Business Financing and the Capital Structure Essay

Explain the process of financial planning used to estimate asset investment requirements for a corporation. Explain the concept of working capital management. Identify and briefly describe several financial instruments that are used as marketable securities to park excess cash. As a business owner, it is important to know the value of your assets as they can be used as leverage for obtaining loans and can be used to estimate your ability to repay your debts. Calculate your current assets, long-term investments, fixed assets and intangible assets and add them up to get your total business assets. Pledgeable assets support more borrowing, which allows for further investment in pledgeable assets. The trade-off between liquidation costs and underinvestment costs implies that low-liquidity firms exhibit negative investment sensitivities to liquid funds, whereas high-liquidity firms have positive sensitivities. If real assets are not divisible in liquidation, firms with high financial liquidity optimally avoid external financing and instead cut new investment. If real assets are divisible, firms use external financing, which implies a lower sensitivity. In addition, asset redeployability decreases the investment sensitivity. Financial management includes management of assets and liabilities in the long run and the short run. The management of fixed and current assets, however, differs in three important ways: Firstly, in managing fixed assets, time is very important; consequently discounting and compounding aspects of time element play an important role in capital budgeting and a minor one in the management of current assets. Secondly, the large holdings of current assets, especially cash, strengthen firm’s liquidity position but it also reduces its overall profitability. Thirdly, the level of fixed as well as current assets depends upon the expected sales, but it is only the current assets, which can be adjusted with sales fluctuation in the short run. Marketable securities replenish cash quickly and earn higher returns than cash, but come with risks; maturity, yield, and liquidity should be considered. Marketable securities are the securities that can be easily liquidated without any delay at a reasonable price. Firms will maintain levels of marketable securities to ensure that they are able to quickly replenish cash balances and to obtain higher returns than is possible by maintaining cash. There are four factors that influence the choice of  marketable securities. These include risks, maturity, yield, and liquidity. Assume that you are financial advisor to a business. Describe the advice that you would give to the client for raising business capital using both debt and equity options in today’s economy. Some business owners say ratios are an accountant’s problem. That’s not smart, says Dileep Rao, president of Minneapolis’ InterFinance Corp, a venture-finance consulting firm, and professor at the University of Minnesota’s Carlson School of Management. â€Å"Running your business without knowing your numbers is like driving a car without being able to see your direction or speed,† says Rao. â€Å"It’s only a matter of time before you crash.†(Rao, 2011) The terms â€Å"debt† and â€Å"equity† get tossed around so casually that it’s worth reviewing their meanings. Debt financing refers to money raised through some sort of loan, usually for a single purpose over a defined period of time, and usually secured by some sort of collateral. Equity financing can be a founder’s money invested in the business or cash from angel investors, venture capital firms, or, rarely, a government-backed community development agency—all in exchange for a portion of ownership, and therefore a share in any profits. Equity typically becomes a source of long-term, general-use funds. The share of any hard assets, such as property and equipment, that you own free and clear also counts as equity. Striking the right balance between debt and equity financing means weighing the costs and benefits of each, making sure you’re not sticking your company with debt you can’t afford to repay and minimizing the cost of capital. Choosing debt forces you to manage for cash flow, while, in a perfect world, taking on equity means you’re placing a priority on growth. But in today’s credit markets, raising equity may simply mean you can’t borrow any more. Until recently, bank credit was a financing mainstay. But experiences like Flipse’s underlie a point made by the Federal Reserve Board’s quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices, released in November. According to loan officers, small-company borrowers were tapping sources of funding other than banks. They were being driven away for many reasons. Banks â€Å"continued to tighten standards and terms†¦on all major types of loans to businesses,† though fewer were doing so than in late 2008, when tightening was nearly universal. Interest rates on small business loans were on the rise at 40% of the banks surveyed, even as the prime rate reached historic lows. One in five banks had reduced small  companies’ revolving credit lines. One in three had tightened their loan standards, and 40% had tightened collateral requirements. Partly because of the plunging value of the real estate securing many commercial loans, pressure from bank examiners for tighter standards continued to build. Meanwhile, home equity loans, another popular source of small business cash, had evaporated. Many recession-weary business owners knew they had essentially become unbankable: Loan officers surveyed said far fewer firms were seeking to borrow. Those few who could borrow were repelled by higher rates. All of a sudden, equity financing l ooked better. Explain why a business may decide to seek capital from a foreign investor indicating the risk and rewards for such a decision. Provide support for rationale. Many investors choose to place a portion of their portfolios in foreign securities. This decision involves an analysis of various mutual funds, exchange-traded funds (ETF), or stock and bond offerings. However, investors often neglect an important first step in the process of international investing. When done properly, the decision to invest overseas begins with a determination of the riskiness of the investment climate in the country under consideration. Country risk refers to the economic, political and business risks that are unique to a specific