Risks Profile And Hedging Example For Free - Free Essay Example

Sample details Pages: 5 Words: 1386 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Tags: Risk Essay Did you like this example? F J Benjamin Holdings Ltd listed on the Singapore Exchange on 14 November 1996, founded in 1959 headquarters in Singapore and it has offices in nine cities with more than 2000 employees. This Company is one of the leaders in building and management, and development system of retail and distribution networks for international luxury and lifestyle brands across Asia. The company participates in importing, exporting, licensing, distribution and retailing of consumer fashion wear and accessories household furnishing, timepieces, eyewear and multimedia storage product and operation of cafes and entertainment outlets. Don’t waste time! Our writers will create an original "Risks Profile And Hedging Example For Free" essay for you Create order Especially, FJ Benjamin has four main segments is Luxury and Lifestyle Fashion Retailing and Distribution such as: Banana Republic, Gap and Givenchy..Timepiece Distribution such as: Bell Ross, Chronotech and DeWitt. Creative and Design such as Raoul and Investing in Lifestyle Concepts. Companys information analysis 2.1 Scenario of FJ Benjamin In FJ Benjamin Holdings Ltds wants to growth its portfolio by expanding business on Europe and the United States. In first of 2013, the company has some investment project to opened store located in Malaysia with required amount of SGD$ 15 million initial capital. FJ Benjamin needs more capital to implement these projects by borrowing SGD$ 10 million from bank for long-term loan for 5 year. To running and remaining new store in Singapore, in first of February 2013 FJ Benjamin need to imports 10milion luxury fashion wear of Cà ©line brand from French with due date at first of March . When order is accepted the company submit Trust Receipt to bank as a short term loan. At the due date, Bank on behalf of FJ Benjamin payoff 10 million for exporter. 2.2 Financial information analysis About general financial situation of FJ Benjamin, based on annual reported for 2011/2012, FJ Benjamin Holdings Ltd. reached $ 393,237,000 turnover in 2012. In 2011, turnover increased 22 % to $353.9 million from $289.4 million. In 2012, companys operating profit was $ 22,046,000 and in 2011 reached $ 18,102,000 increase $3,944,000. Profit before tax was $19,670,000 compared to $17,042,000 a year ago. Net profit after tax rose 55% to $12.8 million from $8.3 million last year. Operating profit strengthened to $18.3 million from $5.1 million in FY 2010. Gross margins rose to 43 % from 41% in the previous financial year. Cost-to-revenue ratio improved to 39% from 42%. Based on all financial information mention above, it reflects that the quality of the business has improved and become more stable in 3 years ago. In Financial ratio analysis: Return On Equity (ROE) (%) of FJ Benjamin in 2012 was 10.13% increase 0.3% compared 2011 was 9.71%. The return on equity evaluated a FJ Benja mins profitability by showing how much profit it generates with the amount shareholders have invested. Debt Ratio of this company in last 3 year was approximately 80% in 2012, 72 % in 2011 and 2010. Debt ratio increase 8% from 2010 to 2012 mean that FJ Benjamin has very high debt ratio. Current Ratio is used to measure the ability to pay short-term debts of the FJ Benjamin. Generally acceptable current ratio is from 1 to 2. During last 3 year, FJ Benjamins current ratio was above 1.5. However, from 2010 to 2012 this ratio was decrease significantly. Net profit Ratio Companys Risks Profile and Hedging 3.1 Internal risk In fashion industry, business risk is a risk totally can occur with any group if they do not have a risk management strategy correctly. Business risk is a risk that FJ Benjamin might have to face. The FJ Benjamin is belonging to fashion industry. Therefore, Benjamins revenues are affected directly by consumer sentiment and purchasing power as well as changing on trend of fashion and lifestyle trends. Especially, competitors also is a risk might affect to Benjamin because a lot of new brands are opened and growth quickly today. In the other words, customer satisfaction is most importance to increase profit and ability to meet customers need is a first mission of this company to against with this risk as well as increasing competitor opportunities. 