Managing Global And Domestic Risks – Study Report

Answer to question no. 1

In this report a detailed study has been prepared on the three questions which provide how global and domestic risks could be managed by organization. In the first question, global financial crises have been taken into consideration which provides that commercial banking sector was not only sector which were affected by the global financial crises. In the next question bottom up analysis have been taken into consideration which provides whether Evan and Partner to make investment decision making. In addition to this, ratio analysis and other parts have also been described which shows the core aspects of business. In the end of this report a summery have been prepared which provides how a company gets its share listed on the stock exchange. There are several terms and conditions have been shown which should be complied in determined approach by a company to get its share listed on Australian stock exchange. 

The money market is global financial market for short term borrowing and lending. It provides short term and long term liquid for global financial system. Money market could be describes as market where short term obligations such as treasury bills, commercial paper and other securities are bought and sold in market (Webster, 2014).

Global Financial Crisis of 2007- 2009 has been called by leading economists the worst financial crises since after it occurs as great depression of the 1930. It resulted into failure of several business declines in consumer health estimated in the trillion of U.S dollars and other failure of financial commitment incurred by government throughout out the time. International financial markets have been used by multinational organizations and other big borrowers as channel to arrange finance for their business need.  It could be defined as international capital market where persons and body corporate from around all over the world exchange their funds and money with a view to create value on their investments (Gotze, Northcott and Schuster 2015).

Global financial crisis of 2007- 2009  has affected developing countries growth which results into rise in foods prices and knock- on- effect from the financial stability and uncertainty of business operations of various multinational companies. There are several countries that have been affected by Global financial crisis such as India faced downfall in its rupee value, growth domestic products rate of Australia also diminished by 3% throughout the time. Nonetheless, various countries come up with the process of liberalizations and privatization in commodity sector which have also failed and did not provide greater stability of international commodity market (Constantin C?runtu, &MihaelaLoredanaL?p?du?i, 2012). Commodity stocks of various countries are exposed to considerable external shocks stemming from price booms and busts in international capital market. There was seen widespread dissatisfaction in the business functioning and outcomes of unregulated financial and commodity market which provide flame to increasing Global financial crisis around all over the world (Cui, & Li 2014). 

International Financial Crisis and Developing Countries

In context with Global financial crisis it was observed that there was considerable decline in the business functioning of multinational companies around all over the world which reduced the output and consumer spending in significant manner. Mostly in Britain, France, Germany and Japan were most affected countries which high amount of industry growth decline in several sectors such as automotive, Airline, Building and Foods and beverage sectors. As per the collected data through secondary sources it is observed that in Oct 2008 GM ford, Toyota reported 45%, 30% and 30% downfall in their business overall turnover respectively.  Nonetheless, there were several companies and government who had come up with business continuity risk management plan to overcome the negative effect of Global financial crises.

This business continuity risk management plan could be defined as evolutionary results of developments in emergency planning, disaster recovery, security, health and crises management plan which would be implemented with a view to reduce the coupled uncertainty of business in determined approach. However, tackling this type of risk requires integrated and holistic framework with the capability to identity, evaluate and define risk response to international circumstances. It could be defined with the practice company example that Toyota and GE capital used project escalation method to reduce the impact of uncertainty of business. For instance, if due to the unforeseen factors and other economic disasters, company had to face losses in its business functioning then project escalation plan prepared will surely reduce the impact of these unforeseen negative factors. In addition to this, other business organizations such as Wesfarmers, Tesco, Rio Tinto, and Coal had come up with their strategic plan procedure to minimize the risk of uncertainty. These types of strategic plans prepare organizations to fight with other internal and external factors which tackled their risk of failure of their business operations (Lee and Epstein, 2012).

Disasters recovery planning process is subset of larger process which is used for business continuity planning and would include planning for resumption of services, application, data, hardware and communications etc. It is set of consistent actions which should be taken before during and after a disaster.

The main factors of disasters recovery planning process is consisted following steps.

The main higher authority approval- The top management and other designated authority should be involved and must support disasters recovery planning process.

Preparation of planning committee- This planning committee should be selected to develop and implement the plan. These members would take care of all the planning process.

Business Continuity Risk Management

Arrangement of resources- This is related with arranging all the resources such as People, capital and other required resources which would be required to implement the plans

Other steps which would be required to follow in disaster recovery planning

• Organizing the disasters recovery team
• Assessment of risk involved in the disasters recovery implementing process
• Developing policies and regulations
• Preparing to handle disasters
• Testing process and rehearsal team
• Ongoing management 

Disasters recovery planning process could be described as documented process or set of plans and procedure which could be used to recover or protect the business.

