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AS and A Level: Accounting & Financial Management
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- Marked by Teachers essays 4
Describe the key features of UK and EU nancial service legislation and regulation likely to inspire investor condence.
Regulatory bodies also inspire investors in the UK. There are many regulatory bodies including Financial Conduct Authority (FCA). FCA aim to make sure that financial markets work well so that consumers get a fair deal. This means that they ensure that the financial industry is run with honesty, first?s product customers with appropriate products and services and customers can trust that the firm has their best interests at heart. Secondly, Prudential Regulatory Authority (PRA) is another regulatory body. PRA was created as part of the Financial Services Act (FSA)
- Word count: 1362
An example of unethical practice was when financial institutions like bank and building societies mis-sold payment protection insurance (PPI). Banks devised an insurance product that was designed to not pay out due to the strict terms and conditions and began to force customers to buy the insurance when taking out loans, mortgages and credit cards. This was very unethical and the financial services were not taking any duty of care. The Financial Services Authority (FSA) then imposed fines to all banks and building societies who mis-sold PPI and were instructed the institutions to compensate their customers. Lloyds had to pay £9.8billion, Santander £500million and the Co-operative Bank £100million proving that they had to pay large sums of fines.
- Word count: 1246
Produce a report evaluating the relative significance of solvency and profitability ratios in identifying serious problems of business performance.
Also you can see if your business is performing successfully or is performing poorly in relative to the figures of another business. In addition, ratio analysis helps in trend analysis which involves comparing a single company over a period of time. And lastly, it can highlight important information in simple form quickly; businesses can explore their business performance by just looking at few numbers instead of reading the whole financial statement. The first ratio is the solvency ratio. This ratio will measure the ability of the business to settle its debts in the short term.
- Word count: 1294
Nevertheless, once all the money is gone, they will not have any money to use in the event of an emergency. Sell assets The business could sell unused assets to gain cash. These assets could include machinery or equipment in which the business does not use. This is good for them to do as it is good business practice and they are making use of something they don?t need. In addition, they could rent out part of their property they no longer need which will allow them to gain money.
- Word count: 1032