Be explicit and explain to the CFO how financial markets differ from markets for physical assets and why that difference matters to Jagdambay Exports. 2. Explain the relevance of money markets and capital markets for Jagdambay Exports. 3. Analyze Jagdambay exports and advise how the CFO should consider the primary market and secondary market in the expected transaction.
The fiscal policy is primarily an instrument in the hands of the government whereby it estimates its revenues and expenditures in the economy. This is a very important tool as it would define the flow of money from different sources, indicating the level of activity in the economy. It also defines the broad policies of the government indicating the outwards flow of money in to different sectors of the economy to maintain the overall health of the economy and fulfill its social goals. Apart from the fiscal policy every country has monetary policy at its disposal. This is primarily a tool at the disposal of the central bank of a country which uses different tools to manage the macro economic variables of a country to keep the economy stable or to stabilize it in situations of fluctuations.
Implementation of GAAP is done through disclosure and measurement principles (Bampton and Cowton, 2013, p.557). Disclosure principles explain the actual figures and other necessary information useful to be presented the financial statements. Measurement principles determine and recognize the basis and timing of items that are to be in the accounting cycle and lead to an impact on the financial statements. In summary, GAAP is concerned with; economic activity measurement, the time to measure and record such measurements, the disclosures surrounding this activity and preparing and presenting of financial statements in a summarized form. In the absence of GAAP, it would be hard for investors and creditors to make decisions since different companies would be free to choose what financial
A securitization transaction is widely used by the organizations in order to prevent any potential risk happen in their organizations. According to Senanayake (2010) on her books is Asset-backed securitization and the financial crisis stated that, securitization is the process of individual loan packaging and other debt instruments. Where the packaging process will be transfer as a security to improve a rating or credit status. While Davidson et al. (2003) stated that securitization is a process of packaging and transfer financial promises into form where it can be easily transfer to other investors.
This is called securitisation and has constituted an alternative fund raising avenue for firms from the capital market. and renders traditional band services less attractive. Disintermediation also occurs due to high inflation rates but, bank interest rates remain stagnant which is often associated with government control. Therefore, where depositors are able to get better returns for their investment in mutual funds or securities, disintermediation
These significant theories in enhancing the financial decision include over-investment theory and under-investment theory. The underinvestment theory is built on the basis that insist on the negative effects of a firm in taking to high amount of corporate debt on the firm value. The over-investment theory also form a very significant component in financial decision and it applies in those cases where there are limited growth opportunities. It also applies when there is high relationship to the free cash flows. The theory creates a crucial emphasis that indicates negative consequences on high level of cash flow that is left under discretionary control of the financial manger making the decision on behalf of the firm.
The objective of financial statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions. The going concern concept is fundamental concept for the preparation of financial statements. Some financial reporting frameworks contain an explicit requirement for management to make a specific assessment of the entity’s ability to continue as a going concern, and standards regarding matters to be considered and disclosures to be made in connection with going concern. For example, International Accounting Standard (IAS) 1, “Presentation of Financial Statements” requires management to make an assessment of an entity’s ability to continue as a going