StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Capital Structure Policy for BARWA Real Estate Company - Case Study Example

Comments (0) Cite this document
Summary
This paper "Capital Structure Policy for BARWA Real Estate Company" focuses on the fact that a company finances its activities from various sources like debt and equity. Capital structure is the combination of the various sources of financing that the company employs in its operations. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.5% of users find it useful
Capital Structure Policy for BARWA Real Estate Company
Read Text Preview

Extract of sample "Capital Structure Policy for BARWA Real Estate Company"

Download file to see previous pages The company must allocate an ideal weight to the various sources of funding. Any kind of over or underutilization of any source must be avoided. It is important to have a healthy mix of debt and equity in the capital structure.

The company must design its capital structure with the aim of maximum utilization of resources and generating a return higher than the cost of procuring capital. In other words, the Return on invested capital (ROIC) must exceed the Weighted average cost of capital (WACC). The higher the ROIC, the more is the value generated by the company. The efficient management of available resources maximizes the value of the company. In order to improve the efficiency of the capital employed every company must aim at achieving an ideal capital base (Putrajaya Committee on GLC High Performance, n.d.). An optimal capital base helps the company to strengthen its growth prospects by seizing the opportunities. This helps the company in acquiring a competitive position in the market. In designing an optimal capital structure the company has to decide upon a right mix of debt and equity.

Financial ratios help in assessing the financial health of the company (University of Washington, 1998-2000). Ratio analysis is a tool for making a quantitative analysis of the company’s financial performance. It is calculated using the current year figures and then it is compared with the previous years. It also facilitates an intercompany comparison between firms belonging to the same industry. The important ratios include debt/equity ratio, current ratio, inventory turnover ratio, asset turnover ratio etc. The current ratio is an important indicator of the firm’s liquidity position. Asset turnover ratio helps in determining the number of sales generated from the total asset. A high asset turnover ratio indicates that the company is making good use of its asset structure. But, the ratios of companies belonging to different industries cannot be compared.   ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Capital Structure Policy for BARWA Real Estate Company Case Study, n.d.)
Capital Structure Policy for BARWA Real Estate Company Case Study. Retrieved from https://studentshare.org/business/1559780-capital-strucutre-leveragegearing-policy-for-barwa-real-estate-company
(Capital Structure Policy for BARWA Real Estate Company Case Study)
Capital Structure Policy for BARWA Real Estate Company Case Study. https://studentshare.org/business/1559780-capital-strucutre-leveragegearing-policy-for-barwa-real-estate-company.
“Capital Structure Policy for BARWA Real Estate Company Case Study”. https://studentshare.org/business/1559780-capital-strucutre-leveragegearing-policy-for-barwa-real-estate-company.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Capital Structure Policy for BARWA Real Estate Company

Capital structure and payout policy

...?Executive summary This report is about the capital structure and payout policy of Starbucks Corporation, an international company that deals with coffee products. The report shows the considerations that the company’s management should make in order to establish the optimal capital structure. These considerations include tax advantages, investors’ requirements, risk of bankruptcy, and cost of capital among many others. The issues that are established in the analysis are used to make recommendations on the most suitable capital structure and payout policy. Introduction Background Starbucks Corporation is an international company that deals with coffee products, with its headquarters based in Seattle Washington, America. During its...
5 Pages (1250 words) Term Paper

Real Estate

...Shaima 16/10/2007 Dr Frances Plimmer Research methods Real E Literature Review United Arab Emirates: The United Arab Emirates is made up of seven Emirates. They are Abu Dhabi, Ras al-Khaimah, Fujairah, Ajman, Sharjah, Umm al-Quwain and Dubai. Abu Dhabi is the federal capital of the UAE and is the largest of the seven Emirates, occupying around 70% (Christine & Nick p 10) of the total land area. While Dubai, considered as the commercial and investment hub, has emerged as the forerunner in the tourism and construction sectors. These two emirates (Abu Dhabi and Dubai) are still the dominant economic players in the country. The UAE is extremely rich in oil and, even though it lacks other natural resources, it expects current additional...
8 Pages (2000 words) Essay

Real Estate and Capital Structure Decisions

... not be overwhelmed by this and immediately decide to buy an office space. Buying one, as practical as the result may seem, is far more complicated than renting one. These factors are the ones that are most important, other issues still need to be considered such as a thorough study of the market and economy for these play a vital role on asset depreciation or appreciation. 3. How will the purchase decision affect the financial position of STL? The purchase would reduce the firm’s working capital from HK$3.638 to HK$1.058, but STL should not be instantly put-off by this. A space purchase is not a liability; it is a venture that the company would speculate, a decrease in the firm’s working capital was spent to gain a company outlay...
7 Pages (1750 words) Assignment

Real estate

... Ways That Real Property Is Transferred and the Procedures for Doing So Real e refers to land, buildings, houses andany other developments that may be connected to real property (Abts, 2002). Real estate is also known as real property, immovable property or realty. Legal ownership of real property rests with the owner of the legal documents of ownership such as the title deeds. Transferring property from one person to the other involves transferring the documents of ownership to the new owner (Abts, 2002). There are several rights of ownership that are recognized by law as far as real estate is concerned. The various types of estates are basically determined from the type of language used in the ownership documents such as the deeds...
2 Pages (500 words) Essay

Several Issues Created by the East India Company

The eventful history of India and Pakistan gives plenty of reason to attribute to their bitter rivalry. The wars fought in 1965, 1971 and 1947 are a testament to this; so are the various bombings that each country’s intelligence agencies have planned on each other’s country (Crossette, 2008). Both countries have constantly bombarded each other over the line of control and escalation of forces at the border to mount pressure on each other has become a frequent course of action. Kashmir still remains disputed territory with no sign of resolution in the coming future. Even the control of environmental resources such as water and its use (Indus Water Treaty) has been a cause of concern and argument for each country. It is...
7 Pages (1750 words) Case Study

