How Different Stakeholder Groups Build Brand Value Research Paper

How Different Stakeholder Groups Build Brand Value - Research Paper Example The concept of brand building has witnessed a striking change from the last decade. Traditionally the role of brands was just to provide a name or an identity to a product (Baehrens, 2012). Apart from being an identity is also the association which satisfies emotional and functional needs of the consumers (Glynn, 2009). A brand also helps to distinguish one company from the other (Dunn, 2004). However the modern concept of branding is a step of the entire marketing and selling process. According to Kotler (2008) branding is defined as the name which is associated with the product line of the companies and is used to recognize the product (Kautish, 2011). Apart from this American Marketing Association (AMA) defined brand as symbol, term, name, sign or design, or an amalgamation of all which are proposed to recognize the products and services of one company to that of the other. In other words brand helps to distinguish a product of a company from that of another company. However many authors have specified that brands are much more than just a mere mark of identification. Brands also act as the element which enhances the societal value of a company and the communal value of the user of a branded product. Kotler also mentioned brands as the major area of concern in the context of the product strategy. Since brand was only a part of the product strategy, the communication strategy also worked with it in the process of exploring the brand value and creating brand awareness. The brand development process is lengthy and there are a number of factors associated with it. Also there are a number of people starting from the employees and customers, who help in the process of creating brand. Hence there is a part played by the stake holders towards the... In this turbulent business environment creation of brand value is not an easy process and is mainly created due to active participation of the stakeholders. The situation worsens for the new companies who enter into a market. To cite an example it took many years for Pepsi, Coca Cola, Volkswagen, and Toyota, to get them established and to become renowned brands of the world. Thus, brand equity and brand value are the essential factors towards the success of an organization. Brand value is mainly used to define the association during the process of value creation, while on the other hand brand equity is imperative for the evaluation of the brand value that is also termed as the result for the relationship. After conduction the research about the impact of stakeholders on the creation of brand value, it can be concluded that the stakeholders plays the most essential role towards the development of a brand. The study also revealed that customers are an important group of stakeholder, bu t are not the sole responsible group for the development of a brand. Other stakeholders such as suppliers, distributors, business partners, other channel members, government, banks, Ngo’s, media and also competitors plays a major role in the process of brand value creation. The null hypothesis holds true for the project.

Financial Accounting and Reporting Essay Example | Topics and Well Written Essays - 1750 words

Financial Accounting and Reporting - Essay Example The formation of the bank was done in cooperation by Unit Trust of India, General Insurance Corporation of India, Life Insurance Corporation of India and also four other Public Sector Undertaking (PSU) companies of insurance namely The New India Assurance Company Ltd., United India Insurance Company Ltd., National Insurance Company Ltd. and The Oriental Insurance Company Ltd. (Axis Bank, 2007).Presently, the bank occupies the third position among the banks in private sector to have a Pan network in India which includes over 1281 branches and Automated Teller Machine (ATMs) numbering 6270 making the bank to have the biggest system of ATMs in the country (Pandit, 2008; Axis Bank, 2007). In the year 2007, a decision regarding having its own individuality different from UTI-I as its parent was taken by the bank authority. And this is how the brand name ‘Axis’ was born. The bank was successfully accomplished to rebrand itself with its new name as ‘Axis Bank’. Thi s had assisted the bank to get rid of the dim perception as an entity that was government owned (Pandit, 2008).According to Axis Bank’s Annual Report for the fiscal year 2011, Rs. 3,388.49 crores was reported as its net profit. The earnings as well as the business of the Bank grew sturdily over the previous years. The net profit of the bank also rose by a considerable amount of 34.76 percent compared to the previous year. The substantial expansion in the business in all the segments was revealed in the form of vigorous financial indicators. The total income of the bank increased by 26.97 percent and reached to Rs. 19,786.94 crores in the financial year 2010-11 in comparison to Rs.15,583.80 crores in the last year. The return from operations in this period augmented by 25.08 percent to an amount of Rs.11, 195.12 crores whereas the profit in relation to operations rose by 22.42 percent and amounted to Rs. 6,415.69 crores (Moneycontrol, 2011). The progress in terms of revenue ca n possibly be credited to the performance of the central income streams of the bank such as the income from net interest (NII) as well as other incomes and fees. NII augmented by a percent of 31.14 to an amount of Rs. 6,562.99 crores which was more in numbers compared to last year i.e. 2009-10, whereas other income as well as fee rose to Rs. 4,632.13 by 17.39 percent in comparison to the previous year i.e. 2009-2010. The increase in NII by such a considerable percent of 31.14 was an outcome of the vigorous progress in the low-cost deposits of Current Account and Savings Bank (CASA) and also in assets on a regular average basis. All through the period, the entire earning assets amplified by 34.70 percent to an amount of Rs. 179,573 crores on a regular average basis and which had augmented in comparison to last year i.e. 2009-10. A progress of 32.81 percent was also observed in relation to the low-cost deposits in CASA which had increased from the previous year i.e. 2009-10 on a regul ar standard basis and which even assisted the bank to hold on to the funding prices (Moneycontrol, 2011). Additional income including fees, miscellaneous income and trading profit even augmented to 4,632.13 crores by a percent of 17.39 compared to the previous y

Criminology Theory Research Paper Example | Topics and Well Written Essays - 2500 words

