...Main ideas in the reading • Jesus washed the feet of the disciples to show love , brother hood and above all to explain to the disciples the fact that there is no one greater and likewise no one is inferior In the kingdom of God. • The “pecking order”: it is a scientific order which chickens follow when they eat food, the lowest chicken has to give priority to the highest status among the chicken and so on, and after everyone has eaten there meal then only it’s the time for the lowest status of the chicken to eat. Similarly Jesus wanted to abolish this pecking order system; he wanted an authority of function and not an authority of status. • Characteristics of self righteous service : 1. comes through human efforts 2. it enjoys serving 3. seeks external rewards 4. ambitious about results 5. picks and chooses whom to serve 6. affected by mood swings 7. temporary in nature 8. insensitive to feelings 9. hurts the community at large • Mike Law suggests us that we should take each day as an opportunity to show people humility and learning to serve our neighbors. Mike Law tells us that if we want to show humility, we need to remove any feelings of superiority, cover our friends weaknesses, celebrate in their victories, accept their friendship and forgive them for the harm they caused us. • We come across the two words – choosing to serve and choosing to be a servant .when we choose to serve we can follow our own rules and...
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...selection of firms listed on the Nigerian Stock Exchange. Both primary and secondary data were obtained for analysis employing both descriptive and inferential statistics for analysis. A sample size of 150 respondents and 90 firms were selected for both primary data and secondary data respectively. Descriptive statistics was used to analyse the primary data, while Chi-Square was used to draw inference of perceived relationship between capital structure and firm value. The results of the study suggested that a positively significant relationship exists between a firm’s choice of capital structure and its market value in Nigeria. The study suggested that listed firms in Nigeria should strategically plan and manage their capital structure in order to maximize their market values. Keywords: Capital structure, market value, Nigeria, debt, equity. 1. Introduction 1.1 Background to the Study After the Modigliani-Miller (1958 and 1963) paradigms on firms’ capital structure and their market values, there have been considerable debates, both in theoretical and empirical researches on the nature of relationship that exists between a firm’s choice of capital structure and its market value. Debates have centred on whether there is an optimal capital structure for an individual firm or whether the proportion of debt usage is relevant to the individual firm's value (Baxter, 1967). Although, there have...
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...industry capacity surpassed demand growth, driving prices down. Along with inflation’s effect on required capital spending, the oil shock driving up costs, a recessionary environment for the industry, and the vertical acquisition of Conoco, Du Pont’s capital structure was near unrecognizable by the end of the transitionary period. Du Pont’s debt ratio stood at 42%, up from less than 20% and eventually led to a downgrading of the firm’s credit rating to AA. Due to Conoco’s performance after the acquisition, the firm was in a troubled situation. Du Pont sold a part of Conoco’s assets dropping its debt ratio to 36%; Despite questionable financial ratios and poor earnings in ’82, Du Pont maintained its AA rating. Key Issues • The pecking order theory postulates that maintaining a 40% debt level would be ideal over the target 25% debt scenario. Reducing the debt ratio would require large issuing of equity, a source of capital that is more expensive than debt. Additionally, Du Pont’s diversified business units provide extra protection from the added-on risk of debt • Du Pont’s shares are undervalued due to investor conceptions from previous financial performance. The Conoco acquisition, although costly and unlucky, reduces costs for Du Pont as its vertical integration potential is still largely untapped. Issuing equity would only signal the board’s belief that the share price is accurate/over-valued, driving the price down even further. Other industry competitors are...
