Balance sheet Essay Example | Topics and Well Written Essays - 2500 words

Balance sheet - Essay Example Balance sheets are generally prepared by a company at the end of its financial year. The balance sheets are presented in either horizontal or in vertical form. All the items present in the balance sheet of a company are discussed in details in this study. The dual aspect of balance sheet and the application of balance sheet have also been mentioned in this study. The users of balance sheets include the company managers to help them in analysing the financial conditions of the company, the investors and shareholders to help them in their decision making process regarding investment in the organisation and all other stakeholders of the company. With the increasing trend of globalisation most of the companies are trying to explore business opportunities in different parts of the world. As a result of this they need to comply with the regulatory requirements of different nations of the world. However with the advent of International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS), the accounting practices followed in different nations are converging to make the financial statements including balance sheets more comparable in nature. A comparison between the balance sheet formats followed by companies in US and UK has been discussed in this study. 2. Balance Sheet Items All the items of a balance sheet fall under two broad headings, namely â€Å"Assets† and â€Å"Liabilities†. The items falling under the categories of assets and liabilities have been discussed below: 2.1 Assets Assets which are possessed by a business concern are categorised into two types, namely, current assets and fixed assets. Fixed assets are considered to be the long term assets of the company and current assets are considered to be the short term assets of the company. All these assets of the company are valued and represented in the balance sheet of the company at its book value or historical costs of those assets that is the costs of the asset s when it was first bought by the company. This is known as the historic cost convention (Horner, 2012, p. 42). However, as an exception to this convention or rule, some of the assets like the buildings possessed by the company are re-valued at its market price and then represented in its balance sheet. Sometimes, assets like goodwill generated internally by the company, including the values o different kinds of brands acquired by the company over a period of time are not included in its balance sheet. It is so because of the difficulty in accurately measuring the value of these kinds of assets. Let us now discuss in details about the assets of a company. 2.1.1 Fixed Assets Long term assets or fixed assets possessed by a company are sometimes referred to as non-current assets of the company. Fixed assets generally comprises of those assets of the company which are utilized by it for conducting its various business activities and are there with the company for a long period of time. They are not meant for resale by the organisation. The fixed assets of the company help it to generate sales or revenues through its business processes over a long period of time. Generally the fixed assets are required to be depreciated along its lifetime (Stittle, & Wearing, 2008, p. 60). Fixed assets of an organisation can further be grouped together into three different categories. They are: a) Tangible

Memoir Essay Example | Topics and Well Written Essays - 500 words - 1

Memoir - Essay Example Usually, I used to celebrate my birthday at home and only call my friend to wish him a happy birthday. One day, as we approached our birthdays, my friends suggested that we went hiking and celebrate surrounded by nature. That was a completely new experience for me, and I agreed. The only thing left to handle was to ask my parents whether I could do that. They allowed me to go hiking and celebrate my birthday with friends but they were upset because our tradition would be broken. I said I was old enough to decide how I wanted to celebrate. Now that I am recollecting that moment I deeply regret I said so. On the day we went hiking, the weather was perfect, and I was cheerful and optimistic. I could not wait to halt, put up tents and start celebrating my friend’s and my birthdays surrounded by nature around the campfire. I really enjoyed spending my special day with my friends; they gave us presents and said a lot of great words to us. They even managed to bring a small cake and light candles. Everything seemed to be perfect. I felt some discomfort though. At first, I thought it was caused only by the unfamiliar environment for I that was the first hike in my life. With some time passing, however, I understood what was wrong. I realized that it was not only the environment but people that made me feel that way. That discomfort was caused by the absence of my family and the atmosphere of a holiday that our house always has at such days. I have never really thought that our family ties are so strong. Also, I have never thought of myself as of a stay-at-home person. In fact, I have always thought I am not tied to my home and believed that I am able to leave it any time I want to do so. In reality, it appears that my family and the home we live in are the most important things in my life. All these memories and feelings were inspired by photos which I tend to look through from time to time. When I opened the page with the photos

