Personal Finance Assignment Essay Example | Topics and Well Written Essays - 500 words

Personal Finance Assignment - Essay Example The kinds of credit available can be categorized into two; short term credit and long-term credit depending on the repayment period (Chandra 56). Purchasing of a new camera and a wardrobe for business does not require a lot of cash; Sam and Judy can opt to take a short term loan for purchase of these two items. On the other hand, they can take long term credit for the purchase of a new 52 inch television and a car. Another credit available to them is personal savings. While budgeting, it is vital that things that need to be purchased be arranged in order of priority (Chandra 27). Without arranging the purchases in order of priority, a person ends up buying the wrong commodity not required within the period. It is noteworthy that Sam and Judy should consider buying what is necessary to them at the moment. Suitable clothing for business wear is the most vital commodity to consider buying. They should purchase clothing immediately since they need them when in business. In purchasing clothing, they can use personal savings or short term loans. A camera, car and television, should be purchased later after purchasing clothing. This is because a camera, car and television are luxury commodities that the two can live without (Chandra 44). If the two were to take a loan in purchasing the commodities, then they would have an extra monthly budget of the following: camera $ 900, car $11000, television $ 2500, and clothing $ 3000. These new expenses add up to $ 17,400. These expenses cannot be payable once. Hence, Sam and Judy have to appropriate the total cost into a period of twenty four months; so as to determine how much they will term as expenses per month in purchasing the items. Dividing $ 17,400 by 24 months, $ 725 is the new, additional monthly expense. From the old budget, it was estimated that total monthly expenses totaled to $ 2778. With the purchase of the new items, the old monthly budget will expand. The items that are to be purchased using loan can be

Evidence of cash conservative and low-leverage firms in UK and Germany Dissertation

Evidence of cash conservative and low-leverage firms in UK and Germany - Dissertation Example The financials of the firms are extracted from the fiscal years 2005 to 2012 and statistically analyzed to establish and prove a hypothesis that the agencies practice cash conservatism and low leverage financial policy; particularly in times of economic recession. CONTENTS COVER PAGE________________________________________________________________1 ABSTRACT 2 TABLE OF CONTENTS 3 CHAPTER 1 INTRODUCTION 4 1.1 The United Kingdom and germany_________________________________5 1.2 FINANCIAL Conservatism AND DISTRESS______________________________8 1.3 Agency and Stewardship theory..._________________________________11 CHAPTER 2 review of literature_________________________________________12 CHAPTER 3 RESEARCH METHOD 14 3.1 Empirical Framework 19 3.2 Data Sample 20 3.3 Results 24 CHAPTER 4 CONCLUSION _________________________________________________26 WORKS CITED_____________________________________________________________29 Appendices _________________________________________________________ ______31 Chapter 1 INTRODUCTION The foundations of a firm’s financial theory can be found in the firm’s organizational culture and structure, the national financial policies, investors, and economic factors. In business, decision-making processes include different perspectives which are reflected in the corporate governance policies. The perspective is relative to the source of financial wisdom, accompanied by the degree of inclusion of Values and Ethics. Theorists have come to believe that contributions to an engaged, politically aware form of multicultural theorizing may cast some light on debates about corporate governance and social responsibility, policy making strategies, and profits. Distinctly, attic eccentric people, for example, Hayek (1976) stressed on the fact that the present-day permissive pre-occupation on ‘the mirage of justice’ could lead them to overlook the procedure that permissive strategies depend too heavily upon market which is not a centralized one and positioned on individual firms, and the final product of this cannot be deduced and is unforeseeable. According to an empirical study by Iona, Leonida, and Ozkan (2004): â€Å"The final result also tells that legislative occupancy, board formation and, to some extent, ownership congregation are vital elements of the possibility of organizations taking up middle-of-the-road financial schemes.† The strategies of cash holding and leverage are traditionally used as factors to determine the level of conservatism in a firm’s financial policy. Corporate executive management experience challenges when the interests of the business coupled with the personal interests of the investors, the organization, or managerial cabinet. This occurs frequently during periods of financial distress. The Agency theory developed amongst concerns for property rights, business economics, business law, and political philosophies, to include the studies of economists and busin ess analysts (Reference for Business, 2013). This paper will investigate the existence and magnitude of financial conservatism in firms in the United Kingdom and in Germany by empirical research of their financial data with regard to financial crises. 1.1 The United Kingdom and Germany In relation to this, the same predicament is there. It should not be ignored that the markets and macroeconomic variables have a great connection with each