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The author of the paper states that the credit appraisal of the nonrecourse project finance lender is based on the underlying case flow from the revenue. The project sponsor has no direct legal obligation to repay the project debt. The project sponsor has limited obligations and responsibilities.
The basic functional area within the accounting practice is dealing with information both internal and external to a business. Accounting information has long been considered to be an effective decision-support tool. The information which is provided by external parties of a business is normally termed as financial accounting information.
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27 pages (6750 words)
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, Research Paper
Appreciation in the value of the domestic currency with respect to a basket of foreign currencies, implying a rise in the domestic rate of exchange, would make foreign goods appear cheaper and hence, more attractive than the indigenous ones. The inflow of foreign goods will increase within domestic premises.
The process involves creating securities out of a pool of debts and turning them into a structure that replicates bonds. Various categories of debt including mortgages, credit card loans, car loans and personal loans are bundled together. Securitization of these instruments helps convert illiquid debt into liquid tradable securities in secondary markets.
International Accounting Standards Board is currently responsible for the development of global standards in accounting and financial disclosure activities. The job of IASB is to develop IFRS (International Financial Reporting Standards) for incorporated businesses. Under IASC (International Accounting Standards Committee) IFRS was called IAS (International Accounting Standards).
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Corporate restructuring involves a fundamental change in the financial structure of the company for maximizing the value of the business to the shareholders. This can be of two types- operational restructuring and financial restructuring. Financial restructuring entails a change in the capital composition of the company.
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Production-related activities are identified as well as the events and circumstances that cause, or drive, those activities. The manufacturing overhead cost is applied to a product by calculating a predetermined overhead rate, also called cost pool rate, for each cost pool and using that rate and a cost driver amount to determine the portion.
In this section, the annual report chosen is the one issued by the BP Group. BP p.l.c. is “one of the largest energy companies” (BP, 2010) in the world. Its brands include Aral, Arco, and Castrol. BP p.l.c. is a publicly listed company domiciled in England and Wales. According to the 2009 Annual Report issued by BP, its inventories as of December 31, 2009, amounted to US$22,605 million.
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One crucial concept, which most investors must be aware of, is the trade-off between risk and return of any financial asset. There is a positive relationship between the expected return of a financial asset. Higher the risk of a financial asset, higher the return would be expected for the same to compensate the associated risk.
Bunbury (2007, p.1) states that “overhead cost is one of the dominating factors of modern industry”. Feinberg (2006) defines overhead cost in simplest terms as “those expenses that do not vary with your production level”. It can also be said that overhead costs are the indirect recurring costs of running a firm or a business.
The author of the following discussion argues in a well-organized manner that management accounting is much more different from financial accounting in the sense that the latter is done for the use of shareholders and company creditors, while the former is designed for application by company management.
There would be shortage of credit money in the economy resulting in decreased demand which would in turn lead to unemployment as firms would cut their supply. Individuals have a moral responsibility to try to pay their mortgages on time. If judging the option of strategic default purely on moral or ethical grounds then it is surely wrong to knowingly gobble up other people’s owed amount and hence should be avoided at all costs.
It explains the competitiveness of the financial services sector, some influences of the external environment, influence of the social environment on customer attitudes and expectations, as well as the ways in which customers have changed in recent years and how this has impacted on their interaction with the financial services sector.
The author states that when one thinks of taxation and its underlying purposes, the first thought that comes to mind is that taxation is something imposed or forced on us by the government and is nothing more than the way in which the government collects money in order to finance its various activities.
A company must restrict its self-financing through retained profits because shareholders should be paid a reasonable amount as dividends that should align with their expectation, this would help keep shareholders happy and keep a good impression in the market, this may in return increase the value of the shares of that company in the market.
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A prime example of such a wheel pattern can be found in the form of department store merchants who having started as ferocious competitors to smaller retailers eventually succumb to “discount house and supermarket competition” (Hollander, 1960, p. 37). According to Hollander, this wheel pattern is not applicable to all instances of retailing.
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The author states that it is often argued that the current business environment is relatively more volatile and the basis of competition has largely changed. Firms now need to prepare themselves for the volatile markets and fierce competition and as such the preparation for such times holds the key to achieve the necessary stability.
