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Numbers are essential tools used in the decision-making process in a company. Effective management entails the proper use of financial figures. But a lot of people have a fear of numbers stemming from unpleasant experiences with them during their school years. In order to understand and use numbers fear must be overcome first. Understanding will then follow; you will know what numbers can tell and what they can not tell. You will know when it is appropriate to use them and when it is not. You will come to know their limitations. Only at this time will figures become a useful tool for making decisions and enhancing the quality of decisions.

Decision-making in a company usually involves presenting financial figures to several managers, not all of whom have backgrounds in finance. The objectives of presenting financial figures to them are to educate and inform them of the financial performance of the company and convince them of future trends that must be considered in order to give direction to the company. This means that the presentation must be clear and comprehensible to the audience. It is not enough to print out financial statements, hand them out and discuss them line by line. This will not accomplish understanding and clarity. Doing away almost completely with figures and financial terms and steering away from technical discussions is tempting because it may seem easier and simpler, but neither will it achieve the goals of educating, informing and convincing the audience.

A better approach to presenting financial figures is to try to level the financial understanding of the attendees. He should put himself in their shoes and think of ways to incorporate financial terms and figures in his presentation in an easily understandable manner, explaining along the way the terms that can not be replaced with layman’s terms.

To prepare for the challenge of presenting financial figures, the presenter must first select the most Read more…

One of the most important part of our lives, unfortunately a necessity, is finance. We are all in different circumstances, so it will certainly depend on these, to determine how finance will affect each of us individually. Of course, our “individuality” might be in fact the way that a partnership like marriage would view a financial situation and thus determine what sort of lifestyle that could be followed.

Finance for most people, firstly and foremost, would constitute a salary. This in itself has a major bearing on how we lead our lives. The days of the cash pay packet seem to be dying out. Probably very sensible, if only from a security viewpoint. So, there may be a day to day sortie to check balances, if finances are not in the healthiest of states, to find out exactly what cash is available at any given time. The handling of finance, quite understandably, is determined by exactly how much we earn. That is certainly the basis for all our budgets. Unfortunately, it may be said, that finance is really too easy to attain nowadays in the form of loans, exerting extra pressure to accept greater debt and therefore diminish spending power because of taking on the extra loan.

Finance may well come in other forms. We may have throughout our early lives, worked out a strict strategy in budgetary considerations, taking into account the fact that allowances need to be made for the future. It all sounds very simple, but folk need to be particularly strict with their spending habits, to fulfil their aims. However, this is achievable in many cases, by perhaps using some of our earned finance by investing in say, shares or some other form of stock.

At different times of our lives we need to be more aware of finances. The very fact that within relationships, children do come along, may indeed put an extreme strain on finances and also in these set of circumstances, care has to be taken when budgeting Read more…

On July 1, the interest rates for federal Stafford loans will hit the highest level since 2001. The rate for outstanding Stafford loans for the academic year 2006-7 will be 7.14%. New loans issued after July 1 will have a fixed rate of 5.8%.

A lot of student loan borrowers will be seeking out consolidation to lower that rate and their payments. And a new bill will give you a chance to shop around a bit more.

The emergency spending bill signed into law recently eliminated the “single holder rule”. For those of you who didn’t lock in your rate before July 1 — Saturday — you can shop around for a lower rate, since you missed out on one by not locking in your rate.

My parents still receive at least three phone calls a week from people wanting to consolidate student loans. And they haven’t had us living at home with them for years. You can pretty much expect to get more phone calls now that the single holder rule is null.

The rule used to require borrowers whose student loans were all with one lender to consolidate with that lender. They couldn’t go elsewhere for consolidation.

Now, you can shop around, no matter who holds how many of your student loans. However, you need to shop wisely.

Federal law bars most borrowers from consolidating their student loans more than once. You are never told this by the consolidating lender, but it is true. Once you consolidate with a lender, you are stuck with them for life — or at least the next 30 years or so.

So look around a bit before you consolidate. Many lenders have to use the government set rates for Stafford loans. However, they often offer you a reduced rate for having your payments automatically withdrawn from your bank account. Some will even cut your rate if you make so many payments on time. In total, you can have your rate cut by 1.25%.

Read the fine print carefully. Some lenders will take back that rate reduction if you make a late payment in the future.

Because a student loan is a long term debt, you should work with a company that treats you the way you want to be treated. It is probably best to go with a well-known company over one Read more…

Banks serve a tremendous purpose in this world.

They take in individuals deposits and pool them together to lend them to businesses or individuals who need the capital for a business opportunity they have. This business opportunity could be a company that wants to expand or an individual who wants to buy a home.

