Easyjet: the Future of the Company Under Government Intervention

easyJet: The eventual fate of the organization under government intercession. Presentation Since the commencement of the flying business, it has had an astounding extension with traveler development still at 14% as later as 2010 [The Economist, 2011]. For the years the flying business has been running, each flight causes a negative externality †an underlying driver of market disappointment. To take care of this issue of market disappointment, governments have interceded by presenting various guidelines throughout the year, to secure the government assistance of society. Nonetheless, the externality the aeronautics business causes can't be tackled so essentially. Contamination of CO2 and NOx gasses are the negative externalities brought about by each flight, and with every day flights the harm is everlastingly raising. To defeat this market disappointment in the flight business, the European Union Trading Scheme will be presented from 2012. The legislature will intercede by putting a top on the measure of gasses firms are permitted to discharge through their flights. The hypothesis of the arrangement recommends that emanations will lessen after some time and will push aircrafts to discover elective assets. What’s The Problem? Market disappointment is the term that business analysts use to portray circumstances where one individual brings about expenses or appreciates the advantages of another's activity [Shiell, A, 2010]. There are four principle reasons with regards to why advertise disappointment happens: Monopoly power, Public merchandise (see Appendix An), Asymmetric data (see Appendix B) and Externalities. Inside the aircraft business, the last becomes an integral factor. Market disappointment brought about by externalities happens when a gathering that isn't engaged with the dynamic (outsider) is influenced because of that choice. There is a negative overflow impact and this makes markets become wasteful and along these lines come up short. Externalities are impacts of creation or utilization on outsiders where the cost doesn't take care of the full social expense. They are classed as positive (see Appendix C) or negative (see Appendix D) [Helbling, T, 2010]. It is considered that the externalities of the carrier business have increasingly unfriendly impacts as contamination, which may prompt a diminished personal satisfaction. This issue has been additionally underlined in the wake of the steady worries of a dangerous atmospheric devation in the media. There is additionally the issue of different externalities, for example, clamor contamination (see Appendix E), blockage (see Appendix E), and the sworn off creation as far as a dirtied zone (where an air terminal is found) is probably going to influence exercises, for example, the travel industry. Negative externality brought about by advertise disappointment happens because of the market not mulling over the total social expense of an activity. As firms are benefit expanding substances as portrayed by neo old style financial aspects, they will create a more prominent amount of items contrasted with what is socially attractive. Taking a case of the aeronautics business, the social expenses of the aircraft doing more flights is an expansion in contamination and the arrival of other poisonous gasses. Balance Quantity 0 Price QMARKET Demand (private worth) Supply (private cost) Social expense QOPTIMUM Optimum Cost of contamination As observed by the outline, the social ideal yield level is the place the interest bend meets with the social cost bend. Be that as it may, this isn't the situation as the current balance is underneath the ideal one, as private firms just consider private costs, making wastefulness and henceforth showcase disappointment. Diagram Adopted from: Harcourt Brace ; Company. 2011). Externalities, Chapter 10. p16. There are various approaches that can be placed into the spot so as to battle advertise disappointment. They might be private, for example, nullification and remuneration, or they might be actualized by government. Through immediate or aberrant estimates, for example, order and con trol arrangements or market based approaches, for example, Pigouvian charges. (Informative supplement F). The legislature had fastidiously surveyed the aeronautics showcase and inferred that there was a significant negative externality in the business. This externality brought about via air travel turned into the government’s primary worry of the business. They talked about this at the Kyoto Protocol (see Appendix G) and chose to utilize order and control arrangements to direct the business so as to handle the issue. There were three components that came to fruition from the convention and the third system was considered generally essential to the flight business; the European Union Trading Scheme (EU ETS). This plan planned to be the essential strategy to diminish emanations. The possibility of the EU ETS spins around the presentation of the carbon advertise and the top and-exchange framework. This framework was presented in 2005 and started an underlying time for testing to make the business sectors foundation. During the time for testing 12,000 offices inside the EU had been set with an emanations top, they were not permitted to dirty more than the top expressed yet they were permitted to exchange these grants if in excess. The tradable quality of these tops allowed firms the chance to make strange benefit by selling them onto different firms that need the additional emanation license. [A. Denny Ellerman and Paul L. Joskow, 2008] The subject of much discussion has been regarding whether governments ought to have mediated in the business. It is demonstrated that the air business just delivers 2% of the all out nursery gasses in the E. U. In this way, it is difficult to pinpoint why governments have focused on the business in the EU ETS. The EU have expressed the fundamental purpose behind this was to lessen discharges, however, there is proof in different businesses that shows an expansion in duties won't affect contamination. It is significant for easyJet to peruse Appendix H, as it will show that administrations may change their methodology if their present decision demonstrates insufficient. This will help easyJet comprehend what may be anticipated from the business later on and may likewise give the firm a case to contend of the current contamination top which might be considered out of line by privately owned businesses. The Outlook for easyJet The fundamental bearers in the UK are easyJet, Ryan air, flybe and bmibaby. They offer lower costs because of various attributes, for example, direct reserving, high seating thickness, uniform airplane types (less economies of scale on overhauling and upkeep), the utilization of optional or less expensive air terminals and straightforward, for example, free food and air miles (see Appendix I for additional data). The fundamental selling purpose of easyJet is its low costs. With the new guidelines being executed by 2012 (see Appendix J), use will make certain to go up yet this won't just influence the individual organization, however the air business an entirety. These frameworks set up by the Kyoto convention will make exceptional changes the spending carrier industry. The different firms should reevaluate their cost structure and their field-tested strategies. easyJet should evaluate what transforms it should make and how this would influence them against their rivals. So as to evaluate the commercial center, and how easyJet will be influenced, Porter’s five powers model should be analyzed. It comprises of substitutes accessible in an economy, the danger of new contestants, the intensity of the client, the intensity of the provider and the danger from direct contenders. Watchman, 2008) The primary principle danger emerging because of greater expenses is that of substitute items. The firm should dissect its costs contrasted with elective methods for transport like trains. As of now, short take separations are less expensive by means of train however for a long stretch excursion it is less expensive to utilize spending carriers, as obs erved by the graph to one side. Be that as it may, this is going to change with new guidelines to decrease CO2 emanations, expanding use for spending aircrafts. Likewise, trains are getting less expensive as they are electric and changing to a full web based booking administration. The principle confinement with individuals changing to trains is the time requirement. In spite of the fact that the hole in cost for long stretch flights will diminish, it is difficult to see clients moving to trains for these more drawn out separations and the way that most trains are not immediate further makes it escaping for clients to keep use trains. This brings up the issue, if costs increment, won’t individuals move to increasingly rich carriers, for example, British Airways and Virgin? This isn't the situation as the non spending carriers in the business are altogether as of now performing wastefully when contrasted with the spending aircrafts, and it is this trademark will be their defeat. With costs ascending because of expanding oil costs (see Appendix K) and the costs of executing new innovation, spending carriers will even now flourish. They are accessible to give such a low cost and their rivals like B. A will be compelled to drop their cost and make up the benefits somewhere else, if conceivable. Non spending aircrafts are starting to address their wastefulness and are differentiating to remain alive in the business however with the limited measure of oil, the spending carriers as of now have an advantage. Dr Patrick Dixon, 2008] The providers, for this situation, the produces of the planes assume a basic job, presently like never before, all things considered up to them to make sense of approaches to make planes progressively proficient. The different firms have adopted various strategies on the most proficient method to manage government intercession and natural issues. Airbus promoted their airplane, the A380, as being ‘more eco-friendly per traveler kil ometer than a little family car’ [Emirates, 2011]. A rundown of further highlights of how the A380 and Emirates are driving towards less outflows is accessible in Appendix L. asyJet have likewise built up their innovation to battle the issue by making an unducted fan-driven airplane that its authorities accept is the following best thing in eco-friendliness [Commercial Aviation Report, 2007]. To have the option to decrease CO2 emanations in the flying business there must be a full spotlight on approaches to lessen them, for example, interest in new innovation so planes can utilize elective fills (Appendix M) or become more e

