A Explanation Of Different Financial Terms Finance Essay - Free Essay Example

Sample details Pages: 21 Words: 6400 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? The main objective of the Finance Manager is to manage funds in such a way so as to ensure their optimum utilization and their procurement in a manner that the risk, cost and control considerations are properly balanced in a given situation. To achieve the objective the Finance Manager performs the following functions in the following areas:- The need to estimate/forecast the  requirement of funds  for both the short term (working capital requirements) and the long term purpose (capital investments). Forecasting the requirements of funds involves the use of budgetary control and long-range planning Helps to decide what type of  capital structure  the company needs to have return: whether these funds would be raised: from loans/borrowings or from internal source (share capital) To raise sufficient long term funds to finance fixed assets and other long term investments and to provide for the needs of working capital . Don’t waste time! Our writers will create an original "A Explanation Of Different Financial Terms Finance Essay" essay for you Create order Investment Decision In projects using the various capital budgeting tools like payback method, accounting rate of return, internal rate of return, net present value. Assets management policies are to be laid down regarding the various items of current assets like accounts receivable by coordinating with the sales personnel, inventory with production Dividend Decision Taking into consideration, earnings trend, share market price trend, fund requirement for future growth, cash flow situation and others. Financial negotiation Plays a very important role in carrying out negotiations with the various financial institutions, banks and public depositors for raising funds on favourable terms. Cash Management The finance manager needs to ensure the supply of adequate, timely and cheap fund  to the various parts of the organization. That there is no excessive cash idling around. Evaluating financial performance To need to constantly review the financial performance of the various units of organization generally in terms of ROI (return on investment. Such review assists management in seeing all the funds have been utilized in the various divisions and what can be done to improve it. Dealing with relevant parties in the Financial Markets Where the company is a listed entity, the need to interact with the Stock Exchange To deal with money markets and capital markets for financing or investment of idling funds To foster relationships with bankers, investors, underwriters of equity and bond issuances and other government regulatory bodies. For those who are uninformed, they tend to think the sole function of this position is that of the head of Accounts Payable and Accounts Receivable, but it goes far beyond that capacity. In fact, the finance manager is in charge of any  financing  and accounting function throughout the company. The role of this position involves that of not only financing functions such as Accounts Payable, Accounts Receivable, and Billing, but it also involves that of budget projections and working with the Chief Financial Officer to make sure that the companys funds are stable and assisting with any budget cuts that become necessary. The finance manager is the head of both the Accounts Payable and Accounts Receivable areas of the company. As such, he will be the one to set policy and direct procedures for both areas of  business. That includes hiring staff based upon need, following budget guidelines for expenses including staffing, assuring that procedures are followed by all staff members, setting reasonable quota system to assure work is completed in a timely fashion, and interacting with department supervisors on a regular basis in order to stay abreast of happenings within the department. The finance manager will also compile reports that show all of the conditions within his department including expenditures, open invoices, production standards, quality control standards, and timeliness of both payment of invoices and processing of payments. The finance manager is also responsible for the billing operation of the Accounts Receivable Department and making sure that guidelines for timely billing are followed as well. The finance manager also is the one who will work with other executives in order to develop the budget for each year. He will work with the Chief Finance Officer and Chief Executive Officer in order to develop an equitable solution for each years expenditures in both staff, office supplies, and any other needs that the company has including training, business trips, out of town meetings, and staff entertainment expenses. The finance manager has a very important position within a company, and his decisions will determine the financial stability of the company, at least within the areas that fall under his control. It is also his job to make certain that other departments and areas of the company follow their budgets and make the most use of the companys  money  by avoiding frivolous expenses. Nature of Financial Management Financial management is that part of total management which is concerned primarily with the financial affairs of an organization and the translation of actions, both past and proposed, into meaningful and relevant information for use in the management process. It includes the functions of budgeting, accounting, reporting, and the analysis and interpretation of the financial significance of past events and future plans. It sometimes also includes other related functions such as internal auditing, management analysis, and others. It is not primarily concerned with the technical procedures and methodology of those individual functions. Rather, it is characterized by the coordination and correlation of those functions into an effective and broad system of financial control that will assure that they, collectively more than individually, become an integral part of the management of the organization. Financial management involves the art of interrelating data to obtain a perspective o f the total financial situation that will assist managers in program planning and decision-making. A very simple operating program may require only a minimum of financial management, and this, in some cases, can be provided by the manager himself. Financial Management is also an important field of Management Sciences. It is a combination of Managerial Finance and Corporate Finance. Managerial Finance concerns with the managerial use of financial techniques, whereas on the other hand, corporate finance deals with corporate financial decisions. In both the cases, it is extremely important for Managers in an organization. Financial Management is used to determine the best way to use the  money  available to an organization in order to improve the future opportunities to  earn  money. Thus the financial managers use techniques such as Valuation, Portfolio management, Hedging and capital structure etc for better decisions about the future of an organizat ion. On the other hand, it is also used to interpret financial results in a given year or time period using financial analysis techniques. This helps in judging the actual performance of an organization in that time period. Financial management helps in proper allocation of costs, anticipate future expense, and budgeting for the future. Retained Earnings The accumulated net income that has been retained for reinvestment in the business rather than being paid out in dividends to stockholders. Net income that is retained in the business can be used to acquire additional income-earning assets that result in increased income in future years. Retained earnings are a part of the owners equity section of a firms balance sheet. Retained earnings also called retention ratio or retained surplus, it is the percentage of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.  Retained earnings are one component of the corporations net worth and increase the supply of cash thats available for acquisitions, repurchase of outstanding shares, or other expenditures the board of directors authorizes. It is recorded under shareholders equity on the balance sheet. It is calculated by adding net income to or subtracting any net losses from beginning retained earnings and subtra cting any dividends paid to shareholders, as shown here: Smaller and faster-growing companies tend to have a high ratio of retained earnings to fuel research and development plus new product expansion. Mature firms, on the other hand, tend to pay out a higher percentage of their profits as dividends. In most cases, companies retain their earnings to invest them in areas where the company can create growth opportunities, such as buying new machinery or spending the money on research and development. If a net loss is greater than beginning retained earnings, retained earnings can become negative, creating a deficit. Debenture A debenture is a debt instrument, which is not backed by collaterals. Debentures are backed by the creditworthiness and reputation of the debenture issuer. Besides, a debenture is a long-term debt instrument issued by governments and big institutions for the purpose of raising funds. The debenture has some similarities with bonds but the terms and conditions of securitization of debentures are different from that of a bond. A debenture is regarded as an unsecured investment because there are no pledges (guarantee) or liens available on particular assets. Nonetheless, a debenture is backed by all the assets which have not been pledged otherwise. Normally, debentures are referred to as freely negotiable debt instruments. The debenture holder functions as a lender to the issuer of the debenture. In return, a specific rate of interest is paid to the debenture holder by the debenture issuer similar to the case of a loan. In practice, the differentiation between a debenture and a bond is not observed everytime. In some cases, bonds are also termed as debentures and vice-versa. If a bankruptcy occurs, debenture holders are treated as general creditors. The debenture issuer has a substantial advantage from issuing a debenture because the particular assets are kept without any encumbrances so that the option is open for issuing them in future for financing purposes. Usually, debentures are categorized into the following types and