A high ratio generally means that the company has been aggressive in financing its growth with debt. Such capital structure is likely to result in volatility in the earnings as a result of additional interest expense. This can also said to be a measure of the gearing level of the company. The optimum level of gearing is different to specific business sectors. For example, capital intensive industries such as logistics tend to have a slightly higher long term debt/equity ratio while electronics manufacturing companies have a relatively lower ratio The company had a debt equity ratio of 2.44 in FY 2011.
Thomas Malthus in his paper An Essay on the Principle of Population suggest that population and economy is related. While population exponentially increases, food production only increase arithmetically. Moreover, as the economy grows, the population would also increase until a point where the economy cannot supply the whole population. It's at this point when factors such as preventive checks, or positive checks kick in to reduce the population back to the equilibrium where the economy can supply the population. However, Malthus's conclusion that growth is hindered by population can be considered wrong if we look at history and economic history of the world where there are situations where population increase brings upon changes in productivity
How does inflation affect an economy? Vaganov Aleksandr Grade 10 - 6th November 2015 1.Inflation is a continuous or sustained increase in the general level of prices of “basket” goods and services in an economy over a period of time. It is not just when the prices go up for a day, then return to the normal. When the price level rises, each unit of currency buys fewer goods and use less services. Therefore, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.
Independent variables Population growth is the rising people in a country. In Malthusian growth model, the increases of population will reduce income per capita. China with 1.4 billion people enjoys the factor endowment namely large labor force but standard of living is low because the increasing of expenditures to improve infrastructure, education, health care and so on. Higher population will result on slower economic growth. So, population growth expected to have negative impact on economic
China has faced inflation and deflation. Particularly, inflation had bring out many effect on China citizen, such as income gap between the poor and the rich, rises in cost of living, and income gap between the rural and city residents. First, the common effect of inflation is the cost of living increases. As a retirees, households, and the people who depend on social security benefits, there are always make the best decision, since they only have fixed incomes. When inflation occurred, the purchase power of RMB will fall and these group are stand to lose on their great deal, which mean that these kind of people will not be able to purchase the same as before.
Inflation inflation is the long term rise in the prices of goods and services caused by the devaluation of currency or a general increase in prices and fall in the purchasing value of money. Through light over the effect of inflation 1)Business competitiveness: On the off chance that one nation has a substantially higher rate of swelling than others for an extensive time frame, this will make its fares less cost focused in world markets. In the long run this may appear through in diminished fare orders, bring down benefits and less occupations, and furthermore in a compounding of a nation's exchange adjust. 1.1)Inflationary development has a tendency to be unsustainable prompting a harming period of boom and bust monetary cycles. For instance,
.3.3 Inflation Rate The inflation rate used as an indicator in measuring the stability of economic condition for a particular country (Rashid et al., 2011). In financial theory, inflation rate reflected by consumer price index (CPI) represents all the price of goods and services will go up and it need to take more money to buy the same items. Moreover, high inflation is likely cause a great impact on economic activities of a particular country because it reduces the purchasing power of domestic consumers and it would lead to currency value decline. The previous researchers believe that the inflation rate will influence the stock market return. There are many empirical studies establish that the inflation rate has an impact on stock market
Hence, it will be addressing and evaluating a local company of my choice. Factors affecting international trade 1. Inflation Inflation is the continuous and significant increase in general price level of the standard of living of the people of the country. The higher the inflation rates the lower consumption rate. Hence, if a country’s inflation rate increases compared to other countries with which it trades, its current account will be expected to decrease, other thing being equal.
The purpose of this article is to study the crashes of housing market, emerging market, poor banking sector and of course recession. Findings of the study shows that growth and expending domestic demand may increase import demand and it will cause growing economics. A cross sectional data was used. Hassan B. Ghassan et al (2013) used time-series data from 1986 to 2010. According to this study the absence of cointegration between international liquitidy net export and GDP are the cause of financial crises and its impact on Saudi Arabia’s economy specially on oil production.
Unemployment has great importance between the macroeconomic problems..Unemployment is one of the major variables that depicts the health of an economy.A higher unemployment means that people can not get according to their wants and skills.The task of Growth is to share profit in the national income. They show a positive relationship between higher rates of profit and higher rates of growth. Higher growth is achieved through profits effective on the rate of investment. Economic growth and unemployment are inversely related along the business cycle in the short run.Unemployment is affected by the long term growth change.Because of this fact European unemployment raise in the 1970s and 1980s . The decline in the rate of economic growth raises the issue of unemployment.