This Financial Audit Report Finance Essay - Free Essay Example

Sample details Pages: 9 Words: 2717 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? The first section of this financial audit report is to briefly explain the company background of the companies of Bonia Corporation Berhad and Parkson Holdings Berhad. Following by the first section, the second section is to examine the market share price movement of the companies from correlation coefficient and regression line of the best fit, to measure that risky and prediction when invests in market share prices. Through the market share prices movements, efficient market hypothesis and random walk theory have to explain in this report. Don’t waste time! Our writers will create an original "This Financial Audit Report Finance Essay" essay for you Create order Lastly, this report also identifies the methods of security valuation methods which are needed to mention when the author wants to value the share prices of the companies. Besides that, this report also presents important of capital budgeting in decision ruling when appraises investment in projects. With the framework, author has determine the different of security valuation and capital budgeting. Bonia Corporation Berhad Company Background Bonia Corporation Berhad is mainly focuses in fashion retailing, marketing and manufacturing, which has provided high quality and fashion of leather goods. There have 883 sales outlets and 103 boutiques in around the world. The Bonias history was started in 1977 year, which Mr. Chiang Sang Sem, the Bonias founder, and now was Executive Chairman in Bonia Group, had apply Bonia of brand name because of inspired from the artwork of Giambologna, Italy. In 1980, the Bonia Group had succeed became market leader in Malaysia and Singapore and was listed on the Bursa Malaysia, Kuala Lumpur Stock Exchange (KLSE). Then Bonia Group had succeeded expanded and had its subsidiaries company. Now the Bonia Group has succeed added more international brands, which are Pierre Cardin, Braun Bruno, Magli, Buffel, and Renoma to its collection of brands with the gaining of 70% equity in Jeco (Pte) Limited. Corporate Goal The main corporate goal of Bonia Corporation Behad is to be the recognized international brand with lists in the public listed companies in the region. According to Bonia Groups vision, Bonia Group will establish more 30 countries and will focus in 5 countries in 2015 year. Furthermore, Bonia Group forecasts to have 1billion earnings and at least have 12% before the tax in yearly. Financial Reporting and Performance According to the annual report 2011, Bonia Groups profits have increased 28% to RM461.4million with RM54.8 million from contribution of Jeco (Pte) Limited and RM24.0 million in consignment sales Malaysia. Then Bonia Group has earned RM56.5 million before tax with 24% and RM14.8 million before tax in Jeco (Pte) Limiteds contribution. However, there still have losses of RM5.4 million from joint venture business in Vietnam. Future Forecast Apart on Bonia Groups forecasting, Renoma Cafeacute; Gallery has chosen as the master Franchisee from Licensor, Renoma S.T.A.R. for Singapore, Indonesia and Malaysia and launchs 1st concept in 2012 year. Besides, Bonia Group has rebuilt the retail in Vietnam because of arguing with partner. It forecasts will be the temporary because of supporting by Vietnams departmental stores. Bonia Group forecasts to launch first boutique at Grand Indonesia Shopping Town in Jakarta. Parkson Holdings Berhad Company Background Parkson Holdings Berhad is a Malaysia investment holding company which was under Companies Act in 1965 year and has named as Amalgamated Cement Mills Sdn Bhd in 1982 year. When 1992 year, it had changed to a public company with Pakson name and had listed to Bursa Malaysia in 1993 year. It had joint venture in Parkson Retail Group Limited and Parkson Retail Asia. It has 89 department stores in China, Indonesia, Vietnam, and Malaysia, which 7 stores in Indonesia are under the brand name of a Kem Chicks Supermarket and Centro Lifestyle Department Store, and 8 stores in Vietnam, 37 stores in Malaysia are under brand name of Parkson. Corporate Goal Parkson Group has the corporate goal which offers more international brands to join venture in consignment of department stores. Parkson Group is using the strategy of consistent market positioning, localization and focusing Fashion, Cosmetics, Household and Electrical to achieve objectives with target of young and contemporary market segments. Financial Reporting and Performance In 2011, Parkson Group has earned gross sales of RM9.49 billion, which had increased 10% and earned operating profit of RM971 million which had increased 11%. Besides, Parkson Group also had earned the net profit RM348 million, which had increased 22%. Moreover, Balance sheet of Parkson Group maintains healthy in 2011 with funds of more than RM2 billion to shareholders. Future Forecast Parkson Group has planning to focus in expanded new retail markets to more countries. Then it has to maintain partnership with the Indonesia which has following the listing of shares of SGX-ST for future forecast. Parkson Loyalty Card programme, which is emphasized, also is the future forecast of the company to gain more consumers. Market Share Price Movement of PARKSON and BONIA Share price movement is determined to estimate the future cash flows and share price in the company. This report has done to determine the share prices movement of Parkson and Bonia. Market Share Price Month PARKSON HOLDINGS BHD Market Share Price Bonia Corporation Berhad Market Share Price Jan 5.95 1.81 Feb 5.66 1.8 Mar 5.73 1.8 Apr 5.87 1.85 May 5.92 1.85 June 7.73 1.81 July 6.12 1.81 Aug 5.89 1.73 Sep 5.82 1.65 Oct 5.69 1.72 Nov 5.81 1.96 Dec 5.84 2.07 Scatter Diagram Graph Scatter Diagram is a technique that uses to determine relationship between two months and to determine how the financial market works and the risk of company. Below is the table of monthly share price Parkson, which uses to plot scatter diagram graph market share prices. PARKSON HOLDINGS BHD Month x y Month JAN 5.95 5.66 FEB FEB 5.66 5.73 MAR MAR 5.73 5.87 APR APR 5.87 5.93 MAY MAY 5.92 7.73 JUN JUN 7.73 6.12 JUL JUL 6.12 5.89 AUG AUG 5.89 5.82 SEP SEP 5.82 5.69 OCT OCT 5.69 5.81 NOV NOV 5.81 5.84 DEC DEC 5.84 2.2.1 Scatter Diagram Graph of PARKSON HOLDINGS BHD The graph above has showed that the correlation between 2 months of the share price of Parkson, which the highest is on June RM7.73 and the lowest, is on February RM5.66. BONIA CORPORATION BHD MONTH x y MONTH JAN 1.81 1.8 FEB FEB 1.8 1.8 MAR MAR 1.8 1.85 APR APR 1.85 1.85 MAY MAY 1.85 1.81 JUN JUN 1.81 1.81 JUL JUL 1.81 1.73 AUG AUG 1.73 1.65 SEP SEP 1.65 1.72 OCT OCT 1.72 1.96 NOV NOV 1.96 2.07 DEC DEC 2.07 2.2.2 Scatter Diagram Graph of BONIA CORPORATION BHD The graph above is scatter diagram of Bonia, which the highest is on December RM2.07, and the lowest, is on October RM5.66. Based on the scatter diagram graph, it also has showed Parksons correlation between 2 months is strong than Bonia. Calculation of Correlation Coefficient However, it needs to use calculation of correlation coefficient to measure more accurately that weak and strong of correlation between 2 months are interpreting. It takes on values ranging between +1 and -1. PARKSON x y xy x ² y ² 5.95 5.66 33.68 35.40 32.04 5.66 5.73 32.43 32.04 32.83 5.73 5.87 33.64 32.83 34.46 5.87 5.92 34.75 34.46 35.05 5.92 7.73 45.76 35.05 59.75 7.73 6.12 47.31 59.75 37.45 6.12 5.89 36.05 37.45 34.69 5.89 5.82 34.28 34.69 33.87 5.82 5.69 33.12 33.87 32.38 5.69 5.81 33.06 32.38 33.76 5.81 5.84 33.93 33.76 34.11 5.84 5.95 34.75 34.11 35.40 72.03 72.03 432.74 435.78 435.78 The formula of Correlation Coefficient The answer shows that the correlation coefficient of Parkson following by the 2 months is 0.11. It means that the correlation efficient of between 2 months of the share price are weak. BONIA x y xy x ² y ² 1.81 1.80 3.26 3.28 3.24 1.80 1.80 3.24 3.24 3.24 1.80 1.85 3.33 3.24 3.42 1.85 1.85 3.42 3.42 3.42 1.85 1.81 3.35 3.42 3.28 1.81 1.81 3.28 3.28 3.28 1.81 1.73 3.13 3.28 2.99 1.73 1.65 2.85 2.99 2.72 1.65 1.72 2.84 2.72 2.96 1.72 1.96 3.37 2.96 3.84 1.96 2.07 4.06 3.84 4.28 2.07 1.81 3.75 4.28 3.28 21.86 21.86 39.87 39.95 39.95 The answer shows that the correlation coefficient of Bonia following by the 2 months is 0.38. It means that the correlation efficient of between 2 months of the share price are weak. However, it still better if compares with Parkson. Calculation Regression line of Best Fit According to Sir Francis Galton (1822-1911), which had developed scatter diagram and correlation coefficient, also had identified regression line that used to do prediction. Equation of x (current share price) and y (predicted share prices) Formula Regression Line of Best Fit PARKSON Therefore, 2.2.2.1 Regression Line Best Fit of PARKSON HOLDINGS BHD is the equation line of Parkson. Therefore, it can use to predict the share prices for future. For example, if this month the share price (x) is RM6.0, And the next months share price also will be RM6. Based on the graph, it also has showed Parksons share prices are more stable. BONIA 0.38 1.8217-0.692 Therefore, 2.2.2.2 Regression Line Best Fit of BONIA CORPORATION BHD is the equation line of Bonia. There also can use to predict the share prices for future. For example, if this month the share price (x) is RM2.0, And the next months share price also will be RM2.64. Based on the graph, it also has showed Parksons share prices are more risky, if compares with Parksons regression line of best fit. Time Series Graph Time series is a collection of market share prices