Finance Essay Writing

Finance Essay
1. Why has the stock price fallen despite the fact that net income has increased over the periods
under review?
The stock price has fallen because the shareholders were worried about increasing debts and
liabilities, that adding two manufacturing factories created and because of how much excesses
inventory was created. Both of these changes would result in interest change of 44,000 to 155,000
that the company would have to pay, that impact on the company's future earnings hurts the
company's image to stockholders causing them to worry.
2. Tabulate your results and briefly comment on the liquidity position of the company between the
two periods.
2004
2003
Absolute Liquidity
5/895 = 0.005:1
= 40/355 = 0.11:1...show more content...
Jay needs to insure them that with time as people pay the cash account will increase and the
company again will have more cash on hand. Also to ease their minds he may need to show the
agreements he has with people on when they are supposed to pay and how much bad debt he has
anticipated from those agreements.
5. Determine the free cash flow of the firm as well as the free cash flow to creditors and shareholders
and interpret your results.
Free Cash Flow= EBIT – taxes + depreciation – change in NWC – capital exp
EBIT $ 393,500 Taxes –$ 95,400
Net Working Capital –$ 415,450 Free Cash Flow =$ –117,350
Free Cash Flow to Creditors = Int Expense – increase in new LTD Int Exp $ 155,000 New LTD–$
1,026,280 FCF to Creditors = –$ 871,280
Free Cash Flow to Stockholders = Div. – increase in new equity Div $ 42,930 New Equity –$
100,170
FCF to Stockholders = –$ 57,240
Free cash flow for the firm is negative, which can be expected since we has a large increase in
working capital a lot of money is being tied up there at the moment because of those current
acquisitions. The free cash flow to
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Business Studies Essay Relating to Finance
Financial Management is a critical aspect of any business in order to achieve a sustainable and
efficient cash flow. It is essential in maintaining the link between a business's future financial goals
(profit maximization) and the resources that it has in order to achieve its objectives. Businesses
demand certain common goals that increase a bussiness's all around achievement, Some of which
involve; growth amongst assests, An increase in efficiency in all areas of the business whether it be
management or not. And the ability to meet short term and long term debts. Finacial management
undertakes the responsibility to implement and acheive these goals for the business using a range of
strategies shaped to meet the needs of the business and...show more content...
By spreading expenses over the whole year there is a more equal cash outflow each month rather
than one huge outflow during one month. An example of this is the offer from insurance companies
to be able to pay insurance premiums monthly instead of annually because of the excessively high
costs.
Another strategy commonly used is 'Discounts for the early payments', This is where a business
may offer discounts to account customers for the early payment of their accounts to speed up cash
inflow. This discount may be a little as 2–5%, but shows effective in terms of cash inflow as it gives
incentive for the customers, Giving both the customer and business a gain in the financial situation.
Other incentives for early payment could include small gifts and discounts on future orders that the
customers may have. The business then may shorten the credit terms it allows for account
customers. Thus Reducing the number of days that a customer can take to pay its invoice, this will
speed up cash inflow into the business as it recieves cash from its sales much sooner.
Factoring, a short–term source of borrowing for a business. IT enables a business to raise the funds
immediately by selling accounts receivable at a discount to a firm that specialises in collecting
accounts recievable (a finance or even factoring buiness). Factoring is an important source of
short–term finance because the business will recieve up to 90% of the totaly amount of

Finance is a universal concept that affects and concern the lives of every person. All individuals
should know the importance of finances regardless of our profession or area of study. At some point
in life everybody, not only big corporations, faces concerns regarding the proper and efficient
management of wealth. This class not only gave me the opportunity to learn about my future career
path but also expanded my perspective regarding the multifunctional aspects of being a professional
in the finance sector.
I am the Vice President of Finance at Loyola Limited, four business that is run by undergraduate
students. As the Vice President of Finance, I'm responsible for facilitating the cash inflows and
outflows from the business's operations. My responsibilities also include the implementing and
executing budget controls, maintaining the general ledger, tracking and monitoring revenues and
expenses. I am also responsible for ensuring the timely completion of all payments and deposits.
Other duties include the accuracy of all financial trackers, enforcing adherence to all of the
business's financial standard operating procedures, performing necessary analysis on sales and
expense patterns, and evaluating the viability and impact of any and all purchases on behalf of the
business. Through my experiences in Loyola Limited, I can to realized that as a Vice President of
Finance, I wear many hats. The responsibilities that I hold do not only involve finance but also
operations,