3.2 External risk The Company has to face with a lot of risks arising from its operations from that Fj Benjamin uses of financial instruments to against all these risk. The main External risks include credit risk, currency exchange risk, interest rate risk and liquidity risk. Credit Risk: Credit risk is the risk of loss that can occur on financial instruments should a partners default or non-performance on its obligations. Especially, The Companys credit risk arises directly from trade and other debtors. Based on annual report, the trade and other receivables of FJ Benjamin shows that all its not past due, unimpaired and creditworthy debtors with very well payment record. Generally, amount of cash and fixed deposits are put in banks and financial institutions with good credit rating. In addition, FJ Benjamin use the ways to manages its credit risk by application of credit approvals, credit limits and monitoring procedures. However high debt ratio is a disadvantage of FJ Benjamin, it reflects that this company has many debts and possible to non performance or default. Foreign Exchange risk: FJ Benjamin is an import and export company so that it has a lot of transactional using foreign currency .The company import, export between Asias countries, US and EU and most of the groups overseas purchases by in Swiss Franc, US Dollar and the Euro. Therefore, FJ Benjamin maybe face with foreign exchange risk when exchange rate movement. The FJ Benjamin always find out the ways to maintain a natural hedge by keeping the balance of liabilities against assets in the same currency or against the entitys functional currency. In order to reduce the companys exposure to foreign currency fluctuations, FJ Benjamin used foreign currency forward contracts based on purchase commitments for periods ranging from three to six months forward to minimize this risk. Liquidity Risk: Liquidity risk is the risk that the Company will not meet financial obligations at maturity date because of not enou gh of funds. Although in 3 years ago the company has enough current assets to meet the payment schedule of current liabilities with a margin of safety. However, current ratio in 2012 fall meaning is amount of liabilities increase more than 2 years ago and current assets decrease in 2012 lead to level of liquidity risk may be increase in the near future. But FJ Benjamin manages its liquidity risk by maintaining a healthy balance of cash and cash equivalents and an sufficient amount of committed credit facilities. Moreover, follow annual report of 2012, the Company assessed the level of risk with respects to refinancing its debt and concluded it to be low. Approaching to sources of funding is enough and available and debt maturing within 12 months can be rolled over with existing lenders. Interest Rate Risk Interest rate risk is the risk that the value of cash flows of the company in the future and all companys financial instruments will go up or go down without predictable beca use of changes in market interest rates. With the FJ Benjamin also may face with this risk and relates to amount of borrowing which is subject to floating interest rates and are re-priced at intervals of less than 1 year. Recommendation FJ Benjamins earnings remained resilient despite the European debt crisis; this company still is leader by strong brand portfolio and growing in the ASEAN economies. Looking at business result in last 3 year, almost signal are good. However, FJ Benjamins financial still exists some problems and risk can be occurring with this business. With high ROE indicates that all investment project of this company can recover capital and gain profit in the future With debt ratio too high that reflects that the company has much debt and bank borrowing than their equity. Bank has to consider very carefully before lending to this company and high interest rate to cover credit risk. Then company needs to provide more collateral and margin account to ensure that can pay off the loans. However,. Conclusion In sum up, FJ Benjamin is a good company in Fashion Industry in around the world. This Company is more and more developed with stable and solid business. Company is assessed that which will become a most successful and has new prospect in the future. Although, looking at business result in last 3 year, almost signal are good. Besides that, FJ Benjamin Appendix Current ratio: Current Assets /  Current Liabilities Year 2010 2011 2012 Current Assets 192,846 212,857 209,940 Current Liabilities 95,264 121,998 127,998 Current ratio 2.024332 1.744758 1.640182 Return on Equity (ROE ): (Net Income/Shareholders Equity) x 100 Year 2010 2011 2012 Net Income 8,260 12,770 13,541 Shareholders Equity 137,209 131,458 133,607 Return on Equity (ROE ) % 6.02% 9.71% 10.13% Debt Ratio: (Total Liabilities /  Shareholders Equity) x 100 Year 2010 2011 2012 Total Liabilities 76,385 80,752 85,907 Shareholders Equity 105,684 111,667 106,819 Debt Ratio (%) 80% 72.3 % 72.2% Net profit Ratio: (Net Profit / Net Sales  ) x 100 Year 2010 2011 2012 Net Profit 8,260 12,770 13,541 Net Sales 295,386 360,003 403,281 Net profit Margin 2.8 % 3.56% 3.36%

