Debt ratio lies between 0 to1. Higher value indicates more risk to company and it will be difficult to obtain loans for new projects or expansion of any project. A low value indicates the company is less dependent on the money borrowed from or owed to others and the company has a strong equity position. Times Interest Earned is used to determine how easily a company can pay interest expenses on outstanding debt. Lower the ratio, more the company is burdened by debt expenses.
For firms, inflation causes cost or production to income since workers’ demand pay rises, as well as making it difficult to firms to plan for future. Inflation is an increase in general price levels and has undesirable impacts on households and firms which means the government is justified to use policies to maintain price
Cons: Transfer of ownership can present a problem if there’s ever a reason to. Banks are more hesitant to hand out a loan due to turnover rate and creditors may go after personal property to settle a claim. Another is that it’s harder to raise capital on a long basis due to it just being one person. Partnership Pros: There’s
The higher is the ration, the more frequently receivables are collected by the company. ▪ The accounts receivable ratio – measures the average amount of time it takes a company to collect on its credit sales. A high accounts receivable ratio could be an indicator of the inefficient credit policy. Higher ratios mean that it takes a company longer to collect its payments. Even though the accounts receivable ratio is often a good indicator of a company's payments collecting ability, it could be misleading.
By finding new markets for its existing products, Coach can restore its revenue performance because it will have increased its market volume. The company can achieve this bit utilizing the opportunity of the emerging markets. However, Coach should not focus too much on China because it is becoming a very concentrated red ocean market because of the rapid inflow of foreign direct investment. As mentioned prior, Coach can also pursue innovation in order to become more adaptive to the volatility of the market conditions (Cassiman & Vuegelers 73). Innovation would be of great use to Coach now that its industry is becoming saturated courtesy of the traditional and haute couture luxury fashion brands.
Trading company must be profitable. Not only that, all the businesses produce lots of product and because of employment rate is higher, economics growth rapidly. To prevent saving money in a bank, the central bank conducts a monetary policy and low interest rate encourage people to spend more money. Fiscal policy is conducted too. As was When Government expenditure cut for trying to stop stagflation that causes of economic down turn in stagflation, it is important to stimulate the supply side for that company have to create a new effective machine and reduce cost of manufacturing then aggregate demand of other countries will up.
• Handling Leases: The length of the lease period in U.A.E is 1 year. After which, the tenant can either choose to renew his leased property for the next subsequent year and so on or vacate the property. Renewals and move-outs are also handled by the property manager. When leasing to a new tenant, the property manager obtains all the necessary documents from the tenant which includes their identification and residence visa (if needed) along with the security deposit and rent. When renewing the leased property, only the rent is collected from the tenant.
Hence, when it announces the acquisition, firm value may drop simply because investors conclude that the market is no longer growing. The acquisition in this case does not destroy value; it just signals the stagnant state of the market. Why do sellers earn higher return? Buying firms are typically larger than selling firms. In many mergers there are so much larger that even substantial net benefits would not show up clearly in the buyer’s share price.
Long-term debt contains provisions or covenants that constrains the firms future actions. Short-term debt arrangements are generally much less onerous in this regard. Costs. Under the normal conditions, interest costs at the time the funds are obtained will be lower if the firm borrows on a short-term rather than a long-term basis. Disadvantages of Short-term Debt a.
Lower unemployment With higher output and positive economic growth firms tend to employ more workers creating more employment UK unemployment rises during a recession – falls during periods of economic growth. Lower government borrowing. Economic growth creates higher tax revenues and there is less need to spend money on benefits such as unemployment benefit. Therefore economic growth helps to reduce government borrowing. Economic growth also plays a role in reducing debt to GDP ratios.