The Great Gatsby Thesis Paper Essay Example for Free

The Great Gatsby Thesis Paper Essay â€Å"This is a valley of ashes — a fantastic farm where ashes grow like wheat into ridges and hills and grotesque gardens; where ashes take the forms of houses and chimneys and rising smoke and, finally, with a transcendent effort, of men who move dimly and already crumbling through the powdery air.† (23) The image Fitzgerald creates in this passage is not a very pleasant one, depicting the impoverished in a filth ridden valley, masked by the overpowering presence of the ashes. The entire landscape is grey and dull; the hills, the houses, and even the people. This is a dramatic contrast to the lives of the wealthy, where everything is shiny, new, and always changing, whereas the ashes are perpetual and dismal. Every time Nick describes the Valley of Ashes, something grim is happening, or about to happen. For example, after Myrtle is killed, Wilson’s â€Å"glazed eyes turned out to the ashheaps, where small grey clouds took on fantastic shapes and scurried here and there in the faint dawn win.† (159) Wilson has almost completely lost himself at this point, and when he looks out to the ashheaps he is seeing what his life was: poverty. Unchangeable, murky poverty, that he couldn’t get Myrtle or himself out of. However, in WIlson’s delusion, he feels like there is a way he can make things right. He has to go and find Tom, who he believed to be driving the ‘â€Å"death car† and kill him to avenge Myrtle. Once he finds out someone else had been driving the car, he goes to find Gatsby. â€Å"A new world, material without being real, where poor ghosts, breathing dreams like air, drifted fortuitously about Like that ashen, fantastic figure gliding toward him through the amorphous trees.† (161) After Wilson shoots Gatsby, he also shoots himself because he feels like he has no other way to escape his life of hardship, and Nick describes his body as being â€Å"ashen† which invokes the image of the dull, grey valley where Wilson had lived. He didn’t belong in the fast paced life of the wealthy, and wouldn’t have been able to handle it  because of how weak minded he was. The poor were trapped in poverty, under the formidable ashes.