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...GM, L&D, let me present the article “Market Timing and Capital Structure” which was published in “The Journal of Finance” by MALCOLM BAKER and JEFFREY WURGLER in 2002. The authors believe that the idea from their work “has not been articulated before”. In this paper, the authors ask how equity market timing affects capital structure. The basic question is whether market timing has a short-run or a long-run impact. One expects at least a mechanical, short-run impact. However, if firms s’ubsequently reb’alance away the influence of market timing financing decisions, as normative capital structure theory recommends, then market timing would have no persistent impact on capital structure. The significance of market timing for capital structure is therefore an empirical issue. The results are consistent with the hypothesis that market timing has large, persistent effects on capital structure. The main finding is that low leverage firms are those that raised funds when their market valuations were high, while high leverage firms are those that raised funds when their market valuations were low. The authors document this in traditional capital structure regression, where leverage is the dependent variable and the market-to-book ratio is the independent variable. The basic regression result is that leverage is strongly negatively related to the historical market valuations. So, the influence of past market valuations on capital structure is economically significant and statistically...
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...the expected costs of bankruptcy. Although trade-off theory predicts that the marginal tax benefit of debt should be equal to the marginal expected bankruptcy cost, the empirical evidence is mixed. Some researchers argue that the former is greater than the latter because direct bankruptcy costs are small and the level of debt is below optimal. Additionally, including personal taxation in the basic model can reduce the tax advantage of debt because tax rates on the return from equity such as dividends or capital gain are often reduced. The second capital structure theory is pecking order theory. The researcher found the key element of pecking order theory is asymmetric information between firm’s insiders and outsiders. The empirical evidence on pecking order theory is mixed. In the pecking order theory also have extension with different type of asymmetric information. The third is signaling. In the pecking order model, good quality firms have to use internal funds to avoid adverse selection problems and losing value. These firms cannot signal their quality by changing their capital structure. The following section discusses models in which capital structure serves as a signal...
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...tool along with a discussion on debt maturity structure. The pecking order theory is examined. Finally this paper reveals empirical evidence of capital structure. Arnold Musadziruma 210525268 Clint Kruger 209541568 Kemsley Grantham 209538112 i “Seminar 4- Capital structure and information asymmetry (2013)” Abstract This study is going to discuss capital structure choices of companies in an environment of information asymmetry. Firstly we discuss information asymmetry and how firms attempt to avoid a pooling equilibrium by signalling the quality of the firm. Quality can be signalled through the use of debt. The use of long term debt is a sign that a firm can make the payment obligations of the long term debt which is shown to signal good quality. The pecking order theory makes use of a hierarchy of financing sources and indicates internally generated funds should be used first. Following this, short term debt should be used before long term debt because of the risk and costs involved. Due to the costs involved in issuing equity in an environment of information asymmetry, firms should make use of equity as a last resort. The maturity structure of debt should also match the maturities of those firms’ assets to reduce costs. Empirical evidence suggests there is no common result for which theory is followed in practice; however it is shown that small firms who are high growth firms tend to follow a pecking order and larger firms follow a trade-off model. Due to the clear complexity...
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...Case Study: PizzaPalace’s Capital Structure Made by A. C a. Provide a brief overview of capital structure effects. Be sure to identify the ways in which capital structure can affect the weighted average cost of capital and free cash flows. The capital structure decision change the value of the firm either through the the free cash flow or the cost of capital. V = ∑ ∞ t=1 FCFt (1 + WACC)t With FCF= NOPAT-change in ( NOWC+NFA) WACC= wd (1-T) rd + wers An additional debt has an effect on WACC and FCF: On WACC: -debt increase the cost of stock rs as the stockholders require a higher return due to the risk associated with additional debt -debt reduce the tax paid by the company as the interest is tax deductible -debt increase the risk of bankruptcy so debtholders will require a higher promised return rd ***low taxes Vs high cost of equity,high cost of debt => uncertain effect on WACC On FCF: -the probability of bankruptcy increases and generates direct costs ( legal fees,fire sales..) and indirect costs: lost customer s( NOPAT decreases) , reduction in productivity of employees , and reduction in credit offered by suppliers ( A/P decrease so NOWC increase ) - bankruptcy risk affects agency cost : decrease them bu reducing wastful spending And increase them by causing the manager to be too risk averse: underinvestment...
