EADS is a company in aerospace industry that earns in euro but spends in dollar. This assignment is aimed to analyze its hedge situation and financial results thus make a decision for investment.
EADS is a company in aerospace industry that earns in euro but spends in dollar. This assignment is aimed to analyze its hedge situation and financial results thus make a decision for investment. Three sections as follows will illustrate the problem. . Risk exposure According to the registration document for EADS (2010:95), more than 60% of the revenue is US dollars with half naturally hedged by US dollar-dominated cost. The remainder cost is mainly incurred by euro. A strong US currency will benefit EADS a lot. Thus the main risk it exposed to is exchange rate risk and credit risk. For the portion that is naturally hedged (nearly 30% of total revenue), the exchange gain or loss from revenue and cost will partially offset one another, there seems no risk.For the portion that is covered by cash flow hedge, it is protected by forward or option to transfer US dollar to euro at a fixed rate. On the one hand, the future price will fluctuate due to different maturity and size of contracts. Take recent two years as the example, revenue was accounted for at 1.35US$/€ in 2010, compared to 1.26 US$/€ in 2009. This led to nearly €1 billion (18.5/1.35-18.5/1.26=-1) decrease in EBIT from 2009 to 2010. An appreciation in euro against US dollar will make the financial result worse since after translation euro revenue will be less with the same amount of US revenue. On the other
Financial strategy of Vodafone
. Identifying the financial objectives of an organization Research has indicated Vodafone UK to be the largest telecommunication firm in Europe serving approximately 191 million clients. The firm is a multinational firm that has its operations west in 26 countries. The success of the firm is one that is not ordinary especially in relation to the numerous challenges that are presented in the industry. The firm has expanded rapidly and the most essential of the firm's expansion is the one that involved the takeover of Mannesmann during the 2000 financial year which proved the company's thirst for expansion and thus becoming a global leader in its line of operations. This takeover cost the firm approximately 112 million pounds (Weetman 105). From this, it is clear that one core objective of Vodafone is to become a global leader in the telecommunication industry. This will be achieved through the introduction of very innovative projects. Vodafone's financial objectives revolve around the future needs and goals of the firm. Vodafone's corporate financial planning deals with the identification of the specific financial objectives and after which various ways and techniques to be employed in achieving them are set. A firm's major financial objective involves making money, the amount to be made, the time frame and how the money that has been made will be spent. Through its
Business Statistics Project. We took Belvin Electronics Manufacturing Company and we specifically select four different variables on their single product model our variables containing Sales, Production Cost, Advertising Expenses, & Profit.
"We dedicate our project efforts to our respectable teachers who taught and hold our hands on several occasions to complete such complicated and lengthy project". ACKNOWLEDGEMENT All praises and thanks to Almighty Allah. The Lord and Creator of this universe by whose power and glory all good things are accomplished. He is also the most merciful, who best owed on me the potential, ability and an opportunity to work on this project. We are grateful to our respected teacher Sir Abid Awan who has guided us in each and every step of this project. Indeed, without his kind guidance we may not be able to even start this project. May ALLAH give him the reward, which he deserves. We are also grateful to all those members who are related to this section. CONTENTS EXECUTIVE SUMMARY 8 CORPORATE OVERVIEW 11 BLESS ENGINEERING COMPANY 11 BELVIN ELECTRONICS 21'' COLOR TV MODEL # BL 2152 FSW 12 RAW DATA OF 21'' COLOR TV MODEL # BL 2152 FSW 13 RAW DATA ANALYSIS: 14 DESCRIPTIVE ANALYSIS 15 PRODUCTION COST DESCRIPTIVE ANALYSIS 15 Arithmetic Mean: 15 Interpretation: 15 Standard Deviation: 15 Interpretation: 15 Co-efficient of Variation: 16 Interpretation: 16 ADVERTISING EXP. DESCRIPTIVE ANALYSIS 17 Arithmetic Mean: 17 Interpretation: 17 Standard Deviation: 17 Interpretation: 17 Co-efficient of Variation: 18 Interpretation: 18 SALES DESCRIPTIVE ANALYSIS 19 Arithmetic
Differences in the stock preferences of domestic and foreign investors
