Nobody downloaded yet

On Principles of Finance - Essay Example

Comments (0) Cite this document
Summary
Principal of Fin. 3 Table of Contents ASSIGNMENT 1 3 Overview of Financial Heath 3 Analysis of the Financial Statements 3 Analysis of Financial Ratios 4 ASSIGNMENT 2 5 References 6 Appendices 7 Appendix 1(a) General Motors 7 Appendix 1(b) General Motors 8 Appendix 1(c) General Motors – Key ratios 9 9 9 9 10 Appendix 2(a) Honda Motors 11 Appendix 2(b) Honda Motors 12 Appendix 2(c) Honda Motors – Key ratios 13 ASSIGNMENT 1 Assignment 1 would evaluate the financial position of General Motors and Honda Motors, so as to state the difference in the financial health and the probable reasons of the success and failure of both the companies…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.8% of users find it useful
Essay on Principles of Finance
Read TextPreview

Extract of sample
"On Principles of Finance"

Download file to see previous pages Honda Motor Corp. from Japan is considered as the fifth largest motorcycle manufacturer and auto-maker in the world. The company has a sustainable financial condition because it has posted a profit of ?234.4 billion, which is about US$2.7 billion in its first quarter of 2011. Moreover, the company has also posted a profit of ?135.92 billion in quarter 2. Honda has a huge market share in the Asian markets. Analysis of the Financial Statements As we can see in Appendix 1(a), that General Motors has to face a gross loss of US$ 8,791,000, in 2009. In 2010, and 2011, the gross profit was US$ 16,554,000, and US$ 19, 047,000 respectively. This indicates an improvement in the financial condition since 2009. However, the net income has reduced from 2009 to 2010 and 2011. In 2009, the net income was US$ 104,821,000, in 2010 it was US$ 6,172,000 and in 2011, US$ 9,190,000. So this signifies that the operating expenses have increases in 2010 and 2011 than 2009. That is why even after having a considerable increase in revenue, the net income of the company was decreasing. In Appendix 1(b), we can see that the total assets of the company have increased in 2011 to US$ 144,603,000 from US$ 136,295,000. The assets have remained almost constant over the years, with a consistent increase in current assets. This means the company maintained its liquid assets over the period of 2009-11. The long-term debt of the company has increased considerably from US$ 5,562,000 to US$ 10,551,000 in 2012. The balance sheet for all the three years of the company shows a negative net tangible asset balance. In Appendix 2(a), the income statement reveals that the revenue of Honda Motor Corp has decreased in 2011 to US$ 96,581,000 than its previous year, 2010, which was US$ 107,829,000. The gross profit figure also reflects the revenue different in 2011 and 2010. The net income has also decreased to US$ 2,570,000, which was US$ 6,444,000 in 2010 and US$ 2,872,000 in 2009. So 2011 had to bear a considerable amount of loss. The company does not have a negative income figure, but the profit had reduced a lot. Considering Appendix 2(b), the total assets which includes the current or liquid assets remains consistent all throughout 2009-11. Long term debts of the company have not increased much as it was US$ 24,754,000 in 2009, US$ 24,653,000 in 2010 and, US$ 27,158,000 in 2011. The net tangible assets show a positive balance, which reveals a balanced financial status of the company. Analysis of Financial Ratios The key ratios of both the companies can be seen in Appendix 1(c) and 2(c), where Honda Motors shows a high liquidity of 1.34 in its latest quarter. Honda Motors have a consistent debt equity ratio. This proves that the company maintains a balance between the debt and equity. The net profit margin has increased and the return on the capital invested has revived after a sharp decrease in 2012 third quarter. If we see the key ratios of General Motors, ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Essay on Principles of Finance Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1457087-principal-of-fin
(Essay on Principles of Finance Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.org/finance-accounting/1457087-principal-of-fin.
“Essay on Principles of Finance Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/finance-accounting/1457087-principal-of-fin.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Principles of finance
...? Principles of Finance Principles of Finance “In a world with corporate taxes, Modigliani and Miller’s view is that a company should issue as much debt as possible. Why is this advice not followed by companies?”A debt is often an obligation owed by a debtor to a creditor, who is usually the second party. In this case, the debtor is the companies in question. In most cases, this is termed as assets granted, particularly by the creditor to the debtor. The debtor agrees to repay the debt with an interest. Some companies use debt as part of their strategy in corporate finance. Before the debt is issued, both parties have to agree on the standard of deferred...
6 Pages(1500 words)Essay
Finance Principles Essay
...? Finance principles Contents Risk 3 Diversification 3 Theoretical concepts underpinning portfolio diversification 4 Measurement of the benefits of Diversification 5 Limitations 6 Risk The potential that a particular activity or a certain type of action will lead to an outcome that is undesirable is called risk. Risk can also be defined as the effect of uncertain events on objectives. The events may or may not take place and lack of information can cause uncertainties. The probability of a specific event that can take place in the future can also be regarded as risk. Diversification A technique of risk management that takes into account a broad selection of investments within a portfolio is called...
4 Pages(1000 words)Essay
Finance Principles
