The document describes a financial calculator software program that contains various calculators for financial analysis, including investment valuation, financial statements, time value of money, rates of return, capital budgeting, and loans/leasing. It provides instructions on how to access different calculators for tasks like bond valuation, liquidity analysis, and present/future value calculations. The software was created by KMT Software and allows users to analyze financial data and perform common financial calculations.
This document provides an overview of Northrop Grumman Corporation's fourth quarter and full year 2008 financial results. Key highlights include record sales, cash from operations, and free cash flow that exceeded guidance. The company also achieved record backlog of $78 billion and $48.3 billion in new business awards for 2008. However, a goodwill impairment charge was taken due to adverse equity market conditions. Guidance is provided for 2009, including sales of approximately $34.5 billion and adjusted diluted EPS from continuing operations of $4.50-$4.75.
Williams reported lower earnings in the first quarter of 2009 compared to the previous year due to dramatically lower energy commodity prices. Adjusted EPS was $0.22, down 61% from $0.57 in the prior year. Average realized prices for U.S. production were 36% lower. Williams is focusing on maintaining a strong balance sheet, reducing costs, and bringing key infrastructure projects online in 2009-2010 to generate stable cash flows.
Confianza y comunicación para la credibilidad organizacionalJavier H. Carlo Mena
'Confianza y comunicación para la credibilidad organizacional'. Presentación de webinar impartido por Javier Carlo en Manpower, México. Diciembre de 2013.
MIC's 50% owned IMTT business experienced revenue growth in the third quarter and first nine months of 2012 compared to the same periods in 2011, driven by increased terminal revenue. Gross profit and operating income also increased for the quarter and year-to-date due to revenue growth and lower interest expense. General and administrative expenses and depreciation and amortization were slightly higher for the quarter and nine months.
MIC's 50% owned IMTT business experienced revenue growth in the third quarter and first nine months of 2012 compared to the same periods in 2011, driven by increased terminal revenue. Gross profit and operating income also increased for the quarter and year-to-date due to revenue growth and lower interest expense. General and administrative expenses and depreciation and amortization were slightly higher for the quarter and nine months.
This document summarizes the current state of operational risk reserves in the Australian superannuation industry. It discusses the regulatory capital requirements for superannuation trustees, the definition of operational risk reserves, and proposed changes to capital standards. Research on current industry practices found a wide range in reserve levels as a percentage of assets, members, and expenses across funds. The document concludes by considering international practices and next steps for the superannuation sector.
This document provides an overview of Northrop Grumman Corporation's fourth quarter and full year 2008 financial results. Key highlights include record sales, cash from operations, and free cash flow that exceeded guidance. The company also achieved record backlog of $78 billion and $48.3 billion in new business awards for 2008. However, a goodwill impairment charge was taken due to adverse equity market conditions. Guidance is provided for 2009, including sales of approximately $34.5 billion and adjusted diluted EPS from continuing operations of $4.50-$4.75.
Williams reported lower earnings in the first quarter of 2009 compared to the previous year due to dramatically lower energy commodity prices. Adjusted EPS was $0.22, down 61% from $0.57 in the prior year. Average realized prices for U.S. production were 36% lower. Williams is focusing on maintaining a strong balance sheet, reducing costs, and bringing key infrastructure projects online in 2009-2010 to generate stable cash flows.
Confianza y comunicación para la credibilidad organizacionalJavier H. Carlo Mena
'Confianza y comunicación para la credibilidad organizacional'. Presentación de webinar impartido por Javier Carlo en Manpower, México. Diciembre de 2013.
MIC's 50% owned IMTT business experienced revenue growth in the third quarter and first nine months of 2012 compared to the same periods in 2011, driven by increased terminal revenue. Gross profit and operating income also increased for the quarter and year-to-date due to revenue growth and lower interest expense. General and administrative expenses and depreciation and amortization were slightly higher for the quarter and nine months.
MIC's 50% owned IMTT business experienced revenue growth in the third quarter and first nine months of 2012 compared to the same periods in 2011, driven by increased terminal revenue. Gross profit and operating income also increased for the quarter and year-to-date due to revenue growth and lower interest expense. General and administrative expenses and depreciation and amortization were slightly higher for the quarter and nine months.
