50 Lev
5. The only project that is unacceptable is Project D. At the 50% leverage level. This has a negative NPV. The other projects at each leverage level all have positive net present values. The following graph shows the NPVs for the different projects:
6. My objective in making this decision is to maximize firm value. The projects are mutually exclusive. I would use NPV as the main criteria. This means that Project B. is the most desirable, at the zero leverage level. Project A is the second-most desirable, against at the zero leverage level. Project C. is the third-most desirable. Project D. is the least desirable and at the 50% leverage level is unacceptable. I feel that it is best to use NPV has the criteria…
The estimated total variable costs for the one-year period were $52,000.
We now use the reak-Even Analysis formula of: Q = FC / (P -- VC), to determine the basic standards for generating a profit. Inside the formula, Q stood for the quantity of service visits required to break even. While, at the same time: FC denoted the fixed cost for the project, P is the prices charged for the various services and VC is the variable cost per visit. At which point, we divided the total variable costs by: expected number of visits ($52,000 / 4000). Once this took place, we came up with a VC of $13. Entering all the values into the formula gave us a result for Q. Of 8,064. Thus, 8,064 visits are required for the hospital to break even. In order to generate any kind of operating profits, they must go beyond this number…
Merry J. McBryde-Foster (2005). Break-Even Analysis in a Nurse-Managed Center. Retrieved from: http://findarticles.com/p/articles/mi_m0FSW/is_1_23/ai_n17208288/?tag=content;col1
Capital Projects. (2009). Planetmoran. Retrieved from: http://www.plantemoran.com/industries/hospitals-health-systems/capital-projects/pages/home.aspx
The Nexus Q, Google's new media streamer, is failing to satisfy investors because it fails to incorporate Google TV, is limited to Google Play, while You Tube has all the necessary features has been let down with the Nexus Q, and it has no Android interface (Smith). The operating system has been buried under Google-owned apps. The device is lacking in features with an overbuilt operating system. With the device costing more to the consumer than competitive products, this will not sell well and could cause the company to develop a bad image. Competitor products include Apple TV, Roku, and other Internet friendly set up boxes.
To make this product more competitive and provide justification needed for the higher price to consumers, it needs to be upgraded to provide features compatible for Google TV, You Tube, and Android compatible features for users to be able to do more…
Google, Inc. Annual Report. 31 Dec 2011. Document htm. 05 July 2012.
Horngren, C.T., S.M. Datar and G. Foster. "Chapter 21." Horngren, C.T., S.M. Datar and G. And Foster. Cost Accounting 12th ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2006. 839. Textbook.
Smith, P. Google Inc. (NASDAQ:GOOG) Under Uses Its Impressively Built Nexus Q. 05 July 2012. News Article. 05 July 2012.
ith a strong customer and employee basis, the company envisions taking early leadership of the global market. This is also to be based upon management excellence on a local scale. The management team is envisioned to be capable of translating vision into performance on both a local and global scale, while also investing strategically to maximize profitability and performance.
d. In terms of Research and Development, Applied Materials has increased its investments despite economic downturns. The purpose of this was to increase its potential future profitability by providing advanced manufacturing systems for its customers worldwide. This proved to be a good strategy, as the company had build a broad product line that catered for nearly every chip manufacturing stage. In order to reach the next step; integrating systems to perform a specific process sequence, a new facility was needed, and 1997 saw the beginning of construction on the Equipment and…
With a strong customer and employee basis, the company envisions taking early leadership of the global market. This is also to be based upon management excellence on a local scale. The management team is envisioned to be capable of translating vision into performance on both a local and global scale, while also investing strategically to maximize profitability and performance.
d. In terms of Research and Development, Applied Materials has increased its investments despite economic downturns. The purpose of this was to increase its potential future profitability by providing advanced manufacturing systems for its customers worldwide. This proved to be a good strategy, as the company had build a broad product line that catered for nearly every chip manufacturing stage. In order to reach the next step; integrating systems to perform a specific process sequence, a new facility was needed, and 1997 saw the beginning of construction on the Equipment and Process Integration Center (EPIC).
EPIC represents the first facility of its kind in the semiconductor industry, in its capacity as a dedicated 200mm pilot line integration facility. Specifically, the Center enables the company's customers to make their technology transitions with greater speed and ease. To do this, the Center enables them to evaluate and integrate new manufacturing systems in advance of installing these. This provides the company with an important leading edge in the global marketplace. To accomplish this was a challenge on multiple levels that did not end with the Center opening its doors in 1998. Indeed, in order to adhere to its central aims, engineers for the center had to effectively implement systems by which they could set up their systems as often as once per month and make quick modifications according to differing requirements.
Business Financing and the Capital Structure
Generally, businesses need to make several financial decisions that have significant direct effects on their operations and success in the increasingly competitive marketplace. However, there are numerous varying options that are available to businesses regardless of the types and sizes. The concept of business financing has emerged as an important aspect in the modern business environment because of the various financial decisions to be made by different firms. The main aim of this concept is to generate enough capital for the business to meet its existing needs in order to promote the growth of the business. In addition to generating capital for the growth of the business, business financing helps firms to meet the recurring financial obligations.
Use of Financial Planning in Estimating a Corporation's Asset Investment equirements:
Financial planning can be considered as a process that is used to approximate the financial requirements…
Coplan, J.H. (2009, December 4). Raising Capital: Equity vs. Debt. Bloomberg Businessweek
Magazine. Retrieved June 2, 2013, from http://www.businessweek.com/magazine/content/09_72/s0912030511552.htm
Melicher, R.W. & Norton, E.A. (2011). Introduction to finance: markets, investments, and financial management (14th ed.). Hoboken, NJ: John Wiley & Sons, Inc.
Sharp, R. & Hua, W. (2004, January 4). International Investing: The Risks and Rewards.