country, and that might result in unexpected investment losses. This article will examine the concept of country risk and how it can be analyzed by investors. There are many excellent sources of information on the economic and political climate of foreign countries. Newspapers, such as the New York Times, the Wall Street Journal and the Financial Times dedicate significant coverage to overseas events. There are also many excellent weekly magazines covering international economics and politics; the Economist is generally considered to be the standard bearer among weekly publications. For those seeking more in-depth coverage of a particular country or region, two excellent sources of objective, comprehensive country information are the Economist Intelligence Unit and the Central Intelligence Agency (CIA) World Fact Book. Either of these resources provides an investor with a broad overview of the economic, political, demographic and social climate of a country. The Economist Intelligence Unit also provides ratings for most of the world’s countries. These ratings can be used to supplement those issued by Moody’s,  S&P, and the other â€Å"traditional† ratings agencies. Finally, the internet provides access to a host of information, including international editions of many foreign newspapers and magazines. Reviewing locally produced news sources can sometimes provide a different perspective on the attractiveness of a country under consideration for investment. It is important to remember that diversification, which is a fundamental principle of domestic investing, is even more important when investing internationally. Choosing to invest an entire portfolio in a single country is not prudent. In a broadly diversified global portfolio, investments should be allocated among developed, emerging and perhaps frontier markets. Even in a more concentrated portfolio, investments should still be spread among several countries in order to maximize diversification and minimize risk. After the decision on where to invest has been made, an investor has to decide what investment vehicles he or she wishes to invest in. Investment options include sovereign debt, stocks or bonds of companies domiciled in the country(s) chosen, stocks or bonds of a U.S.-based company that derives a significant portion of its revenues from the country(s) selected, or an internationally focused exchange-traded fund (ETF) or mutual fund. The choice of investment vehicle is dependent upon each investor’s individual knowledge, experience, risk profile and return objectives. When in doubt, it may make sense to start out by taking less risk; more risk can always be added to the portfolio at a later date. In addition to thoroughly researching prospective investments, an international investor also needs to monitor his or her portfolio and adjust holdings as conditions dictate. As in the U.S., economic conditions overseas are constantly evolving, and political situations abroad can change quickly, particularly in emerging or frontier markets (Forbes, 2011). Situations that once seemed promising may no longer be so, and countries that once seemed too risky might now be viable investment candidates. Explain the historical relationships between risk and return for common stocks versus corporate bonds. Explain how diversification helps in risk reduction in a portfolio. Support response with actual data and concepts learned in this course. Portfolio diversification is the means by which investors minimize or eliminate their exposure to company-specific risk, minimize or reduce  systematic risk and moderate the short-term effects of individual asset class performance on portfolio value. In a well-conceived portfolio, this can be accomplished at a minimal cost in terms of expected return. Such a portfolio would be considered to be a well-diversified. Although the concepts relevant to portfolio diversification are customarily explained with respect to the stock markets, the same underlying principals apply to all types of investments. For example, corporate bonds have specific risk that can be diversified away in the same manner as that of stocks. Bonds issued by companies represent the largest of the bond markets, bigger than U.S. Treasury bonds, municipal bonds, or securities offered by federal agencies (Worldbank, 2013). The risk associated with corporate bonds depends on the financial stability and performance of the company issuing the bonds, because if the company goes bankrupt it may not be able to repay the value of the bond, or any return on investment. Assess the risk by checking the company’s credit rating with ratings agencies such as Moody’s and Standard & Poor’s. Good ratings are not guarantees, however, as a company may show an excellent credit record until the day before filing for bankruptcy. When you purchase stock in a company during a public offering, you become a shareholder in the company. Some companies pay dividends to shareholders based on the number of shares held, and this is one form of return on investment. Another is the profit realized by trading on the stock exchange, provided you sell the shares at a higher price than you paid for them. The risks of owning common stock include the possible loss of any projected profit, as well as the money paid for the shares, if the share price drops below the original price. Corporate bonds hold the lowest risk of the three types of investments, provided you choose the right company in which to invest. The main reason for this is that in the event of bankruptcy, corporate bond holders have a stronger claim to payment than holders of common or preferred stocks. Bonds carry the risk of a lower return on investment, as the performance of stocks is generally better. Common stocks carry the highest risk, because holders are last to be paid in the event of bankruptcy. Preferred stocks generally have higher yields than corporate bonds, lower risk than common stocks, and a better claim to payment in the event of bankruptcy. References Dileep Rao. 2011, â€Å"InterFinance † Cambridge, Massachusetts, The MIT Press. Forbes. 2011, † Small Business Loans: A Great Option â€Å". Retrieved on 6/19/2013 from http://www.forbes.com/sites/ryancaldbeck/2012/11/14/small-business-loans-a-great-option-unless-you-actually-need-money/ â€Å"Foreign direct investment, net inflows (BoP, current US$) | Data | Table† . Data.worldbank.org. Retrieved 6/19/2013 from http://data.worldbank.org/indicator/BX.KLT.DINV