The Righteous Deceit of Helen Turrell

Helen Turrell is depicted from the outset as a free overseer of her nephew, Michael Turell in the short story, â€Å"The Gardener† by Rudyard Kipling. In any case, after figuring out the real story of this present character's story, her veneer of genuineness is stripped away. In it's place is an of untruths uncovered by the story's namesake, the Gardener. Her involvement in people in general is through a shroud of her falsehood. Rather than going to France to fix her lung inconvenience as the open idea, Helen was really there bearing Michael into the world. Other than this mystery, Helen's genuineness is a notable quality to the general public.To her child, in any case, her trustworthiness and falsehoods are a strain on their relationship. By ten years of age he finds that he is an ill-conceived youngster. At the point when Michael out of the blue passes on battling in World War I, Helen meets Mrs. Scarsworth. They meet while heading out to visit Michael's grave, and Mrs. Scar sworth prompts the main contemplation of Helen's falsehood. The Gardener at the cemetery affirms the ill-conceived child to the peruser. The story is by all accounts told from Helen's form of the happenings, and the open's tattle about it. Ostensibly, the open's tattle characterizes Helen's appearance outside of her deceit.Rudyard Kipling expands on his topic of the impacts of double dealing purchase building up the character Helen Turrell into an honest, magnanimous, yet beguiling individual through her contorted collaborations with the general population when all is said in done; her unfulfilled relationship with Michael Turrell; and her short, stressed relationship with Mrs. Scarsworth. Helen's relationship with the general population was a tricky one, however the two gatherings picked up from the relationship. The starting sections of the story aren't exactly from the creators omniscient account. The sentences are short and data is meager and now and again missing, as if it was assembled through gossip.From this it very well may be inferred that the open tattle is composing this piece of the story. The initial section clarifies that Helen Turrell is sister to as of late perished George Turrell; when he kicked the bucket he left an embarrassment afterward of an ill-conceived child in India. Helen was enduring medical problems and recuperating in France, however she returns back to her home in Hampshire with her nephew Michael. To the extent her relationship with general society, â€Å"All these subtleties were open property, for Helen was as open as the day,† and â€Å"scandals are just expanded by quieting them up† (Kipling).Her legit notoriety shows how well the Helen stayed discreet from the general population. The tattle on Helen appeared to some of the time center around the amount of a fair individual she was, and this can be deciphered in two different ways. Her trustworthiness made the open regard her relationship with her nephew, desp ite the fact that she uncovers that she lets him call her â€Å"mummy† at sleep time. No treachery was suspected. In any case, concentrating on how legit somebody is asks for thoughtfulness regarding the deceptive human condition, and this is an unpretentious indication to the opposite side of Helen's veneer. This may have destroyed her, causing a portion of the misery in her relationship with her son.Helen Turrell has an exceptional relationship with her child that altogether characterizes her character into one of blamelessness and generosity in spite of her veneer. At the point when her child, Michael, is around 10 years of age, he understands that his â€Å"civil status [is] not exactly regular,† and afterward he continues to â€Å"[break] down her stammered defences† (Kipling). The subject of Michael's authenticity will clearly be an irritated point for Helen that she isn't keen on discussing a lot. She has been concealing it her whole life, and that is any thing but a little accomplishment, for it is her own son!This, joined with permitting Michael to call her â€Å"Mummy† at sleep time shows that she despite everything thinks of him as her child, with all the connection and feeling that accompanies it. In the wake of concealing it for such a long time, Helen doesn't have something besides a provisional reaction to Michael's assaults. Her provisional reaction mirrors that Helen doesn't harp on her misdirection. She comprehends that duplicity is ethically off base, and she is humiliated by its insidious nature. Since Helen is to some degree unfamiliar to her untruth, her blamelessness is saved through the irreverent veneer. Her falsehood is so her child can have a superior life; it is sacrificial, and in this way Helen is apparently moral.This isn't to state that Helen laments her bind as Helen's gatherings with the bothered Mrs. Scarsworth uncover. Helen's relationship with Mrs. Scarsworth shows that Helen nearly doesn't unders tand the degree of her trickery, and her trickiness is additionally appeared as great contrasted with Mrs. Scarsworth's obsessive lying. Helen meets Mrs. Scarsworth through her excursion to visit the grave of the now perished Michael. Mrs. Scarsworth is visiting the burial grounds under the reason of seeing commissions for companions who might be helped realizing somebody made the excursion. She winds up remaining in a similar lodging as Helen. In he night, Mrs. Scarsworth upsets Helen to admit that one of her payments was her adoration. Helen â€Å"desperately† asks, â€Å"But for what reason do you let me know? †(Kipling) Helen's franticness is a conspicuous reaction to being upset so late around evening time. It is clearly irritating to be awoken so as to watch out for somebody's ethical difficulty, yet Helen is giving more than bothered consideration to the issue of Mrs. Scarsworth. Helen's untruth is near uncovering herself at the subject of why Mrs. Scarsworth wo uld uncover to her. Helen fears that Mrs. Scarsworth feels an inborn connection with Helen and the evening gatecrasher may speculate Helen's deception.That is the reason Helen genuinely feels edginess towards Mrs. Scarsworth. Helen shouldn't be stressed however, for Mrs. Scarsworth admits of â€Å"always lying† for about â€Å"six years†(Kipling) of trickiness all out. This neurotic lying is a condition of malice that fills in as an absolute opposite of Helen's circumstance. Mrs. Scarsworth is obviously and discernibly disturbed by her lying, while Helen was just pained by the essential strain it put on her relationship with her child. Helen has lived with the double dealing for such a long time without agonizing as a lot over it that it doesn't make a difference such a great amount to turn into the devastating and characterizing quality that it is a major part of Mrs.Scarsworth's life. Through Helen's feelings in her relationship with Mrs. Scarsworth, it is truly unco vered that Michael is her child and not her nephew. Here there is no notice of open tattle, yet maybe Helen would now be able to grasp her blamelessness and admit since Michael has died. Helen's character is created as such through her associations with different characters in this short story. Her improvement is particularly appeared in her extraordinary associations with each unique character as a result of her trickery. Be that as it may, at long last, her duplicity is a demonstration of magnanimity and love, and cleans Helen's good slate.As a character, Helen's caring blamelessness is at last demonstrated by the presence of the plant specialist. The plant specialist's â€Å"endless compassion† â€Å"Unending love† in his eyes when his omniscience shows Helen where her â€Å"son†(Kipling) was recovers her. The Gardener's attributes coordinate Christian Christ himself, and in indicating Helen where her child is, pardons her. The story finishes here, yet in the event that it was advised concerning what open tattle knows, Helen more likely than not admitted after her excursion to the burial ground. Along these lines, Helen at long last opens up and proceeds onward with her life past her honest double dealing.

