Finance Essays

Finance Essays | Accountancy Essays

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Our sample finance essays are an ideal tool for any student struggling to start their own finance essay. Financial Management is an essential part of any organisation and there are many components of financial management. By browsing our collection of finance essay topics, you will get ideas for your finance essay through the following finance subjects:

Financial Risk Management, Global Finance, International Banks, Foriegn Direct Investment, FDI, Investment Banking, Privatisation, Corporate Strategy, Risk Management, Finance Portfolio, Share Prices, Capital Investment, Financial Planning, Microfinance and CSR.

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Finance Essays

Title / Subject
Is there a global economy? Discuss policy implications

The rise of technology has led to our environment being characterized as a global one. The global economy gave business the ability to market products and services all over the globe. It has also allowed them to develop partnerships and alliances throughout the world, which has become essential for success in today’s business, Management Information Systems. Prior to globalisation, the United States dominated the global economy. In recent years, however, the U.S. share of the global economy has shrunk to approximately 25 percent and will continue that trend as the economies of many newly industrialized countries continue to pick up steam. Globalisation is an umbrella term for a complex series of economic, social, technological, cultural and political changes seen as increasing interdependence, integration and interaction between people and companies in disparate locations. As a term, ‘globalisation’ has been used as early as 1944, but economists began applying it around 1981. Theodore Levitt is usually credited with its coining through the article he wrote in 1983 for the Harvard Business Review entitled Globalisation of Markets

[2,000 words]
How may information bearing upon performance evaluation help to explain why a firm’s market value differs from its book value? The difference between the market value and book value of a firm is an issue with very important repercussions

Ideally, what the market determines is the value of a firms equity should coincide with what accounting determines. However, the fact that this in reality is not the case raises the issue of why these disparities occur. This essay will examine why the market value of a firm can differ from the book value. To begin with, it is worth noting the definitions of the two measures of a firms value. Market value (MV) is defined as: MV = share price X number of shares issued Book value (BV) or Common Stockholders Equity (CSE) is the cash value of the business, which, after all debts are paid, belongs to the owners. It is calculated, from the balance sheet as: BV = (Assets – Liabilities + value of preferred shares) / Total number of common shares

[1,000 words]
Is there a future for one global set of generally accepted accounting principles? Now that Europe has fully established its own currency, the international competitiveness of the region is intensifying, particularly in relation to the United States

Accounting rules are in the process of converging into a single international standard. This involves two dominant forms namely the US GAAP and the International Financial Reporting Standards. In the EU all publicly traded companies must adopt them by 2005 and many other countries either have adopted them or plan to do so in the near future. This essay aims to achieve the following objectives: (1) Providing insight into the factors influencing the adoption of IFRS (2) Providing insight into the costs and benefits of harmonization, and (3) Providing insight into the consequences of harmonization

[7,300 words]
How does valuation in the Ohlson or Feltham-Ohlson framework differ from valuation in more traditional accounting-based frameworks? The traditional accounting-based valuation methods predict the future from information in the current financial statements

These simple forecasts are based on the prediction that the current profitability and growth, as revealed in the financial statements, will continue in the future. In an SF1 forecast (where SF stands for simple forecast), earnings of the next period are forecast as the closing book value for the current period multiplied by the cost of capital. Operating income is forecast by expecting the net operating assets to earn at the required return for operations. Finally, net financial expense is forecast by expecting the net financial obligations to incur the expense at the cost of net debt

[1,000 words]
Explain the terms: information asymmetries, first time lending, repeat lending and moral hazard

Secondly, discuss the following statement in the context of the two prescribed readings below: “Lenders are wary of high-technology ventures because of their higher risk. Lenders can overcome this by developing close relationships with the business.” In order to understand the concepts of asymmetric information, first-time lending, repeat lending, and moral hazard, it is important to appreciate the underpinning theoretical framework – the principal-agent relationship. This is the examination of incentive problems among contracting parties, particularly within the business environment. Principal-agent theory concerns the problem of separation of ownership and control, motivation, incentive alignment and agreement. One party, the principal, engages another party, the agent, to perform some service on the principal’s behalf. However, it may be difficult and costly to ascertain whether or to what extent these obligations have been satisfied

