Classical and Modern Markets
Explaining how the Global Financial Crisis [GFC] has had a significant impact on 1) the stability and interconnectedness of international financial markets and economies and 2) the regulatory responses that have been implemented in an attempt to stabilize the financial system.
While Commercial Banking was not the only sector to be affected by the GFC, clearly business continuity was threatened, and many were exposed to the very real risk of failure. Business continuity risk management may be said to incorporate a disaster recovery planning process and a disaster recovery response process.
Define business continuity risk management.
Identify and briefly explain the core components of a disaster recovery planning process.
Identify and briefly explain the core components of a disaster recovery response process.
Introduction
The Global Financial Crisis was one of the biggest financial crises known in the recent times. This was one such crisis which has lead to the global impact whereby the financial conditions of almost all the countries in the world was impacted in some way or the other. There were series of recessionary trends, unemployment news and decreased in GDP all over. The crisis was also such that the impact of which had continued for over 2-3 years in almost all parts of the world (Shergil, 2011).
Impact of Global Financial Crisis
The main reason attributed to this financial crisis is the fact that there has been a large number of housing loans which were not backed by the proper mortgages, and they were unsecured. Also, these loans soon started to be understood as risky and that the people do not have the potential to repay back the loans which they have taken on such a large scale. Hence there was a need to perform some activity about these loans and that had happened only once the loans started to get the default. There was a series of default of loans by the banks, and on a continuous basis, the loans had started to get defaulting. Ultimately it was realized that the housing prices of the economy were all cooked up and that there was no instance wherein the loans could be recovered from the parties. There were not enough mortgages to secure the loan and also there were insufficient resources which would help in realizing the loan. Hence the public money deposited in the banks got used up for this, and there were series of bank defaults happening. Ultimately the global demand fell, and all these activities lead to the global financial crisis which is known to be one of the biggest financial crisis of all times (Saraf, 2012).
Responses to GFC to find out the solution
With the financial crisis happening in the US, there were series of economic failures and poor performance of economies in almost all the part of the world. It was then exposed that how deeply all the financial markets of the world are interconnected and how significant impact each one of them has over each other. The reason why the economies of other countries also got damaged was that when the US banks started to fail there was a lack of resources in the US. People in the US had reduced resources to spend in rest of the world, and this ultimately leads to reduced demand in the US. Now a large part of the world is dependent on the demand which the US markets have, because of their exports to the US. With the poor financial conditions in the US markets, the demand in the US has reduced which lead to poor demand in rest of the world (Burman, 2012). Hence ultimately there was short demand all over resulting in short production all across and thereby leading to a financial crisis in almost each part of the world. Also with the reduction in demand in the US there were reduced employment opportunities in the US and this also had an impact on the employment situation in rest of the world. When the US which is said to be the largest body to serve the talent pool, is not able to absorb the same, there is bound to have issues which cannot be sorted by the individual countries. Suddenly people, who used to go out of their domestic territory for work, could not go out. All these lead to situations of unemployment in rest of the world as well. Hence this showed how deeply the economy is interlinked and that poor performance in one can have an impact on all the nations put together (Hodson and Quaglia, 2009).
Business continuity risk management
There is also a concept of business continuity risk management wherein the risk of the fact that the business would continue to exist is addressed and that there is a solution to the problems which can lead to the situation of business continuity. There were multiple situations when we see that the business do not continue to function the way it is supposed to and in these situations, there is a requirement of some disaster management tools and policies to be adopted all of which come under the purview of business continuity risk management. It contains all those steps which are taken to make sure that the business continues to function the way it is and that there is no situation which can have an impact on the proper functioning of the business. These factors are indeed very important and that the business processes have to be realigned in the best possible manner to make sure that these happen in proper form and place. In the day to day business, there is a large number of situations which needs to be addressed, and all of them have risk associated in some form or other. These activities do require that the business must continue in the manner it is meant to be, and that can only be done when the business processes are well defined and that they are ensured to be compliant with the local laws of the state. For this, the most important part is to ensure that there are proper planning and development and that there are sound processes which can help in the maintenance of the day to day requirement of the business (Storkey, 2011).
