...Finance 301 Review 1. The following are advantages to incorporating a business: A. Easier access to financial markets to raise capital through sale of stocks and bonds. B. Limited Liability C. Becoming a legal entity that can have a life in perpetuity. 2. Board of directors is elected by, and represents the interests of the shareholders of the corporation. 3. Corporate managers are expected to make capital budgeting and other decisions that are in the best interest of the corporations shareholders. 4. Sound judgment and effective decision making are important attributes for financial managers because they represent the means to the desired end, to maximize the firm’s stock price, which in turn maximizes shareholder wealth. 5. Initially, most corporations are closely held. They are referred to in this manner because their stock is held by a small group of investors. 6. A corporate bond is an example of a financial asset. 7. Know the difference between financial assets and real assets. A. Financial Assets- (stocks or bonds) is claims on the income generated by real assets. B. Real Assets- includes all assets used in production or sale of the firm’s products or services. They can be intangible (plant, equipment) or intangible (patents or trademarks). 8. A decision to expand into a new line of products, at a cost of 5 million, would be considered a capital budgeting decision. 9. When a corporation decides to issue long-term debt in order to pay for the acquisition...
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...1.Introduction: Bangladesh is a developing country. The product of yarn plays a vital role on industrial sector as well as total economy of Bangladesh. Bangladesh is mainly developed on agriculture sector, but textile is not less important than others. The textile industry has played an important role in Bangladesh’s economy for a long time. Currently, the textile industry in Bangladesh accounts for 45 percent of all industrial employment and contributes 5 percent to the total national income. The industry employs nearly 4 million people, mostly women. A huge 78 percent of the country’s export earnings come from textiles and readymade garments, according to the latest figures available. Bangladesh exports its apparel products worth nearly $5 billion per year to the United States, European Union (EU), Canada and other countries of the world. It is the sixth largest apparel supplier to the United States and EU countries. But recently this sector is facing some ups and downs. Besides share of Bangladesh in world total cotton production is not satisfactory. In this situation we should find out the major problems and barriers of textile sector. Yet, Bangladesh has bright prospect in this sector. From our survey we can understand that Malek Spinning Mills ltd. is much profitable than Apex weaving and finishing mills Ltd. Apex ltd is facing losses for fast several years. Tallu Spinning Mills Ltd. Faced losses few years back but they have overcome the loss. We have selected this company...
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...Chapter 6 Bond Certificate- States a terms of a bond as well as the amounts and dates of all payments to be made Maturity Date- The final repayment date of a bond Term- The Time remaining until the final repayment date of a bond Face Value/Par Value- The notional amount of a bond used to compute its interest payment. The face value of the bond is generally due at the bonds maturity Coupons- The promised interest payments of a bond, paid periodically until the maturity date of bond Coupon Rate- Determines the amount of each coupon payment of a bond. The coupon rate expressed as an APR is set by the issuer and stated on the bond certificate. Zero-Coupon Bond- A bond that makes only payment at maturity Treasury Bills- Zero-coupon bonds issued by the U.S. government with a maturity of up to one year Discount- A price at which trade that is less then their face value Pure Discount Bonds- Zero-coupon bonds Yield To Maturity- The rate of return of an investment in a bond is held to its maturity date, or the discount rate that sets the present value of promised bond payment equal to the current market price to the bond Spot Interest Rates- Default free, zero-coupon yields Zero Coupon Yield Curve- A plot of the yield of risk-free zero coupon bonds as functions of the bonds maturity date Coupon Bonds- Bonds that pay regular coupon interest payments up to maturity when the face is also paid Treasury Bonds- A type of U.S. Treasury coupon security...
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...Accounting Terms and Concepts Student Name BSA/301 Instructor Name 11/30/2013 When first starting a business it can be challenging to keep all records of financial transactions that are performed. It is important to do so because not doing so can leave you in a place of uncertainty and can lead you to make some financial decisions that can hurt you. If the records that have been kept weren't accurate or complete it would be hard to determine how much money is actually available for spending. As your business continues to grow it becomes increasingly more important to keep close and accurate track of your finances. Not just money spent but all aspects of your financial information. This includes but is not limited to: spending, revenue, liabilities, property, loans, personal investments, and asset degradation. All of these assets must be considered to have a proper understanding of the state of the business. This is not just important to your perception but to those that may own your business such as stockholders. Should the situation arise that somebody wants to buy your business and you are interested in selling, they may not be able to see the true success of your business without the proper tracking and status of your financial information and that would greatly affect the chances of the business being sold. The good news for you is that modern accounting systems make it incredibly easy to keep track of all of this information. Many programs are able to compute...