There is several disasters recovery planning process which could be used by business operations to set up their business functioning again.

Preparedness- All the organizations should be ready enough all the time to tackle down the impact of disaster happening in real world. It is observed that all the business operations needs to have back up of their all the required and imperative information on clouds thorough cloud computing system.

Responses- It is evaluated that when there are actual occurrences, then company should consider it’s all the negative impact in each and every part of business. In this stage company could get help of project escalation method or provisional amount which organizations prepared for unforeseen liabilities.

Mitigation- This is the final step in which all the organizations who have got affected by disasters would come up with preparing check list of losses and evaluate how this disaster, or global finance occur and what problems would be faced throughout the time to face to manage its impacts. In the end it provides a lesson to each and everyone so that it would not occurs in future.

Conclusion

Now in the end it would be inferred that Global financial crisis of 2007- 2009  has affected developing countries development which consequences into rise in foods prices and knock- on- effect from the financial stability and uncertainty of business operations of various multinational companies. However, disaster recovery plan will help government and companies to establish an effective working system.  

This financial analysis helps investors to analysis their available resources and makes effective investment decision making. In this case Evan and partners is an investment advisory who has been providing investment advice to investor for their better investment decisions.

This analysis focuses on the analysis of individual stocks which is used to gauge the specific company rather than on the industry in which that selected company operates or run its business functions.  This analysis provides how particular selected company has been performing throughout the time. In addition to this, it is observed that bottom up approach is used for the investors who wants to deploy their funds for long term and buy and hold strategies. This analysis provides the specific trend of company which is analyzed to determine whether company would create value on the invested amount or not (Mumbai, 2013).

Core Components Of Disasters Recovery Planning Process

Why Evan and partners would use this type of investing analysis

It is observed that Evan and partners has been providing investing advisory to investors for their better investment decisions. This analysis provides how particular selected company as per the different needs of investors would be analyzed rather focusing on whole industry. This analysis provides trend of company in its business performance.  Evan and partners uses this bottom up analysis to evaluate companies’ performance and their performance trend in determined approach. This type of analysis provides ideas about the how much value a company would create if investors invest their capital in the particular company. The fundamental analysis by Evan and partners encompass two approaches such as top down analysis and bottom up (Jiang, & Kim, 2013).

In order to understand the bottom up analysis, there are following ratios of Tesco have been taken into consideration which provides how well Tesco has been performing throughout the time. In this analysis fundamental analysis begin from the microeconomic level right from the start, It starts with particular company itself. It is observed that bottom- up analysis provides clear idea about the company considering all the internal and external factor of organization. In this analysis investor would be more inclined towards the company who are having high amount of earning from their business operations irrespective of the fact whether industry in which business operates have been running positively or not. There are several ratios which could be taken into consideration in bottom up analysis which are given as below (Stickney, et al. 2009).

Figure 1- Share price analysis of Tesco Plc

This ratio is also known as price earnings ratio which reflects the relation between market price of company’s share and earnings per share. In this ratio we could take example of Tesco Plc and its price earnings ratio. Tesco has price earnings ratio of 53.85 in 2016 which shows that company has good amount of earning from its business functioning (Webster, A. 2014).

This ratio reflects how well company distributes its earning to its shareholders out of its earning. Tesco had been paying good amount of dividend to its shareholders. Nonetheless, in 2016, company plugged back all its profits for the long term value creation for the shareholders (Bragg, 2012).

Dividend payout ratio	2013	2014	2015	2016
Dividend payout ratio	0.493333333	0.012257732	-0.159205713	0

This ratio of Tesco reflects that company has been managing its cash blockage in effective manner. It is assumed that company has increased its efficiency to manage its receivable turnover ratio. In addition to this, Creditor turnover ratio of Tesco has also effectively managed to block less amount of capital. Tesco has been managing its assets in effective manner which reduce is cost of capital (Weygandt, Kimmel and Kieso, 2010). 

Core Components Of Disasters Recovery Responses Process

Efficiency ratio
Efficiency ratio	2013	2014	2015	2016
Receivable turnover ratio	26.78183738	26.95949099	9.17290133	10.069929
Creditor turnover ratio	6.022156723	5.490986214	12.48299257	11.09801476
Inventory turnover ratio	17.02643678	16.26967213	20.84065514	19.82067941
Assets turnover ratio	1.317075704	1.308093645	1.319883871	1.235457001

Debt equity ratio- This ratio provides how well company has managed its capital structure to reduce its overall cost of capital and financial risk in determined approach (Ehrhardt and Brigham, 2013).