The financial report of British Airways can be made more useful for potential investors if it provides a section on financial ratios. If the investor lack core accounting knowledge it becomes very difficult for them to understand the Financial Statement and Balance Sheet of a company, hence certain vital financial ratios need must be provided.
The days in the calendar year was taken as 250 trading days for the ease of calculating the option prices. The data was collected from 1st of January 2008 to 29th March 2010. The historical volatility was computed with an interval of 50 days. The average volatility for the complete range of data was 41.55%
As is the norm when any crisis erupts in any sector, so is the case with the financial sector. Some questions that are being asked now are: “We advocates of relatively unfettered capitalism have strong exculpatory arguments: Who inflated the housing bubble with 1% money in a strong economy? (The Greenspan Fed.)
Overall, globalization has many benefits, because it represents free trade being chosen over domestic protectionism, which can lead to negative results. Only in a few countries (10 out of 34) did the majority of people consider globalisation a positive factor for local economic development.
As the financial consultant of the company, the main aim is to find out which of the investments in the company is feasible, and viable. Before moving into discussing the two options available for Smith International Hotel Group, it is important to understand a few basic details of the techniques used to appraise a project.
In past times of crisis, foreign cash entered Swiss banks. The same is happening now — confirming the belief that Switzerland is one of the best places in the world to safeguard cash and assets. However, globalization is spreading to all spheres of life, and bank standards sooner or later will be unified around the globe.
The traditional ways of trading no longer reaped the expected returns for the business houses. The financial services companies all across the globe are largely affected by such paradigm shifts. The influential factors of globalization have turned the world to be a smaller place to live in. The revolution of the internet has significantly affected the ways of doing business for the banks.
All the growth indicators are showing negative growth and as such, it may be difficult to compute the key indicators such as dividend yield, growth rates as well as the cost of equity. In order to compute these indicators, it may be more plausible if methods like CAPM are used to compute the required rate of returns as well as future dividend patterns of the firm.
This code will be applicable to the audit firms who audit the accounts of companies listed on the Main Market of the London Stock Exchange. At present, it applies to 8 major auditing firms of UK which audit 95% of the listed companies. Other firms may adopt its practices in full or part. This code has been developed and published by the independent working group.
On the whole, it can be said that though the financial performance looks reasonably good, there are still few areas of concern. Firstly, Vodafone should ensure that the liquidity position is well maintained. Secondly, the company has to ensure that it should not go on an acquisition spree and block its operating cash flows in long-term assets.
The achievement of the above target can be more difficult in certain industries – where competition is stronger; an indicative example is the airline industry. Southwest Airlines is among the most powerful firms in the US Airline industry; in 2007 the firm’s profits were estimated to $9,861 (in millions) – a significant increase compared to the firm’s profits in 2003 – about $5,937 (in millions);
The era during the de-regulation also allowed non-banking institutions to start conducting activities that exclusively fell into the ambit of the banking sector in the past. Due to this gradual encroachment of non-banking institutions, banks also started to lose their efficiency due to competitive pressures.
In terms of profitability, its gross margin of 52.28 percent is superior to that of the industry (6.72 percent) and the S&P500 with its 29.66 percent. More importantly, its net profit margin of 13.16 percent is much better than the industry's 1.26 percent. Experian has a relatively high P/E ratio of 21.57 compared to the sector's 10.67.
The company faces resistance from European and American markets on its plans to take advantage of the low-cost economies by transferring work to these Asian countries. The transfer of these processes can be a great cost advantage to the company but if they are unable to take this advantage then their competitors definitely will.
In the commercial world, guarantees are a commonly used phenomenon. These guarantees can range from the negotiated arrangements designed to help sales of services and products of a business and guarantees to bank loans as accommodations to business associates. The IFRS 4 was introduced in March 2004 mainly to regulate the insurance industry (Epstein et al 2008: 614).
The IAS2 Inventories is a standard that has been developed with the objective of finding an accounting treatment for the inventories. The paper will also detail the measurement, presentation and disclosure details of the standard. A brief comparison of the standard has also been made with that of GAAP of US.