The more that people save, the more money that is in the banking system and this increased money leads to more loans and more economic growth. This growth is natural and healthy because people’s savings represent capital they could use in the future for more purchases. Thus, when a business borrows more money and invests that capital to be able to manafucture more goods it is a smart decision because people already have more money saved to spend on these goods.

This becomes a healthy circular formula that is summarized as such: “higher savings” leads to “more loans to businesses” which leads to “more business investment” which leads to “great consumer choices” and of course more jobs are created along the way which further fuels the economy forward.

Well, most of us are aware that the rate of US savings was actually negative last year, meaning we spent more than we made. This is down from saving 7.5% of our salaries only 30 years ago. So we see that this current economic boom has not been built upon by people’s savings.

On the other hand, economies also grow when interest rates are set artificially low as they were set in the US. These low rates spurred the real estate bubble to new, incredible prices never before seen in the US and the world. And the amazing thing is that there is no economic justification for these high home prices outside of the herd mentality thinking that prices will keep going up.

Well, we have passed that point and are now seeing decreasing prices and increasing inventories of homes available for sale.

The problem with banks is that they get caught up in the herd mentality as well, increasing the amount of money they lend for people to buy homes. And not only that, they are doing so in a riskier and riskier fashion using adjustable rate mortgages.

Currently, US commercial banks face incredible risks because over Read more…

The origin of Hedge Funds dates back to the year 1948 when Alfred Jones, a Harvard University graduate, while writing about current investment trends was inspired to try his hand at managing money. He followed his instinct and came up with the innovation to sell short some stocks while buying others. Thus, he raised $100,000 and got some of the market risk hedged. Further, he employed leverage in an effort to enhance his returns. Then in the year 1966, an article in the Fortune magazine highlighted an investment that had outperformed the mutual funds. This gave birth to the hedge fund industry. Just after two years, there were about 140 hedge funds operating. However, a number of hedge funds collapsed in the period from 1969 to 1970. But this downtrend didn?t continue for long and the hedge fund market got a new life in 1986 when a hedge fund captured the interest of the investors because of its outstanding performance. After this the ups and downs continued but the hedge fund industry is still prospering and currently there are more than 7000 hedge funds in the United States, with an estimated US $750 billion in assets with a strong role-play in the financial market. They are believed to account for as much as 20% of all US stock trading.

As investors are gradually recognizing the value of hedge funds, the need for the study and research in this field has multiplied. According to a recent study hedge funds do not fall into a strategic asset class. Thus is because hedge funds are heterogeneous and cannot be modeled. Most hedge funds highly specialized and their performance depends on the expertise of the manager of the management team. The returns from hedge funds are usually consistent and have over a period of time outperformed standard equity and bond markets. These have a much lower risk factor as compared to equities. Read more…

Since many schools and other organizations today find themselves suffering from a chronic state of under-funding, they are increasingly forced to hold multiple fundraisers through the course of the year. Unfortunately, this can lead to a complete ?fundraiser burnout? for many customers as well as for fundraising salespeople.
So the critical question is: how do you maintain real interest on the part of customers so as to keep support for your group strong, and how do you keep your salespeople from flagging, losing energy and interest in raising money for your organization? Although there are many potential solutions, here are just a few examples to get started with.
In order to keep customer interest high, and as a way of maintaining goodwill, sell different products during each fundraiser throughout the year. There?s nothing wrong with repeating a successful fundraiser, but once a year is probably more than enough ? even an extremely popular fundraising option can quickly lead to customer burnout if it?s repeated too frequently.
As a matter of maintaining customer goodwill, offer useful products and services in your fundraisers ? everyone loves cookies and chocolates, but there comes a point where customers will only be buying them to support the organization; some will just quit buying them at all. If you find a way to provide goods or services that supporters of the organization already want, then they are able to support your organization by buying something that they might have somewhere else anyway ? a win-win situation.
As a corollary of this, be sure not to have too many fundraisers ? you?re better off with a few wildly successful ones than a dozen mediocre Read more…

You can prepay for a college education, and save a little money too.

The cost of education might seem high, but it is a necessary cost in today’s world. Those without college educations often face a hard time finding a job today. Jobs you would never think would require a college education, do. For example, there are many cowboy jobs — you know, riding a horse and doctoring cattle — that require you have an animal science or ag degree. Firefighters have four year degrees. At the least, many management positions, even in retail, require that you have an associate’s degree.

College tuitions are just going up and up every year. Increases are necessary to keep the level of education and boarding up to standard. Education is not cheap and it costs a lot to produce it. You can choose to pay tomorrow’s college at today’s tuition, tax-free.