their definitions are also given below: Convertible Debenture:  Convertible bonds  or bonds that can be converted into equity shares of the issuing company after a predetermined period of time. Convertibility is a feature that corporations may add to the bonds they issue to make them more attractive to buyers. In other words, it is a special feature that a corporate bond may carry. As a result of the advantage a buyer gets from the ability to convert; convertible bonds typically have lower interest rates than non-conver tible corporate bonds. Non-convertible debenture: Simply regular  debenture cannot be converted into equity shares of the liable company. They are debentures without the convertibility feature attached to them. As a result, they usually carry higher interest rates than their convertible counterparts. Corporate Debenture:   Debentures issued by companies and they are insecure in nature. Bank Debenture:  This type of debentures is issued by banks. Government Debenture:  This includes Treasury Bond (T-Bond) and Treasury Bill (T-Bill) issued by the government. They are usually regarded as risk-free investments. Subordinated Debenture:  This is a particular type of debenture, which ranks below regular debentures, senior debt, and in some instances below specific general creditors. Corporation Debenture:  Corporation debentures are issued by various corporations. Exchangeable Debenture:  They are like convertible debent ures, but this debenture can only be converted to the common stock of a subsidiary company or affiliated company of the debenture issuer. Seed Capital Seed capital means the initial capital used to start a business.  Seed capital often comes from the company founders personal assets or from friends and family.  The amount of money is usually relatively small because the business  is still in the idea or conceptual stage.  Such a  venture  is generally  at a pre-revenue stage and  seed capital is needed for  research development, to cover initial operating expenses  until a product or service can start generating  revenue, and to attract the attention of venture capitalists. Seed capital is needed to get most businesses off the ground. It  is considered a high-risk investment, but one that can reap major rewards if the company becomes a growth enterprise. This type of funding is often obtained in exchange for an equity stake in the enterprise, although with less formal contractual overhead than standard equity financing. Banks and venture ca pital investors view seed capital as an at risk investment by the promoters of a new venture, which represents a meaningful and tangible commitment on their part to making the business a success. Frequently,  capital providers  will  want to wait until a business is a little more mature before making the larger investments that typify the early stage financing of venture capital funding. Seed capital in other words can be said as money used as the initial investment for a new product or service launch. Seed capital enables businesses to launch a new product or service without depending fully on a business loan. The funds for this form of financing are typically provided by private investors who are looking for a high return on their investment of at least 30 percent. The investors look to invest in an industry with a market of at least $1 billion, and they also want an industry with few competitors for the business. Businesses that typically obtain seed capit al are young companies around one year of age that have not produced a product or service for commercial sale yet. The companies are so new, so it can be difficult to obtain a regular commercial loan that is sufficient for covering all of the related start up expenses. Cash Credit and Overdraft Cash credit  is  a short-term cash loan to a company.  A bank provides this type of funding, but  only after the required security is given to secure the loan. Once a security for repayment has been given, the business  that receives the loan can continuously draw from the bank up to a certain specified amount. This type of financing is similar to a line of credit. Furthermore, cash credit is a facility to withdraw the amount from the business account even though the account may not have enough credit balance. The limit of the amount that can be withdrawn is sanctioned by the bank based on the business cycle of the client and the working capital gap and the drawing power of the client. This drawing power is determined, based on the stock and book debts statements submitted by the borrower at monthly intervals against the security by hypothecating of stock of commodities and/ or book debts. The excess withdrawal of cash is made generally on dema nd from the customer and the customer has to pay interest on the excess amount he/she has withdrawn. The cash credit facility is quite useful to those businesses where cash payment like wages, transportation, cash purchases are to be made and the receivables are not realized in time. An overdraft facility is a formal arrangement with a bank which allows an account holder to draw on funds in excess of the amount on deposit. Overdraft facility financing is most commonly used by businesses as a way of making their  working capital  more flexible, although it can also be available to individuals. Banks which offer this service typically have a number of expectations from customers who use it, and it is important to be aware of these expectations before entering an overdraft facility agreement. The idea behind overdraft facility agreements is that sometimes one needs a bit more money than is available on deposit to deal with various expenses. For example, a business w hich is always slow in March and April might like to use its overdraft facility to make  payroll  and keep current with all accounts and creditors. Or, a business might need to make a big one-time expense which exceeds the funds on deposit. With an overdraft facility, people can repay the funds at their convenience. The bank may charge an overdraft fee for accessing the overdraft facility, and the  interest rate  can be higher than that for other types of loans. The bank also has the right to demand repayment in full. Balancing an overdraft facility wisely can free up capital and make people more stable financially, but unwise use can lead people into a spiral of debt which may be difficult to escape. The amount of an overdraft facility is also curbed; people are not allowed to continually take money out and not repay it. The amount of the overdraft is usually pegged to account history and financial information, with the goal of ensuring that people do not end up borrowing more than they can realistically repay through an overdraft facility. The agreed limit can be negotiated with the bank, and some banks are willing to reevaluate if customers feel that their circumstances have changed. Similar to personal overdraft facilities, a business overdraft is a prearranged spending limit with your bank. Many businesses find an overdraft useful for those times when cash flow is a problem for a short period of time. Overdrafts are not a good option for funding larger needs, such as capital or expansion expenses. For these needs it is less expensive to obtain a separate business loan. Business overdrafts  may also be subject to more fees than a personal overdraft. Examples include fees to open the overdraft, to renew the overdraft, or sometimes even a fee for not using the overdraft. When used judiciously, overdraft facilities can be a great help in managing the occasional financial shortfall. Commercial Paper Commercial paper is a form of financing that consists of short-term, unsecured promissory notes issued by firms with a high credit standing. Generally, only large firms of unquestionable financial soundness are able to issue commercial paper. Most commercial paper issues have maturities ranging from 3 to 270 days. Although there is no set denomination, such financing is generally issued in multiples of $100,000 or more. A large portion of the commercial paper today is issued by finance companies; manufacturing firms account for a smaller portion of this type of financing. Businesses often purchase commercial paper, which they hold as marketable securities, to provide an interest-earning reserve of liquidity. Commercial paper is sold at a discount from its par, or face, value. The size of the discount and the length of the time to maturity determine the interest paid by the issuer of commercial paper. The actual interest earned by the purchaser is determined by certain calculations. Commercial paper is not  usually backed by any form of collateral, so only firms with high-quality debt ratings will easily find buyers without having to offer  a substantial discount (higher cost) for  the debt issue. For the most part, commercial paper is a very safe investment because the financial situation of a company can easily be predicted over a few months. Furthermore, typically only companies with high  credit ratings  and credit worthiness issue commercial paper. Over the past 40 years, there have only been a handful of cases where corporations have defaulted  on their commercial paper repayment. There are two methods of issuing paper. The issuer can market the securities directly to a  buy and hold  investor such as most money market funds. Alternatively, it can sell the paper to a dealer, who then sells the paper in the market. The dealer market for commercial paper involves large  securities  firms and subsidiaries of  bank  holding companies. Most of these firms also are dealers in  US Treasury securities. Direct issuers of commercial paper usually are financial companies that have frequent and sizable borrowing needs and find it more economical to sell paper without the use of an intermediary. In the United States, direct issuers save a dealer fee of approximately 5 basis points, or 0.05% annualized, which translates to $50,000 on every $100 million outstanding. This saving compensates for the cost of maintaining a permanent sales staff to market the paper. Dealer fees tend to be lower outside the United States. Bridge Finance Bridge financing  is a method of  financing, used to maintain  liquidity  while waiting for an anticipated and reasonably expected  inflow of cash. Bridge financing is commonly used when the cash flow from a sale of an asset is expected after the cash outlay for the purchase of an  asset. For example, when selling a  house, the owner may not receive the