A rise in this ratio can signify that the firm has a competitive edge in the market and so it is able to charge higher prices for its products, or the firm is able to obtain its supplies at a lower cost. If this ratio remains stable while the net profit ratio is falling, which is the case for EYSI; this can signify that the control over expenses is weak. (CIMA, 2012) mentioned that the net profit ratio signifies the profit from trading operations before the interest costs are
The ROE remains the same for all the 3 companies from 2013 to 2014. In conclusion, it can be stated that Apollo Bhd has the best profitability ratio compared to Oriental Food Bhd and London Biscuit Bhd. Apollo Bhd makes more profits. Since the company is generating more revenues, the profits also increase year by year. This also indicates that there are consistency or positive trends in Apollo Bhd company’s earnings.
Frielinghaus et al. (2005), argued that according to the life cycle theory of capital structure, debt ratios should be increased with the progress of the firm, from the early stages of her life to them later. Trade-off theory supports the life cycle theory. So, firms in the early stages (infancy, continuity and teens) cannot afford the high levels of debt, because their costs of bankruptcy are high and their incomes are too low to ensure benefit from deductions interest debt before tax. Stages of maturity and stability, higher earnings are prompting firms to provide advantages from the use of debt.
Also, according to NBS, the Disposable income of China’s urban residents increased 9.7% annually to 26,955 yuan and according to Appendix 1 below, the Per-capita disposable income for urban residents in Shanghai is 40,188 yuan a year in 2012 and is expected to increase. If China citizens have more disposal income, it means that they have more money available for spending. With more disposal income, customer will be willing to pay more for premium products. Thus, in this case, the power of buyers is low as they are less price sensitive and the industry will have more room to play. Also, if they are less price sensitive, buyers would not care so much about the price compared to a more price sensitive buyer where they would compare price and think twice before
• If PE ratios show how much growth (Montagne is growing better and faster) o Sterling expenses are going more than depreciation which is lower than Montagne o Expected to have Montagne PE to be higher (not only by a 0.2 difference) • PE of Montagne is so low and PE of Sterling is so high because it is over valued o Very diversified with beta • [Exhibit 1] Sterling’s operating expenses and commodities costs = rising faster than inflation rate: therefore more pressure on business profits Financial risk: by looking at the trends of coverage ratios, there is medium financial risk because Sterling is doing the borrowing o The higher working capital rate of Montagne Medical indicated financial risk in the Medicare/Healthcare market o Receivables are outstanding longer and there are greater risks of write offs for future o Inventory rates are higher and should be financially controlled/overlooked Beta [Exhibit 3]: • Beta for division: they are buying which is not the same for overall (diversified business) • Do not have returns for the division they are buying in • Division doesn’t trade in the market (doesn’t have a market price)- main challenge • Value of beta = 0.99 • Market premium = 5.0% • Risk free rate =
This statistic illustrates the challenges companies face when trying to grow in competitive environments. Achieving even 1%annual growth requires increasing sales to customers, both existing and new, by 14%. Reducing customers’ loss can dramatically improve business and brand loyalty which leads to consistent and even greater sales since the same brand is purchased repeatedly (Giddens, 2010) . 3.6.2 Premium Pricing Ability Consumers are fewer prices sensitive when increasing the brand loyalty. Generally, they are willing to pay more for their preferred brand because they perceive some unique value in the brand that other alternatives do not provide.
Local Government in Pakistan Subject: Either democracy or Autocracy is better for economic growth in Pakistan Name: Abida Khanum Registration no: 01171611008 Submitted to: Dr. Ume Laila Dated: Nov10, 2017 Quaid-e-azam University, Islamabad. Economic Growth by either Democracy or Autocracy In terms of macroeconomic performance, the country has fared considerably better during military rule. Economic growth during military regimes averaged 6.1 per cent compared to four per cent during civilian regimes. Just to comprehend the quantum of this seemingly small difference, the flood of 2010 that affected two-thirds of the country’s districts, is estimated to have affected GDP growth by two percentage points. Although all three sectors of the economy — agriculture, industry and services — performed better during military regimes, the industrial sector has been the biggest beneficiary of the military muscle and has recorded twice as much growth compared to that achieved under civilian rule.
Strategic goals of Interworx pty ltd The primary strategic goals of this business are: • Increase market share –Interworx pty ltd wished to increase its market share • Increase turnover - Under its previous owner, it annualised less than A$ 250 000. As a result, Interworx wanted to increase its turnover. • Increase sales volume and cash flow – the directors of Interworx wants a larger sales volume and a more reliable cash flow. • Establish a brand image – in order to secure government and other corporate clients, Interworx needed to establish a brand image, as smaller businesses are more unstable and are less likely to draw government business. • Secure government and corporate business Role of operations in achieving business goals Under its previous management, Interworx annualised at less than A$ 250000.
5.0 THE EMERGENCE OF ISLAMIC FINANCE AND BANKING IN MALAYSIA (80S) Islamic banking emerged in the 1980s was a Bank Islam. Islamic Bank is the first Islamic bank established in Malaysia. Bank Islam Malaysia Berhad was established on 1 July 1983 under Companies Act 1965. Since establishment, it has become a symbol of Islamic banking in Malaysia and its vision of a "Global Leader in Islamic banking" describes the Bank's status as a leader in the financial services industry in the country ("industry"). The existence of Islamic Banking Act 1983 (IBA), which came into force on 7 April 1983 is the legal basis for the existence of the first Islamic bank in Malaysia.
The interest rates of the bonds are somehow greater than rates paid by banks. Hence, it will turn the retirement savings into retirement income. Besides, bonds are more stable than stocks as investing in bonds are unlikely to lose money compared to stocks. This is because the bonds are fairly predictable and hence bondholders can predict their investment earnings and expected return. If the company goes bankruptcy, bondholders will have the priority over shareholders to receive payment (Randolf, n.d.).