In your report, please include the information together with other information t
ID: 2360722 • Letter: I
Question
In your report, please include the information together with other information that you think is necessary to above question: ?The nature of the business in brief (all three companies) ?Total current assets and long-term assets of all three companies ?Total current liabilities and long-term liabilities of all three companies ?Revenue of each company ?Total debt/equity ratios of all three companies ?Profit margin, return on assets, and return on equity ratios of all three companies ?Betas of all three companies ?The riskiness of all three companies in brief (e.g., the higher the beta, the higher the risk) ?The advantages and disadvantages of debt over equity financing 2) What do you perceive you have learnt in Module 4 Case Assignment? Which of the following learning objectives do you feel you have mastered? ?Explain and demonstrate the use of bonds and other debt instruments in financing the firm's capital plans ?Discuss the advantages and disadvantages of debt financing and of equity financing ?Identify and discuss the concept of optimal capital structureExplanation / Answer
Business may be understood as the organized efforts of enterprise to supply consumers with goods and services for a profit. Businesses vary in size, as measured by the number of employees or by sales volume. But, all businesses share the same purpose: to earn profits. The purpose of business goes beyond earning profit. There are: • It is an important institution in society. • Be it for the supply of goods and services • Creation of job opportunities • Offer of better quality of life • Contributing to the economic growth of the country. Hence, it is understood that the role of business is crucial. Society cannot do without business. It needs no emphasis that business needs society as much. BUSINESS TODAY Modern business is dynamic. If there is any single word that can best describe today’s business, it is change. This change makes the companies spend substantially on Research and development (R & D) to survive in the market. Mass production and mass marketing are the norms followed by business enterprises. The number of companies with an annual turnover of Rs.100 crore each was only three in 1969-70.The figure has gone up by hundreds these days. Today’s business is characterized by diversification, which may be: