2. A Bond; is a loan amount lent to a Government, or business which pays a fixed interest rate for a fixed period of time. 3. A Mutual Fund; is a collection of investments managed by a professional investment firm, where investors can buy and sell shares of many different organizations or
Financial Management FIN/370 Michael Curtis May 21, 2012 Financial Management Create a list of definitions for the following terms and identify their roles in finance. 1. Finance - Finance is the process of creating, moving and using money, enabling the flow of money through a company. Finance deals with matters related to money and the markets. 2.
1. From your understanding of the Sarbanes-Oxley Act, explain how you feel it may negatively affect America’s stock exchanges. The higher than expected costs for many public companies caused some companies to abandon their public status. The costs of SOX compliance negatively affect companies, markets, investors, and economic growth. Fewer companies are willing to enter the market because of the SOX requirements that make going public too costly.
A US multinational company is required to report its financial results in US dollars. How does this create currency exchange risk for the company? What is the term which most accurately describes this particular risk? a. Currency risk- if unexpected changes in currency values affect the value of the firm 4.
Because the company must produce all financial information to the SEC many businesses find it to be very stressful and time consuming which takes time and money away from a company that is thriving like Kudler Fine Foods. Legal liability is important when conducting an IPO and those offering the shares can be personally sued. The expenses continue after the company goes public with the SEC reporting requirements. Kathy Kudler will not only lose control of some of the decision making for Kudler Fine Foods with an IPO, but she will also lose some of the profits, as a portion will go to the
Equity vs. debt securities Debt securities represent debt incurred by the issuer. （拥有此证券代表你拥有对证券发行人的债权，发行人是你的债务人) Equity securities represent equity or ownership in the firm.（拥有此证券代表你拥有证券标的物的财产所有权） Primary vs. Secondary markets Primary markets facilitate the issuance of new securities. Secondary markets facilitate the trading of existing securities and is liquidity. Money vs. Capital markets Money markets facilitate the sale of short-term (one year or less)
Liabilities are accounts that are owed out to a creditor, vendor or a bank. Liabilities are presented on the Balance Sheet and normally have a credit (negative) balance. A debit to a liability account decreases it while a credit will increase it. Liabilities are broken down to current and long term. The current liabilities are what is owed and is expected to be paid off on one year.
Explain the meaning of money multiplier and its role? (6) The money multiplier calculates the maximum amount of money that an initial deposit can be expanded to with a given reserve ratio. Money multiplier can also be expressed as a ratio of a change in money supply divided by a change in money base. The role of the multiplier is that it explains why output fluctuates.the money multiplier is a multiple of reserves; this multiple is the reciprocal of the reserve ratio, and it is an economic multiplier.In monetary economics, a money multiplier is one of various closely related ratios of commercial bank money to central bank money under a fractional-reserve banking system. Most often, it measures the maximum amount of commercial bank money that can be created by a given unit of central bank money.
The reorder quantity is the amount that furnishing companies buy from the suppliers, when getting an order. (a measurement, from 0 to 500) Maximum stock level – illustrates if the company has too many resources delivered from suppliers, which can incur as heavy additional costs, and it’s a GREEN line at the top. Lead Time – is what’s between an order placement and stock arrival. Stock is different in reality though; normally there would be different rates than in diagram, so it can be only used as example of how Furnishing business or Hunters of Derby may manage their business… Normally company is not so perfect, and could have problems with stock reorder, where furnishing elements are not being made on time, or there is problem with time leading, or transport, so in reality it is difficult to describe it in one diagram. Business may also consider the price of stock, and the amount of resources in compartment with both, which has to be calculated in order to be more precise.
Horizontal analysis is a financial statement analysis technique that demonstrates changes in the amount of corresponding financial statement items over period of time. It is a useful tool in evaluating the trends represented on a balance sheet. The statements for two or more periods are used in horizontal analysis. The changes are generally shown in percentages and dollars. With horizontal analysis, the guideline or base year is represented and other years are compared to that base year.