There are only a couple of key assumptions used in the creation of the NPV data. First, with respect to fixed costs, the wording "will increase by 3.8% over the life of the project" is ambiguous. We need an actual figure for each year. It is assumed therefore, in the interests of being conservative, that the word "annually" was accidentally omitted and fixed costs will increase 3.8% each year over the life of the project.
The sunk costs, it must be stated, were omitted from this calculation as they are not an incremental cash flow (Investopedia, 2015).
There is nothing stated about the return of working capital at the end of the project, so it is assumed that this money vanishes into the ether at the end of the project, because returning it would substantially increase the value of the project. Whether the working capital is returned at…
Fernandez, P., Ortiz, A. & Acin, I. (2015) Discount rate (risk free rate and market risk premium) used for 41 countries in 2015: Survey. IESE Business School. Retrieved December 4, 2015 from http://faculty.mccombs.utexas.edu/keith.brown/AFPMaterial/FernandezEtAl%20WP-Global%20ERP-4.23.15.pdf
Investopedia (2015). Complete guide to corporate finance. . Investopedia. Retrieved December 4, 2015 from http://www.investopedia.com/walkthrough/corporate-finance/4/capital-investment-decisions/incremental-cash-flows.aspx
MACRS 10-year table. Retrieved December 4, 2015 from https://www.irs.gov/publications/p946/ar02.html
MSN Moneycentral: Hasbro. Retrieved December 4, 2015 from http://www.msn.com/en-us/money/stockdetails/analysis/fi-126.1.HAS.NAS?ocid=qbeb
One of the biggest differences between new capital projects and renewal/replacement projects is that the variables are less known. The cash flow for the next few years is subject to a higher degree of uncertainty, but so too is the risk profile for the project. The latter is especially important when the project is in an entirely new business, and the firm has very little concrete information to go on. The reality is that for renewal projects, there is a lot more certainty about everything, and that makes a difference in the capital budgeting process because the numbers are more reliable and the company knows that the discount rate appropriately reflects the risk associated with that project. It must be cautioned, however, to remember that incremental cash flows only should be incorporated into the calculation for renewal projects, not money that has already been committed to the project (Investopedia,…
Investopedia (2016). Applying NPV analysis to project decisions. Investopedia. Retrieved July 19, 2016 from http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/applying-npv-net-present-value-project-decisions.asp
Investopedia (2016). Modigliani and Miller's capital structure theories. Investopedia. Retrieved July 19, 2016 from http://www.investopedia.com/walkthrough/corporate-finance/5/capital-structure/modigliani-miller.aspx
Griffin, D. (2016). Types of business risk. Houston Chronicle. Retrieved July 19, 2016 from http://smallbusiness.chron.com/types-business-risk-99.html
Santos Capital Budgeting and Financial Analysis
2a) Company Perspective
Working capital measures a company short-term financial health as well as a company's efficiency. To calculate a working capital ratio, the paper uses the following formula:
"Working Capital atio= Current Assets / Current Liabilities"
In other words, the working capital ratio measures a liquidity capability of a company that measures whether a company has enough working capital to settle its short-term liability. A working capital below one indicates a negative working capital revealing that a company will face challenges in settling its short-term liability. On the other a working capital of 1.2 and 2.0 reveals that a company has enough liquidity to settle its short liability. However, working capital above 2 shows that a company is not embarking on an investing policy.
The paper uses the following financial tools to measure the working capital efficiency of Santos Company:
Working Capital atio…
Open University (2015). The financial markets context. United Kingdom.
Santos (2014). Santos Annual Returns. Australia.
Morning Star (2015). Rio Tinto plc (RIO). USA.
Malkiel, B.G. (2003). The Efficient Market Hypothesis and Its Critics. Princeton University
5x -- 50,000
200,000 / 7.5 = 26,6667 units
1e) the ROE for the first scenario is 140,000 / (0.85*350,000) = 47%
the ROE for the second scenario is 140,000 / (0.65*350,000) = 61.5%
The difference is 61.5 -- 47 = 14.5%
1f) the dividend payout structure is going to be as follows. The taxable income will be as follows:
($200,000 * .35) = $70,000 of debt. The interest will be (70,000)(.105) = $7,350
So taxable income will be $200,000 -- 7350 = $192,650
Tax at 30% is $57,795
Thus, net income is $192,650 - $57,795 = $134,855
The equity needed for the capital budget is (.65)(150,000) = $97,500
The dividends are therefore calculated as $134,855 - $97,500 = $37,355
The payout is therefore $37,355 / $134,855 = 27.7%
2. a) the company faces some risks if it tightens the credit policy. It will reduce its accounts receivable if it…
" (Kinnunen, 2004) the work of Kaplan and Schroar (2003) states findings that the past performance is highly relative to capitals flows to private equity funds.
The work of Mishra, Kemmerer, and Shenoy entitled: "Managing Venture Capital Investment Decisions: A Knowledge-ased Approach" relates the building of a causal map of the investment decision through use of interviewing venture capitalists and then converting this information into a "causal ayes net" which are stated to be "especially suited for domains characterized by a high degree of uncertainty." (Mishra, Kemmerer, and Shenoy, 2001) This technique has also been utilized in developing artificial intelligence and even used "in medical diagnosis, modeling portfolio risk and return, and new product development..." And are based on "probability theory." (Mishra, Kemmerer, and Shenoy, 2001) This method is reported to be one that increases the likelihood of gaining an understanding of the decision-making process of Venture Capitalists (VCs) and…
Kaplan, S. & Schroar, a. 2003. Private Equity Performance: Returns, Persistence and Capital Flows. MIT Sloan Working Paper No. 4446-03; AFA 2004 San Diego Meetings.
Cochrane, John H. The Risk and Return of Venture Capital. Working paper, University of Chicago, 2001.
