Financial Performance Measurement Essay Example | Topics and Well Written Essays - 1500 words

Financial Performance Measurement - Essay Example The cost of capital aspect is usually a main area of focus. The reason for cost of capital to be taken care of seriously is to ensure that the capital used does not exceed the expected returns from activities of the organization. There is also need to ensure that the cheapest type of capital is used to finance the company. The company therefore considers the cost of each type of capital to compute a general cost of capital referred to as weighted average cost of capital. This incorporates costs such as cost of equity and also cost of debt. The weighted average cost of capital method allocates weights to each component cost of capital. This weighted average cost of capital is usually the rate of return that the company should not operate under in order to be operating at a safe point. Weighted average cost of capital is the best measure of a company's cost of capital. Its measure gives weights to the components of a company's capital structure. Usually shareholder's equity and debt create a company's capital (Brealey, & Richard 2000p.66-67). The company's share price as in the financial times is recorded as 876.50 being the last price. This represents an increase in the company's share price as compared to last one week by 2.2%. 876.50 being the last share price also represent a decrease in share price as compared to 3 months earlier. ... EQ = This represents the shareholder's equity and equity equivalents TC = This represents the total capital RRR = This is the required rate of return, usually cost of equity capital D = This represents debt capital K = This represents the cost of debt capital TR = This represents the tax rate Using the figures of the group company the British Associates Foods plc the shareholder's equity for the year 2005 = 3,696,000 This is at required rate of return of 12% The group's debt as at 17/09/05 was at the tune of 150,000,000. This debt was at a cost of 10% Therefore the weighted cost of capital can be computed as follows: - Total capital = Equity capital + debt Therefore Equity capital = 3,696,000,000 Debt = 150,000,000 Total capital = 3,746,000,000 Therefore WACC = 3,696,000,000 x 12% + 150,000,000 10% (1.28%) 3,746,000,000 3,746,000,000 Note: the tax rate = 28% WACC 0.118 + 0.02 WACC 0.138 = 13.8% Therefore the WACC = 13.8% The company's share price as in the financial times is recorded as 876.50 being the last price. This represents an increase in the company's share price as compared to last one week by 2.2%. 876.50 being the last share price also represent a decrease in share price as compared to 3 months earlier. At the earlier three months the share price was 5.4% higher than the current share price of 876.50. Six months ago, the company's share prices are recorded to have been 16.4% higher than 876.50. This represents a large fall in the company's share price. Upto these six months ago, the trend seems to be moving in the same direction as that of the sector. A difference in the trend of the company's share prices emerges when the comparison of the

Michel Foucault's Theories Essay Example | Topics and Well Written Essays - 1250 words

Michel Foucault's Theories - Essay Example This is usually understood that people are dominate by big social groups and are unable to resist the power of institutions which control day-to-day lives. In the last ten years, the ideas of Foucault has been taken up and use not only by students, but also by professionals in numerous areas. Looking on the three major Foucault's themes in account of prison - power, subjectivity and surveillance - is vital to understanding ideas of Foucault. Foucault's works deal with discipline and instructions. He traces the workings of power at the micro-level and distinguishes his approach from studies of power that focus on the dominating role of the institutions. Foucault writes that it is necessary to cut off the king's head, to understand that power is not the property of the might, but rather the set of forces which establish positions and ways of behaving that influence people in everyday life (Grovier 2005). Foucault has distinguished his understanding of power by noting that there is no right and no wrong way of reasoning, and people are capable of making sense of the world through their own reasoning. However, the human understanding of the self and lives is always filtered though the ideas and institutions that constitute the society (Danaher 2000). Penal system is the s... Foucault devotes a lot of his writings to presenting the genealogy of the prison. IN particular, he writers about the changes in penal procedures in France in late 18th- early 19th centuries. The key change was the abandonment of the torture and public executions, the development of the incarcerating practices and regulating prisoners by practices of surveillance (Eribon 1991). Foucault relates these changes to the Enlightenment - the emerging philosophies based on humanistic virtues of reason and justice. Thus, the changes in prison system were the reflection of the idea that prisoners were aware of their failings. Thus, the old concept of power was replaced by the new physical power which Foucault associates with discipline. He offers two ways of understanding discipline - one tied to punishment, and the other to skills and knowledge. The second concept of discipline is like the set of qualities which humans need to master in order to be recognized and values within the particular field (Danaher 2000). If from the first perspective, discipline is negative, from the second perspective discipline is seen as the positive force tied with self-empowerment and achievement. Disciplinary power gives the person the space within the institution as well as the rank within the system. This ranking enables the institution to regulate the movement of people throughout the space as well as to regulate the progress they can make from one task to another. Foucault further notes that discipline was not simply imposed from above and people submitted themselves to be able to operate effectively in the social con ditions (McNay 1994). It is important to note that Foucault has collected the material