Financial Structure of Financial Environment
Financial structure is the mixture of financial instruments, financial markets and other financial institutions operating within the economy. ( Fase & Abma, 2003). Financial structure consists of a company's assets, capital and liabilities. Financial structure is also specific equity and long-term debts that firms employ to finance its business operations. Typically, financial structure of a company generally affects the business operations and value of a business. On the other hand, financial structure could also be described as the amount of organization's cash flow that goes to shareholders and creditor. Organizations use their financial structure to finance their short-term and long-term obligations and financial structure is different from capital structure since capital structure only focuses on the long-term source of funds, which include long-term debt, debentures, and equity capital shares.
On the other hand, financial environment constitutes the financial market that includes foreign exchange market, bond market, money…...
mlaReferences
Fase, M.M.G & Abma, R.C.N. (2003). Financial environment and economic growth in selected Asian countries. Journal of Asian Economics 14: 11 -- 21.
Konzelmann, S. Wilkinson, F. Fovargue-Davies, M. et al. (2009).Governance, regulation and financial market instability: the implications for policy. Cambridge Journal Economics. 34 (5): 929-954.
Lee, R. (2010). The Governance of Financial Market Infrastructure. Oxford Finance Group. Princeton University Press. USA.
Levine, R. (1991). Stock Markets, Growth, Tax Policy. The Journal of Finance. XLVI (4): 1444-1465.
While all of this is well and good, the reality is that most businesses are not founded by accountants and most find a financial system that is beneficial for them. For instance, it may have been acceptable in school to take large risks on certain costs; however, if a business is struggling and incoming capital is lower, then no risks may be considered acceptable.
The final financial factor that businesses use on a regular basis is leveraging. When a company wants to grow and expand in exceedingly large ways, it does so by weighing the current assets and determining the amount the company as a whole is willing to borrow. The key where financial impacts come into play is the question of how much and for how long to borrow (Ghosh 1993). The primary technique used for this is known as forecasting. A financial analyst will take the companies past…...
mlaReferences
Ghosh, Dilip; Sherman, Robert (1993). Leverage, Resource Allocation and Growth. Journal of Business Finance & Accounting, June, 575-582.
Haddad, Mahmoud; Redman, Arnold (2005). Ivory Tower vs. The Real World: Do We Practice What We Teach? Financial Decisions, 5, 1-19.
Bent Flyvbjerg, Mette K. Skamris Holm, and Soren L. Buhl (2002), "Understanding Costs in Public Works Projects. Journal of the American Planning Association, 68(3), 279-295.
Baker, Malcolm P; Wurgler, Jeffrey (2002). Market Timing and Capital Structure. Journal of Finance 57 (1): 1 -- 32.
Financial Structure
The overall financial structure of JP Kenny Limited can be analyzed from the viewpoint of time duration, which includes short-term and long-term funds.
Debt- Equity Ratio
This ratio analyses relationship between borrowed funds and JP Kenny's capital. It is indicative of reflective claims of the creditors and the shareholders against JP Kenny's assets. Here analysis of the long-term Equity ratio and total equity ratio will be made.
Long-Term Debt -- Equity Ratio
This ratio establishes the relationship between long-term outside liabilities and JP Kenny's funds. It shows the proportion of the External and Internal Equities. The long-term debt for 2010 was 1, 138,000 pounds and the equity shareholder was 8, 885,000 pounds giving a 8:1 long-term debt equity ratio. This shows that creditors of JP Kenny have a larger claim than the shareholders, therefore it can be construed that JP Kenny will deal with stringent conditions from lenders, while borrowing money.
Total Debt-Equity Ratio
This…...
Financial Structure Information System
The delivery of care across all levels of healthcare delivery system is largely influenced by information and information exchange. The information exchange takes place between the various stakeholders in the health care delivery process i.e. The health care facility, the patient, the caregiving team, and political-economic environment. The significance of information in health care delivery process and system has contributed to the development of health care information systems. Health care information systems can be described as systems that captures, manages, stores, and conveys information that is related to people's health and activities of a health care organization of facility. These systems play a crucial role in the management of information exchange towards decision-making on health care activities and processes. Health care information systems have different structures including financial structure, which has positive and negative impacts and is applicable to different work areas in the health sector.