A Study On Dividend Signaling Theories Finance Essay

A Study On Dividend Signaling Theories Finance Essay Introduction Dividend announcement is a significant event that is closely scrutinized by a firms important stakeholders such as investors and financial analysts. Typically, dividend announcement contains information that signals firms earnings condition. Consequently, financial markets may react to these information releases by directly affecting the announcing firms stock price. Finance literature suggests that dividend announcement affects a firms stock price. Stock price may react positively or negatively to dividend announcements. For example, Dewenter and Warther (1998) and Fukuda (2000) both provide evidence of a positive (negative) market reaction to dividend increases (decreases). Dividend signaling is a tool which investors can use to investigate the impact of dividend announcements on stock prices. Literature review is focused on dividend signaling and more specifically on the effect of dividend announcement to the stock price. Relatively to the literature review, it hasnt been directed any research attention about dividend signaling but it has been analyzed some empirical studies in an order to examine the stock price effect to dividend announcement in real markets. Moreover, the studies will be compared and analyzed, based on signaling theory, in an effort to explain further dividend signaling effect. The paper is organized as follows: Section 1 describes generally about dividend signaling based on empirical and theoretical evidence. Section 2 describes the analysis of some empirical studies and section 3 concludes the results of these studies. Signaling theory The signaling theory claims that dividends should reflect the managers superior inside information about the firms future earnings conditions. Future earnings and trigger price can change any time, therefore, managers use dividends as an instrument to signal their superior information about the changes in earnings conditions. (C. Chen and C. Wu, 1999). Signaling theory also predicts that higher dividends signal better earnings performance and therefore, lead to a higher market value of the firm (Kathleen P. Fuller, 2002). There are numeral studies about different scenarios for dividend signaling. Bhattacharya (1979) and Miller and Rock (1985) argue that when there are information asymmetries between firms and outside shareholders, it is possible to induce a signaling role for dividends. Furthermore, managers are well informed about dividends payments but they dont reveal always the necessary information about firms profitability to the shareholders. (As it is found in M. Donga, C. Robinson and C. Veld, 2005 p. 127) Miller and Modigliani (1961) claim, in their dividend signaling hypothesis, that firms increase dividends to convey positive information about earnings prospects. According to this hypothesis, dividend changes can be interpreted as forecasts of future profitability (as it is found in K. Harada, P. Nguyen, 2005, p. 504) Campbell and Shiller (1987) state that the stock price reflects all information about future dividends and therefore, stock price forecasts future dividends and any changes in the process of dividends affects the behavior of the future dividend.( as it is found in C. Chen and C. Wu, 1999, p.30) Consistent with theoretical predictions, studies support that when dividends are increased stock prices tend to increase and when dividends are decreased stock prices tend to decrease. Based on these studies there is a positive correlation between dividend and stock price. On the other hand, some researchers argue that there is not any significant relationship between dividend changes and stock price. Michaely, and Thaler (2002) counter-argue that dividends signal the past and not the future. (as it is found U. S. Dhillon et al, p.2) 2. Stock price reaction to dividend announcements According to financial literature about dividend signaling hypothesis, dividend increasing companies earn positive stock return and dividend decreasing companies earn negative stock return. To understand better this event, it is important to analyze some empirical studies about the market reaction to dividend announcements and to compare their results. Researchers use variable models of signaling dividends in an order to examine the influence of dividend announcement in the stock price. These studies attempt to reconcile the theory with the evidence by considering the fundamentals of numerous companies and detailing the context in which the dividend changes takes place. Generally, it has been examined what happens when the dividend increases and when the dividend decreases. REGULAR DIVIDENTS H. DeAngelo et al. ( 1996) have constructed a sample of 145 large firms by searching Compustats primary and research tapes for NYSE-listed firms (public utilities, limited partnerships, American depositary receipts (ADRs), and Canadian companies) with a decline in annual earnings that follows at least ten earnings reports indicating strictly increasing earnings, i.e., after nine or more consecutive annual earnings increases. According to this sample, they have analyzed the stock markets announcement, day and over longer horizon (1-3 years), reaction to firms dividend increases. Sample firms have experienced an economically small, but statistically significant average equity value increase ~ roughly one-half of 1% ~ when there was an announcement of dividend increase. These findings indicate a positive association among stock market views and dividend increases because the information that company provides, justify a higher quality value. (H. DeAngelo et al. ,1996) U. S. Dhillon et al (2003) have developed a sample of 1700 firms (updated on a quarterly basis) with dividend forecasts in the Value Line Investment Survey. Their analysis contains, among other items, forecasts of the dividend for the current calendar year (and, in some cases, the next year) along with the publication date. Consistent to dividend signaling hypothesis, they have focused on the results of stock price reaction, at a two-day cumulative excess return, to dividend announcements using two different methods. In their study, they have presented the stock price reaction for positive, negative and no dividend changes. Capturing on the fraction of the sample that reflects the analysts expectation of a dividend increase, it has been noted a strong market reaction to dividend increases. In other words it has observed that for positive dividend announcements there was a positive stock price reaction. In the case that the dividend decreases, there is a significant negative price rea ction meaning that for negative dividends announcements there was a negative price reaction. In this study is also be examined the announcements of no dividend changes. The sample, in this case, is divided into three sub-samples: (1) positive dividend surprises, when analysts expectations of a dividend decrease did not materialize, (2) negative dividend surprises, when analysts expectations of a dividend increase did not occur, and (3) no dividend surprise, when analysts forecast of no dividend change was met. The results have demonstrated a significant relation between dividend changes and market reaction. Furthermore, whether dividends increase or remain unchanged, a significant positive reaction is observed when announced dividends exceed analysts forecasts. In contrast, a significant negative price