cash for 90 days, but has already purchased a new home and must pay for it in 30 days. Bridge financing covers the 60 day gap in cash flows. Another type of bridge financing is used by companies before their  initial public offering, to obtain necessary cash for the maintenance of operations. These funds are usually supplied by the  investment bank  underwriting  the new issue. As payment, the company acquiring the bridge financing will give a number of  stocks  at a  discount  of the issue price to the underwriters that equal ly offset the loan. This financing is, in essence, a forwarded payment for the future sales of the new issue. Bridge financing may also be provided by  banks  underwriting  an offering of  bonds. If the banks are unsuccessful in selling a companys bonds to qualified institutional buyers, they are typically required to buy the bonds from the issuing company themselves, on terms much less favourable than if they had been successful in finding institutional buyers and acting as pure intermediaries. There are 2 types of bridging finance which are closed bridging and open bridging. Closed bridging finance is where there is a date for the exit of the bridging finance and is sure that the bridging finance can be repaid on that date. This is less risky for the lender and thus the interest rate charged is lower. Open bridging is higher risk for the lender. This is where the borrower does not have an exact date for the bridging finance exit and may be l ooking for a buyer of the property or land. Capital Market A capital market is a market where both government and companies raise long term funds to trade securities on the bond and the stock market. It consists of both the primary market where new issues are distributed among investors, and the secondary markets where already existent securities are traded.  In the capital market, mortgages, bonds, equities and other such investment funds are traded. The capital market also facilitates the procedure whereby investors with excess funds can channel them to investors in deficit. The capital market provides both overnight and long term funds and uses financial instruments with long maturity periods. The financial instruments are traded in this market such as foreign exchange instruments, equity instruments, insurance instruments, credit market instruments, derivative instruments, and hybrid instruments. The primary role of the capital market is to raise long-term funds for governments, banks, and corporations while providing a platf orm for the trading of securities.  This fundraising is regulated by the performance of the stock and bond markets within the capital market. The member organizations of the capital market may issue stocks and bonds in order to raise funds. Investors can then invest in the capital market by purchasing those stocks and bonds.  The capital market, however, is not without risk. It is important for investors to understand market trends before fully investing in the capital market. To that end, there are various market indices available to investors that reflect the present performance of the market. Every capital market in the world is monitored by financial regulators and their respective governance organization. The purpose of such regulation is to protect investors from fraud and deception. Financial regulatory bodies are also charged with minimizing financial losses, issuing licenses to financial service providers, and enforcing applicable laws. Capital mark et investment is no longer confined to the boundaries of a single nation. Todays corporations and individuals are able, under some regulation, to invest in the capital market of any country in the world. Investment in foreign capital markets has caused substantial enhancement to the business of international trade. The capital market is also dependent on two sub-markets the primary market and the secondary market. The primary market deals with newly issued securities and is responsible for generating new long-term capital. The secondary market handles the trading of previously-issued securities, and must remain highly liquid in nature because most of the securities are sold by investors. A capital market with high liquidity and high transparency is predicated upon a secondary market with the same qualities. Money Market The  money market  is a component of the  financial markets  for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. Trading in the money markets involves  Treasury bills,  commercial paper,  bankers acceptances, certificates of deposit, federal funds, and short-lived  mortgage-backed and  asset-backed securities.  It provides  liquidity  funding for the  global financial system. The money market consists of  financial institutions  and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months. Money market trades in short-term  financial instruments  commonly called paper. This contrasts with the  capital market  for longer-term funding, which is supplied by bonds  and  equity. The core of the money market consists of banks borrowing and lending to each other, using  commercial paper,  repurchase agreements  and similar instruments. The money market is a subsection of the  fixed income  market. We generally think of the term fixed income as being synonymous  to  bonds. In reality, a bond is just one type of fixed income security. The difference between the money market and the bond market is that the money market specializes in very short-term debt securities (debt that  matures in less than one year). Money market investments are also called cash investments because of their short maturities. Money market securities are essentially IOUs issued by governments, financial institutions and large corporations. These instruments are very  liquid  and considered extraordinarily safe. Because they are extremely conservative, money market securities offer significantly lower returns than most other s ecurities. One of the main differences between the money market and the stock market is that most money market securities trade in  very high denominations. This limits access  for the individual investor. Furthermore, the money market is a dealer market, which means that firms buy and sell securities in their own accounts, at their own risk. Compare this to the stock market where a broker receives commission to acts as an agent, while the investor takes the risk of holding the stock. Another characteristic of a dealer market is the lack of a central trading floor or  exchange. Deals are transacted over the phone or through electronic systems. Venture Capital Funds Venture capital  (also known as  VC  or  Venture) is a type of  private equity  capital typically provided for early-stage, high-potential,  growth  companies in the interest of generating a return through an eventual realization event such as an  IPO  or  trade sale  of the company. Venture capital investments are generally made as cash in exchange for shares in the invested company. It is typical for venture capital investors to identify and back companies in high technology industries such as biotechnology and ICT (information and communication technology). A  venture capital fund  refers to a  pooled investment  vehicle that primarily invests the  financial capital  of third-party investors in enterprises that are too risky for the standard  capital markets  or  bank loans. Venture capital funds mean an investment fund that manage s money from investors seeking private equity stakes in startup and  small- and medium-size enterprises with strong growth potential. These investments are generally characterized as high-risk/high-return opportunities. Theoretically, venture capital funds give individual investors the ability to get in early at a companys startup stage or  in special situations  in which there is  opportunity for explosive growth. In the past,  venture capital investments were only accessible to professional venture capitalists. While a fund structure diversifies risk, these funds are inherently  risky. Most  venture capital funds  have a fixed life of 10 years, with the possibility of a few years of extensions to allow for private companies still seeking liquidity. The investing cycle for most funds is generally three to five years, after which the focus is managing and making follow-on investments in an existing portfolio. This model was pioneered by successful funds in  Silicon Valley  through the 1980s to invest in technological trends broadly but only during their period of ascendance, and to cut exposure to management and marketing risks of any individual firm or its product. In such a fund, the investors have a fixed commitment to the fund that is initially unfunded and subsequently called down by the venture capital fund over time as the fund makes its investments. There are substantial penalties for a Limited Partner (or investor) that fails to participate in a capital call. It can take anywhere from a month or so to several years for venture capitalists to raise money from limited partners for their fund. At the time when all of the money has been raised, the fund is said to be closed and the 10 year lifetime begins. Some funds have partial closes when one half (or some other amount) of the fund has been raised. Vintage year generally refers to the year in which the fund was closed and ma y serve as a means to stratify VC funds for comparison. This  free database of venture capital funds  shows the difference between a venture capital fund management company and the venture capital funds managed by them. Present Value Present value means the  current worth  of a future sum of money  or stream of cash flows  given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows.  Determining the appropriate discount rate is the key to properly valuing future cash flows, whether they are earnings or obligations. The calculation of discounted or present value is extremely important in many financial calculations.  