Nobody downloaded yet

Financial Management Principles And Applications - Essay Example

Comments (0)
Summary
Beta’s acquisition of equipment for its operations can be financed by short-term loans, long-term liabilities, or shareholders’ equity. The paper "Financial Management Principles And Applications" discusses how Beta is tied to paying up these loans within the year…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.8% of users find it useful
Financial Management Principles And Applications
Read TextPreview

Extract of sample
"Financial Management Principles And Applications"

Download file to see previous pages Long-term liability requires the payment of interest in pre-agreed periods which requires Beta to have enough liquidity to cover immediate payment of interest when it becomes due. Capital from shareholders can also be considered. This is advantageous since Beta will not be required to pay any dividends. However, issuing new shares require the company to undergo certain processes which can delay acquisition.
After analyzing the advantages and disadvantages of utilizing different financing schemes, it is recommended that Beta raises fund through long-term debt. This is in consideration of the above discussion in addition to the fact that it already has a quite high level of funds from shareholders.
b. An organization's trading profit and loss account showing the revenues or funds generated the entity compared to the costs and expenses incurred in its operation. In most companies, it starts with the revenue generated where the expenses are subtracted. The last line shows its net profit for the fiscal period or for listed ones, the return to its stockholders. This financial statement is often the most popular one as it is used by creditors, stockholders, and even ordinary consumers. Entities considering to provide financing for the company also often gauged profitability and ability to pay based on profit and loss account.
The balance sheet shows an entity's resources and how they are financed. The organization's assets and liabilities are often listed based on their liquidity, that is, on their capacity to be converted to cash easily. Balance sheets are often scrutinized by creditors and stockholders, the major sources of financing for the company. Balance sheets provide information about the company's level of leverage which informs stockholders and creditors about their share in the company's resources and the riskiness of investing in the company. ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Lean Principles and Applications
...? Lean Principles and Applications Review of lean theory and the major issues that Wrap-it management should consider Current business world is extremely competitive because of the introduction of globalization, liberalization and privatization policies by many countries. Generally speaking, loss of productivity, high costs, excessive inventory and poor working environments are some of the big problems facing by major companies in their strive for excellence. However, high cost seems to be a major issue for many western organizations. Principles of lean evolved in the above context. “LEAN IS… A mindset, or way of thinking, with a commitment to achieve a totally waste-free...
16 Pages(4000 words)Essay
Risk Management: Principles and Applications
...?Risk Management: Principles and Applications Options on stocks Options on stocks give their owner the right to purchase or trade shares of a particular stock, at a specified price. It is vital to compare the market price of the stock, with the exercise price of the option (Hull, 1997). A short position in calls Selling a call on the stock offers some limited protection against modest price declines; however one would still incur losses if the prices were to fall by a large amount. This is because the potential profits for the call writer are opposite to those of the call holder. If the market price for the asset is greater than the strike price, it will be worth while for the holder to...
10 Pages(2500 words)Assignment
Principles And Applications Of The Financial Management
Constructing new office building now at a cost of $4,000,000 from funds the business currently has; ii. Investing the $4,000,000 until 2017 when the business is ready to start construction of the building, at which time it would either use all of the $4,000,000; or iii. Obtain a bank loan for $2,000,000 to help finance the cost. The returns or expenditures on the various options need to be calculated and assessed in order to arrive at the best decision. The return on investment for the 4 year period is approximately 11 percent which represents a total of $434,872. Table 1 below shows the calculations. Option - Invest the $4,000,000 and construct building in 2017 Year Amount Interest   2013 4,000,000 3.50% 4,000,000 2014 4,000...
4 Pages(1000 words)Assignment
Financial Management Principles