This document summarizes the current state of operational risk reserves in the Australian superannuation industry. It discusses the regulatory capital requirements for superannuation trustees, the definition of operational risk reserves, and proposed changes to capital standards. Research on current industry practices found a wide range in reserve levels as a percentage of assets, members, and expenses across funds. The document concludes by considering international practices and next steps for the superannuation sector.
Do.,.rY Y^.,^,o,,,!,u r-l hi okfu9could be conver.docxelinoraudley582231
Do.,.rY
Y^:.,^,o",,",!,''u
r-l hi okfu9
could be convertible into 32 shares of stock). Coupon payments will be made annually. The
bonds will be noncallable for 5 years, after which they will be callable at a price of 91,090;
this call price would decline by $6 per year in Year 6 and each year thereafter. For
simplicity, assume that the bonds may be called or converted only at the end of a year,
immediately after the coupon and dividend payments. Management will call the bonds
when their conversion value exceeds 25o/o of thetr par value (not their call price).
a. For each year, caiculate (1) the anticipated stock price, (2) the anticipated conversion
value, (3) the anticipated straight-bond price, and (4) the cash flow to the investor
asstrming conversion occurs. At what year do you expect the bonds will be forced into
conversion with a call? What is the bond's value in conversion when it is converted at
this time? What is the cash flow to the bondholder when it is converted at this time?
(Hint: The cash flow includes the conversion value and the coupon payment, because
the conversion occurs immediately after the coupon is paid.)
b. What is the expected rate of return (i.e., the before-tax component cost) on the
proposed convertible issue?
c. Assume that the convertible bondholders require a 9o/o rale of return. If the coupon
rate remains unchanged, then what conversion ratio will give a bond price of $1,000?
Paul Duncan, financiai manager of EduSoft Inc., is facing a dilemma. The firm was
founded 5 years ago to provide educational software f<lr the rapidly expanding primary
and secondary school rnarkets. Although EduSoft has done well, the firm's founder
believes an industry shakeout is irnminent. To surwive, EduSoft must grab market share
now, and this will require a large infusion of new capital.
Because he expects earnings to continue rising sharply and looks for the stock price to
follow suit, Mr. Duncan does not think it lvouid be wise to issue new common stock at
this time. On the other hand, interest rates are currently high by historical standards, and
the firm's B rating means that interest payments on a nerv debt issue nould be prohibitive.
Thus, he has narrowed his choice offinancing alternatives to (l) preferred stock, (2) bonds
with warrants, or (-l) convertible bonds.
As Duncan's assistant, you have been asked to help in the decision process by
ansu,ering the following questions.
a. How does preferred stock differ from both common equity and debt? Is preferred
stock more risky than common stock? What is floating rate preferred stock?
b. How can knowledge of call options help a financial manager to better understand
warrants and convertibles?
c. Mr. Duncan has decided to eliminate preferred stock as one of the alternatives and
focus on the others. EcluSoll's investment banker estimates that EduSoft could issue a
bond-with-warrants package consisting of a 2O-year bond and 27 warrants. Each
warrant would have a strike p.
The document provides an overview of Dynamic Materials Corporation (DMC) and includes cautionary statements about forward-looking projections. It discusses DMC's three business segments, financial highlights, global operations, and competing cladding technologies. DMC is a leading provider of explosion-welded metal plates and has operations in explosive metalworking, oilfield products, and welding. The document reviews DMC's markets, growth strategy, and historical financial and operational performance.
The document summarizes key information about timely claim reporting and includes the following points:
1) Claims reported more than 24 hours after occurrence are 33% more costly. Timely reporting is important for a company's risk performance scorecard.
2) Timely reporting allows for early relationships with injured parties to ensure claims are handled properly, and allows adjusters to investigate claims when events are freshest in minds of injured employees and witnesses.
3) Faster reporting means better care for injured parties, faster claim resolution and payments, and ultimately lower costs for employers.