Description of…...
mlaReferences
Glickman et. al. (2007, October 18). Promoting Quality: The Health-care Organization from a Management Perspective. International Journal for Quality in Health Care, 19(6), 341-348.
Pina et. al. (2015, April). A Framework for Describing Health Care Delivery Organizations and Systems. American Journal of Public Health, 105(4), 670-679.
Thede, L. (2012, January 23). Informatics: Where Is It? The Online Journal of Issues in Nursing, 17(1). Retrieved from http://www.nursingworld.org/MainMenuCategories/ANAMarketplace/ANAPeriodicals/OJIN/TableofContents/Vol-17-2012/No1-Jan-2012/Informatics-Where-Is-It.html
5 times the actual value of equity.
The return on investment is calculated by dividing the total net profits by the total assets value and shows the "overall effectiveness to generate profits from total investment in assets." At the Colorado Group, the return on investment amounted to 20.4% in 2006 and 21.5% in 2005. The small decrease from 2005 to 2006 can be explained by the fact that that the net profits decreased significantly during this period of time and that the decrease of the total assets value was by no means similar in value.
The gross profit margin is calculated by dividing the net sales minus the cost of goods sold by the net sales value and shows the "profitability of a company's sales after the cost of sales has been deducted." In this case, in 2006 this ratio was equal to 54.4%, as compared to 55.9% in 2005. As we…...
mlaBibliography
1. Financial Ratios. Cardinal Stritch University Library. On the Internet at http://library.stritch.edu/guides/financialratio.htm
2. The company's 2006 Annual Report
Financial Ratios. Cardinal Stritch University Library. On the Internet at
Financial Analysis
Understanding how a company operates within any industry is dependent upon comprehension of many financial properties. Assessing the financial stability of a company is essential in determining the company's strengths and weaknesses as well as ultimately assessing its profitability. Financial ratios should be considered a useful tool when examining the profitability and efficiency of any company. Some companies are certainly more successful and profitable than others, and pharmaceutical companies in particular seem to have a distinct advantage when measuring financial ratios.
When assessing any organization, for terms of this paper are as follows: Johnson & Johnson, Pfizer and Merck it is important to consider the profitability and efficiency of the company. This is among the first information investors will explore before "investing" in a company. atio analysis is a critical analysis of the financial structure of an organization. There are four categories of ratios that need to be examined: leverage,…...
mlaReferences
http://www.investor.jnj.com/trading_stats.cfm?page=ratios
Calculating and Interpreting Financial Ratios. http://aolsearch.aol.com/redir.adp?appname=MS&query=Pfizer%20efficiency%20and%20profitability%20ratios&url=http%3a%2f%2fwww%2efool%2ecom%2fportfolios%2frulemaker%2f2001%2frulemaker010531%2ehtm&datasource=Google&partner=Google&clickedItemRank=2&requestId=cns92890&component=websearch.google.http.tcl&searchType=MS
MBA 681, Fall 2002. "Financial Analysis." http://aolsearch.aol.com/redir.adp?appname=MS&query=Merck%20profitability%20and%20efficiency%20ratios&url=http%3a%2f%2fwww%2emgmtguru%2ecom%2fmgt499%2fTN4%5f3%2ehtm&datasource=Google&partner=Google&clickedItemRank=5&requestId=cns41327&component=websearch.google.http.tcl&searchType=MS
Financial Environment
A non-for-profit entity has a financial structure based on assets and liabilities solely. Such an entity does not have equity. The main source of financing for a non-profit entity is donations. A non-profit entity is, other than a few fixed assets, a flow-through entity. This means that donations come into the organization, and are then rendered out in the form of services. There is a high emphasis on expenses. Most charities will have some current assets, but usually these are things likely to be converted to cash. Otherwise, the assets tend to be equipment or buildings, likely depreciable. The balance sheet is known as the statement of financial position, outlining the assets and liabilities. These are not necessarily balanced, which is why the term balance sheet is not used (Foley, 2015). Spending in a non-profit is almost entirely discretionary in nature, technically, though there may be ongoing programs.
