INTRODUCTION
Asset liability management is defined as “the process of decision making to control risks of existence, stability and growth of a system through the dynamic balances of its assets and liabilities”. ALM (asset liability management) is the process in which the asset and liabilities by matched by managing the maturities and the interest rate sensitivity in the process of the organization to minimize the IRR (interest rate risk) and liquidity risk. ALM (asset liability management) can be seen as a tool of risk management which is designed to earn an acceptable return whilst maintaining a surplus of assets which are comfortably more than the liabilities. ALM (asset liability management) is an integral part of any financial institution. In a banking system various risks are involved such as risks associated with interest rate on lending and short-term and long-term borrowing, exchange rate risks and finally the liquidity position of the bank, these risks are the most important part of ALM (asset liability management) but credit risk and contingency risk also part of ALM (asset liability management). The asset liability matching by banks is done by grouping various assets and liabilities by their maturity period
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The deployment of MIS (management information system) in India was spearheaded by the banks as they felt the most need and drive to implement a MIS (management information system) to better the risk involved in their day-to-day business.
Information availability, accuracy, adequacy and expediency: Availability of the right information at the right time is the key to any successful risk management which is heavily driven by the data available, so it does not come as a surprise that accuracy and availability of the data is one of the most important parameter in ALM (asset liability management).
MEASURING
Net working capital represents organization’s operating liquidity. In order to compute the net working capital, total current assets are divided from total current liabilities. When there is sufficient excess of current assets over current liabilities, an organization might be considered sufficiently liquid. Another ratio that helps in assessing the operating liquidity of as company is a current ratio. The ratio is calculated by dividing the total current assets over total current liabilities. When the current ratio is high, the organization has enough of current assets to pay for the liabilities. Yet, another mean of calculating the organization’s debt-paying ability is the debt ratio. To calculate the ratio, total liabilities are divided by total assets. The computation gives information on what proportion of organization’s assets is financed by a debt, and what is the entity’s ability to pay for current and long term liabilities. Lower debt ratio is better, because the low liabilities require low debt payments. To be able to lend money, an organization’s current ratio has to fall above a certain level, also the debt ratio cannot rise above a certain threshold. Otherwise, the entity will not be able to lend money or will have to pay high penalties. The following steps can be undertaken by a company to keep the debt ratio within normal
Arnott comments on how investors should balance these risks to better understand the health of their company, or at least strive to manage two of the three. As talked about recently in class, I believe all focus should be pointed towards matching assets to liabilities because the safety accomplished through ALM opens up opportunities for increasing the companies net worth. I would
Finance is the most important asset in anyone 's life. The lack of adequate financial planning may results in insecure life. Wealth Building and assets management ensures a secure life without any financial crunches and problems. Personal asset management ensures the growth of wealth in the right direction by implementing an investment strategy that aims at balancing the risk in terms of rewards in accordance with the investor’s financial goals, risk tolerance and investment time frame. There are basically three assets classes i.e. equity, fixed income and cash or cash equivalents that behave differently over time in respect of risk and return.
Asemi observe that Management Information System (MIS) is one of the information systems that is computer based. Besides, Asemi defines MIS as “an organizational method of providing past, present and project information related to internal operations and external intelligences. It supports the planning, control and operation functions of an organization by furnishing uniform information in the proper time frame to assist the decision makers,” (2011). The aim of MIS is to satisfy the general information need of the entire manager in an organization. Before the advent of computers, the process of decision-making was one that was full of built-in advantages and ad hoc methods. Computers technologies have changed the landscape of the decision-making process completely by making the process less demanding and easy to undertake. The reason for this situation is that information technology has made access to information more automated, efficient, effective, timely, and less ambiguous. Consequently, the ordinary t...
In the business world today, technology is becoming an essential staple. Every big business relies on it one way or another. More importantly than just technology itself, the use of management information systems is what guides a company in terms of catering to its customers and knowing what moves to make next. Management information systems (MIS) can be defined is the study of people, technology, and organizations (What is MIS?). However, that is a very general definition because there is a lot more that comes out of the use of these MIS systems.