Sounds too good to be true, but it isn’t. With an Independent 529 plan, you aren’t simply working with a state-sponsored savings plan. Independent 529’s are offered by private colleges and universities.

You simply deposit up to $165,000 into the plan. In return, you receive tuition vouchers good for use at any of the plan’s 255 participating schools and universities. You can use the vouchers between three and 30 years after purchase.

The benefit is that the actual cost of tuition will probably be at least double what it is today when you redeem the vouchers. Think of it as locking-in today’s college tuition prices. Basically, you are pre-paying for an education.

The drawback is that the vouchers must be used at participating schools. If your child or grandchild enrolls at a school not on the list, you can get a refund at the rate your money was invested. You can also roll the assets into a state-run 529 plan.

State-sponsored 529 plans put your money into mutual funds or other investments that grow tax-free. You then can use the Read more…

The merger of The Royal Bank of Scotland (RBS) and National Westminster Bank (Nat West) as well as other major British banks including Barclays and Woolwich Building Society has created major economical and social interest boasting scholarly debate (Papers4you.com, 2006). It is important to understand why such mergers take place and the potential gains of doing so. The RBS and Nat West merger was formed in delivering Nat West from inefficiencies of poor services originally formulated from the merger bid proposed by the Bank of Scotland. Nat West will benefit from the forward thinking impact present at the RBS Group.

The entrepreneurial spirit will help the bank as well as the whole merger to move forwards in a highly competitive market simultaneously maximising customer satisfaction – a major key to survival in this industry. Impact on shareholders during the merger or discussion process can vary bringing about instability and lack of confidence. Following the completion of the RBS ?20.8 billion bid; share yields rose in price to an attractive level in line with the UK economy thereby portraying the strength of the merger. In essence the driving force behind the success of the RBS bid over the Royal Bank of Scotland was in fact the higher share price expectations offering the perfect icing.

There are many foreseeable benefits of merging to create a larger customer base, maintaining market power and ultimately reducing risk (Papers4you.com, 2006). However, in the reshuffling process redundancies and unemployment are highly evident. A BBC News article revealed that the RBS hopes to achieve efficient operation by cutting costs by ?1 billion thereby threatening 18,000 Nat West Employees (Friday, 11 February, 2000). Nevertheless, employee downsizing moves with the financial services market where the shift from branch based services to E-commerce in terms of internet and telephone banking Read more…

The world is changing at a staggering rate and technology is considered to be the key driver for these changes around us (Papers4you.com, 2006). An analysis of technology and its uses show that it has permeated in almost every aspect of our life. According to Tero et al (2004) many activities are handled electronically due the acceptance of information technology at home as well as at workplace. Internet can be seen as a truly global phenomenon that has made time and distance irrelevant to many transactions. According to Heikki et al. (2002), the transformation from the traditional banking towards e-banking has been a ?leap? change.

The evolution of electronic banking started from the use of automatic teller machines (ATM) and has passed through telephone banking, direct bill payment, electronic fund transfer and the revolutionary online banking (Alter, 2002). The future of electronic banking according to some is the acceptance of WAP enabled banking and interactive-TV banking (Petrus

With heightened competition, market concentration and regulation, British Telecom (BT) has employed a number of tactics to maintain profitability, market share and overall financial performance. As leaders of info-communications and worldwide ventures, BT have been contracting part of their operations, services and transferring responsibility to specialist branches, thereby achieving economic efficiency.

Manoj Kumar, a supply chain consultant claimed, “Most of the outsourcing that’s happening has been triggered by cost, and if you want to minimize cost, it’s mainly going offshore” (www.industryweek.com). For example, in India the IT workforce is estimated to rise to 2.2 million worker by 2008 from a mere 280,000 today (McKinsey Report, Ethicalcorp Magazine, www.ethicalcorp.com). BT have been fortunate to benefit from economies of scale in terms of purchasing, financial, marketing, technical and managerial improvements.

Reducing costs simultaneously reduce risks helping to free financial resources. Instead of tying up resources in non-core areas they can be contracted at operational expenses. Contracting part of BTs services has been a viable choice rather than building functions from scratch. In doing so, BT have increased their customer base and re-attracted customers who left in the first place due to inherent inefficiencies. BT have benefited from 25% increase in its most recent financial quarter (www.cbronline.com/article_news).

Likewise, many banking services from Barclays to HSBC as well as I.T. companies including Microsoft have followed the same suit indicating a rising market trend. In 2005, BT derived 91% of its revenue in the UK by providing communication solutions for homes and business helped by rising demand for broadband internet services. Financial statistics Read more…