...finance holds that, provided |http://www.investopedia.com/terms/t/timevalueo| | |money can earn interest, any amount of money is worth more the |fmoney.asp | | |sooner it is received. | | |Efficient market |An efficient market is a market in which all the available |Titman, S., Keown, A., & Martin, J. (2014). | | |information is fully incorporated |getting started principals of finance. | | |into securities prices, and the returns investors will earn on |Finanical Managment, principles and | | |their investments cannot be predicted. |appliations (12 ed., p. 210). New Jersey: | | | |Pentice Hall. | |Primary versus secondary |Primary market, A part of the |Titman, S., Keown, A., & Martin, J. (2014). | |market...
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...strategy of the company is efficient but still the Reserch and Development department does not get a full attention from the top management. As mention above, the strategy of the company is efficient because for each division the chief executive officer will sets the sales growth based on the revenue growth above and beyond economic driven expectations and return on the total capital and the CEO and several corporate officers will meet with the management of each divison at one or two day. During the meeting he can properly check and question directly about the document submited by the president. This can prevent fraud from occurred in that company. CEO knight are actively involved in the beginning of the process and this can be related with the top-down approach planning. The planning system including the value of measurement chart contains comparison in five-year incements fir return on invested capital, economic profit, operating capital turnover and sales. Because of the chief executive officer knight will set the growth and return on the total capital, the chart that has been provided by top managment will reflect both. The CEO has been analyzed that the investment community are valued highly over time. Besides that, the sales gap chart and sales gap line also include in the planning system. The gap will represent the difference between the top management target rate for sales growth and division long range sales forecast. Both gap shows the 5 years sales projection...
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...Discussion Questions Discussion Questions How do you define working capital? What may happen if an organization neglected to manage its working capital? What techniques do you recommend for your organization? Why? * * The equation for working capital is assets minus liabilities. Anything below 1 indicates negative working capital. If a company neglects maintaining their working capital, they run the risk of being in debt or even going bankrupt. Some techniques organizations due to ensure they have a good amount of working capital is ensuring they are paid on time (accounts receivable). In addition, it is also important they are paying their creditors on time. Last, it is important to invest any excess cash to maximize profitability. * What is capital planning? Why is the internal rate of return important to an organization? Why is net present value important to a project? How do you select from multiple projects presented to your organization? * * Capital planning is the process of planning for the future or replacing equipment. When capital planning, it is important to take the value of money into consideration. Thus, will the product or equipment have a higher return? In addition, will the product or the project retain its value in the foreseeable future? Another reason why the internal rate of return is important, is because it tells the organization if the risk of the investment. Net present value is taken into consideration when investing because...
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...Chapter 1 Overview of the 21st century workplace - Organizations must adapt to rapidly changing society > like in 2003 there was so wireless but now its changing now most of the business rely on wireless communication - Economy is global and driven by innovation and technology > you need new original ideas (innovative) High performing companies gain extraordinary results from people working for them Interdependent, knowledge based > Depend on each other as a part of organization Study question 1 what are the challenges of working in the new economy > intellcutual capital people are the ultimate foundations of orgzanitional performances intellcutual capital is the collective brain power or shared knowledge of a workforce that can be used to create value A knowledge worker adds to Globalization . National boundaries of world business have largely dissappeared . globalizations is the worldwide interdependence of resource flows,product markets and business competition that characterisitv that characterize the new company Technology . Continuing transformation of the modern workplace throughout > the internet (having social network websites to market product) > worldwide web (exchange of stocks) > computers > information technology .Increasing demand for the knowledge workers with the skills to fully utilize technology Diversity: >workforce diversity reflects differences with respect to gender , age, race, ethnicity, religion,sexual orientation...