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...Does your career plan include a world of lifelong success? Program of Professional Studies THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA We see more than numbers. Choose a career that places you on the path to lifelong success. It’s all about opportunity. Accounting professionals can work in any sector, anywhere in the world. And when you choose CGA, you’ll gain the leadership, problem-solving and technical skills that are sought after by organizations in the private, public and not-for-profit sectors. The CGA Program of Professional Studies gives you the tools to succeed in business, no matter where your career takes you. You’ll enter the workforce with the applied knowledge and demonstrated expertise that employers want, including specialized technical knowledge, sectorspecific competencies, problem-solving skills and the ethical integrity to lead. CGA’s competency-based curriculum is simply your best way to prepare for a rewarding career in financial management. Flexible study options and the freedom to choose the career you want CGA is all about choice. You choose the professional-studies path and real-world experience that best match your career goals and interests. We give you the skills and freedom to work in any type of organization, in any industry, at any level of management. With a CGA designation, your opportunities—both professional and personal, at home and around the world—are limitless. Take your place as a highly respected...
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...Choosing you Banking Partner Managing your Banking Relationship As a finance manager, managing banking relations has been both a difficult and challenging task. Many treasurers inherited banking relationships that had to be maintained with the various banks that composed the corporation’s core group while achieving their main objective: to ensure that all the company’s needs were met reliably and within a reasonable cost (Zietlow and Maness 289). But what are the things that a finance manager should focus on when trying to determine what bank(s) to chose? Is it based solely on cost? How often so finance managers shop around? Or is it better to just sit tight with the current option as the familiarity with your current bank and their way of doing business is worth the “potential” cost savings of going elsewhere and having to learn their system. Historically, CFO and finance managers were prompt to consolidate their banking needs and services within one banking institutions but as the banking landscape keeps morphing/merging and more banks keep adopting AFP standards, it has become increasingly easier to understand the workings of not only your banking institution, but all others as well – which leads to shopping around for cheaper alternatives for different services. From June to September of 2012, Ernst and Young conducted telephone interviews with treasurers, CFOs, and other senior financial executives. The companies interviewed were spread among 9 industry sectors...
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...This report will present a discussion on the financial challenges and issues based on the Ruritanian Project case study. The report is concerned with analyzing the investment environment of the host nation, maximizing the investment return and minimizing the risks which could have a negative impact on the financial performance of the Ruritanian project. Firstly, the national economy environment will be discussed based on the national GDP growth and inflation rate; secondly, there is a discussion on the foreign exchange risks of Rutitania Crown against international currency; third, the issue of joining the Euro zone will be analyzed in terms of benefits and drawbacks; next, the taxation effect in the investment decision making will be accessed and finally there will be a discussion on the political environment. THE NATIONAL ECONOMY AND THE IMPLICATIONS FOR THE PROJECT 2.1 The Relationship between National Economy and the Foreign Direct Investment (FDI) The economic growth of the host nation has always had a positive relationship with the foreign direct investment decision making. The positive effect of host country economic growth on investment decision making has been supported by various studies (Ericsson and Irandoust, 2000; Dhakal, Kamal and Upadhyaya, 2007; Barrell and Pain, 1996; Grosse and Trevino, 1996; Taylor and Sarno, 1999; Trevino et al., 2002). Traditionally the economic growth of the host nation induces FDI inflow when FDI is seeking consumer markets, or when...