Marketing managemnet Essay Example | Topics and Well Written Essays - 1500 words

Showcasing managemnet - Essay Example Numerous organizations look for accomplishment in different components. These elements include: fantastic data frameworks, qualified workforce, and present day innovation all add to business achievement. By and by, fruitful organizations, for example, Coca Cola Company, McDonald’s nourishments, Starbucks, and other famous organizations have had a similitude: they have a solid client direction programs and have vigorously put resources into showcasing on their items and administrations. Promoting Management generally, showcasing comprises of procedures and strategies that are utilized to recognize, make and keep up fulfilling associations with clients that outcomes in esteem increment for the organizations and the clients. Effective organizations commit endeavors to detecting, serving and fulfilling the necessities of clients in the one of a kind objective markets. Organizations like Apple have accomplished brand value through consistent development an astounding client care. A lso, Apple items are based on cutting edge correspondence innovation and extra element like email and messages capacities, which have expanded the degree of consumer loyalty. Essentially, the Apple Company has had the option to execute innovation, and development in all the promoting blend components (Boone and Kurtz, 2010). Advertisers ought to consistently comprehend that business spins around the creation and conveyance of significant worth to clients. The client esteem is supposed to be the variety between the customers’ esteem picked up from claiming and utilizing the items and the expense of getting the items. Of significance to note is that fruitful advertising administrations involves recognizing the correct market for the items and administrations and planning the fitting promoting correspondence messages, which are custom-made to the specific market and target clients (Green and Keegan, 2012). Components of Marketing Strategy The promoting system of any organization is made out of different components, which interrelate. The fundamental component is the market choice and the item arranging, which essentially includes the product offering and the item offering of the objective market. An organization can either pick a solitary market technique or multi showcase procedure. In single advertising technique, the organization will move its endeavors in adjusting the single one of a kind market portion while maintaining a strategic distance from rivalry with the prevailing players. In a multi promoting methodology, the organization will serves a few particular markets subsequently the significance of cautiously choosing the objective markets which are practical. In a complete advertising procedure, the organization will offer separated items to various market sections; subsequently it ought to use the showcasing factors, for example, value, advancement, items, just as, the conveyance techniques in contending viably in the whole market (Haberberg and Rieple, 2008). The organization ought to guarantee that intensive investigation ought to have the option to choose and take up on the best showcasing system that should be utilized. For example, the Apple Company has had the option to foresee and bear the market dangers including the compelling advancement of the Apple items, for example, iPods and telephones. As indicated by Hartline and Ferrell 2010, an organization may likewise pick an early section where it brings into the market another portion after the market heads henceforth the organization ought to guarantee that it utilizes better promoting methodologies and adequate assets than rival the market chief. An organization could likewise pick a loafer section methodology where it enters in the market through impersonation of

Boyles Law Worked Sample Chemistry Problem

Boyle's Law Worked Sample Chemistry Problem On the off chance that you trap an example of air and measure its volume at various weights (consistent temperature), at that point you can decide a connection among volume and weight. On the off chance that you do this examination, you will find that as the weight of a gas test builds, its volume diminishes. As it were, the volume of a gas test at consistent temperature is contrarily relative to its weight. The result of the weight duplicated by the volume is a consistent: PV k or V k/P or P k/V where P is pressure, V is volume, k is a consistent, and the temperature and amount of gas are held steady. This relationship is called Boyles Law, after Robert Boyle, who found it in 1660. Key Takeaways: Boyle's Law Chemistry Problems Basically, Boyles expresses that for a gas at steady temperature, pressure increased by volume is a consistent worth. The condition for this is PV k, where k is a constant.At a steady temperature, on the off chance that you increment the weight of a gas, its volume diminishes. In the event that you increment its volume, the weight decreases.The volume of a gas is contrarily corresponding to its pressure.Boyles law is a type of the Ideal Gas Law. At typical temperatures and weights, it functions admirably for genuine gases. Notwithstanding, at high temperature or weight, it's anything but a legitimate estimate. Worked Example Problem The segments on the General Properties of Gases and Ideal Gas Law Problems may likewise be useful when endeavoring to work Boyles Law issues. Issue An example of helium gas at 25Â °C is compacted from 200 cm3 to 0.240 cm3. Its weight is presently 3.00 cm Hg. What was the first weight of the helium? Arrangement Its consistently a smart thought to record the estimations of every known variable, demonstrating whether the qualities are for beginning or last states. Boyles Law issues are basically unique instances of the Ideal Gas Law: Beginning: P1 ?; V1 200 cm3; n1 n; T1 T Last: P2 3.00 cm Hg; V2 0.240 cm3; n2 n; T2 T P1V1 nRT (Ideal Gas Law) P2V2 nRT along these lines, P1V1 P2V2 P1 P2V2/V1 P1 3.00 cm Hg x 0.240 cm3/200 cm3 P1 3.60 x 10-3 cm Hg Did you notice that the units for the weight are in cm Hg? You may wish to change over this to an increasingly regular unit, for example, millimeters of mercury, climates, or pascals. 3.60 x 10-3 Hg x 10mm/1 cm 3.60 x 10-2 mm Hg 3.60 x 10-3 Hg x 1 atm/76.0 cm Hg 4.74 x 10-5 atm Source Levine, Ira N. (1978). Physical Chemistry. College of Brooklyn: McGraw-Hill.