Study of the 2009 Influenza H1N1 emergence Pandemic Free Essays

Introduction Pandemic influenza is an epidemic of infectious disease that can spread among human population across the world. Its first appearance was in 1918 (Spanish Influenza H1N1), where it caused an epizootic outbreak in swine causing the most devastating and terrifying pandemic in history. Pandemic influenza H1N1 was then re-emerged again in 2009 (Swine Flu). We will write a custom essay sample on Study of the 2009 Influenza H1N1 emergence Pandemic or any similar topic only for you Order Now According to the World Health Organization (WHO) several factors must be present to be considered a pandemic such as: infected droplets released into the air and breathed in by others or close contact with infected pigs. Swine influenza is caused by Influenza A virus, which belongs to family orthomyxoviridae. They are pleomorphic-enveloped viruses therefore Influenza viruses are named based on the major surface antigens: Hemagglutinins (HA) and Neuraminidase (N). Neuraminidase is an enzyme that is responsible for releasing the progeny virus from infected cells, by cleaving sugar molecules that bind to the virus. By contrast, hemagglutinin is a lectin that mediates binding of the virus to the host cell and entry of the viral genomes into the host cell. Overall, there are at least 16 different HA subtypes named H1 through H16. The first three hemagglutinins, H1, H2, and H3 are the main HA subtypes present in Influenza viruses. It is important to understand the emergence of 2009 pandemic influenza, for which one has to recognize its genetic origins. Influenza A viruses are composed of a protein-studded coat that surrounds a genome made up of eight single-stranded RNA segments (PB2, PB1, PA, HA, NP, NA, MP and NS). These RNA segments of pandemic 2009 have resulted from co-mingling of genomes from two influenza viruses- N. American H1N1 and Eurasian swine H1N1. This concept helps to explain how viral genetic re-assortment has resulted in the emergence of the pandemic strain, with a mixture of swine, human and avian influenza viruses. One would predict that changes in the genetic makeup of this virus requires us to develop new vaccines on an annual basis to attempt to prevent this virus especially in those that are elderly or chronically ill, since for them, influenza can be extremely fatal. According to CDC (Centers for disease control and prevention) epidemiological data indicates that elder people (65 years) tend to be less affected by H1N1 virus. Perhaps this explains the age-related pre-existing immunity. Figure 1- shows age groups most affected by the H1N1 influenza reported to CDC in the United States from April 15 to July 24, 2009.As can be seen, the number of reported cases per 100,000 population was highest among individuals five to twenty-four years of age group (26.7 per 100,000). Recent research on the crystal structure of the HA from the pandemic virus A/California/04/2009 has revealed the similarity of the Sa antigenic site located on the hemagglutinin molecule, in particular, of the 2009 H1N1 virus with the early 1918 human H1 viruses. Exposure to older viruses circulating from 1918 through the 1930’s or 1940’s are likely elicited 2D1-like antibodies that can cross-react with the 2009 viral protein HA. As a result individuals exposed to these viruses, now over the age of 65 have some protection from swine flu by antibodies originally elicited more than 50 years ago. Further research has shown that 2D1- antibody can bind to identical Sa antigenic site in the 1918 and 2009 pandemic and cross-neutralize both 1918 and 2009 pandemic viruses in vivo. Perhaps this provides a strong explanation for the age-related pre-existing immunity and the low levels of mortality rate in elder people, in the current H1N1 pandemic. Today in this 21st century, new advanced vaccines and antiviral drugs have been introduced to prevent this virus especially in those who are unable to produce immunity against Influenza viruses. Compare to the third world where only small proportion of people were fortunate to have vaccines as a safety precaution. Even then, 3% of the world’s population (1.8 billion people) at the timedied of the disease. Nowadays scientists and many health organizations such as CDC or WHO are intensely looking in to whether or not the same virus will strike again. They have the knowledge and the discipline to get the world ready. Recently, CDC recommended a seasonal flu vaccination (trivalent seasonal influenza vaccine) as the most important step in protection against influenza viruses. This seasonal influenza vaccination has been recommended for every individual from the age of 6months onwards as not only it protects against H3N2 virus but also Influenza B and H1N1 Influenza A virus. This proves that seasonal influenza vaccine can still be used to protect against various viruses including 2009 H1N1 Influenza and H3N2. Recent research on neutralising influenza antibodies also proves that seasonal influenza vaccine can lead to increase in the production of neutralizing antibodies up to 80%. But vaccination with plasmid DNA encoding H1N1 influenza (HA) and boosting with seasonal vaccine can stimulate a greater than 50 fold increase in neutralizing antibody than that produced by one does of seasonal vaccine alone or DNA alone. Conclusion The future impact of the 2009 H1N1 influenza virus is not yet possible to predict as to which strain will cause the next pandemic or epidemic. On the one hand, the 2009 H1N1 influenza virus is still expected to continue to circulate as a seasonal influenza strain. Due to this, more people will now develop immunity to this current version of the virus. Despite of that, the World Health Organization (WHO) has warned many countries including Africa and Asia to prepare for more devastating flu epidemics in the future. This concern has been promoted due to the possible mixture of swine flu viruses with seasonal strains during the winter months and can transform in impulsive ways. The best possible way for an individual to protect against 2009 H1N1 influenza virus and other influenza viruses is through defensive measures such as covering mouth when sneezing or coughing, good hygiene and vaccinations against H1N1 influenza virus when possible. How to cite Study of the 2009 Influenza H1N1 emergence Pandemic, Essay examples

