...property) is purchased with a combination of equity and significant amounts of borrowed money, structured in such a way that the target's cash flows or assets are used as the collateral (or "leverage") to secure and repay the money borrowed to purchase the target-company/asset. Since the debt (be it senior or mezzanine) has a lower cost of capital (until bankruptcy risk reaches a level threatening to the lender[s]) than the equity, the returns on the equity increase as the amount of borrowed money does until the perfect capital structure is reached. As a result, the debt effectively serves as a lever to increase returns-on-investment (ROI). The purpose of a LBO is to allow an acquirer to make large acquisitions without having to commit a significant amount of capital. A typically transaction involves the setup of an acquisition vehicle that is jointly funded by a financial investor and management of the target company. Often the assets of the target company are used as collateral for the debt. Typically, the debt capital comprises of a combination of highly structured debt instruments including prepayable bank facilities and / or publicly or private placed bonds commonly referred to as high-yield debt. India has experienced a number of buyouts and leveraged buyouts since Tata Tea’s LBO of UK heavyweight brand Tetley for ₤271 million in 2000, the first of its...
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...Proprietorship, Central & Financial Corporation Act, Dishonour of Cheques, Debt Laws, Embezzle-ment, Hypo-thecation. Interest Act, Selected cases under Banking Regulation Act, Negotiable Instruments Act, BIFR, AAIFR, MRTP Commissions, SEBI, SICA, State Recoveries of Dues Act and several Allied Act making this an essential reading for Practitioners, Financial Institutions, Banks, Corporate Sector wth an invaluable reference source of developments in matters related to the above topics. • Fast access to information. • Each issue contains up to 20 decisions with full text every Judgment. • Almost all reportable / non-reportable judgements, decisions delivered by Debt Recovery Appellate Tribunals and DRT’s. • Cases are clearly presented ith catch words and concise head notes summarizing the judgments clearly and accurately. • Cross – references are given to other major legal decisions delivered by the Supreme Court & various High Courts. Accurate Case Reporting of land mark case, with topical Index, Subject Index & Important Law Point and the background of the case, the judgement given and a list of case referred to in the Judgement. • A News & Reviews section – provides an in-depth access to the latest on matters relating to Debt Recovery Laws. • Articles and Questions & Answers written by leading practioners of this field provide a bird eye view of the discussions of current issues relating to Debt Recovery matters. • The index is divides into 4-parts to make...
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...ACC 303 12/1/2013 ACCOUNTING TRANSPARENCY Accounting is mainly concerned with general rules, concepts and principles that are established with the purpose of governing different fields of financial reporting. Accounting principles are also known as accounting principles and guidelines, these acts as the base on which more complex and critical rules are based. The authority responsible for issuing the accounting standards (i.e. financial accounting standard board) also uses these basic principles to formulate the accounting standards in a more efficient manner. Generally accepted accounting principles (GAAP) consist of various rules and principles which are used for preparing the financial statements. GAAP consist of three important fields:- 1) Basic accounting principles and guidelines. 2) Various accounting standards issued by FASB. 3) Generally accepted practices in the industry. All those companies which are providing its financial statement to public is required to follow the GAAP while preparing the financial statements. Further, if the company is a listed entity then the federal law of the nation requires the company to get its accounts audited by an independent certified public accountant. There has been various corporate scams in past years which has made it compulsory for the regulatory bodies to create various laws and amend the existing laws so that more accurate and transparent financial statements can be prepared. Few of the corporate scams which...
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...keen interest in governance and financial management. Nowadays, effective public financial management is considered critical in combating corruption, alleviating poverty, and ensuring the effective use of internal and external resources. This course is a fundamental course that aims to provide basic understanding of effective public financial management systems to the participants in a better, quicker and efficient way by making them familiar with various internal and external techniques available to strengthen the fiscal transparency and management that is catalyst for economic growth and development. This UNITAR e-learning course will give a holistic overview of the concept and techniques of public financial management. The course will discuss the role of internal controls and audit system as well as the role of external audits in ensuring efficiency and integrity in public financial management and in combating corruption. The course is designed especially for public officials and development practitioners, but is also open to the general public who want to be aware of public financial management instruments and techniques. Some previous knowledge of public financial management and familiarity with financial concepts will be assumed in this course. ------------------------------------------------- Learning Objectives At the end of the course, the participants should be able to: * Discuss the concept of public financial management and recognize the difficulties faced by...
