The Purchasing Managers Index, a closely watched measure of U.K. manufacturing, spiked up from 34.9 in February to 39.1 in March, leading some economists to suggest that Britain's recession has hit bottom and the economy is poised for recovery. The latest figure, based on a combination of factory production and unfilled orders for manufactured items, marks the highest point for the index since the collapse of Lehman Brothers
Thursday, April 2, 2009
Wednesday, April 1, 2009
3 major economies in Asia sink deeper into crisis
3 major economies in Asia sink deeper into crisis
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The latest economic data from Japan, China and South Korea prove that although there are signs that the global economic downturn is slowing, the picture for Asia is growing ever darker. A widely followed survey of sentiment among manufacturers in Japan shows the greatest pessimism since 1974, when the survey was first conducted
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Tuesday, March 31, 2009
Factors of Production (Introduction)
Factors of Production
1. Natural resources:
The things created by acts of nature such as land, water, mineral, oil and gas deposits, renewable and nonrenewable resources.
2. Labor:
The human effort, physical and mental, used by workers in the production of goods and services.
3. Physical capital.
All the machines, buildings, equipment, roads and other objects made by human beings to produce goods and services.
4. Human capital:
The knowledge and skills acquired by a worker through education and experience.
5. Entrepreneurship:
The effort to coordinate the production and sale of goods and services. Entrepreneurs take risk and commit time and money to a business without any guarantee of profit.
Factors of production are the resources that are used to produce goods and services
1. Natural resources:
The things created by acts of nature such as land, water, mineral, oil and gas deposits, renewable and nonrenewable resources.
2. Labor:
The human effort, physical and mental, used by workers in the production of goods and services.
3. Physical capital.
All the machines, buildings, equipment, roads and other objects made by human beings to produce goods and services.
4. Human capital:
The knowledge and skills acquired by a worker through education and experience.
5. Entrepreneurship:
The effort to coordinate the production and sale of goods and services. Entrepreneurs take risk and commit time and money to a business without any guarantee of profit.
IMF Completes First Review Under Stand-By Arrangement with Pakistan and Approves US$847.1 Million Disbursement
IMF Completes First Review Under Stand-By Arrangement with Pakistan and Approves US$847.1 Million Disbursement
The Executive Board of the International Monetary Fund (IMF) today completed the first review of Pakistan's economic performance under a program supported by a 23-month Stand-By Arrangement (SBA). The completion of the review enables the immediate disbursement of an amount equivalent to SDR 568.5 million (about US$ 847.1 million), bringing total disbursements under the program to an amount equivalent to SDR 2.64 billion (about US$3.93 billion).
Monday, March 30, 2009
BOND INDENTURE INTRODUCTION
BOND INDENTURE INTRODUCTION
The contract that specifies all the rights and obligations of the issuer and the owners of a fixed income security is called the bond indenture. The indenture defines the obligations of and restrictions on the borrowed and forms the basis for tall future transactions between the bondholder and the issuer. These contract provisions are known as covenants and include both negative covenant (prohibitions on the borrower) and affirmative covenants(actions that the borrower promises to perform) sections.
Negative covenants include restrictions on asset sales ( the company can't sell assets that have been pledged as collateral), negative pledge of collateral (the company can't claim that the same assets back several debt issues simultaneously), and restrictions on additional borrowings (the company can't borrow additional money unless certain financial conditions are met).
Affirmative covenants include the maintenance of certain financial ratios and the timely payment of principal and interest. For example, the borrower might promise to maintain the company's current ratio at a value of two or higher. If this value of the current ratio is not maintained, then the bonds could be considered to be in (technical) default.
The contract that specifies all the rights and obligations of the issuer and the owners of a fixed income security is called the bond indenture. The indenture defines the obligations of and restrictions on the borrowed and forms the basis for tall future transactions between the bondholder and the issuer. These contract provisions are known as covenants and include both negative covenant (prohibitions on the borrower) and affirmative covenants(actions that the borrower promises to perform) sections.