Market Structure

The market structure is mainly classified based on the number of active players in that market. These market players are the main component to supply a particular type of product in that market. If we look at the economists' view, these players within an industry are the main parameter for the level of competition in that industry. Whether it is a perfect competition or monopolistic competition these players supply only a small portion of the total output for the industry but this small contribution only determines the main market structure. If we talk about the market types there are few players in the oligopoly markets, only two in duopoly and a single player in the monopoly markets.
If we talk about car manufacturing compa...
10 Pages (2500 words) Coursework

Contemporary Issues in World of Politics Climate Change Policy

It is more than a particular problem of any specific community. In fact, climate change has a wider global nature compared to other environmental issues and it affects the people of every nation and boundary. Therefore, the issue of climate change has a far wider reach than the other environmental issues and it is an issue concerned with almost all the international communities. It is identifiable that national boundaries may attempt to prevent the movement of people and goods across the boundaries of the nation. However, when it comes to pertinent environmental issues such as climate change, these issues do not stop at borders, making them – some would argue – quintessentially global phenomena. “Climate change i...
6 Pages (1500 words) Case Study

Multinational Capital Investment in Ruritania

The main risk factors with an emphasis on financial issues, which are important for this decision, are examined in this report. Further, the main financial factors to be considered before making the decision are discussed based on investment appraisal techniques. The next section examines the available evidence on the risk factors and estimation for international investment. In section 3, these factors are examined for the country studied here. In section4, the financial issues to be considered based on investment appraisal techniques are discussed. In section5, appropriate recommendations are made regarding the investment decision for the case presented here.

According to Nagy (1984), the main risks in multinational ca...
8 Pages (2000 words) Case Study

Money Policy versus Credit Market

Financial institutions generally engage in securitization to enhance their profits by trading in the collateralized backed securities that generate high yield returns to the financiers. This nevertheless inversely and negatively affected the credit markets as their efforts to enhance their liquidity positions backfired. Consequently, the import of these monetary strategies has generated cyclical effects on the monetary system to the detriment of the financial system.

Normally, money markets demonstrate a more efficient allocation of credit whenever additional liquidity is injected into the system, which would otherwise display some undesirable distortions. Ultimately, the liquidity market is not easily susceptible to ex...
6 Pages (1500 words) Case Study

Project Management of Beijing Capital International Airport T3 Terminal

Some stakeholders can be both driving (positive) and restraining (negative) forces, it depends on how the project will meet their interests. These forces are marked by a dotted line. If changes happen, and the project won’t meet the interests of some of these stakeholders, a vector of the corresponding force will be changed onto the opposite and the force will move onto the opposite part of the diagram.

Each half of the diagram (left and right) is divided into three parts – Low, Medium and High. It defines the size of a force vector and indicates the importance (power) of a given force. Short forces have a low level of power.

Civil Aviation Administration of China (CAAC) – undoubtedly advanc...
7 Pages (1750 words) Assignment

The History of Heinz Company

It is the different approaches for marketing that has provided the corporation with different opportunities for reaching various targets while expanding into various products that are a part of the company. The current changes that are a part of this have allowed the company to continue to offer one of the top brands that are a part of the market.

The inception of Heinz began in Pennsylvania during the industrial revolution by Henry Heinz. He built his business practices from his parents with their pickling and sauerkraut services. By the early 1900s, Heinz was a growing corporation, specifically in response to the current situation with the Great Depression. The products offered included not only basic picking, but als...
7 Pages (1750 words) Case Study

Business Ethics of Wal Mart Company

The lack of ethics is one that results in complications such as loss of customer loyalty, inability to continue to progress in society and legalities that can cause the business to become hindered when selling products or services.

A company that is taking shape in the global market is Wal – Mart a superstore that is known for low prices on a variety of products. Consumers that are familiar with Wal – Mart often attribute the products offered by this corporation as convenient, easy to use and at lower prices than other stores. However, there are also continuous questions of how the employees, suppliers, and customers are treated when looking at ethical considerations. One of the common problems that many ha...
6 Pages (1500 words) Case Study

North Carolina Wake County Busing Policy

To ensure that the education sector is diversified it is seen that in the United States of America many such policies have been implemented. In 1970s diversity was considered an important tool by the educational experts so that they could help students understand each other. The board of education of North Carolina then formulated a scheme for students through which they could practice a diversity of races in schools. This was known as the North Carolina Wake County Busing Policy which was functional till the late twenty-first century. It was now in July 2010 that the issue was raised again by the educational board members who then decided to scrap the policy of diversity with community-based schools. (Liane Membis 2010; Stacy Tei...
7 Pages (1750 words) Case Study

The Relationship Between Financial Perfprmance and Corporate Social Resposibility on Saudi Electricity Company

The pragmatic parallel mixed methods design was adopted for the study using the questionnaire, structured interview guide and content analysis were the primary instruments utilized in the collection of data. A total of 500 respondents participated in the study. These respondents represented the five sectors considered in the study, namely: the community residents, SEC employees, SEC managers, personnel from other establishments (i.e., the marketplace) and the government.  A combination of sampling techniques was used in this study: stratified random sampling, for the community respondents and SEC employees; simple random sampling, for the respondents of other companies; and purposive sampling for SEC managers and a representa...
88 Pages (22000 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Case Study on topic Capital Structure Policy for BARWA Real Estate Company for FREE!

Contact Us