For example, net present value, bond yields, spot rates, and pension obligations all rely on the principle of discounted or present value. If offered a choice between $100 today or $100 in one year  ceteris paribus, a rational person will choose $100 today. This assumes a positive interest rate for the time period. This is described by economists as Time Preference. Time Preference can be measured by auctioning off a risk free se curity like a US Treasury bill. If a $100 note, payable in one year, sells for $80, then the present value of $100 one year in the future is $80. This is because you can invest your money today in a bank account or any other (safe) investment that will return you interest. An investor who has some money has two options: to spend it right now or to save it. But the financial compensation for saving it (and not spending it) is that the money value will accrue through the interest that he will receive from a borrower (the bank account on which he has the money deposited). Therefore, to evaluate the real value of an amount of money today after a given period of time, economic agents compound the amount of money at a given (interest) rate. Most actuarial calculations use the  risk-free interest rate  which corresponds to the minimum guaranteed rate provided by your banks saving account for example. If you want to compare your change in purchasing power, then you shou ld use the  real interest rate  (nominal interest rate  minus  inflation  rate). The operation of evaluating a present value into the future value is called a capitalization (how much $100 today is worth in 5 years?). The reverse operation-evaluating the present value of a future amount of money-is called a discounting (how much $100 that I will receive in 5 years-at a lottery for example-are worth today?). It follows that if one has to choose between receiving $100 today and $100 in one year, the rational decision is to cash the $100 today. If the money is to be received in one year and assuming the savings account interest rate is 5%, the person has to be offered at least $105 in one year so that two options are equivalent (either receiving $100 today or receiving $105 in one year). This is because if you cash $100 today and deposit in your savings account, you will have $105 in one year. Internal Rate of Return (IRR) IRR means the  discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project  equal to zero. Generally speaking, the higher a projects internal rate of return, the more desirable it is to undertake the project. As such, IRR can be used to rank several prospective projects a firm is considering. Assuming all other factors are equal among the various projects, the project with the highest IRR would probably be considered the best and undertaken first. IRR can be treated as the rate of growth a project  is expected to generate. While the actual rate of return that  a given project ends up generating will often differ from its estimated IRR rate, a project with a substantially higher IRR value than other available options would still provide a much better chance of strong growth. IRRs can also be compared against prevailing rates of return in the securities market. If a firm cant find any projec ts with IRRs greater than the returns that can be generated in the financial markets, it may simply choose to invest its retained earnings into the market. Internal Rate of Return provides a simple  hurdle rate, whereby any project should be avoided if the cost of capital exceeds this rate. Usually a financial calculator has to be used to calculate this IRR, though it can also be mathematically calculated using the following formula: In the above formula,  CF  is the Cash Flow generated in the specific period (the last period being n). IRR, denoted by r is to be calculated by employing trial and error method. Because the internal rate of return is a  rate  quantity, it is an indicator of the efficiency, quality, or  yield  of an investment. This is in contrast with the net present value, which is an indicator of the value or  magnitude  of an investment. An investment is considered acceptable if its internal rate of return is greater than an established  minimum acceptable rate of return  or  cost of capital. In a scenario where an investment is considered by a firm that has  equity holders, this minimum rate is the  cost of capital  of the investment (which may be determined by the risk-adjusted cost of capital of alternative investments). This ensures that the investment is supported by equity holders since, in general, an investment whose IRR exceeds its cost of capital adds  value  for the company. Financial Ratio A  financial ratio  (or  accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprises  financial statements. Often used in  accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential  shareholders  (owners) of a firm, and by a firms  creditors.  Security analysts  use financial ratios to compare the strengths and weaknesses in various companies.  If shares in a company are traded in a  financial market, the market price of the shares is used in certain financial ratios. Ratios may be expressed as a  decimal  value, such as 0.10, or given as an equivalent  percent  value, such as 10%. Some ratios are usually quoted as percentages, especially ratios that are usually or alwa ys less than 1, such as  earnings yield, while others are usually quoted as decimal numbers, especially ratios that are usually more than 1, such as  P/E ratio; these latter are also called  multiples.  Given any ratio, one can take its  reciprocal; if the ratio was above 1, the reciprocal will be below 1, and conversely. The reciprocal expresses the same information, but may be more understandable: for instance, the earnings yield can be compared with bond yields, while the  P/E ratio  cannot be: for example, a P/E ratio of 20 corresponds to an earnings yield of 5%. Financial ratios quantify many aspects of a business and are an integral part of financial statement analysis. Financial ratios are categorized according to the financial aspect of the business which the ratio measures.  Liquidity ratios  measure the availability of cash to pay debt.  Activity ratios  measure how quickly a firm converts non- cash assets to cash assets.  Debt ratios  measure the firms ability to repay long-term debt. Profitability ratios  measure the firms use of its assets and control of its expenses to generate an acceptable rate of return. Market ratios measure investor response to owning a companys stock and also the cost of issuing stock. Financial ratios allow for comparisons between companies between industries between different time periods for one company between a single company and its industry average Ratios generally hold no meaning unless they are  benchmarked  against something else, like past performance or another company. Thus, the ratios of firms in different industries, which face different risks, capital requirements, and competition are usually hard to compare. Cash Budget Cash budget means an estimation of the cash inflows and outflows for a business or individual for a  specific period of time. Cash budgets are often used to assess whether the entity has sufficient cash to fulfill regular operations and/or whether too much cash is being left in unproductive capacities. A cash budget is thus a statement in which estimated future cash receipts and payments are tabulated in such a way as to show the forecasted cash balance of a business at defined intervals. The cash budget is one of the most important planning tools that an organization can use. It shows the cash effect of all plans made within the budgetary process and hence its preparation can lead to a modification of budgets if it shows that there are insufficient cash resources to finance the planned operations. It can also give management an indication of the potential problems that could arise and allows them the opportunity to take action to avoid such problems. A cash budget can sh ow four positions. Management will need to take appropriate action depending on the financial position. A cash budget is prepared to show the expected receipts of cash and payments of cash during a budget period. Receipt of cash may come from one or more of the following Cash sales. Payment of debtors (credit sales). The sale of fixed assets. The issue of new shares or loan stock. Receipt of interest and dividends from investments outside the business. Payments of cash may be for one or more of the following. Purchase of stock. Payroll costs or other expenses. Purchase of capital items. Payment of interest, dividends and taxation.

Continuing Academic Success Essay - 1166 Words

Continuing Academic Success Keyaria Tompkins GEN/201 September 22, 2014 Maureen Parker Continuing Academic Success Of course everyone wants to be successful! It takes 100% of effort and determination to be successful. Maintaining believable goals keeps you on track for the road of success. If you keep your goals in mind, you will not astray from them. Achieving goals that you have set for yourself is your responsibility. It is easy to get distracted from your academic goals, if they are not maintained on a daily basis. Continuing academic success has helped numerous of students succeed. Continuing academic success means to have an advantage by resuming academic growth in an educational environment. Success†¦show more content†¦A goal is the object or aim of an action, for example, to attain a specific standard of proficiency, usually within a specified time limit. As industrial-organizational psychologists, our primary interest has been to predict, explain, and influence performance on organizational or work-related tasks. Thus, we focused on the relationship between conscious performanc e goals and level of task performance rather than on discrete intentions to take specific actions (e. g. , to apply to graduate school, to get a medical examination). According to Dobbins, Pettman, 1997, Set Goals It’s mandatory to set goals, so that you can be successful. Goal setting can help an individual tremendously because they can set short term goals and accomplish them. I have many goals, dreams and aspirations†¦ My lifetime goal is to become a CEO of a 500 fortune company 10 years from now. Setting short term goals can help me achieve my long term goals and get closer to my dreams. Setting goals can also give me a peace of mind and keep me focused . Time management gives you the opportunity to get a lot done throughout the day. Eventually you will be able to accomplish small to larger tasks. Setting goals and managing time, you would surely achieve your set goals. Skills that you learn daily from school or your personal life can be used as transferable skills that will help you advance at being successful. We know that success is derivedShow MoreRelatedContinuing Academic Success1112 Words   |  5 Pages Continuing Academic Success Continuing Academic Success is extremely important to those who plan to make advancements in their