then shows that which month is the highest and lowest, and the upward or down turn in the market. PARKSON HOLDINGS BHD 2.3.1 Time Series Graph of PARKSON HOLDINGS BHD Based on the graph above, the share prices of Parkson has moved down on January to February and moved up again on March. The most transmutation in Parkson is on May which moved up to June then moved down again to July. BONIA CORPORATION BHD 2.3.2 Time Series Graph of BONIA CORPORATION BHD Based on the graph above, the share prices of Bonia has moved moderate in early of the year 2011. Then the share prices start move down on August to September and move up again on October. Calculation of Correlation Coefficient Same with 2.2.1 calculation for scatter diagram, now is calculate correlation coefficient of time series of Parkson and Bonia to determine the relation between month and share prices. PARKSON x y xy X ² Y ² 1.00 5.95 5.95 1.00 35.40 2.00 5.66 11.32 4.00 32.04 3.00 5.73 17.19 9.00 32.83 4.00 5.87 23.48 16.00 34.46 5.00 5.92 29.60 25.00 35.05 6.00 7.73 46.38 36.00 59.75 7.00 6.12 42.84 49.00 37.45 8.00 5.89 47.12 64.00 34.69 9.00 5.82 52.38 81.00 33.87 10.00 5.69 56.90 100.00 32.38 11.00 5.81 63.91 121.00 33.76 12.00 5.84 70.08 144.00 34.11 78.00 72.03 467.15 650.00 400.38 0.0154 0.00024 The answer shows that the correlation coefficient of Parkson following by the months and share price is 0.0154. It means that the correlation efficient of between months and share price are very weak. BONIA x y xy X ² Y ² 1.00 1.81 1.81 1.00 3.28 2.00 1.80 3.60 4.00 3.24 3.00 1.80 5.40 9.00 3.24 4.00 1.85 7.40 16.00 3.42 5.00 1.85 9.25 25.00 3.42 6.00 1.81 10.86 36.00 3.28 7.00 1.81 12.67 49.00 3.28 8.00 1.73 13.84 64.00 2.99 9.00 1.65 14.85 81.00 2.72 10.00 1.72 17.20 100.00 2.96 11.00 1.96 21.56 121.00 3.84 12.00 2.07 24.84 144.00 4.28 78.00 21.86 143.28 650.00 39.95 On the other hand, coefficient of Bonia between months and share price is. Although the correlations efficient are very weak, but it still better if compares with Parkson. Calculation Regression line of Best Fit Same with 2.2, regression line of best fit also has used to determine in time series. PARKSON Therefore, is the equation line of Parkson. BONIA 0.002 1.8217-0.013 Therefore, is the equation line of Bonia. Market efficiency hypothesis Efficient capital market, which security prices change rapidly following by new information and, therefore, the current prices of securities reflect all information about the security. It is important to analyze capital markets efficiency and understand the efficient market hypothesis because its results of researches have significant real-world implications for investors and portfolio managers. An efficient market is requires a large number of profit maximizing participants analyze and value securities. Random Walk Theory Random walk theory is defines by the fact that price changes are independent of each other (Brealey et al, 2005). Actually random walks is connected to efficient market hypothesis, which if more efficient the market, the more random of share prices will change. Investors cannot accurately predict the share prices no matter with the correlation coefficient and regression line of best fit. Thus, share prices always fully reflect the information available and no profit can be made from information based trading (Lo and MacKinley, 1999). Different Forms of Market Efficientcy According to FAMA, there have three sub hypotheses in efficient market hypotheses which are weak efficiency, semi-strong efficiency and strong efficiency. 2.4.2.1 Weak Efficiency The weak forms of the efficient market hypothesis states that share price fully reflect all historical information. It means that past rates of return and other historical share prices do not have relationship with future rates of return, which is rates of return should be independent. 2.4.2.2 Semi-strong efficiency The semi-strong form of the efficient market hypothesis states that share prices will adjust immediately and in an unbiased manner to reflect new information, which is made publicly available. This does not mean that everybody has to have the same opinions about the significance of the new information. Prices will reflect the view of the market, which will automatically be the best interpretation of the mechanism. The implication of this is that a share can never be over or under prices according to the information, which is publicly available. 2.4.2.3 Strong efficiency The strong form of the efficient market hypothesis states share prices reflect all information. This means that no investors have monopolistic access to information related to the prices. The strong form efficient encompasses both weak form efficient and semi strong form efficient. Further, the strong form efficient will get more assumption of efficient markets, to assume perfect markets, in which prices adjust to the release of new news. Technical and Fundamental Analysis Based on the study of past share prices, many financial analysis seems to be view because of capital market are inefficient. A technical analysis or chartist has occurred to predict future price movements from prices. Besides, fundamental analysis is study publicly available information such as published accounts in order to try to identify the real worth or intrinsic value of shares, which may be more or less than the share price. Anomalies in the behavior of share price Many such anomalies have been reported and investigated in the quest to understand the behavior of share prices (Fama 1998). Calendar effects There has some calendar effects have been examined, which trading at particular times of the day can lead to negative or positive returns. One study found a significant monthly effect wherein all the markets cumulative advance occurred during the first half of trading months. An analysis of the weekend effect found that the mean return for Monday was significantly negative during 5 year sub periods and a total period. In contrast, the average return for the other 4 days was positive. The size anomalies The returns from investing in smaller companies have been shown, in the long run, to be greater than the average return from all companies. One study, for example, found that small firms outperformed large firms by 6% per year (Dimson and Marsh 1986). It has been suggested that above-average returns from small companies may compensate for the greater risk associated with them, such as the risk of financial distress. Concepts Security Valuation and Capital Budgeting Security Valuation Security Valuation is the valuation on the net assets of company which willing or able to let investors invest to the company. With the analysis of valuation, investors can determine which companys share prices are under or over valued, and make the decisions in investment. 3.1.1 Asset Valuation Net asset Backing is more appropriately referred to as net tangible assent backing because it excludes intangible assents such as goodwill. And it is sometimes used as a measure of the underlying value of a companys shares in the grounds that it represents what shareholders are entitled to in the event that a company is wound up, it can then be compared with the current price of a companys shares. Parkson 1. Net Assets Method Of Share Valuation Total Assets 7,270,943,000 Intangible Assets 1,235,534,000 Total Liabilities 3,887,578,000 Net Assets Value of Equity 2,147,831,000 No. of Ordinary Shares = 1,093,673,000 Value Per Share = Net Assets Value of Equity divide; No. of Ordinary Shares = 1.964 Income Based Price Earnings Ratio (P/E) Earning Yield (EY) Bonia Asset Valuation Net Assets Method Of Share Valuation Total Assets 373,250,000 Intanglible Assets ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â€š ¬Ã¢â€ž ¢ 68,848,000 Total Liabilities ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â€š ¬Ã¢â€ž ¢ 126,263,000 Net Assets Value of Equity 178,139,000 No. of Ordinary Shares = 201,572,000 Value Per Share = Net Assets Value of Equity divide; No. of Ordinary Shares = 0.88 Income Based Price Earnings Ratio (P/E) Earning Yield (EY) Asset Valuation PARKSON BONIA Net Assets 1.96 0.88 P/E 4.46 2.30 EY 8.77 2.38 Market Value 5.84 2.07 Market Value Capitalization EY Capitalization As a result, Parksons market value has over valued, which market capitalization is RM, but had growth in. It means that Parkson has gained more profit. On the other hand, market capitalization of Bonia also has over valued which RM417, 254,040 but has growth the profit to 478,965,884. It means that the Bonia also has earned more profit. If compared with Parkson, investors are able to invest in Parkson because of Parkson has earned more profit than Bonia according to the valuation above. Capital Budgeting A capital budgeting decision is one that involves the allocation of funds to projects that will have a life of at least one year and usually much longer. Basic capital budgeting decisions determine whether there is under or over capacity in a given firm or within an industry. Whether the marketing manager gets a new product approved for production and distribution may be a function of how well he or she provides data into the capital budgeting process and understand the analysis. 3.2 Importance of Capital Budgeting A proper making decision on capital budgeting is important in increasing a companys value as well as maximize shareholders wealth. It also has involved in long-term implication for the company and might get risk in complexion. If investment projects have failed in the future, the company will have to bear the burden of fixed cost. Besides, capital budgeting is not easy to reversible because it is difficult to search market assets.

