Financial Markets Qantas Airways Limited

Question: Discuss about the Financial Markets for Qantas Airways Limited. Answer: Introduction Qantas Airways Limited is the flag carrier Airways commenced its operations since March 1921. The airline has its headquartered in Mascot, New South Wales, Australia. The airline is located in the suburb of Sydney in Mascot and with the main hub at Sydney Airport. Qantas is aiming in providing the services of 22 specialized cargos which is handling terminal of over 15 major gateways port which will be accessed across Australia, with terminal which is dedicated in the Los Angeles. Qantas freights are having 13 aircraft of the supplements of destination with export and import in and around Australia. Qantas Freight has number of carrier on the logistic specialization. Qantas has many carriers with specialization in logistics all around the world. Qantas is specialized in carrying Express Freighters Australia (EFA), JETS Transport Express and Qantas Courier New Zealand. Qantas has many subsidiaries which are Qantas Link, Jet Star Airways, Jet Connect, Network Aviation, Qantas Freight, A ustralia Air Express, Qantas Holidays and various others. The subsidiaries aim at providing services in Australia and New Zealand which will be flying under the Qantas and also owing to Jet Star Airways and an airline which are cheap and operating from the services internationally under the domestic services between New Zealand and Australia. Qantas is frequently flying services aiming in rewarding the loyalty of the customer. It is getting the points based on the distance flown with bonus varying by the class of travel. Qantas is also providing facilities of Qantas club and lounges for its employees and passengers (Qantas.com.2016). Virgin Australia Holding Limited is public listed Australian airline company who owes and operates Virgin Australia and Tigerair Australia. The company was previously operating on the airlines of the Pacific Blue Airlines which was in a joint venture with Polynesian Airlines (Virgin. 2016). It has its headquarters in Bowen Hills, Brisbane, Australia. In was founded in the year 2000. Some of the subsidiaries of Virgin are Tigerair Australia, Virgin Australia, Virgin Australian Airlines, Virgin Samoa and some more. Chairman of this airline is Elizabeth Bryan and Chief Executive Officer is John Borghetti. Virgin Blue Holdings was formed as a wholly owned subsidiary in the year 2000 of Virgin Group. In the year 2003, Virgin Blue Holdings Limited entered into the ASX because Virgin Group was going to sell, some its holdings. In 2005, Virgin launched a takeover of the hostile in the Australia with 62% holding in the company. In the year 2008, the company announced for the distribution of 9 8.3% of the share to the shareholders of the company and by not remaining in the majority of the holding. During the phase of toll holding, 62.7% of the holdings were attempted for selling the shares for the no availing content was left over. In the year 2012, Etihad Airways had purchased 10% shareholdings to 20% then further on the same year there was next purchase of 10% of the Virgine Holdings by Singapore Airlines. Further on October 2012, Tiger Airways Australia 60% of the holdings was purchased by the Virgin Group. In January 2011, 15% of the Virgin Blue Holdings was purchased by Air New Zealand then by the June 2013 the holdings was increased by 23%. Top down Analysis Top down analysis is process which looks for a big picture of with details of components of smaller. Top down approach is very necessary for breaking down system for achieving profit in the organization (Bierman Jr and Smidt 2012). Top down approach is also called stepwise design and in some of the cases is of the decomposition. The analysis will be conducted on the trend of the of the macro environment of the economic. Top down analysis is the investment approach, which is including a large picture of the market. Top down analysis is determined with the help of Total market estimation. Top-down analysis is done by the fundamental analysis, based on Economic Analysis, Industry Analysis and Company analysis (Vyatkina et al., 2016). For conducting economic analysis comparison will be done with Interest rate structure and GDP growth which will be affecting the above two Airlines. Industry analysis will be conducted through Demand-supply structure and exchange rate effect. Company analysis will be conducted through analysis of dividend and returns (Fornelli et al., 2013). Let us consider the economic analysis first, in respect of economic analysis, an interest rate of the Qantas borrowings has been increased from 5.7% to 6.3%. Whereas, Virgin Holdings Limited has much lower interest rates of borrowings which is 2.8% in 2014 and 3.99% in 2015 (Tvardovskiy et al., 2015). Though the interest rate has increased individually but if the comparison is made then Virgin is getting advantage of due to difference in the interest rate (Guerrero et al., 2015). Similarly, if GDP factor is looked into it is observed that Qantas is providing employment opportunity to 28,622 employees has been working until the year 2015, whereas Virgin is providing 50,000 employment opportunities to the people of Australia. From the above analysis is proved that Virgin is in the front line of economic analysis as compared to Qantas (Lee et al., 2016). Further, moving on with Industry Analysis, the analysis will be made of demand-supply and exchange rate effect of Qantas and Virgin Airlines Holdings (Mao et al., 2013). During the world II, some of the supply of Qantas was dropped in the level of the treetop. After the postwar expansion, it gradually increased there was an increase in the supply of the company which can be seen by observing