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...Corpotate Finance Managment Global Banking of HSCB HSBC Global Banking and Markets provides tailored financial solutions to major government, corporate and institutional clients worldwide. HSBC's global capabilities and footprint allow their Global Banking teams to provide a single coverage point for multinational clients operating internationally. HSBC provide their clients with a suite of products and services in order to meet their global financial needs. HSCB sector-focused client service teams include: • Corporate Sector Group The Corporate Sector Group provides a wide range of banking services via their client relationship managers to some of the world's largest companies. The group is divided into industry/sector-specific teams which are distributed across their offices in Europe, the Middle East, Africa, the Americas and the Asia-Pacific region. • Financial Institutions Group Their team comprises experienced senior bankers and product specialists, each chosen for their sector-specific expertise and knowledge of global financial markets. They have over 400 bankers around the world who work closely with their clients to understand their needs, and deliver integrated and customized banking propositions. They provide a wide range of products and services to financial institutions globally, including transactional banking facilities, strategic advice and capital rising. The main Global Banking products are credit and lending...
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...Working Capital: Change in Accounts Receivable (245,840) Change in Inventories (429,140) Change in Accounts Payable 35,800 Change in Accruals 95,040 Net Cash Provided by Operating Activities (544,120) Investing Activities Cash Used to Acquire Fixed Assets (17,050) Change in Short Term Investments 51, 632 Net Cash Provided by Investing Activity 34,582 2. Free Cash Flow 502,640(1-0.4) = 502,640 (0.6) = 301,584 NOPAT FCF = NOPAT - NOWC - Long Term Capital 301,584 - (14,000 + 878,000 + 1716480 ) - (359,800 + 380,000) = -1,567,096 3. Uses of Free Flow for 2011 1. Pay interest to debtholders. 80(1-.40) = 48 2. Repay debt holders. (359,800+10000000)-(500,000-720,000)= 1139800 3. Pay dividends to debtholders. 250,000*.220=55,000 4. Repurchase stock from shareholders. 460,000-1680936=1220936 5. Buy short-term investments. 71,632-20,000=51,632 4. For 2011 Find the Following- Current Ratio: current assets/current liabilities = 2680112/1039800 = 2.6 Debt Ratio: liabilities/assets = 1539800/3516952 = .44 Profit Margin on Sales: Income/sales = 253,584/7035600 = 0.036 Return on Total Assets: 235,584/3,516,952 = 0.072 Price/earnings: 12.17/1.01 = 12.049 Earnings per Share: net income/# of shares outstanding = 253,584/250,000 = 1.014 Financial Analysis Liquidity Calculation Ratio Avg Comment Current 2680112/1039800 = 2.6 2.6 4.2 poor Quick 2680112-1716480/1039800 = 0.92 0.92 2.1 poor Asset Managment Inventory...
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...stewardship, and performance is the basis for integrated thinking and is the key element in integrated reporting. Integrated reporting (IR) principles are global in nature applicable to all organizations across multitude of industries and sectors and are becoming a fundamental practice towards a more cohesive and efficient approach in demonstrating to internal and external stakeholders how the business creates value in the short, medium, and long-term (Tilley, 2014). An integrated report should identify and communicate how relevant and interdependent, financial and non-financial factors affect an organization’s value creation process across organizational and geographical boundaries. This connectivity fosters a more efficient allocation of capital within the organization by breaking down communication barriers to engender a more collaborative and positive culture and outside of the organization by attracting investors through a more relevant assessment of risk and explanation of non-financial value. Other stakeholders, including policy makers, regulators,...
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...Financial Managment – First Investments, Inc.: Analysis of Financial Statements Team 4: Nathalie Strookman, Dieter Wolfram, Demis Busropan Background Problem Definition The 1994 Basic Industries annual report shows a decline in the return on owners’ equity. This has got the portfolio people worried. An analysis has to be made of the way the company has achieved its return on equity over the last 10 years. The focus should especially be on the 1993-1994 period and the quality of the returns on equity of 1985 and 1994 should be compared, as well as other key financial ratios. By doing these financial analysis we hope to find out why the return on shareholders’ equity is varying in time. {draw:frame} {draw:frame} {draw:frame} Results {draw:frame} {draw:frame} {draw:frame} Analysis In order to analyze the company’s financial performance, we make use of financial ratios; leverage ratios to show how heavily the company is in debt; liquidity ratios how easy cash can become available; efficiency ratios to measure the productive use of the assets; profitability ratios to measure the return on investments. This is done for the period 1985-1994 where possible, and the total analysis can be found in the added excel file. 1985-1994 {draw:frame} If the operating profit margin increases than every sales gives you more money which results in a higher return on equity. If the asset turnover increases, more sales are generated for every unit of asset and the...
