(Garcia-Terul and Martinez-Solano, 2000: p. 164). Investments in working capital constitute a tradeoff between risk and profitability because decisions that increase profitability also increase risk and vice versa. This is obvious even in capital markets where a tradeoff exists between risk and profitability. For example, investments in equities tend to be riskier than investments in savings accounts and bonds but equities tend to pay higher returns that savings accounts and bonds. (Bodie et al, 2005). A company that has a negative net working capital therefore faces higher risks than a company that has a positive net working capital irrespective of the profitability of the company. This is so because, the company with higher current liabilities may have high levels of debts that may be uncollectible, but which must have been included in the sales figure used in calculating profit. Debtors may default on the payment of debt and inventories may go obsolete. Finance literature has long recognized that market imperfection and information asymmetry affect finance. Thus, corporations must choose from the various financing options appropriate for them. These include, warrants issuance, derivatives instruments, common stocks and Preferred stocks etc. (Ambarish, John &Williams 1987). ...Show more
In this paper, we compare five different financing alternatives available to investors in the financial market. Capital constrained investors can adapt either of these financing methods as each of them is dependent on the client's needs. However, some of these financing alternatives are common only to a few industries…
In the corporate world any sort of investment an investor basically makes is based on the fact that the ‘Net present value’ arising out of the project is satisfactory enough discounted by a certain effective return the customer thinks can enhance his value for his/her investment.
Additionally, the term ‘knowledge management’ has been used around for an extremely long time. However, the basic purpose of knowledge management is to offer consultancy services and ways that facilitate businesses in repeatedly changing their company models as well as improving business competence and value.
For this reason, the manager is faced with the challenge of inducing productive labor in their organization. Therefore, they have a role to prepare adequately before they undertake the process of recruitment. Skills of human resource planning and job analysis form a strong foundation of any recruitment process.
This involves generating cash in order to support the operations of the company and choosing among competing ends of investment opportunities present in the market.
Horngren, et al. (2002, pp. 6) defines accounting as the "information system that measures business activities, processes that information into reports, and communicates the results to decision makers." Accounting is generally classified into fields according to the intended users of financial data.
The British Financial institutions include banks, post office and loan institutions. Furthermore, financial institutions also include the national clearing house. This the centralized collection place where a bank or post office where checks and drafts change hands.
The CAPM looks at both the systematic and unsystematic risks and directs the investors to the right direction. The assumption is that the higher the risk the investor takes, the higher the resulting returns
The company offers home and clothing products in addition foods sourced from more than 2000 suppliers from all over the world. Two years ago, the products of the company were also sold through 730 United Kingdom branches and 390 internationally. The
Expected Utility Theory and the Modigliani-Miller theory is also taken into consideration which explains that the financial decisions of a company do not have an effect on its value. The report has also focused on the