reaction is observed when announced dividends are below analysts forecasts, and the price reaction is insignificant when announced dividends match expectations. (U. S. Dhillon et al, 2003) K.P. Fuller (2003) has used a sample of firms with unexpected dividend increases announced and has examined how the trading behavior of various investors affect a firms need to employ dividend changes to signal private information to the market. He has hypothesized that insider buying (selling) prior to a dividend increase is associated with significant and positive (negative) price reactions. The results have supported that the greater the amount of informed trading, the lower the price reaction to a dividend signal. Further, the larger the buy demand relative to the sell demand prior to the signal, the smaller the price reaction to an unexpected dividend increase. (K.P. Fuller, 2003) K. Harada and P. Nguyen (2005) have examined the relationship between dividend adjustments and long-term stock returns for a large sample of Japanese firms, over three different holding periods. A very significant issue in the research is the conditions under which the adjustments take place using the model of dividend changes. Based on signaling hypothesis, there is a significant association between dividend changes and subsequent earnings. At the 12-month horizon, firms were expected to increase their dividends (about 3.5%) but risk adjusted returns were found significantly negative (about -2.7%). At the 24-month horizon, stock returns were found also negative for the firms that expected to increase dividends (about -2.5%). In this research, it has to be mentioned that the results are much less significant, at less than 5% level due to the larger dispersion of (risk-adjusted) returns. At the 36-month period, the firms that did not present the appropriate conditions for a dividend increase have displayed a negative stock performance of dividend-increasing (about -6.35%). But when the firm was expected to increase the dividend (under appropriate conditions) , there was resulted a significantly positive association between dividend increases and risk-adjusted returns (about +14.5%). Overall, the stock performance evaluated over 12-24 months appears that stock returns are consistent with improved profitability only after an extended period of 36 months. That happens because the information presents a good portrait of the company, after 1 or 2 years, and the market participants react positive to this favorable information. On the other hand, in the research was examined the dividend decreases and the relationship with the stock price. The researchers supported that there is a significant positive association between the dividend decreases and stock price. More specifically, at the 12-month horizon, it is noted that dividend reductions are associated with a positive market reaction. (about +2.3%). Over the time, it was observed a significant positive increase association (about 4.5%, from 2.3% at 12-month horizon to 6.8% at 36-month horizon). These results concern firms that decrease their dividends. Regarding the firms that are expected to decrease their dividends, at the 12-month horizon expected dividend reductions that have been implemented result a significantly positive abnormal return (about +3.12%) that continues to increase at the 24-month horizon (+5.98%). An interesting observation that is provided among the two types is that only the first type of expected dividend reductions is associated w ith a positive stock performance, whereas the second type does not generate a significant change in the firms value. (K. Harada, P. Nguyen, 2005) SPECIAL DIVIDENTS Brickley (1982, 1983) has examined how the special dividend announcement related with the stock price. He supported that when firms announce unanticipated special dividends the stock prices increase by about 2%. According to his study, investors treat special dividends as hedged managerial signals about future profitability, in a way that unanticipated specials are associated with weaker stock market reactions than are regular dividend increases of comparable size. He also claims that regular dividend increases have a significantly more favorable market impact than do unanticipated specials. (Brickley, 1983) H. DeAngelo et al. (2000) have studied the stock markets reaction to special dividends. Their study indicates that the sign of special dividend changes do not systematically convey significant information. They observed a positive average stock market reaction (about 1%) when firms increase special dividends. The results have shown that the stock market typically reacts positive to the special dividend increases. Furthermore, they found that the stock market typically reacts favorably to the fact that a special dividend is declared (holding regular dividends constant), but that the market reaction is not systematically related to the sign or magnitude of the change from one positive special dividend payment to another. (H. DeAngelo et al., 2000) Conclusion According to the dividend-signaling hypothesis (Miller and Modigliani, 1961), firms increase their dividends to signal a growth in subsequent earnings. Moreover, dividend increase announcement may have a significant effect in the stock market price. Therefore, a number of studies have been examined in an attempt to understand the relation between dividend announcement and stock price. Many researchers have analyzed dividend signaling effect, based on different models, and they have found almost the same results. H. DeAngelo et al. (1996), U. S. Dhillon et al (2003) and K. Harada and P. Nguyen (2005) have found a significant positive association between dividend increases announcement and stock price, contrary to K.P. Fuller (2003) that has found a significant negative association between dividend increases announcement and stock price response. Other researchers have examined how special dividend announcement affects stock price. Brickley (1983) and H. DeAngelo et al. (2000) have resulted that stock market typically reacts favorably to the declaration of a special dividend, holding the regular dividend constant. Furthermore they have found that the stock market response averages approximately 1%, both when firms increase specials and when they reduce them to a still-positive level. Overall, their data indicate that although special dividends generally convey good news to investors, any such signaling content is typically small. To assume, the signaling models that have been chosen predict a positive relationship between dividend (regular and special) changes and stock price reaction to the announcement. The results are related with the financial literature, which provides extensive evidence that stock prices react to dividend changes. Even though a great number of researchers have resulted a positive association between the two factors, there is a researcher that has supported a negative association between the factors and that has led some analysts to question the signaling role of dividends. Analysts claim that dividend signaling is a very important issue and that it is related with other factors too. For example, the greater the number of informed traders active in a firms stock, the less likely it is that the firm needs to signal its intrinsic value. To conclude, analysts must continue to study the dividend signaling effect and more specifically to examine other significant factors associated with divid end announcement.

