...holders, compared to the stockholders, have prior claim on cash flow. The residual claim of stockholders increases the risk when the debt holders fixed claim increases, which in turn causes the stock to go up. Debt also increases the risk of bankruptcy to the company. This causes pre-taxed cost of debt to go up as well. Free Cash flow is also affected by additional debt. This can cause increase in the possibility of bankruptcy as well. An indirect cost would be a loss of customer, as a direct cost of distress would be legal fees. The indirect costs cause NOPAT to decrease. This is caused by the loss of customers, in turn causing the net operating working capital to increase. The effect that the managers have (or their behavior in most cases) is also effected by additional debt to the company. Managers will be come less likely to spend or waste their Free Cash Flow on opportunities that might in fact add value, or not add value and even the lack of risk in involving the company in any NPV projects that could indeed become prosperous for the company. B.1. The uncertainty about EBIT is considered to be the business risk. There are many factors that are influential to business risk. Some include: Uncertainty in input costs, and product and other liability types. B.2. The change in EBIT is known as the Operating Leverage which is caused by the change in the quantity that is sold. With the higher proportion of fixed costs that is inside...
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...Corporate Finance 1 1.1 | What Is Corporate Finance? | 1 | | The Balance Sheet Model of the Firm | 1 | | The Financial Manager | 3 | 1.2 | The Corporate Firm | 4 | | The Sole Proprietorship | 4 | | The Partnership | 4 | | The Corporation | 5 | | A Corporation by Another Name . . . | 7 | 1.3 | The Importance of Cash Flows | 7 | 1.4 | The Goal of Financial Management | 10 | | Possible Goals | 11 | | The Goal of Financial Management | 11 | | A More General Goal | 12 | 1.5 | The Agency Problem and Control of the Corporation | 13 | | Agency Relationships | 13 | | Management Goals | 14 | | Do Managers Act in the Stockholders' Interests? | 14 | | Stakeholders | 15 | 1.6 | Regulation | 16 | | The Securities Act of 1933 and the Securities Exchange Act of 1934 | 16 | | Sarbanes-Oxley | 17 | | Summary and Conclusions | 18 | | Concept Questions | 18 | | S&P Problems | 19 | 2 Financial Statements and Cash Flow 20 2.1 | The Balance Sheet | 20 | | Liquidity | 21 | | Debt versus Equity | 22 | | Value versus Cost | 22 | 2.2 | The Income Statement | 23 | | Generally Accepted Accounting Principles | 24 | | Noncash Items | 25 | | Time and Costs | 25 | 2.3 | Taxes | 26 | | Corporate Tax Rates | 26 | | Average versus Marginal Tax Rates | 26 | 2.4 | Net Working Capital | 28 | 2.5 | Financial Cash Flow | 28 | 2.6 | The Accounting Statement of Cash Flows | 32 | | Cash Flow from Operating Activities...
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...Introduction. This course provides an introduction to cost management and management control. It is concerned with the generation, use and interpretation of management and cost information and related data by managers under various organizational systems. This information is used for planning and control, decision-making, performance evaluation, and reporting purposes. The course also examines the impact of quantitative information on motivation and organizational communication. This class presupposes some basic knowledge of financial reporting, economics and organizational behavior. Management accounting is a dynamic field and reflects many of the changes seen in business today. We will often use product-based companies to initially discuss a topic, and then expand our discussions to the service and not-for-profit sectors. Financial accounting is externally oriented and governed by fundamental concepts of generally accepted accounting principles (GAAP). In contrast, managerial accounting is internally oriented. Managerial accounting is very context driven. Management accounting is more intuitively understandable than financial accounting. However, the material cannot be learned by ‘thinking’. You must work through the mini-cases, cases and problems, which are assigned for each class. The concepts and techniques must be used to see how they are developed and applied. Discussion in each class assumes you understand the material covered in prior sessions. Therefore...
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...corporation. The course consists of 8x three-hour sessions of lectures and case studies. The aim of the module is to introduce the student to the way in which a firm can achieve sustainable competitive advantage through strategy. LEARNIING OUTCOMES By the end of the course students should be able to (1) understand the concepts of strategic management, (2) evaluate the factors that need to be considered in analysing a firm’s external environment, (3) evaluate the internal core competences of a firm, (4) formulate strategy for the firm, (5) understand the nature of corporate strategy, and (6) understand the nature of international strategy. Additional learning outcomes are specified for each session. COURSE CONTENT The course consists of nine sessions: (1) What is strategy? (2) The Market Positioning Approach (3) The Resource Based View of Strategy (4) The Institution Based View of Strategy (5) Diversifications and Acquisitions (6) Strategic Alliances and Networks (7) International Strategy (8) Globalisation and MNC organisation structures (9) Conclusion The course will be taught over nine sessions of 3hrs, namely a lecture of 2hrs and a seminar of 1hr. The lectures are used to illustrate the key points under each topic as well as real business examples. Seminars will be used for case studies and applications of the material covered in the lectures. In the final session an integrative case study will be used to bring together many of the concepts introduced in...