Marketing Definition Essay - 962 Words

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Comparison of Reliance Mutual Fund with Others Free Essays

string(80) " and Derivatives segments of the NSE as well as the | |Cash segment of the BSE\." A PROJECT REPORT ON â€Å"COMPARISON OF RELIANCE MUTUAL FUND WITH OTHERS† UNDERTAKEN AT INDIA INFOLINE LTD. BARDOLI [pic] SUBMITTED BY: DIMPLE M. SHARMA (10BBA52) GUIDED BY: Mr. We will write a custom essay sample on Comparison of Reliance Mutual Fund with Others or any similar topic only for you Order Now NAVIN H. SAPARIYA BBA PROGRAMME (Year 2012-13) [pic] VIDYABHARTI TRUST COLLEGE OF BBA BCA, UMRAKH I DIMPLE SHARMA from Vidyabharti Trust College of BBA BCA, Umrakh hereby declare that the project report work entitled â€Å"Comparison of Reliance Mutual Fund With Others† submitted by Ms. DIMPLE M. SHARMA Id no. 0BBA52 during December 2012 to February 2013 has been undertaken as a part of 6th Semester of BBA syllabus of Veer Narmad South Gujarat University, Surat. I declare that this report has not been submitted to any other university or institute for any other purposes. DIMPLE M. SHARMA (10BBA52) This Project work is written in accordance with the Bachelor of Business Administration course prescribed by Veer Narmad South Gujarat University for two month project work. I am greatly thankful to India Infoline Ltd. , Bardoli for giving me an opportunity to work on this project at their company. I wish to express my sincere thanks to Mr. Viral Chauhan, I/c Principal of BBA College who gave me the chance to do this project report under India Infoline Ltd. , Bardoli. I wish to express my deep sense gratitude to my guide Mr. Navin H. Sapariya; whose constant help and support at all stages of this project has enable me to complete it. I am thankful to my company guide Mr. Parag Khatri, for providing his valuable suggestion and guidance which has given final touch to the report and also for sharing his rich experience for the contents of this report without whom this project would not have been completed successfully. Last but not least, I am also grateful to my parents, colleagues whose continuous support has always boosted my moral towards working on this report. DIMPLE M. SHARMA (10BBA52) As a partial fulfillment of BBA Programmed all students are required to undergo training for 2 months with respected to this I have prepared a project report on Comparison of Reliance Mutual Fund with Others. The project is based under the assumption that, As Mutual Fund being a new investment avenue in the market people likes to get some information about Reliance Mutual Fund. I want to measure the performance of Reliance Mutual Fund Schemes compared to others. In the duration of 8 weeks, I studied various Mutual Fund Schemes of Reliance Open – Ended Fund like Equity Fund. In order to compare the schemes of Reliance Mutual Fund Others, I collected weekly net asset values of Reliance Mutual Fund Schemes Open – Ended Fund Schemes for the period of 2007 to 2012. I compare schemes by calculating risk return thereby to measure the performance of different schemes of Reliance Mutual Fund Open – Ended Fund in equity schemes. In the Equity Fund Schemes, the years from 2009, 2010 2012 Reliance Mutual Fund is well performing among others. |Ch. No. |Topic | |Page No. |1. |Introduction | | | | |About Company Profile | | | | |About Topic | | | | |About Reliance Mutual Fund | | | |2. Research Methodology | | | |3. |Data Analysis and Interpretation | | | |4. |Findings | | | |5. |Conclusions | | | |6. |Recommendations | | | |7. References | | | | |Bibliography | | | CHAPTER: – 1 [pic]Introduction [pic] COMPANY PROFILE INTRODUCTION OF INDIA INFO LINE PVT. LTD. |VISION OF THE COMPANY | |â€Å"Vision is to be the most respected company i n the financial services space. | | | | | | | | | |INTRODUCTION | |5 paisa is the trade name of the India Infoline Securities private limited, a wholly owned subsidiary of India Infoline ltd. paisa | |holds membership of both the leading stock exchange of India viz. the Bombay stock exchange (BSE) and National Stock Exchange and is | |also a Depository Participant with NSDL and CDSL. It has tied up with the leading banks for funds transfer facilities Viz. City Bank, | |Centurion Bank, ICICI Bank and UTI bank the group has a membership of a Multi Commodities Exchange (MCX), National Commodities and | |Derivative Exchange of India (NCDEX) and the Dubai Gold and Commodities Exchange (DGCX). |India Infoline Ltd was founded in 1995 by a group of professionals with impeccable educational qualification and professional | |credentials. India Infoline is listed on BSE and NSE with a market capitalization of over $ 150 million. | |The India Infoline group, comprising the holding company, the India Infoline Ltd. And its wholly owned subsidiaries offers the entire | |gamut of investment products ranging from Equities and Insurance ,Fixed deposits ,GOI bonds , Loan products and other small saving | |instruments. It also owns and operates web sites, www. indiainfoline. om and www. 5paisa. com. | | | |India Infoline is a forerunner in the field of equity research. India Infoline’s research is acknowledged by none other than Forbes as | |â€Å"The best of the web† and â€Å"a must read for investor in Asia†. India Infoline’s research is available not just over the internet but | |also on international wire services like Bloomberg (code: ILL), Thomson first call and internet securities where it is amongst the most| |read Indian brokers. The India Infoline group has a significance presence across the country with over 500 branches in over 300 cities | |across India. All these offices are networked and connected with the corporate office in Mumbai. The group has invested significantly | |in technology and research, the result of which are there for everyone to see. The 5 paisa trading interface is one of the most | |advanced platforms available to retail investor in India. The group has membership on BSE and NSE for equities trading. It has a SEBI | |license for Portfolio Management under which, various schemes are offered, which have been continentally beating the benchmark indices | |since inception. | |THE INDIA INFOLINE LTD. |India Infoline Ltd, being a listed entity, is regulated by SEBI (Securities and Exchange Board of India). It undertakes equities | |research which is acknowledged by none other than Forbes as Best of the web must read for investors in Asia’. Its various | |subsidiaries are in different lines of business and hence are governed by different regulators. The subsidiaries of India Infoline Ltd | |are: | |India Infolin e Securities Private Ltd. |India Infoline Securities Pvt. Ltd. is a 100% subsidiary of India Infoline Ltd, which is engaged in the businesses of Equities broking | |and Portfolio Management Services. It holds memberships of both the leading stock exchanges of India viz. the Stock Exchange, Mumbai | |(BSE) and the National Stock Exchange (NSE). It offers broking services in the Cash and Derivatives segments of the NSE as well as the | |Cash segment of the BSE. You read "Comparison of Reliance Mutual Fund with Others" in category "Essay examples" | |India Infoline Commodities Private Ltd. | |India Infoline Commodities Pvt. Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged in the business of commodities | |broking. Our experience in securities broking empowered us with the requisite skills and technologies to allow us offer commodities | |broking as a contra- | |Cyclical alternative to equities broking. We enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges, and | |recently acquired membership of DGCX. We have a multi-channel delivery model, making it among the select few to online as well as | |offline trading facilities. |India Infoline Distribution Co. Ltd. | |India Infoline. com Distribution Co Ltd is a 100% subsidiary of India Infoline Ltd. and is engaged in the business of distribution of | |Mutual Funds, IPO’s, Fixed Deposits and other small savings products. It is one of the largest ‘vendor-independent’ distribution houses| |and has a wide pan-India footprint of over 232 branches coupled with a huge number of ‘feet-on-street ’, which helps source and service | |customers across the length and breadth of India. Its unique value proposition of free doorstep expert advice coupled with free pick-up| |and delivery of cheques has been met with an enthusiastic response from customers and fund houses alike. Our business has expanded to | |include the online distribution of mutual funds, wherein users can view and compare different product offerings and download | |application forms which they can later submit to the product provider. | | | | | | |India Infoline Insurance Services Ltd. | |India Infoline Insurance Services Ltd is also a 100% subsidiary of India Infoline Ltd and is a registered Corporate Agent with the | |Insurance Regulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential Life Insurance Co Ltd, | which is India’s largest private Life Insurance Company. | |India Infoline Investment Services Ltd. | |India Infoline Investment Service Ltd is also a 100% subsidiary of India Infoline Ltd. It has an NBFC license from the Reserve Bank of | |India (RBI) and offers margin-funding facility to the broking customers. | |India Infoline Insurance Broker Ltd. | |India Infoline Insurance Brokers Ltd. is a 100% subsidiary of India Infoline Ltd and is a newly formed subsidiary which will carry out | |the business of Insurance broking. We have applied to IRDA for the insurance broking license and the clearance for the same is awaited. | | | | | | | | | | | | | | | | |OPERATIONS | |This is where the 5paisa subsidiary of the India Infoline group, comes in. They operate their functions through their domain knowledge | |and database on in depth research of complex paradigms of commodity kinetics, offers their customers a unique insight into behavioral | |patterns of these markets. Their customers are ideally positioned to make informed investment decisions with a high probability of | |success | |India Infoline commodities private ltd. offers the investors the opportunity to participate in this market by facilitating tradin g in | |commodities futures. They are the members