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... Козловская Анна Гусамов Степан Москва 2011 Цель работы: выявить основные детерминанты и мотивы выбора структуры капитала на развивающихся рынках Задачи: • Поиск литературы с эмпирическим анализом структуры капитала компаний на развивающихся рынках. • Анализ полученных в статьях результатов. • Формулирование выводов относительно влияния предлагаемых в статьях факторов и мотивов выбора на структуру капитала компании на развивающихся рынках Не все зависимости относительно структуры капитала, которые проявляются в развитых рынках капитала, также применимы и к развивающимся рынкам. Ни trade-off theory, ни pecking order theory не могут полностью объяснить поведение фирм на развивающихся рынках капитала. В проанализированной ниже литературе проводились исследования структуры капитала по разным странам в зависимости от различных факторов. Практически во всех статьях в качестве основных объясняющих факторов были выбраны показатели прибыльности, темп роста выручки, размера компании, доли материальных активов. Однако на выборках из разных...
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...Sales order, billing and AR department |Sales order |Billing |AR Department | |The function of the sales order department |The sales order department sends the copy |The sales department sends the sales order | |is to takes the order from customer and |of a sales order to the billing department.|to receivable department and it then entry | |places it into a specific format. | |it to the account receivable subsidiary | | | |ledger. | |This department stores information such as |When it receives the shipping notice and |As payment suggestions are received, they | |the name of customer, address, a/c no, |the stock release document, then it starts |are noted down to the customer’s account in| |quantities, and units of each product, |preparing the sales invoice. |the account receivable subsidiary ledger. | |discount, etc. | | | |Sometimes, it also helps in determining the|The sales invoice is the bill of the | | |possible shipping date. |customer which charges them for shipping | ...
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...Chain of delays. Work in cooperation with Customer Service, Freight Forwarders and Expeditors for shipment/delivery of material. • Review forecast for Catalysts and Chemicals and advise Inventory Replenisher of PO’s that need to be entered immediately. • Driving continuous improvement in on Logistics for the various modes of transportation: Truck, LTL, Rail, Ocean, and Air Freight. File claims with carriers. • Compile Special Instructions, develop lead-time requirements and material reference #’s from Customers and enter into Customer Master and Item Master. • Monitors and trained warehouses on Shipping/Receiving Processes. • Maintained Business Continuity Plan. 11/2009 – 05/2011 Ascend Performance Materials Order Management Analyst - Chemicals Houston, TX • Served as the...
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...Business Technology – How has it improved or not improved business needs Alicia N.Swann University of Phoenix TEC/401 – Human Factors in Technology Tynia Landry September 12, 2011 Abstract This research paper will discuss how the ever changing technology has or has not helped out the business needs within my company. The discussion will be on the computers, to printers, to ordering supplies, and even how employees sign in and out for payroll purposes. Business Technology – How has it improved or not improved business needs Computers The technology division at my place of employment is currently looking at ways to replace our current computers with energy efficient computers. In the past employees were asked to shut the computers down completely, however, that didn’t work for numerous reasons. The idea was brought up to replace our existing computers with energy efficient computers but still the computer must perform with high performance as the computers we currently have. As an administrative assistant it is sort of a benefit because assistants are the first line of employees who receive the newest or latest upgrades, however, it can also be a downfall. Many times with the new software it simply does not meet county expectations. When the expectations do not meet the standards it often times holds up the administrative work progress. This is due to the removal of the software that was installed, or the software didn’t work correctly, some computers we...