Purple Short Crabs

Purple Shore Crabs, Hemigrapsus nudus, are small crabs that are similar in structure to true crabs. They have carapaces that are commonly found to be 4-5. 6 cm. A distinguishing characteristic of the Purple Shore Crabs is their lack of setae. They are usually found to be dark purple, olive green or red with white or cream marks, on their carapace. Their legs match the color of their carapace but have white tipped claws. Though Purple Shore Crabs are capable of living out of water for several hours, they require moisture to survive.These crabs respire with a gill system in which they take in oxygen-rich water orally, obtaining oxygen by diffusion then expelling the excess water and carbon dioxide through their gills. They are commonly found under rocks anywhere from low-tide to mid-tide zones as well as reefs as far down as 10 metres. Purple Shore Crabs prefer an environment in which the shores are medium-energy to high-energy. When their shelters are disturbed, they tend to race towa rds shelters such as other rocks, ledges, holes and crevices.Purple Shore Crabs are scavangers with dietary preferences that include worms, dead organisms, molluscs, small gastropods, small crabs, algae, carrion and seaweed. The purpose of our investigation is to determine whether there is a relationship between the relative distance to the shore and the population density of Purple Shore Crabs. To determine this, 3 transects were placed perpendicular to the shoreline of Eagle Bay, Bamfield.A random number generator was used to determine 5 completely unbiased numbers. These numbers were used to establish the distance of which the quadrats were placed. For each number, 1 quadrat was placed by the top left corner of each of the 3 transects. To calculate the population density of Purple Shore Crabs, the number of Purple Shore Crabs within each quadrat was counted and recorded. To avoid re-counting of an individual crab, crabs were counted after being collected in a bucket.

Racism and Justice System

The authors expose the myth of American meritocracy by informing us of all the ways that we maybe never paid attention to, such as how many black leaders there are in the sports arena’s such as coaches. They also expose the racial realist to the point that everything is not race based. Racial hierarchies are shown in ways that show us that American meritocracy is a myth by where blacks live. If blacks live in white neighborhoods how some would feel uncomfortable, or would even move out of the neighborhood. If racism was a thing of the past then we would no longer need affirmative action. Racism still exists and will forever exist in the world because the history it has of getting here. The book talks about how law institutionalizes the American ideal of equality, and this may be true but there are always people that are in these positions that corrupt and contaminate the entire system. Things have changed from the past form how racial discrimination was. It’s just done now through actions more so now than verbalizing. You can’t really verbalize your hatred for another race such as Texaco’s executives because you run the risk of people not bringing their business to you and now you can end up in civil court. The Supreme courts have made it even harder for one to make a discrimination suit against a company or employer because the evidence has to be so strong that it leaves no room for doubt in anyone’s mind in fact that was the case. Blacks are constantly stereotyped because of another black person’s action. Many white people have the perception that black people are lazy because we as a people seek more government help such as housing, food programs and even the low end jobs that some blacks have. They say that education rules out discrimination and employers rationally hire and promote people on the basis of their education and job skills. This is true to a certain extent; they won’t give the entire truth. They will hire African American based on those credentials but they won’t let them into the top positions. This I have found to be true just as recent as a couple of years ago. Walgreens would hire black assistant managers but would not promote them as store managers and a civil suit was filed against Walgreens’. Even in these case blacks still haven’t won because they promote a couple of black store managers and put them under a microscope, putting them in positions to fail. And once they fail they can keep hiring white store managers because they now have a paper trail of at least giving blacks an opportunity†¦.. to fail but at least they gave them a chance. Racism still exist even in schools to this day, no matter how you look at it they are still segregated to a degree. We can all agree that for the most part public schools in major cities are failing, and to get your children a good education you send them out to the suburbs. For here in Milwaukee they let a couple of black kids in their school system just to show that it’s not segregated but their tolerance for them is pretty low, knowing they can kick them out because 9 times out of ten they don’t stay in that school district. I am thankful that Brown’s case brought about desegregation in schools but there are loopholes in everything that people find. The plan that was implemented was whites move out of the major city and then their children have a chance for a better education with a lot less blacks there to intimidate or get their children involved with the wrong situation because so many whites think very lowly of blacks. I believe no matter what we as a nation or even the world will ever escape the ramifications of racism because like the book says how can we expect something of this nature to disappear in over thirty years that took over three hundred to create. My personal opinion is that we can make strides at it but we will never fully abolish racism. After all collectively as blacks we are taken for granted just as the fish takes the water they live in.