The taxpayer may be an individual resident or maybe a legal business entity of the country. However, in case of any existing tax system of an economy, it has always been a great concern for the economist, policymaker, business leaders, financial institutions, common people or any other rational social agents.
The main technology trend having an impact on the pharmacy and healthcare industries relate to the developments in internet technologies, and the proliferation of telemedicine and remote medical advice. With a multitude of medical forums, the customer is well-informed about the ailments and the treatment options available
Lack of or poor valuation methods leads to asset and liability value inconsistencies and incomparability. Therefore, business organizations need to develop and apply reliable and consistent asset and liability valuation techniques in order to preserve the good value of the assets and pay the right value for the liabilities.
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Net present value technique is one of the project appraisal techniques that are used by project managers or investors to determine whether the project is profitable. It indicates the value that a project or investment add to the firm. Net present value reflects the future value of money as compared to the present.
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The term ‘Budget’ refers to the document or a list of all planned expenditures and revenues. It is commonly characterized as a plan for saving and spending. It can also be called as an organizational plan stated in monetary terms. By budgeting, it is intended to get an overview of the actual economic situation and to forecast the revenue.
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Auditor independence even though is a mindset includes the prevention of certain details which are very significant to third parties. The well informed third party has knowledge of all the appropriate info which might include any precautions enforced and this would entail him/her to fairly reason out a firm’s or a member’s unity.
The arguments presented in the Fair Tax Book are logically sound and provide a good backdrop of the current taxation system. Sometimes, the reader might feel that the authors are making wild claims that may hold no truth, however, mostly; the book provides factual evidence to what it claims and then proposes as a replacement.
The cost of equity of Super Cheap Auto Group Limited can be computed as follows. The following information was identified. Rm = 10.02% (market rates for 2009 according to CIA February 4, 2010), Rf= 5.47% (financial times March 6, 2010) interest free and beta is assumed to be 2.5. Other assumptions include the following. The aim of the company is to maximize its economic value.
It is evident that BMS performs efficiently, manages its risks well, enjoys profitability, and is exceptionally well-positioned to take advantage of the coming recovery. The foregoing price chart shows the market price of the stock being defensively strong, showing the preservation of the value of stakeholders’ interest in the Company.
Actually now the IASB framework due to its various criticisms and shortfalls has decided to alter some of its concepts. The IASB framework has actually set out on a difficult task in determining to modify, complete, and meet their theoretical frameworks. Many of the matters are not only difficult to solve but they are also controversial.
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privileged to be accorded the opportunity to complete a three-year study in Finance and Banking in Xiamen University and then pursue a one-year study in Business and Management in Hull University, as an exchange student. I can achieve both bachelor degrees after I complete the
Chief Executive’s Review also indicates that the firm earned most of its revenue from the regulated customers however the firm focused more on its strategy of acquisition. Most of the growth in 2008 was achieved through a combination of working with the regulated customers as well as by acquiring different businesses across the globe.
According to SFAS 2, Accounting for Research and Development Costs requires (Robert H. Colson, 2003) that R&D generally be expensed as incurred and that each year’s total R&D be disclosed in the financial statements. The development includes conceptual formulation, design, and testing of product alternatives; construction of prototypes, and operation of pilot plants.
The financial analysis for a company is done using the historical data. They mostly tell us what happened in the past or recent past. However, most of the financial analysts and their clients are most concerned about what would happen in future. The shareholders of the company are concerned with the prospective future earnings and dividend payment.
The financial crisis of 2008-09 posed a major threat for most of the funds and the fall in the stock market resulted in huge capital erosion. This holds true even for Morris Fund which invested a good proportion of its fund in the stock market. From June 2010 Morris Fund has to pay the investors who invested around 5 years back.
The economic tsunami (recession) which started in the first half of 2008 and continued throughout 2009, disturbed the financial fundamentals of many well-known companies around the world, especially those operating in the US and UK. The effect of the recession was uneven and the emerging nations managed to overcome it at a much faster rate.
The most vital limitation of the use of economic data accessible in yearly accounts from an investor’s issue of outlook is that this data is chronicled and the time gap between the time of announcing of the yearly report and buying into can give increase to matters which may sway the enterprise severely. The yearly report could encompass economic ratio investigation and competitors’ analysis.