The Efffects Of Louis 16th On :: essays research papers fc

The French Revolution was a significant milestone in European history, remembered by many in historical and literary works. The situation in France, mostly under the leadership of Louis XVI, had a negative influence in France, thus creating a perfect climate for the French Revolution. France was plagued by both debt, and poor decision making. prior to 1789. France was poverty-stricken and burdened with some of the highest debts. On the financial side, Louis XVI was aided by: Finance Minister Anne Robert Jauques Turgot, and Interior Minister Chretien Guillaume de Lamoignon de Malesherbes (*The economic origins of the French revolution, pg. 4). Louis introduced some of the most oppressive taxes and instituted financial reforms. Greater reforms were prevented by the opposition of the upper classes and court. This opposition was so strong that Turgot was forced to resign and was replaced by Jauques Necker. Lengthy wars, the support to the American Revolution and the gross amount of taxes paid and the lavish spending of the court contributed to the huge national debt. The government’s financial problems were made worse after 1740 by the renewal of costly wars (the French revolution, pg. 9). The war of the Austrian Succession (1740-1748) and the Seven Year’s War (1756-1763) were European wars over the domination of central Europe and colonial and commercial wars between France and Great Britain (*Aspects of the French Revolution pg. ). At their end, in 1763 France had lost almost all of it’s colonial empire in America and India. In 1778 the French launched an attack against Britain in the American Revolution. They were hoping to weaken old rivalries and regain lost colonies. The hopes of the French were not realized and their participation in the war increased an already heavy national debt. After Louis XVI granted financial aid (1778-81) to the American colonies revolting against Great Britain, Necker proposed drastic taxes on the nobility. Neck er was forced to resign in 1781 (Louis XVI and M. Antoinette ..pg 37) because of the discontentment of the people. Charles Alexandre deCalonne replaced him in 1783 and borrowed money for the court until the borrowing limit was reached (* Canadian Encyclopedia ref: france, revolution ). The anger of the French people against taxes, debt and lavish spending on the Court resulted in the recall of Necker in 1788, who still could not prevent bankruptcy of the government. During the next couple of years the financial crisis steadily worsened, because the government was bankrupt.

Learning to Read and Write: Language on the Brain :: Biology Essays Research Papers