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...Delhi-110002 National Manufacturing Competitiveness Programme 4 Lean Manufacturing Competitiveness Scheme CONTENTS Sl. No. Subject Preface 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Introduction Overview The Scheme Concept Objectives of Lean Manufacturing Scheme Develoment Commissioner (MSME) Implementation Structure Financial Assistance Coverage and Eligibility Implementation Framework Implementation Time Line Approval Process Modalities of Fund Transfer Format for Application by MCs/SPV – Annexure - 1 Power of Attorney – Annexure - 2 7 7 7 9 9 9 10 10 10 14 14 14 16 18 Page No. 5 National Manufacturing Competitiveness Programme ABBREVIATIONS CMTI CPs DC (MSME) DGFASLI GDP GOI IA IFW ILO LMC LMS MC MSME MSME - DI NMCC NMCP NMIU SPV SSC T&C TAC – – – – – – – – – – – – – – – – – – – – – Central Manufacturing Technology Institute Condition Precedents Development Commissioner (MSME) Director General Factory Advice Service & Labour Institutes Gross Domestic Product Government of India Implementing Agency Integrated Finance Wing International Labour Organization Lean Manufacturing Consultant Lean Manufacturing Scheme Mini-Cluster Micro, Small & Medium Enterprises MSME-Development Institute National Manufacturing Competitiveness Council National Manufacturing Competitiveness Programme National Monitoring and Implementing Unit Special Purpose...
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... Chicken run This case is about small and medium sized enterprise (SME), Excel Poultry & Meat Sdn Bhd (EPM). Since 2005, EPM is a subsidiary of PCK Holding. Encik Selamat, a Certified Public Accountant (CPA), had been the General Manager of this company that located in Kluang, Johor. This case shows that EPM face management, production, financial and internal control problems. Besides that, this case also shown the conflict of General Manager with the main debtors of the company. Since 2008, this company faces bad financial performances because of lack of internal control. Other than that, this case also shows the external factors for the production process that cause "chicken run" crisis. Excel Poultry & Meat Sdn Bhd (EPM) was establish in 1998 as Small and medium sized enterprise (SME). EPM was started their business with an initial capital of RM 3.6 million and starting with twenty (20) employees. Their Core business is chicken farming and supplying to various outlets in Malaysia such as hypermarkets, restaurants, hospitals, hotels as well as university colleges. Currently EPM had more than two hundreds (200) employees within the organization and started positioning itself amongst the top five (5) chicken suppliers, in the mid-tier producers in the country. SMEs is the most important for Malaysian economic growth, so for that purpose we need make sure our SMEs had the excellent management in their financial and internal control.e would ...
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...Chapter 3 Analysis of Financial Statements ANSWERS TO END-OF-CHAPTER QUESTIONS 3-1 a. A liquidity ratio is a ratio that shows the relationship of a firm’s cash and other current assets to its current liabilities. The current ratio is found by dividing current assets by current liabilities. It indicates the extent to which current liabilities are covered by those assets expected to be converted to cash in the near future. The quick, or acid test, ratio is found by taking current assets less inventories and then dividing by current liabilities. b. Asset management ratios are a set of ratios that measure how effectively a firm is managing its assets. The inventory turnover ratio is sales divided by inventories. Days sales outstanding is used to appraise accounts receivable and indicates the length of time the firm must wait after making a sale before receiving cash. It is found by dividing receivables by average sales per day. The fixed assets turnover ratio measures how effectively the firm uses its plant and equipment. It is the ratio of sales to net fixed assets. Total assets turnover ratio measures the turnover of all the firm’s assets; it is calculated by dividing sales by total assets. c. Financial leverage ratios measure the use of debt financing. The debt ratio is the ratio of total liabilities to total assets, it measures the percentage of funds provided by nonequity holders. The times-interest-earned ratio is determined by dividing earnings before...
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...MODULE B Professional Ethics LEARNING OBJECTIVES | | | | | |Review |Exercise, Problems, | | |Checkpoints |and Simulations | | | | | |Understand general ethics and a series of steps for making ethical |1, 2, 3, 4 |54 | |decisions. | | | | | | | |Reason through an ethical decision problem using the imperative, | |55, 56, 57 | |utilitarian and generalization principles of moral philosophy. | | | | | |...
