Archive for the ‘cash demand’ Category
Tuesday, March 16th, 2010
We discussed methods for estimating the information content of trades and the effect of inventory control on prices. The models that we discussed generally assume that only one of the effects (information or inventory control) is present. However, the empirical predictions of the asymmetric information and inventory control market microstructure models are very similar. Both theories predict that prices will move in the direction of the trade: a buyer-initiated order increases bid and ask prices, whereas a seller-initiated trade decreases bid and ask prices. This makes it difficult to distinguish the two theories empirically, unless good data on inventories are available. However, this is rarely the case.
Fortunately, in the absence of inventory data there is another way to separate information effects from inventory effects. Theoretically, information effects arise because trades reflect new information. This information will be incorporated in the price. If the market is efficient, the impact will be immediate and permanent. In contrast, inventory effects arise due to liquidity providers’ inventory imbalances. If the liquidity providers actively manage their inventory, these imbalances will be temporary. As a direct consequence, the price effect of trades will also be temporary and will reverse in the future. This gives a handle to distinguish information from inventory control effects:
information has permanent price effects whereas inventory effects are transitory.
Tags: business objectives, cash reserves, debt consolidation, investment opportunities, loans guide, money guide, refinancing
Posted in business strategy, campaigns, cash demand, companies, credit cards | Comments Off
Thursday, October 22nd, 2009
After the 1990/91 recession the US corporate sector underwent a period of massive restructuring. Balance sheet repair, rights issues to repay debt, asset disposals and measures to improve cash flow generation led not only to falling leverage, but also to low earnings growth rates. During this first phase of the debt–equity cycle, the ‘repair phase’ credit usually outperforms equities. It lays the foundation for higher growth rates due to an improved ability to generate cash flows. The subsequent recovery period is beneficial for equity markets as well as credit markets, as the years 1994–97 have shown.
Tags: Aids finance, currency cycles, Debt, economics, estate, Estate Planning, heir, income, inheritace, insurance
Posted in business goals, business patterns, business publications, business strategy, campaigns, cash demand, companies | Comments Off
Saturday, August 1st, 2009
Here are some steps that should help you develop your business strategy:
Know your business. This seems basic, but it’s the most often forgotten step along the road to business success. Were railroads in the business of being railroads or part of the transportation industry? There’s a distinct difference between the two and a distinct difference in the psychology and strategy that awareness will bring to the business. It’s important, as we noted earlier, when you’re defining your philosophy, identifying your competition, and finding your niche. But it’s just as important when you’re determining how you’re going to achieve your goals.
Identify the philosophy behind your company’s way of doing business. If it’s a service business, articulate how important that service is to the overall goal. If the company makes products, define the purpose and goal each product line has for the company.
Is there a level of quality or production time important to success? If so, that must be part of the strategy.
Tags: business philosophy, business plan, interests, strategy
Posted in business goals, business patterns, business strategy, cash demand, financial principles | Comments Off
Saturday, August 1st, 2009
Developing a strategy and, subsequently, building a business plan based on that strategy are critical to developing the sound financial strategies.
Companies that take the time at the start to define a strategy and then build their business plan around it improve their chances for greater financial success. And department managers have an obligation to help build that success by understanding the strategy and their part in making it work—through the strategy each defines for his or her department.
Although you may not actually be involved (yet!) in forming your company’s strategy, the following discussion will put you there among the movers and shakers who determine that strategy. Then you’ll better understand the principles behind a business strategy.
Tags: business plan, cutting costs, interests, strategy
Posted in business patterns, business strategy, cash demand, financial principles | Comments Off
Friday, July 31st, 2009
Looking for ways to decrease operational costs runs hand-in-hand with looking for new and better ways to manage operations. Can the sales team cut down on the number of personal calls by making regular telephone contact instead? In addition to saving sales call time and money spent on automobile wear and tear, the new approach might give a definite market advantage by allowing staff to make more frequent contact. Done correctly, this can translate into better service at a lower cost. Then everyone benefits.
Inventory can be a cash eater if it isn’t financed. The company should pay the interest required to finance the inventory and keep its cash at hand. The company may need it. To make this clearer: In buying a car, you might have the funds to pay for it in cash, but by financing it, you keep your funds available in case you need them for some situation where it’s more difficult to borrow money than to use your cash. Of course, the company should also better control inventory quantities, to minimize its cash investment.
Tags: cutting costs, interests, payment plans, preserving cash
Posted in business patterns, cash demand, companies, funds | Comments Off
Friday, July 31st, 2009
If cash flow does become an issue, it’s obvious that the company will have to change the way it’s doing business if
it wants to survive. Does that executive plant service still come in once a week to water the ficus and all the other office flora? As a manager, you may have to cancel the service, buy a $2.98 watering can, and start doing it yourself—or maybe just get rid of the plants altogether.
That may seem a little obvious, but it’s amazing how many businesses fall into comfortable patterns during good times and don’t see them as unnecessary frills when cash becomes tight.
Tags: cash dynamics, cutting costs, payment plans, preserving cash
Posted in business patterns, cash demand, customer demand, developers, online bank | Comments Off
Friday, July 31st, 2009
Beware of rapid growth. Many J companies have grown so fast that demand has outstripped their ability to pay for increasing inventory or improved services to meet the demand. Remember that demand is not cash. A company should not borrow too much on the expectation that, when it meets demand, it can repay the loans.
Preserving cash flow is one thing and improving market strategies is another. But sometimes the two can work hand-in-hand for even greater benefit. All it requires is a little better management thinking and a clear understanding of the challenges you face.
Tags: cash dynamics, contingency, payment plans, preserving cash
Posted in cash demand, companies, merchandise, online bank, taxes | Comments Off