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Analyse Determinants Of The Capital Structure Of A Company - 275 Words

Analyse The Determinants Of The Capital Structure Of A Company (Statistics Project Sample) Content: REGRESSION ANALYSIS OF THE FACTORS AFFECTING THE CAPITAL STRUCTURE OF A COMPANYNameClassProfessors NameInstitution, City and StateDateIntroductionThis essay is based on the analysis of the determinants of the capital structure of companies using the multiple linear regression analysis which is done using the ordinary least square method. Capital structure of a company can be explained as the ability or how the given company finances its day to day operations and the overall growth of the company using the available different and diverse sources of funds and capital. For any company to growth there is need for a better capital structure where the company is able to grow faster without liabilities or undergoing financial strains. This analysis involved the use of 697 financial companies in the United Kingdom which are listed in the London stock exchange and other 628 non financial companies from China. The data relating to the various variables was collected and analyz ed using Microsoft excel. A regression analysis was carried out for the variables and the results of the data analysis summarized in the paper.Variable definitionIn the analysis of the capital structure of the company, the study used a number of financial ratios and values to measure how the company finances its operations to and ensure growth. The dependent variable in this analysis was the leverage ratio of the company which was calculated as the ratio of total debt to total assets of the company.The explanatory variables in this analysis are the tangibility of the company which is the ratio of property plant and equipment to total assets, the market to book ratio of the companies which is the (total assets - book value of equity + market value of equity), the size of the given companies which is measured by the logarithm of the total sales made by the given companies under study and the profitability of the companies given by the ratio of earnings before interest and tax to total assets.Brief analysis of past literature on the determinants of capital structureThis section provides an analysis of the previous studies and researches which have been done on the determinants of the capital structure of companies. It provides a detailed analysis of those literature including the data used, methods used by the studies for analysis of data. The variables they also applied in the analysis of capital structure determinants. The result, findings, limitations, conclusions and recommendations of these studies have also been analyzed in this study.Literature reviewHan suck Hong (2005) carried out a study on the determinants of the capital structure of the companies in Sweden using empirical estimation. He used data of around 6000 companies and using a wide span of years from 1992 to 2000. This provided enough data for him to arrive at reliable conclusions and provide robust results which would be applied later by other researchers. The study concluded that the companies in Sweden are highly leveraged that is they have a high leverage ratios and also the short terms debts of the companies formed the major part of the total debts of the companies. The study used the leverage ratio as the depend variable and the explanatory variables were , tangibility of the companies used in the analysis, the non-debt tax shield of the companies, profitability of the company, the size of the company, the expected growth, uniqueness of the companies under study, the income variability of the companies, and time dummies. The study also separated the long term debts and the short term debts of the companies. In the findings, he found that the tangibility of the companies were positively related with the long term debts and negatively related with the short term debts of the companies. He also encountered some limitations in the data since it was difficult for him to separate the short term debt determinants and the long term debts determinants.Nelson Vergas et al ( 2015) carried out a research on the determinants of the capital structure of the listed companies in Portugal using non- financial companies. They used the following factors and determinants of the capital structure of the companies namely; the tangibility of the company, the profitability of the company, other sources of tax optimization of the companies, growth opportunities, the size of the company and the market value. The results showed that the profitability had a negative impact on the companies; both the growth opportunities and other sources of tax optimization had a positive impact on the capital structures. They employed the use of regression equations to carry out the analysis and measure how much the determinants of the capital structure affected the leverage ratios of the selected non-financial companies. In their research, they