Cash Flow
The different authors use a number of quantitative approaches to understanding firm performance. Paunovic (2013) discusses the pricing and valuation of swaps. The author seeks to "demystify the structure of these financial derivatives (swaps) by presenting their valuation methods and by showing how they are used in practice." Thus, the author is presenting textbook explanations of swaps to her audience. Swaps are priced at par at the present time. The counterparties are swapping fixed rate obligations for floating rate, and make differential payments. Neither party would enter into the agreement at an unfavorable rate, but over time the changes in interest rates will mean that one party or the other will pay more. The floating rate is often based on LIBOR, or other common floating rate. Since banks are almost always intermediaries in swaps, they might seek to take a spread on the rate. Thus, a company setting up a swap agreement is likely paying fair value on the day for the swap, plus the bank's spread. The company might choose to do this because it needs to exchange its floating rate obligation for a fixed rate, or vice versa. This is usually based on operational or financial needs, as companies would seldom enter a swap agreement simply on a gamble about the direction of future interest rate changes. The author provides basic, accurate information about the nature of swaps and how they are used.
The second paper is Wang and Hwang (2011), where they discuss the use of options to control corruption and counterfeiting of drugs in emerging markets. Their quantitative work is weakened by a fundamental misunderstanding of options markets. They propose options as a means of helping firms to hedge pharmaceutical prices. While they understand how options work and how they are priced, they miss out on a fundamental difference between pharmaceuticals and products where options currently exist. Options are used for stocks and commodities, where prices fluctuate and future price movements are generally...
This will attract more customers leading to more profits in the organization. In addition, this will create customer loyalty and the company will have a competitive advantage over its rival. Conclusion In conclusion, it is true that Brocade is a successful company. This is due to its increased realization of profits over the last few years. This is evidence from its financial statements including income statements, balance sheet as well as
Financial Analysis of Bestwish Limited Company Overview Bestwish Limited produces extensive range of quality products such as gift dressing, greetings cards, and plush merchandise of more than 50,000 stocks. The production of different categories of products involve between 2 and 15 processes. The company produces standardized products and custom designed products ordered from customers on contract basis. However, Bestwish Limited is facing challenges to control the costs because of varying production process,
Equity, Cash Flow, And Notes Analysis for the General Electric Company Regarding the specific components of the Statement of Changes in Owner's Equity and Statements of Cash Flows, from line items to balances General Electric still stands tall in the public's estimation and in its international reputation as a pioneer of Six Sigma management policies regarding internal quality control. (Six Sigma, 2004) According to its annual report, GE Share owners' equity increased
Accounting The role of the firm in the economy is to maximize shareholder wealth (Friedman 1970), owing to the agency role that managers play, where they safeguard the wealth of the investors. Given this reality, managers are obligate to seek out ways to increase the profits of their companies. There are as many ways to earn profits as there are companies, but this paper is going to focus on a particular
By May 2012, MedAssets long-term debts are approximately $959.94 Million. Additionally, MedAssets secures loans that carry interest rates. With significant amount of loans that the company has secured and notes that the company has issued, the company faces interest rates risks. To mitigate the effect of risks associated with the fluctuation of the interest rates, the company enters into the series of financial instrument to guide against the risks from
The company's promotional literature emphasizes the synergistic effects of this corporate structure: "IAG combines the two leading airlines in the UK and Spain, enabling them to enhance their presence in the aviation market while retaining their individual brands and current operations. The airlines' customers benefit from a larger combined network for both passengers and cargo and a greater ability to invest in new products and services through improved financial
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