Kinnunen, Harri (2004) Institutional Investor's Decision Making Criteria for Investing in Venture Capital Funds. Frontiers of E-Business Research 2004. Online available at http://www.ebrc.info/kuvat/695-709_04.pdf
Patel, Pankaj and D'Souza, Rodney (2008) Uncovering Knowledge Structures of Venture Capital Investment Decision Making. A Working Paper for SBA Office of Advocacy. Jan 2008. Online available at http://www.sba.gov/advo/research/rs315tot.pdf
Only eTrade and aterhouse make good comparables in terms of being in the same discount brokerage business. Full service brokers are working with different revenue streams and ancillary businesses that greatly reduce their effectiveness as comparables. aterhouse's relevance becomes suspect when you consider that they are no longer public. Their data is old - the beta of a discount brokerage in the telephone era is not especially useful to a decision about a discount brokerage entering the Internet era. The cost of capital for eTrade is 6.4%. As with Ameritrade they have no long-term debt and do not pay dividends. Ameritrade's cost of capital is going to be around 8%. Their borrowing cost is 8-9%, and we should take the lower figure to reflect that they have some equity, and that equity has thus far been free due to the lack of dividends.
Joe Ricketts should view the cost of…
Kester, W. Carl, Tofano, Peter, and Ruback, Richard S. (2005) Case Problems in Finance. 12th ed. McGraw-Hill, New York.
increase production of capital goods and reduce consumption.
increase production of capital goods and increase consumption.
decrease current consumption and reduce production of capital goods.
If an economy is producing inefficiently, it is
possible to increase production of all goods simultaneously.
possible to increase production of one good at the expense of another.
not possible to increase production of any good.
not possible to increase economic growth.
If oranges and grapefruit are close substitutes, an increase in the price of oranges will shift the demand curve of a.
both products to the right.
both products to the left.
grapefruit to the right.
oranges to the left.
An important assumption that is made when constructing a supply schedule is
only price and quantity matter in determining supply.
firms always want to sell a…
This information will affect the opportunity cost of the decision, because the company will not have any access to the Chilean market. Well, more likely it will need to sue via the WTO over the policy, so it would eventually gain access to the Chilean market, but until that happens would be shut out. However, there are always opportunity costs associated with any decision. The decision as to whether or not the company should set up in Chile has to be made based on the merits of that decision alone. Making decisions based on speculation and worst-case hypotheticals, in particular when those are opportunity costs, is poor decision-making practice. Thus, this rumor about Matsubara should not have any influence on the decision with respect to setting up in Chile. The decision is still that setting up in Chile is expected to have a positive NPV, and should be undertaken.…
But to take this absurd scenario at face value, 2% is a negative real return as Chilean inflation rates are in the 4.x range for 2015. This mandate would represent negative cash flow. That loss on investment must be included, because it is incremental to the decision, and is known. This cost would then have to be built into the analysis, and the recommendation might change. The recommendation is still a go, because the NPV is still positive, but it is just barely positive, given that the company is losing 2.5% or thereabouts as the difference between the inflation rate in Chile and the 2% return on those funds. If that pushes the discount rate up, it gets to 17.5%, versus an IRR of 17.75%, so the project is still profitable, but barely so.
3. This opportunity would not affect anything. I would not sell tin at a loss, so the offer to export tin means very little to me. Selling at 80% of purchase price is a loss of 20%, so basically I would be paying a 20% charge to get my money out of Chile.. That is more than the 2.5% hit I am taking to keep my money in Chile. While this may result in greater certainty with respect to the value of the profits, the cost is that the venture is no longer profitable. Moreover, the 15% discount rate is no longer sufficient, because the company is now exposed to commodity price risk, as it is impossible to hedge the price of tin five years out. The offer is just that, and I do not have to accept the offer. I would not accept an offer that wiped out my profits.
Thus, because this offer is worse than the one in #2, it would not affect anything. They are mutually exclusive offers, and I would take the best one, which is #2.
Business -- Corporate Finance -- Capital Structure Decisions and the Cost of Capital
Based on the readings of the module and upon reviewing total debt/equity ratios, company betas, profitability ratios, company revenue, assets, and liabilities, and the nature of the operations of the companies, including the nature of their customers and products, what would you recommend to be the capital structure (total liabilities or debt and equity proportions) for each of the three companies?
a) eBay, Inc.
The nature of eBay's business is global online retail connecting more than 124 million buyers and sellers for the sale and purchase of more than 500 million items (eBay, Inc., 2013). As of September 30, 2013, measured in thousands, eBay's: total current assets are $23,476,000 (Yahoo! CA Finance, 2013); long-term assets are $40,067,000 (Yahoo! CA Finance, 2013); current liabilities are $12,028,000 (Yahoo! CA Finance, 2013); long-term liabilities are $17,300,000 (Yahoo! CA Finance, 2013);…
Alaska Air Group, Inc. (2013). Historical overview. Retrieved December 1, 2013 from www.alaskaair.com Web site: http://www.alaskaair.com/content/about-us/history/overview.aspx
Damodaran, A. (2005). Finding the right financial mix: The capital structure decision. Retrieved December 1, 2013 from pages.stern.nyu.edu Web site: http://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/capstr.pdf
eBay, Inc. (2013). One company | ebay inc. Retrieved December 1, 2013 from www.ebayinc.com Web site: http://www.ebayinc.com/who_we_are/one_company
Peavler, R. (2013). Debt and equity financing. Retrieved December 1, 2013 from bizfinance.about.com Web site: http://bizfinance.about.com/od/generalinformatio1/a/debtequityfin.htm
Capital Accounting and Budgeting Questions
When a firm has different potential projects or investments, they will want to assess their options to ensure they make the best choice. However, comparing different types of projects or investments can be difficult, especially if the projects have different terms to maturity and/or different risk profiles. A useful tool is that of net present value (NV). Net present value allows different types of project to be compared on a like for like basis.