concluded the supremacy of the pecking order theory where the managers of the companies made decisions. They concluded that the most important factors which affect the debts ratios of the companies where the profitability which was negatively related and the growth opportunities of the company had a positive impact on the leverage.DataThe data which was used in this analysis was obtained from 697 financial companies listed in the London stock exchange and other 628 non financial companies from the United States which are also listed in China. This gave a total of 1325 companies which would provide enough data to produce accurate and reliable information. There was no specific method used in the collection or selection of the companies but the study used companies whose data was convenient to obtain and those which had a higher market values. The data was collected for the most recent financial statements of the companies which were the end of the 2016 financial year reports. The choice of the most recent financial statements would help obtain accurate and reliable results due to the changing capital structures of the comp anies in general which changing customer needs and the market.MethodologyThe study employed the multiple linear regression technique where the dependent variable which is the leverage ratio was regressed against the explanatory variables of, tangibility, market to book value ratio, size and profitability. The ordinary list square method was applied to estimate the parameters of each of the determinants of the capital structures. The significance and detailed explanation of each of the parameters in relation to the factors they represent was provided. The adequacy of the model was tested and the necessary conclusions made in the study. The predictability of the model was also tested to provide more reliable and robust results from the analysis which would be used to make future decisions which could affect the companies both short term and long term performance. The necessary conclusions from the results of the data analysis have also been made and further recommendations.Data analy sis and empirical resultsThe results of the data analysis have been summarized in this section and the necessary conclusions done from the results. The regression equation is given by the following equationThe regression equation from China companies is given by;R-squared value 0.6245The regression equation for the United Kingdom companies is given by;R-squared value 0.0013Discussion of the results and comparison of the results from the two countriesTangibilityFrom the data results above, it can be seen that the companies in china had a leverage ratio negatively related with the tangibility. This means that an increase in the tangibility of those companies led to a decrease in their leverage ratios. The data for the companies in the UK, the analysis showed that an increase in tangibility showed an increase in the leverage ratio of the financial companies selected in the UK. This showed that with increase of the tangible assets of the companies in the UK led them to borrow more usin g the assets as securities hence raising their leverage ratios. While in china where the non- financial companies were selected, increased tangible assets decreased their debts hence decrease in the overall leverage ratios.SizeThe size of the company in this case had a positive impact on the leverage ratio of the given companies under the study in the UK. In china, the size of the company had negative impact on the leverage ratio of the company. The large the size of the company which is this case was measured by the logarithm of the total sales made by the company, the higher the leverage ratio for UK and the lower the leverage ratio for the China companies. Large companies tend to borrow more in terms of debts. This is to help them finance their activities and day to day operations of the given company. In the data analysis it was noted that most of the financial companies were much affected by the size in terms of the leverage ratio. Financial companies were much affected by the short term debts while the non financial ones were much affected on the basis of their long term debts. The overall conclusion is that the increases in the size of the company led to a corresponding increase on the leverage ratio since higher companies tend to borrow large debts as compared to small companies. This shows that the small companies were more strained in terms of the total term debts and had to take borrowing to finance their activities and investments. For the non financial companies in China, the higher the size of the company the lower the leverage ratios of these companies. This showed more sales led to fewer debts to the companies in china which has led to the growth of the companies and decrease in the leverage ratios.ProfitabilityIn this analysis the profitability of the company had a positive relationship with the leverage ratio of the given companies of the data collected...