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...A 1 2 B C D E F 3 Chapter 3 Mini Case 4 5 The first part of the case , presented in Chapter 2, discussed Computron Industries’ situation after an expansion 6 program. A large loss occurred in 2010, rather than the expected profit. As a result, its managers, directors, and 7 investors are concerned about the firm’s survival . 8 9 Donna Jamison was brought in as an assistant to Fred Campo, Computron 's chairman, who had the task of 10 getting the company back into a sound financial position . Computron 's 2009 and 2010 balance sheets and 11 income statements, together with projections for 2011, are shown in the following tables . Also, the tables show 12 the 2009 and 2010 financial ratios along with industry average data . The 2011 projected financial statement data 13 represent Jamison's and Campo's best guess for 2011 results, assuming that some new financing is arranged to 14 15 Input Data: 16 2009 2010 2011 17 Year-end common stock price $8.50 $6.00 $12.17 18 Year-end shares outstanding 100,000 100,000 250,000 19 Tax rate 40% 40% 40% 20 Lease payments $40,000 $40,000 $40,000 21 22 Balance Sheets 23 24 25 Assets 2009 2010 2011 26 Cash and equivalents $9,000 $7,282 $14,000 27 Short-term investments $48,600 $20,000 $71,632 28 Accounts receivable $351,200 $632,160 $878,000 29 Inventories $715,200 $1,287,360 $1,716,480 30 Total current assets $1,124,000 $1,946,802 $2,680,112 31 Gross Fixed Assets $491,000 $1,202,950 $1,220,000 32 Less Accumulated Dep. $146,200 $263...
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...Development Analysis Two Mini Cases 1 21 June 2012 Final Project: Development Analysis Two Mini Case Studies DeVry University Professor Mozinski, BUS412 Business Policy Development Analysis Two Mini Cases 2 Mini Case 1: Bikes for the World (BfW) Challenge or Problem: The Bikes for the World organization was formed to offer valid solutions to the transportation problems facing the poor around the world. Lack of affordable and eco-friendly transportation system led founder Keith Oberg to create BfW. Oberg states he did so in order to solve two problems: to help address the developing world’s lack of affordable, eco-friendly transportation, and to help find a better use for the glut of unwanted bikes in the United States (Thompson, 2010). (Pictured above a young boy from Nyariga, Ghana receives a Bikes for the World bicycle. Photo courtesy of the Shape Lives Foundation) Oberg’s mission was simply to “assist poor people overseas to become more productive through providing affordable bicycles for personal transport to work, school, and health services. Secondarily, provide satisfying community service opportunities to Americans—collecting bikes and spare parts--towards realizing this primary goal of helping others overseas” (BfW, 2012). Through a goal to achieve a sustained impact both here and abroad BfW has partnered with over 600 volunteers, donors, and agencies worldwide who all share a common concern for reducing waste and helping the poor earn, learn,...
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...Case Study : ROPPONGI HILLS – CITY WITHIN A CITY Subject : Strategic Management Student Name : Balakrishnan Muthukaruppan Student Number : INTRODUCTION The case features the Mori Buildings successful development of Roppongi Hills, an integrated urban development and property management of a planned township under the leadership of Minoru Mori, President and CEO, and its future challenges. SYNOPSIS AND COMPANY BACKGROUND Mori Building was founded in 1959 by Taikichiro Mori. He was later succeeded by his son Minoru Mori whom was considered to be Japan’s most powerful building tycoon. Under his leadership the company envisioned and implemented many ambitious and complex urban development projects. One of the mega property development project were the Roppongi Hills , an integrated urban development of a well planned 12-hector mini city incorporating a blended concept of a place to work , life, entertainment, learning and culture at a cost of $2.25million( excluding land acquisition cost) completed in 2003. The other successful projects under the company were Ark Hills, an active multi property complex in 1986 and subsequently the Omotesando Hills famous for its shopping and residential street in 2006. The company also manages the maintenance and the administrative these complexes through various activities for its exploitations as an added revenues. Its other foreign projects include the construction of Shanghai World Finance Centre, in China considered...