Personal Finance Reflection Paper
During this semester I have learned a lot about personal finance and what it takes to truly be
disciplined. I have learned multiple tips from budgeting and spending my money to investing my
money into funds that could grow my money for me.
Being a waitress it is a little more difficult to manage your money especially when you live off of
most of your tips. I have had to keep track of how much money I make every night and how much
money I spend knowing I have cash in my pocket. I now deposit all of money straight into the bank
so that I can keep track of my spending much easier through my bank statements. I have noticed that
I spend a lot more money than I realized I do and have tried to cut down on my spending.
I currently do not have a retirement plan set up. After taking personal finance this semester I know
that retirement is very important and I need to start one. Growing up I always thought there was
only a 401(k) retirement plan and I now know there are different kinds such as Simple IRA, Roth
IRA, Traditional IRA and many more. It is very important to know where you are investing your
money in an IRA so that you will know how much money you will have when you are ready to retire.
I have open credit cards but this class has just helped me understand more about the cards and
their terms. I need to be careful with credit cards because it is so easy to open a line of credit
without having to read the terms. It is not a bad thing to have a credit line; however, you should
know what you are getting into. You should know what the interest rate (APR) will be, if there
will be a grace period and what are the rates associated with the card. What are the rates for paying
your card late, getting a cash advance and going over the limit of your balance?
When buying an automobile or a house the "homework" you need to do for the purchase is
almost the same. You need to know how much money you can afford. This goes back to the basics
of personal finance and knowing what your budget is and how much you can afford each month.
You will need to save for a down payment on both an automobile and a house. When buying a car
there are websites like Kelly Blue Book and Edmunds that will help you know how much a vehicle is

Finance, Economics, And Finance Essay
Statement of Purpose
As a child, I often accompanied my uncle to the stock market. Looking at the share index numbers
on the large overhead screen, I was fascinated with this world. As I grew up, I gradually came to
appreciate the importance of financial sector in the modern world. In the university, I was fortunate
to have been exposed to many interesting and challenging fields. Though I ultimately chose to major
in Accounting, I also studied business, management, economics, and finance. These courses
impressed upon me the importance of the financial sector in the economy. Finance professionals
have the unique responsibility of managing assets and analyzing risks to ensure the future success of
a company or organization. It is difficult to overstate the importance of this role, as the financial
crisis of 2009 showed. It is due to my understanding of the importance of finance and investment,
coupled with my longstanding interest for this subject, that I have decided to pursue postgraduate
studies in finance at your prestigious university. Earning a master's degree in finance would ideally
complement my undergraduate degree in accounting. My background in accounting provides me
with fundamental knowledge of many finance–related theories and concepts, as well as familiarity
with statistics and data analysis. I learned the basic tenets of finance in courses such as Economics,
Management, Accounting and Corporate Finance. Through case studies and lectures, I broadened my

Financial Management Essay examples
Financial Management Introduction ============ Every organization, irrespective of its size or
ownership pattern, has to manage its finances. The overall objectives of an organization cannot be
achieved in the absence of financial management. Many organizations fail in their objectives because
of financial mismanagement and this failure rate is quite high among the small business enterprises.
Hence, financial management is vital for all types of organizations, profit making as well as
non–profit making. In case of non–profit making organizations also the effectiveness and
performance depends on their financial resources management. Financial Management
====================...show more content...
3. Managerial Accounting deals with procuring of data for the organisation's management i.e. to
serve the internal users with necessary accounting information to carry out the management tasks of
planning, organising, actualising and controlling. " Management Accounting is the presentation of
accounting Information in such a way as to assist management in creation of policy and in the day to
day operations of an undertaking". 4. Financial Management deals with the process adopted by an
organisation for taking financial decisions through analysing and interpretation of financial data for
meeting the organisations objectives. Hence, the tasks involved in Financial Management include:
Г Analysing financial needs Г Forecasting financial needs Г Managing working capital Г
Planning capital structures Г Organising financial operations Г Monitoring and controlling
finances etc. In fact raising funds and allocating funds for business are the two prime financial
management tasks. Financial Planning Financial planning is an appraisal of those financial aspects
that may or are likely too occur in future but need immediate decision making. It involves setting
financial objectives in terms of profits, sales or acquistion of assets along with financial foorecasting
for the organisation. This includes estimation in the areas of: Г

