Nobody downloaded yet

Financial management assignment - Essay Example

Comments (0) Cite this document
Summary
1Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Alternate reasons for restructuring include a…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.9% of users find it useful
Financial management assignment
Read TextPreview

Extract of sample
"Financial management assignment"

Download file to see previous pages the companies favor financial restructuring as the company can still be in the business and can avoid the legal problems associated with bankruptcy proceedings.
The goal of a debt restructuring is to lower the interest payments and extend the terms of the loan in order to get through a bad patch and not to write off a companys debt.  Companies considering the debt restructuring must first prove that their current market downturn is a temporary phenomenon and will ultimately past and the company will be able to resume profitability.  Thus companies have to convince their stakeholders like creditors, bankers, and distributors that the company will be able to improve the financial condition with the new finance arrangements within a specified period of time.
It is important that all the stakeholders actively participate in the preparation of the Financial Restructuring Plan. In some cases even after the Financial Restructuring plan is implemented the company would end up in bankruptcy due to dissatisfaction among certain group of stakeholders or due to bad execution of the Plan. Bankruptcy should be the last option for the companies as only about 15 to 20% of the companies are able to come out of bankruptcy and the cost of bankruptcy is pretty high.
It is evident from the current Case study that the company is Over leveraged, that is the debt:equity ratio is very high. Financial restructuring would also be taken up by the companies which are Under leveraged. These companies raise debt to buy back shares. Financial restructuring can also be taken up when the company’s financial position is effected due to Sluggish sales or seasonal sales problems. Often company would raise debt to fund expansion projects but the expansion projects do not give the expected returns resulting in the defaulting of interest payments by the company. Financial restructuring helps the company improve its credit score, which would be useful if the company intends to borrow in future. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Financial management assignment Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
Financial management assignment Essay Example | Topics and Well Written Essays - 1500 words. Retrieved from https://studentshare.org/miscellaneous/1560056-financial-management-assignment
(Financial Management Assignment Essay Example | Topics and Well Written Essays - 1500 Words)
Financial Management Assignment Essay Example | Topics and Well Written Essays - 1500 Words. https://studentshare.org/miscellaneous/1560056-financial-management-assignment.
“Financial Management Assignment Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.org/miscellaneous/1560056-financial-management-assignment.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Financial Management assignment 2
...Financial Management Registration Number Module Number and of Assignment Question 1a The quantitative results can be found in the Appendices section of this report. Based on the results using the Payback Period, Net Present Value and Internal Rate of Return, Paddle Your Own Canoe Plc should not consider undertaking the project. With the Payback Period method, the number of years to recover the initial costs of the project resulted beyond the life of the plant and machinery, which is only five years. With the Net Present Value method, using a discount factor of 14%, resulted in a negative figure, i.e. -GBP 3,833M. This means that the project will generate a negative cash flow....
12 Pages(3000 words)Essay
Foundations of Finance and Financial Management Assignment
...Chapter 7 i) False ii) True iii) True iv) False v) True vi) True vii) False viii) False ix) True x) True 2) The risk of decline in the price of bond due to rise in interest rates is called interest rate risk. As a manager, one should be aware that those bonds with a bigger length of time before maturity present a more rise and hence one should invest in short-term bonds if it is believed that interest rate risk or interest rates are going to rise in the future. 3) The reason behind this lies in the fact that the shorter the bonds maturity date is the sooner the company will have to redeem the bond and hence it results in cash outflow for the company. So, the issuer of bonds prefers to keep the maturity length...
2 Pages(500 words)Assignment
Financial Management assignment 1
...Question Break-even in units = Fixed Cost Unit Price - Variable Unit Cost 112,000 200 8 50 + $0.70 113,200 / ($8 - $2.70) = $113,200 /$5.3 = 21358.49 units Question 2. Income Statement Sales $2,000,000 Cost of Goods Sold $1,100,000 Gross Margin $900,000 Depreciation Expense $100,000 Interest Expense $43,800 Notes Payable (9%) $10,800 Bonds Payable (11%) $33,000 Selling and Administrative $200,000 Income Before Taxes $556,200 Taxes (40%) $222,480 Net Income $333,720 Question 3. a. Sales Profit Margin = Net Income/Sales = 12% Net Income = $90,000 Sales = Net Income / 12% Sales = $750,000 b. Total Assets Return on Assets = Net Income/Total... Break-even ...
6 Pages(1500 words)Essay
Financial Management Individual assignment
