The values of receivables turnover for 2004 and 2005 are 10.21 times and 8.83 times, respectively. This means that IQ’s efficiency is considerably declining in terms of cash collection. The decrease in receivables turnover is explained by the higher increase in average net receivables (71%) than the increase in net credit sales (25%). • The inventory turnover decreased from 3.8 to 3.59. This is explained by the higher increase in the average inventory (37%) than the increase in cost of sales (29%) during 2005.
There are certain tools that the central bank uses to have control the economy of the country. There are two types of tools that are conventional and the non- conventional tools: A. Conventional Tools • Repo Rate and the Reverse Repo Rate: a. Repo Rate: It is the interest rate that the bank has to pay when it takes any credit from the Central bank. b. Reverse Repo Rate: It is the interest rate that the RBI has to pay when it takes any credit from an... ... middle of paper ... ...ON: Alesina, A, and R. Perotti,(1997) “ Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects.” IMF Staff Papers,92,571-89 Aschauer, D.A.
-4. The against to the monetary policy -4.1 Loose Fitting Monetary Policy -4.2 The relevant between federal fund rate and housing boom and bust. -4.3 Did the global saving glut push the interest rate down? -4.4 Comparing with other countries’ monetary policy. -1.5 The interaction between subprime mortgage problem and monetary factor.
Purchase securities on the open market, known as Open Market Operations 2. Lower the Federal Discount Rate 3. Lower Reserve Requirements The interest rate is affected directly by these factors. When the Federal Bank buys securities on the open market, it causes the price of those securities to increase. The Federal Discount Rate is an interest rate, so lowering it is essentially lowering interest rates.
15). The Federal Reserve can also influence the ability for commercial banks to lend by manipulating the reserve ratio. The reserve ratio is the amount the Federal Reserve is requiring the banks to keep in their reserve. By increasing or decreasing the reserve ratio, this determines if a bank has more or less money to lend (The Federal Reserve, 2007). In the event that a main bank would have unexpected or immediate needs for additional funds, the Federal Reserve can make short-term loans (McConnell-Brue, 2004, chpt.
These facts indicate that Amazon’s cost of goods sold grew faster than its revenue. The income statement in figuer 1 shows that the net income shrank a lot during this four years, it even hit negative 39 million in 2012. The decline value of net income states that Amazon suffered from low or even negative profit. It’s easy to understand Amazon’s profitability by using return on asset ratio and return on equity ratio. Return on asset gives an idea as to how efficiently company is to generate revenue by using assets.
BUSINESS ECONOMICS ASSIGNMENT- 3 Question.1) (a) Analyse both the conventional and unconventional tools used by central banks. Answer. 1) (A) Monetary policy- It is a policy given by the central bank which aims at managing the money supply and the interest rate and represents the demand side economic policy which is used by the government to achieve macroeconomic goals- 1. This policy aims on maintaining the cash supply in the economy. 2.
Keynes and Hayek represent different options. Should we steer markets or set them free? “Which way should we choose, More bottom up or more top down?” (Fight of the Century). These questions reflect the opposite ways Keynes and Hayek address the economy. Keynes wants to “steer” the economy from the “top down.” From his understanding of the economy, Keynes theorizes that the market can be directed by those with the power to do so to accomplish goals leading to a prosperous economy.
Our KLCI for example was down to 832.44 points as at 29th October. 4) Surprisingly,the value of the USD has appreciates drastically to RM3.5815 per dollar as at 29th October 2008. The value of Malaysian Riggit has decreased 9.6% compare with the dollar in the past 3 months. It is quite puzzling when normally, the value of currency of such countries will be dependent for example on the reserve of the gold such countries has, the amount of debt, the performance of the stock market and also its balance of payment. This is in contrast on what actually the United States does not have favorably at the moment.
• Deal volume for the 12 months ending 9/30/2007 versus 9/30/2006 has dropped by 6.1%. • The news from the middle market suggests that the credit crunch has not had an impact on private-company M&A. However, aggregate deal volume is down 6.1%. Middle-market and private deals represent over 70% of the volume. Something is causing friction within the mid-market and private segment.