This document discusses capital structure decision making. It summarizes that business risk exists prior to financing decisions, while financial risk is added through the use of debt. Together these risks determine total corporate risk. It then outlines various analytical tools for evaluating capital structures, including EBIT-EPS analysis, leverage analysis, cash flow analysis, and comparative analysis against industry averages. Guidelines are provided for capital structure planning and common policies used in practice.
This document discusses capital structure and the determinants of a firm's mix of debt and equity financing. It first examines Modigliani-Miller's proposition that capital structure is irrelevant under certain assumptions, such as no taxes, bankruptcy costs, or asymmetric information. It then explores how factors like taxes, risk, financial slack, asset characteristics, and costs of financial distress influence a firm's optimal capital structure. Specific examples are provided to illustrate how these various determinants impact capital structure decisions.
nCino is a cloud banking platform that helps banks streamline loan origination and other processes. It has reduced loan closing times by 34% and increased staff efficiency by 22% for clients like Live Oak Bank. nCino partners with Salesforce to leverage its scalable and secure Force.com platform. During the demonstration, nCino showed how its platform automates workflows and provides a single view of the customer for banks. Greenway Medical Technologies also partners with Salesforce and an innovation partner to build PrimePATIENT, a consumer portal that gives patients access to their medical records and engages them in their healthcare.
This investor presentation discusses DMC's financial highlights and global business operations. It provides cautionary statements about forward-looking projections and explains how non-GAAP financial measures are used. DMC has three business segments and a diversified customer base. It is the dominant provider of explosion-welded clad metal plates and has a global network of production and sales facilities.
This document discusses key concepts around a company's financing decision of whether to issue debt or equity. It covers factors to consider like taxes, financial distress, signaling effects, and how financial leverage can increase expected returns but also amplify risk for shareholders. Examples and equations are provided to illustrate how different financing options like debt versus equity impact returns and financial ratios.
1. Read the information on the STREAMING VIDEO INDUSTRY and apply .docxjeremylockett77
This document provides instructions for analyzing three different cases related to industries and companies.
1. It asks the reader to analyze the streaming video industry using PESTEL, Porter, and strategic group analyses and discuss macroenvironmental factors impacting growth.
2. It asks the reader to analyze how the coronavirus impacts industry forces for two industries using macroenvironmental and industry analyses.
3. It asks the reader to interpret Tesla's strategy as disruptive or sustaining innovation and as blue or red ocean, using company documents and financial performance.
This document provides a summary of an enhanced reporting presentation by Ameriprise Financial on December 4, 2007. It discusses the new segments that Ameriprise will report, including Advice & Wealth Management, Asset Management, Annuities, Protection, and Corporate & Other. The presentation aims to increase transparency and link metrics and financial results to demonstrate how the businesses create economic value. It provides an overview of the segments and discusses transfer pricing between segments. The majority of the presentation focuses on reviewing the income statements of each new segment.
FIN 534 Week 8 Part 2 Capital Structure DecisionsSlide 1Intro.docxssuser454af01
FIN 534 Week 8 Part 2: Capital Structure Decisions
Slide 1
Introduction
Welcome to Financial Management. In this lesson we will discuss capital structure decisions.
Next slide
Slide 2
Topics
The following topics will be covered in this lesson:
A preview of capital structure issues;
Business risk and financial risk;
Capital structure theory;
Capital structure evidence and implications;
Estimating the optimal capital structure; and
Anatomy of recapitalization.
Next slide
Slide 3
A preview of capital structure issues
Managers should make capital structure decisions to maximize the intrinsic value of the firm. The firm’s capital structure is its mixture of debt and equity. While the actual levels of debt and equity may vary over time, most firms try to maintain a financing mix that is close to its target capital structure. Recall, the value of the firm’s operations is the present value of its expected future cash flows, FCF, discounted at the firm’s weighted average cost of capital, WACC. Mathematically, the value of the firm’s operations is given by the following equation:
V sub OP equals summation T equals one through infinity FCF sub T divided by the quantity one plus WACC raised to the tth power;
Where WACC equals w sub D times the quantity one minus T times R sub D plus W sub S times R sub S; and
WACC depends on the percentages of debt and common equity, W sub D and W sub S, the cost of debt, R sub D, the cost of equity, R sub S, and the corporate tax rate T. The only way any decision can change the firm’s value is by changing either FCF or its cost of capital. Debtholders’ claim on the firm’s cash flows rank ahead of the stockholders’ claim because they have a residual claim on the cash flows after debtholders’ are paid.