[2,500 words]
Explain why listed companies produce financial statements for external users and how these are regulated in the UK

– `The International Convergence Project is considered to be absolutely necessary in this age of globalisation´. Discuss. The financial statement of a particular business basically contains the accounting information prepared mainly for users external to the company. Several groups known as user groups are interested in accounting financial information relating to a business. Mainly they are outside the business, however they are likely to be stakeholders and that it is why the need the financial statements so as to make investment decisions. Owners, managers, lenders, suppliers, customers, investment analyst, competitors, employees and their representatives, government, and community representatives are the most important groups. There is a clear distinction between managers and owners. The managers´ role is to run and look after the owners´ businesses acting as stewards. Moreover, they are interested in revenues and expenses, focused on monitoring the business performance so as to plan and make decisions. Meanwhile financial information is important for owners, nevertheless they might not be aware of the business performance because they delegate that work to managers

[2,500 words]
Has XBRL delivered to users the expected improvements in the “format, timing and content” of financial reports or simply added more problems? The technological changes occurred during the last decades and the exponential growth of the Internet have shed light on a new perspective of business reporting, based on electronic languages and enhanced in quality and versatility

XBRL (extensible business reporting language) drives the way of these changes in financial accounting. The aim of this work is to identify the main features of this technological standard and analyse the benefits that, according to the community promoting it, is taking to financial reporting. The topic will be deepened in the second part of the work, relating the technical benefits of electronic reporting to the users of accounting, defined by the “Framework for the Preparation and Presentation of Financial Statements”. The question is whether or not the users’ needs are met by XBRL, not only in terms of efficiency and time saving, but also ranging underlying conceptual limitations of traditional financial accounting. In the last part of the work, limitations and issues about XBRL will be pointed out, in order to understand why the global adoption of such an improving means is not completed yet

[2,500 words]
Financial Management in Nonprofit Organizations

This essay provides us an insight of the application of financial management techniques of a Not for profit organisation and also a comparing with For-profit organisation. Financial management plays a very significant role to make an organisation successful whether it is a non-profit organisation or a profit motive organisation. Financial management is considered as a critical path, which all organisations have to follow to attain success. This paper provides us an insight of the application of financial management techniques of a Not for profit organisation and also a comparing with For-profit organisation. Although, the strategic management process for both the organisation is very similar. However, a non profit organisation often function in a monopolistic environment which render services or produce product which offers low measurability (profit) and depends on finances from outside sources. The nonprofit sector is growing and the need to understand its efficiency, governance is very important for its stake holders, investors, donors, tax authorities and regulators

[1,800 words]
Analytical Review of the Financial Position and Reporting of Marks & Spencer PLC - 1

M&S Share prices slumped by 49% from 2007 till 2008, and by 11% in 2009, but have steadily risen by 18% in the run up to December 2009. Basic EPS has also reduced from 2007 to 2009 by 17%. 2. Total Sales have steadily risen from 2007 to 2009 and GPM figures (albeit reduced from 2007) are much better than figures revealed by Next over the same period, indicating a preference by the public for M&S products. 3. Whilst the total value of assets of M&S increased by 35% from 2007 to £7.26bil in 2009, Next recorded an 81% increase in total assets over the same period of £1.78bil. Again, whilst this signifies better performance from Next, it also indicates the strong presence M&S has in the Retail Market, and its unrivalled asset portfolio. 4. There was a significant reduction in its ROE by 46%, similarly ROCE has reduced by 37% (due to the increase in value of fixed assets) and the GPM by 4% (all over the same period). In comparison, although M&S does not appear to be as highly geared as Next, higher ROSF figures have been recorded for Next further highlighting better returns to Investors. 5. Improvements are to be expected from the Group, however investors must approach their stock with caution as the worst doesn’t seem to be over

[2,000 words]
Top Managers are increasingly and intensely focusing on strategic directions and trying to manage organizations to gain and sustain competitive advantage

