Thursday, December 5, 2019

Finance Real Earnings Management and Cost of Capital

Question: Discuss about theFinance for Real Earnings Management and Cost of Capital. Answer: Critical Analysis: Cluster analysis is a process which use to group a set of items that are similar with each other than the items of other groups. In this report, it has been to estimate cost of capital of a firm. It is very evident that for many firms, such as mining companies, cost of capital, calculated under general and popular methods, is not quite relevant and realistic. Moreover, many big companies, like Google Inc., do not pay dividends. In that case, ascertaining cost of capital by using CAPM model may not be possible (Core et al. 2015). The report describes that divisional cost of capital and cost of capital from accounting data can be used as the required rate of return for such occasions. However, both the methods have some limitations (Kim and Sohn 2013). Cluster analysis method, on the other hand, relies on the accounting data and market data of the proxy firms, which are similar to the actual firm in terms of activity. As the method includes a group of similar firms, the outcomes become more authenticate in context to the market valuation. The cluster analysis method selects the proxy firms based on the accounting data. It can be described as very practical selection process, as market data of the actual firm is not available, but it would have the accounting data surely. Moreover, the proxy firms are incorporated on the basis of the close resemblance with the accounting data of the actual firm. Thus, it reduce possibility of inaccurate outcomes to the minimum extent. The accounting data, used for the analysis process are ROE and cash flow from operations. For deeper analysis, ROE is calculated by using DuPont Formula. Thus, the analysis process covers the profitability, leverage and asset turnover of the firms within a single method and can work on more detailed data. Cash flow from operations depicts the liquidity aspect and working capital structure of the firms. Therefore, by incorporating the operational cash flow, the method can correlate the outcomes with the liquidity position of the company also (Healy and Palepu 2012). The correlation of variation is calculated for both ROE and cash flow of all the firms to synchronize with the risk factors and compare the accounting data of the firm in more accurate manner. Moreover, the outcomes for each firm are compared with balance group to ensure the accuracy of the process. It also ensures that main outcome should not be affected by any under or over weighted data of any specific firm. Finally, , the cost of capital of the selected firm is calculated by using regression analysis on the basis of the calculated CVs of the all firms and the market CAPM, risk-free rate of market, expected market return. As the cost of capital is based on the data of similar firms, regression analysis helps to set a range of the cost (Berger et al. 2012). Conclusion From the above discussion, it is clear that cluster analysis incorporates and uses all the elements quite efficiently to determine the cost of capital of a firm. Though, it is a quite lengthy process, the delivered outcomes can be considered as more accurate than other unconventional methods of cost of capital evaluation. However, the process is better for evaluation of any business or firm. It cannot be used for stock trading purpose, as stock trading requires data that are more accurate. Moreover, it cannot provide proper results for any specific firm, which is unique within the industry or owns some unique property. For example, a pharmaceutical company may invent a revolutionary drug. In that case, the accounting data of other similar type of drug companies will be insufficient to measure its cost of capital, as the company will be ahead of others for a certain period of time. References: Berger, P.G., Chen, H.J. and Li, F., 2012, September. Firm specific information and the cost of equity capital. InEFA 2006 Zurich Meetings Core, J.E., Hail, L. and Verdi, R.S., 2015. Mandatory disclosure quality, inside ownership, and cost of capital.European Accounting Review,24(1), pp.1-29 Healy, P.M. and Palepu, K.G., 2012.Business Analysis Valuation: Using Financial Statements. Cengage Learning Kim, J.B. and Sohn, B.C., 2013. Real earnings management and cost of capital.Journal of Accounting and Public Policy,32(6), pp.518-543

Thursday, November 28, 2019

3 More Cases of Superfluous Semicolons

3 More Cases of Superfluous Semicolons 3 More Cases of Superfluous Semicolons 3 More Cases of Superfluous Semicolons By Mark Nichol Some writers avoid semicolons either because they are not certain of the punctuation mark’s functions or because some people consider it stodgy, or both. It is in fact quite simple and practical to use, but beware of employing one when a comma will do just as well, as in the following examples, each followed by a discussion and a revision. 1. Proponents argue that the surge in foreign demand for US exports will strengthen the value of the dollar; in turn, a strong dollar would increase the demand for imported goods; therefore, the net effect on trade is neutral. Using two or more semicolons in one sentence to divide independent clauses (in a role sometimes called the weak period) is an error. In such a case, replace one with an actual period and capitalize the next word to begin a new sentence: â€Å"Proponents argue that the surge in foreign demand for US exports will strengthen the value of the dollar. In turn, a strong dollar would increase the demand for imported goods; therefore, the net effect on trade is neutral.† 2. It is a strange sort of adventure film, in that it spends as much time in Europe as it does in the rain forest; is as anthropologically curious about the social customs of early-twentieth-century Britons as it is about the indigenous peoples of the Amazon; and cares as much about what is destroyed as what might be found. When a list of more than two phrases within a sentence consists of one or more phrases that themselves include commas, using commas to divide the longer phrases will confuse readers because the hierarchy of the sentence’s organization is unclear; use semicolons (in the strong-comma function) instead to set the longer phrases apart from each other. In this case, however, the only comma in the sentence merely sets the introductory phrase off from the rest of the statement, and the organization of the three phrases that follow is clear without resorting to semicolons; use commas instead: â€Å"It is a strange sort of adventure film, in that it spends as much time in Europe as it does in the rain forest, is as anthropologically curious about the social customs of early-twentieth-century Britons as it is about the indigenous peoples of the Amazon, and cares as much about what is destroyed as what might be found. 3. The auditor improves information for decision making across the organization by assessing the reliability of performance metrics and monitoring systems the organization has in place; using analytic tools to create lead performance indicators and trending metrics to signal when risk events might be approaching or occurring; and recommending automation of key controls or selected processes to enable effective monitoring. This sentence does not require semicolons, even with the complication of conjunctions within the separated phrases that function as items in a list- as mentioned above, they are necessary only when one or more phrases within that list themselves include punctuation: â€Å"The auditor improves information for decision making across the organization by assessing the reliability of performance metrics and monitoring systems the organization has in place, using analytic tools to create lead performance indicators and trending metrics to signal when risk events might be approaching or occurring, and recommending automation of key controls or selected processes to enable effective monitoring.† (As before, the fact that each phrase begins with a distinct verb strengthens the structure of this sentence.) Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Punctuation category, check our popular posts, or choose a related post below:7 English Grammar Rules You Should Know7 Patterns of Sentence StructureAffect vs. Effect