8th amendment Research Paper Example | Topics and Well Written Essays - 500 words

8th amendment - Research Paper Example Here, courts need to look for factors on how to change the standards of the community and also come up with the independent evaluation if the statutes are reasonable. For instance, in the case of Furman V. Georgia, the jury invalidated the death penalty regulation at that time because they constituted the unusual punishment and cruelty against the eighth amendment. The eighth amendment is an American amendment that bars or prevents the government from practices that may result in the violation of the freedom of people (Smith, 2010). It prevents the government from imposing cruel and unusual punishment such as torture and excess bails and fines. This amendment was adopted as early as 1791. Death sentence is a practice of the state where people are sentenced to death due to the magnitude of their crime. It is also commonly referred to as capital punishment. Overtime death penalty was not highly considered as a violation of this amendment. There were no vivid cases that had been presented there before to show the brutality of the death sentence and how it imposed cruel and unusual punishment to people. This was until 1972 when a United State Supreme Court decision called the Furman v. Georgia was ruled. The case had to be presented by three black men including Furman who had to be sentenced to death. In this ruling, the court declared that the death penalty violated the eighth amendment. However, the court did not view the death penalty as a cruel and unusual punishment. The case led to a de facto moratorium on capital punishment. The court argued that the manner in which the death sentences were being imposed was capricious. People were being sentenced to death in an erratic manner. However, this ruling by the court was not taken well by the country. People argued that there are some crimes whose best solution was a death sentence. In 1976, the court reviewed the case due to statutes presented by

Strategic Analysis of Apple Inc Essay Example | Topics and Well Written Essays - 2250 words

Strategic Analysis of Apple Inc - Essay Example Purpose of the essay is to analyze the strategies Apple Inc. used in their business to serve as a guide and inspiration to entrepreneurs who want to start their own business. As shown in the data analysis, Apple Computer used marketing strategies that gave the company a definite competitive advantage over its large competitors. The company devoted a lot of resources and used the innovative skills and technical competence of its personnel to become one of the largest computer companies in the world. Its mission and vision have been rightly tracked to its operations and have guided the company. The company is facing lawsuits on unethical business behaviors, but the researcher believes that they have not violated any unethical behavior because of the protection of patent law. However, as a public corporation, it is their corporate responsibility to serve a great number of people that will in turn contribute to the profitability of the company in the long run. As the company derives its success from its personnel, motivation and rewards should be given. The recommended rewards are bonus and profit sharing plus non monetary rewards. Mergers and acquisitions are recommended to establish long term growth and strengthen position in the market. It is also concluded by the researcher that at the moment the biggest problem of Apple is the fierce competition in the industry, that companies resort to merger and acquisition to compete globally as globalization presents a wide opportunity for computer companies.

