Monday 4 April 2016

Combined Leverage

Combined leverage:A leverage ratio that summarizes the combined effect the degree of operating leverage (DOL), and the degree of financial leverage has on earnings per share (EPS), given a particular change in sales. This ratio can be used to help determine the most optimal level of financial and operating leverage to use in any firm. For calculation, the formula is:

Degree of Combined Leverage = %Change in EPS / %Change in Sales

Degree of Combined Leverage = Degree of Operating Leverage * Degree of Financial Leverage

Financial Leverage

Financial Leverage- The degree to which an investor or business is utilizing borrowed money. Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt; they may also be unable to find new lenders in the future. Leverage is not always bad, however; it can increase the shareholders' return on investment and often there are tax advantages associated with borrowing. also called financial leverage.
The use of borrowed money to increase production volume, and thus sales and earnings. It is measured as the ratio of total debt to total assets. The greater the amount of debt, the greater the financial leverage.
Since interest is a fixed cost (which can be written off against revenue) a loan allows an organization to generate more earnings without a corresponding increase in the equity capital requiring increased dividend payments (which cannot be written off against the earnings). However, while high leverage may be beneficial in boom periods, it may cause serious cash flow problems in recessionary periods because there might not be enough sales revenue to cover the interest payments.
Financial leverage can be aptly described as the extent to which a business or investor is using the borrowed money. Business companies with high leverage are considered to be at risk of bankruptcy if, in case, they are not able to repay the debts, it might lead to difficulties in getting new lenders in future. It is not that financial leverage is always bad. However, it can lead to an increased shareholders’ return on investment. Also, very often, there are tax advantages related with borrowing, also known as leverage.

Calculating financial leverage
Financial leverage indicates the reliability of a business on its debts in order to operate. Knowing about the method and technique of calculating financial leverage can help you determine a business’ financial solvency and its dependency upon its borrowings. The key steps involved in the calculation of Financial Leverage are:
Compute the total debt owed by the company. This counts both short term as well as long term debt, also including commodities like mortgages and money due for services provided.
Estimate the total equity held by the shareholders in the company. This requires multiplying the number of outstanding shares by the stock price. The total amount thus obtained represents the shareholder equity.
Divide the total debt by total equity. The quotient thus obtained represents the financial leverage ratio.

Formula
The most well known financial leverage ratio is the debt-to-equity ratio (see also debt ratio, equity ratio). 
It is calculated as:

Total debt / Shareholders Equity

Operating Leverage

Operating Leverage:- The higher the degree of operating leverage, the greater the potential danger from forecasting risk. That is, if a relatively small error is made in forecasting sales, it can be magnified into large errors in cash flow projections. The opposite is true for businesses that are less leveraged. A business that sells millions of products a year, with each contributing slightly to paying for fixed costs, is not as dependent on each individual sale. For example, convenience stores are significantly less leveraged than high-end car dealerships.

Operating Leverage = [Quantity x (Price - Variable Cost per Unit)] / Quantity x
(Price - Variable Cost per Unit) - Fixed Operating Cost

Advantages and Disadvantages of Global Marketing

Advantages of Global Marketing
  • Lower Marketing Costs: If you are to consider the lump-some cost, then, yes, it is high, but the same cost goes even higher if the company has to market a product differently in every country that it is selling.
  • Global Scope: Scope of this kind of marketing is so large that it becomes a unique experience.
  • Brand image Consistency: Global marketing allows you to have a consistent image in every region that you choose to market.
  • Quick and Efficient Use of Ideas: A global entity is able to use a marketing idea and mold it into a strategy to implement on a global scale.
  • Uniformity in Marketing Practices: A global entity can keep some degree of uniformity in marketing throughout the world.
Disadvantages of Global Marketing
  • Inconsistency in Consumer Needs: American consumer will be different from the South African. Global marketing should be able to address that.
  • Consumer Response Inconsistency: Consumer in one country may react differently than a consumer in another country.
  • Country Specific Brand and Product: A Japanese might like a product to have a traditional touch, whereas an American might like to add a retro modern look to it. In this case, a global strategy is difficult to devise.
  • The Laws of the Land Have to be Considered: Original company policies may be according to the laws of home countries. The overseas laws may be conflicting in these policies.
  • Infrastructural Differences: Infrastructure may be hampering the process in one country and accelerating in another. Global strategy cannot be consistent in such a scenario.

Friday 1 April 2016

Different types of meetings.

Different types of meetings.

