type‚ sales growth‚ operating cash flows‚ return on equity‚ leverage and size. The latest annual reports for all non-financial companies listed on Abu Dhabi Securities Exchange and operate in the UAE were used to achieve the purpose of the study. The result of the analysis revealed that the effectiveness of working capital management of the companies covered in the study are influenced by sales growth‚ size and the level of corporate leverage. INTRODUCTION Working capital is a financial measure used
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MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY --- oOo --- HUỲNH ANH KIỆT CAPITAL STRUCTURE AND FIRM PERFORMANCE: CASE STUDY: LISTED COMPANIES IN HOCHIMINH STOCK EXCHANGE MASTER THESIS Ho Chi Minh City – 2010 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY --- oOo --- HUỲNH ANH KIỆT CAPITAL STRUCTURE AND FIRM PERFORMANCE: CASE STUDY: LISTED COMPANIES IN HOCHIMINH STOCK EXCHANGE MAJOR: BUSINESS ADMINISTRATION MAJOR CODE: 60
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Procedure 42 7. Data Presentation and Method of Analysis 42 1. Financial Analysis Tools 43 • Ratio Analysis 43 • Standards of Comparison 44 • Capital Structure or Leverage Ratios 44 • Financial Leverage 46 • Capital Adequacy Ratios 47 • Other Indicators 47 2. Statistical Analysis Tools 49 • Correlation Coefficient 49 • Regression Analysis 50
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35 28 2. Return on assets 30 24 3. Net income margin 20 16 4. Gross income margin 15 12 B. Liquidity Ratios 100 1. Net working capital 40 2. Current ratio 20 3. Acid test ratio 20 4. Strict liquidity test ratio 20 C. Leverage Ratios 100 1. Debt to equity 40 32 2. Debt service coverage 35 35 3. Current liabilities to net worth 25 10 D. Activity Ratios 50 1. Inventory turnover 20 8 2. Average collection period 20 20 3. Total asset turnover
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regression technique is used to regress the data. Findings of this study conclude that Institutional Shareholding ratio‚ Board Size and Independent Directors’ ratio affect firm performance in the positive way whereas‚ CEO duality‚ Firm size‚ and Leverage have negative impact on firm performance overall when firm performance measured through four different measures. In future‚ the study may be extended to more corporate governance variables and increased sample size so that more generalized results
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Part1 Data Inc. has $40 billion of equity and $60 billion of debt currently. So the initial leverage (D/V) is 60%. We can calculate the cost of equity using this formula: WACC = ke * E/V + kd *(1-t) *D/V. ke = the cost of equity = 20% Using the same formula we calculate WACC‚ when the leverage is 20%: WACC =
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Chapter 1 Introduction 1.1 Prelude Financial structure refers to the make-up of the right hand side of a company`s balance sheet‚ which includes all the ways it`s assets are financed‚ such as trade accounts payable and short-term borrowings as well as long-term debt and ownership equity. Each business will have a different mixture depending on its needs and expenses. This specific mixture of debt and equity that a company uses to finance all it`s operations directly affects the risk
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DEBT TO EQUITY PROPORTIONS In building the pool of funds for the business it is important to balance and optimize the proportions of debt and equity. The relationship between total debt and total equity is referred to as leverage or gearing. If there is too much debt‚ a business becomes highly leveraged with the implications of: • Repayment risk. The risk to debt providers increases as there is less of an equity buffer to absorb losses that the business may make. • Interest risk. The interest
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CHAPTER 1 INTRODUCTION 1.0 CHAPTER OVERVIEW Capital plays an important role in business. Every business enterprise‚ whether big‚ medium or small‚ manufacturing‚ services or industrial‚ needs capital to carry on its operations smoothly and to achieve its targets organization’s objective. Capital Structure means how an organization or company manage their capital or obtain financial resources to manage their business well. Business adopts different types of capital structures in order to meet
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American Home Products (AHP) has established a strong track record of revenue growth and return on equity over the past decade‚ producing a host of products in four separate business lines: prescription drugs‚ packaged drugs‚ food products‚ and housewares/household products. AHP’s distinctive culture emphasizes conservatism‚ cost control and risk aversion. AHP’s corporate structure also concentrated most decision-making authority with the incumbent chief executive‚ William F. Laporte. This approach
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