Criminology Theory - Research Paper Example Theories allow scholars to make hypotheses, which are tested through empirical research in order to come up with assumptions that make us understand the world better. Theories, which depict the causation of crime, are complex but studies from the past and present helps the researcher in understanding the behaviors among criminals. These theories are used to determine the best causes of action that can be used in order to ensure that crime is prevented from happening in our society. Traditionally, punishment was very harsh and the police used brutality when recording statements from suspects without having to understand why certain people committed certain crimes. In addition, the punishments meted out on convicts were harsh and as a result, scholars begun to study criminology in order to ensure that punishments were fair (DeMelo, 2001). Classical School Before 1789, the law system, punishment, and access to justice were barbaric. The classical school’s interest was not the stu dy criminals but it focused on understanding the legal processes and law making. According to this school of thought, criminals knew the consequences of their actions and they even weighed the options before they engaged in any criminal activity. In addition, punishment was designed for the purposes of deterring crime and it was painful than the pleasure one got from engaging in any criminal activity. ... The human behavior is motivated by attainment of pleasure and the ability to avoid pain. Natural law reveals actions that people should not be engaged in, but the punishments that criminals received were not deterrent in nature, but brutal. No forms of punishments that criminals receive should be used to take way a person’s happiness while in the society. This is because according to Beccaria, a person is ready to relieve a minute amount of happiness in order to live in a secure and humble environment. Men do not want to be under scrutiny at all times and they feel more independent when the scrutiny is at the minimum (Beccaria 2009). Pleasures in human beings can be described as that of skill, wealth, sense, amity, piety, and benevolence. In addition, a good name, malevolence, memory, power, relief, and expectation constitute to feelings of pleasure in a person. Pleasures can be complex or simple. People will do everything to ensure that they have pleasure as opposed to pain. Pleasures and pains are caused by certain actions, however, the amount of the pleasure or pain felt is not proportional to the causing effect. Since majority in the society look for pleasure at all times, Bentham notes that people should be given a free will to enjoy their lives as long as they do not inflict pain on others (DeMelo, 2001). On the other hand, Bentham focused on utilitarianism because he believed greatest happiness for the majority. This could not be achieved without changing the justice system because the leadership of that time was corrupt and barbaric. The people, according to Bentham measure the probabilities between future and present pleasures against future

Financial Accounting and Reporting Essay Example | Topics and Well Written Essays - 1750 words

Financial Accounting and Reporting - Essay Example The formation of the bank was done in cooperation by Unit Trust of India, General Insurance Corporation of India, Life Insurance Corporation of India and also four other Public Sector Undertaking (PSU) companies of insurance namely The New India Assurance Company Ltd., United India Insurance Company Ltd., National Insurance Company Ltd. and The Oriental Insurance Company Ltd. (Axis Bank, 2007).Presently, the bank occupies the third position among the banks in private sector to have a Pan network in India which includes over 1281 branches and Automated Teller Machine (ATMs) numbering 6270 making the bank to have the biggest system of ATMs in the country (Pandit, 2008; Axis Bank, 2007). In the year 2007, a decision regarding having its own individuality different from UTI-I as its parent was taken by the bank authority. And this is how the brand name ‘Axis’ was born. The bank was successfully accomplished to rebrand itself with its new name as ‘Axis Bank’. Thi s had assisted the bank to get rid of the dim perception as an entity that was government owned (Pandit, 2008).According to Axis Bank’s Annual Report for the fiscal year 2011, Rs. 3,388.49 crores was reported as its net profit. The earnings as well as the business of the Bank grew sturdily over the previous years. The net profit of the bank also rose by a considerable amount of 34.76 percent compared to the previous year. The substantial expansion in the business in all the segments was revealed in the form of vigorous financial indicators. The total income of the bank increased by 26.97 percent and reached to Rs. 19,786.94 crores in the financial year 2010-11 in comparison to Rs.15,583.80 crores in the last year. The return from operations in this period augmented by 25.08 percent to an amount of Rs.11, 195.12 crores whereas the profit in relation to operations rose by 22.42 percent and amounted to Rs. 6,415.69 crores (Moneycontrol, 2011). The progress in terms of revenue ca n possibly be credited to the performance of the central income streams of the bank such as the income from net interest (NII) as well as other incomes and fees. NII augmented by a percent of 31.14 to an amount of Rs. 6,562.99 crores which was more in numbers compared to last year i.e. 2009-10, whereas other income as well as fee rose to Rs. 4,632.13 by 17.39 percent in comparison to the previous year i.e. 2009-2010. The increase in NII by such a considerable percent of 31.14 was an outcome of the vigorous progress in the low-cost deposits of Current Account and Savings Bank (CASA) and also in assets on a regular average basis. All through the period, the entire earning assets amplified by 34.70 percent to an amount of Rs. 179,573 crores on a regular average basis and which had augmented in comparison to last year i.e. 2009-10. A progress of 32.81 percent was also observed in relation to the low-cost deposits in CASA which had increased from the previous year i.e. 2009-10 on a regul ar standard basis and which even assisted the bank to hold on to the funding prices (Moneycontrol, 2011). Additional income including fees, miscellaneous income and trading profit even augmented to 4,632.13 crores by a percent of 17.39 compared to the previous y

Poetrys Influences on the Harlem Renaissance Essay Example for Free

Poetrys Influences on the Harlem Renaissance Essay Racial equality has been the topic of many works for centuries. Many of those works weren’t written by those actually affected by inequality. During the 1920’s African Americans began to express their opinions on the issue more frequently through the arts. Poetry was among the most prominent forms of art used for spreading equality and justice. Poets like Langston Hughes, Countee Cullen, and Claude McKay wrote many poems that spoke on equality in society. African Americans felt betrayed after the civil war. They had given their lives and after the war nothing had changed (Cartwright, â€Å"The Harlem Renaissance†). They were still not treated equal and didn’t get paid as much as any other worker. During the 1920’s they started a cultural and racial movement in Harlem, New York called the Harlem Renaissance. The Harlem Renaissance was a time of growth of African Americans during the 1920’s. During this time ideas on equality and freedom spread through the African American community like wild fire. African Americans were expressing their emotions about racial equality in many different ways (Rau 167). Some chose poetry some chose painting or jazz. They used these arts to highlight the injustices they saw in their everyday lives. 