Essay On Pursuing A Degree In Finance
Decision making is a critical step for every individual. Pursuing a degree in finance was an
overwhelming decision to make. However, I had to make it. Since my childhood, I have been
having the dream and ambition of working as a financial operator. I wanted to work in this role in
any of the accounting fields. The desire was further enhanced by some of my relatives who used in
financial administrators in the City. They looked so great and appeared to enjoy doing most of
their job duties. Also, I could them speak of the working which when I inquired further they gave
perfect descriptions making to desire to join them someday in the future. Moreover, their annual
salaries seemed quite attractive. On the academic side, I have always excelled...show more content...
The general costs of starting at the Harvard University is as shown below: (Harvard, 2017) Tuition
per year $44990 Fees per year $3959 Room per year $10300 Board per year $6360 Subtotal – billed
costs per year $65609 Estimated personal expenses per year (including $1,000–$1500 for books)
$3991 Estimated travel costs per year $0–$4000 Total billed and unbilled costs per year $69600
–$73600 * It should be noted that health insurance is required and it costs $3130. Those with
cover under family health plan don't have to pay. However, many of the universities had options
for financial aid. Part 2 Having completed the degree successfully, I will be looking forward to
employment in a good accounting firm. I anticipate to earn and be compensated a substantial
amount of money so that I can appreciate my hard work since early years. I will be employed as a
financial controller. The average annual salary for financial controller in the US is about $93003
(PayScale, 2017). If I select to work in New York, I will earn $102048 (PayScale, 2017). There are
several job opportunities in this field. From the salary paid to the financial controllers, it will not
take me a long–term to pay the loan. The loan shall have an interest of 4% so that first I pay it the
better so that I do not have to incur a lot of expenses at the end. However, even if I will not be able
to pay immediately, the cost of interest is not much, and therefore I will manage given the high

Equity Finance And Debt Finance
Stockholders are those entities who provide a company with the risk capital such as preference
share owners and ordinary share owners (Freeman and Reed, 1983). Generally, stockholderis one of
long–term finance providers with the aim to maximize their wealth.According toBrickleyet al.
(1985), long–term finance providers are more likely to focus on the matter whether the financial
structure in the company is sound or not and the durability of profitabilityrather than temporary
profits that a potentially risky financial structure may bring. In addition, different company will
encounter different problems when changing their capital structure. This part therefor mainly focus
on equity finance and debt finance in small and medium–sized enterprises (SMEs) and listed
company.
From the perspective of stockholders, debt finance may be more attractive compared with other
financial approaches. The reasons are as follows. Firstly, it may ensurestockholders' ownership
unchanged (Mooij, 2012). If the board of the company intend to adopt the approach of equity
finance such as issuing new rights, there is a possibility that the former stockholders may not be
able to purchase all new issuing rights and then lead to dilution of control which they do not expect.
Secondly, debt finance is a relatively cost–effective method as there is tax advantage of debt.If a firm
only has equity finance, an extra tax then needed to pay because dividends which come from profits
are income for investors which

Personal Finance Essay
Personal finance is the principles implementation of finance to an individual's or personal's
monetary decisions. It involved the way of an individual or personal to gain, keep, spend and budget
monetary resources over time, and taking into account of different kind of financial risk and future
life events. Personal's wealth picture will determined by combining the personal finance knowledge,
education, financial decision, financial plan, goals and financial desire. The appropriate financial
management and improvement will help personal financer to see its positive impact in the next
several of decades.
By studying the personal finance, I know and understand the personal finance basic. First, I learn
how to create a financial plan. Financial plan is an evaluation process that predict...show more
content...
Now, I will manage my money by using the balance sheet and income statement. The balance sheet
help me to know and understand the asset that I own and the liabilities that I owe. This may help
me to determine the level of my wealth or net worth by subtracting the level of liabilities from
assets. While the income statement help me to trace my money, the income statement is like a
financial motion picture which show me where my money comes ( income ) and where I spent my
money ( expenses ). The income statement help me to control my daily spend and make sure that I
will not spending too much.
Apart from that, personal finance also teach me the importance of insurance. Personal finance make
me understand that I should protect myself from risk by buying an insurance. It also help me to
understand the life insurance that I needed and choose the appropriate insurance.
The personal finance is extremely important to me because it help me to create a good financial
plan and well control and manage my money. The knowledge of personal finance is very useful and
can well insert into our daily

