Case Study on Entrepreneurship: Larry Page

Business Analysis

The Boundaryless Career: Modern Contemperory Perspective on Career

Human Resource Management

Concepts of Throughput Accounting and Theory of Constraints

Financial Management

Kaizen – Understanding the Japanese Business Philosophy of Continuous Improvement

Operations Management

Role of Leaders in Shaping Organizational Culture

Management Principles

What is a Master Budget?

Budget provides comprehensive financial overview of planned company operation. A company’s objectives budget is the overall financial plan showing expenditure of the available funds. A company’s budget is driven by the aims and objectives of the company as well as what it can actually accomplish. Many variables in a business can be budgeted which includes sales, output, cost- (variable and fixed), profits, cash flow, capital investment. Budget should be SMART, that is specific, measurable, achievable, realistic, and with time bound otherwise budget will be ineffective. Strategic objective of the company is the first factor that needs to be considered when formulating budgets because unaligned budget with strategic objective lead to failure. The next step of budgeting is identifying the limiting factor that the organization is faced with which is known as constraint which may be a limit on the number of goods a business could sell (demand is limiting factor) Continue reading

Abey Francis

Difference Between Euro Note Market and Euro Commercial Paper Market

The Euromarkets are the single most important source of commercial loan funds for the developing countries. The development and operation of Eurocurrency markets have played a very significant role in the post war international financial system. Indeed the explosive growth in international banking and bank lending could not have come about but for the Eurocurrency markets. Simply stated, the term Eurocurrency refers to a currency deposited in a bank outside the home country of that currency. Therefore, Eurocurrencies and Eurocurrency markets are outside the regulatory framework of any monetary authority-the monetary authority of the place where the deposit is made is not concerned with non-residents depositing or borrowing foreign currencies, which does not affect the domestic money supply. It is also outside the control of the monetary authority of the home country of the currency concerned because the transaction takes place outside the country. Inter-Bank Markets Apart from customer transactions, Continue reading

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Important Characteristics of Financial Information

The financial statement should contain information sufficient in quantity and quality to satisfy the reasonable expectations of the readers to whom it is addressed. According to the above statement, it is means that the financial statement should contain useful and meaningful information which included quantity and quality so that the reader who we make the financial statement to the person knows and understand it. How we achieve the quality information? The four important characteristics of financial information are understandability, relevance, reliability, and comparability. First, understandability is including taking into consideration users’ abilities, and aggregation and classification of information. Relevance is including having predictive value and confirmatory value. Next, Reliability is including faithful representation, being natural, free form material error, complete, and prudent. Comparability is including consistency and disclosure. All the characteristics are attributes that make the information provided in financial statements are useful to users. Understandability includes users’ abilities and Continue reading

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Appropriate Capital Structure

An Appropriate Capital Structure  is that capital structure at that level of debt — equity proportion where the market value per share is maximum and the cost of capital is minimum.  It is important for a company to have an appropriate capital structure. Features of an Appropriate Capital Structure Return- The capital structure of the company should be most advantageous subject to other considerations it should generate maximum returns to the shareholders without adding cost to them. Risk- The use of excessive debt threatens the solvency of the company. To the point debt does not add significant risk it should be used otherwise its use should be avoided. Flexibility- The capital structure should be possible for a company to adapt its capital structure with a minimum cost and delay if warranted by a changed situation. It should also be possible for the company to provide funds whenever needed to finance Continue reading

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Capital Structure and Risk-Return Tradeoff

The capital structure of a firm should be designed in such a way that it keeps the total risk of the firm to the minimum level. The financial or capital structure decision of a firm to use a certain proportion of debt or otherwise in the capital mix involves two types of risks: Financial Risk: The financial risk arise on account of the use of debt or fixed interest bearing securities in its capital. A company with no debt financing has no financial risk. The extent of financial risk depends on the leverage of the firm’s capital structure. A firm using debt in it capital has to pay fixed interest charges and the lack of ability to pay fixed interest increases the risk of liquidation. The financial risk also implies the variability of earning available to equity shareholders. Non-Employment of Debt Capital (NEDC) Risk: If a firm does not use Continue reading

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Role of Credit Default Swaps in Subprime Crisis

Background of Subprime Crisis The immediate cause or trigger of the crisis was the bursting of the United States housing bubble which peaked in approximately 2005-2006. High default rates on “subprime” and adjustable rate mortgages (ARM) began to increase quickly thereafter. An increase in loan incentives such as easy initial terms and a long-term trend of rising housing prices had encouraged borrowers to assume difficult mortgages in the belief they would be able to quickly refinance at more favorable terms. However, once interest rates began to rise and housing prices started to drop moderately in 2006-2007 in many parts of the U.S., refinancing became more difficult. Defaults and foreclosure activity increased dramatically as easy initial terms expired, home prices failed to go up as anticipated, and ARM interest rates reset higher. Foreclosures accelerated in the United States in late 2006 and triggered a global financial crisis through 2007 and 2008. Continue reading

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