...-profitability, leverage, activity, and efficiency. Based on Table 1, Dell shows superior profitability. The company's return on equity is 86.5 % which reveals that every dollar invested in the firm's stock will yields $.856 cents within a year. The company also generates a return on asset of 15.5% while gross margin accounts for 18.2% of the entire revenue. The company's profitability ratios reflect its efficient cost management. Table 1. Financial Ratios of Dell, Inc. Source: Advance Financials, 2006 Dell is recognized as one of the most efficient companies in the IT industry. The figures shown in Table 1 further justify this as Dell reported very high inventory turnover. High...
2 Pages(500 words)Essay
Management (principles,skills,and applications)
...with many different skills as we will see in the following pages. Their effectiveness will be the source for the success of the business enterprise, so there are many strong demands placed on the managers' shoulders in relation to their skills. Leslie W. Rue and Lloyd L. Byars (2005) in their book "Management: Skills and Application" (PowerPoint format) deals with the most relevant principles of Management. They make the distinction of the different kinds of management into three classes: Top management, middle management and supervisory management (chapter 1, slide 6). In the...
9 Pages(2250 words)Essay
Financial Management Principles
...Spreadsheet for Ratio Calculation Power Point Presentation RATIO ANALYSIS Following is the brief financial analysis of Strident Marks Inc. based upon the ratios calculated for the financial year ended 2005. Profitability Gross Profit Margin The gross profit margin of Strident Marks Inc. is 50%, which reveals that the company has managed to keep about 50% of its total sales revenue out of all the production and distribution expenses. This can also be inversely stated that the company loses about 50% of the total sales revenue in meeting its cost of sales. Operating Profit Margin The operating profit margin for the company indicates that after having met cost of good sold and various...
4 Pages(1000 words)Essay
Financial Management Principles
... of its interest obligations. Generally, the business organization should attain its goal of maximizing shareholder value through profitability, efficiency, stability, and liquidity (Keown 2005). Works Cited Keown, A.J., Martin, J.D., Petty, J.W., and Scott Jr., D.F, 2005, Financial Management principles and applications, Pearson/Prentice Hall International Edition, 10th Edition. Mishkin, F 2004, The Economics of Money, Banking, and Financial Markets, Addison-Wesley, 7th Edition... 20 April 2007 Financial s and Intermediation Financial s are essential components of financial systems. Taken from an economic point of view, financial institutions function in maintaining the...
2 Pages(500 words)Essay
Financial Management Principles
...funds raised increases the interest payments and/or dividend payments whatever was forecasted earlier. Additional interest payments or dividends are calculated and adjustments are made in the previously forecasted income statement. This adjustment lowers the earnings that were forecasted in the previous statement. Then a second pass of balance sheet is made and again a new change in interest and dividend payment comes up before managers. Then again adjustments are done in income statements. So in the end it becomes a hit and trial like method to come up with forecasted financial statements which are approximately accurate. “A capital expenditure is and outlay of cash for a project that is expected to...
2 Pages(500 words)Essay
Financial Management Principles
...Financial managers are often presented with investment opportunities in the form of projects that a company may pursue. The consequences of choosing a wrong project could be detrimental to the financial well-being of a business since most of these projects are long term endeavors. These projects are essential for an enterprise to accomplish forecasted sales growth. The financial manager needs to utilize a concise and consistent tool to be able to analyze, compare and evaluate the different projects to choose the optimal solution for the enterprise. A way these managers are able to achieve an unbiased quantitative analyses is by applying...
3 Pages(750 words)Essay
Principles of Financial Management
...The main sources of Sources of Finance Sources of Finance Introduction An organization has to manage its financial resources in order to continue operating in an effective and efficient manner. The organization needs to maintain and have a flow of finances that is quite steady in nature in order to pay for day to day operational activities and to expand its base. Organizations that are in their initial stage of business and entrepreneurs who want to start new businesses even experience the issue of cash flow management. These organizations need money to start their business and need steady flow of funds to continue operating until they start making enough money to finance its operations....
3 Pages(750 words)Assignment
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 Financial Management Principles And Applications for FREE!
Contact Us