A for…...
mlaReferences
CharityWatch.org (2015). Overhead ratios are essential for informed giving. CharityWatch.org. Retrieved April 13, 2015 from https://www.charitywatch.org/charitywatch-articles/overhead-ratios-are-essential-for-informed-giving/133
Foley, E. (2015). Reporting and operations. Non-Profit Accounting Basics. Retrieved April 13, 2015 from http://www.nonprofitaccountingbasics.org/reporting-operations/statement-financial-position
Friedman, M. (1970). The social responsibility of business is to increase its profits. New York Times Magazine. Retrieved April 13, 2015 from http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
" Bhattacharya (1988). It is used to calculate the value of a company based on its total cash flow. (oss, 1988).
Bhattacharya (1998) states that this theory assumed that lower dividends will lead to reduced levels of new equity and this will bring about a balance between the debt and equity of a company. This is not ture for utilities companies and other monopolistic firms where new equities are rare.
For the "Current Examples" in our table, do we need to find specific company examples that exist today or have happened in the last 2-3 years? Or will it suffice to give a theoretical example of a measurement in a firm that fits the model.
For example, would this be OK.
Efficiency Theory Example
- Production returns based on shared, variable, and per unit costs divided by the total output of a factory in a given period of time.
Instructor esponse: I am ok with any…...
mlaReferences
Chew, DH (Ed.). (2001). The new corporate finance: Where theory meets practice (3rd ed.). New York, McGraw-Hill Irwin.
Copeland, T. & Weston, J.F., (1988). Financial theory and corporate policy (3rd ed.). Reading, MA. Addison-Wesley Publishing Company.
Fabozzi, R., & Modigliani, F. (1996). Capital markets institutions and instruments (2nd ed.). New Jersey, Prentice Hall.
Fama, E. And K. French. (2001). Disappearing dividends: Changing firm characteristics or lower propensity to pay," Journal of Financial Economics, 60, 3-43
stock market and the Banks promote economic growth and it provides a critique of their functions in transitional economies. Every country depends on its economy for its growth. For a country to be stable it has to be stable in terms of its economy. Bank and stock market contribute to a great extent to the economy growth of every country where it provides firms with opportunity to get funds thus encouraging more investment from the firms. At the same time they give information on the ways resources should be allocated. The development of a financially sound, market-oriented banking system is always considered to be fundamental to a flourishing transition. Arguably, it is important to macroeconomic stability and to positive long-term growth prospects. As documented, bank intermediation in transition economies continues to be stunted after a decade or addition of reform, mainly where advancement in banking reforms is inadequate. The…...
mlaWORK CITED
Atje, Raymond and Jovanovic, Boyan, (April 1993), "Stock Markets and Development," European Economic Review, 37 (2/3), pp. 632-40.
Bagehot, Walter. (1873) Lombard Street. Homewood, IL: Richard D. Irwin, (1962
Edition).
Bresharan, T., Milgrom, P., and Paul, J., (1992),"The Real Output of the Stock
Financial esource Management
eaching a financial decision regarding heath care services
All forms of industries deemed financial management as expressive in origin till the 1960's. Its basic and sole role was to ensure financing for completing the business's operatives and functions. The department for business planning or marketing would project a net total for meeting the services and meeting daily demands; managers would calculate the assets required to complete a given project needed, equipment's, supplies and building. Financial management is a field which focuses on business securities as well as the markets in which they are in key demand. Also, more emphasis is made on how businesses can tap new markets and unlock their hidden potential. As a result, financial management books were pretty explanatory and predictable in origin during those times. (Sandrick, 2008).
These days, financial management plays a pivotal role in day-to-day operations of a business. The responsibility of financial management…...
mlaReferences
Allen, S., and M. Bombardieri. 2008. "A Healthcare System Badly Out of Balance." The Boston Globe, November 16.
Glaeser, E.L. 2004. "The Governance of Not-for-Profit Organizations." The International Journal of Not-for-Profit Law 6 (3).
Halvorson, G.C. 2005. "Healthcare Tipping Points." Healthcare Financial Management (March): 74 -- 80.
Helvin, L.K. 2008. "Caring for the Uninsured: Are Not-for-Profit Hospitals Doing Their Share?" Yale Journal of Health Policy, Law, and Ethics (summer): 421 -- 70.