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...TALLMART- BUsiness cASE TALLMART- BUsiness cASE Accenture CASE STUDY Accenture CASE STUDY ISSUES/GAPS ISSUE/GAPS We found 4 major issues with respect to the strategy implemented by Tallmart. “ The goal as a company is to have customer service that is not just the best but legendary “ * Sam Walton,Founder of Walmart ISSUE/GAPS We found 4 major issues with respect to the strategy implemented by Tallmart. “ The goal as a company is to have customer service that is not just the best but legendary “ * Sam Walton,Founder of Walmart TALLMART- BUsiness cASE The case talks about the problems being faced by one of the largest non- food retailers in USA, Tallmart. Some of the major issues recognized by us are as follows: 1. No Test Marketing done As a part of the 2013/2020 strategy, Tallmart renovated the entire store design of all its 500 stores. This approach was not justifiable. The new model should have been implemented for around 10% of the stores. This would have enabled them to understand the consumer preferences in accepting the change. Also the revenue from the remaining 90% stores could have been retained. 2. Catalog printing The catalog’s for the clothing line of Tallmart has to be re- printed frequently. The average expense of catalog was $ 15887 per year(refer to cost benefit analysis sheet) As new trends in the clothing line, has to be showcased in the catalog this becomes a recurring expense, and could have been...
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...MINI COOPER: MARKETING STRATEGY, DIGITAL MARKETING, BRAND & ETHICS 10.2478/cris-2013-0005 MINI COOPER: MARKETING STRATEGY, DIGITAL MARKETING, BRAND & ETHICS MARIIA MOISEIEVA The report is designed to examine, analyse, and evaluate where appropriately the current Mini Cooper’s marketing strategy, its digital marketing initiative, branding, and the importance of ethical values in Mini Cooper as well as other organisations. That is important for understanding of the practical applications of marketing is achieved by applying theory to them. It is determined that Mini’s marketing strategy has shifted in terms of targeting and brand positioning. As previously it was an affordable iconic British car, now it has become a cool luxury car dominantly for a young segment. Its international marketing strategy is differentiated in a way that a brand is built up on the historical iconic image of Mini for the UK and associated market, but it is not associated with any values in the past for the US customers. Overall, Mini’s marketing strategy is considered to be innovative, creative, and sometimes ‘silly’, which is of great value for its young energetic target audience. Digital marketing initiative also corresponds to the latest IT and social trends worldwide by ‘digitalising’ marketing initiatives and active social networking with the consumers. Brand is a core competence and ‘everything’ for Mini. Marketing is centered on its brand, not vice versa. An analysis of the Mini’s strategy...
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...Business overview | | 1.2 | Mission | 1 | 1.3 | Vision | 1 | 1.4 | Our Value | 1 | 2 | Opportunity and research analysis | | 2.1 | Primary feasibility analysis | 2-7 | 2.2 | Porter five forces | 8 | 2.3 | PESTEL analysis | 10 | 2.4 | SWOT analysis | 11 | 3 | Marketing plan | 14 | 3.1 | Marketing mix | 14-16 | 3.2 | Marketing strategy | | 3.2.1 | Typologies of our current marketing strategy | 17 | 3.2.2 | Current marketing strategy | 18 | 3.2.3 | Future marketing | 19-22 | 4 | Management and Operation | | 4.1 | Physical location | 23-24 | 4.2 | Floor plan | 25 | 4.3 | Management team | 26 | 4.4 | Overall Business strategy | 27-28 | 5 | Financial plan | | 5.1 | Startup cost | 29 | 5.2 | Sales forecast | 30 | 5.3 | Income statement | 31 | 5.4 | Balance sheet | 32-33 | 5.5 | Depreciation method | 34 | 5.6 | Investment revitalization | 35 | 5.7 | Loan amortization | 35 | 5.8 | Financial objective | 36 | 5.9 | Financial Strategy | 36 | 6 | Conclusion | 38 | Executive Summary The business that we shall be discussing...
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...AF436 Management Control Systems Assignment One Name: Pramendra K Nair ID # S91672510 Due Date: 16th June 2015 AF436 MANAGEMENT CONTROL SYSTEMS ASSIGNMENT ONE CASE: Haengbok Bancorp A small national wide Korean Bank with local customers and Company took advantage of financial crisis and open its similar business in US Question One Haengbok’s Management control systems the systems advantages and disadvantages 1. Action Control A) Current system of loan application process * If loan is more than one million it is approved by Mr Kim a senior manager from Seoul, Korea * For loans ranging from 1 – 5 million dollars the loan is approved by branch committee * Loan which is more than 5 million is approved the credit committee in Korea * Application is reviewed and scrutinize Advantage * This double approval reduces the risk for loans * This system gives time for worldwide trend in banking sector Disadvantage * Time consuming takes long to approve loan * Two most experience managers in branch committee there is no independent representative * Less involvement of branch manager in credit committee headquarters in Korea can make a wrong decision as they may not know the US market * Managers will try process loan application for less than 5 million * Rejected loans can have negative morale 2. Results Control A) Mini Profit Centers * The loan that is generated from each profit center the interest is credited...
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