Discuss and critically evaluate the role of management accountants in providing relevant information to managers to manage strategies effectively. Management accounting measure analyzes, and reports financial and no financial information that helps managers make decisions to fulfil the goals of an organization. Thru process of preparing management accounts, accurate and relevant information is developed to coordinate production design, as well as marketing decisions. Nevertheless, evaluate performance is reported by managers to make dad-to-day, short-term and long-term decisions. Brief understanding major differences between financial accounting VS management accounting that is financial accounting focuses on reporting to external parties such as investors, government agencies and so on. Unlike financial accounting, management accounting focuses emphasis internal measures and repots which do not have to follow GAAP yet are based on cost-benefit analysis. By doing so, organization have broad focus on how will and accurate the information help managers in different levels example sales managers, production managers, human resources managers, etc. to do a better job and determinate what substitute products to consider in decision making

[3,000 words]
Fair Value Accounting and the Global Financial Crisis of 2008

The 2008 Financial Crisis caused a drought like condition for people all over the world and specially United States. The rates of unemployment rose high and all types of investments proved to be wrong. Trillions of dollars were lost. It all started with United States and percolated down to so many countries that it became the Global Financial Crisis. As we all know, it is the basic human behavior to blame something else for their troubles, several people have pointed their fingers at greed or credit. However, it is the belief of many bankers and economists that it was caused by unethical use of fair-value accounting, which is basically a rule for measuring companies’ liabilities and assets. Fair-value accounting has had a major effect on most of the financial troubles of almost all the nations. However, investigative evidences till date point mostly towards the overvaluation of banks’ assets. Could accounting rules have caused a world-wide financial crisis? That is what we will be discussing here. We will also discuss what happened in US as it is the epicenter of this GFC, the measures taken by Financial Accounting Standards Board (FASB) of US, the responses and actions taken by International Accounting Standards Board (IASB) and how and why Australia Accounting Standards Board (AASB) responded to GFC

[1,300 words]
Financial Reporting & Governance - International financial reporting standards (IFRS’s) were developed by international accounting standards board (IASB) and International accounting standards (IAS’s) were adopted and republished

Main purpose of IASB is to get global recognition and appearance. Accounting policies are the rules in which way financial statements should be prepared, minimum level of disclosers and information about how numbers are calculated and treated. As it stated in international accounting standard (ISA 8), accounting policies “the specific principles, bases, conventions, rules and practices applied by entity in preparing and presenting financial statements” (Melville A. 2009 p.59). In other words it means that ISA 8 gives entity different chose of treating financial statement. Accounting policies are disclosed in the notes section. Some polices are only can be treated as it allowed by international accounting standards, some of them permit a choice of polices, others permit only one way. Therefore IAS 8 provides guidance on selection standards and interpretations. If there are no specific application of policy in international standards to specific item, entity should use its own judgment based on IASB framework and guidance. Moreover polices depend on industry and economic decisions, and sometimes management require changes in polices for more relevant information, which is allowed by IAS8. Change in accounting policies can also be required by IAS8, due to change in standards of interpretation

[1,800 words]
Information for decision making - How can management accounting assist in manager’s decision making? When managing an organisation or business, decision making involves high levels of risk and uncertainty therefore management accounting in itself is the underpinning factor behind a business’s decision making

According to the American Accounting Association, accounting is “the process of identifying, measuring and communicating economic information to permit informed judgements and decisions by users of the information”. In simpler terms management accounting is an essential factor within any business as it can be utilised to record and summarize an organisations overall performance levels and finances. This allows the manager to set up and implement the correct funding/ processes needed to achieve its maximum success capabilities. Management accounting identifies and measures the success levels of previous decisions made within the management system, as a result this allows the manager to ascertain and forecast what specific areas will need to be adjusted before the processes are put into practice. There are a number of key tools within management accounting that can aid managers in their decision making, these are known as budgeting and forecast reports, profit and loss sheets and cash flow forecasting

[4,000 words]
As the management accountant of a local NHS hospital this report has been written for the senior management to help identify, explore and analyse some of the issues raised by Gordon Brown in comments surrounding ‘poor management’ within the NHS

