Informal Recommendations Research Report Paper Example | Topics and Well Written Essays - 1000 words

Informal Recommendations Report - Research Paper Example Accounts payable is the hardest working accounting function. It is very important for an organization to use its resources for implementing this best practice in a company. In an organization generally different types of accounting record are being gathered. That information is invoices, purchasing orders and copy of receipt. Person from accounts payable department collects these three important documents and verify those documents before paying the accounts payable (Esma, 2013). It is tough job and highly error prone. Elimination of manual checking is a best practice for accounts payable. It is often being noticed that staffs of a company perform manual check of different bills and sign those bills and enter those information into a computer system. In this whole process staffs may enter faulty information into the system and as the process is done fast so, often some important information are not free from errors. Maintaining database of suppliers is a best practice for payable staffs of a company. It has been observed that maintaining a large data base of supplier is a serious problem for the staffs. It is often being noticed that suppliers make complaints that they are not getting their money in proper time. These kinds of problems generally occur due to large supplier base (Hansen, Otley and Sted, 2003). For resolving this issue reducing the supplier base is a best practice. Budgeting is a very difficult and painful but one of the most important best practices of accounting. It requires significant efforts to come up with a proper budget. Budgeting is all about allocations of the resources of a company in its different operating segments. This process is completed on the basis of past trends and futures forecasting and so levels of uncertainties are there. Those presences of uncertainties are making this a very risky function. It has been observed that when staffs of an organization is presenting the budget in front of the management of

Sweatshops Essay Example | Topics and Well Written Essays - 750 words

Sweatshops - Essay Example Nike violated laws about working conditions, working hours, and forced overtime. They have been labeled as employing ‘sweatshop’ conditions in their manufacturing units. Due to globalization markets expanded and the market discipline intensified. This discipline penetrated into the spheres of lives of people previously untouched. The global garment industry offers the western consumers a wide variety of styles and fashion at affordable prices. Competition in the industry gave rise to sweatshops. To survive amidst competition, market restructuring had to be done in the form of buyer-driven commodity chains and lean retailing (Micheletti, 2006). They had to respond to the changing consumer demands for fashion and quality at reasonable prices. They had to invest to create and satisfy the fluctuating demands of the consumers. To deliver fashion and quality they had to rely on the individual garment workers and not the machinery. People started clamoring for branded products and brand culture was what became the decisive factor. Sweatshops are not new to America and since the industrial revolution many generations have toiled in sweatshops. Usually women, children or unskilled workers are used in sweatshops from the poverty-stricken families, who have no other option to earn a livelihood. Their pay is sub-standard and the working conditions are unsafe and unhygienic. Although it essentially started in the garment industry, but it exists in other industries as well. Sweat shops are the result of greed and opportunism; they may also stem from competitive pressures. These have come into existence due to globalization, government regulations, immigration, business practices, racial, ethnic and gender discrimination. The people are underpaid and overworked while the working conditions are unsanitary and far from reasonable. It violates safety, heath, wage and child labor laws. People have gone to the extent of saying that they would