Conclusion
The key areas of the business need to be identified, and there must be an assessment of all of them. Unless one can address the key areas in the organization, they would not be able to manage them in the manner required, and this would ultimately lead to a loss on all the aspects. Hence for the purpose of sound management, the most important part is understanding and making one understand how to manage the affairs in the best possible manner so that the business continues the way it is supposed to be (Farrar, 2010).
Bottom-up Analysis
Evans and Partners is an investment advisory firm that provides specialist investment advice to its private clients. As part of the investment decision process, the senior investment analysts at the firm apply the bottom-up approach to the fundamental analysis of share prices.
Explain why Evans and Partners would use this type of analysis.
Identify and discuss six different accounting ratios that should be included in a bottom-up approach model.
Identify and discuss three other performance measures that may be used.
An investor is evaluating the use of the bottom-up and the top-down approaches to fundamental analysis. The investor wants to use the approach that will best enable the structuring of a diversified share portfolio that will achieve specified income returns and capital gains.
Compare both approaches and propose a recommendation as to which approach the investor adopt – top-down or bottom-up or both? Provide sound reasoning for your argument.
The top-down approach includes an analysis of the local economy in which a company is situated, plus the economies of major trading partner countries and the global economy more generally. Why would an investor be interested in forecasting changes in these economies?
Introduction
With the end goal of the same, I have utilized a few monetary investigation and instruments, to get a reasonable comprehension of the general money related position, and furthermore the key data identifying with the speculation choice (Agrawal, 2012). Amid the examination unique consideration has been made to the Profitability, Liquidity, and Assets Management, Long Term Debt, and Leverage position of the organization. Nitty gritty investigations of each of these things are contained in the accompanying sections.
Ratio analysis and key performance measurements
Again taking a gander at the above outline, it can be seen that the EBITDA and Operating Income are steady throughout the years. These two figures are the one which shows the working effectiveness of the worry (Sharma, 2011). Thus there is by all accounts no material issue in such manner, and the firm has been performing sick in the operations part. Consequently, an uplifting standpoint is normal later on.
If I take a gander at the benefit proportion, the firm has detailed great gainfulness and has a Gross Profit Margin of more than 25% in every one of the years. The net revenue of over 10% is additionally thought to be great with thought to the figures revealed in different organizations in a similar industry. On the off chance that I think about the execution over the time of the audit, there are material worries, since the year 2010 is by all accounts the best, and from that point forward the execution has been falling. Nonetheless, the outcomes after the defeat are likewise not that awful, to rate the firm not great in benefit wilderness (Singleton-Green, 2012).
The working influence of the organization has been around 0.45. This demonstrates the firm is not especially reliant on the parts of settled cost. The use of around 0.5 is legitimized considering the way of industry in which the firm works. Henceforth, on the general side, the firm is gainful.
To break down the liquidity position of the worry I take a gander at the Current Ratio, and the Quick Ratio. The present proportion of the firm is at around 1.3 to 1.5, aside from the year 2010 where the same was around 2. This lower proportion, i.e. around 1.3 involves concern. There may emerge some liquidity issues in the organization sooner rather than later. The present proportion of 2 is thought to be perfect for any industry, and particularly the business in which the firm works. Henceforth, the firm needs to take up this viewpoint. Since the present resources are mealy 1.3 times the present risk, there can be the evident situation, where the firm is not ready to get together its present commitments as respects to the installments and different liabilities (Shukla, 2011).
The brisk proportion of the organization has been at around 0.3 – 0.7. This again involves worry, as a speedy proportion of 1.5 is the most sought one. Firms are having a fast proportion of 1.5 are thought to perform sick on the liquidity angle (Mathews, 2012). The organization at present has a low brisk proportion, which is recently touching 0.5. In the current circumstances, there may emerge a few issues as to the liquidity part of the organization if the circumstance is not enhanced.
Bottom-Up analysis approach
If I consider the proportion, the receivable turnover proportion has been great and is expanding over the time, which may be a worry showing increasingly of extraordinarily indebted individuals, and lower development and liquidity of the account holders. Taking a gander at the stock turnover proportion, the same is performing sick and is more than 4. This is by all accounts the best in the business, and general execution of the organization is by all accounts sick, in this viewpoint (Agarwal, 2010). The aggregate resources turnover proportion has been reliably kept up at 1.3 in the current years. On this perspective, some change still should be finished. The business considers 1.5 as the perfect figure for the benefits turnover proportion. Consequently, the firm is not being utilizing the advantages in a perfect way to produce the incomes.