As the management accountant of a local NHS hospital this report has been written for the senior management to help identify, explore and analyse some of the issues raised by Gordon Brown in comments surrounding ‘poor management’ within the NHS. These comments were made in response to the varying range of costs involved in various procedures within the NHS. This report will begin by analysing the costing methods employed and giving a breakdown of the method. Costing is vital to the success of any organisation and the NHS is no exception. Costing allows us to budget, compare and contrast which allow us to benchmark and measure efficiency. The report will then move on to tackle possible causes for the variation in costs and finally look to offer some possible improvements based on the report’s findings

[2,000 words]
Importance of Communication in Accounting for decision makers

Managerial reporting can help corporation achieve its goal, objectives and mission. The information is useful in assessing both the past performance and future directions of the corporation. It provide decision-making support, and for evaluating and rewarding decision-marking performance. Financial reporting is useful in making investment and credit decisions. The information is useful in assessing amount, timing and uncertainty of future cash flows. It can affect economic resources, claims to resources, and changes in resources and claims. After steps of accounting processing, accounting information goes to decision makers in the corporation. With such useful information, they will decide a series of economic activities for current cycle or even the next cycle. With identifying different costing method, decision maker will do performance evaluation to see how the corporation is performing for the current year. Also, with accurate information, decision maker will do incremental analysis to identify the relevant revenues and costs for each economic activates and the expected impact in the future

[1,400 words]
Investment Banking in The United States and Foreign Countries

The purpose of this report is to elaborate trends that are followed today in investment banking around the globe. This report will put light on investment banking in US and foreign countries, how they raise capital for their clients and instruments that they popularly use. We will make discussion about trends, their pros and cons etc. Investment banks are financial institutions that help individuals, corporations and governments in raising capital by underwriting or issuing securities on behalf of them. They also assist companies whom are involved in merger or acquisition with any other authority and provide them with services of market making, equity securities, foreign exchange and fixed income instruments etc. These banks are mainly involved in two services, one is trading securities by exchanging them with cash or other securities and other is promoting securities in order to sell them to public. In this ways investment banking involves buying and selling side components, so that they can increase client’s annual turnover and make huge profits for them

[5,000 words]
Global Financial Crisis

According to a survey conducted in the year 2013, most countries in the world continue to struggle with the impacts of the recent global economic recession. Most analysts agree that the 2007-2012 economic recessions is the worst economic downfall since the 1930 economic recession. Though the impact of the recession was not directly felt in the developing countries, all developing countries recorded a decline in the GDP. Its consequences are likely to felt for more than a decade especially in the developed countries where it was greatly felt. This essay will briefly describe the nature of the Global Financial Crisis of 2007-2012. It will also suggest policies to address the effects of GFC on trading nations

[2,500 words]
Corporate Governance

There are few companies which are recognized by the customers on the basis of their remarkable commitment with the people, Home retail is one of these companies. Home retail is UK’s leading home and general merchandize retailer. The Home retail group has developed its branding by servicing the people since 1958. The group owned two major brands i.e. Argos & Homebase. The business of retail is directly linked with the daily life use of the people which is why the business needs a lot of things to satisfy the day to day customers. With the help of digital marketing, innovative leadership and multi channel ability, the Home Retail has made shopping very easy and convenient for UK shoppers. Current Ratio, Quick Ratio, Inventory Turnover Ratio, Return on Assets Ratio and Leverage Ratio

[3,000 words]
Business Plan: Global Financial Services and Consultancy Business Opportunities for UK small investors in China

ABC is a global financial service provider company which will be located in Central London, UK. From business plan services to financial solving solutions, the company will provide expert solutions on investment decision services, risk management decision services and business contact services to small business holders seeking for business opportunities in China and the UK as well. This company will be unique in the sense because it will provide strong interlinking connections between China’s business opportunities to the small business developers of the UK as well as UK’s business opportunities to small business developers in China. Hence, the company will be in the position to anchor strong relationship between the UK and China also. The legal status of ABC Company will be the Pvt. Ltd. company with the HM Revenue and Customs

[2,500 words]
Financial Analysis River Island Clothing Limited

Profitability, Efficiency, Liquidity, Solvency, Business Analysis, Discussion And Analysis Of Forecast Of The Company’s Future Expected Economic Benefits, Rate Of Growth, Weighted Average Cost Of Capital (WACC), Forecast Of The Company’s Future Expected Economic Benefits (Using DCF Method), Relative Valuation, Appraisal & Discussion Of Key Assumptions And Evaluation Of Key Methodologies Applied, Issues That May Impact On Propriety Of Valuation, Sensitivity Analysis, Conclusion Of Value And Recommendation For Maximum Price