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...CHESAPEAKE ENERGY CORPORATION BY: GALE C. HOWARD Chesapeake Energy Corporation is headquartered in Oklahoma City, Oklahoma. With field offices spread throughout its vast operating area to include: Oklahoma, Texas, Wyoming, Louisiana, Ohio, and Pennsylvania. Chesapeake Energy is the second largest producer of natural gas and the twelfth largest producer of oil in the United States. Chesapeake Energy employs approximately 4400 employees and owns about 9.5 million net acres of leasehold rights. As with all energy companies, Chesapeake Energy must follow the legal guidelines of several entities. One of the entities being the State Commissions governing oil and gas interests. These control the conservation of oil and gas products as well as mineral interest owner’s rights. Another entity is the Internal Revenue Service which requires strict adherence to their set procedures and accounting of owner’s tax information and payment history. Chesapeake Energy is also subject to various audits of its accounting systems, data concerning its interest calculations, and all investor information. The social environment at Chesapeake Energy is always expanding. Some of the amenities provided to its employees include: a top of the line fitness center, an employee garden, three restaurants on campus, and an outdoor track and field area. All of these amenities allow the employees to interact with each other in a more relaxed social setting. In a more professional setting, Chesapeake...
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...addressed by Governor, Dr. Y. V. Reddy when he was Deputy Governor. My address today is like a footnote to the comprehensive address given by Dr Reddy in Bangkok1 . He had covered a whole range of issues relevant for the development of the debt market including the need and motivation for development of domestic debt markets, the key issues relating to the development of the government securities market and also of the corporate bond market. He had emphasised the importance of the development of institutions and infrastructure such as the development of institutional investors, self-regulatory organisations, credit rating agencies, the relative roles of banks and bond markets, development of primary dealers, efficient clearing and settlement mechanisms and the like. More importantly, he had laid out the road map for the development of Indian debt markets in a very detailed manner for the following two years. I am here to really give you a progress report. First, it is very gratifying to see that most of reforms contemplated by him at that time have been completed. Second, as he had said, the development of the corporate debt market is different: whereas the government securities market has developed a great deal, the corporate debt market has a long way to go. The development of any market needs a great deal of collaboration and consultation between regulatory authorities and market players. This has been achieved very...
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... Shashank Gupta (2013266) | 9/6/14 | Financial Services | | Q. What does the Government of India hope to achieve with the new draft RBI guidelines for the wealth management industry? What are the reasons behind introduction of the new regulations? A. Reserve bank of India’s guidelines for the wealth management industry prohibit banks from offering discretionary wealth management services to their customers, wherein a portfolio manager independently manages funds of individual customers and takes their investment decisions. The discretionary portfolio management service also includes portfolios broadly directed by the customer, or those wherein the customer gives a negative list of investment products at the time of opening the account so that the fund manager ensures that such investment products are not included in the portfolio. In case of non-discretionary services, the RBI allows banks to work through a separately identifiable department or division (SIDD) or a subsidiary. Such a subsidiary or SIDD would require to be registered with market regulator Securities and Exchange Board of India (SEBI) and comply with SEBI guidelines on providing these services, including the code of conduct, if any. There should be an arm’s length relationship between the bank and the subsidiary if the latter is offering wealth management services, the central bank said. RBI has also stated that bank employees involved in marketing or sales of third-party products should not be given...
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...Entrepreneurial engine, Venture capital revs up the engine fast till it attains sustainable speed to change the gears from idea to entity, eventually reaching IPO stage. The paper starts with Research and Development Cess Act, 1986 and covers the development in the field till 2003 and presents an analysis of venture investments as well as future prospects . The history of Venture capital (VC), its advent in India, Characteristics of VC, Government guidelines on VC, Classification of VC in India, Types of V and their analysis has been dealt in the C paper. . Introduction Since Independence till early1990s, the Government has been playing the role of an entrepreneur as well. This was on account of the policy direction which propounded socialistic society and mixed economy. There was dearth of capital, infrastructure facilities and entrepreneurship in the country. During this period, the Government developed infrastructural base such as roads, railways, electricity, ports, banks, financial institutions, insurance etc through the public sector enterprises which were supposed to attain commanding heights of the economy. The environment thus created resulted in the people of India becoming job seekers and the Government itself became a dominant entrepreneur and job provider. Industrialists in general became license seekers rather than wealth creators. Goods and services of poor quality were produced at higher cost and lower reach, thus India Inc. could never develop a competitive edge...