MTV'S real life show does not present the true life of Saudi Arabia Essay

MTV'S genuine show doesn't present the genuine existence of Saudi Arabia - Essay Example The narrative all in all doesn't depict the genuine image of Saudi Arabia. Fatima spoke to herself as a lady who can't have a vocation by any means. She is demonstrated to be moving in the direction of the dispatch of another business of hued Abayas. An Abaya is a material that Saudi ladies wear on their garments when they come out to work, schools, emergency clinics and so on. In spite of the fact that she isn't against the Abaya itself, she wishes to create some in an assortment of hues other than dark. Fatima likewise featured a portion of the restraints of the way of life saying that ladies are kept from riding bikes in the boulevards, regardless of the way that a ton of spots take into account bicyclists of the two sexual orientations simply like here in the United States. As will be seen, a portion of her conflicts don't remain constant. Right off the bat, shaded Abaya has been in presence for quite a while, and ladies have been wearing it for the length of its reality. Saudi ladies don dark for purity like nuns in the United States. Nuns wear dark garments with white lines much the same as Saudi ladies who make their Abayas dark in shading while at the same time coordinating it with others. Fatima appeared to be uninvolved in finding the way in to her issues. Her purpose was more towards just being heard rather than effectively looking for an answer. At the point when she visited the American maker, she set down bogus realities before them, realities that would stun them. Her point was to make a business for her business for individuals who watch American TV. Her insight into the dark Abaya is plainly obvious, she comprehends it to be a piece of her way of life, however advances it rather as a strict limitation, realizing beyond any doubt that resistance to her bright Abaya, likewise with anything strange, would be normal. On the off chance that she truly trusted it to be an issue of the general public that required tending to, she would have communicated in the language of the individuals of her general public, so everybody gets the message and can impart their consent or

The Risks of Snorting Cacao Powder

The Risks of Snorting Cacao Powder Addiction Addictive Behaviors Print The Risks of Snorting Cacao Powder By Naveed Saleh, MD, MS twitter linkedin Naveed Saleh, MD, MS, is a medical writer and editor covering new treatments and trending health news. Learn about our editorial policy Naveed Saleh, MD, MS Medically reviewed by Medically reviewed by Steven Gans, MD on January 26, 2020 Steven Gans, MD is board-certified in psychiatry and is an active supervisor, teacher, and mentor at Massachusetts General Hospital. Learn about our Medical Review Board Steven Gans, MD Updated on February 06, 2020 R Tsubin/Getty Images More in Addiction Addictive Behaviors Caffeine Internet Shopping Sex Alcohol Use Drug Use Nicotine Use Coping and Recovery Club goers in Europe and the U.S. are snorting lines of raw cacao powder, used to make chocolate, as well as taking cacao pills and drinking cacao-infused drinks for their latest “natural highs.” Unlike phencyclidine (PCP or angel dust), MDMA (ecstasy or Molly), and cocaine, cacao isn’t considered a controlled substance by the U.S. government; in other words, sniffing cacao isn’t illegal. Furthermore, there’s only scattered and scant research on the neurological effects of cacao and chocolate. In an attempt to contextualize the apparent highs derived from cacao, let’s take a more detailed look at what cacao is composed of as well as the research attempting to explain its effects, vis-à-vis chocolate, on the central nervous system. Composition of Cacao The cacao bean contains more than 50% fat. Other components of cacao include protein and other nitrogen-containing compounds, such as theobromines and caffeine. Between 20 and 25% of the cacao bean is sugar or carbohydrates.?? As any health-conscious person likely knows, cacao is rich in antioxidants, including flavonoids like epicatechin and catechin. When the cacao bean is processed into cocoa powder and chocolate by means of fermentation and roasting, it loses much of its antioxidant content. Cacao contains multifarious other compounds with potential biologic and psychoactive effects including:?? PhenylethylamineSerotoninTryptophanTryptamineTyramineTyrosineAnandamideSalsolinolTetrahydro-b-carbolines Several of these compounds are metabolized by the body before they ever make it to circulation.?? Specifically, the biologic amines serotonin, tryptophan, phenylethylamine, tyramine, tyrosine, and tryptamine are broken down by monoamine oxidases in the kidneys, liver, and intestines. (People who are deficient in monoamine oxidases must avoid chocolate so as not to develop headaches and high blood pressure.) Potential Cognitive Effects of Snorting Cacao Powder It’s a stretch to call cacao or chocolate a drug. However, because chocolate cravings are somewhat similar to symptoms of substance dependence, some researchers have been inspired to examine the mechanistic effects of chocolate on the brain.?? Anandamide Compounds: Two analogs of anandamide are found in chocolate. These anandamide analogs are similar to cannabinoids (marijuana) and may result in euphoria. Instead of directly causing euphoria, however, these anandamide compounds exert a more circuitous effect by inhibiting the breakdown of endogenous anandamide  which are already produced in the body.?? Serotonin Effects: Serotonin moderates a number of physiological processes in the body, including sleep, impulse control, and appetite.?? For a long time, experts hypothesized that serotonin linked food cravings and mood and that craving for chocolate and carbohydrates somehow sated serotonin deficienciesâ€"especially in those people who are depressed.?? In fact, studies involving people with seasonal affective disorder and atypical depression somewhat support this hypothesis.?? Nevertheless, the phenomenon of chocolate craving as a biological response to depression is most obviously undercut by the fact that many people with melancholic depression don’t crave food at all. Another reason the hypothesis that chocolate consumption is linked to serotonin and positive mood may be flawed has to do with research that suggests serotonin levels are raised only after consumption of foods that are less than two percent protein; calorically, chocolate is five percent protein.?? Research published in 2013 also suggests that the mood benefits of chocolate and carbohydrates occur independently of serotonin, suggesting that these mood benefits are likely much more complex than can be explained by serotonin alone.?? Opioid Effects: People who are dependent on heroin and other opioids often crave sweets like chocolate.?? Additionally, other physical states including pregnancy, menstruation, alcohol dependence, and eating disorders also change endogenous, or intrinsic, opioid levels in the body. These associations have led experts to suggest that opioids and chocolate are associated in some way. Research from 2010 tends to support this hypothesis. Specifically, endorphins, which are opioids, are released after eating delicious foods like chocolate. Moreover, the release of such endorphins after eating chocolate or something else that’s sweet and palatable appears to produce analgesia, or pain relief, as well as mood elevation.?? Moreover, the analgesic effect of sweet stuff like sugar solutions and chocolate can be reversed by naltrexone, an opioid antagonist which is also given to people who experience heroin opioid dependence.?? Catechin and Epicatechin: The flavonoids catechin and epicatechin present in cacao rapidly make their way into circulation after consumption of chocolate. Furthermore, based on animal studies, epicatechin and catechin cross the blood-brain barrier and accumulate in the brain. This accumulation of flavonoids may exert beneficial cognitive effects.?? Cerebral Blood Flow: In order for our brains to function well, we need good cerebral blood flow or circulation. Proper cerebral circulation is necessary to supply glucose and oxygen to the brain and clear waste products. Research suggests that cacao, wine, grapes, berries, tomatoes, and soy are all polyphenol-rich foods that promote vasodilation of brain blood vessels and thus enhance brain circulation. These brain effects may help explain improved motivation, attention, concentration, memory, visual tasks, and other cognitive and cerebral benefits of cacao.?? Interestingly, flavonoids present in cacao may also decrease blood-vessel endothelial senescence in those who eat it, suggesting anti-aging effects. In other words, chocolate may help make your brain younger. Flavonoids may also protect neurons from damage caused by neurotoxins, reduce inflammation of neurons, and improve learning, memory, and cognitive function.?? Dopamine Effects: People no longer eat predominantly to satisfy energy deficits but rather eat mostly for pleasure. If you’ve ever had dessert at a restaurant after stuffing yourself on appetizers and the main course, you may agree. The mesolimbic dopaminergic system is involved in the effects of drugs of misuse. Consumption of cacao and chocolate may also activate the body’s dopamine receptors.?? This activation is likely not specific to chocolate per se and caused by the consumption of other foods, too. The Link Between Chocolate and Mood In one research study funded by the Australian National Health and Medical Research Council and a grant from Pfizer, Australian researchers examined chocolate craving in people with depression, atypical depression, and certain personality traits (neuroticism). Hyperphagia, or excess eating, is a prominent symptom in those with atypical depression.?? Researchers analyzed online survey responses from 2692 participantsâ€"soliciting data on depressive symptoms, demographics, treatments of depressive episodes, personality constructs, and whether chocolate was craved when depressed. All survey respondents were more than 18 years old, with the average age being 40 years old. Research participants experienced depressive symptoms for two or more weeks. About 71% of the survey respondents were women, 74% had taken antidepressant medications in the past, and 78% had received counseling or other forms of psychotherapy. Among survey respondents, 54% reported food cravings, with 45% craving chocolate specifically. Additionally, among those respondents who craved chocolate, 61% attested to the capacity of chocolate to improve their mood. Chocolate cravers also said that chocolate made them feel less annoyed and anxious. Researchers also found that chocolate was craved by people with neuroticism and that chocolate craving was indicative of atypical depression. Although results from this study generally point to the improved mood among people who consume cacao-derived chocolate, there are some issues that limit the applicability and generalizability of these findings. First, the results of this study were self-reported and not validated by the researchers. Second, the participants had depression and possibly neuroticism, and the researchers didn’t examine people without depression and neuroticism. In other words, these results don’t automatically apply to people without depression or possibly neuroticism. Presumably, many club-goers who snort cacao don’t have depression or neuroses. What It All Means We might never know exactly whether the “natural high” experienced after snorting lines of cacao is, in fact, specific to chocolate or a placebo effect. According to the National Center for Biotechnology Information (NCBI): “The placebo effect is defined as a physiological response following the administration of a pharmacologically inert ‘remedy.’ The word placebo means ‘I will please,’ and the placebo effect has a long history of use (and abuse) in medicine. The reality of the effect is undisputed.”?? Research suggests that cacao and chocolate do exert some mood and cognitive effects. The mechanism of such activity likely involves various neurotransmitters and so forth. In other words, there’s probably no one single reason why these substances elevate mood.??     There are issues, however, with the claim that snorting cacao is natural. Except for your fingers, sticking anything up your nose is unnatural and, unless directed by your physician, refrain from snorting anything. Even over-the-counter (OTC) nasal decongestants can have adverse effects if used excessivelyâ€"notably the development of rebound congestion which can result in a vicious cycle of dependence for the user.?? A couple of concerns that come to mind when people snort foreign substances are inflammation and infection. Foreign substances introduced into the respiratory tract can cause inflammation that, in turn, can predispose a person to infection.?? If a person often engages in late-night clubbing, drinking, illicit drug use, and cacao sniffing, the immune system can get run down and predisposed to respiratory infection, especially in the presence of inflammation.   Please note that these concerns are specific to sniffing cacao and don’t necessarily apply to cacao pills or cacao-infused drinks, which apparently also lead to anecdotal highs. Nevertheless, it’s always best to use caution whenever you buy something novel and unregulated.