chosen career fields. It provides the opportunity to keep current with ideas, techniques, and advancements that are being made in their area of employment. We will address the importance of setting achievable goals, the importance of learning styles in academic success and the validity of ethics and academic integrity in helping to achieve continuing academic and professionalRead MoreContinuing Academic Success1359 Words   |  6 PagesContinuing Academic Success Name GEN/201 Date Teacher Name Continuing Academic Success Achieving academic success is something that many individuals consider to be a challenging task. Some people even think that it might be too difficult to worry even about trying to achieve it. While attempting to reach your goal in obtaining academic success, you must meet your university’s expectations and guidelines to reach your goal of being awarded a degree. If you want to thrive in school, youRead MoreContinuing Academic Success1559 Words   |  7 PagesCONTINUING ACADEMIC SUCCESS Dale Ray Blackard GEN/201 5/23/2016 Laticia Dezell Continued Academic Success Continuing academic success opens opportunities for advancement and increases monetary value based upon transferred knowledge. Education promotes a person as a dedicated person that does the necessary actions to accomplish the personal preference of the goal desired. One who exemplifies this internal drive receives advancements in the work place. Promotions and added responsibilities areRead MoreContinuing Academic Success Essay1196 Words   |  5 Pagesï » ¿Continuing Academic Success Alejandra Ruvalcaba General Education 12/13/14 Pete Medina â€Å"Continuing Education Success†, personally I never even thought about this nor about setting educational goals for myself, like obtaining a bachelors in criminal justice to achieve a good paying job. In this class I learned how important it is to make my education a priority so I do not get sidetracked by other things that are also important in my life. Setting educational goals for my academic success is aRead MoreContinuing Academic Success Essay1172 Words   |  5 PagesContinuing Academic Success When looking at continuing academic success one must make several critical decisions; chose if continuing going to school is the right choice for them. Most of the time when people come to that decision, they come to realize several things. That it is important to continue academic success because it helps you set goals for your academic success, helps you strengthen your learning style, and there are so many sources out there to help you succeed. When one makes thatRead MoreContinuing Academic Success Essay1502 Words   |  7 Pagesï » ¿ Continuing Academic Success Francheska Masoller GEN/201 Foundations for University Success July-28, 2014 Ann Zomerfeld Continuing Academic Success It is a big step for someone who has been out of school for so long, to have the courage to begin the journey of higher education. Personally, it took me several years of contemplating if going back to school was the right move for me. I postponed it until I realized this was the only way I could provide my family with the life I’veRead MoreEssay about Continuing Academic Success1075 Words   |  5 PagesContinuing Academic Success GEN/201 â€Æ' Continuing Academic Success Achieving success is something that many consider to be difficult, sometimes too difficult to be worth even trying. But there are many tools and processes available to help people be successful. By knowing what these tools and processes are, students are able to achieve not only academic success, but also be successful in many other areas of their lives. Setting goals is an important step in achieving success. By recognizing yourRead MoreGen200 Continuing Academic Success Essay1253 Words   |  6 Pagesï » ¿ Academic Success xxxx University of Phoenix GEN200 – Foundations for General Education xxxx xxxx Academic Success Technology and industry is growing at an ever increasing rate, and each year there are new devices or concepts adopted by business wanting to be on the cutting edge. Workers and leaders also need to stay on the cutting edge as well if they desire to excel in their careers. Often, this means that the working adult will return to a learning environment to earn a certificationRead MoreCaress Alexander gen201 r2 using sources Essay758 Words   |  4 PagesSources Review the Continuing Academic Success assignment requirements from Week 5. Conduct research in the University Library to find at least three sources that are relevant for your Week 5 essay. Complete the following table for each source you have chosen. Include the original passage when you provide the summary, paraphrase, and quote. Source 1 Title of the article The influence of motivational orientations on academic achievement among working adults in continuing education Why did youRead MoreEssay about Academic Success1210 Words   |  5 PagesContinuing Academic Success Kasey E Marsh II Gen/200 3/1/2015 Susie Holiday Continuing Academic Success The end is near to my first class at the University of Phoenix. As I continue on with my education, I would like to have great academic success. Academic success can be achieved by being aware of one’s goals, the writing process and the importance of critical thinking skills. By knowing these things, I believe my academic success will be achievable. Goals Setting

Reliable, Ultimate Security For Homes - 1632 Words

RUSH (RELIABLE, ULTIMATE SECURITY FOR HOMES) INTRODUCTION Home security systems is no longer a luxury but a necessity in todays high crime society. Burglary is a crime New Zealanders are most likely to suffer. Our solution to this problem is a smart home security application that would allow us to effectively and efficiently notify police and homeowners discretely, as well as accurately identify the stolen items. Thus, minimizing chances of a thief escaping conviction and ultimately reduce the annual burglary rate and provider safer homes. 3. BUSINESS SECTION 3.1 Vision Our vision is to be industry leading and provide affordable, user friendly, effective and efficient home security for society; giving users peace of mind and a secure home. 3.2 Industry Analysis: Home Security Application Industry Industry: Home Security Application Industry Force: High/Low: Justification: Buyer power: High There are numerous home security applications available for example, AlarmForce (VideoRelay), SimpliSafe Security and Vivint Thus high buyer power as buyers have more options to choose from. (Voss, 2006) Supplier power: Low More than 10 mobile platforms and thousands of application developers are in market. Registered developers have increased from just 3,000 to over 130,000 in the past 22 months (Mace, 2005). Therefore supplier power is low due to numerous choices. Threat of new entrants: High There are no entry barriers making it relatively easy for new competitors to enter intoShow MoreRelatedThe Best Home Security Service Company949 Words   |  4 Pagesof home burglary across the globe has been decreasing over the recent past. However, this does not mean that your home is totally safe. There are still a significant number of criminal elements in your neighborhood who pose a formidable danger to your peace. Contract the best home security service company and eliminate this risk. In service selection, customer satisfaction is always the prime factor. The customer should be guaranteed a 5 star service. The provider must be honest and reliable. InRead MoreAustralia s Leading Digital Solutions Agency1058 Words   |  5 Pagesagreement including cloud hosting, backups plus ongoing maintenance and security checks. Strategy to concept to implementation, followed by ongoing support – that’s the Exa way. Exa’s solutions are built on a framework that combine a digital strategy, online marketing, cloud-based SaaS (Software as a Solution) solutions, enterprise applications and systems integration, to become a one-stop shop for businesses who require the ultimate in tailored digital platforms that are easily workable and generateRead MoreMicrosofts Operating Systems And Security Features1502 Words   |  7 PagesWindows has evolved into an operating system that is very reliable and dependable when it comes to getting task done on a daily basis when a computer system is needed. â€Å"In 1975, Gates and Allen form a partnership called Microsoft. Like most start-ups, Microsoft begins small, but has a huge vision—a computer on every desktop and in every home† (Microsoft.com). In this paper I will discuss the history of Microsoft’s Operating systems and security features available during each stage of advancement overRead MorePower Grid Systems ( Essp 2015 )1556 W ords   |  7 PagesElectricity Subsector What was once a novelty; energy is now the ultimate necessity for any modern country. A sustain power grid is what separates a solvent nation from a third world country. The scenario of one of the three power grids failing would cause chaos to that area but would be sustainable with the capabilities of the remaining grid systems (ESSP 2015). A major sustain loss of power grid across the United States would interrupt commerce of the food chain via manufacturing and deliveryRead MoreThe Health Financing Mechanisms Of Four High Income Countries Essay1093 Words   |  5 Pages(1). However, there are several steps and obstacles a government must face before being able to achieve the ultimate goal of universal health coverage. This paper investigates the health financing mechanisms of four high-income countries (United States, Australia, United Kingdom, and Japan), which are all at different stages of this process. Although they all aim to ultimately provide reliable, affordable, and com prehensive coverage to all individuals, these countries face similar obstacles in establishingRead MoreEssay about Internet Security1320 Words   |  6 PagesInternet Security Security is crucial to any flourishing society such as the one in which we Americans live today. Imagine if there was no law enforcement in New York City. No one except criminals would dare to walk down the streets. People would live in fear every day. No one would work and no one could enjoy nature and the outdoors. We would all barricade ourselves indoors, only daring to venture outside into the dangerous world when we absolutely needed to. Everything would be differentRead MoreThe Golden Age Hospital888 Words   |  4 Pagesthe same task as the doctor if needed. Our receptionist, cleaning crew, and security, will