Essay Corporate Finance
Why is corporate finance important to all managers?
Corporate finance is a specific area of finance dealing with the financial decisions corporations
make and the tools as well as analyses used to make these decisions. The primary goal of corporate
finance is to enhance corporate value, without taking excessive financial risks.
A corporation's management's primary responsibility is to maximize the shareholder's wealth which
translates to stock price maximization.
Corporate finance provides the skills managers need in order to:
пЃ¬Identify and select the corporate strategies and individual projects that add value to their firm–
Capital Budgeting
пЃ¬Forecast the funding requirements of their company, and devise strategies for...show more
content...
In practice business operations are financed by the owners, but sometimes businesses are financed by
venture capital firms.
Venture capital is capital typically provided by outside investors for financing of new, growing or
stagnating businesses. They are characterized as risky investments.
Before developing a final product, venture capitalists do not invest into business.
In the first stage the financing venture has finally launched and achieved initial traction. Sales are
trading upwards. The funding from this stage is used to fuel the sales, reach the breakeven point,
increase productivity, and cut unit costs. At this point the company is two or three years old. This is
the stage when the venture capitalists get into business.
At second stage of financing, sales are starting to grow rapidly. The company is also rapidly
accumulating accounts receivable and inventory. Capital from this stage is used for funding
expansion in all its forms from meeting increasing marketing expenses to entering new markets to
finance rapidly increasing accounts receivable.
At third stage sales are climbing. Customers are happy. The second level of managers is in place.
Money from this financing is used for increasing capacity, marketing, working capital, and product
improvement or expansion.
After this stage company is at "Mezzanine or Bridge financing" point when investment bankers
agreed

Managing Personal Finances Essay
Managing Personal Finances
Managing personal finances is an important skill to acquire. However, no where in school is this
subject taught. As a result of a lack of preparation, our society is subject to a high percentage of
people who lack financial success. Those who are successful at managing their personal finances
will find that they are successful in many other areas as well. To learn how to manage personal
finances there are books and web sites that provide a step by step guide to successfully managing
personal finances. Those who lack financial success often possess many of the same traits.
The first reason most people lack financial success is because they lack knowledge, or better yet, a
desire to gain knowledge....show more content...
This is similar to goal setting in respect to that one must dream to make a dream come true.
A big mistake commonly made by the financial failures is conforming. Listen to the advice of
mother's: "If so and so jumped off a cliff would you?" Don't do what everyone else is doing; dare
to be different! Don't be afraid to take calculated risks. This does not mean that you can actually
jump off of a cliff, because that would be a foolish risk, this means again to foresee the results and
consequences of your actions. The successful people in society are the ones who don't do the same
thing as everyone else. For example, look at the modern art. This type of art is so profitable
because it is so different from any other art created.
It is also important to beware of credit. Don't borrow excessively, because it will soon become
debt, which has interest and other consequences. Instead, set a budget and stick to it firmly!
Attitude is also an issue in financial success. If a person has a poor attitude, he will only get what
he deserves! If the worst is expected, the worst will happen. It all comes down to the power of one's
mind. Think positively! When setting goals, focus on the positive aspects, and don't include any
negative words. Everything can be rephrased to be positive. Successful people are optimists! In
order to be an optimist, only associate with optimists. The

Budgeting Essay
Budget
Budget is the major financial and economic statement. The role of the budget is to keep track of the
money coming in and the money going out. It is essential part of running any business effectively. It
can help make a short and long term projections about financial situation, avert a financial crisis and
plan for major financial changes.
The company has to be able judge its spending performance. Does not matter what type of company
it is, the ability to measure performance using budgets is an important process in any business
organisation. Planning helps to understand where business is at present and where it is going to be
in the future. Company's planning process has to involve different developing objectives and prepare
...show more content...
Another advantage is control and evaluation. It helps to think about how to correct company's
problems, if they have them. Motivation is another important advantage. Budget can motivate to
reach the goals. It also can force managers to think and plan for the future. Budgeting helps to ensure
that everyone in the organisation is pulling in the same direction. The budgeting process provides a
means of allocating resources to those parts of the organisation where they can be used most
effectively.
A budget can be disadvantageous also. There is judgment and subjectivity in the budgeting process.
It does not consider quality and customer service. Budgets can be seen as pressure devices imposed
by management, thus resulting in: bad labour relations. Budget could results departmental conflict
arises due to disputes over resource allocation, and departments blaming each other if targets are not
attained. It is difficult to reconcile personal and corporate goals
In conclusion, every major company in the world uses budgeting and there is a good reason for
that. It is an important component of financial success. Budgeting makes easier to achieve financial
goals. It keeps track of all expenses and help to avoid crisis. It also helps companies to control their
growth and provide them with realistic idea where business is going.