In resent years, due to the high return in a very short period, most investor tend to invest their money in stock, which lead the trading activity of stock markets growing at a rapid rate. Most previous researches have shown that there is a strong distinguish invest behavior between them. Kang and Stulz (1997) collect the data from Japanese equity holdings in the period from 1975 to 1991 and find that foreign investors are prone to invest in firms with higher quality accounting, low undiversified risk as well as low leverage and firms in the manufacturing sector. The further research was analyzed by Covirg, Lau and Ng (2006), who example the equity holdings figures of 11 developed countries to identify several similar and different stock preferences of domestic and foreign fund managers, the results shows that when domestic and foreign fund managers make investing decisions, the turnover rates, return on equity, and stock riskiness are considered by both of them. The purpose of this article is to further analyze the different stock preferences of domestic and foreign investors from various countries that include both developed and developing countries and what factors cause their different stock preferences. This article makes several contributions to the existing literature and I would like to separate this it into three different parts. In the first part, I discuss the
DELL WORKING CAPITAL - optimising inventory and Accounts receivable and payable
DELL WORKING CAPITAL . From Tab #1, what is the meaning of the Unneeded Investment? Why is having fewer "days" of inventory an advantage over Compaq? Answer: The Unneeded Investment is done by Compaq in contrast to Dell. Dell could minimize its inventory days in 1995 to 44% of the inventory days of Compaq in the same year! It means for Dell that its liquidity does not have to be invested (to be held) in the inventory, but can be used to achieve faster growth or to do the prices of its products even more attractive. 2. From Tab #2, why does having lower inventory translate into a potential margin advantage for Dell? Answer: Both Companies are acting on a high-tech market. The development and progress in this market is really fast. If Dell holds the components in his inventory not so long, there is a competitive advantage for Dell, exceptionally in case of technology change. The old technology loses its value and has to be sold cheaper to customers. On the other hand Dell can faster bring new technologies to the market than its competitors. We can take the fast development by Intel CPUs to Pentium in 1994-95. Dell was able in the shortest time deliver the new chips to its customers. Such technology change is for Compaq clearly more expensive and it means a potential margin advantage for Dell. 3. From Tab #3, you can estimate the "Net Financing Requirement" for Dell in
Fact sheet on the role of the financial institutions
Fact sheet on the role of the financial institutions Building societies The first building societies were formed about 200 years ago when some people got together to co-operate with each other in building their own houses. Members regularly contributed to the society and built the houses together. Each completed house was allocated by lottery to a member. They carried on until each member had his own house. The society, the house-building co-operative, was then dissolved. After a while building societies began to borrow money from investors to build houses more quickly and this was the start of permanent building societies, now simply called building societies. Then about 100 years ago, most UK building societies stopped building houses and concentrated on providing capital for building houses, on providing mortgages. Many people are tied for life to paying rent to, and so working for, profit-seeking landlords who are able to increase rents largely at will and who are thus absorbing any gains in income. The building society movement, however, has enabled a massive number of people in the UK to own their own homes. It has been giving people something to work for and a sense of achievement from living in a house of one's own, enabling them also to save and provide for retirement and old age. In the UK at this time are 80 building societies with 5,500 branches, having
Exchange rates. When international trade makes up a significant proportion of a countrys economic activity, the exchange rate is one of the most important determinants of both inflation and output
Determining Exchange Rates Content I. Introduction 3 I.1 Bilateral exchange rate 3 I.2 Trade weighted or effective exchange rate 3 I.3 Real exchange rate 4 II. Determinants of the Nominal Exchange Rate 4 II.1. Trade Balance 4 II.2. Relative Purchasing Power Parity 5 II.3. Relative Interest Rates 6 II.4. Relative Price Changes 7 II.5. Speculators, Traders and Financial Instruments 7 II.6. Political and Psychological Factors 10 III. The macroeconomic impact of the exchange rate 11 III.1 Inflation and the exchange rate 11 III.2 Economic growth and the exchange rate 12 III.3 Balance of payments and the exchange rate 12 IV. THE EFFECTS OF MONETARY AND FISCAL POLICIES ON INTERNATIONAL GOALS (Examples in the United States) 12 V. Macroeconomic influences on the exchange rate 14 Economic policy and the exchange rate 15 Monetary and fiscal policy and the exchange rate 15 Foreign currency intervention 15 Fixed vs floating exchange rate regimes 16 Similar policy objectives 16 VI. Fixed exchange rates 16 VII. Flexible Exchange Rates 17 VIII. Bibliography: 18 I. Introduction When international trade makes up a significant proportion of a country's economic activity, the exchange rate is one of the most important determinants of both inflation and output. It also has a major impact on firms competing in overseas markets, and even on firms with foreign competitors