the increasing trend of sales per year (Piotroski and So 2012). Similarly, if Virgin is looked into the trend is same as to Qantas there is an increase in the supply of the airline's services. Next analysis is the effect of an exchange rate. Qantas had total gains of due in hedging of unrealized gains on long term debt as $ 12 million in 2015 and $ 54 million in 2014. Whereas, Virgin had suffered from loss of fuel which arises due to hedging of activities which was $129.4 million in the year 2015 and on which $ 106.7 million was the unrealized amount because of hedging. This proves that Qantas h as been the front line in the factor of exchange rate mechanism (Bartram and Grinblatt 2015). Finally moving on with the company analysis the factor of dividend and return has to be looked into in the above two airline (Goodman et al., 2013). Qantas has not paid final dividend and neither interim, instead of that there was declaration of and payment of non-controlling interest to the shareholders, who non-wholly owned the controlled entities $ 4 million in 2015 and $ 1 million on 2014. Virgin too had similar case in respect of dividend; there was not any existence of final dividend and neither the interim (Geis-Asteggiante et al., 2015). Instead, there was distribution of equity which was $ 17.8 million in the form of payment to the non-controlling interest holder during the year. Further moving on with the return on investment factor it is seen that Qantas achieved a return of 16.2% in 2015 and 1.5% in 2014. Whereas Virgin is taken into consideration, there has been decreasing in the percentage of return from 30% to 10%. In this context, Qantas has been the ruler in giving h ighest return to its shareholder (Breyer et al., 2013). Bottom up Analysis Bottom up analysis is determined on the calculation of the estimation of the sales which are potential in the market. Bottom down analysis is broad sector in the economic environment and is based on the factor affecting the company stock on the basis of business cycle of the business. It does not look into macro environment of the company. Bottom down analysis is the basically quantitative analysis. Bottom down analysis is done only to analyze the financial position in terms of figures (Bierman Jr and Smidt 2012). Bottom up analysis is done on the basis few accounting ratios and some of the budgeting factor. Accounting ratio includes computation of Current ratio, Quick ratio, Net Profit Margin Ratio and Return of Asset Ratio (Parker and Vannest 2012). Whereas, Capital budgeting techniques includes Net Present Value, Profitability Index, Annual Percentage Rate and Pay Back Period. All the above computations have been done by data present in the annual report of the respective companies (Hu et al., 2012). First, let us look into the Accounting Ratios which are given as follows: Current Ratio Qantas has current ratio 0.66 in 2014 and 0.68 in 2015, whereas, Virgin has 0.64 in 2014 and 0.69 in 2015. Current Ratio is calculated by total current assets divided by total current liabilities. Current ratio depicts cash available to the company for paying the long-term debt in liability. Current ratio interprets the liquidity position of the firm. Virgin has comparatively better position than Qantas in respect of paying long term debt in the category of current liability. But Qantas position in the year 2014 was comparatively better than that of Virgin because in the year 2014. Qantas ability for paying the long-term debts in respect of current liabilities was much high. On the present analysis, it will be said that Virgin is the better player in respect of paying the debts (Uechi et al., 2015). Quick Ratio - Qantas has quick ratio 0.56 in 2014 and 0.52 in 2015, whereas, Virgin has 0.57 in 2014 and 0.58 in 2015. Quick ratio is calculated by current asset divided by current liabilities by excluding the inventories form the current asset. Quick ratio depicts the position of the company in terms of cash available to be converted into cash. Virgin has comparatively better position than Qantas in respect of available cash for the transformation of Asset. But if the overall scenario, it has been observed that Qantas position has tremendously decreased that too with large difference. Qantas do not have sufficient amount of cash available as compared to Virgin for transforming into assets (Hrl et al., 2013). Net Profit Margin ratio - Qantas has Net Profit Margin Ratio -0.19 in 2014 and 0.04 in 2015, whereas, Virgin has -0.09 in 2014 and -0.06 in 2015. Net Profit Margin ratio is calculated by Net income/ loss divided by the net credit sales. In this context, Qantas has become the ruler regarding generating profit and effectively making use of resources available in the company. Virgin has been continuously facing loss for long span of time. On the prior year, Qantas has faced loss but proceeding further with the operations it has recovered from the situation of facing loss. But if a close look is given to the ratio, Virgin loss for the current year have decreased, which shows an indication of gradually improving the situation (Drivelos and Georgiou 2012). Return on Asset - Qantas has Return on Asset -0.15 in 2014 and 0.03 in 2015, whereas, Virgin has -0.09 in 2014 and -0.02 in 2015. Return on asset is calculated by Net income or loss divided by average of the total asset. In this context, Qantas has become the ruler regarding managing the assets for the producing the profit. Qantas has tremendously increased it return on assets from -0.15 to 0.03, Whereas; Virgin is still in the negative place. Virgin should not be ignored totally in these respects slowly and gradually it is moving decreasing the negative return. Qantas is effectively utilizing the assets for generating profit