Introduction To Financial Management Essay
Define the terms finance and financial management, and identify the major sub–areas of finance.
Finance is the study of applying specific value to things individuals own to include services used
and decisions determined [Finance by Cornett, M. M., Adair, T. A., & Nofsinger J. (2014). M:
Finance (2nd ed.)]. In simple words, finance is how much value is attributable to goods and services
and the basis of such attribution.
Financial management may be defined as the management of the finances of a business or an
organization in order to achieve the financial objectives. It includes creation, effective utilization of
funds to ensure the smooth functioning of the business. It encompasses planning, administration and
controlling.
The various...show more content...
The advantages are as follows:
More than one owner is there in business and hence the risk is shared
Each partner will contribute capital and hence more capital will be available
This is also relatively easier to start compared to a corporation
The income from this type of ownership is taxed once as personal income
The disadvantages of a partnership is as follows:
The profits are shared between the partners. Hence, when compared to a sole proprietorship there is
lesser profits
Generally, the liability of the partners is unlimited (except in the case of a limited liability)
It is difficult to transfer ownership
A corporation is a separate legal entity whose transactions and conduct of the business is separate
from its owners. Corporations can borrow money, sue and be sued in its own name. The advantages
of a corporation are as follows:
The liability is limited to the amount paid on stock by the investor
The corporation has an unlimited life
There is separation of ownership and management as the corporation is a separate legal entity
Transfer of ownership is easy
As a corporation, it is easier to raise capital from equity and debt market
The disadvantages are:
The agency problem arises as there is separation of management and

Finance Director Essay
I am applying for the Finance Director position advertised on your website. With over seven years'
experience in finance and accounting along with a solid academic background in Finance and
pursuing my CPA license, I am confident I possess the skills and qualifications you are seeking.
Being a Controller I deal with a variety of financial budgeting, profit and loss, forecasting, cash flow
analysis, cash management, sec reporting, valuation analysis and running a team of 7 accountants,
while handling numerous administrative duties. Among the most pertinent to the advertised position
would be my financial budgeting, forecasting, cash flow analysis, valuation analysis and business
adequate.
Having my academic preparation in business...show more content...
I helped set up a 35 million dollar bank according that allows us to draw funds when necessary for
capital purchases. Overall I have versatile experience with alternative funding sources and know how
to work with the funds readily available to organizations.
The Colorado tabor amendment limits the amount of revenue our government can collect and spend.
The surplus in taxes collected must also be refunded to Colorado's tax payers and any tax increases
requires voter approval. This limits the ability for governments to raise taxes in order to reestablish
programs and update equipment necessary to help the public. Colorado Gallagher amendment set
forth the guidelines on how the actual value of property is assessed. This amendment simplifies the
method used to determine the actual cost, market value and income based analysis.
I bring a unique variety of experience from the private, public, government and nonprofit financial
sectors that allows me to understand GAAP, FAR, CAS and other accounting standards currently
used. I always look at the whole picture of an organization and how cutting cost affects operations
and the longevity of the projects. Having strong financial budgeting analysis ability allows me to
build budgets that are accurate precise and easy to follow. This allows operations to understand how
much funding they are projected to have within a year and the amount they can expect to have for
capital assets, operational cost and

Finance Essay
5558 Nath
Why would not your financial problems end with even more income? 7 reasons! Sandeep works in a
multinational company and earns one lac a month, but still he remains upset about his finances. It
often comes to his mind that when I was earning 50 thousand rupees in the beginning of the career, I
would have been hardly satiate the needs of month anyway, and today, when I earn twice even than
the money is falling short.
Friends, are you able to relate to this situation of Sandeep?
Is this happening to you – your income is increasing but still your financial problems could not
ending.
Yes, it is a bitter truth that just increasing of income doesn't end financial problems!
But do not panic, you are not the only person to face this...show more content...
3. You give today's happiness more importance than tomorrow's need:
Instead of saving 5000 rupees, you believe in taking new mobile of 15 thousand, even when your
old mobile is absolutely right! The philosophy of "Living in the moment" is seems well only when
"financials for the future" are intact. But you believe in the first part and forget the other!
Do not do this, it is very important to make balance between these two things. Doing this can saves
you from many financial stresses.
Always remember this one quote of Warren Buffett, world's most successful investors–
"Do not save what is left after spending, but spend what is left after saving."
4. You do not separate 'wants' from 'needs':
Need: Something without which it will not go.
Want: Something that you want you to have, but you can work without it too.
People worry about finances also makes their desire their needs. For example: Genuinely you need
a car, but instead of an affordable hatchback you make an SUV your need and then pay loan for it
years.
Never take anything for just show off, doing so may give you some happiness for a few days, but
in the long term, it will make problems to you.
5. You are spend–o–holic:
You used to be disturbed financially because you enjoy spending... There is something in every
corner of your house that is the result of buying impulse. Your wardrobes are full of clothes that
you barely wore once or twice. In your drawer, there are