Meeting is an assembly of people for a particular purpose. It is a formal discussion within or outside the organisation. Following are the types of meeting:

a)   Adhoc meeting- A meeting created to address a specific problem or task. For example- Meeting by organisation to determine how a specific event will took place, like launching a new product. All the key people involved will be asked to attend a meeting and discuss various arrangements to be made. All the people involved are participants of the specific tasks; they are assigned some specific work to do.

b)      Board meeting- It is a formal meeting organised in an organisation. It is a meeting of board of directors of an organisation, usually held at definite intervals to consider policy issues and major problems. The decisions regarding direction of company are made. The decisions and action taken by the members of board meeting are called minutes.

c)      Investigation meeting- these meetings are investigative in nature among the investigator and representative. They are generally conducted during pre- interview or exit interview.

d)     Kick off meeting- this meeting is the first meeting with the project team held by project manager. This meeting held between the project team and the client of the project to discuss the role of each team member.

e)      Management meeting- these meetings are held to discuss interrelated information or some important tasks between the managers of the organisation.

f)     Informative meeting- the main purpose of these kinds of meetings are to regulate information on the topic of relevance to the organisation. These meetings take place between the co-workers and sometimes also involve e top management.

g)     Pre- Bid meeting- these are meetings of various competitors and contractors to visually inspect a jobsite for a future project. These are normally hosted by the future customer who wrote the project specification to ensure all builders are aware of the details and services expected of them. Attendance of the bidding members at the ore- bidding meeting may be mandatory. Failure to attend meeting, usually results in a rejected bid.

h)      Staff meeting- these meetings are typically between a manager and those that report to the manager. These meetings are to discuss targets, progress and work to be done by the subordinates.

i)        Team meeting- these meetings are among colleagues working on various aspects of a team project. These are conducted to discuss the work to be done by team member.


j)        Work or problem solving meeting- these meetings are those which produces the intangible results in the meeting such as decisions. These are challenging meetings. It involves taking decisions regarding solving some problem or taking actions which brings changes in the organisation. The decisions taken by the members are of much importance.

Which aspects you will keep in mind while facing the interview?

Which aspects you will keep in mind while facing the interview?

Ans. Following aspects have to be kept in mind while facing the job interview:
        i.            Introduction- the first and foremost thing is to introduce you. The way you greet and introduce puts the first impression on the interviewer. Be confident and greet the interviewer by taking his correct name and a firm handshake. Then wait till you are asked to be seated and sit with an erect posture. It conveys a good image of the interviewee.

      ii.            Non- verbal communication- the non verbal communication depicts your behaviour. It reflects how confident and attentive you are while facing the interview. You should have direct contact with the interviewee, facial gestures should be positive, generally a smile on the face and nodding head as necessary to pretend that you are listening to all important aspects during the interview.

    iii.            While interviewing- while answering the questions of the interviewer, the interviewee should show interest in the job. He should do some homework of the organisation for answering the questions. He may also ask relevant questions whenever possible. The interview should be made two way communication process by the interviewee.

    iv.            Honesty- the interviewee should avoid giving unnecessary answers for the questions he don’t know. He should give answers honestly instead of giving vague or fake answers, pretending being over smart. Don’t be over smart. The employers prefer candidates who are honest with their answers during the interview.

      v.            Positive answers- the positive answers depict how positively you handle the interview questions. You should give positive feedback even for the worst negative question. For example- why you left the previous job? Instead of answering that I don’t like this and that about the organisation, you can say because I want the growth in my specialised field. So the answers have to be handled very tactfully by the interviewee.

    vi.            Salary discussion- the salary discussion is always initiated by the interviewer. the salary expectation may be asked for discussing salary, so avoid giving particular figures, instead indicate a range. Before answering about your expectation, first do self assessment.

 Closing the interview- this part is as much important as the introduction one. The closing is indicated by the interviewer either by words or by giving facial expression. Then the interviewee must thank the interviewer and give a firm handshake. With the handshake, you may also ask for the email-id of the interviewer so that you can send the interview feedback to the organisation. 

Benefits of Internet

Benefits of internet
  •         i.            The internet is available 24×7 to be accessed by the internet users.
  •       ii.           The information on almost every subject and every topic is available.
  •     iii.          The internet user can access it from anywhere in the world, even at home, travelling or in the research libraries.
  •     iv.            It also serves a message board where people can discuss ideas on any topic.
  •       v.     The people can get any information such as audio, video, pictures, graphics etc. everything online.
  •     vi.   The internet provides the easy access to emails, chatting over the internet, sending and receiving important data etc.
  •   vii.   It is used in almost all organisations in order to access data of the organisation, perform organisation activities, retrieve organisation data as and when required, to do video conferencing etc.
  • viii.          Internet is the easiest way to stay connected with the whole world through various social networking sites such facebook, twitter, google plus etc.
  •     ix.            People can stay connected with their loved ones through Skype, viber etc. over the internet.
  •       x.       The internet is being used everywhere in the whole world by individuals, organisations, schools and colleges for their personal or professional use.