be hired based on personality and recommendations. The interviewer will evaluate the interviewee’s character and call all recommendations listed by the interviewee. This will solidify our trust that the employee hired is overall a reliable person. There will be no need for experienced receptionist, cleaning crew members, or security. There will be paid training available to ensure all of our employees are motivatedRead More Should We Cast the Ballot Electronically? Essays1716 Words   |  7 PagesBallot Electronically? With the advancement of technology in the United States today, many are drawn to the idea of making elections available electronically. Although the technology is available, it is important to consider if it is safe and reliable. Electronic voting could have many negative implications on our society if it isn’t completely safe. In this paper, I will explore why this is such an important issue, who is affected, and how and if our new technology integrated into our votingRead MoreImproving Health Care through Smartphones and Apps1365 Words   |  5 Pages mediate a range of interventions, and provide communications with other devices and systems† (Kumar, Nilsen, Pavel, Srivastava, 2013). This gives patients the opportunity to receive medical support when they need it, where they need it. The ultimate goal of primary health care providers is to better the health of their patients. Thanks to rapidly growing technological advances, health care providers have been given t he opportunity to improve the health and well- being of their patients throughRead MoreNadine Gordimer Essay on Irony1171 Words   |  5 Pagestrying to write a story for children. She uses the fairytale-like language to clarify the irony in the story. One of the more interesting examples of irony I found in the text was where the author wrote â€Å"Consult DRAGON’S TEETH The People For Total Security†¦Ã‚   One evening, the mother read the little boy to sleep with a fairy story from the book the wise old witch had given him at Christmas. Next day he pretended to be the Prince who braves the terrible thicket of thorns to enter the palace and kiss

The Importance Of Artificial Intelligence - 2186 Words

It is the 21st century now; things have changed, such as people‘s mind, tools, and policies, especially the learning environment. Learning areas are not limited to the classroom; it could happen at anywhere, such as the library, home, garden, etc. Therefore, because it was the 21st century, we also need to learn 21st-century skills. Pellegrino and Hilton (2012) mentioned, 21st-century skills include cognitive abilities (nonroutine problem solving, system thinking, and critical thinking), interpersonal skills (range from active listening, to presentation skills, to conflict resolution), and interpersonal skills (broadly clustered under adaptability and self-management/self-development personal qualities. 21st-century skills are critical†¦show more content†¦Digital technologies are electronic tools, systems, devices and resources that generate, store or process data. These include social media, online games and applications, multimedia, productivity applications, cloud computing, interoperable systems and mobile devices (Victoria State Government, n.d.). Thus, many people think digital technology and education has connected with each other. They believe that the school is making students learning and spreading the knowledge of society, and digital technology is providing skills for students to be better understand the theory idea, information, and intelligent behaviour (Woolf, Lane, Chaudhri and Lolodner, 2013). Digital technology also could help the teacher to develop the personalized educational programs for individuals or groups of students, and even help students use a range of learning styles and methods. Thus, in this essay, I will discuss the problems and the role of digital technology in education, and find some ideas could help the school in the future through digital technology. Nowadays, more and more people depend on digital products. Digital technologies are everywhere, and even bringing many exciting opportunities for the society, especially for the schools (Ministry of Education, 2017). Therefore, not only adults using or play smartphone or tablets at school or outside the classroom, but also many younger people since from their early age have started to use it. From primary,Show MoreRelatedThe Importance Of Artificial Intelligence1302 Words   |  6 PagesArtificial intelligence is the utilization of computers to imitate human brains in restricted domains. This is a consequence of developing computer which carry on logically, reason rationally and can adequately decipher its surroundings continuously in real time. Artificial Intelligence is no longer a fictionist concept, the superior computing prowess of artificial intelligence has enabled them to surpass humans in problem solving. They have made it conceivable to recreate complex activities thatRead MoreImportance Of Artificial Intelligence1156 Words   |  5 PagesTitle: Understanding Emotional Intelligence and its role in development of AI Introduction In 1983, Howard Gardener, an American psychologist proposed eight (originally seven) types of intelligences (Gardner, Howard, 1983, Frames of Mind: The Theory of Multiple Intelligences). Emotional Intelligence was not one of the eight as it did not fulfill eight criteria set by Gardener which all intelligence must meet. It is interesting that Gardener gave interpersonal intelligence place in the list as it dealsRead MoreImportance Of Artificial Intelligence1409 Words   |  6 Pagesmost famous science fiction writers, artificial intelligence ( AI) is taking root in our everyday lives† ( Science Fiction to Reality 1). Artificial Intelligence is a machinery which includes network and a probabilistic model. Artificial intelligence is the computer that can now spontaneously translate spoken and written conversation. It can also recognize and accurately cations photos, identify faces and can be your personal assistant. Artificial intelligence has specific technologies, like theRe ad MoreThe Importance Of Artificial Intelligence2225 Words   |  9 Pagesthe 21st century, especially the artificial intelligence (AI). According to Stanford (2016) mentioned that the artificial intelligence (AI) is a science and a set of computational technologies that are inspired by—but typically operate quite differently from—the ways people use their nervous systems and bodies to sense, learn, reason, and take action. Since the first artificial intelligence in 1956, and with the development and progress of artificial intelligence, it is affected in many sectorsRead MoreThe Importance Of Artificial Intelligence In The Military1524 Words   |  7 PagesAs humanity becomes more technologically advanced, the development of artificial intelligence for specific fields of work is becoming more prevalent. One of these fields where artificial intelligence (AI) is beginning to grow rapidly is in the military. All branches of the military are beginning to develop and im plement AI on the battlefront in order to replace human soldiers. However, the use of AI to perform life and death decisions is a highly debated over topic. The morals and ethics behindRead MoreRationalism vs. Irrationalism1607 Words   |  7 Pagesrationalistic perspecive we observe the mind as active, the emotions passive, and the notion that no material thing can cause an nonmaterial idea; however from the viewpoint of irrationality I will prove that: 1) Emotion is in fact not passive and 2) Intelligence can be created materially. Before going into detail on irrationalism I wish to explore the rationalistic perspective. The rationalist tends to believe in the existence of truths that could not be discovered through the senses alone,Read MoreFuture Of Life : Thanks With Artificial Intelligence1451 Words   |  6 PagesFuture of Life: Thanks to Artificial Intelligence Artificial Intelligence is soon to be a massively important and relevant part of our future. I have no doubt about it, and knowing this... I began my research simply wanting to know more about AI and it’s current and speculative uses and capabilities. I wanted to know how we planned to accommodate for the biggest change our species has ever experienced, I wanted to find out how legislature would adapt, how research would spring up, how productionRead MoreArtificial Intelligence Essay1008 Words   |  5 Pagesworld. We’ll be their butlers soon enough.†(Brain Quote) Artificial Intelligence is the development of computer systems that normally require human intelligence. This (Artificial Intelligence) has lead to countless short-term positives such as â€Å"improving the speed, quality, and costs of available goods and services (Karsten and West 1). (This being said from the Brooking institution) However, as businesses continue to use Artificial Intelligence to inc rease extra goods and make more money, they willRead MoreEssay on The Turing Test1426 Words   |  6 Pages One of the hottest topics that modern science has been focusing on for a long time is the field of artificial intelligence, the study of intelligence in machines or, according to Minsky, â€Å"the science of making machines do things that would require intelligence if done by men†.(qtd in Copeland 1). Artificial Intelligence has a lot of applications and is used in many areas. â€Å"We often don’t notice it but AI is all around us. It is present in computer games, in the cruise control in our cars and theRead MoreArtificial Intelligence Essay924 Words   |  4 Pagesthese problems. The study of Intelligent Systems, often called â€Å"artificial intelligence† (AI), uses computation as a medium for simulating human perception, cognition, reasoning, learning, and action. In the case of artificial intelligence, the first thing that usually comes to mind is that AIs are convenient for mankind. It makes life much easier having the artificial intelligent systems to do peoples works. Having artificial intelligence around not only cuts the tasks in half, but also it saves lots

Understanding Oil and Gas