Debt equity ratio
Capital structure ratio	2012	2013	2015	2016
Debt- equity	2.50205179	2.739665856	5.25286381	4.089728727
Interest coverage ratio	4.607350097	4.664893617	-11.60721443	2.100401606

This ratio reflects that company has reduced its overall profit throughout the time. In addition to this overall return on capital employed is very less which is not enough to cover cost of capital of organization. However, company has reduced its profitability due to sluggish market conditions (Gibson, 2012).

Profitability Ratios	2013	2014	2015	2016
Operating Profit Margin	0.037567423	0.041395912	-0.0929934	0.0192163
Net Profit Margin	0.000378513	0.015261891	-0.0921746	0.0025352
Return on Capital Employed	0.1	0.1	-0.2	0.043
Return on Equity	0.00144049	0.065887787	-0.8119078	0.0159981
Return on Total assets	0.000484868	0.02034524	-0.12984575	0.003143222

This analysis provides the clear view points on macro-economic factors in relation to global economic factors.  Most investors are struggled to pick right amount of stocks for their investments. Top down analysis is imperative tools to evaluate the stocks in the market in context with economic conditions. The top down analysis evaluate analysis of macro-economic factors to investigation the industry trend and evaluating its impact on the particular security. There are several macro-economic factors E.g. interest rates of Global economy, GDP, inflation, and other international factors have been analysed (Bierman,  2012).

Tesco Plc provides that in four years super market business will grow at 10 %. In addition fiscal policy of organized by various countries has lately planned growth in the sartorial cap of tenure of foreign investors in super market business. It is also reflected that GDP of UK has upward slop since last years which reflects that Economic condition of UK is very much satisfactory for the investment purpose. Inflation rate of UK is growing at the standard rate of 1.53% since last four years. Interest rate is used by government of country to control the inflation in economy (National Institute Economic Review, 2011). Recently share price of company has risen in spite of its downfall business. Nonetheless, company has been increasing its business in other areas as well (Kiran & Singh, 2014).

Investors would be inclined toward knowing changes in economy

A company works in the external environment. All the demand, values and perceptions of stakeholders is comparatively depends upon the external factors. Investors analysis all internal and external factor to gauge whether their investment would create value in the future or not. Creation of value of investor’s capital is highly dependent upon the company’s future performance (Johal  Vickerstaff and McAuliffe, 2014). 

Conclusion

Therefore investors should adopt both methods Top down analysis and Bottom up analysis before investing their money in any organization. Bottom up analysis provides core details and business performance of particular company. On the other hand, top down analysis provides details about the external factors to internal factors which could affect the business of selected company (Yorkshire, 2016).  

Conclusion

This question contains all the required details and listing requirement which would be followed by listed companies to comply with all the listing rules and regulation of Australian stock exchange. This report consist all the listing rules and regulation which should be followed by companies for getting their shares listed on continues basis.

In order to provide a deep answer on the listing requirement of Australian stock exchange, Freelancer Ltd a new listed public company has been taken into consideration. Freelancer Ltd is a global crowd sourcing marketplace where all the employers provides freelancing Job to potential employees who make bids accordingly to get that particular job (Nottage and Aoun, 2017).

Right, responsibilities and role of stakeholders of Freelancer Ltd

Stakeholders	Right	responsibilities	Role
Shareholders	They are the real owner of company and would be having right to ask for return and other information from the company at any time.	They would comply with all the rules and regulation of Freelancer Ltd. In addition to this, they would provide capital to organizations whenever required.	Role of shareholders depend upon their active functions in organization. It is evaluated that  all the shareholders would take active participation in annual meeting of company and will pass resolution accordingly.
Debenture holders	They have right to take back their money at the time of completion of their debentures tenure	They will do all the acts in the best interest of organizations and provide good rating for the listing of organization.	Debenture holders will provide loan and money to Freelancer Ltd and will wait for completion of bonds tenure.
Directors	These person are the KMP of Freelancer Ltd who will have right to take all the strategic decision on the behalf of organizations.	They will be liable for each and every act which they have taken on the behalf of Freelancer Ltd	The main role of directors to take all the decision in the best interest of Freelancer Ltd.
Executive	They have right to take draw their salary on timely basis and raise any concern in grievances department of Freelancer Ltd.	They will be responsible for providing best possible services to employees.	All executive will be accustomed to act as per the directions and instructions of their higher authority.

There are several requirements which would be followed by Freelancer Ltd to get its share listed on Australian stock exchange.

Freelancer Ltd should have at least 300 non-affiliated investors @ AUD $ 2,000

There should be free float of stock around 20% (Nottage and Aoun, 2017).