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...Taufiq Azam FIN 301 October 14, 2012 CASE 2 COMMUNITY GENREAL HOSPITAL I. INTRODUCTION Community General Hospital was a growing and prosperous not-for profit organization in segregated Virginia from WWII until the abolishment of segregation in the 1960's. At that time they have served and treated the black community, however post-segregation caused for more competition and therefore Community general hospital has undergone various financial problems throughout their existence. Dr. Nolan Wright has been appointed the new manager of the Hospital. However, he has been puzzled by the conditions seen in the financial statements. Over time they had acquired an excessive amount of debt, poor management, budget deficits, and lack of hospital patients. In 1983 the Hospital relocated and changed the name from Whittaker memorial Hospital to Community General Hospital. The fifteen-million dollar bond that was issued and 1.5 million dollar pledges helped Community General Hospital achieve this change. In 1990 the debt increased to twenty-million, this in turn pushed the board of directors to extreme financial measures. The fund deficit increases as the years go by, the reason being short and long-term liabilities. II. METHODOLOGY a) Debt Ratio b) Current Ratio c) Acid Test Ratio d) Net Present Value e) Beta (β) f) Z-Score III. SOLUTION Debt Ratio > Total Debt/Total Assets (1994) = 26,449,071/10,600,209 = 2.50 (1995) = 26,540,410/10,543,410 ...
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...Massey-Ferguson, 1980 Case Study Solution Q1) Assess the product-market strategy and financial strategy Massey pursued through 1976. Where possible, compare Massey’s strategy with those of its leading competitors. Market strategy Massey is a multinational company and has a series of products. It produces farm and industrial machinery and diesel engines, which contributes to 80% and 20% of sales respectively. The farm and industrial machinery has two product lines: the farm machinery line and industrial machinery line. The former produces tractors, combine harvesters, balers, forage harvesters, cane harvesters, agricultural implements, farmstead equipment and other equipment for agricultural purpose, while the latter produces different types of loaders. Massey had been a large provider of the agricultural equipment because it was holding 17% market shares for tractors, 14% market shares for combines and 13% market for machinery worldwide in the year 1980. Although accounting for 20% of sales, the diesel engines are products promising for future growth. However, the engines were produced by Perkins Engine Group in England, where the currency was strong and margins became low. In terms of market distribution, the company’s main focus moved to less-developed places such as Peru, Pakistan and Egypt. The shift to overseas market in less-developed countries made the company lag behind in research and development to make high-tech products to attract customers in the North American...
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...DISSERTATION PROPOSAL The Impact of Foreign Share Ownership on Financial Performance in Australia Word Count: 2,696 Table of Contents 1. Introduction ........................................................................................................................ 3 2. Literature Review ............................................................................................................... 5 2.1 2.2 3. 4. Corporate Governance in Australia ............................................................................. 5 Ownership Structure and Financial Performance........................................................ 6 Hypothesis .......................................................................................................................... 8 Methodology....................................................................................................................... 8 4.1 4.2 Model Design .............................................................................................................. 9 Sample ....................................................................................................................... 10 5. 6. References ........................................................................................................................ 11 Appendix .......................................................................................................................... 14 6.1 6.2 Structure .................
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...Accredited Tertiary Courses Listing 2012 Accredited Tertiary Courses Listing 2012 – as at 26 September 2012 1 2012 Accredited Undergraduate Courses AUSTRALIAN CAPITAL TERRITORY The Australian National University University of Canberra NEW SOUTH WALES Australian Catholic University Australian Institute of Higher Education Avondale College Charles Sturt University Kings Own Institute Macquarie University Southern Cross University Top Education Institute The University of New England The University of New South Wales The University of Newcastle The University of Sydney University of Technology, Sydney University of Western Sydney University of Wollongong Williams Business College NORTHERN TERRITORY Charles Darwin University QUEENSLAND Australian Catholic University Bond University Central Queensland University Christian Heritage College Griffith University James Cook University Queensland University of Technology The University of Queensland The University of Southern Queensland University of the Sunshine Coast SOUTH AUSTRALIA Flinders University Kaplan Business School The University of Adelaide University of South Australia Open Universities (conferred by Uni of SA) TASMANIA University of Tasmania VICTORIA Australian Catholic University Cambridge International College Carrick Higher Education Deakin University Holmes Institute Holmesglen Institute of TAFE La Trobe University Melbourne Institute of Technology Monash University Northern Melbourne Institute of TAFE RMIT...