of Multi commodity Exchange of India (MCX) and National Commodity Exchange of India | |(NCDEX). Their main function is to provide the investor with the complete range of commodities for trading, in both the morning as well | |as evening sessions. | |Trading can be online, over the phone or at their branches. Highly qualified, well trained relationship managers are available at their| |investor points across the country, to help the investor make the best of commodities trading! | |Besides all the above functions, they also leverage their skills in research, investments in cutting edge technology and understanding | |of investor’s requirements to ensure that their needs are taken care of. Thus, they perform the function of adding value to the | |investor’s money. | | | | | | | HISTORY MILESTONES |Year | | |2011 |Launched IIFL Mutual Fund. | |2010 |Received in-principle approval for membership of the Singapore Stock Exchange | | |Received membership of the Colombo Stock Exchange. | | | |2009 |Acquired registration for Housing Finance | | |SEBI in-principle approval for Mutual Fund | | |Obtained Venture Capital license | | | | |2008 |Launched IIFL Wealth | | |Transitioned to insurance broking model | |2007 |Commenced institutional equities business under IIFL | |Formed Singapore subsidiary, IIFL (Asia) Pte Ltd | | | | |2006 |Acquired membership of DGCX | | |Commenced the lending business | | | | |2005 |Maiden IPO and listed on NSE, BSE | | | | |2004 |Acquired commodities broking license | | |Launched Portfolio Management Service | | | | |2003 |Launched proprietary trading platform Trader Terminal for retail customers | | | | |2000 |Launched onlin e trading through www. 5paisa. com Started distribution of life insurance and mutual fund | | | | |1999 |Launched www. indiainfoline. om | | | | |1997 |Launched research products of leading Indian companies, key sectors and the economy Client included | | |leading FIIs, banks and companies. | | | | |1995 |Commenced operations as an Equity Research firm | | | | PRODUCT SERVICES Equities our core offering, gives us a leading market share in both retail and institutional segments. Over a million retail customers rely on our research, as do leading FIIs and MFs that invest billions. IIFL has rapidly emerged as one of the premier institutional equities houses in India with a team of over 25 research analysts, a full-fledged sales and trading team coupled with an experienced investment banking team. Private Wealth Management services cater to over 2500 families who have trusted us with close to Rs 25,000 crores ($ 5bn) of assets for advice. Investment Banking services are for corporates looking to raise capital. Our forte is Equity Capital Markets, where we have executed several marquee transactions. |IIFL’s investment banking division was launched in 2006. The business leverages upon its strength of research and placement | |capabilities of the institutional and retail sales teams. Our experienced investment banking team possesses the skill-set to | |manage all kinds of investment banking transactions. Our close interaction with investors as well as corporates helps us | |understand and offer tailor-made solutions to fulfill requirements. | | | |IIFL Mutual Fund made an impressive beginning in FY12, with lowest charge Nifty ETF. Other products include Fixed Maturity | |Plans. | | | | | | | | | | | | | | Credit Finance focuses on secured mortgages and consumer loans. Our high quality loan book of over Rs. 6,200 crores ($ 1. 2bn) is backed by strong capital adequacy of approximately 20%. IIFL offers a wide array of secured loan products. Currently, secured loans (mortgage loans, margin funding, loans against shares) comprise 94% of the loan book. The Company has discontinued its unsecured products. It has robust credit processes and collections mechanism resulting in overall NPAs of less than 1%. The Company has deployed proprietary loan-processing software to enable stringent credit checks while ensuring fast application processing. Recently the company has also launched Loans against Gold. Life Insurance, Pension and other Financial Products, on open architecture complete our product suite to help customers build a balanced portfolio. IIFL entered the insurance distribution business in 2000 as ICICI Prudential Life Insurance Co. Ltd’s corporate agent. Later, it became an Insurance broker in October 2008 in line with its strategy to have an ‘open architecture’ model. The Company now distributes products of major insurance companies through its subsidiary India Infoline Insurance Brokers Ltd. Customers can choose from a wide bouquet of products from several insurance companies including Max New York Life Insurance, MetLife, Reliance Life Insurance, Bajaj Allianz Life, Birla Sunlife, Life Insurance Corporation, Kotak Life Insurance and others. |Commodities | |IIFL offers commodities trading to its customers vide its membership of the MCX and the NCDEX. Our domain knowledge and data | |based on in depth research of complex paradigms of commodity kinetics, offers our customers a unique insight into behavioral | |patterns of these markets. Our customers are ideally positioned to make informed investment decisions with a high probability of| |success. | IIFL (India Info Line Ltd) – Corporate Structure [pic] [pic] ABOUT THE TOPIC COMPARISON OF RELIANCE MUTUAL FUND WITH OTHERS† What are Mutual Funds? |A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus | |collected is then invested in capital mar ket instruments such as shares, debentures and other securities. The income earned | |through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of | |units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest | |in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly | |the working of a mutual fund: | |[pic] | | Mutual Fund Operation Flow Chart | | | | | | | | | | | |ORGANIZATION OF A MUTUAL FUND | |There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund: | | [pic] | | Organization of a Mutual Fund | | | |ADVANTAGES OF MUTUAL FUNDS | |The advantages of investing in a Mutual Fund are: | |Professional Management | |Diversification | |Convenient Administration | |Return Potential | |Low Costs | |Liquidity | |Transparency | |Flexibility | |Choice of schemes | |Tax benefits | |Well regulated | | | | | | | | | |TYPES OF MUTUAL FUND SCHEMES | |Wide varieties of Mutual Fund Schemes exist to cater to the needs such as financial position, risk tolerance and return | |expectations etc. The table below gives an overview into the existing types of schemes in the Industry. | | | TYPES OF MUTUAL FUND SCHEMES BY STRUCTURE †¢ Open – Ended Schemes †¢ Close – Ended Schemes †¢ Interval Schemes BY INVESTMENT OBJECTIVE †¢ Growth Schemes †¢ Income Schemes †¢ Balanced Schemes †¢ Money Market Schemes OTHER SCHEMES †¢ Tax Saving Schemes †¢ Special Schemes – Index Schemes – Sector Specific Schemes | | | | | | | | | | | | | |FREQUENTLY USED TERMS | |   | |Net Asset Value (NAV) | | | |Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of | |the scheme divided by the number of units outstanding on the Valuation Date. |   | |Sale Price | | | |Is the price you pay when you invest in a scheme? Also called Offer Price. It may include a sales load. | |   | |Repurchase Price | | | |Is the price at which units under open-ended schemes are repurchased by the Mutual Fund? Such prices are NAV related. |   | |Redemption Price | | | |Is the price at which close-ended schemes redeem their units on maturity. Such prices are NAV related. | |   | |Sales Load | | | |Is a charge collected by a scheme when it sells the units? Also called, ‘Front-end’ load. Schemes that do not charge a load are | |called ‘No Load’ schemes. | |   | | | | | High Risk, High Return Many investors purchase a particular stock with the intention of making a big profit over a short period of time. However, this action is not investing, but a pure gambling. The reason for this is that you are never guaranteed that you will get the high returns you hope for over such a short period of time. There may be times in which stocks have put a record on short-term growth, but these occurrences are very rare. On average stocks have returned from 10% to 12%. However, this doesn’t mean that all stocks return at these rates. The stock market is characterized by the trade-off between risk and return. The higher the risk the investor is willing and able to take, the higher the potential rewards from the investment. Therefore, if a particular investment offers you high returns, it is an indication that it will come with a high risk burden. As part of the selection process, you should determine the risk level of the stock as well as your risk tolerance. If you are looking for high returns you should be able to meet high potential losses as well. Many investors prefer young technology-oriented companies over blue chip companies, because the first provide higher returns than the latter. However, the latter provides its shareholders with regular dividends to compensate for the modest growth. So, the next time you are offered a stock that is expected to triple in value over a short time period, think carefully whether to invest in it, because the chances of it failing to reach this level of return is extremely high. Risk : Return (finance) the financial term for profit or loss derived from an investment. Return is the benefit distributed to the owner. A person making an investment expects to get some return from the investment in the future. But as the future is uncertain, so is the future expected return. It is the uncertainty associated with the returns from an investment that introduces risk in to an investment. Standard Deviation: For the more technically-minded, Standard Deviation is â€Å"the basic statistical measure of the dispersion of a population of data observations around a mean†. In trading language it’s an indication of price fluctuation; it measures how far the closing price is from the average closing price over a set period. The greater the difference between the closing prices and the average price, the higher the standard deviation will be. The closer the closing prices are to the average price, the lower the standard deviation . he relative rate at which the price