Negative covenants include restrictions on asset sales ( the company can't sell assets that have been pledged as collateral), negative pledge of collateral (the company can't claim that the same assets back several debt issues simultaneously), and restrictions on additional borrowings (the company can't borrow additional money unless certain financial conditions are met).
Affirmative covenants include the maintenance of certain financial ratios and the timely payment of principal and interest. For example, the borrower might promise to maintain the company's current ratio at a value of two or higher. If this value of the current ratio is not maintained, then the bonds could be considered to be in (technical) default.
Difference between equity security and fixed income security
Difference between equity security and fixed income security
Equity Securities
Fixed Income Securities
Equity Securities
The most important equity security is common stock. Stock represents ownership interest in
a corporation. Equity securities may pay dividends from the company’s earnings, although
the company has no legal obligation to do so. Most companies do pay dividends, and most
companies try to increase these dividends on a regular basis.
Unlike fixed-income securities, equity securities represent an ownership interest in a corporation. These securities provide a residual claim—after payment of all obligations to fixed-income claims on the income and assets of a corporation
a corporation. Equity securities may pay dividends from the company’s earnings, although
the company has no legal obligation to do so. Most companies do pay dividends, and most
companies try to increase these dividends on a regular basis.
Unlike fixed-income securities, equity securities represent an ownership interest in a corporation. These securities provide a residual claim—after payment of all obligations to fixed-income claims on the income and assets of a corporation
Fixed Income Securities
A fixed income security usually provides a known cash flow with no growth in the income stream. Bonds are the most important fixed income securities.A bond is a legal obligation to repay a loan’s principal and interest, but carries no obligation to pay more than this. Interest is the cost of borrowing money. Most preferred stocks pay a fixed annual dividend that does not change overtime consequently. For investment purposes, preferred stock is considered a fixed income security.
Saturday, March 28, 2009
Canadian official projects 8.5% contraction in Q1 GDP
Canadian official projects 8.5% contraction in Q1 GDP
Canada's GDP is headed toward a first-quarter contraction of 8.5%, said Kevin Page, the Canadian Parliament's independent budget officer. If Page's projections are correct, Canada will suffer this year its worst economic conditions since the end of World War II, a finance critic from the Liberal Party said. Page said he was handicapped by the government's refusal to give him some of the data he needed. Financial Post (Canada)/Reuters .
Canada's GDP is headed toward a first-quarter contraction of 8.5%, said Kevin Page, the Canadian Parliament's independent budget officer. If Page's projections are correct, Canada will suffer this year its worst economic conditions since the end of World War II, a finance critic from the Liberal Party said. Page said he was handicapped by the government's refusal to give him some of the data he needed. Financial Post (Canada)/Reuters .
Break Even Analysis
Break Even Analysis
Break even point (for output) = fixed cost / contribution per unit
Contribution per unit= selling price (p.u) - variable cost (p.u)
Break even point (for sales) = fixed cost / contribution (pu) * Selling price (pu)
Fixed Costs
Examples are;
Admin expenses
Rent of office building
Marketing and research cost
etc.
Variable Costs
Variable costs are those costs which vary directly with the level of output.
Examples are;
Manufacturing expenses i-e labour cost, raw material cost etc
Assumptions are:
It assumes that fixed costs (FC) are constant.
It assumes average variable costs are constant per unit of output, at least in the range of likely quantities of sales.
It assumes that the quantity of goods produced is equal to the quantity of goods sold
Illustration
Abc limited has following monthly data. calculate break even point.
Average Selling price per unit $ 10
Average Variable cost per unit $ 6
Fixed cost (Estimated) $ 20,000
Break Even analysis
Monthly Sales (units) 5,000
Monthly Sales ($) 50,000
Therefore, no profits are made from the sale of this product until more than 5,000 units are sold or more than $ 50,000 in gross sales is generated.
Break-even analysis can be very helpful in the evaluation of a new venture. In most instances, success takes time.Many new enterprises and products actually operate at a loss (at a point below break-even) in the early stages of development. Knowing the price or volume necessary to break-even is critical to evaluating the time-frame in which losses are permissible. The break-even is also an excellent benchmark by which a company’s short-termgoals can be measured/tracked. Break-even analysis mandates that costs be analyzed. It also keeps a focus
connection between production and marketing.
