Financial Management : Key Performance Metrics

Financial Management: “The process for and the analysis of making financial decisions in the business context.” (Cornett, Adair, & Nofsinger, 2016, p. 5).

The five events are correlated and occurring over approximate five months from 18th August 2010 to 13th December 2010.

Week 1 – Introduction – Financial Accounting (Review) Week 2 – Financial Markets and Net Present Value Week 3 – Present Value Concepts Week 4 – Bond Valuation and Term Structure Theory Week 5 – Valuation of Stocks Week 6 – Risk and Return – Problem Set #1 Due Week 7* – Midterm (Tuesday*) Week 8 - Portfolio Theory Week 9 – Capital Asset Pricing Model Week 10 – Arbitrage Pricing Theory Week 11 – Operation and Efficiency of Capital Markets Week 12 – Course Review – Problem Set #2 Due

Financial management in U.S. firms covers many areas in stocks and cost optimization of the company’s performance management, especially in IT. Many emerging and recent

| Attempt made to analyse a financial issue incorporating discipline knowledge and theory, but only minimal understanding of the issue is evident; Analysis addresses some aspects of the issue, but key elements are not

This document is authorized for use only in Financial Management23 by Dr. Raj, at Institute of Management Technology - Dubai from January 2015 to July 2015.

This document is authorized for use only by Yen Ting Chen in FInancial Markets and Institutions taught by Nawal Ahmed Boston University from September 2014 to December 2014.

The premise of an efficient market is that stock prices adjust accordingly as information is received. The speed and accuracy of the pricing changes are a reflection of the strength of the market efficiency, where in theory a perfectly efficient market will re-adjust prices immediately and precisely with new information. The efficient market hypothesis aligns with beliefs about whether technical and fundamental analyses are useful in making investment decisions or whether a passive approach is appropriate. In a perfectly efficient market, these types of analyses are not able to predict stock price trends (based on market inefficiencies or price abnormalities) which could assist in portfolio positioning or investment management. However, some investors belive that the market pricing is not precise and that there are timing windows and pricing trends that can be identified through analysis of past performance and finding price abnormalities where all information is not correctly reflected in the stock price (Hirt, Block and Basu, 2006).

It can fairly be said that an Investor considering an investment decision (whether to purchase, sell or hold stock) in publicly traded company acts on the basis of extensive information which is available by corporation to him until the last moment of his investing decision and try to determine the fair price of corporate stock. In the light of continuous creation of a particular impression of corporate affairs by the corporation, new information by corporate can vanish the importance of previous available information to investor. In the scenario only one kind of investors can get advantage over others, who is either very close to corporate operation (corporate officers) or can access nonpublic price-sensitive information to corporation

Financial Management Introduction = == == == ==

As indicated by the case study S&P 500 index was use as a measure of the total return for the stock market. Our standard deviation of the total return was used as a one measure of the risk of an individual stock. Also betas for individual stocks are determined by simple linear regression. The variables were: total return for the stock as the dependent variable and independent variable is the total return for the stock. Since the descriptive statistics were a lot, only the necessary data was selected (below table.)

The author has experience in dealing with financial data during his day to day job. Therefore he is comfortable with extracting relevant figures and come to a conclusion on his

The relationship between published financial or accounting information and capital market is a complex one. The capital market is affected by analyst’s forecasts and expectations putting pressure on companies to adjust their reported earning numbers. Share prices are affected by the way corporate profits and balance sheet data

Stock markets are a central component to the functioning of a capitalist economy. All major economies have national stock markets and many economies have smaller markets as well in order to facilitate trade in small cap stocks, or other specialized securities such as derivatives. Sometimes the performance of a stock market is used in the media as a measure of economic performance, as the market is deemed to be comprised of rational economic actors whose actions are guided by high levels of knowledge. It is important for everybody to understand how stock markets work, and what the benefits and limitations are of using stock markets as a gauge of economic performance.

To increase and maximize the wealth/value of shareholders, it is necessary that the company is competitive in their market and can reliably “earn a considerable return on its investments above their cost of capital” (Doyle, 2000). The increasing rates of return of well performing companies attract new investors who invest money to become shareholders. These outside funds from investors are essential for growth of businesses and the expansion into new markets. Measurements of generated shareholder returns over a certain time period deliver the company useful information on whether their objectives have been achieved or should be new adjusted (Atrill, 2009).