The net present value calculation takes all of the forecast future net cash flows of a project (the revenue less all the costs), and then discounts them into today's value. The discounting allows the firm to assess what the value of the future cash flows will be in today's money. The rate of discount applied will usually be the cost of capital for the firm, but where there is…
Political risk manifest in a number of ways, they may be in the policies and laws that a government enacts, political instability and even aspects such as competition regulations. These will all impact on the potential level of risk associated with an investment. When undertaking capital budgeting, for a project to be viable, where there is an additional risk it is necessary for there to be a risk premium to justify taking that additional risk. The introduction of different types of policies, regulation or laws by government, may impact on the overall value of an investment, and in some cases may be severely detrimental. For example, in some countries there may be a risk of nationalization which the company may lose a significant amount of its investment (Mintzberg et al., 2008). Likewise, the amount of value in investment may create, especially if it is targeting markets, will be impacted by the competitive conditions, which in turn influenced significantly by government policies and attitudes.
Transfer pricing refers to pricing of internal transactions, for example when goods are sold by one company to another company in the same group, or possibly transfers between divisions. When undertaking capital budgeting, the potential benefits and risks associated with transfer pricing will need to be considered. A project may be viable due to the economies which can be gained from in-house, or in group supply. Likewise, the potential benefits may also be limited in terms of national regulation and the way in which transfer pricing is controlled. Transfer pricing will impact on the costs and potential profits that are assessed when examining potential investments or projects. The security of the
It also appeals to conservatives who are interested in charity-based social supports, and wish to see individuals and communities, rather than the state, providing solutions to persistent problems such as poverty or social exclusion. It also holds appeal for neo-liberal states that seek to bolster social engagement without addressing structural issues such as changes in employment forms and decreases in social service expenditure (Bezanson,2006)."
On the other hand, the versatility of the theory has been criticized. Some have asserted that the theory may become "all things to all people" and as such it will become a theory that is not viable in any format (Bezanson,2006). With all these factors taken into consideration it is also apparent that, the theory of social capital does single out the importance of informal caring relationships to the quality of life afforded to individuals and groups (Bezanson,2006).
Each of the three aforementioned types of social…
Bezanson, K. (2006). Gender and the Limits of Social Capital. The Canadian Review of Sociology and Anthropology, 43(4), 427+.
Dakhli, M. De Clercq, D. (2004). Human capital, social capital, and innovation: a multicountry Study. ENTREPRENEURSHIP & REGIONAL DEVELOPMENT, 16, MARCH (2004), 107-128
More Social Capital, Less Global Poverty? The World Bank. http://www1.worldbank.org/devoutreach/summer00/article.asp?id=67
human capital development United States human capital development countries a 2-page, double-spaced paper. Support observations conclusions properly formatted text citations references assigned readings academic sources.
Human capital development
Within the contemporaneous business community, the employee enjoys a favorable position. Protected by laws and legislations, trained and motivated, the employee of the modern day society is as developed as has ever been. Or at least this is what the textbooks say. To assess the reality, it is important to look at the status of human capital development in three different states -- the United States of America, Turkey and China.
Within the United States, the employees are well treated and rewarded. They are continually presented with opportunities of personal and professional developments and the corporations in the U.S. are a symbol of the American culture. This can be best observed relative to the corporations that have expanded outside the U.S., such…
Hickman, C.R., 2005, Management malpractice: how to cure unhealthy management practices that disable your organization, Adams Media
2011, The world factbook -- GPD per capita, Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html?countryName=China&countryCode=ch®ionCode=eas&rank=126#ch last accessed on July 13, 2011
Gender inequality index, United Nations Development Programme, http://hdr.undp.org/en/media/HDR_2010_EN_Table4_reprint.pdf last accessed on July 13, 2011
There are many firms that exist and operate within the capital management realm. Some companies operate and expand via their internal income and operations. There are other firms that are not currently self-solvent. However, the latter is commonly able to expand through capital investment and fundraising. The goal with such firms, of course, is to ramp up business levels, pricing structures and so forth so as to get to a profit at some point, even if it takes a few years. Indeed, many firms start off relying on capital investment and resource allocation at first and then become able to expand organically with no outside support, budgeting or investment. While firms like Amazon are a behemoth right now, there was a time where their operations and capital structures were quite thin internally and thus they needed a lot of investment and support through the capital investment and budgeting process.
It is important, therefore to understand the different frameworks by which the ethics of an act can be evaluated.
The art of citizenship, as identified by Barber (no date), must taught as part of one's education. It also holds that practical experience is the best way to teach the art of citizenship. People learn about the consequences of their actions by attaching themselves to those consequences physically. In my case, the sheer volume of shoes that I had to sort made the point clear -- I was helping people clothe themselves. Every box of children's shoes I sent was a child that I helped to live a better life. e have a responsibility, Barber argues, to understand the implications of our actions on our communities.
The different approaches to ethics can also be studied through practical experience. It is social interaction that illustrates for us the outcomes of our actions,…
Barber, B. (no date). A model program: Education-based community service at Rutgers University. In possession of the author.
CharityNavigator.org (2011). World Vision. Retrieved March 11, 2011 from http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=4768
Daniels College of Business. (2011). Daniels today and tomorrow. University of Denver. Retrieved March 11, 2011 from http://www.daniels.du.edu/aboutus/missionvisionvalues.html
Fukuyama, F. (1999). Social capital and civil society. International Monetary Fund. In possession of the author.
We need to create roadmaps that clearly outline what their positions entail, and what we expect from them. We do expect a lot from our new recruits, as we should. If we wish for our new recruits to rise to the occasion, then we will need an Induction Day program.