Bottom-up vs. Top-down approach
The long haul obligations of the organization ascending throughout the years and this may involve genuine worry to the administration. A higher long haul obligation is not alluring as it makes an intrigue commitment and a charge against the organization. This is not the normal component of a decent performing organization, as the organizations with long haul obligation got themselves not that gainful since the whole benefit is eaten up by the intrigue benefit load (Soni Kumar. 2011). Thus, the administration needs to take up the matter of disposing of and diminishing the obligations by some different wellsprings of accounts, which might be inside financing or making subsidizing from the promoters of the organization. The firm is thinking about the liquidity of value and implanting all the more long haul obligation into the capital structure of the organization. Taking a gander at the present monetary condition and the position of the worry, the same does not seem to be extremely productive. The same might be done simply after the money related condition is enhanced. Exchanging the capital stocks and after that injecting long haul, obligation might affect the use proportions. All the more especially, the intrigue scope proportion might fall, and affect the organization. Once more, there might be changes in the required cost of capital of the firm. With the incorporation of more obligation, the level of hazard which the loan specialists might bear should increment (Agyei-Mehsah, 2013).
Conclusion
Considering the general circumstance of the firm, it can be presumed that the firm is productive, and has a great flag without bounds development. However, there are a few worries as to the liquidity and the use position of the worry, which absolutely should be enhanced. The everyday exchanges identifying with buy, deals, costs, and different wages are accommodated in the books of records. It is done through the bookkeeping programming accessible in the market. The important bookkeeping principles are additionally remembered while the exchanges are recorded in. These exchange recording is a continuous procedure and might need to be done in a consecutive way. All the applicable rules and the direction notes should be considered. There are countless passages which are required to be passed toward the finish of the year. This incorporates sections for an arrangement for doubtful obligations, modification of any distinction in the stock levels. Every one of these changes is required to be made in the bookkeeping framework (Poonam, 2011). Additionally, amid the year-end, there are an extensive number of record adjusts, which should be cleared and settled by a method for book sections. Every one of those alterations is likewise required to be made in the books.
Stock Exchange Listing Process
Provide a broad overview of Freelancer Ltd AND identify and discuss the rights, roles and responsibilities of Freelancer’s shareholders, the board of directors and executive management now that it is a publicly listed company, including the specific requirements for Australian companies seeking general admission to the ASX and the ASX profit test and asset test requirements.
Explain why these rules are in place and how they contribute to an efficient stock exchange, support the interests of listed entities, maintain investor protection and impact will these have on the liquidity management of the firm and firm value?
Within the context of the ASX, explain why there are a requirement and need for continuous reporting.
Introduction
Around 10,000 organizations have been delisted from the Australian Stock Exchange (or the state-based trades), Newcastle Stock Exchange and Bendigo Stock Exchange in the course of the last 100 odd years, or have had their name changed. These organizations, the date and the purpose behind the delisting, highlight on our site. To the extent is conceivable, our record for delisted organizations is “solidified” at the purpose of delisting from a trade. Contingent upon organization improvements in the wake of delisting, you may discover current things in “News and Events” inside the organization record. You ought to acknowledge other information inside the organization record may never again be substantial; the organization may, therefore, have changed its legitimate status and even be deregistered. On the off chance that deregistered, it has stopped to exist (Esser and Havenga, 2008).
Responsibilities and roles
Most organizations are delisted either on the grounds that they are gained by another organization, they converge with another organization or they have dissolvability issues. Shareholders ought to likewise take note of that elements do change their name and many have had numerous names. They are then obviously recorded under their new name and no longer under their past name. As indicated by the Australian Stock Exchange Listing Rules, an organization might be expelled from the official rundown:
On the off chance that it makes a request to be expelled (ASX may force conditions).
