Background Information: The article is written to help readers gain a solid understanding the roles of corporate governance, both inside and outside the company. Its goal is simply to impart information, not make claims or arguments on its own. I will be judging it mainly on the sources gathered, numerous examples and explanations given and the overall effectiveness it possesses in effectively communicating its ideas.
The unhealthy financial state of the company could be due to the split from the monopoly. Round 0 financial statements demonstrate last year’s results. The company should look into the future because there is room for growth and financial success. For instance, the company can decide to take long term debt to invest it back into the company. The company can also focus drastically on sales to increase their customer base and obtain a higher market share. If the company takes the right direction of growth, it will quickly become a healthier
In Australia the corporate failures means the “insolvency” that a company cease its business operation(Michaela 2012, 365-366). The categories of corporate failures are six possible reasons that lead the failure of corporate(Mickelwaith 2006, 2-6). The accounting theory is a way to explain the accounting practice or prescribe how accounting should be done(Michaela 2012, 133-134). Additionally, the corporate governance was defined that the framework of rules, relationships, systems and processes can be exercised and controlled by corporate(Council 2014, 3).
The first section of this essay focuses on the possible causes of corporate failures including dominant CEO, poor strategy decision and the failure of internal control. Secondly, it discusses how the third edition of corporate governance principles and recommendations could be applied to prevent the causes of the failure. The 1st, 2nd, and 7th principles along with specific recommendations will be mentioned in this section. However, the context is concerned solely with the causes stemming from Dick Smith itself.
ANALYSIS Days in Accounts Receivables: 137 days (assuming 365 days) Computation: = 365 / (970,844 / ((261,989 + 468,071) / 2)) Conclusion: Higher than the industry average at 62 days Please see the next page for more analysis. Table 1.1 A table comparing Oracle’s financial ratios with the industry average. It’s noticeable how the company’s operations have been deteriorating as they are having a more difficult time translating sales into cash. Their A/R turnover is not where it needs to be, and in line with that, their liabilities are increasing as well. The company has also been inefficient with the use of their assets as their current activity ratios are not up to par with the industry standards.
Concise Corporations Law. 5th ed.. Sydney: Federation Press. Donelly, R. (2003). Corporations Law. 2nd ed. Sydney: LexisNexis Butterworths Farrar, J. (2008). Corporate Governance: theories, principles and practice. 2nd ed. South Melbourne, Vic: Oxford University Press
FINS3626 Group Assignment Evaluation of BBG, DJS, TEN, EWC Executive Summary Phenomenal growth of interest in corporate governance has emerged in recent years. The body of literature on the subject has grown markedly in response to successive waves of large corporate failures. Furthermore, there have been numerous attempts to define what constitutes ‘good corporate governance’ and to provide guidelines in order to enhance the quality of corporate governance.
SAM Adams Porter Analysis 1 of 1 DOCUMENT Copyright 2013 GlobalData Ltd., All Rights Reserved GlobalData - SWOT Analysis October 13, 2013 The Boston Beer Company, Inc. Suite 850, One Design Center Place Boston, MA 02210 United States * * * * * * * * * * SWOT ANALYSIS * * * * * * * * *
The ASX Corporate Governance Council defines the ‘corporate governance’ as the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled within corporations (Corporate Governance Principles and Recommendations, 2014). The term “failure” of a corporate can be described as “Insolvency” in Australia (Michaela Rankin, 2012). And the reasons for corporate failure can be grouped into six categories: 1. Poor strategic decisions. 2. Greed and the desire for power. 3. Overexpansion and ill-judged acquisitions. 4. Dominant CEOs. 5. Failure of internal controls 6. Ineffective boards(Michaela Rankin, 2012).
Financial data from past periods of a company, provides a perspective for future outcomes. Investors give proper attention to different ratios. In this report I am analyzing the financial position and financial performance of AT & T, a US. Telecommunication Company. The objective and conclusion of this analysis will be, if is either good or not to invest in the company.
AT & T Financial Analysis A company’s past performance is a good indicator of its future outlook. Investors give proper attention to different ratios. In this report I am analyzing the financial position and financial performance of AT & T to conclude whether it is better to invest in the company or not.
Reading Notes: Dr. Jasso’s Sarbanes-Oxley Article • The objective of this article was to address the questions “how does the concept of market failure apply to ethical corporate governance? Are corporate ethics authentic in the modern corporation or just lip service? Will Sarbanes-Oxley achieve results?” (Jasso, 2009, p.1). Before they are answered, I want to answer them myself. Market failure applies to ethical corporate governance because the factors that lead up to the failure and after the failure are usually not ethically correct. In other words, corruption was involved and ethics were forgotten, even if they existed. Corporate ethics are authentic in the modern corporation, but it really depends on the company and the people involved.
Table 3: Major Ratios | 2003 | 2004 | 2005 | | | | | Profitability | | | | Return on sales | 2,1% | 2,0% | 1,7% | Return on capital | 6,5% | 5,9% | 4,7% | Return on equity | 11,9% | 18,3% | 17,1% | | | | | Liquidity | | | | Current ration | 2,5 | 1,6 | 1,1 | Quick ratio | 1,27 | 0,82 | 0,61 | | | | | Leverage | | | | Assets/Equity | 1,8 | 3,1 | 3,6 | Debt/total capital | 17,41% | 25,93% | 37,26% | Long-term debt/Capitalisation | 21,08% | 41,67% | 60,46% | Interest coverage | 4,22 | 3,00 | 2,77 | | | | | Activity Ratios | | | | Sales/assets | 3,2 | 3,0 | 2,8 | Days receivable | 38,2 | 43,1 | 48,9 | Days inventory | 55,9 | 59,9 | 62,6 | Days payble | 35,3 | 47,1 | 40,1 | Cash Conversion Cycle | 58,8 | 55,9 | 71,4 | As concerns profitability, the company seems quite profitable; however, looking at liquidity, the problems appear. Current ratio shows that the firm has enough money in hand to pay short-term obligations. However, quick ratio illustrates that the company
Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to
Reflection Paper #4: The Concept of Corporate Governance Lionell C. Henderson Northwood University MBA 664: Satisfying Shareholders Spring 2015 – Evening Adam Guerrero, PhD Adam Guerrero, PhD This was a very interesting article, in my opinion it brings to mind the derived phrase, which came first the chicken or the egg. Meaning, is corporate governance an attempt to control the results of unethical practices of corporations or is it meant to deter them. In reading this article, it is clear that certain corporations practiced unethical business behaviors for self-interest, but the questions this author have are: 1. Should corporate governance be regulated by the legislature as well as the organization and to what degree, 2. Is corporate governance, there to protect the shareholder or the stakeholder, 3. How effective is corporate governance on a global level. The need for a governance system is based on the assumption that the separation between the owners of a company and its management provides self-interest executives the opportunity to take actions that benefit themselves, with the cost of these actions borne by the owners (Larcker & Tayan, 2008).