Loftus and Palmer Study free essay sample

There are variables that may affect memory and recall. Aim How information provided after an event in the form of leading questions may effect peoples memories. Experiment 1 Participants 45 students from the University of Washington. Procedure Participants shown seven videos of car crashes ranging from 4 to 30 seconds long. The videos were excerpts from drivers ed courses so the researchers were aware of the speeds of the cars. The videos were shown to the participants in random order. After each video participants were given a questionnaire which asked them to give an account of the film they had seen. Then they were asked to answer some questions based on what they had seen. Results Verb|Mean Estimate. Smashed|40. 8, Collided|39. 3, Bumped|38. 1, Hit|34. 0, Contacted|31. 8. Discussion Loftus and Palmer argue that memories are based on two types of imformation: What we percieve at the time of the event and what we find out after the event. We will write a custom essay sample on Loftus and Palmer Study or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page They argue that what they hear after the event can distort our memories. In this experiment loftus and palmer argue that two things can be happening: Distortion and Response Bias. Distortion: The verbed used may lead the participant to amend their memory. For example the word smashed may lead the participants to estimate the speed higher than it actually was. Response Bias: (a form of demand characteristics) The participants may not have been sure about the speed and so they may have adjusted their answer to fit the researchers expectations. In the above experiment the researchers were uncertain whether their prompts altered the participants memories or if it had led them to give a certain answer. The second experiment is to show that information provided after an event is capable of distorting memories. Experiment 2 Participants 150 students from the University of Washington. Procedure The participants were shown a short film of a multiple car crash, which lasted for one minute, though the action lasted for four seconds. The participants were split into three groups. The first group were asked: How fast were the cars going when they smashed into each other? The second group were asked: How fast were the cars going when they hit each other? The third group was the control group and were not asked about the speed of the cars. A week later the participants were recalled and asked some more questions about the film. Nine of these were filler questions. The critical question was: Did you see any broken glass? This question appeared randomly in the other question. (There was no broken glass in the film) Results The results supported that of the first experiment. The participants in the smashed condition overestimated the speed of the cars. The participants who reported seeing broken glass: Condition|% who answered yes. Smashed|32%, Hit|14%, Control|12%. Discussion The results suggest that the verb used affect memory altering their perception a week later. The word smashed incorporates broken glass in to their memories as the word smashed implies broken glass. Loftus and Palmer support the reconstructive memory hypothesis. They believe that information gathered at the time of an icident is altered by information gathered after an event. These two sources of information merge over time and it is impossible to seperate them. Evaluation ^ Strength control over confounding variables. The researchers could control age, incident viewed, environment etc. ^ The reconstructive memory hypothesis is useful in instances such as in formulating guidelines for police questioning of witnesses and suspects. x Ecological validity is a problem as a video is different to experiencing a real life car crash. In real life the crash would be unexpected and there would be more emotional involvement which would effect recall. The sample was of students from the same place and studying at the same level. They may have wanted to please the senior members and their memory capacity may not have been the same as that of the general population. They may be better at memorising or they werent bothered with remembering something as trivial as this. x Some psychologists have critiscised Loftus and Palmers conclusions. They argue that