Imagine you are a small business owner Essay Example | Topics and Well Written Essays - 1000 words

Imagine you are a small business owner - Essay Example Net margin can be calculated dividing net income by total sales. The managers of small businesses must pay close attention to the profitability of the business as well as its cash flow position. The current ratio is a good ratio to analyze small businesses because it measures the liquidity of a company. It measures the ability of the company to pay off its short term debt. A current ratio is positive if is above 1.0. The inventory turnover ratio measures how many times a company sold its inventory during a year. The desired outcome is to have a high inventory turnover rate. Three ratios that are suitable to evaluate the financial performance of a large enterprise are return on assets (ROA), return on equity (ROE), and debt to equity ratio. Return on asset measures how well assets were employed by management, while return on equity measures the extent to which financial leverage is working for or against common stockholders (Garrison & Noreen, 2003). The debt to equity ratio is calcul ated dividing total liabilities by stockholder’s equity. B) Explain the advantages and disadvantages of debt financing and why an organization would choose to issue stocks rather than bonds to generate funds. Debt financing has become an extremely popular financing tool in today’s global economy. ... â€Å"Another advantage of debt financing is that interest paid on debt reduces tax burden of the business† (Kido, 2012). Despite the advantages of debt financing it also has cons. A drawback of debt financing is that in cases of business failure lenders have first option at the liquidating assets of a firm. A second drawback of using debt financing is the obligation to pay interest to the lenders. Sometimes interest expenses of debt instrument can be very high. A third con of debt financing is that if it is excessively used it can negatively impact the credit rating of the company (Simplyfinance, 2007). C) Discuss how financial returns are related to risk. Financial returns and risk are two factors that are positively related. This means that to obtain higher rewards managers must assume greater risk. In the stock market companies that have higher risk have a greater chance of equity appreciation. Risk adverse people try to stay away from risk. Being risk conservative can hel p a company minimize the risk of financial loss. â€Å"Financial risk is the loss probability arising from adverse price fluctuations in financial markets or business partner defaults† (Codjia, 2012). When companies get too greedy they often make bad business decisions by incurring in too much risk. Firms that have higher risk tend to have higher cost of capital. When the cost of capital is high the profitability of the company is adversely affected. D) Describe the concept of beta and how it is used. The beta coefficient is a measure of an asset’s risk in relation to the market or to an alternative benchmark or factor (Thefreedictionary, 2012). The average beta coefficient of the stock market is 1.0. When the beta coefficient of a company is higher than 1.0 the stock has

Abortion Should Be Illegal Except in Cases Where Rape, Incest, or the Essay

Abortion Should Be Illegal Except in Cases Where Rape, Incest, or the Health of the Mother Is Involved - Essay Example My response to this question is in the negative. A woman’s conscience does not respond to the call of abortion normally and her heart is like the oases of love. But hard and unexpected developments relating to her health drive her to that option. During the course of a medical examination, the doctor informs the pregnant mother that the growing fetus will develop physical deformities and the child will also suffer from mental disorders. By the current standards of medical billing, even to bring up a normal child is a difficult proposition (notwithstanding the insurance reimbursements) and to take care about a physically challenged child for a middle-class family is a tough option. Psychological issues will also torment the parents of such a child. Who will look after about its welfare, when the parents are no more? Many types of deformities are incurable and the modern medical system is grappling with such issues. The child’s suffering added to the suffering of the pare nts can be prevented when the mother avails the option of abortion. Abortion, just because the parents or the mother do not want the child, should be illegal. A part of the society and some of the women activists strongly plead that abortion needs to be legalized and it must be the choice of the mother to have the child or not and her decision should be final for termination of the pregnancy. But pro-life activists are not willing to accept this stand. The unwanted child can be given for adoption after completing the legal formalities. This is a good alternative from sociological considerations. Why terminate the life before it had the chance to begin its innings? God knows what the future holds for that child. That child may be credited with sterling achievements in life. But when a woman is raped, a peculiar situation develops. Such pregnancies will not be to the liking of the woman. The legal procedures may take care of the individual who commits such a heinous crime, severe punishment may be awarded, but what can compensate the woman who goes through the process of intense suffering?