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...Financial Analysis & Management Assignments 1. Discuss the extent to which the legal and professional regulatory framework of accounting ensures that corporate reports provide reliable, relevant, objective, and comparable information to users. 2. Critically evaluate the importance of discounted cash flow techniques in investment decisions. Illustrate your answer with your examples. 3. Discuss the relative importance profitability and liquidity for the survival of a business and explain how the working capital can be managed to minimise the risk of liquidity problems. Shahrzad Parhizgar Student Number: B0229JTJT1112 February 2013 Lecturer:PalanAmbikai Word Count: 2980 Financial Analysis & Management Assignments February 1, 2013 Table of Content LEGAL & PROFESSIONAL REGULATORY FRAMEWORKS ENSURING RELIABLE, RELEVANT, OBJECTIVE, AND COMPARABLE DATA ........................................................................................................................................ 3 INTRODUCTION ....................................................................................................................................................... 3 FINANCIAL INFORMATION USERS ................................................................................................................................ 3 LEGAL AND PROFESSIONAL REGULATORY FRAMEWORKS ................................................................................................. 4 FINANCIAL REPORTS...
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...customer needs, new processes of delivering customer service, and new products which might attract the markets.For example, Apple Inc, the an American multinational corporation, understand and grasp the customer's needs which is phablet (more than 5 inch smartphone screen) , so they offer two new designs for the iPhone 6 which have the screen size of 4.7 inch and 5.5 inch. As a result , Apple are now able to cross the biggest competitor ,SamSung and becomes the No. 1 smartphone maker in the world. Nevertheless, there is the fact that 70% or more of significant organization changes either fail to achieve the desired results or make things worse. The failure may result in disillusionment, frustration, chaos, waste of time and human and capital resources, the loss...
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...The main objective of any manager is to maximize the value of the investment. Thus anyone should invest only to earn a yield which is greater than the minimum acceptable hurdle rate. Hurdle Rate = Risk-Free Rate + Risk Premium Beta of a security or a portfolio helps in analyzing the volatility or systematic risk of the particular stock or portfolio in relation to the market as a whole. The value of the Beta is used in The Capital Asset Pricing Model (CAPM). The CAPM is a model which helps in understanding the relationship between the expected return and risk of a security or a portfolio and thus helps in the pricing of the security. The basic premise on which the CAPM is based is that an investor who is sacrificing his consumption in order to invest should be compensated for two things; one is the Time Value of Money and the risk which is inherent in the stock or the portfolio. The formula used to calculate the expected returns is: RS = Rf + (Rm – Rf)*Beta Now if we break the formula into two halves then we can say that the investor is being rewarded for Time Value of Money with the risk-free rate (Rf). The other half of the formula is known as the risk premium and tells us the portion of return which the investor needs for taking additional risk. The CAPM thus helps us to find out an expected return on a stock or a portfolio and then the expected rate of return is compared to the required rate of return and if the expected rate of return is greater than the required rate...