for the company (Bierman and Smidt 2012). Now moving on with some of the techniques of capital budgeting, the analyses for those are as follows: Net Present Value NPV is calculated as difference between present value of cash inflows and outflows. NPV of Qantas is 9,70,64,239 $ and Virgin is 2,47,72,244 $. It implies that there will be acceptability of Qantas because it has highest NPV. NPV shows acceptability of the project regarding measuring the present value of cash inflow and outflow. It is also helpful in analyzing the profitability of the projected investment. In the above point, Qantas is the ruler (Hayward et al., 2016). Annual Percentage Rate Qantas has a negative balance of finance cost in both the year. So there will be no APR in the case of Qantas because it has no borrowings. Whereas, Virgin has very high APR which shows that Virgin is very much liable for paying its return regarding loan taken by the company (Grob 2013). Profitability Index Profitability index is a somewhat modification of the NPV; it implies to be accepted if the PI calculated is greater than one and terms to be rejected if it is less than one or zero. Form the calculation done it has been observed that PI of Virgin is comparatively much higher than of Qantas in both the years. So in the respect acceptance, Virgin is accepted for doing the investment (Andor et al., 2015). Pay Back Period - Pay Back Period implies that the time taken to recover the cost of the investment done on the project. In this Virgin stands to be ruler for the recovery of the cost, for the investment done. Virgins Pay Back Period is the highest as compared to the Qantas (Saxena 2015). Recommendation Overall analysis of the report is seen that Virgin has comparatively better position in respect of providing liquidity, the acceptability of the project on return, payback period and profitability index. Qantas has proven to be the winner in doing the comparison related to performance of the company. Through the Top down Analysis it has been observed Qantas is in the better position for doing the further improvement in the company position. Further, it is also recommended that company Qantas should fulfill the requirement of payment of dividend to its investor because it is one of the important factors which is expected by the investors. If Virgin recovers the loss of the company, then it can be become the ruler of the market. Further, it is recommended that Virgin should make proper use of its assets regarding generating profit. From the bottom analysis, it has been observed that Virgin needs to increase its return on the equity otherwise, the investors with withdrawing their inves tment for the company. The financial position of the two companies depicts that Virgin is continuously facing the loss in the respect of Net income or loss achieved by the company, whereas Qantas has comparatively better position in the in terms of generating the profit for the company. So in this respect Virgin should find way to improve the position of the company by incurring income for the company. In terms of depicting the assets of the company Virgin is in the front line for getting advantage, whereas Qantas shows position, which is comparatively low show it needs to improve the position further. Highest return is the only thing which an investor looks. Further it is suggested that Virgin should increase it amount of assets so that it can fully utilize its asset for the generation of the profit. The overall top down analysis and bottom up analysis has been fully completed to its requirement. Reference list Andor, G., Mohanty, S.K. and Toth, T., 2015. Capital budgeting practices: a survey of Central and Eastern European firms.Emerging Markets Review,23, pp.148-172. Bartram, S.M. and Grinblatt, M., 2015. Fundamental Analysis Works.Available at SSRN 2479817. Bierman Jr, H. and Smidt, S., 2012.The capital budgeting decision: economic analysis of investment projects. Routledge. Breyer, C., Birkner, C., Meiss, J., Goldschmidt, J.C. and Riede, M. 2013, "A top-down analysis: Determining photovoltaics RD investments from patent analysis and RD headcount",Energy Policy,vol. 62, pp. 1570-1580. capital budgeting2016, , 6th edn, Oxford University Press. Capital budgeting 2016 Drivelos, S.A. and Georgiou, C.A., 2012. Multi-element and multi-isotope-ratio analysis to determine the geographical origin of foods in the European Union.TrAC Trends in Analytical Chemistry,40, pp.38-51. Fornelli, L., Parra, J., Hartmer, R., Stoermer, C., Lubeck, M. and Tsybin, Y.O., 2013. Top-down analysis of 3080 kDa proteins by electron transfer dissociation time-of-flight mass spectrometry.Analytical and bioanalytical chemistry,405(26), pp.8505-8514. Geis-Asteggiante, L., Dhabaria, A., Edwards, N., Ostrand-Rosenberg, S. and Fenselau, C. 2015, "Topdown analysis of low mass proteins in exosomes shed by murine myeloid-derived suppressor cells",International Journal of Mass Spectrometry,vol. 378, pp. 264-269. Goodman, T.H., Neamtiu, M. and Zhang, F., 2013. Fundamental analysis and option returns.Available at SSRN 1974753. Grob, H.L., 2013.Capital budgeting with financial plans: an introduction. Springer-Verlag. Guerrero, A., Lerno, L., Barile, D. and Lebrilla, C.B., 2015. Top-down analysis of highly post-translationally modified peptides by fourier transform ion cyclotron resonance mass spectrometry.Journal of The American Society for Mass Spectrometry,26(3), pp.453-459. Hayward, M., Caldwell, A., Steen, J., Gow, D. and Liesch, P., 2016. Entrepreneurs' Capital Budgeting Orientations and Innovation Outputs: Evidence From Australian Biotechnology Firms.Long Range Planning. Hrl, M., Schnidder, J., Sauer, U. and Zamboni, N., 2013. Non stationary 13C metabolic flux ratio analysis.Biotechnology and