Posts Tagged ‘CEO’
Wednesday, April 14th, 2010
As the previous section has shown, some price effects of trading are temporary, and in an efficient market, in the long run, prices are expected to return to their fundamental values. However, the equilibrium price itself is not a fixed value, but moves with public news and information revealed by the trading process. In this section, we develop models that separate the equilibrium price dynamics from short-term price fluctuations around the equilibrium. Such models can be used, for example, to assess the speed of convergence to the equilibrium after a shock (e.g. a large transaction). The variance of the short-term deviations from the equilibrium price are a measure of market liquidity.
Finally, in a setting where one asset is traded on several different markets (fragmented trading), the models can be used to assess how informative the trading process is in each market (the contribution to price discovery); this last topic will be dealt with in section 9.4.
Tags: business competition, CEO, merger, pricing policy, shareholders, shares
Posted in financial risks, funds, global market, innovative marketing, loans | Comments Off
Wednesday, November 11th, 2009
A correlation between total returns of high yield and treasury bonds shows that interest rate risk can certainly not be neglected by high-yield investors. The mid-1990s serve as a good example. High yield and treasury returns had a quite high correlation in an environment of low default rates and tight credit spreads. In 2003 an increased correlation could be observed again when spreads were approaching historical lows and default rates were falling.
High-yield sensitivity to interest rates is a function of credit risk. This means that the high-yield upper tier (BB/BB) segment’s correlation to 10-year treasuries is higher than for lower tier credit (B and below). Duration management in high-yield portfolios will have a positive performance contribution. Particularly crossover credits and BB’s total returns will be also determined by the movements of interest rates.
During times of low default rates, historically tight spreads and low interest rates it is worthwhile to analyze the duration contribution of various sectors to the high-yield index. In a scenario of rising interest rates, sectors with tight spreads and a high average duration should be watched closely due to a high underperformance potential.
Tags: business competition, business objectives, cash reserves, CEO, investment opportunities, loans guide, merger, money guide, pricing policy, shareholders, shares
Posted in accounting, attitude, banking, budget analysis, business goals, business patterns, business publications | Comments Off
Thursday, October 29th, 2009
One approach to identify relative value between the above-mentioned asset classes is to compare risk premia. For corporate bonds this is equivalent to the spread over government bonds. The comparison versus equities requires the estimation of the equity risk premium, that is the difference between the expected rate of return on the stock market and a risk-free interest rate, usually long-term government bond yields. While there are differences in the sector structure of the equity and corporate bond markets, for example with respect to technology exposure, the equity credit premium may nevertheless provide valuable insights into the relative valuation of both markets. This is because risk factors such as economic growth, risk aversion and implied equity volatility influence both markets in a similar manner.
Tags: business competition, business objectives, cash reserves, CEO, loans guide, merger, money guide, pricing policy, shareholders, shares
Posted in banking, business patterns, campaigns, credit cards, developers, equity, finances, financial risks | Comments Off
Monday, August 3rd, 2009
That’s good—as a beginning. Now, you need to get into details, by asking a few questions and coining up with solid answers:
- How are you going to increase sales?
- What expenses are you going to cut? How?
- What new products will you develop?
- How will you reach different markets in different ways?
- How can the company become more efficient? In what areas?
Of course, you may want to set ancillary goals in each of these areas. But beware of goals that set department against department, worker against worker. For example, goals for marketing, which are measured in terms of sales, might cause resentment if there are other factors that could affect sales—just as sales goals might not be met because an improvement in efficiency caused a drop in the quality of the products the sales reps are trying to sell.
Tags: benchmark, CEO, economy, sales
Posted in customer demand, employee, expenses, funds, payments, profitability | Comments Off
Sunday, August 2nd, 2009
Except in the movies, nobody has ever made the leap from start-up to success in one jump. The company needs a well-thought out plan built on steps, strategies, and benchmarks to reach its financial goal.
If your financial goal, for example, is a profit of $12 million, you might decide on the following steps:
- Increase sales
- Cut expenses
- Develop new products
- Innovate marketing
- Improve efficiency
Tags: benchmark, CEO, company, economy
Posted in attitude, innovative marketing, payments, profitability, strategy elements | Comments Off
Sunday, August 2nd, 2009
It’s possible to plan on the low side, of course, to set a financial goal that your company can reach easily. That may be a good idea for some new companies, allowing them to focus on building a solid foundation rather than stretching to meet a higher goal. But if the economy is generally good, easy goals can promote lax attitudes, keeping your company from becoming truly competitive. Then, if the economy starts to decline…
The bottom line here: Know your company and then set an appropriate financial goal.
Tags: CEO, company, economy, executives
Posted in accounting, attitude, business patterns, business publications, profitability | Comments Off
Sunday, August 2nd, 2009
How are you going to measure your success as a company in financial terms? The most basic measurement is a profit goal. You might also want to set ancillary goals—growth goals, sales goals, or whatever you think would be the best ways to gauge your progress and help you achieve your primary financial goal.
Then, ask a few hard questions. Is your goal realistic? Is it achievable? Are there ways to leverage the overall goal to achieve the financial goal? If not, one or the other has to be reconsidered.
Some CEOs seem to set goals according to their sense of business ideals or to really push their workers to the limit. Goals of IS percent profitability and 10 percent growth, for example, may sound great and look great on paper. But are they realistic for your company? Can you actually expect to achieve them? Also, if the overall economy is suffering, 15 percent and 10 percent might be improbable goals even for established companies.
Tags: CEO, company, entrepreneurs, executives
Posted in campaigns, financial principles, funds, merchandise, profitability, strategy elements | Comments Off