Managing Financial Principles and Techniques Coursework

Managing Financial Principles and Techniques - Coursework ExampleManagement of the institution is also recommended to reduce the amount of cash and cash equivalent assets outstanding to avoid expend in projects with negative net present value, and avoid pushing management into empire building. In all, Autonomy Plc has a good performance in its liquidity, profitability, faculty and Long term financial stability as on average it out performed the industry performance. These interpret a favourable signal to the company horizontal trend. To suppliers, the quick payment system operated by the company is unique to the industry as such suppliers should strife at strengthening their relationship. For applicants, the company is a red ink concern applicant should not hesitate to seek a career with the companyGlobalisation, the new information technology, and deregulation of financial markets have eased the proviso and search of finance. Millions of shares are traded every day on the worlds stock markets. (Penman, 2003). Investors who trade on these stocks are often forced to ask themselves whether they are buying or selling at the right legal injury. (Artril & Elliot , 2003). Artrill & Elliot (2003) argue that, they often attempt to provide answers to these questions by turning to various media including internet chat rooms, printed press, talking heads on idiot box and financial networks, who often voice opinions on what they feel the stock prices should be. In addition, investors consult investment analysts who provide an almost endless stream of information and recommendations to sift out. There are often claims that some shares are undervalued and vice versa. (Penman, 2003).This information at times becomes confusing leaving the investor with no clear indication of what the original prices of stocks should be. (Penman, 2003). In the prevailing circumstances, Brealey & Myers (2005) state that the investor is forced to crystallize the investment decision follo wing his/her instinct or based on the information provided by the market. (Penman, 2003). Investors who make the decision based on instinct are referred to as intuitive investors while those who make investment decisions based on capital market cleverness are referred to as passive investors. (Penman, 2003). Passive investors carry out their investment decisions based on the assumption that the market price is a fair price for the risk taken, that is, that market forces have driven the price to the appropriate point. (Brealey & Myers 2005).These investment mechanisms appear to be very simple, as they do not require much(prenominal) effort. (Penman, 2003 pp 3). However, Berlin & Lexa (2003) caution that, both investors run risks that are even more than the risks of the firms they are investing in since they can either pay too much or sell for less and as a result suffer a decrease in returns on their investments. (Penman, 2003). Penman (2003) argument was supported by Brealey and M yers (2005) when they give tongue to that, the intuitive investor has the problem of the intuitive bridge builder one may be pleased