The fixed claim of debtholders increases the cost of equity, R sub S, because their residual claim becomes riskier. Interest expense is tax deductible which reduces the firm’s taxable income and therefore its tax bill. The tax reduction reduces the after-tax cost of debt which results in more income available to debtholders and other investors.
When the firm increases its debt level the probability of financial distress or bankruptcy increases. This results in an increased pretax cost of debt, R sub D, because debt-holders will require a higher interest rate. The net impact on the WACC is indeterminate because both R sub D and R sub S change because it is a weighted average of relatively low-cost debt and relatively high-cost equity. The risk of bankruptcy can reduce FCF and the value of the firm. When the risk of bankruptcy increases, customers may make purchases from another firm and hence sales decline which reduces net operating profit as well as FCF. Additionally any type of financial distress negatively impacts the productivity of managers and employees and reduces net operating profit after taxes, NOPAT, and FCF. Moreover the firm experiences a reduction in accounts payable and results in an ...
This document discusses hedging strategies for insurance companies. It notes that establishing hedging programs can mitigate earnings volatility and is viewed positively by rating agencies and analysts. The document outlines identifying risks such as interest rate, market, and credit risk; choosing hedging strategies such as static or dynamic hedging; and implementing hedges through financial modeling and executing trades. Effective hedging programs require quantifying goals, generating economic scenarios, and reviewing hedging effectiveness over time.
This document provides an overview of financial statement analysis and key metrics used to analyze companies. It defines the key financial statements - the income statement, balance sheet, and statement of cash flows. It then explains various ratios used to evaluate a company's liquidity, leverage, asset utilization, profitability, and market performance, including definitions of ratios like the current ratio, debt-to-equity ratio, inventory turnover, return on assets, and price-to-earnings ratio. Industry averages from sources like RMA and Dun & Bradstreet are also discussed for comparison purposes.
Financial leverage involves using debt to finance a firm's assets in order to increase expected earnings per share. While it increases expected returns, it also increases risk. There is no unique optimal capital structure, as changing leverage simply redistributes risk between shareholders and bondholders without changing firm value. According to the Modigliano-Miller propositions, capital structure is irrelevant in perfect markets with no taxes or bankruptcy costs.
- Symantec held an earnings call to discuss its fiscal second quarter 2009 results. The call included comments from the CEO, COO, and CFO.
- While revenue grew year-over-year, softness in the retail sector and IT spending slowdown impacted results. Currency fluctuations also negatively affected revenue.
- However, storage, backup, archiving, and large enterprise deals performed well. New products were also highlighted.
- Margins increased through cost savings and efficiencies. Guidance was updated to reflect economic uncertainties.
The document summarizes Symantec's fiscal second quarter 2009 earnings conference call. It introduces the speakers and outlines that John Thompson will provide high-level comments on the company's performance, Enrique Salem will discuss quarterly highlights, and James Beer will review the financials and guidance. Thompson notes growth in revenue and margins despite economic challenges. Salem highlights softness in retail but growth in electronic sales for consumer security products. Beer will review the financial results and updated guidance.
The document discusses how bankers evaluate business loan requests, including analyzing financial statements and ratios to assess expense control, operating efficiency, and profitability. It also covers different methods used by banks to price business loans, such as cost-plus pricing, price leadership models, and customer profitability analysis. The goal is for banks to understand borrowers' ability to repay and set appropriate interest rates to achieve the bank's profit and risk management objectives.