we have no way of knowing that the memory has been distorted. (taken from:http://selene. wordpress. com /2006/04/02/loftus-and-palmer/) Loftus and Palmer Study free essay sample There are variables that may affect memory and recall. Aim How information provided after an event in the form of leading questions may effect peoples memories. Experiment 1 Participants 45 students from the University of Washington. Procedure Participants shown seven videos of car crashes ranging from 4 to 30 seconds long. The videos were excerpts from drivers ed courses so the researchers were aware of the speeds of the cars. The videos were shown to the participants in random order. Results Verb|Mean Estimate. Smashed|40. 8, Collided|39. 3, Bumped|38. 1, Hit|34. 0, Contacted|31. 8. Discussion Loftus and Palmer argue that memories are based on two types of imformation: What we percieve at the time of the event and what we find out after the event. They argue that what they hear after the event can distort our memories. In this experiment loftus and palmer argue that two things can be happening: Distortion and Response Bias. Distortion: The verbed used may lead the participant to amend their memory. We will write a custom essay sample on Loftus and Palmer Study or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page For example the word smashed may lead the participants to estimate the speed higher than it actually was. Response Bias: (a form of demand characteristics) The participants may not have been sure about the speed and so they may have adjusted their answer to fit the researchers expectations. In the above experiment the researchers were uncertain whether their prompts altered the participants memories or if it had led them to give a certain answer. The second experiment is to show that information provided after an event is capable of distorting memories. Experiment 2 Participants 150 students from the University of Washington. Procedure The participants were shown a short film of a multiple car crash, which lasted for one minute, though the action lasted for four seconds. The participants were split into three groups. The first group were asked: How fast were the cars going when they smashed into each other? The second group were asked: How fast were the cars going when they hit each other? The third group was the control group and were not asked about the speed of the cars. A week later the participants were recalled and asked some more questions about the film. Nine of these were filler questions. The critical question was: Did you see any broken glass? This question appeared randomly in the other question. (There was no broken glass in the film) Results The results supported that of the first experiment. The participants in the smashed condition overestimated the speed of the cars. The participants who reported seeing broken glass: Condition|% who answered yes. Smashed|32%, Hit|14%, Control|12%. Discussion The results suggest that the verb used affect memory altering their perception a week later. The word smashed incorporates broken glass in to their memories as the word smashed implies broken glass. Loftus and Palmer support the reconstructive memory hypothesis. They believe that information gathered at the time of an icident is altered by information gathered after an event. These two sources of information merge over time and it is impossible to seperate them. Evaluation ^ Strength control over confounding variables. The researchers could control age, incident viewed, environment etc. ^ The reconstructive memory hypothesis is useful in instances such as in formulating guidelines for police questioning of witnesses and suspects. x Ecological validity is a problem as a video is different to experiencing a real life car crash. In real life the crash would be unexpected and there would be more emotional involvement which would effect recall. The sample was of students from the same place and studying at the same level. They may have wanted to please the senior members and their memory capacity may not have been the same as that of the general population. They may be better at memorising or they werent bothered with remembering something as trivial as this. x Some psychologists have critiscised Loftus and Palmers conclusions. They argue that we have no way of knowing that the memory has been distorted.