Financial Derivatives
This study emphasized the importance roles of financial derivatives, which has been known for the last decade and its effects on the Global financial crisis. It further analyzes the impact of financial derivatives and how it can be controlled to prevent corporations from incurring a lot of risks. It also explains the existence of financial derivatives since 1970, to the recent Global Financial Crisis which occurred in the 2006.
Risk is a feature associated with all productivity. As a result, financial markets adjust themselves to the fluctuation of exchange and interest rates. Hedging risk, these corporations highlight the importance of risk management tools known as Derivatives. Derivatives are defined as financial tools providing investors with effective solutions when avoiding risk caused from market volatility (Dodd, 2006). Financial derivatives are considered to be an effective risk management tool associated with Financial Engineering creating solutions to financial problems (Marks, 2010). In this…...
mlaWorks Cited
Angel, James, and Douglas McCabe. "The Business Ethics Of Short Selling And Naked
Short Selling." Journal Of Business Ethics 85.(2009): 239-249. Business
Source Elite. Web. 1 Apr. 2012.
Barth, Mary E., and Wayne R. Landsman. "How Did Financial Reporting Contribute To
Financial Comparison
Financial analysis is a tool that allows third parties to analyze corporate financial statements. One of the main reasons that the Securities and Exchange Commission requires that statements are compiled and presented in a consistent manner is to ensure that third parties will be able to use the statements to compare different companies. These comparisons can, among other things, help with investment decisions. This paper will compare PepsiCo and Coca-Cola Company, the two leading soft drink marketers in the world. PepsiCo is actually the larger of the two companies, because it is more diversified, with its snack food properties. These properties also alter the company's finances, creating certain points of difference between the two companies. This report will cover a number of different forms of financial analysis, arriving at a conclusion about which company has the stronger financial position.
PepsiCo
The first set of ratios to be studied are the liquidity…...
mlaWorks Cited:
FTC. (2010). FTC puts conditions on PepsiCo's $7.8 acquisition of two largest bottlers and distributors. Federal Trade Commission. Retrieved May 19, 2012 from http://www.ftc.gov/opa/2010/02/pepsi.shtm
Leckey, A. (2010). Coca-Cola Co. outlook strong after big acquisition. Los Angeles Times. Retrieved May 19, 2012 from http://articles.latimes.com/2010/oct/31/business/la-fi-leckey-20101031
Loth, R. (2012). Financial ratio tutorial. Investopedia. Retrieved May 19, 2012 from http://www.investopedia.com/university/ratios/#axzz1vG92KPwm
MSN Moneycentral: PepsiCo. (2012). Retrieved May 19, 2012 from http://investing.money.msn.com/investments/stock-income-statement/?symbol=PEP
Financial Contracting for New Venture:
Investments in a new venture usually involve financial contracts between the entrepreneur and external investors. These external investors include venture capitalists, angel financiers, banks, private financing companies, and credits unions among others. Notably, financial contracts can have positive and negative effects on the new venture. For instance, an angel financier can add a clause on the financial contract that will not permit the entrepreneur to borrow more funds without permission from the lender. While this is likely to occur when the lending institution has a mortgage or lean on the venture's property, the clause is usually added to lessen foreclosure risk. As an individual seeking to venture in a clothing business for the Mixed Martial Arts customers to provide shirts, hoodies/fleeces, and hats, it is important to choose the most appropriate type of financial contracting with the external investor. This process of selecting the most suitable…...
mlaReferences:
Anderson, C. (2013, January 25). 8 Things You Need to Know About Starting A Fashion
Business. The Huffington Post. Retrieved January 10, 2014, from http://www.huffingtonpost.com/2013/01/24/starting-a-fashion-business_n_2534518.html
de Bettignies, J. (2008, January). Financing the Entrepreneurial Venture. Management Science,
54(1), 151-166. Retrieved January 10, 2014, from http://web.business.queensu.ca/faculty/jdebettignies/docs/EntrepFinPrintedVersion.pdf
Financial Analysis
Assumption Use in the Financial Plan
Additional Assumption in Sensitivity Analysis
FIRST TWELVE MONTH CASHFLOW RESULT
HOW MUCH SHOULD NORMAN PAY FOR THE EXCLUSIVE RIGHT?