1. Langston Hughes Langston Hughes is one the most well know poets of the Harlem Renaissance. Hughes was born in 1902 in Joplin, Missouri (Rampersad, â€Å"Hughes’s Life and Career†). His beginnings were more humble than most. At a very young age Langston’s Hughes parents divorced. After the divorce Hughes moved to Lincoln with his grandmother. This is where he began to write poetry (The Academy of American poets, â€Å"Langston Hughes†). Hughes ideals were closely based around his grandfather, who was a militant abolitionist (Rampersad, â€Å"Hughes’s Life and Career†) His poetry was influenced by many poets who shared his colorful writing style (The Academy of American poets, â€Å"Langston Hughes†). Hughes lived his life as he wrote, with passion. After high school Hughes spent a year in Mexico with his father who disliked his passion for writing and urged him to stop. At that time Hughes was beginning to get published in a number of places like magazines and children’s book. During this time he was noticed but W. E. B Dubois. Upon Hughes return to America he enrolled in Colombia University in New York. Hughes did not like the atmosphere at Colombia so after a year he left. After Columbia he moved to New York and began work on a freighter. This job took him to many places. He traveled to the coast of Africa, Spain, and Paris. ( Rampersad, â€Å"Hughes Life and Career†)He ended up staying in Paris for a couple of months this is where he began practicing a new style of poetry there. Hughes writing style was a lot different from the others. Throughout his life time Hughes wrote many poems that showed common experiences that all African Americans shared. Hughes never discussed the differences between his life and the lives of other Africans Americans. His poetry always showed the negative and positive sides of the African American experience. Hughes may have seen both sides of African Americans but when it came to issues between African Americans and Caucasians he had strong opinions. He (Rampersad, â€Å"Hughes’s Life and Career†) wrote many poems that touched on the controversial topics of that time. In poems like I, Too and The nergo speaks rivers Hughes talked about the struggles that African Americans went through. (Poetry Foundation and the National Endowment for the Arts, â€Å"Langston Hughes†). Hughes used his dislike for Caucasians often in his poetry. 2. Countee Cullen Countee Cullen might not have reached the fame that Langston Hughes has over the years but his poetry was just as influential. Countee Cullen was born in May 30, 1903 in New York when his grandmother died in 1918 Cullen was put under the custody of Reverend Fredrick A. Cullen. Cullen’s connection to the Salem Methodist Episcopal church through Reverend Cullen placed him in the center of black politics and culture at the age of 15. This gave him a more unconventional education. Instead of learning regular writing and math like other children his age he was taught about black ideals. Most of his education was provided by completely white influences. This gave him a well rounded look at racism. (Poetry Foundation, â€Å"Countee Cullen†). This was often shown in his writing. Cullen’s writing technique would never directly attack Caucasians like other poets during the Harlem renaissance. He was a new voice for the African Americans, one that was actually listened too Cullen graduated from New York University in 1925 as Phi Beta Kappa. At that time he was already writing some of the acclaimed poems published in books by Harper and Brothers: Color (1925), Copper Sun (1927). He won first prize in the Witter Bynner Contest in 1925. Graduating with a Harvard University M. A. egree in 1926, the poet traveled to France as a Guggenheim Fellow(A grant). Upon his return in 1928, he married Yolanda Du Bois, daughter of W. E. B. Du Bois. She divorced him two years later, saying that he told her he was sexually attracted to men. From 1934 on, Cullen taught English and French at the Frederick Douglas Junior High School, though he declined a Creative Literature invitation from Fisk University in Nashville. In 1940 he married an old friend, Ida Mae Roberson. (The Harvard Square Library, â€Å"Countee Cullen† He died in 1946 of gastrointestinal disorder Cullen’s upbringing helped his poetry reach both African American and Caucasian audiences. Cullen was able to do something most African American poets in the Harlem renaissance couldn’t and that was reaching both sides. Cullen was against the way that African Americans were treated but he also understood not all Caucasians had the same ideals. He was brought up with Caucasians in his life which causes him to show a less offensive type of poetry. Cullen’s poetry often presented the sad side of an African Americans life (Poetry Foundation, â€Å"Countee Cullen†). The poem The Little Brown Boy tells of the death of a young black boy (Nelson and Smethurst, â€Å"Countee Cullen poems†). This shows the method of persuasion he used. Countee’s poetry’s influence reached many and his voice spread far. 3. Claude McKay In 1889 Claude McKay was born in sunny vile, Jamaica to peasant farmers. His lower class up bringing taught him how to love himself and have pride in his African heritage. Similar to Cullen, McKay was unconventionally taught as well. McKay was home schooled by his older brother and neighbors. He studied romantics and many other European based things. In adult hood he moved to Kingston which would be the first time that he had actually experienced racism he was immediately disgusted with the way that African Americans were treated and returned home disgusted. Once he returned to sunny vile he published his first verse of poetry. (Academy of American Poets, â€Å"Claude McKay†) After hearing about Booker T. Washington’s Tuskegee institute he decided to move to Alabama and enroll. There he sees American racism for the first time. McKay took a lot of his influence for his writing from similar poets to Langston (University of Illinois, â€Å"Claude McKay’s Life†). As early as 1912 he had published his first volume of verse, Songs of Jamaica, which had been widely praised and had won a medal for poetry. McKay slowly decided not to return to Jamaica and stayed in America. In 1914 he left college and began work menial jobs typical of the African American in the Northern cities of America at that time. At different periods he worked as wheelwright, porter, dishwasher, waiter, and longshoreman. McKay didn’t take his jobs very seriously they were just a matter of earning enough cash to quit for a while and write. McKay’s interest in politics led him to the socialist like many other artist. He was associate editor of The Liberator, a socialist U. S. journal of art and literature. In 1923-24mckay went to Moscow, Russia to be a part of the Bolshevik Revolution. As a African American, McKay was used to show the soviets commitment to racial equality, and he was treated like royalty, being lavishly entertained and exhibited on platforms with the most famous revolutionary leaders. But McKay was skeptical of all this, though he had sympathy for the lives lost in to the Revolution. Claude traveled the world trying to find a peaceful place to write. He went to Morocco and France. In 1928 