bioengineering,110(12), pp.3164-3176. Hu, Z., Liu, Y., Gao, S., Liu, W., Zhang, W., Tong, X., Lin, L., Zong, K., Li, M., Chen, H. and Zhou, L., 2012. Improved in situ Hf isotope ratio analysis of zircon using newly designed X skimmer cone and jet sample cone in combination with the addition of nitrogen by laser ablation multiple collector ICP-MS.Journal of Analytical Atomic Spectrometry,27(9), pp.1391-1399. Lee, A.E., Geis Asteggiante, L., Dixon, E.K., Miller, M., Wang, Y., Fushman, D. and Fenselau, C., 2016. Preparing to read the ubiquitin code: top down analysis of unanchored ubiquitin tetramers.Journal of Mass Spectrometry,51(8), pp.629-637. Mao, Y., Valeja, S.G., Rouse, J.C., Hendrickson, C.L. and Marshall, A.G., 2013. Top-down structural analysis of an intact monoclonal antibody by electron capture dissociation-Fourier transform ion cyclotron resonance-mass spectrometry.Analytical chemistry,85(9), pp.4239-4246. Parker, R.I. and Vannest, K.J., 2012. Bottom-up analysis of single-case research designs.Journal of Behavioral Education,21(3), pp.254-265. Piotroski, J.D. and So, E.C., 2012. Identifying expectation errors in value/glamour strategies: A fundamental analysis approach.Review of Financial Studies, p.hhs061. Qantas.com. (2016).Flights to Australia | Australia travel | Qantas. [online] Available at: https://www.qantas.com/travel/airlines/home/in/en [Accessed 10 Sep. 2016]. Saxena, A.K. 2015, "Capital budgeting principles: bridging theory and practice",Academy of Accounting and Financial Studies Journal,vol. 19, no. 3, pp. 283. Tvardovskiy, A., Wrzesinski, K., Sidoli, S., Fey, S.J., Rogowska-Wrzesinska, A. and Jensen, O.N., 2015. Top-down and middle-down protein analysis reveals that intact and clipped human histones differ in post-translational modification patterns.Molecular Cellular Proteomics,14(12), pp.3142-3153. Uechi, L., Akutsu, T., Stanley, H.E., Marcus, A.J. and Kenett, D.Y., 2015. Sector dominance ratio analysis of financial markets.Physica A: Statistical Mechanics and its Applications,421, pp.488-509. Virgin. (2016).Virgin. [online] Available at: https://www.virgin.com/ [Accessed 10 Sep. 2016]. Vyatkina, K., Wu, S., Dekker, L.J., VanDuijn, M.M., Liu, X., Toli, N., Luider, T.M., Paa-Toli, L. and Pevzner, P.A., 2016. Top-down analysis of protein samples by de novo sequencing techniques.Bioinformatics, p.btw307.

External Factors and Political Factors †Free Samples to Students

Question: Discuss about the External Factors and Political Factors. Answer: Introdution: MFC is required to replace the existing ferries and seeks to undertake project for the same. They are required to determine the required rate of return for which they are facing difficulties and randomly using the required rate of return at 10%. An organization named Adsteam Limited is similar to MFC that has determined equity cost of capital by considering risk premium along with unsystematic and systematic risks. Using equity cost of capital as arrived by Adsteam Limited should be used by MFC, as it is feasible. Hence, appropriate rate of return that MFC should use for project evaluation is 12%. MFC is undertaking project for replacing their existing ferries and report deals with evaluation of project using the technique of capital budgeting. This helps in determining projects feasibility. Operation of ferries is done on two sites of MFC that is Bay site and Greenwich site. However, an operation of replaced ferries that is four jet car ferries is suitable on Bay site. Required rate of return or equity cost of capital for evaluation of project is 12%. Total initial outlay incurred by MFC stood at $ $ 7226200 and the equity cost of capital is 12% that is used for determining net present value of project. Net present value of for cat ferries involves in the business activities of MFC is arrived by considering time value of money that is computed at $ 29808467. Figure is suggestive of the fact that future cash inflow from undertaking project of replacing ferries is more than initial outlay made (Brigham 2014). Conclusion: From the above analysis and computation, it can be concluded that project is feasible and MFC should be accepted. This is so because, net present value of four cat ferries is positive. ARR gives the clear picture of profitability of any project and total lifecycle of investment is taken into consideration. However, accounting rate of return does not take into account time vale of money. Under this technique of evaluation of investment project, benefits acquired by firms from abandonment of any equipment replaced by new equipment are not considered under this technique. ARR does not take into account determination of average investment levels and they should not be used as decision-making criteria as the cash inflow of any project is not taken into account (Arnold 2013). Furthermore, chances are there that organization can reject some profitable projects if the current earnings are more than value of accounting rate of return. An organization is required to consider many factors while undertaking the project of replacing any parts involved in functioning. Some of the factors that should be consider are internal to organization as well as they are external. External factors are political factors, some macro economic factors such inflation and general environment in which organization operates. Quality and change control involved in managing four cat ferries needs to be considered while evaluating the project feasibility (Bodie 2013). References: Arnold, G., 2013.Corporate financial management. Pearson Higher Ed. Bodie, Z., 2013.Investments. McGraw-Hill. Brigham, E.F., 2014.Financial management theory and practice. Atlantic Publishers Distri. Lasher, W.R., 2013.Practical financial management. Nelson Education.