...?FINANCE PRINCIPLES Table of Contents Table of Contents 2 A.Portfolio Diversification 3 Mean – Variance Diversification 4 Efficient Frontier 5 B.Construction of Diversified Portfolio 6 References 12 Bibliography 13 A. Portfolio Diversification Portfolio diversification can be defined as the designing of a portfolio which includes several assets like stocks, bonds, commodities, etc. The main purpose of diversification of portfolio is to reduce the overall risk associated with the portfolio without compromising much on the return. It is the motive of every investor to maximize return and minimize risk. The volatility or risk associated with a portfolio is minimized due to diversification because of the fact...
8 Pages(2000 words)Essay
Finance Principles
...and investment analysis. McGraw publishers. New York. Fabozzi, F 2009. Institutional investment management: equity and bond portfolio. Telso publishers. California. Graham, J and Smart, S 2011. Introduction to corporate finance and economic coursemate: stock and bond portfolio investment. Oxford press. New York. Hagin, R 2004. Investment management: portfolio diversification, risk and return. Telso publishers. California. IBR report: global economy, 2012, viewed on May 9, 2012. Available from. . Jones, C 2009. Investment: analysis and management. McGraw Hill publishers. New York. Megginson, W 2008. Introduction to corporate finance. Oxford...
3 Pages(750 words)Essay
Finance Principles
...? Finance Principles Table of Contents Introduction 3 Principles underlying corporate governance and its importance 3 Combined on corporate governance 4 SOX on corporate governance 6 Conclusion 7 References 9 Bibliography 10 Introduction This paper deals with a detailed study on two acts of corporate governance and impact of these on improvement of corporate governance in UK and US based firms. These two acts are Combined Code 1998 and Sarbanes-Oxley (SOX) Act 2002. Combined code was prepared by Hampel committee in 1998. Corporate governance refers to a set of standard policies and principles through which a company is governed. This is developed to follow how the company...
6 Pages(1500 words)Essay
Principles of Finance
...__________________ Principles of Finance John and Johnson Case Analysis by ______________Year College ___________________ Student ____________, 2006 Table of Contents Title Page Abstract Introduction Answer Annotated Bibliography Appendix JOHNSON AND JOHNSON Abstract There are many tools used analyzing bond issues. One issue is the Annual Percentage Rate. The Computation below shows that issue 7.375s19 generated the highest Annual Percentage Rate of 14.75%. This is very much higher than the annual percentage rate of issue...
20 Pages(5000 words)Essay
Principles of Finance Essay
...Page Principles of Finance Contents Page Page i Contents Page ii Q1: Financing in Three Continents Q4: Lessons Learned 5 Q5: CFOs and the Corporate Mission 5 Table 1: Total Equity and Debt Issues (2001-2006) 7 Figure 1: Selected Indictors on Capital Markets (2005) 8 Figure 2: Sectoral Balance Sheets for U.S., Japan, & Europe 9 Figure 3: Equity Markets Indices (1990-2006) 10 Figure 4: Volatility History in Equity Markets 11 Figure 5: Historical Volatility of Bond Yields and Returns 12 Works Cited 13 Q1: Financing in Three Continents Table 1 shows the amounts raised by issues of stocks and bonds from 2001 to 2006 in the U.S., the U.K., and in Japan. The figures were...
4 Pages(1000 words)Essay
Finance principles
...://www.techonthenet.com/excel/formulas/mirr.php Payback period. (n.d.). Retrieved May Thursday, 2012, from Bized: http://www.bized.co.uk/virtual/bank/business/finance/investment/theories1.htm Pietersz, G. (n.d.). Net present value. Retrieved May Thursday, 2012, from Money terms: http://moneyterms.co.uk/npv/ Profitability index. (n.d.). Retrieved May Thursday, 2012, from Wolframalpha: http://www.wolframalpha.com/entities/calculators/profitability_index_calculator/mp/r9/g8/... Products laundry limited: Capital Budgeting decision Submitted by: 3rd May INTRODUCTION Radiant Products laundry limited is one of the best producers of detergents. It produces traditional and concentrated powder detergents for its consumers. Radiant is the profitable...
7 Pages(1750 words)Essay
Finance (Principles)
...+ growth rate of dividends Cost of equity 9.6923% This company’s only source of debt funding is by use of a perpetual note. This note is currently priced at $55. The note pays quarterly interest on a $100 face value. Assume a constant nominal rate of 4% (in practice the rate changes over time). The total number of notes on issue equal 50,000. b) Calculate the cost of debt for this Company (Round the value to 4 decimal places). (8 MARKS) Nominal rate 4% Discounted note price $ 55.00 Face value of note $ 100.00 No. of notes on issue 50,000.00 Total debt $ 5,000,000.00 Tax rate 30% After tax cost of debt rate (4%)*(1-30%) Cost of debt 2.8000% c) Calculate the WACC for this Company (Note...
7 Pages(1750 words)Essay
Principles of Finance
...]. Brealey, R. .. A. & Myers, S., 2005. Principles of corporate finance. 6th ed. New York: McGraw-Hill . CAIA, 2012. An Introduction to Core Topics in Alternative Investments. 3rd ed. London: John Wiley & Sons. Chrisholm, A., 2009. An Introduction to International Capital Markets. West Sussex: John Wiley & Sons. Fernandes, P., 2005. Valuation methods and shareholder value creation. 2nd ed. San Diego, CA.: Academic Press. Fernandes, P. & Jose, M. C., 2006. 96 Common and uncommon errors in company valuation. 4th ed. San Diego, CA: Academic Press. Germidis, D., Kessler, D. & Meghir, R., 2010. Financial Systems and Development: What Role for the Formal and the Informal Financial Sectors?. 6th ed. Paris:...
4 Pages(1000 words)Essay
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 Essay on topic Essay on Principles of Finance for FREE!
logo footer
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • StudentShare App Store
  • StudentShare Google play
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • Miscellaneous
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us