of security moves up and down. Risk is found by calculating the annualized standard deviation or daily changes in the price. Risk = standard deviation of closing price [for n periods] / average closing price [for n periods] [pic] The variance and standard deviation measure the extent of vari ability of possible returns from the expected return. Several other measures such as a range, semi-variance and mean absolute deviation have been used to indicate measure risk but standard deviation has been the most popularly accepted measure. The standard deviation or variance however provides a measurement of total risk associated with security. Total risk comprises of two components namely systematic risk and unsystematic risk. Variance: The variance of a random variable is a measure of its statistical dispersion, indicating how far from the expected value the variance is the average of squared deviation about the arithmetic mean for a set of numbers It describes how far values lie from the mean. In particular, the variance is one of the moments of a distribution. [pic] Risk and Beta: As far as an investor is concerned, the systematic risk is no very important as it can be reduced or eliminated through diversification. It is an irrelevant risk. The risk that is relevant in decision making is the systematic risk because it is undiversifiable. Hence the investor seeks to measure the systematic risk of security. Systematic risk is the variability in security returns caused by changes in the economy or the market. All securities are affected by such changes to some extent, but some securities exhibit greater variability in response to market changes. Such securities are said to have higher systematic risk. A higher variability would indicate higher systematic risk and vice versa. The systematic risk of security is measured by a statistical measure called â€Å"Beta† the input data required for the calculation for beta are the historical data of returns of the individual security as well as the returns of a representative stock market index. For the calculation of beta, the return of individual security is taken as dependent variable, and the return of the market index is taken as the independent variable. Beta is a score that measures a market stock’ volatility or risk against the rest of the market. It is calculating using regression analysis. â€Å"The Beta of an asset, ? , is a measure of the variability of that asset relative to the variability of the market as a whole . Beta is an index of the systematic risk of an asset†. Risk also implies return. Stocks with a high beta should have a higher return than the market. If you are accepting more risk you should accept more reward as beta measures the Risk of a securities return relative to the market the larger the beta, the security is more risky. A beta of 1. indicates a security of average risk a stock with beta greater than 1. 0 has above average risk. Its returns would be more risky than the market returns. A stock with less than 1. 0 would have belo w average risk. A security can have betas that are positive, negative or zero. It is a historical measure of systematic risk of systematic risk. In using this beta for investment decision making, the investor is assuming that the relationship between the security variability and market variability will continue to remain the same in future also. Investor can find the best use of beta ratio in short term decision making, where price volatility is important. Beta shows sensitivity of Stock market with that of index. If positive than moves with market. And if beta is negative it has inverse relationship. † Correlation: The correlation is one of the most useful statistics. A correlation is single number that describes degree of relationship between two variables. Correlation is a statistical technique that can show weather that how strongly pairs of variables are related. For example height and weight are related taller people tend to be heavier than shorter people. The relationsh ip isn’t perfect. People of the same height vary in weight and you can think of two people. You know where the shorter one is heavier than the other taller one. Correlation can tell you just how much of the variation in people’s weight is elated to their heights. Compute the correlation value, the formula for correlation are: [pic] Covariance: Intuitively, covariance is the measure of how much two variables vary together. That is to say, the covariance becomes more positive for each pair of values which differ from their mean in the same direction, and becomes more negative with each pair of values which differ from their mean in opposite directions. In this way, the more often they differ in the same direction, the more positive the covariance, and the more often they differ in opposite directions, the more negative the covariance. The covariance between two real-valued random variables X and Y, with expected values E(X) = ? and E(Y) = ? is defined as: [pic] [pic] About Reliance Mutual Fund Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act, 1882 with Reliance Capital Limited (RCL), as the Settler/Sponsor and Reliance Capital Trustee Co. Limited (RCTCL), as the Trustee. RMF has been registered with the Securities Exchange Board of India (SEBI) vide registration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital Mutual Fund was changed to Reliance Mutual Fund effective 11th March 2004 vide SEBI’s letter no. IMD/PSP/4958/2004 date 11th March 2004. Reliance Mutual Fund was formed to launch various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities. The main objectives of the Reliance Mutual Fund are: †¢ To carry on the activity of a Mutual Fund as may be permitted at law and formulate and devise various collective Schemes of savings and investments for people in India and abroad and also ensure liquidity of investments for the Unit holders; †¢ To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their savings and †¢ To take such steps as may be necessary from time to time to realise the effects without any limitation. Our Schemes Equity The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. Diversified Large Cap |Diversified Theme Based | |Diversified Multi Cap |Sector | |Diversified Mid Cap Small Cap |Tax Saver | |Index |Arbitrage | |Banking |Balanced | Debt The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations. Ultra Short Term |Money Market Funds (Liquid Funds) | |Short Term Funds |Long Term Funds | |Monthly Income Plans | | Gold Gold is seen as a symbol of security and a sign of prosperity. Indian consumers consider gold jewellery as an investment and are well aware of gold’s benefits as a store of value . Gold is also recognized as a form of money in India, a tradable liquid asset. It is one of the foundation assets for Indian households and a means to accumulate wealth from a long term perspective. Gold investment has been in the culture of Indian tradition and has been on rise amongst the modern investors as well due to the financial uncertainty and inflationary pressures. Gold Exchange Traded Fund |Gold Savings Fund | [pic]Chapter – 2 research methodology RESEARCH METHODOLOGY Problem Statement: â€Å"Comparison of Reliance Mutual Fund with others. † Scope of Study: The scope of the project is mainly concentrated on the different categories of the mutual funds such as equity schemes, debt funds, balanced funds and equity linked savings schemes etc. Research Objectives: Primary Objective: †¢ To know the best scheme of Mutual Fund by different parameters. Secondary Objectives: †¢ Understanding the attitude behavior of the distributors towards Reliance Mutu al Fund (RMF). Understanding the competition for the schemes provided by different Mutual Funds Company. †¢ Finding out ways means to improve on the services by RMF. †¢ To evaluate investment performance of selected mutual funds in terms of risk and return. †¢ Also to analyze the performance of mutual fund schemes on the basis of various parameters. Importance of The Study: This study provides the good comparison to Reliance Mutual Fund for improving in their services and takes a sound decision regarding it. Reference Period: Reference period is 1st January 2007 to 30th December 2012. Research Design: I have selected Descriptive Research Design. Data Collection: Collect data with the help of distributor (INDIA INFOLINE) and Internet. Sample Size 5 schemes of Reliance Mutual Fund 5 schemes of Open – Ended Funds. Plan for Data Analysis: By stepwise like: †¢ Checking †¢ Editing †¢ Tabulating through Table, Charts Graphs. LIMITATION OF STUDY: †¢ Data is collected from secondary sources which may not be as reliable as primary data so sometimes it may be lead wrong prediction about future. †¢ Data giving a prediction of market condition but other factors also affect to it so perfect suggestion may not be predicted. DIRECTION FOR FURTHER RESEARCH: The study is held for direct Company and research department head. [pic]Chapter: – 3 Data Analysis Interpretations DATA INTERPRETATION The study is based on the weekly scheme returns of Mutual Fund as well as the weekly return of NIFTY INDEX. The series of scheme returns computed from weekly scheme prices of the nifty index for the period of 5 years from 1st Jan 2007 to 31st Dec 2012 and take top 5 Open – Ended Schemes to measure risk and return. Risk is measured by standard deviation, beta, etc. Performance of Reliance Banking Fund Other: [pic] |Funds Name | Beta |Standard Deviation |Correlation |Covariance |Return | |ICICI Prudential Discovery Fund- |1. 03% |4. 7% |0. 86 |0. 0018 |110. 8% | |Growth | | | | | | |UTI Pharma Health Care Fund- |0. 78% |4. 7% |0. 65 |0. 0014 |98. 41% | |Growth | | | | | | |TATA Balanced Fund- Growth |0. 77% |3. 9% |0. 93 |0. 0014 |82. 92% | |ICICI Prudential Discovery |1. 03% |4. 7% |0. 86 |0. 0018 |110. 8% | |Fund- Growth | | | | | | |UTI Pharma Health Care Fund- |0. 78% |4. 7% |0. 65 |0. 0014 |98. 41% | |Growth | | | | | | |TATA Balanced Fund- Growth |0. 77% |3. 9% |0. 93 | 0. 0014 |82. 92% | |ICICI Prudential Discovery Fund- |1. 03% |4. 7% |0. 86 |0. 0018 |110. 8% | |Growth | | | | | | |UTI Pharma Health Care Fund- |0. 78% |4. 7% |0. 65 |0. 0014 |98. 41% | |Growth | | | | | | |TATA Balanced Fund- Growth |0. 77% |3. 