Review On The Capital Structure Debate Finance Essay

Review On The Capital Structure Debate Finance Essay Corporations fund their operations by raising capital from a variety of distinct sources. The mix between the different sources, generally referred to as the firms capital structure has attracted considerable attention from academics and practitioners. Debt and equity are raised by firms to finance new investment projects. As such, both of them are sources of funds for the business. Debt usually consists of bank loans either long term or short term whereas equity consists of stocks and bonds. Hence, capital structure refers to the mixture of debt and equity finance used by a company to finance its activities. The correct choice of the mix of debt and equity is questionable. Financial managers problem is to find out the combination of securities that have the greatest overall appeal to investors. Moreover individual firms often change their debt ratios over time, perhaps responding to changes in investment opportunities, agency costs and so on. According to R Charles Moyer, James R. McGuigan and William J. Kretlow (1982), leverage is closely related to capital structure in the financial field. 2.1.1 Importance It is found that there are basically three types of financing decisions taken by firms namely the (i) the distribution of earnings which is the consumption decision, (ii) the capital budgeting decision,i.e, the investment decision and (iii) the capital structure decision. The capital structure decision is fundamental in order to carry out the other two financing decisions, i.e how much cash should the firm lend or borrow in order to carry out the consumption and investment decision. The capital Structure decision is important since profits of various organizational constituencies are maximized as well as the organization is able to deal with its competitive milieu. 2.2 Theories of Capital Structure 2.2.1 Traditional View The traditional view specifies that when a firm uses the right mix of debt and equity, the lowest its WACC, the more it will maximize the firms value due to the tax advantage of debt. If a firm wants to make an optimal capital structure decision, it will have to choose those sources of finance that gives the lowest cost of capital which will in turn lead to the lowest WACC. However, it is to be noted that as gearing increases, the cost of equity and consequently the bankruptcy risk will increase which will in turn lead to an increase in the cost of debt. However, the validity of this theory has been criticized since there is no underlying theory which shows by how much the cost of equity should increase due to increased leverage and by how much the cost of debt should increased due to increased in bankruptcy risk. 2.2.2 Modigliani and Miller Theory In their landmark paper in 1958, the Modigliani Miller Theorem (Modigliani and Miller, 1958, 1961) says that the value of a firm and the investment decisions should be autonomous from its capital structure. In other words, leverage should have no effect on investment decisions. However, the Modigliani Miller Theorem assumes a world with no taxes, information asymmetries or agency costs. Assuming perfect capital markets, they propounded to what is today widely known theory of capital structure irrelevance which means that the capital structure that a company chooses does not affect its value. Later theories argue that leverage clearly can matter due to the effect of taxes, information and agency costs (Myers, 2001). Later, in 1963, Modigliani and Miller took taxation under consideration and proposed that companies should employ as much debt capital as possible in order to achieve the optimal capital structure. Along the lines with corporate taxation, numerous studies also analyzed the case of personal taxes imposed on individuals. Miller (1977) suggests tax rates in the tax legislation of the some of the OECD countries that evaluate the total value of the company. These are the corporate tax rate, the tax rate on income in the form of dividends and the tax rate on interest income. According to Miller, the value of the company depends on the relative percentage and importance of each tax rate, compared with the other two. With respect to theoretical studies, there are two widely acknowledged competitive models of capital structure namely the static trade off model and the pecking order hypothesis. 2.2.3 Tradeoff/ Static Theory This approach presents capital structure as a balance between positive and negative effects of leverage respectively linked to a firms tax advantages and financial risk. The trade off theory introduces into the capital structure debate the benefit of the debt tax shield on one hand and the cost associated with financial distress on the other. The implication of this theory is that each firm has an optimal debt ratio that maximises value, although this level may vary between firms. Moreover, the trade off theory is often further extended to incorporate agency considerations. This is in the spirit of Jensen and Meckling (1976) who note that debt is valuable in reducing the agency costs of equity but at the same time debt is costly as it increases the agency costs of debt. However, there are factors that this theory cannot explain such as why companies are generally conservative in using debt finance, for example, some successful companies such as major pharmaceutical manufacturers continue to operate with low leverage. Furthermore, this theory cannot explain why leverage is negatively related to profitability as reported by Myers (1993), Titman and Wessels (1988) and Fama and French (2000). 