...Financial Management Individual assignment Table of Contents Capital Market 3 Role and Importance of capital market 3 Efficient market hypothesis 5 Sources of finance 6 Impact of Sources of finance on cost of capital 8 Dividend policy 11 Theories explaining the relevance and irrelevance of dividends in share valuation 12 Conclusion 15 Reference 17 Bibliography 21 Introduction Capital is said to be the life of business. As the size of the firm increases there arises the need for additional funds. For raising the surplus funds the business can adopt various routes. It can go for the issue of fresh equity or it can also raise debts like issue of bonds, borrowing from the financial institutions. The choice of the mode will depend... on the...
12 Pages(3000 words)Essay
Assignment 5: Financial Management
...Financial Management Financial Management The company that is capable of paying its current liabilities(debt) Current ratio is a popular financial ratio that is used to test the company’s liquidity (liquidity is also referred to as the working or the current capital position of the company). The current ratio is derived from the proportion of the current assets available to cover the current liabilities. The idea behind the ratio (current ratio) is to determine if the company’s short term assets (cash equivalents, receivables and inventory, marketable securities, and cash) are available to pay off the company’s short term liabilities (current portion of...
5 Pages(1250 words)Essay
Finance and Financial Management assignment
...Financial Management s Organizations always strive hard for the sake of economic prosperity and strategic momentum. Unfortunately, there is no single definition of the term “Organization” exist in this world, because every author has had defined the concept in somewhat different manner (Bruce, 2006). According to the major consensus of the authors, it is found that “organization is basically a place wherein people belong to different demographics and mindset work together for the achievement of a single and pre-specified goal. In a second place, authors had identified that; organization is a place where in different departments work together in order to contribute in the long run productivity of the...
6 Pages(1500 words)Assignment
Financial Management assignment
...billion liquidity into its loss making businesses. The deal was also cleared by the European Union and the United States Department of Justice. The deal also received necessary approvals from Chinese authorities. Motives behind Merger The various factors that motivate mergers and acquisitions are discussed as follows: Synergy – In 2004, Bruner argued and said that synergy means co-operate or work together and involves in merger when two organizations come together and pool in their resources and expertise for better performance. The effect of synergy is considered to be important because merger means value creation, investors’ reaction to merger is an important consideration, Managers effective estimation and...
6 Pages(1500 words)Essay
Financial Management Assignment
...Financial Management Assignment Table of Contents Introduction 3 Critical Assessment of the Deal 3 Potential Benefits 4 Potential Risks 4 AlternativeOptions 5 Conclusion 5 References 7 Introduction On September 02, 2013, Vodafone Plc announced that the group had decided to sell 45 percent stake in Verizon Wireless to parent group Verizon Communications Inc. for £84 billion or approximately $130 billion. Verizon Communications already owns the remaining 55 percent ownership state in Verizon Wireless. The deal is historically the third largest corporate deal that will end very controversial 14 years venture between the two groups (Business Today, 2013). Critical Assessment of the Deal In...
5 Pages(1250 words)Essay
International Financial Management - Assignment Question
...International Financial Management INTERNATIONAL FINANCIAL MANAGEMENT Question Explain the difference between transaction exposure and economic exposure and suggest strategies that a multinational company might adopt to reduce these types of exposure. Transaction exposure is a summation of the risks facing an organization that is involved in international trade. Such risks are mostly caused by changes in currency rates after a company has already established trade in the international market (Wang2009). On the other hand, economic exposure refers to the factors affecting an organization’s investments, cash flows, and earnings when there are fluctuations in exchange rates. This type of exposure is also called operating exposure... ...
3 Pages(750 words)Essay
Financial Management Assignment
... = current assets – current liabilities Current ratio = current assets/current liabilities Year 2013 2012 2011 Net working capital -6311000 -6496900 -5519800 Current ratio 0.585 0.6002 0.565 a. The company’s current liabilities exceed current assets across the period, implying that the company is illiquid, i.e. not in a position to clear current liabilities when they are due. The trend is not clear as the company’s liquidity worsened between 2011 and 2012 but improved in the following year. Question 6 Multiple questions 1. D. 270 days or less Question 7 Multiple questions 1 A. Dividend payments References Narayanaswamy, R. (2013). Financial accounting: A Managerial perspective. Delhi: PHI Learning Private Limited... Total assets...
1 Pages(250 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 assignment for FREE!
Contact Us