Shakespearian Tradgedy Essays - Othello, English-language Films

Shakespearian Tradgedy In the article, Othello and the pattern of Shakespearean Tragedy, by G.R. Hibbard published in 1968, Hibbard discusses how Othello, by William Shakespeare, stands apart from the rest of the Shakespearean Tragedies. He uses examples from the play to support his thesis of how the tragic pattern in Othello is very much different from that of the others. I agree with Hibbard's view on Othello and it's unique characteristics that set it apart from the traditional pattern of Shakespearean tragedies. Hibbard wrote his article using supporting points to show how Othello is set apart from the other plays. He describes the unrealistic events surrounding Othello being sent to Cyprus, where he is allowed to bring his new wife. Hibbard write that Iago's only goal in the play is to ruin Othello's life and does not want more political or military power, as in the other plays but wishes only to destroy all that is good and beautiful. All the other plays have plots where the events in the public follow the pattern of the events of the antagonist this is missing in Othello. ?The pattern of the tragedy is a whirlpool, with its center in the poisoned mind of the hero which reshapes, distorts, and degrades objective reality.? Unlike in the other Shakespearean tragedies Othello does not know the antagonist until the end of the play when it is too late to realize what has occurred. The ending of Othello is also unique, in this case good does not prevail over evil and unlike the other tragedies O thello seeks his own valediction and ?the ruin is total?. I agree with most of the authors points of discussion in this article. I agree that Othello is sent to Cyprus for the sole purpose of changing the scene to commence Iago's plan and that this is very different from the other plays where there are no such dramatic events that are discarded so quickly (the immediate sinking of the Turkish fleet). I see the ?whirlpool' pattern the author speaks of where Iago is at the center; this is clearly different from the other tragic plays where the direction is clear and straightforward. Unlike in MacBeth, or Romeo and Juliet, Othello does not know the antagonist until the end, I agree with this point because throughout the play it is clear that Othello trusts Iago completely and disbelieves any evidence that contradicts what he is saying. I also agree with Hibbard's point that in other Shakespearean tragedies the public events mirror the actions of the antagonist. Hibbard is right in saying that the ending is quite unique with the bodies being le ft on stage and the others quickly moving through the arrangements of distributing the assets, they learned no lessons as in Romeo and Juliet, they seemed almost unaffected by the deaths. The end was also unique because Othello killed himself, he knew he did wrong and punished himself, this does not occur in other tragedies. Although I support Hibbard in his thesis, I disagree with a few of his supporting arguments. It is true that Iago did want to destroy the lives of both Cassio and Othello, but did this because he felt that he deserved Cassio's position in the military. When Hibbard says, ?The ruin is total? I think this is extreme. I feel that evil did not prevail, because Iago's plan did not succeed, neither good nor evil triumphed. In reading Hibbard's article I felt he did a good job at supporting his thesis. He provided the reader with enough information to understand why he chose his thesis and decide whether or not they agree with his points. He used appropriate references to support his ideas and backed up his points with specific events from the play. Shakespeare

The Best Way to Use a Standard Hamlet Sample Essay

The Best Way to Use a Standard Hamlet Sample EssayAre you looking for a way to earn extra money during your teaching career? One of the best ways to do so is to take up an Introduction to Writing For A Living (Hamlet) sample essay. There are many people who have taken up this particular course and received excellent results, making this the ideal way to introduce yourself to a potential employer. This guide will teach you how to create a resume and cover letter using the contents of Hamlet sample essays.The first step in preparing for an Introduction to Writing For A Living (Hamlet) sample essay is to find a good example of an essay that is appropriate for the job you are applying for. You can take Hamlet at home, or buy a copy from your local library. Reading through the various examples will give you some ideas on how to structure the essay.Make sure that the essay you use has been written by someone with experience and is professionally edited. Not only will this ensure that the c ontent is well presented, but it will also help it stand out when you submit it for inclusion in your own resume. Once you have a list of examples, you can begin by reading the contents of the essays and deciding which one is most suitable for you. Since these are published samples, you should not be forced to add details that will make the essay difficult to understand.You will also want to consider the level of detail that you feel comfortable with. It is easy to go overboard with details, but for many students the more detail you provide the better it is. If the essays are interesting, then you will likely be able to engage the reader with the information they are looking for.The next step is to contact your university or college if you wish to pursue a teaching degree. Most universities and colleges offer many courses that allow their students to move into other careers. If you are interested in doing this, be sure to keep in touch with your schools and get their approval before enrolling in a course. Many will ask that you be a good student so that they can trust you to learn the skills you need to succeed in your teaching career.Finally, check with the teaching job placement office at your local college. They may also offer any advice that they feel is necessary. Make sure that you have read the Teaching for a Living literature and at least agreed to write an introduction to a book about teaching, because this can be used as a sample for your essay.Even if you do not have a job right now, you can still use this resource. If you have a lot of free time and you are open to spending a little bit of money, you can study the contents of these books and prepare your own outline. Be sure to spend some time getting familiar with the material and understand how the essay works.