Essay on personal finance goals
Figuring out where you will be financially years from now is hard to imagine. There are always
what you plan, and then there's things that just happen that you would usually rather not have of.
You can always make goals and things and hope that things go alright and end up close to what you
expected.
I am currently eighteen years old. I am working on setting up all my financial things so that I am
independent and can rely on myself for what I need and not have to worry about having my
parents approving of things and being responsible for what I choose to do. I am going to take out a
small loan soon and work on building up my credit history. I am also planning on transferring all my
things like my car and phone to my name. This summer I...show more content...
I will then purchase my own house and also a car. I will be paying insurance on both of these items. I
will work the rest of my life as a Nurse and will eventually retire at the age of 65.
Although I don't really know how well all of this will work out and I'm sure there are probably
easier ways to do all this, I don't think I will be talking to any professionals. I think I have enough
basic understanding in order to keep myself stable. Granted I will probably fall a couple of times
and make a few mistakes, I've been taught to keep working at it and you'll get it right eventually. I
know that in order to get what you want you have to try and work really hard. I don't believe in
being handed things, whether it be money or advice or anything else. I would rather try and fail then
have someone tell me what to and what not to do.
I myself believe in risks to an extent. I think they are alright as long as they are somewhat logical.
I don't believe in "jumping off a cliff with no ropes hoping to survive". I plan on having two
accounts, one checking and one savings. I will mainly work with my checking account and the
savings will not be touched unless for emergencies. I will keep a minimum of a thousand dollars
in my savings account, which I will be opening at a credit union since they have a slightly higher
interest rate, so I will always have it. I have learned to always keep a "safe" amount of

Personal Finance And Social Finance
Personal Finance has always been an emotional topic in the United States. Today, many Americans
are generating unlimited wealth and living exceptional lives, while others are struggling to make
ends meet. Evidently, people's actions and beliefs are the deciding factors in their achievement of
wealth. Thus, this huge gap in wealth between rich and poor people has a special connection with the
philosophy and attitude of each individual toward personal finance. Merriam–Webster Dictionary
defined Philosophy as a set of ideas about how to do something or how to live. Therefore, each
person's philosophy is a major factor in how their personal finance works out since the knowledge
of facts, concepts, and principles will determine how people spend, save, and invest their financial
resources. Dr. E Thomas Garman is a renowned advisor and academic. Garman is the author of 30
books and 200 research articles in personal finance and consumer economics. Raymond E. Forgue
professor at the University of Kentucky, they stated, "You have to do only a few things right in
personal finance during your lifetime, as long as you do not do too many things wrong."(Garman
and Forgue 5) Clearly, many people are in the dark when it comes to personal finance, their
financial IQ is very limited. If only a few money principles done right is all people need to succeed
financially; evidently, they are missing some fundamental information. Sadly, some people do not
recognize this reality which is the