Economic Value Added (EVA) is a measure of a company's true profit by taking into account the cost of capital used to generate earnings. EVA is calculated as net operating profit after tax minus a charge for the cost of capital employed. Using EVA rather than earnings allows companies to focus on generating returns that exceed the minimum required by shareholders and create real economic profit and shareholder value over time. Determining a company's cost of capital, which includes its cost of debt and equity, is necessary for accurately calculating EVA.
Do.,.rY Y^.,^,o,,,!,u r-l hi okfu9could be conver.docxelinoraudley582231
Do.,.rY
Y^:.,^,o",,",!,''u
r-l hi okfu9
could be convertible into 32 shares of stock). Coupon payments will be made annually. The
bonds will be noncallable for 5 years, after which they will be callable at a price of 91,090;
this call price would decline by $6 per year in Year 6 and each year thereafter. For
simplicity, assume that the bonds may be called or converted only at the end of a year,
immediately after the coupon and dividend payments. Management will call the bonds
when their conversion value exceeds 25o/o of thetr par value (not their call price).
a. For each year, caiculate (1) the anticipated stock price, (2) the anticipated conversion
value, (3) the anticipated straight-bond price, and (4) the cash flow to the investor
asstrming conversion occurs. At what year do you expect the bonds will be forced into
conversion with a call? What is the bond's value in conversion when it is converted at
this time? What is the cash flow to the bondholder when it is converted at this time?
(Hint: The cash flow includes the conversion value and the coupon payment, because
the conversion occurs immediately after the coupon is paid.)
b. What is the expected rate of return (i.e., the before-tax component cost) on the
proposed convertible issue?
c. Assume that the convertible bondholders require a 9o/o rale of return. If the coupon
rate remains unchanged, then what conversion ratio will give a bond price of $1,000?
Paul Duncan, financiai manager of EduSoft Inc., is facing a dilemma. The firm was
founded 5 years ago to provide educational software f<lr the rapidly expanding primary
and secondary school rnarkets. Although EduSoft has done well, the firm's founder
believes an industry shakeout is irnminent. To surwive, EduSoft must grab market share
now, and this will require a large infusion of new capital.
Because he expects earnings to continue rising sharply and looks for the stock price to
follow suit, Mr. Duncan does not think it lvouid be wise to issue new common stock at
this time. On the other hand, interest rates are currently high by historical standards, and
the firm's B rating means that interest payments on a nerv debt issue nould be prohibitive.
Thus, he has narrowed his choice offinancing alternatives to (l) preferred stock, (2) bonds
with warrants, or (-l) convertible bonds.
As Duncan's assistant, you have been asked to help in the decision process by
ansu,ering the following questions.
a. How does preferred stock differ from both common equity and debt? Is preferred
stock more risky than common stock? What is floating rate preferred stock?
b. How can knowledge of call options help a financial manager to better understand
warrants and convertibles?
c. Mr. Duncan has decided to eliminate preferred stock as one of the alternatives and
focus on the others. EcluSoll's investment banker estimates that EduSoft could issue a
bond-with-warrants package consisting of a 2O-year bond and 27 warrants. Each
warrant would have a strike p.
The document provides an overview of Dynamic Materials Corporation (DMC) and includes cautionary statements about forward-looking projections. It discusses DMC's three business segments, financial highlights, global operations, and competing cladding technologies. DMC is a leading provider of explosion-welded metal plates and has operations in explosive metalworking, oilfield products, and welding. The document reviews DMC's markets, growth strategy, and historical financial and operational performance.
The document summarizes key information about timely claim reporting and includes the following points:
1) Claims reported more than 24 hours after occurrence are 33% more costly. Timely reporting is important for a company's risk performance scorecard.
2) Timely reporting allows for early relationships with injured parties to ensure claims are handled properly, and allows adjusters to investigate claims when events are freshest in minds of injured employees and witnesses.
3) Faster reporting means better care for injured parties, faster claim resolution and payments, and ultimately lower costs for employers.
This document discusses capital structure decision making. It summarizes that business risk exists prior to financing decisions, while financial risk is added through the use of debt. Together these risks determine total corporate risk. It then outlines various analytical tools for evaluating capital structures, including EBIT-EPS analysis, leverage analysis, cash flow analysis, and comparative analysis against industry averages. Guidelines are provided for capital structure planning and common policies used in practice.