2.2.4 Pecking Order Theory Pecking Order Theory is considered as one of the most influential theories of capital structure According to Myres (1984), this theory advocates an order in the choice of finance due to different degrees of information asymmetry and related agency costs embodied in distinct sources of finance. As such, retained earnings are used first since they constitute the cheapest means of finance, hardly being affected by any information asymmetry. Second, debt is used as there is low information asymmetry due to fixed obligations acting as an effective monitoring device. Finally, external equity is used only as a last resort as it conveys adverse signaling effect as explained by event studies. This theory also claims that there is no optimal capital structure that maximises the firms value. The attraction of interest tax shields and the treatment of financial distress are therefore assumed to be second order of importance, because debt ratios change when there is an imbalance of internal cash flows net of dividends and real investment opportunities. Profitable firms work down to low debt ratios, while those whose viable investment opportunities exceed internally generated funds tend to borrow more and more. The pecking order form of financing is also influenced by information asymmetries which are where investors make inferences about a firms prospects based on managements financing decisions. A positive impact on the share price only occurs if management chooses to refinance with debt rather than equity, because the firms prospects are then viewed as being good (i.e. by investors). Managers thus avoid the alternative scenario (a decline in the share price due to new equity issues) by maintaining a borrowing capacity or financial slack that consists of retained earnings and/or marketable securities. 2.2.5 Agency Theory Jensen and Meckling (1976) pinpoint the existence of the agency problem which arises due to the conflicts either between managers and shareholders (agency cost of equity capital) or between shareholders and debt holders (agency cost of debt capital). Promoters with major shareholding usually consider the impact of raising funds via equity financing. However, more equity shareholders would imply a dilution of control. Therefore, in order to retain control over management, some firms prefer debt financing. Theory supports that leverage matters due to the effect on agency costs. Leverage is predicted to reduce the agency costs from the manager-shareholder conflict; thereby mitigating the investment inefficiency resulting from this conflict. The Free Cash Flow theory (Jensen, 1986) suggests that debt reduces the agency cost of free cash flow. He also argues that, since debt commits the firm to pay out cash, it reduces that amount of free cash flow available to managers to engage in self interest activities. Debt financing ensures that the management is disciplined to making efficient investment decisions which will maximize the firms value and that they are not pursing individual decisions which will increase the profitability of bankruptcy. The mitigation of the conflicts between managers and shareholders constitutes the benefit of debt financing. Furthermore, Jensen argues that debt also imposes strong control effects on managers. Debt holders can exert a stronger control of the firm than shareholders. A promise to shareholders to payout a certain amount in dividends is considered weak since it is not binding (dividends can be reduced in the future). Debt creation, however, forces managers to effectively bond their promise to pay out future cash flows. The debt holders have the right to take the firm to bankruptcy court if the firm cannot make its debt service payments. The threat caused by failure to make debt service payments serves as an effective motivation force for managers to make their firms more efficient. Thus, through the reduction of free cash flows and control effects, leverage is presumed to mitigate the manager-shareholder conflict and overinvestment. According to Harris and Raviv (1990), the role of debt in allowing investors to generate information useful for monitoring management and implementing efficient operating decisions. Debt-holders use their legal rights to force management to provide information. The optimal amount of debt is determined by trading-off the value of information and opportunities for disciplining management against the probability of incurring costs. Monitoring costs would be incurred by debt-holders to ensure that the managers do not increase the risk of the firm by investing in risky projects. However, by investigating in risky projects, free cash flows can fluctuate and debt holders might not be paid. To prevent this, banks will have to monitor the firm and will thus impose a number of conditions, for example, the firm will keep a particular liquidity ratio as decided by the banks analysis. Subsequently, the cost of debt will increase since it will include the agency costs. As a result WACC will increa se and eventually the value of the firm will decrease. Hence, the firm will not be able to take maximum of debt since the cost of debt will increase because of the monitoring costs that have to be adhered to. Therefore, firms with relatively higher agency costs due to the inherent conflict between the firm and the debt-holders should have lower levels of outside debt financing and leverage. 2.2.6 The Signaling Hypothesis The Signaling Theory is based n the assumption that managers possess superior knowledge as insiders as opposed to outside investors who know much less about the economic health of a firm. This hypothesis suggests that managers may choose financial leverage as means to send signals to the public about the future of the company. Ross (1977) claimed that greater average financial leverage is used by managers to signal an optimistic future about the firm. Furthermore, Leland and Pyle (1977) argued that an owners willingness to invest in his own project conveys a positive information to the market since it can be used as a signal for project quality. 2.2.7 Bankruptcy Cost Arguments against/For debt (put I table in Appendix in case in excess)