Induction Day will entail motivating the new employees, making them feel welcome and encouraged. They will be developed as members of our organization, expected to contribute and make suggestions. The new recruits will develop a sense of pride and identity working for our organization and representing us to our clients, as the recruits make the transition from door-to-door sales to more challenging and rewarding positions in the company. As the new entrants feel more at home in their working environment, their roles will be clarified too. They will know what is expected of them, and can generate the sales that…
Cross-Country Capital Flows and Currency
overseas investment .
GLOBAL INSTITUTES IN INTERNATIONAL FINANCE .
INTERNATIONAL FINANCE CORPORATION .
ORLD BANK .
ORLD TRADE ORGANIZATION
INTERNATIONAL MONTARY FUND .
INTERNATIONAL FINANCE IN CHINA .
THE EXCHANGE RATE FIASCO
FINANCIAL CRISIS IMPACTS ON SINO-AMERICAN RELATIONSHIP
RECESSION'S AFFECT ON CHINA .
ASIAN MONETARY FUND .
CHINA'S TRADE POLICIES AND THEIR CONTRIBUTION TO THE FINANCIAL CRISIS
Monetary policy is the study of circulation of money, the granting of credit, the making of investments and the provision of banking facilities and international finance is studying it on an international level.[footnoteRef:2] Usually the affect can be seen in exchange rate and foreign investment and international trade. This includes the analysis of global financial markets, cross-country capital flows and currency, international projects, and overseas investments. [2: Merriam-ebster Online Dictionary: http://www.merriam-webster.com/]
US Monetary Policies have a far reaching effect on the other…
Alta villa, Carlo, and Matteo Ciccarelli. "The Effects of Monetary Policy on Unemployment Dynamics under Model Uncertainty: Evidence from the United States and the Euro Area." Journal of Money, Credit & Banking 41.7 (2009): 1265+. Questia. Web. 18 Mar. 2011.
Auerbach, Robert D. Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan's Bank. Austin, TX: University of Texas Press, 2008. Questia. Web. 18 Mar. 2011.
Barron, Jacob. "Jobs, Exports and the Yuan: Pressure Builds on China for Currency Reform." Business Credit May 2010: 30+. Questia. Web. 18 Mar. 2011.
Bi, Jianhai. "An Asian Monetary Fund? Jianhai Bi Outlines Asian Efforts to Protect Their Economies during the Global Financial Crisis and Predicts Long and Difficult Negotiations." New Zealand International Review 34.6 (2009): 8+. Questia. Web. 18 Mar. 2011.
Lending Institutions, Health Care, And Human Capital
Human Capital, its use and Gender Disparity
Gender plays crucial roles in decision-making and resource allocations ideal for economic growth. Mothers' human capital improves child education and health, determining the well-being of the next generations (Finlay, 2007). Women Empowerment tends to allow for allocation of resources to more productive means, serving as relevant measure for improving economic outturn in the long run (Baldacci, 2004). Despite of the rather concrete understanding and appreciation gender disparity in human capital and its uses, it remains a key policy issue in both developing and developed economies.
The ole Health Plays in Developing Economies
Finlay (2007) elucidates that health does play a role in economic development. He showed that health influences economic growth through education incentive effects. Finlay went further to say that, a healthy individual tend to live longer, and has the impetus to undertake investment in…
Baldacci, E.B. (2004). The impact of Poor Health on Total Factor Productivity. The Journal of Development Studies, 42(6), 918-938.
Bloom, D.E., & Canning, D. (2008). Health and Economic growth: "Reconciling the Micro andMacro Evidence." Cen ter on Democracy, Development, and The Rule of Law Working Paper No.42. Pp 2, 3. .
Bloom, D.E., Canning, D., & Sevilla, J. (2004). The Effect of Health on Economic Growth: AProduction Function Approach. World Development, 32(1), 1-13.
Finlay, J. (2007). The Role of Health In Economic Development. Program on the Global Demography of Aging. PGDA Working Paper No. 21
Labor and Monopoly Capital
HAY BAVEMAN's book Labor and Monopoly Capital carries the tradition of Marxist schools. The author focuses on the labor process under the Fordism, arguing that how the work, under the discipline of scientific management, becomes disjointed, dull, and repetitive. According to him, the work is degraded. Like Marx, Braverman is a deterministic and looks into the question of how technological change in Fordism affected the attributes of work and the discrimination of working class.
The labor process under capitalism is one of the central themes of Braverman. Its main emphasis lies in providing a voice to the working-class movement. Taking his insights from Marx, Braverman is considered the latest follower that has accurately appreciated the profundity of Marx's work. Supporting his work from Marx himself, and drawing on his own experience as a trained craftsman, a socialist militant and journalist, and a manager of two publishing…
Harry Braverman, "Automation: Promise and Menace," The American Socialist, October, 1955, pp. 7-12.
Harry Braverman, "The World of Work," The American Socialist, June 1959, pp. 12-18.
According to statistics, it has been noted that the current workforce is growing more and more disloyal and dissatisfied. The companies that do not respond to the current trends will end up paying a high price later. This is because, with the improvement in the job market, these companies will end up losing key employees to their competitors, which leads to reduced employee productivity. Companies need to establish a well-designed employee compensation and benefits package in order to retain its top talent and attract others. There are numerous companies that desire to attract, retain, and motivate their employees in order to meet the company's strategic objectives. Currently, employees are considered to be part of the company's assets because they have to be effectively and efficiently managed. There are numerous instruments that companies can use to attract, retain, and motivate employees. Compensation and benefits are some of the tools that companies…
People working teams achieve goals efficiently effectively people working '. Draw theories team design effectiveness give practical examples relating organisational/work University study experience discuss statement
Efficiency of team projects over individually handled projects
The current research project t is focused on the discussion of the following statement:
People working in teams always achieve their goals more efficiently and effectively than people working alone.