This document discusses capital structure and the determinants of a firm's mix of debt and equity financing. It first examines Modigliani-Miller's proposition that capital structure is irrelevant under certain assumptions, such as no taxes, bankruptcy costs, or asymmetric information. It then explores how factors like taxes, risk, financial slack, asset characteristics, and costs of financial distress influence a firm's optimal capital structure. Specific examples are provided to illustrate how these various determinants impact capital structure decisions.
nCino is a cloud banking platform that helps banks streamline loan origination and other processes. It has reduced loan closing times by 34% and increased staff efficiency by 22% for clients like Live Oak Bank. nCino partners with Salesforce to leverage its scalable and secure Force.com platform. During the demonstration, nCino showed how its platform automates workflows and provides a single view of the customer for banks. Greenway Medical Technologies also partners with Salesforce and an innovation partner to build PrimePATIENT, a consumer portal that gives patients access to their medical records and engages them in their healthcare.
This investor presentation discusses DMC's financial highlights and global business operations. It provides cautionary statements about forward-looking projections and explains how non-GAAP financial measures are used. DMC has three business segments and a diversified customer base. It is the dominant provider of explosion-welded clad metal plates and has a global network of production and sales facilities.
This document discusses key concepts around a company's financing decision of whether to issue debt or equity. It covers factors to consider like taxes, financial distress, signaling effects, and how financial leverage can increase expected returns but also amplify risk for shareholders. Examples and equations are provided to illustrate how different financing options like debt versus equity impact returns and financial ratios.
1. Read the information on the STREAMING VIDEO INDUSTRY and apply .docxjeremylockett77
This document provides instructions for analyzing three different cases related to industries and companies.
1. It asks the reader to analyze the streaming video industry using PESTEL, Porter, and strategic group analyses and discuss macroenvironmental factors impacting growth.
2. It asks the reader to analyze how the coronavirus impacts industry forces for two industries using macroenvironmental and industry analyses.
3. It asks the reader to interpret Tesla's strategy as disruptive or sustaining innovation and as blue or red ocean, using company documents and financial performance.
This document provides a summary of an enhanced reporting presentation by Ameriprise Financial on December 4, 2007. It discusses the new segments that Ameriprise will report, including Advice & Wealth Management, Asset Management, Annuities, Protection, and Corporate & Other. The presentation aims to increase transparency and link metrics and financial results to demonstrate how the businesses create economic value. It provides an overview of the segments and discusses transfer pricing between segments. The majority of the presentation focuses on reviewing the income statements of each new segment.
FIN 534 Week 8 Part 2 Capital Structure DecisionsSlide 1Intro.docxssuser454af01
FIN 534 Week 8 Part 2: Capital Structure Decisions
Slide 1
Introduction
Welcome to Financial Management. In this lesson we will discuss capital structure decisions.
Next slide
Slide 2
Topics
The following topics will be covered in this lesson:
A preview of capital structure issues;
Business risk and financial risk;
Capital structure theory;
Capital structure evidence and implications;
Estimating the optimal capital structure; and
Anatomy of recapitalization.
Next slide
Slide 3
A preview of capital structure issues
Managers should make capital structure decisions to maximize the intrinsic value of the firm. The firm’s capital structure is its mixture of debt and equity. While the actual levels of debt and equity may vary over time, most firms try to maintain a financing mix that is close to its target capital structure. Recall, the value of the firm’s operations is the present value of its expected future cash flows, FCF, discounted at the firm’s weighted average cost of capital, WACC. Mathematically, the value of the firm’s operations is given by the following equation:
V sub OP equals summation T equals one through infinity FCF sub T divided by the quantity one plus WACC raised to the tth power;
Where WACC equals w sub D times the quantity one minus T times R sub D plus W sub S times R sub S; and
WACC depends on the percentages of debt and common equity, W sub D and W sub S, the cost of debt, R sub D, the cost of equity, R sub S, and the corporate tax rate T. The only way any decision can change the firm’s value is by changing either FCF or its cost of capital. Debtholders’ claim on the firm’s cash flows rank ahead of the stockholders’ claim because they have a residual claim on the cash flows after debtholders’ are paid.