Research project. The levels of risk tolerance to financial stability of Malaysian banks rely on a variety of environmental risk factors that impact investment risk. It is through investment that banks have business and finance to regulate and synthesize,
Table Of Contents Introduction...........................................................................................................2 Background of the problem...................................................................................3 Objective of the Study...........................................................................................4 Hypothesis.............................................................................................................5 Methodology..........................................................................................................5 Literature Review...................................................................................................6 Case Study.............................................................................................................7 Timescale...............................................................................................................12 Limitations and Research Proposal.........................................................................13 Recommendations...................................................................................................14 Conclusion................................................................................................................15
mathematics of finance and commerce
VILNIAUS GEDIMINO TECHNIKOS UNIVERSITETAS Course work:- Mathematics of Finance and Commerce Checked by Prepared by: JATIN PATEL & KHUNT HARSHAD Contact Simple interest.................................................................................3 Compound interest...........................................................................4 Simple interest via compound interest................................................6 Compound interest via simple interest................................................6 Main measure of financial risk...........................................................6 Present and Future Value of Annuities................................................8 Bonds: how to calculate current yield, yield to maturity (YTM), price of the bond for various types of bonds.................................................12 Main models to estimate the value of a stock.....................................16 Reference......................................................................................19 Simple interest When someone lends money to someone else, the borrower usually pays a fee to the lender. This fee is called 'interest'. 'Simple' interest or 'flat rate' interest. The amount of simple interest paid each year is a fixed percentage of the amount borrowed or lent at the start. The simple interest formula is as follows:
ANALYSIS OF 2 CURRENCIES ON THE FINANCIAL MARKET OVER THE LAST 5 YEARS
ACADEMY OF ECONOMIC STUDIES OF BUCHAREST FACULTY OF BUSINESS ADMINISTRATION ENGLISH SECTION ANALYSIS OF 2 CURRENCIES ON THE FINANCIAL MARKET OVER THE LAST 5 YEARS Scarlat Aurelia-Stefania Tudose Ana Maria Ungureanu Magda Group 128 TABLE OF CONTENTS . Introduction 2. The euro vs dollar debate in economics before the start of European Monetary Union 2.1 The "Euro-Optimist" Hypothesis 2.2 The "Euro-Pessimist" Hypothesis 3. The euro vs dollar debate in economics 3.1 The Euro Challenge Hypothesis Reinvigorated 3.2 The Euro Challenge to the Dollar Measured in Quantitative Terms 4. The Euro vs Dollar Debate in International Political Economy 4.1 The Political Determinants of International Currencies 4.2 The Euro's Political Shortcomings 4.3 From Dollar Uni-Polarity to a One-And-a-Half System 5. The Euro vs Dollar Debate from a Social Perspective 5.1 International Currencies as a Social Phenomenon 5.2 The Euro's Socio-Cultural Impact 5.3 Euro-Optimism seen from the Perspective of Key Financial Actor 6. PIIGS - Economics and debt crisis: Possible consequences for euro currency 7. The US Subprime mortgage crisis 8. Conclusion 9. Bibliography LIST OF ABBREVIATIONS BIS Bank of International Settlements EZ Euro-zone ECB European Central Bank ECBO European Central Bank Observatory EFSF European Financial Stability Facility EMU European