A Explanation Of Different Financial Terms Finance Essay - Free Essay Example

The main objective of the Finance Manager is to manage funds in such a way so as to ensure their optimum utilization and their procurement in a manner that the risk, cost and control considerations are properly balanced in a given situation. To achieve the objective the Finance Manager performs the following functions in the following areas:- The need to estimate/forecast the  requirement of funds  for both the short term (working capital requirements) and the long term purpose (capital investments). Forecasting the requirements of funds involves the use of budgetary control and long-range planning Helps to decide what type of  capital structure  the company needs to have return: whether these funds would be raised: from loans/borrowings or from internal source (share capital) To raise sufficient long term funds to finance fixed assets and other long term investments and to provide for the needs of working capital . Investment Decision In projects using the various capital budgeting tools like payback method, accounting rate of return, internal rate of return, net present value. Assets management policies are to be laid down regarding the various items of current assets like accounts receivable by coordinating with the sales personnel, inventory with production Dividend Decision Taking into consideration, earnings trend, share market price trend, fund requirement for future growth, cash flow situation and others. Financial negotiation Plays a very important role in carrying out negotiations with the various financial institutions, banks and public depositors for raising funds on favourable terms. Cash Management The finance manager needs to ensure the supply of adequate, timely and cheap fund  to the various parts of the organization. That there is no excessive cash idling around. Evaluating financial performance To need to constantly review the financial performance of the various units of organization generally in terms of ROI (return on investment. Such review assists management in seeing all the funds have been utilized in the various divisions and what can be done to improve it. Dealing with relevant parties in the Financial Markets Where the company is a listed entity, the need to interact with the Stock Exchange To deal with money markets and capital markets for financing or investment of idling funds To foster relationships with bankers, investors, underwriters of equity and bond issuances and other government regulatory bodies. For those who are uninformed, they tend to think the sole function of this position is that of the head of Accounts Payable and Accounts Receivable, but it goes far beyond that capacity. In fact, the finance manager is in charge of any  financing  and accounting function throughout the company. The role of this position involves that of not only financing functions such as Accounts Payable, Accounts Receivable, and Billing, but it also involves that of budget projections and working with the Chief Financial Officer to make sure that the companys funds are stable and assisting with any budget cuts that become necessary. The finance manager is the head of both the Accounts Payable and Accounts Receivable areas of the company. As such, he will be the one to set policy and direct procedures for both areas of  business. That includes hiring staff based upon need, following budget guidelines for expenses including staffing, assuring that procedures are followed by all staff members, setting reasonable quota system to assure work is completed in a timely fashion, and interacting with department supervisors on a regular basis in order to stay abreast of happenings within the department. The finance manager will also compile reports that show all of the conditions within his department including expenditures, open invoices, production standards, quality control standards, and timeliness of both payment of invoices and processing of payments. The finance manager is also responsible for the billing operation of the Accounts Receivable Department and making sure that guidelines for timely billing are followed as well. The finance manager also is the one who will work with other executives in order to develop the budget for each year. He will work with the Chief Finance Officer and Chief Executive Officer in order to develop an equitable solution for each years expenditures in both staff, office supplies, and any other needs that the company has including training, business trips, out of town meetings, and staff entertainment expenses. The finance manager has a very important position within a company, and his decisions will determine the financial stability of the company, at least within the areas that fall under his control. It is also his job to make certain that other departments and areas of the company follow their budgets and make the most use of the companys  money  by avoiding frivolous expenses. Nature of Financial Management Financial management is that part of total management which is concerned primarily with the financial affairs of an organization and the translation of actions, both past and proposed, into meaningful and relevant information for use in the management process. It includes the functions of budgeting, accounting, reporting, and the analysis and interpretation of the financial significance of past events and future plans. It sometimes also includes other related functions such as internal auditing, management analysis, and others. It is not primarily concerned with the technical procedures and methodology of those individual functions. Rather, it is characterized by the coordination and correlation of those functions into an effective and broad system of financial control that will assure that they, collectively more than individually, become an integral part of the management of the organization. Financial management involves the art of interrelating data to obtain a perspective o f the total financial situation that will assist managers in program planning and decision-making. A very simple operating program may require only a minimum of financial management, and this, in some cases, can be provided by the manager himself. Financial Management is also an important field of Management Sciences. It is a combination of Managerial Finance and Corporate Finance. Managerial Finance concerns with the managerial use of financial techniques, whereas on the other hand, corporate finance deals with corporate financial decisions. In both the cases, it is extremely important for Managers in an organization. Financial Management is used to determine the best way to use the  money  available to an organization in order to improve the future opportunities to  earn  money. Thus the financial managers use techniques such as Valuation, Portfolio management, Hedging and capital structure etc for better decisions about the future of an organizat ion. On the other hand, it is also used to interpret financial results in a given year or time period using financial analysis techniques. This helps in judging the actual performance of an organization in that time period. Financial management helps in proper allocation of costs, anticipate future expense, and budgeting for the future. Retained Earnings The accumulated net income that has been retained for reinvestment in the business rather than being paid out in dividends to stockholders. Net income that is retained in the business can be used to acquire additional income-earning assets that result in increased income in future years. Retained earnings are a part of the owners equity section of a firms balance sheet. Retained earnings also called retention ratio or retained surplus, it is the percentage of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.  Retained earnings are one component of the corporations net worth and increase the supply of cash thats available for acquisitions, repurchase of outstanding shares, or other expenditures the board of directors authorizes. It is recorded under shareholders equity on the balance sheet. It is calculated by adding net income to or subtracting any net losses from beginning retained earnings and subtra cting any dividends paid to shareholders, as shown here: Smaller and faster-growing companies tend to have a high ratio of retained earnings to fuel research and development plus new product expansion. Mature firms, on the other hand, tend to pay out a higher percentage of their profits as dividends. In most cases, companies retain their earnings to invest them in areas where the company can create growth opportunities, such as buying new machinery or spending the money on research and development. If a net loss is greater than beginning retained earnings, retained earnings can become negative, creating a deficit. Debenture A debenture is a debt instrument, which is not backed by collaterals. Debentures are backed by the creditworthiness and reputation of the debenture issuer. Besides, a debenture is a long-term debt instrument issued by governments and big institutions for the purpose of raising funds. The debenture has some similarities with bonds but the terms and conditions of securitization of debentures are different from that of a bond. A debenture is regarded as an unsecured investment because there are no pledges (guarantee) or liens available on particular assets. Nonetheless, a debenture is backed by all the assets which have not been pledged otherwise. Normally, debentures are referred to as freely negotiable debt instruments. The debenture holder functions as a lender to the issuer of the debenture. In return, a specific rate of interest is paid to the debenture holder by the debenture issuer similar to the case of a loan. In practice, the differentiation between a debenture and a bond is not observed everytime. In