9% |0. 93 |0. 0014 |82. 92% | |ICICI Prudential Discovery Fund-|1. 03% |4. 7% |0. 6 |0. 0018 |110. 78% | |Growth | | | | | | |UTI Pharma Health Care Fund- |0. 78% |4. 7% |0. 65 |0. 0014 |98. 41% | |Growth | | | | | | |TATA Balanced Fund- Growth |0. 77% |3. 9% |0. 93 |0. 0014 |82. 2% | |ICICI Prudential Discovery Fund-|1. 03% |4. 7% |0. 86 |0. 0018 |110. 78% | |Growth | | | | | | |UTI Pharma Health Care Fund- |0. 78% |4. 7% |0. 65 |0. 0014 |98. 41% | |Growth | | | | | | |TATA Balanced Fund- Growth |0. 7% | |ICICI Prudential Discovery Fund- Growth |1. 03% | |Reliance Banking Fund- Growth |0. 98% | |Reliance Diversified Power Sector Fund- Growth |0. 90% | |Reliance Equity Opportunities Fund- Growth |0. 86% | |UTI Pharma Health Care Fund- G rowth |0. 78% | Standard Deviation: Here, are the top 5 schemes that has moderate low deviation which is somewhat good. Funds Name |Standard Deviation | |Reliance MIP (Monthly Income Plan) Fund- Growth |3. 10% | |Reliance Pharma Fund- Growth |3. 30% | |Reliance Equity Opportunities Fund- Growth |3. 50% | |SBI Magnum Balanced Fund- Growth |3. 80% | |TATA Balanced Fund- Growth |3. 90% | Correlation: Here, are the top 5 schemes whose Correlation is High Highly Moderate. |Funds Name |Correlation | |SBI Magnum Balanced Fund- Growth |0. 95 | |TATA Balanced Fund- Growth |0. 93 | |Reliance Equity Opportunities Fund- Growth |0. 92 | |Reliance Diversified Power Sector Fund- Growth |0. 91 | |ICICI Prudential Discovery Fund- Growth |0. 6 | Covariance: Here, are top 5 schemes who has moderate to low variation compared to others. |Funds Name |Covariance | |Reliance MIP (Monthly Income Plan) Fund- Growth |0. 0004 | |Reliance Pharma Fund- Growth |0. 0008 | |Reliance Equity Opportunities Fund- Growth |0. 0011 | |ICICI Prudential FMCG Fund- Growth |0. 012 | |SBI Magnum Balanced Fund- Growth |0. 0013 | [pic] Chapter: – 5 Conclusions Conclusion Every investor wants to maximize his returns at the lowest possible risk or he tries to minimize his risk keeping his returns equivalent, both gives him higher profits. In evaluating mutual funds, investors usually consider only the past returns g enerated by the fund without considering the risk associated with it. From the project, I conclude that, After analysis of all the schemes of reliance mutual fund open – ended funds, there are 5 schemes that as high risk involved but there is also high return accumulated with it. These schemes are Reliance Banking Fund, Reliance Diversified Power Sector Fund, Reliance Equity Opportunities Fund, ICICI Prudential Discovery Fund UTI Pharma Health Care Fund. Theory says that risk and return go hand in hand. And we can see that in these 5 schemes. Considering all the factors, the best scheme is Reliance Pharma Fund Reliance MIP (Monthly Income Plan) Fund compare to all other schemes. [pic] CHAPTER – Recommendation †¢ After analyze the Risk and Return of all the schemes of Reliance Mutual Fund Open – Ended Funds, I recommend that the Reliance Pharma Fund Reliance MIP (Monthly Income Plan) Fund for the low risk takers and Reliance Banking Fund ICICI Prudential Discovery Fund for the high risk takers. These schemes gives the highest return but there is also high risk compare to other schemes included in Reliance Mutual Fund Open – Ended Funds. Those people invest in this schemes who believes that â€Å"High Risk, High Gain†. †¢ I also recommend that the SBI Magnum Balanced Fund and TATA Balanced Fund schemes are providing less return having high risk so; there is highest risk to invest in these two schemes. [pic] Chapter: – 7 Bibliography ? www. mutualfundsindia. com/rankfund. rpt. asp ? http://www. personalfn. com/tools-and-resources/mutual-funds/nav-history. aspx ? http://www. indiainfoline. com/Aboutus/ ? http://www. reliancemutual. com/NAV/NAVDownload. aspx [pic] ———————– DECLARATION ACKNOWLEDGEMENT EXECUTIVE SUMMARY TABLE OF CONTENTS How to cite Comparison of Reliance Mutual Fund with Others, Essay examples

Financial Statement Analysis - Redesign Of Starbucks Stores

Question: Discuss about the Financial Statement Analysis for Global Redesign of Starbucks Stores? Answer: Introduction When you need coffee to start your day, then the options are nearly limitless. Dunkin Donuts and Starbucks Corporation are the 2 largest companies that specialize in providing coffee in the USA. Both the companies has similar menus and strategies, but the difference between the two of them is in their branding, store ownership and scale. Starbucks Corporation was founded 20 years after Dunkin Donuts but then also it grew aggressively and is now larger company as compared to Dunkin Donuts. Although the growth of Outlets like McDonaldsother brands, Starbucks or Dunkin Donuts grabs a good chance. The two big players, who control over half of the coffee market in U.S., are fighting ever-growing competitors. Starbucks and Dunkin Donuts co-existed for long back when Dunkin donuts were all about to serve the donuts (Mullins, 2009). But after the retirement of Fred the Star Baker in the 1990s, Dunkin Donuts started growing its coffee business, bringing Dunkaccino in the year 2000 and espresso revolution in the year 2003. Dunkin Donuts slowly started new coffee drinks, and in the year 2006, declared to go one-on-one with Starbucks. Financial Statements In the year 2015, Starbucksprovided good returns with their stocks up over 50%. On the other handDunkin' Brands gained a modest 2.4% over the same stretch. Since earlier performance does not guarantee future returns, and the investment decisions should be based on forward-looking approach. Regarding the revenue, Dunkin' Brands is way smaller than Starbucks. Though the smaller size of the company can make it more unstable and volatile, but it provides more chances for expansion (Nissim Penman, n.d.). It's becoming easier to withstand rapid growth in a smaller revenue base, which could become an advantage for investors of Dunkin' Brands v/s Starbucks. As Starbucks operates in its stores, therefore it has constricted margins as compared to Dunkin' Donuts. The Profit after the cost of sales, including occupancy costs and product expenses, was 84% for the Dunkin' Brands for the quarter June 2015, Whereas Starbucks had 62% gross margin during this period. The operating marginof Starbucks is 17.5%, which is almost more than 26 % points lower that of the Dunkin' Brands. Dunkin' Donuts also has a lower capital expense as compared to Starbucks. Dunkin' Donuts' spend $14.6 million in the expense in capital in the 2nd quarter of the year 2015 which was 32% of the net cash flow an d 8% of the revenue. Starbucks' $945 million of the expenses in capital was 19% of the revenue and 34% of the net cash flow from operation. This discrepancy is because of different store possession structures of both the companies, and it is important for the investor to make decision about the investment to be made in the above companies. Investors must also note the difference in capital structure of both the companies. The long term debt of Dunkin' Donuts is $2.5 billion which represents 75% of the total assets whereas the long term debt of Starbucks is $2.4 billion which represent 18% of total assets. Retrieved from www.Bloomberg.com Balance sheet analysis Dunkin' Brands had net income declined by 4% during the last quarter because of loss on extinguishment of refinancing and debts. High debt could cause a huge amount of interest expenses that could hamper the long-term profitability and the cash flow. Dunkin' Brands' free cash flow is negative $2.9 million in the last quarter, which was $34.9 million during the same time of the last year. The Improvements were due to favourable changes in operating liabilities and assets and high net income (Ferranti, 2003). Dunkin' Brands balance sheet is highly leveraged, and the cash balance are at 53% of the stockholder's equity and the long-term debts to the equity ratio is at 461%. Its Operating income is more than its interest expenditure by almost four times while the rule for the safety is atmost five times. Presently Dunkin' Donuts pays to its shareholders $0.95 PS every year, and it yields 3% yearly. Starbucks experienced vigorous year to date net income and revenue expansion, growing 18% and 11% respectively.Starbucks free cash flow is in the negative range because of a onetime litigation charge andwithout litigation charge, the free cash flow would have grown 44%.Starbucks balance sheet is excellent with stockholder's equity and cashes 41% and 30% respectively. The Operating income is more than the interest expense by 47 times.Presently the company is paying its shareholders $1.05 (PS) each year, and its yields are 1.6%. Income Statement However," Starbucks has beaten Dunkin' donuts in relations of the revenue increase in last many years. Starbucks continues to lead Dunkin' Brands about sales revenue according to the latest financial reports. One of the Seattle-based company reported $4.9 billion in sales revenue during September quarter, which is a big increase of almost 18% from the similar period last year. Global sales grew up to 8%, with increasing traffic 4% every year, which shows that the Starbucks continues to enjoy lively demand, and the sales of the previously existing stores is not hampered due to the opening of new stores (Rangaswamy, 2007). Dunkin' Brands also announced an increase in sales revenue of 9% last quarter. Growth is much more than just the mathematics of size versus speed. Starbucks Corp. is far bigger than Dunkin' Donuts in areas like world-wide brand recognition and its management's skill to drive growth through product innovation, which is helping the company to deliver exceptional financial results despite of its big size. Comparison between Starbucks and Dunkin Brand Particulars Starbucks Dunkin brand Sales revenue (2014) $16.4 billion $749 Million Stores 22519 11460 Sales revenue of Starbuck Corporation in the year 2014 was $16.4 billion whereas the sales revenue of Dunkin Donuts in the year 2014 was $749 million which means that the sales of Starbuck Corporation was more than that of Dunkin Donuts. Starbuck Corporation has 22,519 stores whereas Dunkin Donuts has 11,460 stores. Starbucks has opened almost 10,000 stores in 64 countries whereas Dunkin' Brands has a considerable international presence, and many of their international stores are Baskin Robbins stores. In the year 2014, almost 75% of the Dunkin brand consolidated revenue were from the USA while international revenue was less than 5% while 20% of Starbucks' Corp. Consolidated revenues were from the USA in the year 2014. Basics of Analysis On the bases of PE Ratio One of the biggest drawbacks while analyzing the investment in Starbucks Corp is possibly valuation. Starbucks trades at a very steaming-hot PE ratio, which is around 34 times earnings over the period of last twelve months, a significant premium v/s the whole market (Amiram, Bozanic Rouen, n.d.). When compared to any of the average company on SP 500 P/E ratio is near 19.The stock of Dunkin' Brands is cheaper than Starbucks at the P/E ratio near to 26. Company Market Capitalization Trailing-12-Month-Revenue Growth (YOY) P/E P/S Dunkin' Brands $3.9 billion 8.3% 26 5.2 Starbucks $83.6 billion 16% 34 4.3 Size As Starbucks is bigger company, this could wrongly lead investors in concluding that Dunkin certainly has more room to run and is better to invest. But when we look closely at both the companies it reveals that Starbucks is not only growing faster than the Dunkin' donuts but has more determined outlook, going ahead. Growth Starbucks is a fast growing company among the two and is expecting the increase in revenue by 10% compared to the previous year which will be driven by 1850 new stores opening. Retrieved from abcnews.go.com Dunkin' Brands expect an increase in revenue growth to be 4% to 6%, which is driven by 400-450 new Dunkin Donuts stores. Franchising Dunkin brand operates through franchises whereas 99% of Starbucks are company operated. In June 2015, 63% of Dunkin Donuts revenue where from royalties and franchise fees. Whereas Starbucks revenue reflects the sale of food, beverages, and all the other items. Because Starbucks has company-operated stores, therefore, COGS and store expenses (operating) are much higher of the Starbucks than the Dunkin Donuts. As COGS is higher in the Starbucks' corporation expenditure structure, therefore, the profits of Starbucks are also more sternly affected by any change in the price of the coffee beans. Starbucks has more capital expenditure as compared to the Dunkin' Donuts (Haskova, 2015). Quality Starbucks is more premium brand than the Dunkin' Donuts. Starbucks commands a higher price, whereas Dunkin Donuts focus on the middle class and provides lower cost menu. Liquidity of the Short term Assets and debt payof ability based on Ratios Profitability Ratios Starbucks Dunkin Donuts Starbucks Dunkin Donuts Gross Margin= Gross Profit/ Net Sales 56% 82% 60% 79% Return on Assets= Net Income/ Total Assets 7% 1% 24% 5% Gross Margin:Itcalculate the cost-effectiveness of the actual products that is sold in the market before some overheadand expenses areexcluded.It helps to measure the price of the product above the cost of the product (Flor Hansen, 2012). Gross margin of Starbuck Corporation in the year 2009 was 56% whereas in the year 2015 it was 60%. Gross margin of Dunkin Donuts in the year 2009 was 82% whereas in the year 2015 it was 79%. This shows that the gross margin of Dunkin Donuts has declined with the period of time. Dunkin' Donuts gross margin is higher than Starbucks, which shows they are using their inputs more efficiently than Starbucks Corporation and then selling their products. Return on Assets:It represents the profitability of a company's in generating revenue. Since the return on asset of Starbucks is higher than that of Dunkin Donut which means they are more efficient in revenue generation as compared to Dunkin Donuts. Starbucks has assets which are more profitable as compared to that of Dunkin' Donuts. Liquidity Ratios Starbucks Corporation Dunkin Donuts Starbucks Corporation Dunkin Donuts Current Ratio= Current Assets/ Current Liabilities 129% 202% 190% 119% Quick Ratio= (Current Assets-inventory)/Current Liabilities 87% 128% 134% 118% Current Ratio: The period of less than one year is called Current as per accounting principal. The formula for calculation of current ratio is CA (Current Assets)/CL (current liabilities). It calculate that the company has good amount of assets which can be within a period of one year be converted into cash to repay the debts which will be due next year. In the year, 2009 Dunkin Donuts have the higher current asset, but after that it started to decline, whereas the current ratio of Starbuck have increased. Therefore, Starbuck is in a better position to repay it dues which are due next year. Quick Ratio:It is similar to current ratio when inventories and current assets are excluded. Excluding inventories are important because all the other items covered in the calculation of current ratio is receivables or cash.Starbuckss quick ratio in the year 2009 was less than 100%,which means their current assets are less than the required current liabilities when the inventories are excluded. But after 2009 their quick ratio has improved andnow in the year 2015 it was better than Dunkin' Donuts. Leverage Ratios Starbucks Dunkin Donuts Starbucks Dunkin Donuts Debt Ratio= Total Liabilities/ Total Assets 45% 76% 38% 89% Times Interest Earned=EBIT/ Annual Interest Expense 15.48 1.6 61.08 3.23 Debt Ratio:It calculate liabilities / assets. It calculate the number of company's assets provided by debt than that of equity.The Starbucks Corporation had lower debt in 2015 than that of Dunkin' with is 38% v/s 89%, respectively. Time Interest Earned:It calculates the companys capability to pay its interest in a year. It calculate the interest which the organsation is required to pay against the operating income of the company (Suthan, n.d.).In 2015, the EBIT of Starbucks is 61.09 times whereas the EBIT of Dunkin Donuts is 3.23 times, which means Starbuck will be able to pay its interest 61.09 times whereas Dunkin Donuts will be able to pay its interest only 3.23 times. Turnover Ratios Starbucks Dunkin Donuts Starbucks Dunkin Donuts Asset Turnover= Net Sales/ Total Assets 1.75 0.17 1.62 0.20 Inventory Turnover=( Inventory/ COGS)*365 56.11 32.77 77.95 6.07 Asset Turnover:It processes the capacity of the assets of the company, which can be improvedbyreducing receivables, reducing inventory, or by increasing the sales by maintaining the assets of the company.In 2015, Starbucks asset turnover was higher, which means they are moreefficient than the Dunkin' brand' assets. Inventory Turnover:It calculates the number of times the inventories are used or are sold in a particularyear.It shows whether the company is using the inventory efficiently or not. When inventory turnover is higher than it shows that the company is using the inventory efficiently. In the year 2015, Starbucks inventory turnover was higher than that of Dunkin' Donuts.Starbucks has used their inventory almost 78 times and Dunkin Donuts has used it six times in a year (Vrontis Kogetsidis, 2008). As it is seen that Starbucks has the better current ratio, return on assets, times interest earned, debt ratio, inventories and asset turnover. As Dunkin' Donuts only has gross margin % higher whereas Starbuckshas all the other ratios higher therefore Starbuck Corporation is in much better positionthan that of Dunkin' Donuts. Growth Trends Assessment Dunkin Donuts 2011 2012 2013 2014 2015 Sales 628 658 714 749 789 Cost 124 144 156 158 160 Profits 504 514 558 591 641 Starbucks 2011 2012 2013 2014 2015 Sales 11700 13300 14892 16448 19163 Cost 4949 5813 6382 6859 7788 Profits 6751 7486 8510 9589 11375 From 2011 to 2015, Starbucks' sales are more than that of Dunkin' Donuts, the expenses of Starbuck increased by lower amount, and their profits have increased more which means Starbucks Corporation has better compounded annual growth rate than Dunkin' Brand. Although, Dunkin' Donuts sales and profits both have increased, but with that their costs have also increased much higher than the increase in sales and profit. The growth trend analysis also shows that Starbucks is better than Dunkin' Donuts. Conclusion Starbucks is a first-class business in which investors can freely have comfortable holding for many years. The stock of Starbucks has always been expensive, but then also it has delivered great returns for investors for the long term,achieving over 300% in last five years (Vrontis Kogetsidis, 2008). Whereas Dunkin' Brands is a rationally good business which is trading at a reasonable premium to the global market. Starbucks has a solid financial statement with higher coverage of interest expense of operating income and low amounts of the debt. Starbucks introduces new products like Oprah Tea Latte and it experiments with the new different sodas. As Starbucks operates 6,600 restaurants outside the western hemisphere, which means it has plenty of room to run in the emerging markets. References Aiello, G., Dickinson, G. (2014). Beyond authenticity: a visual-material analysis of locality in the global redesign of Starbucks stores. Visual Communication, 13(3), 303-321. https://dx.doi.org/10.1177/1470357214530054 Amiram, D., Bozanic, Z., Rouen, E. Financial Statement Irregularities: Evidence from the Distributional Properties of Financial Statement Numbers. SSRN Electronic Journal. https://dx.doi.org/10.2139/ssrn.2374093 Arie, S. (2015). The health coaches from Dunkin' Donuts. BMJ, 350(mar27 4), h1456-h1456. https://dx.doi.org/10.1136/bmj.h1456 Chigumira, T. (2014). Dollars to Donuts. World Policy Journal, 31(3), 108-115. https://dx.doi.org/10.1177/0740277514552980 Cole, G. (2008). Grande Expectations: a Year in the Life of Starbucks' Stock20081Karen Blumenthal. Grande Expectations: a Year in the Life of Starbucks' Stock . Loughton: Piatkus 2007. Management Decision, 46(4), 673-675. https://dx.doi.org/10.1108/00251740810865120 Donuts Dissociate. (2012). Science, 335(6075), 1407-1407. https://dx.doi.org/10.1126/science.335.6075.1407-h Ferranti, K. (2003). Digging deep into derivatives: balance sheet management making strategic decision making better. Balance Sheet, 11(3), 20-22. https://dx.doi.org/10.1108/09657960310491154 Flor, C., Hansen, S. (2012). Technological advances and the decision to invest. Annals Of Finance, 9(3), 383-420. https://dx.doi.org/10.1007/s10436-012-0191-4 