he published his famous novel, Home to Harlem, which was a national best-seller in the U. S. and was instantly a literary sensation. ( Though McKay reached great success in his life he died impoverished and unappreciated. Claude McKay’s experience with the racism in Alabama was the basis for a lot of his writing. McKay more geared towards the empowerment of blacks and less toward equality. McKay wanted to show that African Americans weren’t just equal but they were better. A lot of his poetry was written to show how much power African Americans had. (Academy of American Poets, â€Å"Claude McKay†) in the poem â€Å"If We Must Die† McKay writes about how African Americans must fight as hard as they can even if the end result is death. This poem says a lot about McKay’s style of writing. In the years after the Harlem renaissance African Americans expressed themselves more often than ever before. The Harlem renaissances effect on African Americans was obvious. Free ideas were flowing and battles were being fought for equal rights. In the thirties no one had much money so African Americans had even less opportunities for work. Each of these poets had a different style and finesse but there messages were all the same. They all grew up as African Americans and they all experienced racism in some way shape or form. They all took those situations and used them to empower those around them. Claude McKay, Countee Cullen, and Langston Hughes might have all had different writing styles but they all played a major role in the growth of African Americans in the United States of America.

The Theories And Implications On Corporate Financial Decisions Finance Essay

The Theories And Implications On Corporate Financial Decisions Finance Essay This paper concerns mainly on exploring the area of corporate valuation models and their implications in assessing the value of corporate firms. The models to be reviewed and analyzed are Economic Value Added (EVA), Capital Asset Pricing Model (CAPM) and Free Cash Flow (FCF). The selected models would be used on 5 publicly listed firms in the Bursa Malaysia. The aim of this study is to analyze the three models on how it can be utilized in helping a firm to create, sustain and access its corporate value. This paper consists of six parts, which are introduction, literature review, importance of theories and its implications on corporate financial decisions in Malaysia, application of concepts, tenets, fundamentals, technical issues, etc to the five chosen firms, methodology to analyze 5 years financial data of the selected firms and conclusion. Introduction In this paper, three corporate valuation models have been chosen as our main concern, which are Economic Value Added (EVA), Capital Asset Pricing Model (CAPM) and Free Cash Flow (FCF). We then apply the selected valuation models and methodologies to five publicly listed firms in the Bursa Malaysia from the food and beverage industry. The five companies are Dutch Lady Milk Industries, Fraser Neave Holdings Berhad, Nestle Ltd, QSR Brands Bhd and Yeo Hiap Seng (M) Berhad. Summary will be made by reviewing ten journal articles under the literature review part for a preliminary understanding of the models. This paper includes four journal articles for EVA as well as another seven journal articles for FCF and CAPM. In addition, we will identify the importance of the theories and describe its implication on corporate financial decisions in Malaysia. This study has provided us a great learning opportunity by accessing the company value of the real corporate firms. It also provides us a lear ning platform in how to utilize the valuation tools to evaluate companys performance for investment purpose in the future. Literature Review Economic Value Added (EVA) Economic Value Added (EVA) is a corporate valuation tool developed by Stern Stewart Co. to assist managers in their decision making by incorporate two basic principle of finance inside. The first principle is the financial goal of any company for shareholders wealth maximization and the second one is that a companys corporate value is based on the extent to which investors expect future earnings to exceed or fall short of the cost of capital. Another way to explain is that, EVA is developed to align decisions with shareholders wealth. According to Stewarts study in 1994, it is proved that EVA as the single best tool of measuring wealth creation on a contemporaneous basis and the result in describing changes in shareholders wealth is about 50 percent better than its greatest accounting-based rival of EPS, Return on Asset (ROA) and Return on Equity (ROE). EVA model assist managers in better investment decisions making, to identify improvement opportunities as well as to consider the short-term and long-term benefits for a firm. Based on Taubs study in 2003, it is observes that most of the valuation models used among industries focus only on the financial or accounting information. Unlike EVA, it combines factors like accounting, market and economy information in a companys performance evaluation. Various studies have proved the superiority of using EVA over other traditional models for evaluate companys performance due to its transparency and capacity to obtain more important information. According to Kudla and Arendts study in 2000, EVA can eliminate the arising conflicts and confusion when a company employs multiple measures like EPS, Return on Investment (ROI), Return on Equity (ROE) and Net Operating Profit after Tax (NOPAT). Furthermore, EVA can also be used as a tool to eliminate economic distortions of General Accepted Accounting Practice (GAAP) to focus decisions on the actual economic outcomes. It promotes better evaluation of decisions that have an impact on the income statement and balance sheet or trade-offs between each other. Also, EVA managed to cover every aspect of the managerial cycle through the use of the capital charge against NOPAT. There are also studies indicate that EVA is a superior measure of the managerial decisions quality. From Fishers study in 1995, EVA is suggested to be treated as a reliable pointer in estimating a firms value growth in the future. Also, according to Sterns study in 1989, the purpose of EVA is to change the management behavior as well as their performance, leading managers to act in the owners interest. It can be used as a motivation tool to encourage managers to create shareholder value by being a basis for management compensation. Importance of the theories and implications on corporate financial decisions in Malaysia As business grows wider and complex across the border, there is a demand for better valuation tool to evaluate the performance of the business. It is important to adopt more innovative performance metrics so that the companys management behaviors can be closely monitored to achieve the goal of maximizing the shareholders benefits. It is also important to access a firms value for any decision making regarding business expansion or contraction. According to the article of The Chartered Institute of Management Accountants (CIMA), Latest Trends in Corporate Performance Measurement (1992), many companies were experiencing difficulties in implementing measurement frameworks and