[3,000 words]
Financial Analysis of IBM

International Business Machines, commonly known as IBM is an American Multinational technology and consulting corporation. The company has its headquarters in Armonk, New York and deals in manufacturing and marketing of computer hardware, middleware and software. It also offers infrastructure, hosting and consulting services in areas ranging from nanotechnology to mainframe computers. IBM was incorporated in 1911 as Computing-Tabulating-Recording Co. (C-T-R) and later changed its name to IBM in 1924 and continues to trade as so today. Relative Cost of the Company. We first look at the market capitalization of the company. This is the measurement of business value based on share price and number of shares outstanding. It is calculated by multiplying the number of shares outstanding by the price per share. Market price (share price) *number of shares (common stock) = market capitalization. As of December 9th 2015, IBM Market Capitalization stood at $132.53 Billion. This figure ranked second in comparison to its direct competitors i.e. Microsoft Corporation, HP, Accenture plc and Information Technology Services

[1,500 words]
Financial Decision Making FTSE 250 Index - A Company Report WHSmith PLC

WH Smith PLC is one of the UK’s leading retailers. It has two main businesses – Travel and High Street. The Travel business has 757 stores, mainly in workplaces, railway stations, airports, and hospitals mostly in UK. As travel stores are convenience stores and located in such places as airport or railway station, so they are quite smaller than High Street stores. Travel has presence in 181 international locations in Europe, Australia, the Middle East, India. And South-East Asia.. Financial Ratio analysis, Profitability and Earnings, Dividends, Liquidity and Financial Stability, Corporate Governance, Asset price of the shares and Evaluation of the company

[3,500 words]
Ford Motor Company – Financial Analysis

The aim of this paper is to analyse the financial strength and processes of Ford Motor Company. To attain this aim, the paper has been divided into three parts. The first part is financial ratio analysis. This part identifies and interprets major profitability, liquidity, and efficiency ratios of the organization. For comparison purposes, the similar ratios of Tata Motors are used, as it is one major competitor of the organization. The second part focuses on the financing decision in relation to the purchase of a land. This part analyses retained earnings, issue of shares, and issue of bonds as three plausible sources of finance. It then recommends the best source of finance, by aligning each of them with the current status of the company. The last part discusses the relevance of the conventional budgeting environment in the current business world. In addition to that, it also discusses the budgeting process of the organization, determining how effective this process is in supporting the overall aims, objectives, and strategy of the organization. Project includes: Profitability Ratios, Gross Profit Ratio, Operating Profit Margin, Net Profit Margin, Liquidity Ratio, Current Ratio, Quick Ratio, Gearing Ratio, Interest Coverage Ratio, Management Effectiveness and Efficiency Ratio, Earnings per Share (EPS), Return on Capital Employed and Asset Turnover

[6,500 words]
Business Research and Decision Making

The purpose of this report is to shed light on the unprecedented circumstances of Tesco & Sainsbury based on its fundamental analysis. For this reason, this report integrates the historical financial statements of both organization to determine the financial stability and health of the organization. Moreover, this report focuses on evaluating the current value of both organizations based on its fundamental analysis. In such concern, the data for analysis has been gathered from online sources related to selected companies of UK based retail industry. Profit Margin, Return on Invested Capital, Return on Asset, Quick Ratio, Current Ratio, Debt to Equity Ratio and Inventory Turnover

[2,000 words]
Financial Decision Making: Case Study of Kier Group Plc

Kier Group Plc (KIER) was established 1928 by Olaf Kier and Jorgen Lotz. It was incorporated in 1992 (Kier Group, n,d). It deals in the building industry and is a leading company in the construction, residential, property, and services group in the United Kingdom (UK). It operates under four divisions which include services, construction, residential and property. It serves its clients in a range of markets such as utilities, transport, pharmaceuticals, science, retail, leisure and hotels, industrial, infrastructure, residential, healthcare, energy, and waste as well as education. The company also serves defense and justice, commercial and public sector as well