Question: Describe about following points..The route of your product through the oil and gas industry sectors. The impact, if any, by International Oil Companies (IOCs), National Oil Companies (NOCs) and Government agencies. The factors that may effect the demand and supply of these products. Answer: Introduction Oil and gas industry is known as one of the largest in the world in terms of revenue generation. This report presents a brief overview of oil and gas industry. It presents a discussion about the products derived from natural gas and crude oil such as ammonia and petrol. Additionally, the report focuses on the impact of international oil companies, national oil companies, and government agencies on oil and gas industry. Moreover, this report provides the factors that affect demand and supply of ammonia and patrol, which are selected in this report. Oil and gas industry: It is a well-known fact that oil and gas industry is the biggest sector of the world in term of monetary value. This industry is assumed as a global powerhouse in terms of job creation and in generating revenues (Hilyard, 2012). In this way, the oil and gas industry is a major contributor to the growth of OPEC nations like Dubai, Kuwait etc. Natural gas: Natural gas is a highly flammable product. It is a mixture of methane, nitrogen, hydrogen sulfide, carbon dioxide, helium and other higher alkenes. It is used to make fuel, paint, LPG, ammonia etc. Ammonia: Ammonia is an inorganic product that is derived from Natural gas. Ammonia was discovered for first time in 1774 by a chemist Joseph Priestley. It is produced by Haber process from nitrogen and hydrogen (Roney, 2011). Firstly, the natural gas is cleaned from sulfur and then mixed with heated water and supplied it to reactors, where itis passed to catalyst beds. This stage is known as gas vapor conversion. After this stage, a mixture of methane, hydrogen, carbon oxide (CO) and carbon dioxide (CO2) are produced by the reactor. After then, this mixture is mixed with atmospheric oxygen, nitrogen, and vapor in appropriate proportion. Atthe end of this stage, carbon monoxide (CO) and carbon dioxide are detected from the mixture. After this, themixture of nitrogen and hydrogen is passed with high pressure of atmospheres to the high cooling area, and then it turns into liquid form. This form of ammonia is used to cleaning, deodorizing and bleaching activities. It also used for the pr oduction of fertilizer and chemicals (Liu, 2013). Crude Oil: Crude oil is a compound of hydrocarbons and other organic materials. It is processed to produce different products like Petrol, diesel, jet fuel, heating oil, kerosene and many more products (Shah, 2011). Petrol: Petrol is a liquid product that is produced by the refining of crude oil. The crude oil is heated to 900 F temperature in a Coker and boiled at 104 F to produce petroleum. This boiling process is conducted at a temperature of 1112+ F. This process uses hydrogen to remove Sulfur products and converts it into naphtha molecule, which is the end product of petrol. At the end of this process, heavy residual oils are converted into end product as petrol by using of delayed coking unit. This end product (i.e. petrol) is used for internal combustion of the engine for cars, bikes, boats, trucks and more. Upstream, Midstream, and Downstream in oil and gas industry: Oil and Gas industry is very big. It can be divided into three key areas such as upstream, midstream and downstream. Upstream: Upstream is also known as EP (Exploration and Production) sector. Upstream tends to identify the underwater and underground fields of gas and crude oil. It also includes exploration of drilled wells and operating the wells to recover oil and gas on the surface. Midstream: It is an operational link between the upstream and downstream units. Examples of midstream unit are Kinder Morgan and Williams Companies, which provide resources to Midstream and Downstream units. Downstream: Downstream tends to filter of raw materials that are obtained from the upstream phase. In other words, it is a phase, in which natural gas is purified and crude oil is refined. It also includes the marketing and distribution of crude oil and natural gas products like petrol, diesel, lubricants, kerosene, heating oil, LPG as well as in other forms of petrochemical products. The impact of International Oil Companies (IOCs), National Oil Companies (NOCs) and Government agencies (GA): International oil companies significantly affect oil and gas industry as well as its products. For example, if these oil companies produce a low quantity of crude oil and natural gas than the prices will hike in the whole world. This way, all the products related to this industry will become expensive. It is because the international oil companies control over all supply of petroleum products of the world. In the same manner, the National Oil companies will also affect the prices of oil and petroleum products in countries, as they rely on IOCs. NOCs will need to increase the price with a hike in crude oil prices by IOCs. In this concern, Government agencies keep high-level control on domestic oil and gas sector. Government agencies frame regulations related to health and environment safety for regulating this sector. These agencies control the trade of oil and gas by enforcement of regulations and taxes. It also designs different rules and waste regulations for controlling this industry. Factors that may affect the demand and supply of the selected products: There are various factors such as; price, the cost of production, natural conditions, technology, transport, government policies, prices of related goods etc, which affect the demand and supply of a petroleum/gas and related products (Moon, 2013). Descriptions of these factors are as below: The price of Crude: If the price of crude oil increases, the price of Ammonia and Patrol will also increase. The increase in the price of these products will affect the demanded quantity of these commodities negatively. In other words, there is an inverse relation between the price and demand. At the same time, from the point of view of oil and gas companies, the increase in the price of oil and gas products will lead to increase in the supply of these products (Mendes, 2011). Because, when prices increases than the suppliers of these products try to earn more revenue. For this, they will increase the supply of these products. The cost of production: If the cost of production of these products increases, then the profitability decreases. In this way, the seller will increase the price of its products. Increase in price will lead to a decline in demand (Ruttan and Thirtle, 2014). Natural conditions: Natural condition also affects the demand and supply of the products. In the rainy season, the demand for fertilizer products increases. The demand of Ammonia will rise because it is used in the production of fertilizer products. Technology: Technology is an important determinant of demand and supply. Advanced and best technologies decrease the cost of production and enhance the quality of the product (Meijer et al, 2012). This will lead to an increase in demand for products. It is because the cheap and qualitative products are more demanded in the market. So, the improved technology will increase demand and supply of these products. Transport: It an important factor, as it directly affects the demand and supply of the product. If there is a good transport facility for transportation of these products, then the supply of the products will increase (Desjardins, 2014). Due to poor transportation condition, the supply of the product will decrease and the demand for the product will increase there. Factor prices of input products and their availability: If the inputs like equipment, raw material, labor, and machines are available in enough quantity at lower prices, then it will increase the production of goods (Zinnert, 2010). This increased quantity of these products will increase the supply of the product. For example, if these factors are available nearby the manufacturing plants of Ammonia and Patrol, then it will be helpful in reducing the cost of manufacturing. As a result, it will increase the production and supply of the product. Government policies: The different government policies like monetary policy; fiscal policy etc. also have a greater impact on the supply and demand. If the taxes and excise duties are increased than the cost of production also gets increased (Nechyba, 2010). In this case, the companies will decrease the supply of the product due to low-profit margin. On the other hand, if the price of the product is increased by the manufacturing firms to maintain its revenue, then the demand for that product will generally decrease. Prices of related goods: This factor refers to the price of substitute goods and complementary goods. If the price of these goods is increased, then suppliers will increase the supply of products to earn more revenue. But, if the customers are switched to lower priced product then, it will decrease the demand for these products, Conclusion From the above report, it is concluded that Oil and Gas industry is an important sector of the economy of every country. Upstream, downstream and midstream are the important areas to recover the oil and gas on the surface. It is also identified from the above discussion that there are different factors affecting demand and supply of oil and gas products like the price of crude oil, change in government policies, change in technology and quality of transport facility etc. Additionally, IOCs, NOCs, and Government agencies also affect Oil and Gas industry in a great manner by the formulation of different policies and tax rates. References Desjardins, R. (2014) Rewards to skill supply, skill demand and skill match-mismatch: Studies using the Adult Literacy and Lifeskills survey. UK: Lund University. Hilyard, J. (2012) The Oil Gas Industry: A Nontechnical Guide. USA: PennWell Books. Liu, H. (2013) Ammonia Synthesis Catalysts: Innovation and Practice. UK: World Scientific. Meijer, M., Haar, M., and Lousberg, J. (2012) The Demand Supply Governance Framework. USA: Van Haren. Mendes, P. (2011) Demand Driven Supply Chain: A Structured and Practical Roadmap to Increase Profitability. UK: Springer. Moon, M. (2013) Demand and Supply Integration: The Key to World-Class Demand Forecasting. USA: FT Press. Nechyba, T. (2010) Microeconomics: An Intuitive Approach with Calculus. USA: Cengage Learning. Roney, N. (2011) Toxicological Profile for Ammonia. USA: DIANE Publishing. Ruttan, V., and Thirtle, C. (2014) The Role of Demand and Supply in the Generation and Diffusion of Technical Change. UK: Routledge. Shah, S. (2011) Crude: The Story of Oil. USA: Seven Stories Press. Zinnert, S. (2010) Integrative Long-Term Supply Chain Demand Planning. UK: Logos Verlag GmbH.