Stock Dividends and Stock Splits Essays

Stock Dividends and Stock Splits Essays Stock Dividends and Stock Splits Essay Stock Dividends and Stock Splits Essay For investors, it is important to understand stock dividends and stock splits. Stock dividend is different from stock split.   While it is true that, in both cases, new shares of stock are issued to current stockholders, distinction between the two has been recognized.   The distinctive difference between a stock dividend and a stock split is that in the former, there is a capitalization of earnings or profits, together with a distribution of the added shares which evidence the assets transferred to capital, while in the latter, there is a mere increase in the number of shares which evidence ownership without altering the amount of the capital, surplus or segregated earnings.   In short, a stock split is but a dividing up of the outstanding shares of the corporation into a greater number of units without touching the stockholder’s original proportional participating interest in the corporation.   Stock split is basically one of form and not of s ubstance.Concept of dividendsA stock corporation subsists to make a profit and to allot a percentage of the profits to its stockholders.   The board of directors of a public corporation may declare dividends out of the unrestricted retained earnings which shall be payable either in cash, or in stock to all stockholders on the basis of outstanding shares held by them.   A dividend is that part or portion of the profits of a corporation set aside, declared and ordered by the directors to be paid ratably to the stockholders on demand or at a fixed time.   It is a payment to stockholders of a corporation as a return on their investment.   It is a feature of a dividend that all of the stockholders of the same class share in it in proportion to the respective amounts of stock which they hold.Without disturbing the capital stock, a dividend is an aggregate amount which can be shared among stockholders.   The term has been considered as suggesting that there must be a surplus or p rofits to be divided.   To warrant the declaration of dividends, there must be actual bona fide surplus profits or earnings over and above all debts and liabilities of the corporation.   Although a corporation has earned no profit from the current period, it may properly pay dividends from accumulated surplus out of previous years.   On the other hand, dividends may not be declared as long as a shortfall exists although; it has realized actual profit in the current year.Stock dividendsInstead of cash, a corporation may opt to declare stock dividend, which is a dividend payable in unissued or increased or additional shares.   Stock dividends do not decrease the value of the stockholder’s interest; they only bring down the cost per share of the stockholdings. To illustrate, Mr. X owned 200 shares of stock at $10 per share worth $2,000.   The company declared and distributed 25% stock dividend.   Mr. X would now own 250 shares for the same value of $2,000, with a new value per share of $8 (Heakal, 2003).   A corporation may increase its authorized capital stock by way of stock dividends without touching its unissued shares as long as there are retained earnings to justify the declaration.The declaration of stock dividend may be revoked at anytime before the actual issuance of the stock.   Unlike in cash dividend, a stock dividend requires, as a general rule, more than a mere declaration to make it effective.   It must be approved by the stockholders. Until the stock is actually issued, or at least in some manner especially set apart to the stockholders, its effect is not complete.   The so called stock dividend in shares of the kind already held gives the shareholder nothing in the way of a distribution of assets, but merely divides his existing shares into smaller units.   There is no increase in his proportionate claim upon the assets of the corporation or income by reason of such a paper dividend.   There is no obligation upon th e corporation to declare stock dividends, which are not distributions but only a change of the share and capital structure.   Since the declaration of stock dividend gives the stockholder nothing until all the formalities necessary to a valid increase of stock are complied with, its revocation, therefore, takes away nothing.   But unless rescinded, the shareholders have absolute right to their respective shares in the stock dividend so declared and actual delivery of the corresponding certificate is not essential to make the shareholder the owner of the dividend (De Leon, l993).Dividends DatesEssentially, there are three dates to observe in dealing with dividends.   The first to consider is the date of declaration where the board declares dividend and sets the amount of dividend, the payment date and the ex-dividend date. Next is the record date, where all list of of current stockholders who are to receive dividends are rolled up. The most important date is the 2-day period be fore the record date which is designated as the ex-dividend date. This is to allow completion of all unfinished transactions before the record date.   Those stockholders not on record or do not own the stock before the ex-dividend date will not be entitled to dividend payment. Proceedings not completed at the ex-dividend date, the price of the stock is immediately reduced as dividend payment dilutes the value of the company and investors absorbs the diminution in value (â€Å"Investing†, 2007).Effect of declaration of stock dividendA stock dividend transfers the surplus covered by such dividend into permanent account thereby placing it beyond the power of the board of directors to withdraw from corporate use and to distribute to the stockholders.   Such a capitalization of surplus adds nothing to and takes nothing from the corporation.   The corporation merely transfers the surplus to capital account and issue shares of stock to represent the same.   Such shares may b e preferred as well as common stock.After a declaration of stock dividends, the stockholder receives no greater proportional interest in the assets of the corporation that he had before.   In this regard, it is identical in substance with a splitting of original share in which outstanding shares are exchanged for an increased number of new shares of proportionally less par value than the old, leaving the aggregate value of all his stock substantially the same.   Such an increase simply dilutes the shares as they existed before.   The declaration of stock dividend is advantageous to existing creditors of the corporation to the extent that corporate earnings are capitalized, unavailable for distribution to stockholders.   At the same time, it improves the cash position of the corporation with expansion projects or programs eliminating the necessity of borrowing and paying high interest rates.Stock dividends are not taxable as income because they represent merely an unrealized gain to the stockholders who receives nothing from the corporation that answers the definition of income under the revenue code (â€Å"Strengthening†).Illustration:A, B, C, D and E organized a stock corporation with an authorized capital stock of $400,000 divided into 4,000 shares with a par value of $100 per share.   