these statements have been brought to today. There is a study conducted by Dr. Issham Ismail in Malaysia with the purpose to examine the relationship between EVA and the company performance in Malaysia. The study indicates that EVA has a strong relationship with stock return as compared to other measures due to its focus on long-term performance. EVA enhances stock performances by including more informational content in describing the stock returns. According to the study, EVA is considered as a better alternative to other traditional valuation tools such as EPS, ROE, etc. Its characteristic of transparency and capacity to provide more important information helps investors in Malaysia to make better investment decision as well as the resources allocations decisions. Besides that, EVA and MVA can be also treated as performance measures and signals for any strategic change (Lehn and Makhija, 1996). There is another study conducted by Norfarah, Suhaila and Wan Mansor in Malaysia regarding the adoption of EVA on real estate corporations in Malaysia. In Malaysia, real estate sectors have grown to become a large sector and continue to develop for the past two decades even through difficult economic period. Some has been performing well in the industry such as IOI Properties and Boustead Properties Bhd while some of them are experiencing hardship like Country Heights, Land General, and Damansara Realty. In order to identify the company potential of adding more shareholders value, an alternative corporate valuation model has been introduced, which is EVA, proposed by Stern Stewart Management Services. The adoption of EVA is considered to be more comprehensive as its measurement tool provides a clearer picture of whether a business is raising or reducing shareholder wealth. Most of the multinational companies such as Sony, Coca-Cola and Monsanto have formally announced their adoption and implementation of EVA as management systems in their quest of the value. On the other hand, EVA based performance plan produces positive result towards a company management. There is a study on the effects of adopting management bonus plans based on residual income measures. According to Wallaces study in 1997, EVA based performance plan motivates managers to utilize companys assets in a more productive and efficient way. This hence, reduce of the conflict between managers and shareholders interest and the decreasing agency cost eventually help the company to boost its profit after the adoption of the residual income based incentives plans. As a result, EVAs superiority is proved in encouraging managers for shareholder wealth creation. However, in order to work out the EVA compensation system, it requires large commutation effort and extensive training for both managers and their subordinates. Lastly, EVA and its practical applications as a management control system for performance measurement which helps manager to make better investment decisions. Methodology Economic Value Added is an evaluation tools used to examine a companys true economic profitability because it factors in net operating income after taxes interest minus the opportunity cost of capital deployed to earn that net operating income. In other words, EVA tells whether a companys financial performance is higher or lower than the minimum required rate of return for shareholders or business lenders. Besides that, EVA also tells investors if their amount of invested capital in the business is providing them a higher return than their minimum, or if it is better to shift their capital elsewhere. There are few steps required in calculating EVA and this is how Economic Value Added (EVA) is used by the financial analysts. Annual reports from the five selected firms have been sourced respectively in this report. First of all, we have to identify the earnings before interest and tax (EBIT) from the income statement. Next we have to calculate the Net Operating Profit after Taxes (NOPAT) by deducting the Income Tax Expenses from the EBIT. Afterwards, we need to determine the invested capital deployed in the business by deducting Non-interest Bearing Current Liabilities from Total Assets. Then, we need to calculate the Weighted Average Cost of Capital (WACC) using the Capital Asset Pricing Model (CAPM). WACC calculated by adding Risk Free Rate with Beta multiply by Market Risk Premium, where Market Risk Premium is calculated by deducting Risk Free Rate from Market Return. Take WACC multiply with the Invested Capital and finally, EVA can be found by deducting the multiplication of WA CC and Invested Capital from the Net Operating Profit after Tax. The calculation formulas for EVA are as follows: EVA = NOPAT (WACC * Invested Capital) where, NOPAT = Profit Lost Before Interest and Tax Income Tax Expenses and, Invested Capital = Total Assets Non-interest bearing Current Liabilities and, Cost of Equity, WACC is calculated by using CAPM Model where, WACC = Risk Free Rate + ( Beta * Market Risk Premium ) where, Market Risk Premium = Market Return Risk Free Rate Free Cash Flow Literature Review Free cash flow (FCF) refers to the cash generated by the assets of the business available for distribution to all the shareholders and it cant be affected by the businesss capital structure. A firms stock value is calculated by projecting the future free cash flow (FCF) that will be generated by the business assets and then compute the present value of FCF by discounting them at the appropriate required rate of return. FCF appeared to be an appropriate valuation model to be used when (1) the firm doesnt pay dividends at all or pays out lesser dividends than dictated by its cash flow, (2) free cash flow tracks profitability or (3) the analyst takes a corporate control perspective. The present value of FCF is the most fundamentally useful valuation tool used in assisting any investing decisions like investment opportunities appraisal and corporate valuation (Arumugam, 2007). It can also be used to measure the potential of investment opportunities as well as to forecast the firms future performance by accessing its corporate value. Based on an article written by Ben Lardes in March 2010, a companys free cash flow reflects a lot of information about the company performance. Obviously the higher the free cash flow of a business is, the more money you can expect to earn as the businesss shareholder. Every firm has different FCF, which is depends on how well is their performance over the periods. For instance, a well performing firm may have a good amount of positive cash flows. On the contrary, a firm may not have a positive cash flow at all if it has been struggling to succeed. A firm will have a negative FCF if its expenses are exceeding its income. By looking at the FCF, a company can decide whether to go on with its current business direction or to change its management operation. However, negative FCF does not always signify problems within a business. The negative FCF may be due to the preparation of business expansion in the future. The age of a company and its circumstances should always be in the consider ation before judging it purely based on its free cash flow. According to the study conducted by McClure, although FCF has its