¶ … company's investment success especially in relation to other companies. The paper aims at establishing how a company's competitiveness can be calculated in relation to others in the same industry and the factors that hinder the calculations or hinder a true picture of the same
Compare industry average and a main competitor
For convenient comparison of industry average, majority of companies place Industry average values next to a company's financial measures for convenient comparison. To get a clear picture, a company can obtain industry average from its competitor by carefully examining (its competitors) stock screen results. (Gray, 2004)
However it is notable that various industries have their peculiarities with some operating under very heavy debts which would companies in other industries. For instance, software companies enjoy high profit margins that other companies envy and that all software companies must attain to stay in the game.
For that case, to see whether a company is doing well, you must compare its financial measures with those of the overall industry to which it belongs. And because most industries contain companies of all sizes and specialties it is good to compare a company to its direct competitors.
Strong competitors in an industry are seen by their industry average performance. Comparison can be done using revenue growth, gross margin, and operating margin. In the same time, one can make use of the spreadsheets that industrial- strength stock screens produce to calculate average values for the competition. By screening for stocks in a specific industry, limiting the field to companies with similar annual revenue or specifying other criteria, the results are likely to reflect your view of a company's closet competitors. (Titman, 1988)
What difference does it make to make a comparison with a main competitor? Financial data represents a company major nature of its structure and strategy. Making the difference between the industry and the main competitors helps the company determine its standing or performances in relation to other companies.
Relate People's United Bank's capital structure choices and capital structure theory(ies).
The theory of capital structure with the celebrated Modigliani and Miller in 1995. Since then many structures have used it. Capital structure theories are based on agency costs, asymmetric information, product/input market interactions, and corporate control considerations (but excluding tax-based theories).
The function of the theory is to provide the optimal dynamic recapitalization policy as a function of firm-specific characteristics. Even for small recapitalization costs lead to wide swings in a firm's debt ratio over time. Rather than static leverage measures, we use the observed debt ratio range of a firm as an empirical measure of capital structure relevance. The results of empirical tests relating firms' debt ratio ranges to firm-specific features strongly support the theoretical model of relevant capital structure choice in a dynamic setting.
For each of the structure model their relation to each other is given. The central papers are described in some detail, and their results are summarized and followed by a discussion of related extensions. Majority of a broader set of capital structure has not been analyzed empirically. Since the capital structure theories have different empirical implications in regard to different type of debt instrument, it is essential to analyze measures of short-term, long-term and convertible debt rather than an aggregate measure of total debt.
Salawu, R. (2007) argues that Credit rating, volatility of earnings and cash flow, bankruptcy, or near-bankruptcy, financial distress, transaction costs, fees for issuing debts, and financial flexibility are important factors that affect bank's choice between short- and long-term debt is matching the maturity of debt with life on the debt.
The determinants of bank capital structure are mainly ownership structure, and management control, growth and opportunity, profitability, issuing cost, and tax economics associated with debt. It is therefore advisable that the banks go for a mixed source of financing and choosing an appropriate ownership structure and management policy. (Riahi, 2003)
United Bank's Capital structure choices are what are translated to capital structure theory. To investigate the determinants of capital structure choices can be done by analyzing the financing decision of public firms in the major industrialized countries. A deeper understanding of the two concepts suggests that the theoretical underpinnings of the observed are still largely unresolved.
Firms adjust their capital structure infrequently when there is a friction. The result of this is, is that company are likely to differ from the "optimum" leverage at the time of readjustment in a dynamic economy. The results of standard cross-sectional tests on these data are consistent with those reported in the empirical literature. In particular, the standard interpretation of...
Company audit occurs when there is need to examine the performance of a big company especially the financial and the accounting records over a given period of time. Professionals such as the certified public accountant always do the auditing. The audit of a company is significant in the verification of accuracy particularly in the accounting records. A company like coca cola will need an audit to help in verifying their
While the first chapter was brief, it is important to explain what will be studied and then move forward into the literature review. In Chapter 2, the literature review provides a review of academic literature by way of journals and textbooks. This information is placed into separate sections which allow for ease of understanding. An introduction is made to capital structure, and information is given on the Indian capital structure
For instance, McDonald's has a solid partnership with Starbucks that came as a natural solution to the increased consumption of coffee in its restaurants. Starbucks happens to be the world's leading specialty coffee retailer with a worldwide presence that matches that of the fast food producer. 4. Other factors affecting decision Vietnam is an Asian country with strong oriental cooking habits, which might not be very compatible with McDonald's typical menu of
Also, businesses should be open to the idea of changing the way these relationships are formed and maintained to make way for the changing business environment. "Changing the prevailing relationship a firm has with its stakeholders offers an opportunity for innovation and the economic rewards that accompany such innovation" (Harting, Harmeling & Venkataraman, 2006, p.44). Conclusion In short, different stakeholder groups have a big impact on the performance of a company. Their
His ideas are not important for their uniqueness (though they are singular), but because of the essential similarities between his conservative business utopia and other versions of collectivism" (Gilbert, p. 12). This biographer reports that King Camp Gillette was born in January 1855, the fifth of seven children, to George Wolcott Gillette and Fanny Camp Gillette, in Fond du Lac, Wisconsin; when King was four years old, the family
Recruitment and Selection Techniques contribute to the Success of an Organization Recruitment is a form of business contest and it is fiercely competitive. Organizations have to be strategic in order to attract and retain top talent to positions in the company. Competition between companies have become even more fierce and companies are doing all that they can to get the best talent for their organizations. Hence, it is important to
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now