[3,500 words]
Analysis of the Stock Market Crash and Global Financial Crisis

In the years leading up to the stock market crash on October 19, 1987, there was an extension of a continuation of a highly powerful bull market. At this period, running from 1982, the market had started to embrace globalization and the advancement in technology. In the years 1986 and 1987, the bull market was fueled by hostile takeovers, low-interest rates, leveraged buyouts and increased mergers. The business philosophy at the time encouraged exponential business growth by acquisition of others. At the time, companies used leveraged buyouts to raise massive amounts of capital to fund the procurement of the desired companies. The companies raised the capital by selling junk bonds to the public. The junk bonds refer to the bonds that pay high-interest rates by the virtue of their high risk of default. Initial public offering or IPO was another trend used to drive market excitement. During that time of increased market activity, the US Securities, and Exchange Commission (SEC) found it extremely hard to prevent shady IPOs and the existing market trends from proliferating

[2,000 words]
Capital Market Risk Analysis

Each and every business process must have to be familiar to the appropriate capital market structure. By understanding overall issues attached to this matter an organization could be able to execute all sorts of activities in an appropriate manner. This paper is mainly showcasing an individual who made some hilarious activities in this particular field. The paper started with the career development plan of Mr. Nick Leeson. Mr. Leeson worked for various banks and his last bank was Barings. Many people were over there shocked to see the growth and success of Lesson. Leeson increased the market share of Barings by doing bet on the Nikkei index. His lavish lives shocked everybody as he spent a larger than life which probably didn’t match his earnings and other elements

[2,500 words]
Corporate Finance - Mergers and Acquisitions

Business organisations are primarily instituted with the rationale of maximising shareholder value through growth. To achieve this end, businesses will have to operate in a competitive landscape characterised by high uncertainties. Given the kind of environment they operate, businesses can be affected by financial volatilities such as the credit crunch of 2008. One of the strategies to offset this financial distress is through Mergers and Acquisitions (M&A). This report will carry out a performance review in the banking sector on the acquisition of Halifax Bank of Scotland (HBOS) by Lloyds Banking Group within the precarious times of the global financial recession in 2008. Drawing on qualitative and quantitative information this report aims to establish the profitability effect of the acquisition on acquirer. The report also reflects on the rationale that necessitated this acquisition and the effect its announcement had on shareholder value. Secondary data in the form of profitability ratios (2004 to 2013) will be sourced from OSIRIS and FAME financial databases. Other qualitative information for analysis will be sourced from annual reports of the banks and credible news agencies. Share prices to be used to perform the event study will be sourced from Yahoo Finance. Performance indicators in the form ratios will be analysed using graphical interpretation of results with the help of Microsoft Excel. The event study will be performed using the market model in deriving the abnormal returns on the day of the announcement. The performance of the acquirer will be benchmarked through a trend and peer analysis review

[4,000 words]
Competitor Profile - Procter & Gamble

Unilever is a transnational consumer goods company based in the UK, London and Rotterdam in the Netherlands. Its products include food and drinks (approximately 40 percent of its income), cleaning agents and personal care. The company was founded in 1929, by the merger of the Dutch margarine producer Margarine Unie and the British soap maker Lever Brothers. As Unilever has 400 brands spanning 14 categories such as home, personal care and foods products, no other company touches people’s lives in so many ways as Unilever does. Includes: Return on Capital Employed, Gross Profit Margin, Operating Profit Margin, Gearing, Interest Cover, Budgeting Techniques, Balanced Score Card and Key Financial Issues in Making an Investment Decision

[4,000 words]

Currencies are common mediums of exchange and store of value with the most common being the gold standard that has been in use for more than 3000 years and fiat money that is mostly used in the world today. However, with the growth and spread of technology, a new form of currency has emerged in the form of cryptocurrencies. Cryptocurrency is a decentralized form digital currency that uses encryption techniques to verify transactions and generate units of the currency with any reliance of an intermediary between the two parties exchanging money (Watson 2). The standout factor that makes cryptocurrencies to gain popularity is their ability to keep transaction details anonymous. Some of the most common cryptos are Bitcoin, Ripple and VeChain

[2,800 words]