Corporate Finance Essay
Corporate Finance Essay
Most corporate financing decisions in practice reduce to a choice between debt and equity. The
finance manager wishing to fund a new project, but reluctant to cut dividends or to make a rights
issue, which leads to the decision of borrowing options. The issue with regards to shareholder
objectives being met by the management in making financing decisions has come to become a major
issue of recent times. This relates to understanding the concept of the agency problem. It deals with
the separation of ownership and control of an organisation within a financial context. The financial
manager can raise long–term funds internally, from the company's cash flow, or externally, via the
capital market, the market for funds...show more content...
Any profits remaining after deducting operating costs, interest payments, taxation, and dividend are
reinvested in the business and regarded as part of the equity capital. The finance manager will
monitor the long–term financial structure by examining the relationship between loan capital, where
interest and loan repayments are contractually obligatory, and ordinary share capital, where
dividend payment is at the discretion of directors. This is known as gearing. There are two basic
types of gearing, they are capital gearing which indicates the proportion of debt capital in the firm's
overall capital structure; and income gearing indicates the extent to which the company's income is
pre–empted by prior interest charges. Both are indicators of financial gearing.
Now, the advantages of debt capital centre on its relative cost. Debt capital is usually cheaper than
equity because, the pre–tax rate of interest is invariably lower than the return required by
shareholders. This is due to the legal position of lenders who have a prior claim on the distribution
of the company's income and who in liquidation precede ordinary shareholders in the queue for the
settlement of claims. Debt is usually secured on the firm's assets, which can be sold to pay off
lenders in the event of default, i.e. failure to pay interest and capital according to the pre–agreed
schedule;

Business Finance Essay
Multinational Business Finance, 12e (Eiteman, et al)
Chapter 1 Globalization and the Multinational Enterprise
1.1 Globalization and Creating Value in the Multinational Enterprise
Multiple Choice
1) Which of the following are critical to a firm trying to reach the top of the "firm value pyramid"?
A) An open market place.
B) High quality strategic management.
C) Access to capital.
D) all of the above
Answer: A
Diff: 2
Topic: 1.1 Globalization and Creating Value in the Multinational Enterprise
Skill: Conceptual
2) A well–established, large U.S.–based MNE will probably NOT be able to overcome which of the
following obstacles to maximizing firm value?
A) An open market place.
B) High quality strategic management....show more content...
A) Raw materials
B) Financial capital
C) (Non–military) Technology
D) All of the above factors of production flow freely among countries.
Answer: A
Diff: 1
Topic: 1.2 The Theory of Comparative Advantage
Skill: Recognition
4) Which of the following would NOT be a way to implement comparative advantage?
A) IBM exports computers to Egypt.
B) Computer hardware is designed in the United States but manufactured and assembled in Korea.
C) Water of the greatest purity is obtained from wells in Oregon, bottled, and exported worldwide.
D) All of the above are examples of ways to implement comparative advantage.
Answer: D
Diff: 2
Skill: Conceptual

5) Of the following, which would NOT be considered a way that government interferes with
comparative advantage?
A) Tariffs.
B) Managerial skills.
C) Quotas.
D) Other non–tariff restrictions.
Answer: B
Diff: 2
Skill: Recognition
True/False
1) The theory of comparative advantage owes it origins to Ben Bernanke as described in his book
The Wealth of Bankers.
Answer: FALSE
Diff: 1
Skill: Recognition
2) International trade might have approached the comparative advantage model in the 19th century,
and it does so even more today.
Answer: FALSE
Diff: 2

Essay on My Personal Financial Plan
My Personal Financial Plan
I. Current
A. Description
Currently I am a full time student, and senior, at majoring in Accounting and Finance. I do not have
a part time job and do not plan to work until I graduate. I currently have taken out student loans to
support myself through the rest of my college education. My parents pay for insurance payments for
my car, cover my phone bill, and provide me with medical insurance. I pay for all the rest of my
expenses, including rent, food, gas, and all other daily expenses. I currently have no investments
and no substantial assets with a value of over $1000. I graduate in May and have signed a contract
with KPMG to start work as an auditor in August after I complete the CPA. I...show more content...
To accomplish my second goal I plan on putting a cap on my level of living expenses that
increases at a smaller multiple then my income each year. I want to give another half percent of my
income each year. I will budget out my salary for discretionary and non–discretionary spending and
stick to the budget by limiting use of credit cards and attempting to pay cash for most items I
purchase. This will help me control my cash outflow.
E. SWOT Analysis
Strengths
Most of my assets at this point are in cash so I have a lot of liquidity to pay off debt or other
expenses. I am a very goal oriented person so when I set goals to follow to financial success I take
them very seriously. My job at KPMG is a strong job with high future potential earnings as well as
learning opportunities. One of the best things about auditing is that I will be able to find a job
making a lot more after I work a few years at KPMG. My knowledge over investments and how to
invest is very good which will help me to continue to make money in the market. When looking at
risk management, my health is very good, which means I should hopefully not have very high
healthcare costs. KPMG provides a good insurance policy that covers any of my insurance needs
and reduces my risk. KPMG also has a very good medical reimbursement policy and a high quality
of other programs for their employees.
Weaknesses I do not have

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