Murray Siskind: Wise Man Or Raving Mad? Essay -- essays research paper

Is Murray Siskind a raving lunatic or a wise, but somewhat eccentric man? Does he ever have a point, or is he just mindlessly rambling? He’s neither of those things. The first impression he gives is of someone who’s in between, but that proves not to be the case. He’s actually a very cunning man, one who has become the â€Å"devil† voice of Jack Gladney’s conscience. Eventually he’d like to become Jack. He covets not only his position and standing in the university, but also his wife, Babette, and he makes no secret of it. Why else would he do something to lewd as to sniff her hair and grope her the way he does? He tells Jack that the only way to seduce a woman is with clear and open desire. Well, it don’t get no clearer than that. All those things become apparent later on. First, we find out who Murray Jay Siskind is. He’s an ex-sportswriter from New York. He’s Jewish. He was briefly married once during his sportswriter days. We know he is now a visiting lecturer on â€Å"living icons† at College-on-the-Hill. Physically, he is â€Å"a stoop shouldered man with little round glasses and an Amish beard† (DeLillo 10). He’s hairy, but does not have a moustache, only a beard. He dresses almost entirely in corduroy. He likes his men simple and his women complicated. He â€Å"is trying to develop a vulnerability that women will find attractive† (DeLillo 21), but so far has only managed to create sneaky and lecherous expression. For him, sex seems very matter-of-fact, like a business transaction. Just flat out lust. He even reads a magazine called American Transvestite. Murray is, by his own admission, â€Å"a solitary crank who marrons himself with a TV set and dozens of stacks of dust-jacketed comic books† (DeLillo 52). He shares a house across the street from an insane asylum with boarders who seem like they ought to be confined there too. Not that he minds, though. He’s â€Å"totally captivated and intrigued †¦ totally enamored of †¦ the small town setting† (DeLillo 10). At first, Murray seems like a deep person with interesting quirks (he takes pleasure in sniffing food labels in the supermarket). He’s deeper than the other pop culture professors who read nothing but cereal boxes and have food fights while discussing the culture of public toilets and reminiscing where they were when James Dean died. Murray has theories. Lots of theories. In an odd way, some of them make sense. For exa... ...mps out the fragments of Jack’s mind and fills it with his own devious thoughts. Jack is not a killer, and under normal circumstances Jack would never have been a killer. Murray is a killer, if just psychologically. He proves it once and for all when he forces Jack to â€Å"elicit the truths [he] already possess† (DeLillo 293), that a dier can become a killer. He disguises himself - â€Å"I’m only a visiting lecturer. I theorize, I take walks, I admire trees and houses† (DeLillo 293), and prefaces nearly every sentence with â€Å"in theory† or â€Å"theoretically† but he knows what the outcome will be. When Jack shoots Willie Mink, Murray is as guilty as if he pulled the trigger himself. Murray probably hoped Jack would be sent to prison for shooting Willie, freeing up Babette for himself. I stated in the beginning that Murray was cunning. People who are cunning possess a strong ability to mesmerize and manipulate. They can, on some levels, seem very logical. Hitler is often described as a cunning man. Murray is not wise. Murray is bad. He manipulated minds, he played with peoples’ lives. In hindsight none of it worked out in his favor, but that doesn’t change that facts. It was an evil thing to do.

Radio One, Incorporated

Radio One, Incorporated In general ? Assume a corporate tax rate of 34%, and a market risk premium of 7. 2%. ? Data in exhibit 9 are in $1,000. ? Show and explain all your calculations, i. e. the reader/grader must be able to follow your reasoning and be able to understand all your calculations without using time to reconstruct your numbers. ? Make additional assumptions if necessary, but make them explicitly. ? Good luck. ? Questions 1. Why does Radio One want to acquire the 12 urban stations from Clear Channel Communications in the top 50 markets along with the 9 stations in Charlotte, North Carolina, Augusta, Georgia, and Indianapolis, Indiana? What are the benefits and risks? 2. What price should Radio One offer on a discounted cash flow analysis assuming all equity financing? ? Show and explain cash flows items needed to be estimated to get relevant cash flows in 2001 – 2004. Estimate relevant cost of capital to calculate PV of relevant cash flows assuming acquisition is all equity financed. ? Estimate terminal value of potential acquisitions after forecast period ends in 2004. ? What price should Radio One offer on a discounted cash flow analysis using relevant cash flow in 2001 – 2004 and a terminal value in 2004? ? Are the cash flow projections (in forecast period and terminal value) reasonable? If not: Revise your calculations. 3. What price should Radio One offer on a transaction multiple for comparable transactions analysis? What price should Radio One offer on a trading multiple of comparable firm analysis? 4. Assuming that Radio One’s stock price is 30? BCF, can it offer as much as 30? BCF for the new stations without reducing the stock price? 5. What price should Radio One offer for the new stations?