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...Wal-Mart Ethics and Compliance FIN/370 OCT 23RD 2010 Wal-Mart Stores Inc.Ethics and Compliance Give me a “W”, Give me an “A”, Give me an “L”, Give me a squiggly, Give me an “M”, Give me an “A”, Give me and ‘R”, Give me a “T”. What’s that spell? Wal-Mart. Whose Wal-Mart is it? It’s my Wal-Mart! Who’s number one? The customer! Always! This is the motto and cheers that Wal-Mart lives by. Don’t be surprise if you hear the associates shouting this loudly and proudly at your local Wal-Mart store. It is one way they show pride in the company and how much they value its customers. Ethics plays a huge role on why Wal-Mart has been successful and as Sam Walton would say “Just because we work hard, we don’t have to go around with long faces. It’s sort of a ‘whistle while you work ‘philosophy and we work better because of it” In 1962, Sam Walton opened his first store, he implanted many principles and values within the company; Respect for individual, Service to the Customer and Striving for Excellence which were his 3 basic beliefs and remain firmly committed to after his death. The Global Ethics Office in the company promotes ethical culture to all stakeholders worldwide. The statement of ethics gives all associates globally a reference guide to make ethical decisions. Wal-Mart ethical standards exist to strengthened the operation of positive labor and environmental practices in factories. The company encourages anyone that is involved in an ethical...
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...Entrepreneurial engine, Venture capital revs up the engine fast till it attains sustainable speed to change the gears from idea to entity, eventually reaching IPO stage. The paper starts with Research and Development Cess Act, 1986 and covers the development in the field till 2003 and presents an analysis of venture investments as well as future prospects . The history of Venture capital (VC), its advent in India, Characteristics of VC, Government guidelines on VC, Classification of VC in India, Types of V and their analysis has been dealt in the C paper. . Introduction Since Independence till early1990s, the Government has been playing the role of an entrepreneur as well. This was on account of the policy direction which propounded socialistic society and mixed economy. There was dearth of capital, infrastructure facilities and entrepreneurship in the country. During this period, the Government developed infrastructural base such as roads, railways, electricity, ports, banks, financial institutions, insurance etc through the public sector enterprises which were supposed to attain commanding heights of the economy. The environment thus created resulted in the people of India becoming job seekers and the Government itself became a dominant entrepreneur and job provider. Industrialists in general became license seekers rather than wealth creators. Goods and services of poor quality were produced at higher cost and lower reach, thus India Inc. could never develop a competitive edge...
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...Internship Report on Credit Rating and Factore of Affecting The Bank rating Executive Summery Credit rating agencies (subsequently denoted CRAs) specialize in analyzing and evaluating the creditworthiness of corporate and sovereign issuers of debt securities. In the new financial architecture, CRAs are expected to become more important in the management of both corporate and sovereign credit risk. The logic underlying the existence of CRAs is to solve the problem of the informative asymmetry between lenders and borrowers regarding the creditworthiness of the latter. Issuers with lower credit ratings pay higher interest rates embodying larger risk premiums than higher rated issuers. Moreover, ratings determine the eligibility of debt and other financial instruments for the portfolios of certain institutional investors due to national regulations that restrict investment in speculative-grade bonds. The banking sector in Bangladesh passed through significant changes in terms of structure and policies. Starting with six nationalized commercial and a few specialized banks after independence, the total number of banks has reached 48 at present including private and foreign commercial banks. The Bangladesh financial sector is under going through a phase of transaction, transformation and convergence. The regulators are more active then ever before to bring the sector up to an international standard. The competitive environment created with the presence of too many banks in...