merits, it still has some limitations and the most significant one would be the garbage in, garbage out principle. Predicted FCF is used as the main input in DCF calculation to evaluate any investment decisions, thus the quality of FCF is very important in the valuation process in order to get an appropriate and reliable outcome. If all the FCF values have found to be inaccurate, then it will be useless in assessing the firms stock price. Therefore, the ability to make good future projections of FCF is critical. The more you confident about the future cash flow, the better project evaluation you can made, leading to a desirable profit from your investment. In this case, the forecast of potential cash flow appeared to be the tricky part, as you are required to prepare a full financial model to get a better estimation. This requires some serious analysis of the business, the macro-economic environment, the legal and regu latory framework and the competitive landscape (Cartmail, 2010). Importance of the Theories Implications on Corporate Financial Decisions in Malaysia Investing decisions can be made based on a simple analysis like selecting your desire firm with a product you expect to have high demand in the future. The underlying expectation is that the company will continue to produce and sell high-demand products and will generate cash flow back to the business. The second part is that the companys management will know where to spend this cash to continue its operations whereas the third assumption is that all of these expected future cash flows are worth more today than the stocks current price.   Free cash flow (FCF) tracks the remaining operating cash flow for the shareholders after laying out the money a firm required to expand or sustain its asset base. It is important as it allows business to pursue more opportunities that could enhance shareholders value. Present value of all free cash flows is the key indicator of a firms equity value. The growing FCF is often a prelude to increased profits. Firms that facing surging FCF as a result of revenue growth, debt elimination, improvement of operational efficiency and others, can reward their investors tomorrow. Thats the reason investors cherish FCF as a sound valuation metric. The odds are good when a firms FCF is increasing, it is believed that the firms share value will soon be increased as well. An important thing to note is that, negative FCF is not bad in itself, however it could represent a sign that a firm is engaging in large investments (Investopedia, n.d.). DCF is one of the favorable and sound tools to be used in corporate valuation because it can produce outcome, which has the closest value to an intrinsic stock value. Unlike other valuation tools like P/E ratio, DCF analysis relies on FCF. It is believed that FCF reflects a clearer view of a firms ability in generating cash, as profits can sometimes be clouded by accounting tricks, but cash flow cannot. The reason is because cash flow generation is hardly to be influenced by accounting assumptions and practices. Also, FCF is a trustworthy measure that eliminates most of the arbitrariness and guesstimates found in reported profits (Investopedia, n.d.). Other than that, FCF can be considered as a forward-looking metric because it depends more on future prospects rather than past results. In addition, it also enables expected operating strategies to be included in the valuation as it allows varies business components to be valued separately. On the other hand, free cash flow theory has important implications for the leverage effect on a firms investment financing decisions. The FCF model implies that for an over-investor, an increase in leverage should lead to a reduction in unprofitable investment spending. Additional leverage will leave less amount of free cash flow at the discretion of the managers at the same time that it increases the intensity level at which the companys activities can be closely monitored. Overall investment will become more efficient as the firm substitutes contractually obligated debt service for negative net present value investments. Empirically, the reduction in unprofitable investment spending should contribute to an increase in the firms stock price that reflects the improved efficiency of managerial investment decisions. Methodology Free Cash Flow (FCF) is the cash generated by the companys assets and it is available for distribution to all the shareholders. It is used to tracks the remaining operating cash flow available for the shareholders after laying out the money a firm required to expand or sustain its asset base. It is calculated by deducting Net Investment in Operating Capital from Net Operating Profit after Tax (NOPAT), where NOPAT is calculated by deducting Income Tax Expenses from the Profit Lost before Interest and Tax (EBIT) and Net Investment in Operating Capital is obtained by using the Operating Capital at time t to minus the Operating Capital at time t-1. Operating Capital is calculated by adding up Net Operating Working Capital (NOWC) and Net fixed Assets, where NOWC is calculated by deducting Non-interest Bearing Current Liabilities from Operating Current Assets. The calculation for FCF is as followed: Free Cash Flow (FCF) = Net Operating Profit after Tax (NOPAT) Net Investment in Operating Capital where, NOPAT = Profit Loss before Interest and Tax (EBIT) Income Tax Expenses and, Net Investment in Operating Capital = Operating Capital at time t Operating Capital at time t-1 where, Operating Capital = Net Operating Working Capital (NOWC) + Net fixed Assets where, NOWC = Operating Current Assets Non-interest bearing Current Liabilities Capital Asset Pricing Model Literature Review Basically, Capital Asset Pricing Model (CAPM) is based on Markowitz (1959) and Tobin (1958), who introduced the risk-return portfolio theory. The primary implication of the CAPM is the mean-variance efficiency of the market portfolio. The efficiency of the market portfolio implies that the positive linear relationship between expected returns and market betas is exists and only beta is playing a significant role in explaining the expected returns of stocks. Several attempts have been done to test the implications of the CAPM using historical rates of returns of securities and historical rates of return on a market index. The CAPM is relies on several assumptions with the fact that every investor wants to maximize the expected satisfaction of their wealth. An addition to the risk aversion is that all of them are having the same expectations towards the returns of the securities. The returns of the securities follow a normal distribution, which characterizes the phenomenon of homoscedasticity. Besides that, CAPM also assume that every investor is allowed to borrow any amount of money at the risk free rate. Finally, there are no taxes or other barriers which lead to an imperfection of every market, that is, the market is assume to be in equilibrium and have a perfect competition among all the participants in the market. According to Grigoris and Stavross study in 2006, one of the earliest empirical studies that support the theory of CAPM is that of Black, Jensen and Scholes [1972]. By using monthly data of return