Financial assets

Financial benefits Higher profit margins improve cash flow Crow revenue Higher return on assets Financial perspective... 

Property, plant, and equipment percent of total assets Financial Ratios 53.30% 13.10% 15.40%... 

Usually a company will have a portfolio of assets which are at different stages of the described life cycle. Proper management of the asset base will allow optimisation of financial, technical and human resources. 

Petroleum economics provides the tools with which to quantify and assess the financial risks involved in field exploration, appraisal and development, and allows a consistent approach with which alternative investments can be compared. The techniques are applied to advise management on the attractiveness of such investment opportunities, to assist in selecting the best options, and to determine how to maximise the value of existing assets. 

A financial analyst looking at a company from a potential common stockholders point of view is hkely to classify preferred stock as debt. In contrast, bondholders and general creditors are likely to regard preferred stock as additional eqmty. Since preferred stock is a hybrid type of security, it may be issued by a company whose management is divided over the question of whether to use equity or debt to finance additional assets. However, preferred stock does have the disadvantage that the dividends are not allowed as a tax-deductible expense. 

A positive value of any term in Eq. (9-177) implies an increase in working capital, and a negative value a decrease. For example, the sale of fixed assets such as plant, buildings, land, etc., is a source of cash, and the purchase of fixed assets uses up cash. Similarly, an increase in financial resources in the form of loans and stock and bond issues is a source of cash, and a decrease in financial resources in the form of repayment of loans, retirement of stocks and bonds, and the payment of cash dividends uses up cash. (Note that a stock dividend as opposed to a cash dividend does not use up cash.)... 

Ratios well below 1 may indicate financial problems ahead while those substantially greater than 1 may point to poor credit control or under-utilization of cash. This ratio is sometimes known as the acid test . The principal profitability ratio in use is the net profit before interest and tax (NPBIT) to net assets or return on capital employed. 

Some assets are difficult to cost accurately for example, the notional financial value of providing a haven for wildlife, or of keeping your part of the river free from excess nitrates. Another example would be the value of keeping beef cattle indoors and then using the farmyard manure to improve soil structure and maintain wheat yield. 

The EVA [10,11] combines information from the profit and loss statement (revenue, costs, earnings before interests and taxes (EBIT), etc.) and the financial sheet (net working capital (NWC), assets, etc.). The EVA is the interest calculation in absolute measurements and strongly related to the return on capital employed (ROCE) where the gained interest rate is calculated (Figure 1.7). In the long term, this interest rate should be above the capital costs of the company which is the interest rate the company has to pay for a credit on the capital market. Hence, a positive EVA means that the company has earned some money above the capital costs. 

Offshore facilities are dramatically different from onshore facilities because instead of being spread out the equipment is segregated essentially into compartments or separated into a complex of platforms. Offshore facilities pose critical questions of personnel evacuation and the possibility of total asset destruction if prudent risk assessments are not performed. A through analysis of both life safety and asset protection measures must be undertaken. These analyses should be commensurate with the level of risk a particular facility represents, either in personnel exposed or financial loss. An unmanned wellhead platform might only require the review of wellhead shut-in, flowline protection and platform ship collisions to be effective, while manned drilling and production platforms may require the most extensive analysis. 

If the NPV is positive, the investment increases the company s assets The investment is financially attractive. 

Arrests, the loss of sanctuary and the freezing of assets have diminished some threats, but it has spawned others as terrorists adjust to being the focus of the global war on terrorism. What will be the balance Will loss of sanctuary and financial resources prevent terrorists from developing or acquiring CBRN that can be used to mass effect Or will the global war on terrorism embolden terrorists and states to share and use CBRN While terrorists continue to use traditional weapons in innovative ways, a primary concern is terrorist adoption of CBRN weapons in the future. The potential for this is explored next. 

The most influential and determining factors in decision making are the quantitative financial analyses, which are used to declare the winner as the best use of the firm s assets. The criteria used most often are the net present value, NPV, and the internal rate of return, IRR. A financial plan begins with a time horizon, such as 5 years, and the forecast of a number of parameters of expenditures and incomes for each of the years, on ... 

Balance Sheet The balance sheet represents an accounting view of the financial status of a company on a particular date. Table 9-3 is an example of a balance sheet for a company. The date frequently used by corporations is December 31 of any given year, although some companies are now using June 30 or September 30 as the closing date. It is as if the company s operation were frozen in time on that date. The term consolidated means that all the balance sheet and income statement data include information from the parent as well as subsidiary operations. The balance sheet consists of two parts assets are the items that the company owns, and liabilities and stockholders equity are what the... 

The costs to Britain of a long war were the loss of export markets, which were never wholly recovered, and a weakening of her financial power through the sale of overseas assets and the accumulation of debts. 

The difference between assets and liabilities is then the owners equity or the financial net worth of the company. 

Faced with massive increases in the price of imported gas in combination with ineffective billing and revenue collection during the 90-s the Georgian gas sector incurred heavy domestic and foreign debts. The lack of financial resources required for rehabilitation and maintenance has led to deterioration of a large proportion of the physical assets. 

Choose a qualified, experienced professional as your financial advisor if you plan to manage your own assets. Otherwise, select a professional money manager. 

Death. Life insurance is an important part of an overall financial plan, but see it for what it is. Don t get led into buying life insurance as an investment. Sales commissions and administrative costs run high. In retirement, minimize coverage since you will have other assets to cover living costs for survivors. Look into converting existing whole life policies to paid-up insurance. If you have a policy that pays dividends, consider having the dividend applied to the premium. One insurance feature that is attractive to retired couples is the second-to-die policy. This policy provides cash to help with estate taxes and thus eliminates the need to sell other assets when the estate passes to children. 

The Capital Asset Pricing Model and other financial theories around diversification offer useful insights. If I give you a million dollars, you are a fool to invest in venture capital. But if you have a billion dollars, you are a fool if you don t invest in venture capital. 

If, however, a seller puts an asset up for sale in the absence of an existing bid there is an element of fishing for a value as was seen in 2006 with the divestment of the family-owned stake in Serono. This stake was originally discussed in the financial press as having an expected value of around 15 billion Swiss francs and yet it was later withdrawn from sale as none of the potential suitors for the company could justify that price to their own shareholders. In the end the stake was acquired by Merck Kgaa from Germany for a more modest 11 billion Swiss francs which represents a CHF 4 billion difference between the bid and offer prices - or around 30 per cent ... 

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