Benefits of Student Identification Tags

Benefits of Student Identification Tags Free Online Research Papers School uniforms have been used for quite a few years. There are many schools today that still use the uniform to identify their students. The uniforms consist of a polo shirt and khaki pants or shorts. Schools generally choose their own school colors for the polo shirt. For example, Mandeville High colors are skipper blue and white. Every few year’s the school mails out a form to the parent to vote for or against school uniforms. Student identification tags (I.D.) should be used in schools instead of uniforms. I.D. tags are more cost effective for families and they serve the purpose of identifying people who belong on campus. If the outcome is for uniforms, this can be very costly for the families. Especially if the child only has one year left at the school. Lower income families can’t afford to spend money on uniforms that their children will only wear at school. Their children may hit a growth spurt and grow out of their uniforms, which then causes their parents to go out and buy new uniforms. I.D. tags will fit anyone no matter what size or shape they are. Another down side of uniforms is that any person can purchase these items and enter the school premises. School identification tags are issued by the school office and have a unique design; for example it contains the school logo. These also contain the student’s picture for easy identification. Students are required to wear their I.D. tags on a daily basis on school grounds. If a student forgets to wear their I.D. to school, they must report to the school office to purchase a temporary I.D. Teachers have a right to question anyone without an I.D. The parents prefer their child to wear school uniforms so that they don’t get their good clothes dirty. The parents need to teach their children not to get their clothes dirty and explain to them that it cost money. The children need to learn to have responsibility. In conclusion there are many disadvantages with uniforms. It benefits the students and parents. It is more cost effective for the parents and for their children to wear I.D. tags. Identification tags can be improved in the future. Research Papers on Benefits of Student Identification TagsStandardized TestingPersonal Experience with Teen PregnancyHip-Hop is ArtEffects of Television Violence on ChildrenThe Spring and AutumnThe Relationship Between Delinquency and Drug UseHarry Potter and the Deathly Hallows EssayThe Effects of Illegal ImmigrationComparison: Letter from Birmingham and CritoGenetic Engineering

5 Tips For Landing an Administrative Assistant Job

5 Tips For Landing an Administrative Assistant Job There were just under four million jobs for administrative assistants in the United States in 2012, according to the Bureau of Labor Statistics. While this may sound like a lot, its important to consider another equally important factor: the many people seeking out these sought after positions. What can you do to gain the inside edge on the competition? Lets take a closer look at five ways to land the administrative assistant job of your dreams.1. Study UpWhile some employers require no further education than a high school degree, most prefer additional education and/or certifications that indicate additional motivation and competency. Check into coursework in basic office, computer, and grammar skills at your local community college or technical school.If you aspire toward an administrative assistant job in an industry-specific field, such as law or medicine, specialized coursework in this area may be required.2. Intern or VolunteerMany key administrative assistant skills are learne d during on-the-job training. By gaining these skills during an internship or as a volunteer, you offer employers a fast-track to productivity. You will still require some office-specific training, but more general work such as computer programs and preparing office documents will be covered.Not sure where to begin when it comes to finding an internship or volunteer opportunity? Check in with your schools career center.3. Refine Your ResumeThe best resumes are targeted to specific jobs. If you are applying for an administrative assistant position, be sure your resume covers all of the skills required to do the job. These include everything from technical skills to soft skills, such as the ability to interact well with others, organization, and integrity.4. Work Your ConnectionsAdministrative assistants are at work in nearly every single industry. In short, where theres an office, theres an administrative assistant.One of the best ways to find vacancies and gain a jump on the comp etition is by leveraging pre-existing relationships. Let friends, family members, and other people in your network both online and in person know that youre looking for an administrative assistant job. This way if they hear of a new opening, they can pass the information along to you. Your connections are also valuable referrals and references.5. Present ProfessionallyAs an administrative assistant, you will be a representative of your company, so a neat, polished appearance is essential. And dont forget about the importance of eye contact when meeting with hiring managers. The more competent and personable impression you make, the more likely you are to land the job.While the competition for administrative jobs is steep, its far from insurmountable. These five tips can position you for success in your search for a fulfilling career as an administrative assistant.