Learning to Read and Write: Language on the Brain When I was little, my favorite book was Happy Birthday Moon. For a while, it was my nightly bedtime story. Anyone who offered to read aloud to me was immediately proffered this book. After some time, I knew the story by heart, word for word. I could not quite read the book but I had memorized the framework of it and so could tell the story myself. The day that I learned to finally recognize the words themselves was so exciting. When the blur of squiggly lines on the page became letters with sound and meaning, a whole new dimension opened up. Every form of human expression is codified within some framework of language. As an English major, I study how people manipulate and interpret language in order to communicate. As a tutor with a reading enrichment program, I sometimes encounter kids who do not share this love of reading and writing. As it is my job to help them master and gather more enjoyment from their dealings with language, and since brain equals behavior, I thought this web paper the perfect opportunity to ask few questions. How does the brain process language? Why do some people enjoy reading and writing better than others do? Why is it easier for some people to learn to manipulate language? And which came first the brain, or the linguistic framework that defines and identifies it? I have learned that language, like the nervous system, is a complicated blueprint which humans use to communicate with, navigate, and interpret, the world. For most people, the parts of the brain that process language are located in the left hemisphere (3). The primary sections in the brain that allow us to read, write, and speak communicably are: the left frontal cortex or Borca's Area, the posterior part of the temporal lobe or Wernicke's Area and a bundle of nerves called the arcuate fasciculus (3). The angular gyrus, at the back of the brain, interprets the words and letters that compose language (4). In order for a word or a sentence to be understood when it is read, an action potential must travel the network of these various parts. First, the information must get from the page to the primary visual cortex. From there is must go to the posterior angular gyrus, near Wernicke's area. Then, if the word or sentence is to be read aloud, it must travel to Borca's Area and the primary motor cortex (3).

Big Time Essay

Today, more and more researchers are interested in estimating the absolute divergence in income distribution in developed and developing countries. And Lant Pritchett is no exception. In his â€Å"Divergence, Big Time† he shows that actual historical statistics are not needed for estimating the ratio of income in the richest and the poorest countries. As far as researchers pay thorough attention to literature on economic growth, Pritchett finds it important to discuss the phenomenon of conditional convergence. The key argument is that economies with low-level incomes have the tendency to develop faster than economies with higher-income levels. Pritchett argues that lack of reliable historical data on per capita income hinders estimations of long-run convergence. Nonetheless, in his research his proves that divergences can be estimated without historical data. Development of modern economic history is attributed to estimations of divergence in productivity and living standards across the countries. I agree with Pritchett that the tendency has gained wider attention as economists and analysts should be provided with proper knowledge of why the poorer countries grow faster, why they recover faster from crisis, etc. Economists should be provided with full scene of what is happening globally, why growth rates are different and what constitutes economic development. Pritchett argues that income in developing countries has fallen, whereas the income in developed countries has significantly increased increasing the gap between the rich and the poor. In particular, long-run economic growth has increased in developed countries, their growth rates remain similar to developing countries, whereas developing countries have the tendency to grow faster to balance convergence in absolute income levels. Interestingly, developing countries are often referred to as the other set of countries, but I can’t agree with such definition because some of the East Asian countries as, for example, China and Japan are swiftly developing and they are very likely to replace the most developed countries within the next years. Of course, in the end of the 19th century economic development in less developed countries was significantly lower, but today the situation has changed. Pritchett notes that, on average, the growth rates in developing countries are slower contributing to divergence in relative incomes. Nevertheless, Pritchett is right when stating that developed countries are marked by different patterns of growth. Further, Pritchett cites one of the modern economists, Gerschenkron, who argues that the idea of ‘advantage of backwardness’ stimulates developing countries to experiences episodes of rapid economic growth driven by increased productivity. I agree with researchers as there are many examples of individual developing countries that have illustrated rapid growth as China, for example. Of course, the most of the backward countries have practically no chances to become world leaders. Historical researches claim that such cases are rare. Nevertheless, poorer countries are provided with the potential of economic growth, but strong forces of stagnation and lack of proper resources hinder economic development. Implosive decline is observed in countries, where society is disintegrated failing to gather economic statistics. Pritchett’s claim that backwardness carries disadvantages is valid. The key challenge is how to overcome disadvantaged posted by stagnation and backwardness. Pritchett concludes that growth theories try to related economic growth to world’s experience. Economic growth in developed and developing countries depends on the level of technological progress, per capita growth, and other internal and external factors. The author is interested in revealing why some countries are developing rapidly, whereas others are fading and loosing rapid growth. In my opinion, the issues raised in the article are important for modern economic history as the author contributes to understanding the reasons of economic growth. He says that divergence in income levels contributes to hindering economic development. However, the key finding is that the poorer countries have the tendency to grow faster. Works Cited Pritchett, Lant. Divergence, Big Time. Journal of Economic Perspectives, 11, 3 (1997); pp. 3-17.