In order to get shares listed on Australian Stock Exchange Company would have profit test and assets test as fellows.

Freelancer Ltd would have AUD $ 1 million aggregated profit from its continuing operations over past 3 years plus consolidated profit from its all continuing operations should be AUD $ 5,00,000 over the last 12 Months (Wilkinson, 2014).

Assets test- Freelancer Ltd needs to have at least AUD $ 4 million net tangible assets or AUD $ 15 million market capitalisation.

Company needs to have half yearly and annual reporting in Australia (Nottage and Aoun, 2017).

Why these rules are in place

The ASX listing rules govern the initial and ongoing listing of company. These requirements are imposed with a view to curb the high fluctuation in price and provide assurance to investors and suppliers that company would not go in liquidation. It increases the transparency of the business operation of company. In addition to this, the minimum level of capital requirement also provides that company has high amount of liquidity in its business functions and company would be able to meet its all possible liabilities in determined approach (Nottage and Aoun, 2017). 

Compliance with ASX listing rules is continuing requirement. The ASX listing rules govern the initial listing of company and set out the ongoing requirement which Listed Company must meet to remain listed. The main requirement of continue reporting is imposed with a view to curb the high fluctuation in price and provide assurance to investors and suppliers that company would not go in liquidation (Nottage and Aoun, 2017).

Conclusion

In this report it has been observed that the entire listing requirement helps companies to curb the high fluctuation in price and provide assurance to investors to make effective decision. Now in the end it would be inferred that, all listing companies are required to follow listing rules on continues basis.

References

Bierman, H. 2012. The Capital Structure Decision. New York: Springer Science & Business Media.

Bragg, S.M. 2012. Business Ratios and Formulas: A Comprehensive Guide. New Jersey: John Wiley & Sons.

Cecilia Gallegos Muñoz,& Alex Medina Giacomozzi. (2011). Deciding the economic value added: An alternative model. Contabilidad Y Negocios :Revista Del DepartamentoAcadémico De CienciasAdministrativas, 6(11), 31-48.

Constantin C?runtu,&MihaelaLoredanaL?p?du?i. (2012). METHODS USED IN DETERMINING THE VALUE ADDED USED IN THE ASSESMENT OF THE COMPANY’S REAL ECONOMIC POWER. Annals of the University of Petrosani : Economics, XII(1), 33-48.

Cui, Kuang, Wu, & Li. (2014). The changing trend and influencing factors of energy efficiency: The case of nine countries. Energy,64, 1026-1034.

Ehrhardt, M. and Brigham, E. 2013.Corporate finance: A focused approach.5th ed. Cengage Learning..

Gibson, C.H. 2012. Financial reporting and analysis. London: Cengage Learning.

Gotze, U., Northcott, D., and Schuster, P. 2015. Investment appraisal: methods and models. Springer.

Jiang, Z., & Kim, K. A. 2013.Financial management in china. Journal of Multinational Financial Management, 23(3), 125. doi:10.1016/j.mulfin.2013.03.007

Johal, P., Vickerstaff, B. and McAuliffe, E. 2014.Unlocking financial accounting. New York: Routledge.

Kiran, R. S., & Singh, V. K. 2014. How to make the financial analysis an easy task – A comparative analysis between the traditional and the modern approach? International Journal of Engineering Research and Applications, 4(8), 61-66.

Lee, J.Y. and Epstein, M.J. 2012.Advances in management accounting. Bingley: Emerald Group Publishing.Edwards, J.R. 2013. A history of financial accounting. New York: Routledge.

Mumba, C. 2013. Understanding accounting and finance: Theory and practice. USA: Trafford Publishing.

National Institute Economic Review, 2011, Vol.218(1), pp.F3-F3

Nottage, L.R. and Aoun, F., 2017. Corporate Governance, Corporate Responsibility and Law: Independent Director Requirements in Australia and the Asian Region.

Stickney, C.P., Weil, R.L., Schipper, K., and Francis, J. 2009. Financial accounting: an introduction to concepts, methods and uses. London: Cengage Learning.

Webster, A. 2014.Introduction to accounting. 2nd ed. Applied Finance.

Weygandt, J.J., Kimmel, P.D. and Kieso, D.E. 2010.Accounting principles. 10th ed. USA: John Wiley & Sons.

Yorkshire, 2016, Asda beats Morrisons and Tesco to cheapest supermarket crown, viewed from https://www.yorkshirepost.co.uk/business/retail/asda-beats-morrisons-and-tesco-to-cheapest-supermarket-crown-1-8332543