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...Accounting Horizons Vol. 27, No. 2 2013 pp. 301–318 American Accounting Association DOI: 10.2308/acch-50434 Capital Structure, Earnings Management, and Sarbanes-Oxley: Evidence from Canadian and U.S. Firms Kelly E. Carter SYNOPSIS: I examine Sarbanes-Oxley’s (SOX) effect on capital structure. I find that SOX is associated with higher long-term debt ratios, as firms listed in the U.S. raise their long-term debt ratios by 2 to 3 percentage points. This finding is consistent with the idea that, although the reduction in information asymmetry associated with SOX could prompt managers to increase equity financing, debt is still safer and less costly than equity in the SOX era. Further analysis shows that the increase in debt occurs in the two quarters prior to SOX, suggesting that firms anticipate a higher cost of debt after SOX and acquire debt while it is relatively cheap. Also, firms that heavily (lightly) manage earnings prior to SOX use less (more) debt after SOX. This result is consistent with the view that firms that aggressively manage earnings before SOX reveal intrinsically weaker earnings after SOX, casting doubt on those firms’ ability to repay debt and relegating those firms to issue equity for financing purposes. Keywords: capital structure; earnings management; debt ratio; Sarbanes-Oxley. JEL Classifications: G32; G38. Data Availability: Data available upon request. Kelly E. Carter is an Assistant Professor at Morgan State University. I...
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...Journal Of Financial And Strategic Decisions Volume 10 Number 3 Fall 1997 STRATEGIC ASSETS, CAPITAL STRUCTURE, AND FIRM PERFORMANCE Rahul Kochhar* Abstract Possession of strategic assets is a necessary condition for sustained competitive advantage. This condition is, however, not sufficient. Firms require financial management capability to realize the rents present in their strategic assets. The firm-specific nature of strategic assets implies that they be financed primarily through equity; other less specific assets should be financed through debt. Firms are likely to suffer increased costs and decreased performance if they do not adopt suitable governance structures in their transactions with potential suppliers of funds. INTRODUCTION The recently developed “resource-based view of the firm” seeks to focus the attention of researchers and managers alike on the unique and hard-to-copy strategic assets of the firm [7, 61]. Firms earn economic rents from these assets when there is an initial level of asymmetry in resource endowments, there is imperfect mobility of these assets, the market for these assets is imperfect, and competitors cannot easily obtain similar assets [2, 6, 7, 20, 24, 48]. Strategic assets provide the firm with a source of steady stream of rents so that it gains a sustained competitive advantage over its rivals. While researchers in this area have a general agreement over the characteristics of strategic assets (albeit adopting slightly different terminology...
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...Project Financing Asset-Based Financial Engineering Second Edition JOHN D. FINNERTY, Ph.D. John Wiley & Sons, Inc. Project Financing Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers’ professional and personal knowledge and understanding. The Wiley Finance series contains books written specifically for finance and investment professionals as well as sophisticated individual investors and their financial advisors. Book topics range from portfolio management to e-commerce, risk management, financial engineering, valuation, and financial instrument analysis, as well as much more. For a list of available titles, visit our Web site at www.WileyFinance.com. Project Financing Asset-Based Financial Engineering Second Edition JOHN D. FINNERTY, Ph.D. John Wiley & Sons, Inc. Copyright C 2007 by John D. Finnerty. All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. Wiley Bicentennial Logo: Richard J. Pacifico No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States...
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...Journal of Banking & Finance 22 (1998) 613±673 The economics of small business ®nance: The roles of private equity and debt markets in the ®nancial growth cycle Allen N. Berger a a,b,* , Gregory F. Udell c Board of Governors of the Federal Reserve System, Washington, DC 20551, USA b Wharton Financial Institutions Center, Philadelphia, PA 19104, USA c Kelley School of Business, Indiana University, Bloomington, IN 47405, USA Abstract This article examines the economics of ®nancing small business in private equity and debt markets. Firms are viewed through a ®nancial growth cycle paradigm in which different capital structures are optimal at dierent points in the cycle. We show the sources of small business ®nance, and how capital structure varies with ®rm size and age. The interconnectedness of small ®rm ®nance is discussed along with the impact of the macroeconomic environment. We also analyze a number of research and policy issues, review the literature, and suggest topics for future research. Ó 1998 Published by Elsevier Science B.V. All rights reserved. JEL classi®cation: G21; G28; G34; E58; L89 Keywords: Venture capital; Small business lending; Bank; Mergers 1. Introduction The role of the entrepreneurial enterprise as an engine of economic growth has garnered considerable public attention in the 1990s. Much of this focus * Corresponding author. Tel.: 1 202 452 2903; fax: 1 202 452 5295; e-mail: aberger@frb.gov. 0378-4266/98/$19.00 Ó 1998 Published...
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