You are tasked with analyzing the last four years of accounts of a Essay

You are tasked with analyzing the last four years of accounts of a global mining company - Essay Example Graph 1 shows the company’s liquidity ratios over the four-year period. All the point ratios are less than one, and this means that performance of the company in management of short-term assets and liabilities is poor. In addition, current ratio and quick ratio have a declining trend, and this means that the organization’s management of liquidity worsened over the period. The two ratios, however improved from year 1 to year 2 before assuming the decreasing trend. Cash ratio reported an increasing trend but it was too low, with a maximum value of only 0.15. Correlation analysis of the ratios identifies a positive correlation between current ratio and quick ratio and a negative correlation between cash ratio and both current and quick ratio. Table 1 shows the correlation coefficients. Long-term solvency ratios are indicators of management’s efficiency in long-term management of resources. The ratios compare internal and external funding that an organization has and are inversely proportional to management efficiency (Thukaram 2007, p. 90). Times interest earned ration and cash coverage ratios are however inversely proportional to management efficiency (Mayes & Shank 2011, p. 118). From the graph, total debt ratio is low, over the entire period, and debt to equity ratio and equity multiplier ratio falls to lower values by year 1. The three ratios then decreases with time, indicating improved performance, which can be forecasted. Times-interest ratio and cash coverage ratio also show an improvement trend in performance because of their increasing trends over the period. Performance in management of long-term solvency is therefore strong and show improvement possibility. Asset turnover is another performance indicator that shows asset utilization in an organization. Inventory turnover, receivable turnover, and total asset turnover measures are directly proportional to management efficiency while days of realization and capital intensity are inversely

How does the shareholder model of corporate governance impact in the Essay

How does the shareholder model of corporate governance impact in the management of labour - Essay Example According to Peterson (2005), transparency, from the shareholder perspective, allows for an opportunity to judge performance of a corporation (p. 59). Because there are measurable differences between the goals of managers and shareholders, corporate governance structures are put into place to ensure that appropriate needs are met. Because the shareholder model of corporate governance is restricted towards the goals of only the investors, most businesses will eventually evolve into a stakeholder form of governance. In this model, all parties that have an interest in the business are taken into consideration. This would identify investors, managers, suppliers, customers, employees, the government and the community all as partners within the goals of the corporation. This type of structure acknowledges that the function of a corporation extends beyond the boundaries of the interests of the investors. Without this acknowledgement and governance that takes the needs of all parties into consideration, a company will not always have the mechanisms in place to sufficiently satisfy the needs of all the interested parties, thus ultimately impacting the needs of the investors. The shareholder model of corporate governance, therefore, impacts the way in which labour is managed because it does not have the interests of employees as stakeholders as part of the structure. According to Hoffman (2007), the shareholder model is a predominate corporate structure in both the U.S. and U.K., where the stakeholder model is more predominant in the rest of Europe and Japan (p. 29). Companies that are designed with the shareholder model of corporate governance are more oriented towards short-term goals. Achieving short term goals and increasing immediate profits dominate the structure of the businesses. Short term oriented decisions and market strategies that involve higher yields in a shorter time frame are more prevalent than long term