Media Analysis Essay Example | Topics and Well Written Essays - 1500 words

Media Analysis - Essay Example Reference is made in the text used in the above news article, as this text is followed by relevant visual aids. Commonly, the text used in each medium is decisive in regard to the medium’s role and the message involved. At a first level, the text used needs to be clear; this means that the reader or the viewer can develop a specific view on the issue discussed. In addition, the text used needs to reflect an existing event or the personal view of the writer. The text of the medium chosen, the news article of BBC News, has the following characteristics: a) it focuses on a particular subject: the intention of Walt Disney to ban junk food ads in its programs, b) the subject of the medium is made clear in the title; this means that the text that follows cannot lead to different assumptions, i.e. no opposition would exist between the title and the rest of the text as such phenomenon would cause doubts in regard to the credibility of the information provided, c) the article itself, i .e. the text of the article excluding the title, offers a high range of information in regard to the subject discussed. This part of the text should be further analyzed in order to verify whether there is any aspect that it is not immediately obvious to the intended consumer. ... At the next level, it is noted that these standards will not be applied immediately but after a 3-years period, i.e. from 2015 onwards (BBC News 2012). However, the above fact leads to the elimination of the potential benefits of the project; in the next 3 years the development of the problem cannot be clearly estimated. This means that it is quite possible that after 3 years these standards will be incapable of facing the problem that they aim to address. Moreover, according to the text of the article, the firm has not set the criteria on which the characterization of food as junk food will be based (BBC News 2012); in this way, it is not clear when the nutrition standards of the firm will be applied. In regard to the issues discussed above, the title of the article could be considered as misleading, giving the impression that it refers to an initiative that it is in progress or one that it is about to start while neither of these cases exists. In this context, the text used in the medium chosen is problematic, not providing accurate information to intended consumers. At this point, the following fact should be highlighted: the opposition between the title of the text and the rest of the text is not clear to readers. Indeed, if reading the title in hurry the following impression is given: the title describes an event and the rest of the text presents additional aspects of the event without changing the key framework of the event. This impression is false. If reading the text carefully it is clear that the text itself presents the important doubts in regard to the particular initiatives of the organization. From this point of

Bacterial cells Quantification Lab Report Example | Topics and Well Written Essays - 1000 words

Bacterial cells Quantification - Lab Report Example Additionally, the information provided by this can be used to discover the effect of an enzyme on bacterial cell count – if an enzyme increases reproduction or lyses cells, this is discoverable by comparison to the absorbance graph created using known concentrations. In this experiment, the activity of lysozyme is studied. Lysozyme is the name of a glycoside hydrolase which damages cell walls by catalysing hydrolysis of the links between two key components of peptidoglycan – N-acetylmuramic acid and N-acetyl-D-glucosamine (Pommerville, 2007). It is notable that lysozyme is present in many human excretions, such as saliva and tears, and this forms one of the body’s many natural antimicrobial techniques. It is also notable that lysozyme is more effective against Gram-positive cells because the cell walls of these bacteria have a higher concentration of peptidoglycan (Pommerville, 2007). An additional experiment was performed to test the effect of certain antibiotic s on bacterial cells. This is always an important test because of the current crisis in clinical practice due to the increasing amount of bacteria that are highly resistant to many or all of the available antibiotics (Neu, 1992). This can be done in several ways, but antibiotic disc sensitivity testing is particularly useful as it allows a test of several antibiotics on one sample of organism, allowing us to be certain that all the microbes are the same and thus reducing the possibility of false results. Results Antibiotic Effect on Various Bacteria Antibiotic/Dose Escherichia coli (-) Pseudomonas aeruginosa (-) Staphylococcus aureus (+) Bacillus subtilis (+) AP/25?g S R S S GM/10?g S S R S PY/100?g S R S S NA/30?g S R S R NI/50?g R R S S SM/200?g R R R R T/100?g S R S R TS/25?g S R S S NI at a dose of 50?g is effective only against Gram-positive microbes. TS at a dose of 25?g and T at a dose of 100?g, as well as NA at 30?g, PY at 100?g, GM at 10?g and AP at 25?g all appear to be ef fective against both Gram-positive and Gram-negative organisms. Micrococcus lysodeikticus Concentration vs. Absorbance at 450nm Micrococcus lysodeikticus (cells/ml) Absorbance at 450nm 0 0.000 6.25 x 106 0.406 1.25 x 107 0.274 2.5 x 107 0.301 5.0 x 107 0.455 1.0 x 108 0.870 Unknown 0.599 The general trend appears to be that absorbance is higher with a higher concentration of cells per ml. Absorbance = (0.000000008 * cell concentration) + 0.21 We can thus work out the unknown value by rearranging this formula – Absorbance – 0.21 = 0.000000008 * cell concentration Cell concentration = (Absorbance – 0.21)/0.000000008 Unknown = 48625000 or 4.8625 x 107 Effects of Lysozyme Solution on Viable Cell Count – Shown Using Absorbance Time (minutes) Absorbance of the M. Lysodeikticus standard containing 5.0 x 107 cells/ml 0 0.414 3 0.350 6 0.337 9 0.333 12 0.320 15 0.300 The longer the cells are left in the lysozyme solution, the less absorbance is shown. Discussion A s noted in the discussion, lysozyme is more effective as a antimicrobial towards Gram-positive cells due to the larger amounts of peptidoglycan in the cell walls of these organisms. As can be seen here, lysozyme has a very distinct effect on the absorbance measurements from the M. lysodeikticus standard which increase substantially with time, suggesting that there are less viable cells the longer the organism is left in the presence of