some cases, bonds are also termed as debentures and vice-versa. If a bankruptcy occurs, debenture holders are treated as general creditors. The debenture issuer has a substantial advantage from issuing a debenture because the particular assets are kept without any encumbrances so that the option is open for issuing them in future for financing purposes. Usually, debentures are categorized into the following types and their definitions are also given below: Convertible Debenture:  Convertible bonds  or bonds that can be converted into equity shares of the issuing company after a predetermined period of time. Convertibility is a feature that corporations may add to the bonds they issue to make them more attractive to buyers. In other words, it is a special feature that a corporate bond may carry. As a result of the advantage a buyer gets from the ability to convert; convertible bonds typically have lower interest rates than non-conver tible corporate bonds. Non-convertible debenture: Simply regular  debenture cannot be converted into equity shares of the liable company. They are debentures without the convertibility feature attached to them. As a result, they usually carry higher interest rates than their convertible counterparts. Corporate Debenture:   Debentures issued by companies and they are insecure in nature. Bank Debenture:  This type of debentures is issued by banks. Government Debenture:  This includes Treasury Bond (T-Bond) and Treasury Bill (T-Bill) issued by the government. They are usually regarded as risk-free investments. Subordinated Debenture:  This is a particular type of debenture, which ranks below regular debentures, senior debt, and in some instances below specific general creditors. Corporation Debenture:  Corporation debentures are issued by various corporations. Exchangeable Debenture:  They are like convertible debent ures, but this debenture can only be converted to the common stock of a subsidiary company or affiliated company of the debenture issuer. Seed Capital Seed capital means the initial capital used to start a business.  Seed capital often comes from the company founders personal assets or from friends and family.  The amount of money is usually relatively small because the business  is still in the idea or conceptual stage.  Such a  venture  is generally  at a pre-revenue stage and  seed capital is needed for  research development, to cover initial operating expenses  until a product or service can start generating  revenue, and to attract the attention of venture capitalists. Seed capital is needed to get most businesses off the ground. It  is considered a high-risk investment, but one that can reap major rewards if the company becomes a growth enterprise. This type of funding is often obtained in exchange for an equity stake in the enterprise, although with less formal contractual overhead than standard equity financing. Banks and venture ca pital investors view seed capital as an at risk investment by the promoters of a new venture, which represents a meaningful and tangible commitment on their part to making the business a success. Frequently,  capital providers  will  want to wait until a business is a little more mature before making the larger investments that typify the early stage financing of venture capital funding. Seed capital in other words can be said as money used as the initial investment for a new product or service launch. Seed capital enables businesses to launch a new product or service without depending fully on a business loan. The funds for this form of financing are typically provided by private investors who are looking for a high return on their investment of at least 30 percent. The investors look to invest in an industry with a market of at least $1 billion, and they also want an industry with few competitors for the business. Businesses that typically obtain seed capit al are young companies around one year of age that have not produced a product or service for commercial sale yet. The companies are so new, so it can be difficult to obtain a regular commercial loan that is sufficient for covering all of the related start up expenses. Cash Credit and Overdraft Cash credit  is  a short-term cash loan to a company.  A bank provides this type of funding, but  only after the required security is given to secure the loan. Once a security for repayment has been given, the business  that receives the loan can continuously draw from the bank up to a certain specified amount. This type of financing is similar to a line of credit. Furthermore, cash credit is a facility to withdraw the amount from the business account even though the account may not have enough credit balance. The limit of the amount that can be withdrawn is sanctioned by the bank based on the business cycle of the client and the working capital gap and the drawing power of the client. This drawing power is determined, based on the stock and book debts statements submitted by the borrower at monthly intervals against the security by hypothecating of stock of commodities and/ or book debts. The excess withdrawal of cash is made generally on dema nd from the customer and the customer has to pay interest on the excess amount he/she has withdrawn. The cash credit facility is quite useful to those businesses where cash payment like wages, transportation, cash purchases are to be made and the receivables are not realized in time. An overdraft facility is a formal arrangement with a bank which allows an account holder to draw on funds in excess of the amount on deposit. Overdraft facility financing is most commonly used by businesses as a way of making their  working capital  more flexible, although it can also be available to individuals. Banks which offer this service typically have a number of expectations from customers who use it, and it is important to be aware of these expectations before entering an overdraft facility agreement. The idea behind overdraft facility agreements is that sometimes one needs a bit more money than is available on deposit to deal with various expenses. For example, a business w hich is always slow in March and April might like to use its overdraft facility to make  payroll  and keep current with all accounts and creditors. Or, a business might need to make a big one-time expense which exceeds the funds on deposit. With an overdraft facility, people can repay the funds at their convenience. The bank may charge an overdraft fee for accessing the overdraft facility, and the  interest rate  can be higher than that for other types of loans. The bank also has the right to demand repayment in full. Balancing an overdraft facility wisely can free up capital and make people more stable financially, but unwise use can lead people into a spiral of debt which may be difficult to escape. The amount of an overdraft facility is also curbed; people are not allowed to continually take money out and not repay it. The amount of the overdraft is usually pegged to account history and financial information, with the goal of ensuring that people do not end up borrowing more than they can realistically repay through an overdraft facility. The agreed limit can be negotiated with the bank, and some banks are willing to reevaluate if customers feel that their circumstances have changed. Similar to personal overdraft facilities, a business overdraft is a prearranged spending limit with your bank. Many businesses find an overdraft useful for those times when cash flow is a problem for a short period of time. Overdrafts are not a good option for funding larger needs, such as capital or expansion expenses. For these needs it is less expensive to obtain a separate business loan. Business overdrafts  may also be subject to more fees than a personal overdraft. Examples include fees to open the overdraft, to renew the overdraft, or sometimes even a fee for not using the overdraft. When used judiciously, overdraft facilities can be a great help in managing the occasional financial shortfall. Commercial Paper Commercial paper is a form of financing that consists of short-term, unsecured promissory notes issued by firms with a high credit standing. Generally, only large firms of unquestionable financial soundness are able to issue commercial paper. Most commercial paper issues have maturities ranging from 3 to 270 days. Although there is no set denomination, such financing is generally issued in multiples of $100,000 or more. A large portion of the commercial paper today is issued by finance companies; manufacturing firms account for a smaller portion of this type of financing. Businesses often purchase commercial paper, which they hold as marketable securities, to provide an interest-earning reserve of liquidity. Commercial paper is sold at a discount from its par, or face, value. The size of the discount and the length of the time to maturity determine the interest paid by the issuer of commercial paper. The actual interest earned by the purchaser is determined by certain calculations. Commercial paper is not  usually backed by any form of collateral, so only firms with high-quality debt ratings will easily find buyers without having to offer  a substantial discount (higher cost) for  the debt issue. For the most part, commercial paper is a very safe investment because the financial situation of a company can easily be predicted over a few months. Furthermore, typically only companies with high  credit ratings  and credit worthiness issue commercial paper. Over the past 40 years, there have only been a handful of cases where corporations have defaulted  on their commercial paper repayment. There are two methods of issuing paper. The issuer can market the securities directly to a  buy and hold  investor such as most money market funds. Alternatively, it can sell the paper to a dealer, who then sells the paper