It is the point at which total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume, sales value or production at which the business makes neither a profit nor a loss.
One of the most common tools used in evaluating the economic feasibility of a new enterprise or product is the break-even analysis. The break-even point is the point at which revenue is exactly equal to costs. At this point, no profit is made and no losses are incurred. The break-even point can be expressed in terms of unit sales or dollar sales. That is, the break-even units indicate the level of sales that are required to cover costs. Sales above that number result in profit and sales below that number result in a loss. The break-even sales indicates the dollars of gross sales required to break-even.
Break even point (for output) = fixed cost / contribution per unit
Contribution per unit= selling price (p.u) - variable cost (p.u)
Break even point (for sales) = fixed cost / contribution (pu) * Selling price (pu)
Fixed Costs
Fixed costs are those business costs that are not directly related to the level of production or output. i-e, even if the business has a zero output or high output, the level of fixed costs will remain broadly the same.
Examples are;
Admin expenses
Rent of office building
Marketing and research cost
etc.
Variable Costs
Variable costs are those costs which vary directly with the level of output.
Examples are;
Manufacturing expenses i-e labour cost, raw material cost etc
Assumptions are:
It assumes that fixed costs (FC) are constant.
It assumes average variable costs are constant per unit of output, at least in the range of likely quantities of sales.
It assumes that the quantity of goods produced is equal to the quantity of goods sold
Illustration
Abc limited has following monthly data. calculate break even point.
Average Selling price per unit $ 10
Average Variable cost per unit $ 6
Fixed cost (Estimated) $ 20,000
Break Even analysis
Monthly Sales (units) 5,000
Monthly Sales ($) 50,000
Therefore, no profits are made from the sale of this product until more than 5,000 units are sold or more than $ 50,000 in gross sales is generated.
Break-even analysis can be very helpful in the evaluation of a new venture. In most instances, success takes time.Many new enterprises and products actually operate at a loss (at a point below break-even) in the early stages of development. Knowing the price or volume necessary to break-even is critical to evaluating the time-frame in which losses are permissible. The break-even is also an excellent benchmark by which a company’s short-termgoals can be measured/tracked. Break-even analysis mandates that costs be analyzed. It also keeps a focus
connection between production and marketing.
Friday, March 27, 2009
SYSTEM SOFTWARE & APPLICATION SOFTWARE
SYSTEM SOFTWARE & APPLICATION SOFTWARE
The system software controls the computer. It communicates with computer’s hardware(key board, mouse, modem, sound card etc) and controls different aspects of operations.
It includes following sub categories:
o Operating system
o Device drivers
o Utilities
Operating system
An operating system is the program that manages all the other programs in a computer. It is a integrated collection of routines that service the sequencing and processing of programs by a computer.
So it is the the software responsible for controlling the allocation and usage of hardware resources such as memory, central processing unit (CPU) time, disk space, and peripheral devices.
Device driver
The device driver software is used to communicate between the devices and the computer. We have monitor, keyboard and mouse attached to almost all PC’s; if we look at the properties of these devices we will see that the operating system has installed special software to control these devices. This piece of software is called device driver software. When we attach a new device with the computer, we need software to communicate with this device. These kinds of software are known as device drivers e.g.CD Rom driver, Sound Card driver and Modem driver.
Utility Software
Utility software is a program that performs a very specific task, usually related to managing system resources. You would have noticed a utility of Disk Compression.Whenever you write a file and save it to the disk, Compression Utility compresses the file (reduce the file size) and write it to the disk and when you request this file from the disk, the compression utility uncompressed the file and shows its contents. Similarly there is another utility, Disk Defragmentation which is used to defragment the disk. The data is stored on the disks in chunks, so if we are using several files and are making changes to these files then the different portions of file are saved on different locations on the disk. These chunks are linked and the operating system knows how to read the contents of file from the disk combining all the chunks. Similarly when we delete a file then the place where that file was stored on the disk is emptied and is available now to store other files. As the time goes on, we have a lot of empty and used pieces on the disk. In such situation we say that the disk is fragmented now. If we remove this fragmentation the chunks of data on the disk will be stored close to each other and thus reading of data will be faster.For the purpose of removing fragmentation on the disk the Defragmentation utility is used.