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...Business Model and Strategic Plan Part I: Conceptualizing a New Product of an Existing Business Stephanie Crossman BUS/475 12/11/15 Darrell Costello Table of Contents I. Title Page II. Table of Contents III. Executive Summary IV. Business Model and Strategic Plan Part I: * Conceptualizing a New Product of an Existing Business V. Conclusion VI. Reference Page * * * * * * * * * * * * * * * * * Executive Summary * This report is providing information on the future of profitability of SanDisk in regards to a new product launch. SanDisk is proud to announce our new product launch and partnership with Sony Electronics. Their latest and greatest 4K Televisions will now also be equipped with a built-in SanDisk Memory Card. The memory card will be accessed through the record button on the remote control. This new launch and partnership is going to change not only our industry, but the cable and satellite industry as well. Our innovation will replace the need for a DVR. * * New Product Mission Statement * The new Built-in Memory Cards endeavor of SanDisk and Sony is a very innovative division for both our companies. It is initialling going to be geared toward enhancing the viewers home entertainment experience. As time passes, we will be able to build on the consumers’ experience by combining more features to make this product compatible...
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...costing system into their business. The comparison of a job order cost system and a process order system will be analyzed to decide which would be the best fit for Super Bakery, Inc. Super Bakery, Inc. was founded by ex-National Football League Pittsburgh Steeler play Franco Harris his vision was to provide vitamin, mineral, and protein enriched doughnuts to schools and other institutions. Super Bakery is a virtual corporation, in which only the core, strategic functions of the business are performed inside the company (Darling, October 1996).The main thought about running a company this way was to pull other organizations with expertise in these areas together to reduce the amount of liabilities for facilities, labor, and working capital. The company can claim that this system of outsourcing is working because sales have grown at an average annual rate of approximately 20%. Even though Super Bakery was experiencing some success with the outsourcing at the same time it was proving to be a challenge to the organization in terms related to controlling the costs. The organization started off with a more traditional costing method that simply spread the costs of the operation to every customer. This caused every customer orders to appear to cost the same amount to complete but this was not the case. This was causing the customers whose orders were less to make up the difference for those orders that were more expensive due to distance or other things. This did not seem...
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...corporate governance will be examined as a means of accurately demonstrating the overall merit and usefulness of corporate governance in today’s financial environment. Investor Protection: Defond & Hung, (2004) defined investor protection as the extent of the laws that protect investors’ rights and the strength of the legal institutions that facilitate the enforcement of those laws where they exist. This definition was further expanded by La Porta et al (2000) who postulated strong investor protection laws and similarly robust enforcement institutions were the main contributors to markets that promoted investment simply because the rights of the investors were seen to be adequately protected and the risk of exapropriation by managment was greatly reduced. It was therefore seen as critical that the protection of investor’s rights was necessary as minority shareholders were often exploited by creditors and majority shareholders extensively. La Porta, et al., (2000) further posited that, in the absence of strong corporate governance mechanisms, shareholders faced the real risk of returns on their investments being expropriated by managers and other controlling shareholders. Corporate Governance Overview: Tirole, (2001) proffered that the standard definition of corporate governance among traditional scholars is the defence of shareholders’ interests and further postulated that a...
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...I.INTRODUCTION Experiencing low cost traditional surgical procedures, Advanced Medical Technology Corporation (AMT) wants to broadcast this tagline by manufacturing well designed medical instrument based on a massive researching. Taking into account the efforts and allowances spilled by AMT on its research and development aspect, and in invading new markets, it is not unexpected that it had gained an extraordinary growth and rapid expansion of its sales force for just a few years of being established. Like any other companies who were in their infancy/growth stage, it is a normal thing to put the best shoe forward in order to gain an A+ mark. But the aggressiveness nature of the decisions made by Peter Haskins, president of the AMT, had, to the conclusion of some lenders, contributed to several tribulations that impede the continuous growth of the company. Though AMT had gained extraordinary growth through their well done researches, it tends to risk its financial aspect by exhausting too much fund just to develop and produce its product. Its mismanagement of its assets had made potential creditors to deny its loan requests. These facts had led to the perfection of this study. It aimed to analyze the problems faced by the company, the cause of these problems and how the company will trounce these problems. II. EXECUTIVE SUMMARY Advance Medical Technology Corporation (AMT) developed, manufactured and sold scientific medical instruments, needles, and catheters that allowed...
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