and portfolios rather than individual stocks, Black et al tested whether the cross-section of expected returns is linear in beta. By constructing a portfolio made up by an amount of securities, investors managed to diversify away most of the firm-specific risk, thus increasing the precision of the beta estimates and the expected rate of return of the portfolio. This approach eliminates the statistical problems that arise from measurement errors in beta estimates. The data found to be consistent with the predictions of the CAPM, at which the relationship between the average return and beta is close to linear and that portfolios with high (low) betas will have high (low) average returns. There is another classic empirical study that supports the theory conducted by Fama and McBeth in 1973. In the study, they examined whether there is a positive linear relation between average returns and beta. In addition, the author also investigated whether the squared value of beta and the volatility of asset returns can explain the residual variation in average returns across assets that are not explained by beta alone. There are several studies in the early 1980s suggested that there were deviations from the CAPM risk return trade-off due to other variables that affect this tradeoff. The objective of the studies was to find the missing components that CAPM omitted in explaining the risk-return trade-off and to identify the variables that created those deviations. Banz [1981] tested the CAPM by examining whether the size of firms can explain the residual variation in average returns across assets that remain unexplained by the CAPMs beta. CAPM is being challenged by indicating that firm size does explain the cross sectional-variation in average returns on a particular collection of assets better than beta. The author concluded that the average returns on stocks of small firms were higher than the average returns on stocks of large firms, vice versa. This study has known as the size effect. The general reaction to Banzs [1981] findings, that CAPM may be missing some aspects of reality, was to support the view that although the data may suggest deviations from CAPM, these deviations are not as significant to invalidate the theory. Importance of the theories and implications on corporate financial decisions in Malaysia CAPM, which is a theoretical representation of the financial markets behavior, can be used in the estimation of a companys cost of capital. Despite the limitations, the model can be a superior addition to the analytical tool kit of financial manager. The modern financial theory relies on three major assumptions. First, we assume the participants in the securities market are dominated by rational, at which all the investors are risk averse. Risk-averse person often seek to maximize satisfaction from the returns on their investment. CAPM also assume a perfect competitive market, which is in the equilibrium. It means that the financial market is populated with highly sophisticated and well informed buyers and sellers, meaning that the financial market has the characteristic of transparency. The third assumption implies that investors will choose to hold diversified portfolios, means that every investor wants to hold a portfolio that could reflects the stock market as a whole. Although i t is impossible to own the market portfolio, it is relatively easy and inexpensive for investors to eliminate specific or unsystematic risk and construct a portfolio that tracks the stock market through diversification. Another significant problem is that, it is not possible for investors to borrow at the risk-free rate in the real world. This is because the risk associated with individual investor is particularly higher than the risk associated with the Government. This inability to borrow at the risk-free rate means that the slope of the SML is shallower in practice than in theory. However, CAPM is generally considered as a better method to calculate the cost of equity and it explicitly takes into account the sensitivity of a companys security return to market risk. It is clearly superior to the WACC in providing discount rates to be used in investment appraisal. Research has shown the CAPM to stand up well to criticism, although the arguments against CAPM have been increasing in the recent years. Investment managers in Malaysia have widely applied CAPM as well as its sophisticated extension as the investment valuation metric. CAPMs application to corporate finance is the recent development. Although it has been employed in many utility rate-setting proceedings, it has yet to gain widespread use in corporate circles for estimating companies cost of equity. Methodology The Capital Asset Pricing Model indicates a simple linear relationship between expected rate of return and systematic risk or market risk of a security or portfolio. The model is an extension of Markowitzs (1952) portfolio theory. The researchers who are commonly credited with the CAPM development are Sharpe (1964), Linter (1965) and Black (1972) and that is the reason CAPM is normally referred as SLB model. Markowitz (1952) developed a concept of portfolio efficiency through the combination of risky assets that minimizes risk for a given return or maximizes return for a given risk. Variance of expected returns has been used as the measure of risk and then the efficient portfolio will be developed to minimize risk for a given rate of return. The equation of CAPM indicates the relationship between cost of capital and market returns. The general idea behind CAPM is that investors need to be compensated for two reasons: time value of money  and risk. The time value of money is represented by the risk-free rate, Rf  in the equation and investors are being compensated for the forgone opportunity cost and time value of money due to their investment over a period of time. The other half of the equation represents the risk and the risk premium is the compensation for the investors for taking on any additional risk. It is calculated by using a risk measure (Beta) to the market premium (Rm-rf). The calculation of CAPM is as followed: Ri = Rf + ( Beta * Market Risk Premium ) where, Market Risk Premium = Rm Rf where, Ri = return on equity or portfolio Rm = return on the market portfolio Rf = return on risk-free asset Beta = sensitivity of security or portfolio to the systematic risk The equation indicates that the expected rate of return on asset i is equal to the rate of return on the risk-free asset plus a risk premium. The risk premium is calculated by multiplying beta with the difference between the expected rate of the return of the market portfolio and the risk-free rate. Risk free rate can be obtained from the return on Malaysian Treasury bill at particular time of the stock trading while beta can be calculate from the historical prices of stock and the market and the market return can be calculated based on the market index. To calculate the beta value, we need to first calculate the covariance of the security and the market. Second, we need to calculate the variance from market return. Next, we need to divide covariance of the particular security and market by variance of market to obtain the value of beta.