Google Inc: Swot Analysis

Google Inc. : SWOT analysis Introduction: Google was started as a research project by two Stanford PhD students named Sergey Brin and Larry page. They registered the domain name google. com in the year 1997 and in September 1998, it became a privately owned incorporate Google Inc. With its extensive research on search algorithms and use of state of the art technology, Google successfully established its brand name in internet search engines market. By the year 2004, Google came up covering over 75% of US web search market. Though Google is a dominating player in internet searching market, it has to compete with its rivals in this field where there is no long time entry barrier. Google can expand / change its business model to survive in this best search engine race. SWOT Analysis:* Strengths:* †¢ Google – Already number one search engine has established a brand name, in which its users trust. It’s dependable, reliable and fast. †¢ Google needs very little end user marketing as the name itself is getting word by mouth publicity. Google has a simple interface and it gives comprehensive results without confusing its users. †¢ Google has low operation cost as it uses low cost UNIX web servers for indexing millions of web pages across internet. †¢ Google has hired PhDs who are continuously working hard in order to enhance search algorithms and make searching faster, efficient and relevant. †¢ By 2003, Google has already powered over 75% of the 300 million searches cond ucted daily in the U. S. and 300 million plus outside the U. S. Google provides an interface to 88 languages to make it comfortable to search for its users in different countries. †¢ Google uses state of the art search technology to index pages regularly in order to give most updated results to its users. †¢ Google also weights the votes and ranks web pages with its PageRank technology to give its user access to most important pages first. †¢ Google is not biased towards advertisers. It clearly separates relevant advertisements and actual results by giving â€Å"Sponsored Links† tag to sponsored results when user searches to get information with some keyword. Moreover, it also ranks sponsored links to keep most relevant sponsored links on the top. †¢ Google offers localized search called â€Å"search by location† where users can get results showing vendors, products and services nearby their areas. †¢ Google also has a range of innovative additional services like Images, Groups, Directory, and News. Google didn’t complicate its website by making itself a portal; rather it kept tabs for these services on its homepage so users can easily navigate and that also keeps the website as simple as it was earlier. Google has also come up with solutions for wireless handheld devices, personalized toolbars, catalogues which are added essence strengths. †¢ Google quickly routes the user to the webpage and doesn’t linger for ad revenue. *Weaknesses:* †¢ Many spammers manipulate Google’s ranking technology by creating dummy sites with thousands of links to pages that they wanted Google to rank highly. â₠¬ ¢ Google’s link based ranking did not employ actual traffic analysis. Google’s Cost Per Click advertising charging and ranking policy is confusing and makes it difficult for marketers to predict where their ads would be positioned and how much they would cost. †¢ Google’s contextual advertising was perceived by marketers to be less effective in generating sales because visitors to web pages showing editorial content were less likely than searchers to be ready to buy. †¢ Contextual search algorithms are not 100% perfect and many times make mistakes. Google’s localized search algorithms too sometimes result in errors due to automated indexing. †¢ Google’s business model is complex, depending upon both google. com and mass market portals for its revenue. †¢ Although Google is a dominating player among search engine websites, only 50% to 65% of web search queries are answered accurately by it. †¢ Google doesn’t have â €Å"sticky† like Yahoo! And MSN have which can attract users. †¢ Google doesn’t have highly personalized search by which it could charge users with switching cost if they decide to leave Google’s services.