in the market. The dealer market for commercial paper involves large  securities  firms and subsidiaries of  bank  holding companies. Most of these firms also are dealers in  US Treasury securities. Direct issuers of commercial paper usually are financial companies that have frequent and sizable borrowing needs and find it more economical to sell paper without the use of an intermediary. In the United States, direct issuers save a dealer fee of approximately 5 basis points, or 0.05% annualized, which translates to $50,000 on every $100 million outstanding. This saving compensates for the cost of maintaining a permanent sales staff to market the paper. Dealer fees tend to be lower outside the United States. Bridge Finance Bridge financing  is a method of  financing, used to maintain  liquidity  while waiting for an anticipated and reasonably expected  inflow of cash. Bridge financing is commonly used when the cash flow from a sale of an asset is expected after the cash outlay for the purchase of an  asset. For example, when selling a  house, the owner may not receive the cash for 90 days, but has already purchased a new home and must pay for it in 30 days. Bridge financing covers the 60 day gap in cash flows. Another type of bridge financing is used by companies before their  initial public offering, to obtain necessary cash for the maintenance of operations. These funds are usually supplied by the  investment bank  underwriting  the new issue. As payment, the company acquiring the bridge financing will give a number of  stocks  at a  discount  of the issue price to the underwriters that equal ly offset the loan. This financing is, in essence, a forwarded payment for the future sales of the new issue. Bridge financing may also be provided by  banks  underwriting  an offering of  bonds. If the banks are unsuccessful in selling a companys bonds to qualified institutional buyers, they are typically required to buy the bonds from the issuing company themselves, on terms much less favourable than if they had been successful in finding institutional buyers and acting as pure intermediaries. There are 2 types of bridging finance which are closed bridging and open bridging. Closed bridging finance is where there is a date for the exit of the bridging finance and is sure that the bridging finance can be repaid on that date. This is less risky for the lender and thus the interest rate charged is lower. Open bridging is higher risk for the lender. This is where the borrower does not have an exact date for the bridging finance exit and may be l ooking for a buyer of the property or land. Capital Market A capital market is a market where both government and companies raise long term funds to trade securities on the bond and the stock market. It consists of both the primary market where new issues are distributed among investors, and the secondary markets where already existent securities are traded.  In the capital market, mortgages, bonds, equities and other such investment funds are traded. The capital market also facilitates the procedure whereby investors with excess funds can channel them to investors in deficit. The capital market provides both overnight and long term funds and uses financial instruments with long maturity periods. The financial instruments are traded in this market such as foreign exchange instruments, equity instruments, insurance instruments, credit market instruments, derivative instruments, and hybrid instruments. The primary role of the capital market is to raise long-term funds for governments, banks, and corporations while providing a platf orm for the trading of securities.  This fundraising is regulated by the performance of the stock and bond markets within the capital market. The member organizations of the capital market may issue stocks and bonds in order to raise funds. Investors can then invest in the capital market by purchasing those stocks and bonds.  The capital market, however, is not without risk. It is important for investors to understand market trends before fully investing in the capital market. To that end, there are various market indices available to investors that reflect the present performance of the market. Every capital market in the world is monitored by financial regulators and their respective governance organization. The purpose of such regulation is to protect investors from fraud and deception. Financial regulatory bodies are also charged with minimizing financial losses, issuing licenses to financial service providers, and enforcing applicable laws. Capital mark et investment is no longer confined to the boundaries of a single nation. Todays corporations and individuals are able, under some regulation, to invest in the capital market of any country in the world. Investment in foreign capital markets has caused substantial enhancement to the business of international trade. The capital market is also dependent on two sub-markets the primary market and the secondary market. The primary market deals with newly issued securities and is responsible for generating new long-term capital. The secondary market handles the trading of previously-issued securities, and must remain highly liquid in nature because most of the securities are sold by investors. A capital market with high liquidity and high transparency is predicated upon a secondary market with the same qualities. Money Market The  money market  is a component of the  financial markets  for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. Trading in the money markets involves  Treasury bills,  commercial paper,  bankers acceptances, certificates of deposit, federal funds, and short-lived  mortgage-backed and  asset-backed securities.  It provides  liquidity  funding for the  global financial system. The money market consists of  financial institutions  and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months. Money market trades in short-term  financial instruments  commonly called paper. This contrasts with the  capital market  for longer-term funding, which is supplied by bonds  and  equity. The core of the money market consists of banks borrowing and lending to each other, using  commercial paper,  repurchase agreements  and similar instruments. The money market is a subsection of the  fixed income  market. We generally think of the term fixed income as being synonymous  to  bonds. In reality, a bond is just one type of fixed income security. The difference between the money market and the bond market is that the money market specializes in very short-term debt securities (debt that  matures in less than one year). Money market investments are also called cash investments because of their short maturities. Money market securities are essentially IOUs issued by governments, financial institutions and large corporations. These instruments are very  liquid  and considered extraordinarily safe. Because they are extremely conservative, money market securities offer significantly lower returns than most other s ecurities. One of the main differences between the money market and the stock market is that most money market securities trade in  very high denominations. This limits access  for the individual investor. Furthermore, the money market is a dealer market, which means that firms buy and sell securities in their own accounts, at their own risk. Compare this to the stock market where a broker receives commission to acts as an agent, while the investor takes the risk of holding the stock. Another characteristic of a dealer market is the lack of a central trading floor or  exchange. Deals are transacted over the phone or through electronic systems. Venture Capital Funds Venture capital  (also known as  VC  or  Venture) is a type of  private equity  capital typically provided for early-stage, high-potential,  growth  companies in the interest of generating a return through an eventual realization event such as an  IPO  or  trade sale  of the company. Venture capital investments are generally made as cash in exchange for shares in the invested company. It is typical for venture capital investors to identify and back companies in high technology industries such as biotechnology and ICT (information and communication technology). A  venture capital fund  refers to a  pooled investment  vehicle that primarily invests the  financial capital  of third-party investors in enterprises that are too risky for the standard  capital markets  or  bank loans. Venture capital funds mean an investment fund that manage s money from investors seeking private equity stakes in startup and  small- and medium-size enterprises with strong growth potential. These investments are generally characterized as high-risk/high-return opportunities. Theoretically, venture capital funds give individual investors the ability to get in early at a companys startup stage or  in special situations  in which there is  opportunity for explosive growth. In the past,  venture capital investments were only accessible to professional venture capitalists. While a fund structure diversifies risk, these funds are inherently  risky. Most  venture capital funds  have a fixed life of 10 years, with the possibility of a few years of extensions to allow for private companies still seeking liquidity. The investing cycle for most funds is generally three to five years, after which the focus is managing and making follow-on investments in an existing portfolio. This model was pioneered by successful funds in  Silicon Valley  through the 1980s to invest in technological trends broadly but only during their period of ascendance, and to cut exposure to management and marketing risks of any individual firm or its product. In such a fund, the investors have a fixed commitment to the fund that is initially unfunded and subsequently called down by the venture capital fund over time as the fund makes its investments. There are substantial penalties for a Limited Partner (or investor) that fails to participate in a capital call. It can take anywhere from a month or so to several years for venture capitalists to raise money from limited partners for their fund. At the time when all of the money has been raised, the fund is said to be closed and the 10 year lifetime begins. Some funds have partial closes when one half (or some other amount) of the fund has been raised. Vintage year generally refers to the year in which the fund was closed and ma y serve as a means to stratify VC funds for comparison. This  free database of venture capital funds  shows the difference between a venture capital fund management company and the venture capital funds managed by them. Present Value Present value means the  current worth  of a future sum of money  or stream of cash flows  given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows.  