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...Module 1 Financial Accounting for MBAs ------------------------------------------------- DISCUSSION QUESTIONS Q1-1. Organizations undertake planning activities that shape three major activities: financing, investing, and operating. Financing is the means a company uses to pay for resources. Investing refers to the buying and selling of resources necessary to carry out the organization’s plans. Operating activities are the actual carrying out of these plans. Planning is the glue that connects these activities, including the organization’s ideas, goals and strategies. Financial accounting information provides valuable input into the planning process, and, subsequently, reports on the results of plans so that corrective action can be taken, if necessary. Q1-2. An organization’s financing activities (liabilities and equity = sources of funds) pay for investing activities (assets = uses of funds). An organization’s assets cannot be more or less than its liabilities and equity combined. This means: assets = liabilities + equity. This relation is called the accounting equation (sometimes called the balance sheet equation), and it applies to all organizations at all times. Q1-3. The four main financial statements are: income statement, balance sheet, statement of stockholders’ equity, and statement of cash flows. The income statement provides information about the company’s revenues, expenses and profitability over a period of time. The balance sheet lists the...
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...telecommunication. Samsung's motto is to "inspire the world and create the future" by leveraging three key strengths: new technology, innovative products and creative solutions. | Samsung | Wells Fargo | AT&T | Current Ratio | 1.4101 | 1.1500 | 1.6467 | Debt to Equity Ratio | 0.6768 | 9.8100 | 0.9675 | Profitability Ratio | 0.2881 | 2.3500 | 0.3069 | Return on Sales | 0.0736 | 2.0900 | 0.9563 | Dupont Ratio | 0.1200 | 0.6900 | 0.3496 | Financial Leverage | 1.1317 | 1.3500 | 1.0724 | Total Asset Turnover | 2.5035 | 0.0100 | 0.9003 | When you compare Samsung to AT&T, the retail sales company we profiled, Samsung has a lower current ratio by 20%. Samsung's debt to equity ratio is almost 30% lower than AT&T. Samsung's profitability ratio is very similar to AT&T, though 2% lower. Samsung's return on sales is comparable to AT&T, thought slightly lower. AT&T is much strong on return on equity, with almost 3X the Dupont ratio of Samsung. Samsung's financial leverage is slightly higher than AT&T. The key strength of Samsung over AT&T's financial performance is the total asset turnover which is almost 3X that of AT&T. Samsung's focus on lean manufacturing and supply chain management enable the company to perform so strongly in this area. When you compare Samsung to Wells Fargo, the services industry company we profiled, Samsung has a higher current ratio by more than 20%. Samsung also...
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...Laws create a guideline for a way a company must run and how it needs to conduct itself. Ethics of a company are a guideline for how the management and employees of a company should conduct themselves regardless of their own personal views and ethics. Laws explain on what we are able to do whereas ethics explains about what we should always do (Ethicaledge, 2008). Both laws and ethics allow a company to run properly. If a company does not run by the laws that are in place they are likely to be ethically unstable as well. Within each company there is a legal system set up made of legal guidelines and regulations that handle different areas of business. This set-up helps in controlling risk, debts and obligations. These laws have the ability to provide members of management with recommendations on how the company should be run. Laws are laws and are set in place. No company has special treatment from these laws. The principles and restrictions that are in position legalize all areas of a business…its investments, employees, and production (SCU, 2008). Because there are laws set forth for companies to follow they are not afforded the ability to fun their company completely in a way they want to. These laws offer regulations for companies to conduct their business which allows for ethical standards to be put in place. These ethical standards are to be followed by all within a company and does not afford special treatment for anyone in higher power. Laws also assist in...
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...Basel I The Basel Accords are some of the most influential—and misunderstood—agreements in modern international finance. Drafted in 1988 and 2004, Basel I and II have ushered in a new era of international banking cooperation. Through quantitative and technical benchmarks, both accords have helped harmonize banking supervision, regulation, and capital adequacy standards across the eleven countries of the Basel Group and many other emerging market economies. On the other hand, the very strength of both accords—their quantitative and technical focus—limits the understanding of these agreements within policy circles, causing them to be misinterpreted and misused in many of the world’s political economies. Moreover, even when the Basel accords have been applied accurately and fully, neither agreement has secured long-term stability within a country’s banking sector. Therefore, a full understanding of the rules, intentions, and shortcomings of Basel I and II is essential to assessing their impact on the international financial system. This paper aims to do just that—give a detailed, non-technical assessment of both Basel I and Basel II, and for both developed and emerging markets, show the status, intentions, criticisms, and implications of each accord. Basel I Soon after the creation of the Basel Committee, its eleven member states (known as the G-10) began to discuss a formal standard to ensure the proper capitalization...
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