On the off chance that in the supposition of ASX:
It breaks a posting guideline or is unwilling or not able to consent to a run the show
It has no cited securities
It fits for some other reason
Speculators are regularly confounded by organization delisting and organization disappointment. They are totally inconsequential. The larger part of organizations is delisted for reasons other than disappointment, for example, takeover, merger, illiquidity, withdrawal in light of posting expenses and so forth. Most organization disappointments don’t bring about a delisting. Organization disappointment lies behind many “changes of action” where organizations fall flat with one movement and formally embrace another. Here and there a change of name mirrors an endeavor to disassociate from past disappointments. Both are exemplary instances of disappointment covered by occasions other than a delisting. The share cost more often than not mirrors these disappointments.
Listing requirements
The Listing Rules are not planned to be connected in a robotic or legalistic way; rather they are to be translated as per their “soul, goal and reason, by looking past frame to substance and in a way the best advances the standards on which they are based. The ASX has set up both formal and casual interior boards of trustees to evaluate the substance of rundown candidates and it is thusly significance to meet with the ASX ahead of schedule to guarantee that the ASX concur that the mission criteria are met in substance and the trustworthiness and notoriety of the market he ASX works is in this manner maintained. The key changes to confirmation necessities for elements looking for affirmation, viable from the nineteenth of December 2016 are as per the following. There must be no less than 300 non-associated security holders each holding at any rate $2,000.00 worth of securities and are not confined securities or subject to willful escrows (ASX, 2014).
The Listing Rules and Guidance Notes will be refreshed to fortify ASX’s outright prudence on a mission and “choices” and that the ASX will consider the notoriety, uprightness and effectiveness of its market in practicing these discretions. Specifically, the advance direction will now be given in Guidance Note 1 Applying for Admission – ASX posting for a candidate that is fused in, has its principle business operations or has a greater part of its board or a controlling shareholder occupant in a rising or creating market.
The Australian stock trade (“ASX”) has now concluded the biggest changes to its accommodation necessities for recorded substances in over 10 years, which became effective on the nineteenth of December 2016. Those progressions are gone for enhancing the honesty of the market worked by the ASX and the notoriety of the ASX, which viably implies that the ASX now requires higher guidelines from those substances looking to list on the ASX. The Listing Rules are not planned to be connected in an unthinking or legalistic way; rather they are to be translated as per their “soul, aim and reason, by looking past frame to substance and in a way the best advances the standards on which they are based. The ASX has built up both formal and casual inner boards of trustees to survey the substance of rundown candidates and it is along these lines significance to meet with the ASX ahead of schedule to guarantee that the ASX concur that the mission criteria are met in substance and the trustworthiness and notoriety of the market he ASX works is in this manner maintained (Stary, 2014).
Importance of continuous reporting
The key changes to affirmation necessities for substances looking for confirmation, compelling from the nineteenth of December 2016 are as per the following. There must be no less than 300 non-partnered security holders each holding, in any event, $2,000.00 worth of securities and are not limited securities or subject to deliberate escrows. The Listing Rules and Guidance Notes will be refreshed to fortify ASX’s supreme attentiveness on a mission and “choices” and that the ASX will consider the notoriety, respectability and productivity of its market in practicing these discretions. Specifically, encourage direction will now be given in Guidance Note 1 Applying for Admission – ASX posting for a candidate that is joined in, has its primary business operations or has a dominant part of its board or a controlling shareholder inhabitant in a rising or creating market (Lim, 2010).
Conclusion
Numerous little organizations come up short and go into organization, where they are reproduced and recapitalized. They later develop with either a similar name or an alternate name. Later there is not really any indication of the disappointment. Just the shareholders concerned are horrendously mindful. Their capital has been brutally, weakened and their shares are useless. Bigger organizations that bomb, for example, Pasminco, HIH Insurance, ABC Learning, Babcock and Brown are obviously in the long run delisted. The Australian Stock Exchange (“ASX”) has now finished the biggest changes to its accommodation prerequisites for recorded elements in over 10 years, which became effective on the nineteenth of December 2016. Those progressions are gone for enhancing the uprightness of the market worked by the ASX and the notoriety of the ASX, which viably implies that the ASX now requires higher guidelines from those elements looking to list on the ASX (Brenan and Flynn 2013).
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