Nobody downloaded yet

Capital strucutre (leverage/Gearing) policy for BARWA Real estate company - Essay Example

Comments (0) Cite this document
Summary
Capital structure is the combination of the various sources of financing that the company employs in its operations. Capital structure changes, significantly impact the pricing as well as entry and exit…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.8% of users find it useful
Capital strucutre (leverage/Gearing) policy for BARWA Real estate company
Read TextPreview

Extract of sample "Capital strucutre (leverage/Gearing) 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 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 amount of sales generated from the total asset. A high asset turnover ratio indicates that the company is making a good use of its asset structure. But, the ratios of companies belonging to different ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Capital strucutre (leverage/Gearing) policy for BARWA Real estate Essay”, n.d.)
Capital strucutre (leverage/Gearing) policy for BARWA Real estate Essay. Retrieved from https://studentshare.org/miscellaneous/1559780-capital-strucutre-leveragegearing-policy-for-barwa-real-estate-company
(Capital Strucutre (leverage/Gearing) Policy for BARWA Real Estate Essay)
Capital Strucutre (leverage/Gearing) Policy for BARWA Real Estate Essay. https://studentshare.org/miscellaneous/1559780-capital-strucutre-leveragegearing-policy-for-barwa-real-estate-company.
“Capital Strucutre (leverage/Gearing) Policy for BARWA Real Estate Essay”, n.d. https://studentshare.org/miscellaneous/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 strucutre (leverage/Gearing) policy for BARWA Real estate company

Real Estate

...GCC countries (Zawya). There are prospects for industrial real estate activities within the free trade zone known as the Kuwait Free Trade Zone or KFTZ, which had been in operation since 1999, and have about 90 percent occupancy rates for companies who have on paper come to enjoy some of the benefits that do not accrue to businesses situated outside of the KFTZ, including lower income taxes and relatively fewer regulations. The KFTZ can be considered as industrial real estate, designated specifically for that purpose by the government. On the other hand, in practice, restrictions and regulations are said to pepper foreign firms who locate in the KFTZ,...
10 Pages(2500 words)Research Paper

Capital Structure and Leverage Practices

...Family Dollar Company: Capital Structure and Leverage Practices COMPANY BACKGROUND "Family Dollar Stores, Inc. (Family Dollar) operates a chain of general merchandise retail discount stores across the United States. The company offers general merchandise in four categories such as consumables, home products, apparel and accessories, and seasonal and electronics" (Bharat Book Bureau). "The first Family Dollar store was opened in Charlotte, NC, in 1959. It was a relatively small, self-service operation located in a neighborhood convenient to low and middle income consumers. The merchandise assortment featured basic goods for family and home needs" (Family...
4 Pages(1000 words)Essay

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,...
8 Pages(2000 words)Essay

Real Estate

...industry is a large and influential sector of the US economy, employing millions of people nationwide. The book, Real Estate Principles, underscored this fact: Several million real estate transactions take place in the United States every year, representing billions of dollars in economic activity. Statistics concerning real estate are among the data economists use to evaluate the health of the economy. (p. 2) The sector includes not only real estate brokers and agents, but also property managers, relocation specialists, real estate investment counselors,...
5 Pages(1250 words)Essay

Capital Strucutre

...Debt to book capitalization ratio Capital strucutre is one of the highly debated issues involving many complex problems related with what should be the optimum capital structure for the company to maximize its value. One such effort was made by Modgigliani and Miller who suggested that the capital strucutre do not have any impact on the value of the firm under certain assumptions.[RHS08] These assumptions were following: 1) No taxes 2) No bankruptcy costs 3) No cost for enforcing debt contracts 4) Investment Opportunities are given 5) Homegeneous expectations about the investment opportunities for the firm Based on the...
2 Pages(500 words)Essay

Real Estate

...from satisfactory to a seller and very satisfactory to buyers. According to the website, the current square foot price as of March 1st, 2009 was only $95 for homes in Charlotte. This had fallen to the current level from a high of nearly $185 in July 2008. (Real Time Market Profile for Charlotte). According to the above figures the value of my home would be as follows 95 X 1750 = $ 166,250 In such a scenario, it will be worthwhile to compare prices if one wants to buy a ready made house or construct one instead. A search with an agent also shows that prices are low. It shows that three bed room houses are available in the market for at only slightly higher price than what was seen in my valuation. Prices of two and three...
2 Pages(500 words)Essay

Real Estate

...impact on the economy of the country. It was during this period that different kinds of policies and loans were introduced by banks and estate companies. All other industries that were somehow associated and linked with the real estate market also grew stronger (Hersh, 2002). But soon with the start of the new millennium the situation started to reverse and the market started to face a downfall. The financial institutions started to withdraw the money and the gross percent money assets diminished rapidly and within single year it decreased to an extremely low value (New York University, 1971). The subprime credit was completely eliminated from the market...
2 Pages(500 words)Essay

Real estate

...the year 2007 to 2009 economic recession in order to save cost on operation and mitigate the effects of low income for the organization to ensure their survival. The companies are strengthening their organization base to ensure smooth operations of the firms (Western Mail, 2011). For example, DTZ ensures that they hire and maintain experienced staff to eliminate hiring and training cost. They also involve their employees in managerial roles to ensure that all the workers are aware of the firms’ goals and pursue them. Another strategy used by UK real estate firms to ensure they thrive during economic hardships is engagement in construction of cheap houses for low income earners (Western...
10 Pages(2500 words)Essay

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...
2 Pages(500 words)Essay

Real Estate

..., a trespasser needs to meet the following requirements: the trespasser must have occupied the property for at least 15 years, he/she must occupy the property with or without the knowledge of the owner, he/she must be physically present on the land, he/she must be open in trespassing, and must be exclusive and continuous possession. Having considered the above requirements, the client is under legally entitled to own the land that belongs to his neighbor. Work Cited Senn, Mark A. State-by-state Guide to Commercial Real Estate Leases. New York: Wolters Kluwer Law & Business, 2012. Print.... Interoffice Memo The Attorney Real E Consulting Co. ltd CC: All Real E Consulting Co. ltd Staff Date: 16...
1 Pages(250 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 Capital strucutre (leverage/Gearing) policy for BARWA Real estate company for FREE!

Contact Us