Ressource Management Essay Example | Topics and Well Written Essays - 1000 words

Ressource Management - Essay Example This paper aims at discussing strategies that are involved in sourcing, budgeting processes as well as financial reporting requirements adopted by Tesco PLC, a UK based supermarket that deals with various kinds of products. Sourcing Apart from dealing with food products and Tesco mobile among other brands, Tesco PLC deals with selling and distribution of safety equipments such as gumboots, oil resistant boots, helmets, ear plugs, overalls and dust coats among others. Majority of our customers are entities dealing with manufacturing of all kinds of products as well as flower farms. Based on the need to maintain safety in all work places and be in line with Occupational Safety and Health Administration (OSHA) safety requirements, majority of firms offering products as well as services have continued to order from us thus increasing our sales. Tesco PLC has outsourced the process of manufacturing most of our products to a neighboring firm. Outsourcing refers to the contracting of a firm ’s business activity to a third party. ... The second advantage is that the company is able to share the risks arising. Another advantage of outsourcing is that the company does not incur the costs of hiring production machine or purchasing them. Likewise, we are able to concentrate with our core business of selling and marketing of our products making the relationship with our client’s stronger. Disadvantages of outsourcing our services Although Tesco PLC emulates outsourcing, the company is faced with some disadvantages. First is lack of customer focus by the company we have outsourced to. Based on the fact that the company manufacturers products for various companies dealing with safety gadgets, it may lack complete focus on the quality of our brands2. Additionally, sometimes there is a delay in the delivery of the final products to Tesco PLC premises an issue that has caused us to lose some loyal customers3. Despite the disadvantages, our organizations objective is to outsource its production process for the next 3 years after which it will establish its own production department. Budgeting processes Tesco PLC.has established accounting department that undertakes the budgeting process under the leadership of a senior accountant. The company maintains a cash budget. The cash budget entails an expansive plan of future cash flows. In order to ensure that the company liquidity is maintained at a recommendable state, four items are covered by the cash budgets. These includes cash receipts, cash disbursements, net change in cash for a particular period of time as well as new financing needs. The accounting department undertakes six processes in its annual budget preparation. Automating: This department uses excel spreadsheets with formulas that are used to compute

There are many types of investment vehicles, one of the vehicles that Essay

There are many types of investment vehicles, one of the vehicles that pay some of the highest returns - Essay Example In this part, the paper will discuss the compensation structure used by hedge funds. The discussion will include the rationale for this compensation structure, its mechanics and the agency issues that can be associated with the compensation structure. The hedge fund structure is usually composed of general partners who handle all the trading activity from the fund and limited partners who supply the capital that is invested in the fund. Other members include the portfolio manager, who is usually the owner of the management company. The investors in the portfolio are usually between 100 and 150 certified investors who are willing to let the portfolio manager manage their funds for profit. The administrators of the hedge funds maintain the books and records and process all the transactions in the funds. Since the investors are not involved in the day to day handling of the fund, it is up to the hedge fund managers to complete all the transactions in the fund and charge fees to the inve stors in form of compensation structures. As already stated, the compensation structures used by hedge funds are different from those used by normal mutual funds since they take more fees in a different manner. The managers in the hedge fund use different strategies to create profits from the funds, and the Limited Partners, also known as the investors receive a percentage of the profit. The compensation structure in hedge funds is usually set on two main types of fees; performance fees and management fees. The performance fee in a hedge fund refers to the fee in the investment fund that a manager charges investors as a percentage of the increase in value of the assets in which the funds are invested. The value of the funds investments is periodically calculated and the fund manager gets a performance fee, usually between 20 and 30% of the Net Asset Value, which is the increase in value. The performance fee in hedge funds is similar to that in mutual funds. However, other fees that are in the hedge fund and not in the mutual funds are the management fees. The management fee is usually 1 to 2% of the fixed fee of the assets in the mutual fund, and in addition, an incentive fee of between 10 and 30% of the assets in the fund is also charged. The contentious point about these fees is that the management fee is usually charged regardless of whether the fund has made any profits, which means that the managers will always earn profits even if the fund fails. However, the performance fee can only be charged if the fund makes a pre-specified level of return, which is usually set at a percentage or decided as an index. This level of return is referred to as an hurdle, and the managers strive to increase the level of performance of the hedge fund in order to earn extra fees. Hurdles typically reduce the size of performance fees and increase the reward for better management of the fund, a factor that accounts or its popularity with investors. Another terminology analogou s with the compensation structure of hedge funds is the high water mark, a term used to refer to the performance of the fund. The highest value of a hedge fund in a year is called the high water mark, and if the fund’s value falls in the subsequent year, the managers are not paid performance fees. This means that in subsequent years, if the funds increase in NAV but does not exceed the high water mark, no performance is also charged on the investors since they do not make any additional