The role of liability insurance is to assume the financial consequences arising out of a policyholder’s obligation to pay compensation for harm suffered by third parties. Liability insurance provides liable parties with financial protection against consequences of harm that they cause to others and in that regard liability insurance protects wrongdoers. Victims of wrongful acts are also assured of compensation in the presence of liability insurance and they do not have to face the prospect of suing someone who is financially incapable of paying for the harm caused. Liability insurance also promotes entrepreneurial activities in that people with business ideas are not afraid to implement them because they can transfer the risk of harm to third
The objectives of operation, reporting, and compliance are represented in the column. Components are represented by the rows regarding the ERM. The third dimension is the entity’s organizational structure. It demonstrates clear how and how counteract low risk tolerance and high risk appetite. Risk reduction is obtained by facilitating effective internal control with a broad scope that reflects changes in the framework to risk management with ERM. The framework requires adaptability which enables flexibility due to a overlap of functions of identify, assessing, and responding to risks within operations, reporting, and compliance. Activities, information, communication should be monitored, evaluated, and identified for response are part of the ERM for effective and efficient risk management. The concept of risk appetite and risk tolerance is introduced because the identification of potential events affecting achievement can be managed. Also, the process requires communication, consultation before and monitoring and review after every decision or action (McNally, 2015). The financial principles to risk management are effective risk management creates value, integration, decision making, address uncertainty, systematic structure, and facilitated continuous improvement. The financial principles form effective and efficient management within a firm. Financial principles help ERM with risk
According to Investopedia (Asset Allocation Definition, 2013), asset allocation is an investment strategy that aims to balance risk and reward by distributing a portfolio’s assets according to an individual’s goals, risk tolerance and investment horizon. There are three main asset classes: equities, fixed-income, cash and cash equivalents; but they all have different levels of risk and return. A prudent investor should be careful in allocating each asset class to his portfolio. Proper asset allocation is a highly debatable subject and is not designed equally for everybody, but is rather based on the desires and needs of the individual investor. This paper discusses the importance of asset allocation, the differences and the proper diversification within the portfolio.
The fascination about information management, the seminar on ‘Hadoop vs RDBMS’ as well as the exposure to data-ware housing made me realize the need of a concrete base in MIS. My long term goal is to conduct research in the field of Information Systems and I look forward to develop my career in the field of MIS and a graduate degree at University of ______, _______will be the right step in that direction.
Ackoff identifies five assumptions commonly made by designers of management information systems (MIS). With these assumptions, Ackoff argues that these assumptions are in most cases not justified cases, and often lead to major deficiencies in the resulting systems, i.e. "Management Misinformation Systems." To overcome these assumptions and the deficiencies which result from them, Ackoff recommends that management information system should be imbedded in a management control system.
O'Brien, J., & Marakas, G. (2008). Management information systems with MI source 2007. New York, NY: McGraw-Hill Laudon.
Maintaining a company’s financial assets is a daunting task. Cash management techniques and short-term financing provide accounting executives with the tools needed to survive the constant changes within the economy. The combination of these tools and the knowledge of the world economy will assist companies in maintaining current assets and facilitates growth.
My interest in Information Systems Management was drawn when I was working on my final year project at Maharashtra Institute of Technology under the able guidance of the head of the Computer Engineering department. Professor R. K. Bedi’s support provided a much needed boost to my confidence in my programming skills. This new found confidence, in conjunction with the organization management skills I had acquired through active participation in extracurricular activities like “Tesla”, in inter college programming fest, made me realize I wanted to pursue a program that had comprised a blend of both the computer science and management disciplines.
Laudon C. & J. Laudon (2003: 5th edition) Essentials of Management Information Systems. London: Prentice Hall International Limited
Information Systems Management (ISM) is the application of information technology to support the major functions and activities of either a business sector private or public sector institution (http://tim.soe.ucsc.edu/).An information system is a collection of people, software, hardware, data, and procedures that are designed to produce information that supports the short-range, day-to-day, and long-range actions of employers in an organization. The use of information systems in the organizational environment has been growing in recent Mendes Duarte, A. I., & Costa, C J.(2012). An office information system or OIS is an information system that uses software, hardware, and networks to improve work flow and help communications among employees. Today, it is widely accepted that managing the information resource is very often equally important to the organization or IT department.