Haskova, K. (2015). Starbucks Marketing Analysis. CRIS - Bulletin Of The Centre For Research And Interdisciplinary Study, 2015(1). https://dx.doi.org/10.1515/cris-2015-0002 Knowles, C. (2000). Burger King, Dunkin Donuts and community mental health care. Health Place, 6(3), 213-224. https://dx.doi.org/10.1016/s1353-8292(00)00024-1 Latif, M., Qurat-ul-ain, H., Gulzar, H., Bukhari, S., Sameen, S. (2014). Starbucks sustained during economic crisis. Ijafr, 4(1). https://dx.doi.org/10.5296/ijafr.v4i1.6084 Magiera, F. (2010). Financial Statement Analysis. CFA Digest, 40(1), 85-86. https://dx.doi.org/10.2469/dig.v40.n1.61 Mullins, C. (2009). Supply and demand in the decision-making process of pharmaceutical consumers: The starbucks versus dunkin' donuts dilemma. Clinical Therapeutics, 31(8), 1858. https://dx.doi.org/10.1016/j.clinthera.2009.08.013 Nissim, D., Penman, S. Financial Statement Analysis of Leverage and How It Informs About Profitability and Price-to-Book Ratios. SSRN Electronic Journal. https://dx.doi.org/10.2139/ssrn.292725 Rangaswamy, P. (2007). South Asians in Dunkin Donuts: Niche Development in the Franchise Industry. Journal Of Ethnic And Migration Studies, 33(4), 671-686. https://dx.doi.org/10.1080/13691830701265644 Schmidt, R., Oldfield, B. (1999). Dunkin Donuts the birth of a new distribution and franchising concept. Journal Of Consumer Marketing, 16(4), 376-385. https://dx.doi.org/10.1108/07363769910371044 Snyder, M. (2006). State of the Profession: The Starbucks Effect. Academe, 92(1), 70. https://dx.doi.org/10.2307/40252902 Suthan, A. Fundamental of Financial Statement Analysis. SSRN Electronic Journal. https://dx.doi.org/10.2139/ssrn.1588981 Vrontis, D., Kogetsidis, H. (2008). Environmental analysis as a means to customer satisfaction: the case of Starbucks in Cyprus. J. For International Business And Entrepreneurship Development, 3(3/4), 188. https://dx.doi.org/10.1504/jibed.2008.019156 , GabGeun Yoon,. (2013). A Study on the Donuts Lay-out according to the Sales Analysis of Market Type -Focused on the D Donuts franchise-. Journal Of Korea Design Knowledge, null(27), 109-120. https://dx.doi.org/10.17246/jkdk.2013..27.011

Janeen Saylor Essays - Christianity, Christian Theology, Religion

Janeen Saylor BIBL 104-07: New Testament Studies Professor Sara Wells Regent University September 29, 2016 What are the key areas of continuity between the teaching of Jesus and the Gospels and the teachings of Paul in his letters? Some keys are the resurrection, justification, in Christ and the Lord's Supper. Resurrection- Jesus taught the disciples of what was going to happen his death and that he would be risen three days later Mark 8:31(NIV) "He then began to teach them that the Son of Man must suffer many things and be rejected by the elders, chief priests and teachers of the law, and he must be killed and after three days rise again." Paul also taught this in 1 Corinthians 15:1-7 he states he personally was taught of these things and that Jesus was telling what would happen in us four it shows three days later Christ had been risen. Justification in Christ- Jesus taught that his death is justification and by people having faith that he died for them we would benefit from it with eternal life. John 8:24 (NIV) Paul puts in his letter in Romans 6:23 (NIV) with us being sinners and we die by sin but, because of Jesus we have eternal life. The Gundry text also states that "God had provided justification, and the good news of d eliverance from sin by the giving of God's righteousness to everyone who believes in Jesus Christ." (A Survey of the New Testament) Lords Supper- During the last supper Jesus had with his disciples we see him talk of communion and taught them how to preform it and the significance of it. Paul writes in 1 Corinthians 11:23-26 (NIV) the new covenant Jesus makes with us sinners in the event of taking communion. "In Acts 9 Luke records the events surrounding Paul's conversion. Jesus himself called Paul and sent him to be an Apostle." (carm.org) "An example is below showing Jesus and Paul were in agreement." (carm.org) "Jesus: Truly, truly I say to you, he who hears My word, and believes Him who sent Me, has eternal life, and does not come into judgement, but has passed out of death into life. (John 5:24, carm.org) "Paul: Therefore, having been justified by faith, we have peace with God through our Lord Jesus Christ." (Romans 5:1, carm.org) So we come to the conclusion that both Jesus and Paul were teaching the same things just wording it a little different. Anyone can misconstrue words and pick things apart, as it is shown God's word prevails both thru Jesus and his disciples. Works Cited Carm.org Gundry, Robert H., A Survey Of The New Testament 5 th edition, Print 2012 The Holy Bible (NIV) New International Version

Shakolton essays

Shakolton essays As the sands of time run through the hourglass one particular grain demands a closer look. That moment in time tells a story of wonderful expedition. On an epic adventure where Sir Earnest Shackolton and his crew of 26 men and one stowaway set off from South Georgia island on December 5, 1914. Amazingly they lost no human life. Common belief is that three main factors led to their survival. Supplies, their determination and perseverance, and their leader and captain, Shackolton The cold barren nature of Antarctica makes it very tough to accumulate supplies like food, fresh water, dry wood, and flint. The demand of supplies needed on an expedition of this great extent is very, very, immense; with their skills on hunting and fishing to rely on the journey would be a long one. Their determination and perseverance is one other thing that led to no loss of human life. (Their physical and emotional strength contributed to this as well) before the Endurance sunk the two men pumping water out of the boat, the men fixing floor boards, and getting the supplies needed to get off the Endurance and to make camp. If you were thinking that any of them gave up, you were wrong. I believe that Shackolton just wouldnt let them give up Shackoltons leadership is one of the many things that led to no loss of human life on this great expedition. I think that one of the great things about leadership is that there at least three qualities. One of them is bravery. If your leader is a chicken he would not be much of a leader. Subsequent to the first one, if your leader is not smart he might run into an immense battle alone. Third, if your leader is not experienced in whatever subject it is. In conclusion, three main factors that led to no loss of human life are, supplies, perseverance, and Shackoltons leadership. These three things lead to a great and courageous journey lead by a man whose legacy has stood the test of time. ...

Reasearch paper about Adulterants in toxicology specimens Research

Reasearch about Adulterants in toxicology specimens - Research Paper Example Basically, there are two classes of adulterants. One class includes the commonly available household substances including water, bleach, detergent, eye drops, baking soda, iodine tincture, and vinegar. The opposite classification includes the commercially out there adulterants with the subsequent ingredients: (1) nitrite: klear and whizzies. (2) Acid: â€Å"THC-FREE" and "Amber 13". (3) Detergent with purafyzi and test clean. (4) Glutaraldehyde: "Instant Clean Additive."(5) Oxidizing reagents: stealth and clear choic (Levine 5-6). In that sense, adulterants that are added to reduce the amount of expensive product in illicit drugs are termed as cutting agents. According to a view shared Levine (41) numerous biological specimens are usually tested for drug abuse. The compulsory guidelines for workplace drug testing need to make use of the urine as the basis of drug testing matrix. This is attributed to the fact that urine specimens usually have high drug concentrations and also contai n metabolites. On the other hand, alternate specimens provide particular advantageous over urine. They include: blood, saliva, semen, breath, earwax, nasal secretions, breast milk, nails, hair, and sebum all have the potential of being drug testing matrices. Blood is viewed to be a very useful matrix if the aim of the testing to determine the relationship between drug concentration and pharmacological effects. In that sense, hair and nails can also detect the long term or chronic use. Generally, the potential benefits of utilizing biological matrices as an alternative to urine include: greater analyte stability, less invasive collection requirements, a lower disease risk, ability to determine parent or the pharmacological active moiety, and easier shipment and storage (42). Urine Regulated workplace drug testing entities use urine as the specimen of choice for determining cocaine metabolite, opiates, amphetamines, and cannabinoids. In the non-regulated drug testing entities it may b e used to test for additional drug classes such as ethanol, benzodiazepines, and methadone. Illegal drug users may try to falsify the results by means of in vitro adulteration of specimens (Mikkelsen and Ash 2335). The adulterants can be added to urine so as to interfere with the definitive accuracy of drug tests. Most of these adulterants are oxidative in nature. Bleach, chromate, nitrite, and hydrogen peroxide are viewed as effective urine adulterants sometimes with pH adjusting substances, for instance sodium bicarbonate or vinegar that are utilized by the illegal drug users in order to conceal the positive results of marijuana. A study conducted by Buddha and Jacobs reported that there are many methods that can be used to establish the availability of chromate and nitrite. However, the effects of other oxidizing agents that could probably be used as adulterants and could possibly be hard to detect or measure the level of toxicity in the specimen of urine. According to study cond ucted by Buddha and Jacobs (460) found out that urine samples containing 9-carboxylic acid THC-acid were actually treated with oxidizing agents that are commonly available. This means that these adulterants can be detected by most drug testing labs’ procedures. However, some less expensive tests do not comprehensively search for them. Since not all the adulterants can