The fixed claim of debtholders increases the cost of equity, R sub S, because their residual claim becomes riskier. Interest expense is tax deductible which reduces the firm’s taxable income and therefore its tax bill. The tax reduction reduces the after-tax cost of debt which results in more income available to debtholders and other investors.
When the firm increases its debt level the probability of financial distress or bankruptcy increases. This results in an increased pretax cost of debt, R sub D, because debt-holders will require a higher interest rate. The net impact on the WACC is indeterminate because both R sub D and R sub S change because it is a weighted average of relatively low-cost debt and relatively high-cost equity. The risk of bankruptcy can reduce FCF and the value of the firm. When the risk of bankruptcy increases, customers may make purchases from another firm and hence sales decline which reduces net operating profit as well as FCF. Additionally any type of financial distress negatively impacts the productivity of managers and employees and reduces net operating profit after taxes, NOPAT, and FCF. Moreover the firm experiences a reduction in accounts payable and results in an ...
This document discusses hedging strategies for insurance companies. It notes that establishing hedging programs can mitigate earnings volatility and is viewed positively by rating agencies and analysts. The document outlines identifying risks such as interest rate, market, and credit risk; choosing hedging strategies such as static or dynamic hedging; and implementing hedges through financial modeling and executing trades. Effective hedging programs require quantifying goals, generating economic scenarios, and reviewing hedging effectiveness over time.
This document provides an overview of financial statement analysis and key metrics used to analyze companies. It defines the key financial statements - the income statement, balance sheet, and statement of cash flows. It then explains various ratios used to evaluate a company's liquidity, leverage, asset utilization, profitability, and market performance, including definitions of ratios like the current ratio, debt-to-equity ratio, inventory turnover, return on assets, and price-to-earnings ratio. Industry averages from sources like RMA and Dun & Bradstreet are also discussed for comparison purposes.
Financial leverage involves using debt to finance a firm's assets in order to increase expected earnings per share. While it increases expected returns, it also increases risk. There is no unique optimal capital structure, as changing leverage simply redistributes risk between shareholders and bondholders without changing firm value. According to the Modigliano-Miller propositions, capital structure is irrelevant in perfect markets with no taxes or bankruptcy costs.
- Symantec held an earnings call to discuss its fiscal second quarter 2009 results. The call included comments from the CEO, COO, and CFO.
- While revenue grew year-over-year, softness in the retail sector and IT spending slowdown impacted results. Currency fluctuations also negatively affected revenue.
- However, storage, backup, archiving, and large enterprise deals performed well. New products were also highlighted.
- Margins increased through cost savings and efficiencies. Guidance was updated to reflect economic uncertainties.
The document summarizes Symantec's fiscal second quarter 2009 earnings conference call. It introduces the speakers and outlines that John Thompson will provide high-level comments on the company's performance, Enrique Salem will discuss quarterly highlights, and James Beer will review the financials and guidance. Thompson notes growth in revenue and margins despite economic challenges. Salem highlights softness in retail but growth in electronic sales for consumer security products. Beer will review the financial results and updated guidance.
The document discusses how bankers evaluate business loan requests, including analyzing financial statements and ratios to assess expense control, operating efficiency, and profitability. It also covers different methods used by banks to price business loans, such as cost-plus pricing, price leadership models, and customer profitability analysis. The goal is for banks to understand borrowers' ability to repay and set appropriate interest rates to achieve the bank's profit and risk management objectives.
Economic Value Added (EVA) is a measure of a company's true profit by taking into account the cost of capital used to generate earnings. EVA is calculated as net operating profit after tax minus a charge for the cost of capital employed. Using EVA rather than earnings allows companies to focus on generating returns that exceed the minimum required by shareholders and create real economic profit and shareholder value over time. Determining a company's cost of capital, which includes its cost of debt and equity, is necessary for accurately calculating EVA.