Archive for the ‘management’ Category
Fallen Angels and crossover credits
Saturday, November 21st, 2009
Fallen Angels and crossover credits are often targeted by alternative investor groups like hedge funds and risk arbitrageurs who speculate on the mispricing between the various financing instruments of a company.
Characteristics of Fallen Angels:
- High leverage in respect to operating cash flows
- Weak industry trends lead to low and unpredictable operating cash flows
- A further deterioration of the operating performance is not sustainable with the financial profile
- Loss of market share
- Not enough liquidity to support the ongoing business
- Decreasing asset quality
- Management is unable to identify profitable business units
- Weak and complex debt structure
- Unfavorable regulatory environment and lack of support by the government (mainly for European companies)
Tags: Aids finance, Debt, economics, estate, Estate Planning, heir, income, inheritace, insurance, Interest, joit, last will, Market, market cycle, rate, tenancy
Posted in management, merchandise, money spending, negotiationg, online bank, payments, profitability | Comments Off
Whenever the credit risk premium falls
Friday, October 30th, 2009
Whenever the equity risk premium falls below current spread levels, there is a quasi-arbitrage opportunity between corporate bonds and equities. After a long period with a positive equity credit premium, the picture changed in 1999, signaling the height of the equity bubble. The interpretation of this was that expected returns on corporate bonds versus equities were extremely attractive. While corporate bonds actually outperformed equities by far between 2000 and 2002, those years were characterized by a massive widening of credit spreads. Due to the bursting of the tech bubble and the credit spread tightening since fall 2002, the gap has closed.
Tags: bad debt, business objectives, car loans, compare credit, currency trading, debt consolidation, debt settlement, forex, funds, home equity, investment opportunities, loans guide, portfolio, refinancing
Posted in budget analysis, business goals, finances, financial principles, financial risks, loans, management, merchandise | Comments Off
Corporate and credit bonds can be replicated
Tuesday, October 27th, 2009
Remember that corporate bonds can be replicated by the combination of a riskless bond and a short put on the assets of the company. Since lower rated bonds generally are closer to at-the-money than higher rated bonds, it can be expected that the increase of equity-market volatility leads to a widening of the spread differential between issues of different rating classes. This is due to the fact that the sensitivity of the bonds to changes in volatility is different. Options that trade close to at-the-money levels react more strongly given a change in volatility compared with options, which trade far out-of-the-money. The above-described relationships can be witnessed particularly well during crash scenarios in equity markets. In 1990/91, the rise in equity volatility, which was initiated by numerous profit warnings by companies, was a leading indicator of credit spreads.
The subsequent rise in implied equity-market volatility led to a steepening of the yield differential between high and lower rated credits. Baa and Aa rating classes are chosen to illustrate this relationship because for these rating classes the bond universe offers sufficient breadth and liquidity.
Tags: bonds, business, business tips, credit, credit cards, economy, finances, making money, money management, payday loans
Posted in global market, innovative marketing, loans, management, merchandise, money spending, negotiationg | Comments Off
A Good Reason to Have a Business Plan – part 2
Monday, August 3rd, 2009
The best business plans tend to look like a truck ran them over. They are well-thumbed, heavily annotated, and popping their staples or bursting their bindings. That means they’re being used. The worst plans are clean, pristine documents that went straight from the printer into the file cabinet. That means they’re not being used. That may mean that nobody needs them, which might suggest that the company is continuing to follow the same old routes to get to the same destinations. Or it might mean the business plan isn’t worth the paper it’s printed on for those who should be following it. Either way, the company may be in serious trouble.
Tags: business plans, documents, marketing schedule, methodology, sales
Posted in companies, funds, innovative marketing, management, stocks | Comments Off
Check your goals – part 1
Saturday, August 1st, 2009
The quickest way to shortcut both a strategy and a goal is to specialize: Your company and your product or service are the same. Identify one core goal and go for it. Of course, this approach won’t work for diversified companies, although it should apply within each division.
Articulate your goals as clearly as possible. For example, the manufacturer who wants to develop three new product lines is more likely to do it than the manufacturer who simply wants to “grow.” The more specific a company can be in setting its goals, researchers have found, the more likely it is it will reach that goal.
Tags: business philosophy, competition, manufacturers, strategy
Posted in business patterns, business publications, financial principles, management, merchandise, research | Comments Off
How to Plan a Cash Flow – part 1
Friday, July 31st, 2009
When planning cash flow needs for a new business, managers should take their best guess and then double it. Then they should plan to spend three times as long moving into a profitable mode. That way they’re less likely to be disappointed. The point: It’s sad but true that being a pessimist is probably more prudent than being an optimist when predicting costs and length of time to profitability.
Companies should borrow or set up payment plans with suppliers to pay for all of inventory—or at least part of it—and then actually pay for the inventory using funds received from customers paying their bills (otherwise known as paid off accounts receivable).
Tags: cash crunch, cash dynamics, contingency, payment plans
Posted in companies, management, merchandise, money spending, negotiationg | Comments Off
Anticipating the Contingencies – part 2
Thursday, July 30th, 2009
Most suppliers understand that no company can sell from an empty store. Therefore, most suppliers usually work out financing arrangements that take into account when the company gets paid by its own customers. In other words, most suppliers have come to understand that when their customers are paid, they’ll be paid shortly thereafter. Otherwise, suppliers know they’ll get the unpopular merchandise back anyway when the companies close down—and that’s the last thing suppliers want.
Success can lead to failure if you can’t master cash flow dynamics. If a company can’t keep up with the demand of its customers, it may need to scale down its expectations temporarily and hope to make the most of its growth opportunities later. If a company can’t keep up with payments to its suppliers, it should meet and negotiate, and maybe reduce its purchases in the future. Then it should establish better means of monitoring its cash flow and find ways to operate more efficiently.
Tags: cash crunch, cash dynamics, contingency, productivity
Posted in developers, finances, management, merchandise, negotiationg | Comments Off
Beware the Cash Crunch! – part 2
Thursday, July 30th, 2009
The size, nature, and complexity of a business may indicate up to one, two, or three years of losses before the business starts turning a profit in new ventures. Managers won’t know for sure until they have some operations time behind them and have begun retool-ing based on what the market is really like, rather than on what they think it’s like. Once managers have an understanding of what customers think of their products and services, they can make more realistic predictions about expenses, income, and profitability to minimize the chances of getting into a cash crunch.
Tags: business, cash crunch, productivity, profit
Posted in customer demand, developers, finances, management | Comments Off