Each subscribed to and paid for 400 shares.   Hence, the actual asset of the corporation at the beginning of the business was $200,000.After a few years of profitable business, the assets of the corporation amounted to $400,000 with no debts.   Instead of declaring cash dividends, it was agreed to increase the capital stock in the form of stock dividends with a total value of $40,000 which amount represents the actual increase of his share or interest in the business.   At the start of the year, each stockholder held 400 shares with a total value of $40,000 which is 1/5 of the total corporate capital of $200,000.   At the close of the year, after stock dividends are declared, each stockholder still holds 1/5 interest in the corporation with his 800 shares worth $80,000 in relation to the increased corporate capital of $400,000.   But the proportional interest of each share in the corporate assets is decreased because of the increase in the number of shares, from 1/2,000 to 1/4,000 (Kennon, 2007).Stock dividend from issue of additional sharesWhenever an increase is made in the capital account of a stock corporation, the increase is valid only when it represents additional shares issued for which the equivalent consideration is received by the corporation.   The increase may be the result of an issue of additional shares or the re-investment of retained earnings effected by the distribution of shares as stock dividend.Hence, a corporation with outstanding no par value shares originally issued at $5 per share cannot increase its capital account by transferring its surplus to its capital account without issuing additional shares for the amount transferred.   Under such method, stockholders who have already paid in full their no par value shares would in effect be made to pay additional amounts for the same shares to increase their value.   No par value shares of capital stock issued shall be deemed fully paid and non-assessable.   Once no par value shares have been issued at their issued price, their value can no longer be changed.   Accordingly, such stock dividend by a transfer of the surplus to capital with no shares to be issued cannot be validly made (De Leon, 1993).Stock dividend distinguished from cash dividendStock dividend does not involve any disbursement to the stockholders of accumulated earnings, while cash dividend involves disbursement of said earnings.   Corporate creditors may reach for stock dividends, being still part of corporate property, while cash dividend declared and paid becomes the absolute property of the stockholders and cannot be reached by the creditors.   While co rporate capital is increased by a stock dividend, cash dividend does not.   Except in the sense that capital stock constitute a liability, no debt from the corporation to the stockholders is created by the declaration of stock dividend.   The declaration of cash dividend creates an obligation to the stockholders who then hold such stock.It is important to note that a dividend payable in stock is not synonymous with, and is not always or necessarily, a stock dividend.   A dividend payable in stock may, under some circumstances, is a cash dividend, as where the dividend consists in treasury stocks or in stocks of another corporation.Stock splitsThe board of directors may approve a stock split when the market is too high or too low, as sometimes investors are forestalled from buying or keeping their stocks.   In stock split, the market per share is adjusted by the same ratio which results in additional shares being issued and the market price being reduced to a trading level to attract investors. Stock splits are generally carried out in two different ways.   In a par value stock, the original certificate is converted into a new certificate validating the original shares, plus the new shares issued.   In a no par value stock, the stockholder keeps his original certificate but receives additional certificates for the additional shares issued. In either case, the split merely changes the number of outstanding shares without affecting the stockholders’ equity or the capital stock (Heakal, 2003).Illustration:X Corporation has 100,000 outstanding shares of stock, with a par value of $10 per share.   The board of directors feels that a lower price is necessary to attract more investors, it authorized that the 100,000 shares be replaced by 500,000 with a par value of $2.   Thus each stockholder will receive 5 shares in exchange for each share owned.   This increase in the number of outstanding share is referred to as stock split (Little, 2007).O n the other hand, the reverse stock split, involves the reduction of the outstanding shares into a smaller number of shares and it is done when it is felt that a higher price for the shares will be advantageous to the corporation.   Thus, in the same example above, the 100,000 outstanding shares may be called in and replaced by 50,000 shares with a par value of $20 per share.   There is an increase in the par value of outstanding shares with a corresponding reduction in the number of shares issued.If a stock splits, it does not make it a better investment or enlarges the share in the company’s earnings nor does it affect materially short sellers. The aim of stock splits is to lower the trading price of a stock to a level viewed as popular to investors. It is comfortable to purchase stock at $10 per share than at $100 per share. Hence, when share prices have moved up considerably, publicly-listed companies declare stock split.ConclusionOne way or another, the stock itself may change, whether it is a stock split or a stock dividend.   It is crucial that an investor must be fully aware of the character of corporate actions to understand how a corporate decision affects his interest in the business. Corporate action may bring a change in the stock (â€Å"Corporate†).Whether it is cash dividend or stock dividend, dividends matter. It is the evidence of profitability.   It offers unvarying return on a less secure investment. Dividends grow as the company grows thus providing more economic value to the investors. Some investors profit from dividends.   Investors would purchase stocks right after dividend is declared and sell it after collecting the dividend, thus, receiving dividend at no cost.   However, this does not usually happen successfully as the dividend payout reflects immediately the stock price.It is important that an investor understands stock splits.   Stock splits do not change the equity of the company or the net assets of t he business.   Board of directors approves stock splits to maintain high level of trading activity of its stock. Sometimes a reverse stock split is decided to discourage small investors and maintain its status because a relatively low stock price is considered highly speculative and often trades over the counter.