Monday, November 25, 2019

Chemistry Abbreviations Starting with the Letter A

Chemistry Abbreviations Starting with the Letter A Chemistry abbreviations and acronyms are common in all fields of science. This collection offers common abbreviations and acronyms beginning with the letter A used in chemistry and chemical engineering. Chemistry Abbreviations: A A: AtomAA: Acetic AcidAA: Amino AcidAA: Atomic Absorption spectroscopyAACC: American Association for Clinical ChemistryAADC: Amino Acid DeCarboxylaseAADC: Aromatic L-Amino acid DeCarboxylaseAAS: Atomic Absorption SpectroscopyAB: Acid-BaseAB: Acid BathABC: Atomic, Biological, ChemicalABCC: Advanced Biomedical Computing CenterABCC: American Board of Clinical ChemistryABS: Acrylonitrile Butadiene StyreneABS: AbsorbABV: Alcohol By VolumeABW: Alcohol By WeightAc: ActiniumAC: Aromatic CarbonACC: American Chemical CouncilACE: AcetateACS: American Chemical SocietyADP: Adenosine DiPhosphateAE: Activation EnergyAE: Atomic EmissionAE: Acid EquivalentAFS: Atomic Fluorescence SpectroscopyAg: SilverAH: Aryl HydrocarbonAHA: Alpha Hydroxy AcidAl: AluminumALDH: ALdehyde DeHydrogenaseAm: AmericiumAM: Atomic MassAMP: Adenosine MonoPhosphateAMU: Atomic Mass UnitAN: Ammonium NitrateANSI: American National Standards InstituteAO: Aqueous OxygenAO: Aldehyde OxidaseAPI: Aromatic PolyImideAR: Analytical Reage nt Ar: ArgonAs: ArsenicAS: Ammonium SulfateASA: AcetylSalicylic AcidASP: ASParateAT: Adenine and ThymineAT: Alkaline TransitionAt: AstatineAT NO: Atomic NumberATP: Adenosine TriPhosphateATP: Ambient Temperature PressureAu: GoldAW: Atomic Weight

Thursday, November 21, 2019

The Right to Live or Die Essay Example | Topics and Well Written Essays - 2000 words

The Right to Live or Die - Essay Example Another one is a comatose patient who for a time cannot think because of the current state of his brain and body. And two, there are other species besides ours who have a biographical sense because they too have thoughts, emotions etc. According to Moreland, they probably have more value than humans who have only the so-called biological life. Advances in the 21st century have allowed both doctors and patients to have more options regarding different diseases and conditions. Different methods of resuscitation, ventilation and testing procedures have made the many lives easier. However, the right to withhold or discontinue treatment has brought unto people the emergence of ethical problems. In the past, the concept of being "brain dead" was unheard of, but nowadays the idea has saved many recipients of organ donors. The Church has been an active participant in the debates of different medical practices. Organ donation, pain management and natural death are all concepts that they are okay with since it deals with life and its different dimensions. On the other hand, abortion and euthanasia both deal with death, effectively exterminating life. Ethics may be defined as the basic principles of the right action, specifically in reference to a certain person or profession. Ethical compliance and professional competence come hand in hand especially in the practice of medicine, which coincidentally deals with the issue of life. In the article "Traditional Principles of Medical Ethics," discusses how religious principles apply to patient care. The recent legalizations of abortion in some parts of the world have aroused disagreements in the medical and religious practices. Moreover, normal people and citizens have become either disillusioned or confused regarding their own predicaments on the issue. And with a dynamic society such as ours, to agree unanimously on moral issues is quite impossible to achieve. Biomedical Ethics or Bioethics which applies to both people's ethical and moral principles regarding issues concerned with human life is then considered. As the "Traditional Principles of Medical Ethics" article said, "Western medicine was founded on our Judeo-Christian and Greco-Roman heritage, where the sanctity of life and the dignity of the human person are paramount for decision-making in patient care." The article also mentioned seven principles of medical ethics: a Moral Code and Moral Justification, the Doctor-Patient Relationship, Patient Autonomy, Beneficence (the Good Samaritan), Non-Malificence (Do No Harm), Justice, and Moral Integrity. According to the code of ethics, all of these seven must go together in order to achieve the ideal type of patient care. The Moral Code and Moral Justification guide the physician in whatever he does. The bible clearly declares the sanctity of life, saying that we were created in God's image and likeness. And as all of us were created in such a manner, we are supposedly called to respect the dignity of each one's claim to life. Of course if we were to talk about life, one specific rule