This includes the dividend payments that the company earned for its shareholders and the money earned from the sale and buying of stock shares to and from the public. The net cash used by Dollarama Inc. from its financing activities is $197, 213. The cash was used for disbursement on its long-term debt, repayment of bank indebtedness and of finance lease, the dividends paid and repurchase and cancellation of its own stock shares. The amount earned by the company in this part of the cash flow statement is from the proceeds from senior unsecured notes and bank indebtedness, as well as the issuance of common shares. 4) What is Dollarama’s inventory turnover ratio and elaborate on how this can be a performance indicator?
The ratio of return on equity shows how much profit is made by a company as compared to its capital. It shows the ability of a firm to generate profit from its shareholder investments. Return on equity is also an indicator how effective is the management at using equity for growth and operation. For Talke, the trend of return on equity is consistent to net profit. This is due to the shareholder’s equity only increasing by the profit for the year for the period under consideration.
CORPORATE GOVERNANCE Corporate Governance is referred as the process through which power of a corporation is exercised to manage the corporation’s total portfolio of assets and resources for maintaining and increasing shareholder value and satisfy stakeholders of the company. Corporate governance expresses the relationship, structure of rules, and process by which authority controls inner corporations. It encloses the mechanism, in which companies and the people be held to account. The good corporate governance enhances the shareholder morale which is very crucial. It gives the guidelines of how to control the business so that it can achieve its goals as well as also profitable to its shareholder for a long time.
Abstract The aim of the study is to check the relationship between corporate social responsibility (CSR) and the corporate governance (CG) of the company. A company considers its accountability, transparency, credibility through corporate governance. Performance of the company depend on corporate governance. A company also follows the business code of conduct (ethics), are the moral values which company needs to follow to maintain the discipline. This study tells the relationship between CSR and CG and measure how company is performing?
3. Introduction to Financial Ratios Financial ratios are dealings determined from a firm's financial information and used for comparison purposes in financial means. Some of the financial ratios are Profitability ratios, Liquid ratios, Capital structure ratios, Assets management ratios and Market value ratios. Sub-categories of these ratios are defined below. 3.1 Profitability Ratios A category of financial metrics used to evaluate a business's ability to generate profit as compared to its expenses and other relevant costs earned during a specific period of time.
The situation becomes very critical when the entity shows a poor financial performance or when a company required a huge amount of loan for business activities. For this lenders required an assurance that their investment is safe, so the loan will be secured by an asset by pledging it as a collateral. If the entity is unable to pay the lenders on time that collateral will be used to recover the amount. Kaplan-urwitz model is developed to generate a credit score, which incorporates entity size, profitability, type of debt, gearing ratios interest cover and level of risks are entered in a formulae to determine the credit rating of a company. E.g.
The Financial Management Decision Process what are the three types of financial management decisions? For each type of decision, give an example of a business transaction that would be relevant. The three financial management decisions are: Capital Budgeting Capital structure Working capital management Capital Budgeting: The process of planning mad managing a firm’s long term investments The firm invests its fund in two types of assets – fixed and current. When the investment is regarding fixed assets it is called as capital budgeting decision. Factors that affect capital budgeting decisions are: Cash flow of project : when a company invests huge amount on a investment project the proposal is to be assessed properly before investing Return
To what extent is NPV an effective Investment appraisal tool? Capital Budgeting: To understand the value of NPV, the identification of its purpose in capital budgeting should be addressed beforehand, with its alternatives. This process of Capital Budgeting refers to the evaluation of potential in large scale business expenses and investments over long-term ventures. Often this step in the investment appraisal assessment, identifies the cashflows over the projects life-span, determining its generated returns in comparison to the organisations benchmark targets. (Book) Flowton’s options of replacing its older systems (Project A) or upgrading them to a centrally controlled platform (Project B) are considered such a venture.
Budgeting it creates a budget setting out planned cash flows in and out of the business. By monitoring a cash flow budget it is possible to identify any potential crisis points where liquidity will be poor. Budgets can also be set out for income and expenditure by the business, as well as a capital budget showing major capital spending e.g. on premises, equipment etc. Second is Profit and loss analysis it involves the creation of a profit and loss budget setting out expected future profits/losses for the business.