Determining the appropriate discount rate is the key to properly valuing future cash flows, whether they are earnings or obligations. The calculation of discounted or present value is extremely important in many financial calculations.  For example, net present value, bond yields, spot rates, and pension obligations all rely on the principle of discounted or present value. If offered a choice between $100 today or $100 in one year  ceteris paribus, a rational person will choose $100 today. This assumes a positive interest rate for the time period. This is described by economists as Time Preference. Time Preference can be measured by auctioning off a risk free se curity like a US Treasury bill. If a $100 note, payable in one year, sells for $80, then the present value of $100 one year in the future is $80. This is because you can invest your money today in a bank account or any other (safe) investment that will return you interest. An investor who has some money has two options: to spend it right now or to save it. But the financial compensation for saving it (and not spending it) is that the money value will accrue through the interest that he will receive from a borrower (the bank account on which he has the money deposited). Therefore, to evaluate the real value of an amount of money today after a given period of time, economic agents compound the amount of money at a given (interest) rate. Most actuarial calculations use the  risk-free interest rate  which corresponds to the minimum guaranteed rate provided by your banks saving account for example. If you want to compare your change in purchasing power, then you shou ld use the  real interest rate  (nominal interest rate  minus  inflation  rate). The operation of evaluating a present value into the future value is called a capitalization (how much $100 today is worth in 5 years?). The reverse operation-evaluating the present value of a future amount of money-is called a discounting (how much $100 that I will receive in 5 years-at a lottery for example-are worth today?). It follows that if one has to choose between receiving $100 today and $100 in one year, the rational decision is to cash the $100 today. If the money is to be received in one year and assuming the savings account interest rate is 5%, the person has to be offered at least $105 in one year so that two options are equivalent (either receiving $100 today or receiving $105 in one year). This is because if you cash $100 today and deposit in your savings account, you will have $105 in one year. Internal Rate of Return (IRR) IRR means the  discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project  equal to zero. Generally speaking, the higher a projects internal rate of return, the more desirable it is to undertake the project. As such, IRR can be used to rank several prospective projects a firm is considering. Assuming all other factors are equal among the various projects, the project with the highest IRR would probably be considered the best and undertaken first. IRR can be treated as the rate of growth a project  is expected to generate. While the actual rate of return that  a given project ends up generating will often differ from its estimated IRR rate, a project with a substantially higher IRR value than other available options would still provide a much better chance of strong growth. IRRs can also be compared against prevailing rates of return in the securities market. If a firm cant find any projec ts with IRRs greater than the returns that can be generated in the financial markets, it may simply choose to invest its retained earnings into the market. Internal Rate of Return provides a simple  hurdle rate, whereby any project should be avoided if the cost of capital exceeds this rate. Usually a financial calculator has to be used to calculate this IRR, though it can also be mathematically calculated using the following formula: In the above formula,  CF  is the Cash Flow generated in the specific period (the last period being n). IRR, denoted by r is to be calculated by employing trial and error method. Because the internal rate of return is a  rate  quantity, it is an indicator of the efficiency, quality, or  yield  of an investment. This is in contrast with the net present value, which is an indicator of the value or  magnitude  of an investment. An investment is considered acceptable if its internal rate of return is greater than an established  minimum acceptable rate of return  or  cost of capital. In a scenario where an investment is considered by a firm that has  equity holders, this minimum rate is the  cost of capital  of the investment (which may be determined by the risk-adjusted cost of capital of alternative investments). This ensures that the investment is supported by equity holders since, in general, an investment whose IRR exceeds its cost of capital adds  value  for the company. Financial Ratio A  financial ratio  (or  accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprises  financial statements. Often used in  accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential  shareholders  (owners) of a firm, and by a firms  creditors.  Security analysts  use financial ratios to compare the strengths and weaknesses in various companies.  If shares in a company are traded in a  financial market, the market price of the shares is used in certain financial ratios. Ratios may be expressed as a  decimal  value, such as 0.10, or given as an equivalent  percent  value, such as 10%. Some ratios are usually quoted as percentages, especially ratios that are usually or alwa ys less than 1, such as  earnings yield, while others are usually quoted as decimal numbers, especially ratios that are usually more than 1, such as  P/E ratio; these latter are also called  multiples.  Given any ratio, one can take its  reciprocal; if the ratio was above 1, the reciprocal will be below 1, and conversely. The reciprocal expresses the same information, but may be more understandable: for instance, the earnings yield can be compared with bond yields, while the  P/E ratio  cannot be: for example, a P/E ratio of 20 corresponds to an earnings yield of 5%. Financial ratios quantify many aspects of a business and are an integral part of financial statement analysis. Financial ratios are categorized according to the financial aspect of the business which the ratio measures.  Liquidity ratios  measure the availability of cash to pay debt.  Activity ratios  measure how quickly a firm converts non- cash assets to cash assets.  Debt ratios  measure the firms ability to repay long-term debt. Profitability ratios  measure the firms use of its assets and control of its expenses to generate an acceptable rate of return. Market ratios measure investor response to owning a companys stock and also the cost of issuing stock. Financial ratios allow for comparisons between companies between industries between different time periods for one company between a single company and its industry average Ratios generally hold no meaning unless they are  benchmarked  against something else, like past performance or another company. Thus, the ratios of firms in different industries, which face different risks, capital requirements, and competition are usually hard to compare. Cash Budget Cash budget means an estimation of the cash inflows and outflows for a business or individual for a  specific period of time. Cash budgets are often used to assess whether the entity has sufficient cash to fulfill regular operations and/or whether too much cash is being left in unproductive capacities. A cash budget is thus a statement in which estimated future cash receipts and payments are tabulated in such a way as to show the forecasted cash balance of a business at defined intervals. The cash budget is one of the most important planning tools that an organization can use. It shows the cash effect of all plans made within the budgetary process and hence its preparation can lead to a modification of budgets if it shows that there are insufficient cash resources to finance the planned operations. It can also give management an indication of the potential problems that could arise and allows them the opportunity to take action to avoid such problems. A cash budget can sh ow four positions. Management will need to take appropriate action depending on the financial position. A cash budget is prepared to show the expected receipts of cash and payments of cash during a budget period. Receipt of cash may come from one or more of the following Cash sales. Payment of debtors (credit sales). The sale of fixed assets. The issue of new shares or loan stock. Receipt of interest and dividends from investments outside the business. Payments of cash may be for one or more of the following. Purchase of stock. Payroll costs or other expenses. Purchase of capital items. Payment of interest, dividends and taxation.