United Airlines multinational finance Research Paper

United Airlines multinational finance - Research Paper Example United Airlines (UAL) is the major United States airline with the largest number of destination and passenger flights. It caters to the customers’ demand of maximum luxury and comfort during flight. It is the most in-demand airline for all employees and shareholders to invest. It is the world’s most inclusive set of connections worldwide with first-rate international gateways to Asia and Australia, Europe, Latin America, Africa and the Middle East. United Airlines has its base almost everywhere in the US with non-stop or one-stop services. Its fleets are the most fuel-efficient among all the US network carriers. It has ten most advantageous central locations in the four largest cities in the US (UAL, Factsheet 1). The overseas subsidiaries of UAL are United Express, Ted, Continental Express and Continental Connection carriers. United Express and Ted are premium and low-cost subsidiaries of UAL. With these two subsidiaries, UAL participates in the entire scale of the con sumer market. These are regional operators and act as additional services of UAL’s mainline network. These subsidiaries add to UAL’s operations by carrying flights that connect to the mainline service. These subsidiaries also can allow a more number of flights in smaller cities than would not have been economically viable with full sized mainline jet aircraft (UAL, Form 10-K 5). The total number of aircrafts owned and leased by the subsidiaries is 552 (UAL, Form 10-K 29). In 2009, UAL had an operating revenue from mainline passengers of $11,313 million as reclassified and $11,910 million as historical. In the same year, UAL had an operating revenue from regional passengers of $2,884 million as reclassified and $3,064 million as historical. Other operating revenues were $1,602 million as reclassified and $825 million as historical (UAL, Form 10-K 99). Foreign Exchange Risk Management Policy UAL being an international airline garners revenues and makes expenditures in nu merous foreign currencies. Some expenses include aircraft leases, commissions, catering, personal expense, advertising and distribution costs, customer service expense and aircraft maintenance. Fluctuations that occur in the rates of foreign currencies exchanges have a major effect on the service of UAL and â€Å"cash flows through changes in the dollar value of foreign currency denominated operating revenues and expenses† (UAL, Form 10-K 140). In order to effectively reduce the possibilities of risk, the Company may use foreign currency forward contracts to avoid a part of its vulnerability to changes. UAL does not enter into foreign currency derivative contracts for purposes other than risk management. In 2009 and 2010, United did not have any foreign currency derivatives. Continental had foreign currency derivatives with a fair value of $7 million in 2010 and $5 million in 2009. During these two years, according to financial statements, there were no significant hedge gain s or losses (UAL, Form 10-K 140). UAL emphasizes North American and hence is not vulnerable to US$ exchange rate risk. For this, UAL does not have to worry about risk related to foreign exchange while buying fuel because oil is traded in US$. This is one advantage for UAL (Muck and Rudolf 573). Some of the most common foreign exchange transactions of the Company are Canadian dollar, Chinese renminbi, Japanese Yen, British pound and European Euro (UAL, Form 10-K 74). UAL’s foreign currency exchange rate changes were 11 million in 2010 and 8 million in 2009 (UAL, Form 10-K 121). Fluctuations in foreign exchange rates can affect UAL in various ways. The scopes and variations of foreign exchange impact can be immense. Foreign exchange exposure is of significant importance to UAL as the large aircrafts travel into foreign markets (Levi 303). Net cash flows of UAL that include foreign currency cash flows have increased in 2010 by $941 million from 2009. There has been a steady incr ease in cash flow over the last few years and the principal sources

Prenatal Development Essay Example | Topics and Well Written Essays - 1000 words

Prenatal Development - Essay Example The paramount relevance of prenatal care in reducing infant deaths has been over and over again reported in studies and the connection between Fetal Alcohol Syndrome (FAS) and prenatal development corresponds, most obviously, to this factor. The impact of drug consumption during prenatal development is, therefore, highly perilous and the connection between prenatal development and FAS draws attention to the same danger. The relationship between prenatal development and Fetal Alcohol Syndrome offers one of the stimulating topics of profound analyses in the area and it is important in such analyses to determine when and how the fetus is affected. Therefore, this paper mulls over the various pertinent areas of the relationship between prenatal development and FAS in order to determine the proper utility of such analyses. In a reflective analysis of the broader picture of Fetal Alcohol Syndrome in the modern world, one becomes aware of the immensity of the issue and the prenatal exposure to alcohol is the single most cause mental retardation in the US today. Important studies on prenatal development prove that the use of alcohol during this period have a venomous impact on the growing facial features, the central nervous system of the fetus, the growth rate and birth weight. "Alcohol consumption during pregnancy can result in full-blown fetal alcohol syndrome or a host of fetal alcohol effects that include a wide range of mild to severe cognitive, behavioral, and growth delays. Fetal alcohol syndrome occurs in about 1 of 750 births in the United States. Many thousands more are born with fetal alcohol effects." (Sloboda and Bukoski, p 330). In fact, the widely recognized human teratogen called alcohol has been the prime producer of FAS and the other related effects in children. Alcohol, among all the substances of abuse, is the most dangerous and serious manufacturer of neurobehavioral effects in the fetus. While the nature of the substance used in the prenatal development period has a vital role in causing Fetal Alcohol Syndrome, it is more imperative to analyze the timing of the exposure alcohol as it is a major variable influencing FAS. As mentioned before, one of the most vital variables predicting the effect of the consumption of alcohol during the prenatal development has been the timing of the exposure to the substance. Thus, the exposure of the fetus to a substance can have different types if impact when it either coincides with or misses a period of peak sensitivity to the substance. "For example, fetal exposure to alcohol, even at relatively low doses, has its greatest impact on development if it occurs early in the first trimester or at any time during the third trimester. This is because the developing fetus has different periods of peak sensitivity to alcohol." (Sloboda and Bukoski, p 330). Therefore, it is vital to relate to the timing of the exposure alcohol when the fetus is affected the most in prenatal development. The broad period of prenatal development is often divided into three periods for the sake of convenience, i.e. the pre-differentiation period, the period of the embryo, and the period of the fetus. In the total span of prenatal devel