In order to address it, a twofold approach is implemented -- the review of the specialized literature and the analysis of the practical implications within a real life context -- the working teams at Wal-Mart. It is eventually concluded that the teams are indeed more efficient than individuals, but that the development and management of a team is a matter to be decided upon based on the unique particularities of every business situation.
Table of contents
2. Key issues / findings from the literature…
Alberts, D.J., 2007, A model of multidiscipline teams in knowledge-creating organizations, Team Performance Management, Vol. 13, No. 5/6
Armstrong, M., 2008, Chapter 05: Team building, Kogan Page Ltd.
Capozzoli, T., 2006, How to succeed with self-directed work teams, Super Vision, Vol. 67, No. 2
Castka, P., Bamber, C.J., Sharp, J.M., Belohoubek, P., 2001, Factors affecting successful implementation of high performance teams, Team Performance Management, Vol. 7, No. 7
Long-Term Capital Management: The Original Enron?
Three years before energy industry giant Enron Corp. sought protection from creditors and came under the harsh light of scrutiny for the complex web of off-balance sheet deals that masked the firm's huge debt, a very similar scenario unraveled among some of Wall Street's most celebrated financial players. ut while Enron unsuccessfully sought eleventh-hour aid from the power brokers it has bankrolled in Washington D.C., a "who's who" of global financial institutions stepped up to bail out hedge fund Long-Term Capital Management (LTCM) in September 1998. Not coincidentally, the bankers arguably had more to lose from the impending collapse of LTCM than they faced in the more recent debacle.
While they are, of course, very different institutions, the mistakes made by LTCM and Enron are strikingly similar. The near collapse of LTCM ultimately taught bankers around the globe to pay closer attention to the…
1. Shirreff, David. "Eve of Destruction," Euromoney, Nov. 1999, http://www.euromoney.com/public/markets/risk/em.98.11.1.html
2. Warde, Ibrahim. "Crony Capitalism: LTCM, a Hedge Fund Above Suspicion," LeMonde Diplomatique, Nov. 1998
3, 10. Koller, Joe. "LTCM Speaks," Derivatives Strategy, April 1999. http://www.derivativesstrategy.com/magazine/archive/1999/0499fea1.asp
The capital structure refers to the way that the company is financed. There are two basic forms of financing -- debt and equity -- and a number of other choices that can be made within the scope of those options. The capital structure for Simpson Manufacturing as of December 31, 2011 is 11.3% liabilities and 88.7% equity. The company has $5.239 million in long-term debt, $95.515 million in total liabilities and $789.6 million in shareholder's equity. This capital structure is appropriate for the type of company that Simpson is, and the type of industry in which it operates. The income statement shows that the company is modestly profitable, but that profits are declining. The combined effects of share buybacks and dividends have reduced the value of the firm in fiscal 2012. Given that the company is in a state of contraction, a policy of limiting debt and total…
Simpson Manufacturing Q4 2012 Results. Retrieved March 4, 2013 from http://www.simpsonmfg.com/docs/results-2012-4Q.pdf
STI vs. USB
The capital accounts for the two banks reveal a significant difference in the price-to-book ratios. Suntrust Banks has an equity value that is higher than the market cap of the company, a favorable price-to-book ratio that implies the company is undervalued on the market. U.S. Bancorp has a more typical price-to-book ratio where the market value of the firm is higher than the book value. Part of this difference is that U.S. Bancorp is experiencing modest sales growth, while Suntrust is facing sales declines in excess of 5% annually, such that its expected future worth is lower than its current worth.
For banks, the primary asset is the net loans, along with a category known as "other earning assets," which the annual report for Suntrust reveals to be securities available for sale, or short-term investments that the bank hold and upon which it earns interest. Other assets…
MSN Moneycentral. (2013). Suntrust Banks. Retrieved February 16, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=sti&ocid=qbeb
MSN Moneycentral. (2013) U.S. Bancorp. Retrieved February 16, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=USB&ocid=qbeb
Suntrust Banks 2011 Annual Report. Retrieved February 16, 2013 from http://phx.corporate-ir.net/phoenix.zhtml?c=82273&p=irol-reportsAnnual
US Bancorp 2011 Annual Report. Retrieved February16, 2013 from http://phx.corporate-ir.net/phoenix.zhtml?c=117565&p=irol-reportsannual
Capital Investments in Emerging Markets
The Procter & Gamble Corporation (P&G) is one of the largest manufacturing companies on the global scene. P&G undertakes its business operations in approximately eighty nations and retails its products in over 180 nations. At present, the company has about thirty five manufacturing plants that are responsible for handling manufacturing and production across the globe. In the preceding year, about 35% of the total revenue generated by the company came from the United States alone. The other 65% emanated from the company's global business operations. The rise in wage levels in middle-income earners has brought about an increase in demand for household goods and merchandises in emerging markets. At present P&G places emphasis on ten emerging market economies; these include: China, India, Mexico, Nigeria, ussia, and South Africa. This limited concentration, and focus, on these emerging markets will assist P&G in tailoring its marketing approaches…
Axelsson, H., Jackovicaka, J., Kheddache, M. (2002). Capital Budgeting Sophistication and Performance: A puzzling Relationship. Industrial and Financial Economics. Retrieved from: http://gupea.ub.gu.se/bitstream/2077/2359/1/gbs_thesis_2002_38.pdf
Bhandari, S.B. (1986). Discounted payback: A criterion for capital investment decisions. Journal of Small Business Management, 24, 16.
Iloiu, M., & Csiminga, D. (2009). Project Risk Evaluation Methods-Sensitivity Analysis. OF THE UNIVERSITY OF PETRO-ANI? ECONOMICS?, 33.
Jovanovi?, P. (1999). Application of sensitivity analysis in investment project evaluation under uncertainty and risk. International Journal of Project Management, 17(4), 217-222.