Business Marketing and Life Cycle - 1431 Words

Chapter 7, 8, and 9 Questions and Problems Name: Juanita Askew Date Submitted: 10/22/2012 Week Number: Three Chapter/Question: Chapter Seven, Eight, Nine/Questions 1,7,18,2,9,10,1,2,8 1. Discuss the concept of a marketing information system and why it is important for marketing managers to be involved in planning the system. A marketing information system is a management information system designed to support marketing decision making. Trend in the marketing environment are picked up and analyzed through four subsystems making up the marketing information systems the internal accounting systems, marketing intelligence system, marketing research systems, and analytical systems. The information flows to marketing managers to help†¦show more content†¦5. List five brand names and indicate what product is associated with the brand name. Evaluate the strengths and weaknesses of the brand name. Amazon, Hewlett-Packard, Apple, Nike, and Dunkin Donuts. The products associated with these brand names are: purchase merchandise online, computers, iPod, shoes, and donuts. Strengths: Product development. Doesn t invent the market, but its products set high standard s for the market. Weaknesses: Very proprietary and controlling. Won t open the operating system to outsiders to develop hardware to work with the products, keeping hardware sales to it. While this keeps design control inside and up to standards, it has hurt wide adaptation of its hardware, especially computers, where it has a relatively small market share. Apple has veto power over Apps sold. Strengths 1. Competitive brand. 2. No tying up to the factories making it a lean organization. 3. Global brand. 4. Manufacture products at lowest possible price. Weaknesses 1. Lack of diversification in products. 2. Lack of retail stores. 6. Explain family brands. Should Best Buy carry its own dealer brands to compete with some of the popular manufacturer brands it carriers? Explain your reasons. Family branding is a marketing strategy that involves selling several related products under one brand name. Yes, I feel that Best Buy should carry its own dealer brand too compete with some of the popular manufacturerShow MoreRelatedThe Relationship between Differentiation and Positioning of Products or Services849 Words   |  3 PagesSimulation The relationship between differentiation and positioning of products or services Product or service differentiation is the state of your business products and service standing out with uniqueness as compared with other competitors on the same market, while product and service positioning is the product delivery to the consumer. 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There are undifferentiated marketing, differentiated marketing, and concentrated marketing. For undifferentiated marketing, is a market coverage strategy whereby company using single product to attack whole market without concern differences within market. Undifferentiated marketing obtain to mass distribution and massRead MoreUsing Perceptual Maps in Marketing Simulation Summary1214 Words   |  5 PagesUsing Perceptual Maps in Marketing Simulation Summary Nikitta Echols MKT/421 June 13, 2011 Instructor Chrisann Merriman Using Perceptual Maps in Marketing Simulation Summary The Business world is constantly thinking of innovative ideas to accomplish the goal of having an ample amount of information for current and future marketers. Subsequently marketing students were specifically instructed to complete the simulation, Using Perceptual Maps in Marketing, located on University of Phoenix’sRead More Product Life-Cycle Model Essay568 Words   |  3 Pagesanything that satisfies customer need. Each product has its own limited life, however it shares the same aspect and we define the period that the product goes through as the â€Å"Product life cycle†. The Product life cycle consist of four stages starting from introduction stage, growth stage, maturity stage and decline stage. At the introduction stage, the product is not popular and can’t really make a lot of profit. Its marketing cost may be high in order to test a market and set up a distribution channelRead MoreCompare and Contrast the Characteristics of a Growing and a Mature Product Market1034 Words   |  5 Pagesgrowing and a mature product market. Regardless of the value of every product, they all progress through a product life cycle. The phase starts with the introduction of the product and gradually moves to growth, maturity and finally be replaced by new improved products or naturally decline. Each of these stages of product life cycle requires a different marketing mix and research. The life of a product is the period over which it appeals to customers. The sales performance of any product rises fromRead MoreBusiness Environment Past Papers1115 Words   |  5 PagesUnit Title: Introduction to Business Guided Learning Hours: 100 Level: Level 4 Number of Credits: 12 Learning Outcome 1 The learner will: Understand the objectives of a business, what resources they need and to whom they are accountable. Assessment Criteria The learner can: 1.1 Define and show an understanding of the important business terms related to corporate objectives. Indicative Content 1.1.1 Define and show an understanding of the terms ‘corporate aims’, ‘corporate objectives’Read MoreMarketing Concept Of The Production Era876 Words   |  4 PagesMarketing has been in existence since before the 1800’s. It has changed dramatically over the decades. Marketing is the process of creating value for customers and building relationships with those customers in order to capture value back from them. It revolves around a part of the market, aiming for a profitable sector and producing a product that is different from your competitors. Years ago, the marketing concept was making goods available so that people who had needs could buy. There areRead MoreHips Feel Good1124 Words   |  5 Pagespursuing a societal marketing campaign. The core element that defines this decision is quoted by Allen is this: â€Å"Our business has been to sell products, not to satisfy our customers or cure society’s ills. But now we know that we can do both. As long as we keep listening to customers, there is no reason why we can’t continue to stand out and distinguish ourselves from our competitors (Michael B Allen, pg 391) †. The major issues that the Dove Company had with Dunleavy’s marketing campaign idea wasRead MoreMarketing Planning1081 Words   |  4 PagesMarketing Planning Gilligan Wilson (2009), define marketing planning as logically establishing of marketing objectives and formulating plans to achieve them. This involves an elaborate plan researched and detailed to evaluate results of past marketing decisions, create future goals, and to obtain funds to pursue new business ventures. Perspectives of marketing planning The marketing perspective is an organizations long-term view of its market position; can be spread over by short-term profit

Critical Evaluation Of The Serious Crime Bill - 1928 Words

Critical Evaluation Introduction. The Serious Crime Bill takes a look at the different ways through which crime can be handled through the police and authorities. The bill looks at sentencing aims that have been created in order to handle crimes as well as help the victims. The main aim of the serious crime bill is to lower the amount of organised and serious crime that affects the UK. The costs of organised crime within the UK are  £24 billion a year which is a massive effect upon the economy and has been causing problems rapidly for the authorities and the government, (Gov.uk, 2014). The bill was created to help keep serious crimes and organised crimes in control and to assist the local community in preventing crimes from breaking out and disrupting the rules of society. The serious crime bill looks at different types of organised crimes that occur within societies and how they can be prevented from changing laws to ensure that crimes are punished accordingly through theories such as utilitarianism or retribution. This essay will be looking at and evaluating two different initiatives that have been provided by the serious crime bill and how changing the initiatives will affect the offenders and the victims and society. â€Å"Clarifying and updating the criminal law on child cruelty†, (Gov.uk, 2014). The first initiative that this essay will be looking at is â€Å"Clarifying and updating the criminal law on child cruelty†. 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