Customer Knowledge Management

Question: Describe about the Customer Knowledge Management? Answer: Introduction: The report provides a deep insight into the operations management of Starbucks in the United Kingdom. The major component activities of the Company have been identified along with evaluation of performance objectives used by each of the components. The report also highlights upon the critical analysis of the performance management along with recommendations about ways to enhance organizational performances by Starbucks. Company Background: Starbucks Corporation is a global brand and is considered to be one of the leaders in coffee creamer industry in the United Kingdom. It has been focusing on the upper class customer group who value high quality coffee. It maintains a market segment within the specific industry which involves students, adults of middle ages, also loyal customers in all age groups (Starbucks puts a degree on the menu for 135,000 employees, 2014). The Company has been established on the idea that consuming a cup of coffee must be a matter of social experience. With time, besides brewed coffee as well as espresso drinks, Starbucks has added ready-made breakfast sandwiches, coffee merchandise, lunch items, branded beverages, music, films, books, etc (Snyder, 2006). The Company had adopted some key effective strategies in order to five a tough competition to its rivals such as McDonalds, Dunkin Donuts, etc. It has focused upon social responsibility ad campaigns which remind customers of humanitarian as wel l as outreach programs that lead customers to consider not just the premium price of its products but also global costs as well as impacts (Baker, 2004). It also stresses upon the fact that it uses the best beans in the world. There are some key component activities of the Company that establish individual performance objectives to operate sustainably in the competitive environment. These activities of Starbucks have been discussed in detail along with the performance objectives and progress. Transforming its Supply Chain: With the aim of transforming its supply chain and considering rise in operational costs along with declining sales, Starbucks has implemented a three-step strategy for improving performance of supply chain, reducing costs, and preparing for future (Ritson, 2007). The first step was reorganizing its supply chain by separating four functions of planning, sourcing, making and delivering. All manufacturing activities, if in-house activity or contract basis, were assigned to the unit of making functional unit. Activities of transportation, customer service, and distribution are assigned to deliver category. Then the step of cost reduction as well as improvement of efficiencies was practiced (Paryani, 2012). The manufacturing team had developed an efficient model to deliver coffee beans to the processing plants. For sustaining the equivalent momentum to improve as well as to ensure future effective flow of organizational talent, the Company has begun the policy of recruiting top talented p eople. It also planned to provide them with adequate training for enabling their further developments and growth. Performance Objectives: The five performance objectives that have been identified here are QualitySpeedDependabilityFlexibilityCost Quality Assurance Product Recalls: Starbucks is said to place greater importance to safety as well as wellbeing of its customers as well as partners. The quality assurance procedure of the Company is utterly rigorous and that it extends towards the whole supply chain right from coffee, products of dairy, and various other agricultural items to manufactured products like mugs, brewers, and gift items (Taylor, 2008). The Companys commitment towards product safety refers to not only complying with legal legislations as well as operating with complete transparency, but also seeks to conduct the right things for its customers(Chua and Banerjee, 2013). Business partners, shareholders, and environment. The quality experts, coffee buyers and agronomists of Starbucks often travel distances to reach the perfect farm. With every individual product that Starbucks is said to brand, market and sell, or even used in its operations, the Company maintains its commitment towards product quality as well as strives to source all its prod ucts in manner that is socially as well as environmentally responsible (Birge and Linetsky, 2006). Integrating Corporate Social Responsibility: The commitment towards excellent governance, social responsibility and that of ethical practices are the core strategies of the Company to conduct business as well as stay strongly aligned with its drive for creating as well as increasing value of shareholders. It aims at maintaining effective relationship with the stakeholders to gain their feedback upon cases of mutual importance. Starbucks aims at practicing corporate social responsibilities to gain benefits like attracting as well as retaining its partners, achieving customer loyalty, reducing costs of operations, strengthening its supply chain, and also licensing its operations (Keenan and Evans, 2013). The manner by which the corporate social responsibility is managed at the company has been emerging continuously for ensuring all issues have been identified and addressed systematically as well as integrated manner. Starbucks depends upon a dedicated group of CSR whereby daily activities are reported to the senior vice president of the group. Apart from this, it has established a team of three cross functions with responsibilities regarding corporate governance(Marques, 2008). Dependability: The stakeholders of the Company include partners like employees, clients, suppliers, governments, shareholders, environmental groups, community, activists, etc. It aims to engage its stakeholders proactively and all others who may directly impact upon the business decisions (Halper, 2006). By this Starbucks effectively understands various concerns. The Company has been quite effective in delivering its performance in this respect. A meeting was held in 2005 for exploring health as well as wellness issues within the industry of food. It aimed at better understanding the expectations of the stakeholders about nutrition issues, learning how efforts are perceived and forming the basic platform for various undertakings(Halachmi, 2002). The company had even discussed upon playing role of both user of water resources by means of its supply chain as well as operations, and also supporting accessibility of clean water across the world. The Company had held a feedback session for gaining initi al input upon the creation of sustainable buying guidelines for cocoa piloted in finance year 2007 (Beamon and Kotleba, 2006). Flexibility: After several years of travel to various coffee-producing regions across the globe, the Company has been deeply appreciating the care it involved in acquiring the best quality of coffee. The quality experts, coffee buyers and agronomists of Starbucks often travel distances to reach the perfect farm (GAUDIO, 2003). With every individual product that Starbucks is said to brand, market and sell, or even used in its operations, the Company maintains its commitment towards product quality as well as strives to source all its products in manner that is socially as well as environmentally responsible. It is known as sustainable trade. On walking in of every customer, Starbucks considers it to be an opportunity for sharing its knowledge as well as passion of coffee, serving the customers with the best possible quality of beverage, and imparting them with an experience so that a mere customer becomes its loyal customer (Freeburg, 2012). The Company even aims at creating the ultimate experienc e for the customers every time. The Company better understands the customer expectations and what makes them pay at premium. The Company achieves its objective by focusing upon the most essential requisite of quality products and excellent relaxing experience (Beamon and Kotleba, 2006). Cost: For assuring that farmers receive an equivalent share of price that is paid by Starbucks, an economic transparency is required to be included in the coffee contracts including that of with its suppliers who participate in the practices of C.A.F.E. Starbucks aims at achieving such economic transparency (Forgues, 2008). It therefore stipulates that its suppliers should provide authentic payment evidence basically in the form of receipts that indicate payments undertaken at different levels in the coffee supply chain. While the firm is encouraged by recent progress, such institutionalizing of new requirement includes some challenges, like coffee industry lacks standardized approach which permits every party across coffee supply chain to submit payment evidence easily and consistently (Cole, 2008). Starbucks provides various forms of documentation right from the basic receipt of coffee cherries delivered by farmers to the mill for purchasing agreements including several levels in the sup ply chain of coffee industry. Starbucks share common goals with that of Fair Trade movement. It aims at ensuring that farmers get fair and just process for the coffee they generate and also to have an enhanced access to the global markets. Commitment to Health and Wellness: The World Health Organization had introduced a plan in 2004 that calls for attention towards growing epidemic diseases attributed to poor unhealthy diet, lack of obesity and exercise. As per the organization, obesity has been a considerable threat in almost all countries across the globe. With concern over this aspect, Starbucks has made several efforts in implementing numerous measures relating to health as well as wellness of its customers (Billy, 2001). Such measures include expanding its menu offerings for including various options to promote customization, generating nutrition information on food and beverage items, lessening trans-fats within the products, and adopting sustainable holistic approach for promoting health and wellness. Starbucks understands the expectations and demands of its customers. It also understands that fact that customers of the present generation are more absorbed into maintaining health and fitness. They basically prefer fresh and quality products when it comes to food and nutrition (Argenti, 2004). Besides, Starbucks aims at driving efforts meant to provide a wider selection of product preferences to its customers both companywide as well as regional basis. The Company has included several special food items to enhance customer health and wellness such as yoghurt parfaits as well as fresh salads, prepackaged nuts with dried fruits, Frappuccino juice blends, etc. The Company is committed to support its customers to make informed-choices regarding the Company products (Cole, 2008). The Company provides nutritional information along with the products so that its customers are well-informed about the products they are using. Recommendation: From the above study of operations of Starbucks, it may be interpreted that although the Company strives to achieve excellence in its operations, there are areas that it needs to focus upon. The first aspect is lowering of its process (Ritson, 2007). For reaching out to increased number of customers who often avoids attending Starbucks shop for its high-priced products, the Company must think of slightly lowering its prices. This would attract more customers towards its brand with increased market share. On the other hand, if the organizational management does not wish to lower its process, it must initiate offers like buy one get one free or deals that of hourly or weekly discounts. This would gain the Company more customers and increased brand reputation and recognition (PAGELL, 2004). Another aspect that the Company needs to focus is that of international expansion. With a slight reduction in the rate of expansion in the United States, the Company can easily redirect capital saved into efforts of international expansion(Wurgaft, 2003). There are several countries that long for such a brand to be opened. Starbucks must think of strategies to penetrate new markets and capture increased market shares. Another recommendation fact is that the Company must continue with right-sized strategies like that of reducing company support-staff, implementing cost-effective technological approaches, and focusing on sharing best practices throughout every store. With context to involuntary turnover, importantly Schultz must continue to emphasize upon motivating employees and enhancing their morale (Paryani, 2012). The strategy of maintaining effective commitment to its partners has proved to be one of the key success factors and that Starbucks must continue to follow it in the years to come. Conclusion: Thus, from the report suitable conclusion can now be drawn. The manner by which the corporate social responsibility is managed at the company has been emerging continuously for ensuring all issues have been identified and addressed systematically as well as integrated manner. It aims to engage its stakeholders proactively and all others who may directly impact upon the business decisions. By this Starbucks effectively understands various concerns. The Company has been quite effective in delivering its performance in this respect (Sanchez Rodrigues, 2010). With every individual product that Starbucks is said to brand, market and sell, or even used in its operations, the Company maintains its commitment towards product quality as well as strives to source all its products in manner that is socially as well as environmentally responsible. For reaching out to increased number of customers who often avoids attending Starbucks shop for its high-priced products, the Company must think of slightly lowering its prices. This would attract more customers towards its brand with increased market share. References Argenti, P. (2004). Collaborating with Activists: How Starbucks Works With NGOs.California Management Review, 47(1), pp.91-116. Billy, R. (2001). I Love New York, or Starbucks out of Hell's Kitchen.Theater, 31(3), pp.169-177. Chua, A. and Banerjee, S. (2013). Customer knowledge management via social media: the case of Starbucks.Journal of Knowledge Management, 17(2), pp.237-249. Cole, G. (2008). 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