Private-label securitization has basically ended, and Fannie and Freddie were positioned into conservatorship by their controller subsequent to working in a dangerous and unsteady way. The job currently is to figure out how best to restore a connection between homebuyers and capital markets in a manner that deals with the problems of the old arrangement (Bernanke, 2008).
One alternative that has been talked about is that of privatizing the GSE's and letting them contend in the marketplace as private mortgage insurers and securitizers. In order to get rid of the assumption of government backing and to arouse competition, some suggestions supporting privatization call for collapsing the corporation into less significant components prior to privatizing them. Privatization would resolve a number of troubles connected with the present GSE model. It would get rid of the disagreement amid private shareholders and public policy and probably reduce the total dangers as well (Bernanke,…
Bernanke, Ben S. (2008). The Future of Mortgage Finance in the United States. Retrieved November 13, 2010, from Federal Reserve Web site: http://www.federalreserve.gov/newsevents/speech/bernanke20081031a.htm
Housel, Morgan. (2010). Why the U.S. Can't Inflate Its Way Out of Debt. Retrieved November 13, 2010, from the Motley Fool Web site: http://www.fool.com/investing/general/2010/04/16/why-the-us-cant-inflate-its-way-out-of-debt.aspx
US Congress passes stimulus plan. (2009). Retrieved November 13, 2010, from BBC Web site: http://news.bbc.co.uk/2/hi/business/7889897.stm
Woodhill, Louis. (2010). You Can't Tax Your Way Out of a Debt Crisis. Retrieved November 13, 2010, from Real Clear Markets Web site: http://www.realclearmarkets.com/articles/2010/05/11/you_cant_tax_your_way_out_of_a_debt_crisis_98459.html
Investible PTY LTD. offers a degree that distinguishes and creates pioneering capability and limits the risk of pre-IPO speculation. The organization gives business constructing projects; and creates a pipeline of investible companies and startup organized functionality. It offers the “lab,” expert enterprise development and execution motor that ensures individuals are geared up with the gadgets to collect and process data, create further decisions, networks, and additionally put in place compliances. Investible acts as the admission to an association of startup funding, which can open doorways to potential partners for businesses and the firm. Investible PTY LTD modified into consolidated in 2015 and is situated in Sydney, Australia. According to LinkedIn, Investible has roughly twenty-five employees. Comment by Ingrid Martin: These two sentences don’t make sense?? Comment by Ingrid Martin: Which is what? Comment by Ingrid Martin: I’m not sure where this information comes from but it is really confusing……
The second phase would include using these metrics in order to gather the appropriate results. Finally, the third phase implies interpreting those results and using them to gain a competitive strategic advantage on the market.
The phase dealing with the development of qualitative and quantitative metrics brings about some of the usual challenges in terms of measuring things: what metrics best reflect the performance of a certain activity? In the case of human capital, quantitative metrics can sometimes be a simple as sales growth per employee or changes in financial performance and productivity.
There are several problems, however, with this type of approach. The direct link between the changes in financial performance and human capital results is difficult to prove and, quite often, a negative change in financial performance is not necessarily caused by negative performances of human capital. For example, external factors, such as the current economic crisis, could…
1. Armstrong, Michael (2006). A Handbook of Human Resource Management Practice (10th ed.). London: Kogan Page
2. Fitz-enz, Jac. February 2009. The ROI of Human Capital: Measuring the Economic Value of Employee Performance. AMACOM; Second Edition.
3. GAO 2004. A Guide For Assessing Strategic Training and Development Efforts in the Federal Government. On the Internet at http://books.google.com/books?id=MvBOBDmbOrYC&pg=PA1&dq=human+capital+management#v=onepage&q=human%20capital%20management&f=false . Last retrieved on August 1, 2009
4. Ingham, Jon. 2006. Strategic Human Capital Management: Creating Value Through People. Butterworth-Heinemann; 1 edition
These experts or chartered surveyors use the following five main methods for capital valuation & #8230;
The Investment Method:
This is the first and most common method of capital valuation that is applied in commercial property valuation. The method incorporates translating a property's income flow or rent into a suitable capital sum. In this case, the capital value of the commercial property is directly linked to its producing power of income. Therefore, Value = ent * Years Purchase with the year purchase being the multiplier that translates rental income to capital sum.
For example, if rent is $200,000 and Years Purchase is 10, therefore
Value = ent * YP (200,000*10) = 2,000,000.
The Comparison Method:
Being a method that applies to capital values, the comparison method that is also known as the comparative method of valuation is primarily used for residential property. The method is used for properties that are…
"An Introduction to the Valuation of Property." (n.d.). Best-Investment-Property-Tips.com.
Retrieved November 9, 2010, from http://www.best-investment-property-tips.com/valuation-of-property.html
Kim, K.S. & Nelson, W.A. (1996). Assessing the Rental Value of Residential Properties: An
Abductive Learning Networks Approach. The Journal of Real Estate Research, 12(1), 63-77. Retrieved from http://www.gmdh.net/articles/applic/aln.pdf
Value of a Corporation's Intellectual Capital: Its Impact on the Bottom Line and How it Should Be Managed
This is a proposal on how to analyze the value of corporate intellectual capital and its impact on bottom line management. It has 4 sources and a list of bibliography.
The research aims to identify how corporations' intellectual capital can be evaluated by identifying the factors that contribute to its high valuation. The research also aims to outline strategies that would allow a firm to integrate knowledge management into its management process to enhance its intellectual capital. The basic objective is to shed light to a new management concept in which intellectual capital is integrated as a tool for management instead of a mere accounting head in the balance sheet.
2.Statement of the problem
In today's information technological age, intellectual capital or ICs have become the most visible and valued asset for…
Nahapiet, Janine and Ghoshal, Sumantra, Social capital, intellectual capital, and the organizational advantage. Vol. 23, Academy of Management Review, 04-01-1998, pp 242(25).