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...= 648,000 pounds/week (weekly production capacity) 6 x 8 = 48, 48 x 60 = 2880 minutes (weekly time capacity) * Hence, the total capacity of contracts should be less than or equal to the weekly capacity and also should satisfy the time limit capacity. * It is known that blending capacity is 22,000 pounds/ hour and needs 40 minutes set-up time. Depending on this, process time for all contracts is presented in Table I: Contract | Quantity per order/pounds | Time for 1 order/minutes | Time for total orders/minutes | A | 8,000 | (8,000/22,000)x60+40=61.6 | 61.6x24=1466 | B | 16,000 | (16,000/22,000)x60+40=83.6 | 83.6x18=1504.8 | C | 24,000 | (24,000/22,000)x60+40=105.4 | 105.4x15=1581 | D | 18,000 | (18,000/22,000)x60+40=89.09 | 89.09x10=890.9 | S* | 24,000 | (24,000/22,000)x60+40=105.4 | - | Table I Time calculation for each contract *Assuming the highest order limit for the contract S * Table II shows the weekly total orders by contracts: Contract | Quantity per order/pounds | Weekly total orders /pounds | A | 8,000 | 8,000x24=192,000 | B | 16,000 | 16,000x18=288,000...
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...SALES ORDER PROCESS The sales order process was documented to allow for the smooth flow of sales orders through to invoices and deliveries. It is meant to act as a guide for employees when executing this system. The goal is to set standards and alleviate or minimise errors. This is intended to give additional confidence to everyone involved in this process and to enhance the customer experience in every transaction with the company. The Sales Manager would be closest to this process. To achieve the desired goals and objectives, he should strive to accomplish sales targets with the least amount of cost, time and resources involved. Having a documented system will raise efficiency providing that the system is operating well and everyone has the knowledge and skills to use it. Every system will need to be upgraded using proven techniques of continuous improvement to make the system more efficient. A system is known as a group of parts, events, or processes that are interdependent and connected together in a distinct form. The point is bringing together each part through systems thinking so that the whole organisation survives and thrives. Undoubtedly a lot can go wrong with a system and therefore we must consider a few things. Here are some that are applicable: * Connections between departments across the organisation * Asking the five whys (Grubb, 2008)to find the root of a problem * Patterns of behaviour * Use a systematic six step process to solve...
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...Acknowledgement First of all I want to thank God for guiding us the right path in doing this thesis. And to our COMPRO3 Instructor Sir. Jessie. And to my teammates for making this system possible. 1.0 Introduction Lot of things flash into our thoughts when we hear the word technology someone say it is a term that entails for being progressive but other’s won’t. Nowadays we couldn’t live without our gadgets . Because technology we can make our work easier and faster than before. Technology was one of the best invention of all the time . 1.1 Background of the Study PC World is located at Quezon City, Manila. The Pc World opens at exactly 8am to 8pm Monday to Saturday. The nature of their business are selling computer parts like Flashdrive , Motherboard , Mouse , Videocard , Memory etc. Manual Transaction are visible in PC World. It is one of the newest PC store in town. It built by Mr. Richard Galvez 1.2 Statement of the Problem -The following statements are the current problems in the PC World. 1.2.1 General Problem The current manual system gives a slower , Inaccurate and unreliable data -Problem arises on Pc world since they’re using manual on all of their transaction resulting to slow service 1.2.2 Specific Problem Manual transaction makes the processing and validating of the inventory a time consuming task. -Supplies being delivered by the Supplier was counted and processed manually,And the Supplies that are being added...
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...Meditech case Q1. What are Meditech’s Problems in introducing new products? In manufacturing ALL products? New products face forecasting problems. So in the beginning, as they can see in the data (graph of Weekly Net Order for New Products) of previous years, the demand in the first few weeks is booming. They should adjust their production numbers to the higher demand, until it will ease after week 4-6. In the weeks after the introduction peak the business should keep production on a constant level without having too much inventory but still enough to keep a 1 2/3 weeks of demand. There is a lot of data available but it is scattered over different systems in different areas of the organization. Therefore the data is practically useless. No routine way to see incoming demand for a new product. Configuring one universal data sheet was difficult because of the use of different time spans in different systems. A week’s notice before production change is too long. Q2. What is driving these problems, both systemically and organizationally? The business is decentralized, which means that there different areas work with different standards and system. Therefore they cannot quickly respond to each other. Problems are recognized too late. Problems are known, but because of the different systems that are used, this information is not properly communicated throughout the different departments of the business which results in slow response to problems (i.e. changes...
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