FORECASTED CASHFLOW FOR THE NEXT FIVE-Year
CASH FLOW WITH A LOAN AT 8% PER ANNUM
SENSITIVITY ANALYSIS
THE SALES PRICE AND kg SALES GRADUALLY INCREASE AT 5%
THE SALES PRICE PER kg INCREASE AT 10% UT THE UNIT SALES REMAIN AT 5%.
Investment Value Using At Discounted Rate 5%
est Financial Plan and Option
Assumption Use In The Financial Plan
Additional Assumption in Sensitivity Analysis
It is further assumed that price will increase gradually at the rate of 8% per annum and sales will increase at 7% per annum.
For the purpose of analysis, both the sales price and Kg sales will gradually increase at 5%.
Another scenario will be that the sales price per Kg increase at 10% but the unit sales remain at 5%.
est-case scenario assumption, Norman did not exercise his plan to borrow $100,000 at 8%…...
mlaBibliography
Saltelli, A., Ratto, M., Andres, T., Campolongo, F., Cariboni, J., Gatelli, D. Saisana, M., and Tarantola, S., 2008, Global Sensitivity Analysis.The Primer, John Wiley & Sons.
Sensitivity analysis. (2014). Retrieved Janaury30, 2014, from http://en.wikipedia.org/wiki/Sensitivity_analysis
Sheet1
€ Exchange Rate $
he only observation that could be made here is that one would expect a larger proportion of the total expenses to be allocated to research and development, given the fact that this is such an important part of Microsoft's activity and essential in order to obtain a competitive advantage on the market.
Asset and Capital Structure
2008
Cash and cash equivalents
$10,339
Accounts receivable
$13,589
Inventories
$985
otal fixed assets
$29,551
he asset structure at Microsoft reflects some of the particularities in the industry, notably the fact that the inventory levels tend to be quite low, as compared to the other assets. his means that the I industry is not one supporting production on stock. At the same time, the value of the total fixed assets is significantly high, which can be partly explained by the size of the company and the investments in land, buildings and equipment.
Part III -- Ratio Analysis
he current ratio in 2008 was 1.45, as compared…...
mlaThe return on assets at Microsoft was 0.24 in 2008, as compared to 0.22 in 2007. As most of the other profitability and asset management figures, the return on assets also shows a better performance in 2008.
Part IV -- Conclusions and Recommendations
Microsoft's results, both in terms of absolute value from the income and cash flow statements and balance sheet and the ratio analysis, show a solid, extremely competitive company, whose results have improved from 2007 to 2008, despite the global economic crisis. Its capacity to retain low levels of inventory, to gradually increase its efficiency in using assets and to bring new products to the market are some of the positive aspects at Microsoft. As a recommendation, the company could consider allocating a larger proportion of its expenses into research and development.
Accounting ethics are incredibly important because accountants are entrusted with handling money for individuals, businesses, and other organizations. Unethical accountants can expose a business to financial risks and liabilities, even if their breaches of ethics do not amount to criminal behavior or involve intentional wrongdoing on the part of the accountant. Huge financial scandals, such as Enron, could not occur without ethical breaches on the part of the accountants because the financial structure of large organizations requires at least passive participation in wrongdoing by people at the accountant level. Accountant ethics are....
The thesis statement for a "Compare And Contrast" essay on "Funding for private colleges vs. public colleges" could be: Despite both private and public colleges providing access to higher education, a comparison of their funding sources and distribution reveals distinct differences in their financial structures, ultimately affecting the quality of education, affordability, and overall accessibility for students. When crafting a debatable thesis statement on the funding of private colleges versus public colleges, consider focusing on specific aspects of funding that highlight the disparities between the two systems. For example, you could explore how the reliance on tuition fees in private colleges....
The Wirecard Scandal: A Case Study in Corporate Fraud
In June 2020, the German fintech company Wirecard filed for insolvency, revealing a massive accounting fraud scandal that shook the global financial community. As the dust settled, it became clear that the company's financial statements had been grossly inflated, and that executives had engaged in a sophisticated scheme to deceive investors and regulators.
The Scheme
Wirecard's fraudulent scheme involved several interconnected elements. Firstly, the company created fake subsidiaries in Southeast Asia to inflate its revenue and profits. These subsidiaries had no real operations but were used to process fictitious transactions. Secondly, Wirecard used third-party....
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