Stewart, Thomas A. And Kirsch, Sandra L. Managing/Cover Story: Brainpower Intellectual capital is becoming corporate America's most valuable asset and can be its sharpest competitive weapon. The challenge is to find what you have -- and use., Fortune, 06-03-1991, pp 44.
Ulrich, Dave. Intellectual capital = competence x commitment. Sloan Management Review Winter, 1998.
Woods, Bob. Taking Stock of What You Know. The Chief Executive, July, 2001.
Both Keynes and Kalecki use Marx's theories as a starting point but quickly moved into new ways of thinking, particularly with regard to effective demand being oriented toward the demand-side. Marx had remained rooted in supply-side demand function, rejecting Say's Law only to note that demand did not necessarily meet supply.
Marx, K. (1867). Das kapital: A critique of political economy.
Mandel, E. (1995). Marx's theory of crises. International Viewpoint. Retrieved April 24, 2010 from http://www.internationalviewpoint.org/spip.php?article289
Argitis, G. (2003). Finance, instability and economic crisis: The Marx, Keynes and Minsky problems in contemporary capitalism. University of Crete working paper no. 0307.
Green, F. (1991). Marx, Malthus and wages: A comment on Cotrell and Darity. History of Political Economy. Vol. 23 (1) 95-100.
Magdoff, F. & Magdoff, H. (2004). Disposable workers: Todays' reserve army of labor. CBS Marketwatch. Retrieved April 24, 2010 from http://findarticles.com/p/articles/mi_m1132/is_11_55/ai_n6137106/
Sebastiani, M. (1989). Kalecki and Marx…
Marx, K. (1867). Das kapital: A critique of political economy.
Mandel, E. (1995). Marx's theory of crises. International Viewpoint. Retrieved April 24, 2010 from http://www.internationalviewpoint.org/spip.php?article289
Argitis, G. (2003). Finance, instability and economic crisis: The Marx, Keynes and Minsky problems in contemporary capitalism. University of Crete working paper no. 0307.
Green, F. (1991). Marx, Malthus and wages: A comment on Cotrell and Darity. History of Political Economy. Vol. 23 (1) 95-100.
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…
reporting of capital and operating leases and their impact on fair value measurements. The essay surveys lease accounting standards from 1976 thru the present.
The basic principle of lease accounting is that some leases are merely rentals, while others are in effect purchases. U.S. regulations that specify lease accounting rules are issued by the Financial Accounting Standards Board (FASB). The primary FASB statement on leases was Number 13, issued in 1976, and is also known as FAS 13, SFAS 13 and FASB 13. Over the years it has been amended several times by additional FAS, including FAS 22, FAS 23, FAS 27, FAS 28, FAS 29, FAS 98, and FAS 121. In addition to financial accounting standards, various interpretations and technical bulletins have also been issued to provide additional guidance. Lease accounting rules were previously labeled as section L10 in the FASB Current Text, while the new FASB Codification uses…
Epstein, Barry J. "Accounting for Leases IFRS vs. GAAP. " IFRS Accounting. 2011. 16 September 2011. .
"History of Lease Accounting (Agenda Paper 2)." Joint International Working Group on Leasing. International Accounting Standards Board and Financial Accounting Standards Board. London. 15 February 2007.
"Leases (Topic 840)." Financial Accounting Standards Board. August 17, 2010: 1. Financial Accounting Foundation. 2011. 16 September 2011. .
"Lease Accounting Rules." Financial Computer Systems, Inc. 2007. 16 September 2011. .
The author of this report is asked to answer to several questions and specifications surrounding a business venture and how exactly it would and should be pulled off in an effective and well-performing manner. The form and function and "how" the business would be established is the first thing while the next is the funding sources that would be undertaken to get things going. The form or forms of intellectual property that would have to be enforced and protected as next and then the overall way in which the business will be created or acquired. How the sources and need for capital would change after five years of operation is the last thing to be discussed. While getting a business up and running requires a mass infusion of cash and/or borrowed money to get going, the business will eventually be lucrative.
As for how to establish…
IRS. (2014, February 28). Forms and Pubs. Internal Revenue Service. Retrieved February 28, 2014, from http://www.irs.gov
Nolo. (2014, March 1). Intellectual Property. Nolo.com. Retrieved March 1, 2014, from https://www.nolo.com/products/intellectual-property
Peterson, A. (2013, November 6). Netflix has won: Blockbuster is closing its last retail stores. Washington Post. Retrieved February 28, 2014, from http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/06/netflix-has-won-blockbuster-is-closing-their-last-retail-stores/
Entrepreneur-Why investor would give me capital to start a decorating den?
With the spiraling demand for housing, the demand for interior decoration market is also rising in tandem. Concern regarding making the home interiors beautiful and plush is high on the wish list of many home-buyers. Modern and aware customers who view popular channels on TV dedicated to interiors and subscribe to the magazines flooding the market are valuing the quality of interior decorating in an increasing manner than ever before. ising on this demand for interiors among the people is a great opportunity to take up the Franchise offer of Decorating Den. It is an investment in the future compared to other franchise offered in the market and a completely new way of life. (Opportunities in a New Economy - Message from the President)
Convincing the Venture Capitalist for guaranteed profitability:
By taking up the franchise, owners of Interiors…
"A Beautiful Business" Retrieved from http://www.decoratingden.com/Bbusiness.shtml Accessed on 17 February, 2005
"Interior Views: Sample Plan" Retrieved from http://www.paloalto.com/sampleplans/MPP6/enu/Live/InteriorViews-mpp_Live.pdf
Accessed on 17 February, 2005
"Is the Business for you" Retrieved from http://www.decoratingden.com/foryou.shtml Accessed on 17 February 2005