princess diana :: essays research papers

Princess Diana A.  Ã‚  Ã‚  Ã‚  Ã‚  1. Diana Francis Spencer was born July 1, 1961. 2.  Ã‚  Ã‚  Ã‚  Ã‚  She was born in Norfolk, England.   Ã‚  Ã‚  Ã‚  Ã‚  3. Her parents were Lord and Lady Althorp.   Ã‚  Ã‚  Ã‚  Ã‚  4. Diana’s nationality was English.   Ã‚  Ã‚  Ã‚  Ã‚  5. She learned that she was expected to be a boy but had died 10 hours after conceived just before her (she had been a twin). a.  Ã‚  Ã‚  Ã‚  Ã‚  She would remember the churchyard grave that her brother had been buried in.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚   6.  Ã‚  Ã‚  Ã‚  Ã‚  Diana was the third or four children. B.  Ã‚  Ã‚  Ã‚  Ã‚  1. Princess Diana grew up at a mansion called Park House. 2.  Ã‚  Ã‚  Ã‚  Ã‚  She had a relatively happy home until she was eight years old when her parents separated. a.  Ã‚  Ã‚  Ã‚  Ã‚  After her parents split up she bravely declared that she would marry only once and only for love and never ever divorce. 3.  Ã‚  Ã‚  Ã‚  Ã‚  At age 12, Diana began attending the exclusive West Health School in Sevenoaks, Kent. a.  Ã‚  Ã‚  Ã‚  Ã‚  At Sevenoaks she developed at passion for ballet. b.  Ã‚  Ã‚  Ã‚  Ã‚  Ã¢â‚¬Å"She wanted to be a ballet dancer†. 4.  Ã‚  Ã‚  Ã‚  Ã‚  Diana dropped out of West Health at age 16. a.  Ã‚  Ã‚  Ã‚  Ã‚  After dropping out, she attended Swiss Finishing School but was homesick and returned to Norfolk. b.  Ã‚  Ã‚  Ã‚  Ã‚  When she moved to England, she hired her self out as a cleaning woman until she found work as a kindergarten teacher’s aide. 5.  Ã‚  Ã‚  Ã‚  Ã‚  Diana gave and helped needy charities. C.  Ã‚  Ã‚  Ã‚  Ã‚  1. Diana fell in love with Prince Charles at a young age. a.  Ã‚  Ã‚  Ã‚  Ã‚  She taught him how to tap dance on the terrace. 2. Prince Charles thought that she was â€Å" adorable†¦ full of vitality and terribly sweet†. a.  Ã‚  Ã‚  Ã‚  Ã‚  He thought that Diana was much too young to consider as a   Ã‚  Ã‚  Ã‚  Ã‚   marriage prospect, so they went their separate ways. 3.  Ã‚  Ã‚  Ã‚  Ã‚  They met back up in the summer of 1980. 4.  Ã‚  Ã‚  Ã‚  Ã‚  Charles proposed to Diana February 3, 1981. 5.  Ã‚  Ã‚  Ã‚  Ã‚  She resigned from her job, moved in with the Queen Mother, and began to prepare becoming the wife of the future King. 6.  Ã‚  Ã‚  Ã‚  Ã‚  On July 29, 1981, Diana rode in glass coach to St. Paul’s Cathedral, where the Archbishop of Canterbury and twenty-five other clerics officiated at her wedding to Prince Charles. 7.  Ã‚  Ã‚  Ã‚  Ã‚  On November 5, 1981, the palace announced that the Princess of Whales was expecting a child. a.  Ã‚  Ã‚  Ã‚  Ã‚  Diana gave birth to her son William (Wills) in June 1982. b.  Ã‚  Ã‚  Ã‚  Ã‚  A second son Harry arrived two years later in September 1984. 8.  Ã‚  Ã‚  Ã‚  Ã‚  In 1992, Diana was suffering form depression, had attempted suicide five times during the early 1980’s. a. the one incident occurred while pregnant with William and six   Ã‚  Ã‚  Ã‚  Ã‚   months after the wedding. 9. On December 9, 1992, it was announced that the royal couple was   Ã‚  Ã‚  Ã‚  Ã‚