Evaluating Fiscal Policy Alternatives Simulation ECO 372 November 28, 2011 Matthew Angner A government has a couple of roles the need to enforce in order to ensure that their people and land will be able to support them through any times. One of these roles is to invoke and sustain economic growth. The government can achieve this by trying to manipulate the trends in that particular economy, though fiscal policy. Fiscal policy is changes that are made to government spending or taxes that leads to one of two conclusions. One of these conclusions is that the economy will stimulate because of the changes being made, or the economy will slow down.
Comparative Ratio Analysis of Tootsie Roll Industries and Hershey Comapny A company’s general financial picture can be determined through a ratio analysis. Financial ratios have proved to be a useful tool for management, investors and creditors. Management uses financial ratios to develop ways to improve operating efficiency strategies for future growth and see how they stack up against the competition in their industry. Creditors and investors analyze ratios to determine a company’s financial strength and operating effectiveness in order to loan money or invest in them. Financial ratios have more impact when compared over several years to help identify trends.
These methods are usually applied through the central bank in the UK The monetary policy contains buying and selling of national debt, changing the credit restrictions in the county and changing the interest rates this is done by changing backup requirements. I am now going to talk about how monetary policies affect aldi. Over the years since the country has been through some difficult financial times the interest rates have risen and this has affected aldi. This is because there is less disposable income for consumers to spend which results in the buying only the essentials which they need to go throughout the week. On the other hand this has benefited aldi because more consumers would rather go to aldi than Tesco or Morrison’s because they are cheaper and they have good quality on the goods and
Project Paper– Part 2 Business Economics (GM545) Spring Session B 2012 \ \ June 6, 2012 Exercise 1: Chapter 16, Question 5 Our text describes three types of unemployment; frictional, structural and cyclical, all which have different ramifications on the economy (Stone, 2008 pp. 443). Fricitional unemployment occurs when people are inbetween jobs or are recently entering into the job market, this includes contract workers, seasonal workers and newly graduated students. It also includes voluntary unemployement when people make a choice to leave their current job and seek better opportunities elsewhere. This type of unemployment is is much less serious than structural or cyclical unemployment and is viewed as being healthy part
The Federal Reserve Bank makes recommendations to the government on the monetary policy issues. The Federal Reserve also controls the short-term interest rates along with the long-term interest rates. Currently the Prime Interest rate in the United States is at 3.25%, and it has been at that level since December 16, 2008 (Fed Prime Rate, 2012). With the prime interest rate remaining at its current level this will allow businesses and individuals to spend more money and borrow higher amounts of money and still leave them will some extra
The first way to improve working capital is to make the excess liquid funds work for the company. These funds should be invested back into the company. This can be accomplished by reducing long-term liabilities with high interest rates such as the mortgages on facilities. The second is to manage the inventory held by the company. Currently Competition Bikes purchases inventory for production the month before it goes to the production line.
Being able to track sales compared to the previous years’ numbers is a valuable tool in being able to track business. They use this information to forecast on where they think the business will be heading in the next week, month, or year. If the debt percent gets to high then they need to adjust the amount of liabilities that they have to bring that number down. Knowing the times interest earned ratio allows the managers to know at what percent the company is earning interest on its net income. Investors find this information lucrative because the more expendable cash a company has the more likely they are to pay out in dividends for the stock holders..
The four fundamental factors that affect the cost of money are production opportunities, time preferences for consumption, risk, and expected inflation. k. What are some economic conditions (including international aspects) that affect the cost of money? Some economic conditions are budgets deficits, federal reserve policies, budget surpluses, level of business activity and international trade deficits or surpluses. The international aspects are country risk and exchange rate
No, many “real world” stocks do not satisfy the constant growth hypothesis because the real world circumstances can be unpredictable and harder to forecast so being able to continually grow your business at a specific rate each year is difficult. 2. The Wall Street Journal lists the current price of James River Current stock at $27. Based on this information, and the Value Line expected dividend, and the annual rate of dividend change for the growth estimate, what is the company’s return on common stock using the constant growth model? What is the expected dividend yield and the expected capital gains yield?