Application software
A program or group of programs designed for end users. For example a program for Accounting, Payroll, Inventory Control System, and guided system for planes. GPS (global positioning system), another application software, is being used in vehicles, which through satellite determines the geographical position of the vehicle.
Most Popular Application Software Categories are:
Web browsers
Email clients
Word processors
The system software controls the computer. It communicates with computer’s hardware(key board, mouse, modem, sound card etc) and controls different aspects of operations.
It includes following sub categories:
o Operating system
o Device drivers
o Utilities
Operating system
An operating system is the program that manages all the other programs in a computer. It is a integrated collection of routines that service the sequencing and processing of programs by a computer.
So it is the the software responsible for controlling the allocation and usage of hardware resources such as memory, central processing unit (CPU) time, disk space, and peripheral devices.
Device driver
The device driver software is used to communicate between the devices and the computer. We have monitor, keyboard and mouse attached to almost all PC’s; if we look at the properties of these devices we will see that the operating system has installed special software to control these devices. This piece of software is called device driver software. When we attach a new device with the computer, we need software to communicate with this device. These kinds of software are known as device drivers e.g.CD Rom driver, Sound Card driver and Modem driver.
Utility Software
Utility software is a program that performs a very specific task, usually related to managing system resources. You would have noticed a utility of Disk Compression.Whenever you write a file and save it to the disk, Compression Utility compresses the file (reduce the file size) and write it to the disk and when you request this file from the disk, the compression utility uncompressed the file and shows its contents. Similarly there is another utility, Disk Defragmentation which is used to defragment the disk. The data is stored on the disks in chunks, so if we are using several files and are making changes to these files then the different portions of file are saved on different locations on the disk. These chunks are linked and the operating system knows how to read the contents of file from the disk combining all the chunks. Similarly when we delete a file then the place where that file was stored on the disk is emptied and is available now to store other files. As the time goes on, we have a lot of empty and used pieces on the disk. In such situation we say that the disk is fragmented now. If we remove this fragmentation the chunks of data on the disk will be stored close to each other and thus reading of data will be faster.For the purpose of removing fragmentation on the disk the Defragmentation utility is used.
Application software
A program or group of programs designed for end users. For example a program for Accounting, Payroll, Inventory Control System, and guided system for planes. GPS (global positioning system), another application software, is being used in vehicles, which through satellite determines the geographical position of the vehicle.
Most Popular Application Software Categories are:
Web browsers
Email clients
Word processors
The Global Information Technology Report 2008-2009
The Global Information Technology Report 2008-2009
The Report stresses the importance of ICT as a catalyst for growth in the current global turmoil
The Report stresses the importance of ICT as a catalyst for growth in the current global turmoil
Denmark and Sweden once again lead the rankings of The Global Information Technology Report 2008-2009, released for the eighth consecutive year by the World Economic Forum. The United States follows suit, up one position from last year, thus confirming its pre-eminence in networked readiness in the current times of economic slowdown. Singapore (4), Switzerland (5) and the other Nordic countries together with the Netherlands and Canada complete the top 10.
The Report underlines that good education fundamentals and high levels of technological readiness and innovation are essential engines of growth needed to overcome the current economic crisis. Under the theme “Mobility in a Networked World”, this year’s Report places a particular focus on the relationship and interrelations between mobility and ICT.
With record coverage of 134 economies worldwide, the Report remains the world’s most comprehensive and authoritative international assessment of the impact of ICT on the development process and the competitiveness of nations.
The Report is produced by the World Economic Forum in cooperation with INSEAD, the leading international business school, and is sponsored by Cisco Systems.
For more details
The Global Information Technology Report 2008-2009
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