1. The correlation coefficient between crop yields and UGG’s grain shipments is 0.8814.
2. Although it is expensive to reduce the weather risk exposure, there are several reasons as to how it will benefit UGG’s diversified shareholders. For starters, reducing the risk exposure helps to avoid costly financial distress. Due to the positive correlation of weather and grain shipments, a negative effect on the grain volume will cause a direct negative effect on the bottom line. Total losses would be very high if something occurred during the grain transit. And since most of the earnings at risk would be weather related, there would be a high frequency of losses with pretty severe outcomes.
By reducing their risk, UGG’s shareholders are also reducing the variance in their cash flows, thereby making them less financially distressed. This allows them to be able to invest without having to come up with external capital, i.e. loans. Since they are getting new grain elevators, this is a great way for the firm to avoid the costs associated with raising external capital. The less amount of loans UGG has, the less debt that they have, and their debt ratio remains low. This makes them more attractive to better rates when they do have to get loans.
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Because of their size, when the demand for producing specific genetically engineered crops arises, as analysts are predicting. With less financial distress, UGG can obtain more contracts with suppliers and customers and can shift the costs to
In July of 2010 in Miami, Florida, Richard Smith, a 79-year-old dialysis patient was admitted to the ICU after a dialysis appointment left him with severe shortness of breath. The following day after being admitted the patient complained of an upset and the doctor had prescribed him an antacid. Uvo Ologboride, the nurse taking care of Mr. Smith, gave him a deadly dose of a drug called pancuronium, which is a drug that induces paralysis, instead of the antacid. 30 minutes later the patient was found unresponsive, but they were able to revive him. Unfortunately when he was revived, he was left brain dead to which did not settle well with his family. When the patient son had came in he had found his father unconscious, unresponsive, and on a respirator. When looking over the chart to try and figure out what happened it had said his dad had just been resuscitated 10 minutes earlier and the nurse had pretty much told him to go and speak with the doctor. Upon speaking to the doctor he was told the nurse had given his dad the wrong medication which lead to his current state of his condition. The nurse was not able to be reached and spoken to about what happened on that fatal day but from what the doctor had explained was the nurse had grabbed a
These ratios can be used to determine the most desirable company to grant a loan to between Wendy’s and Bob Evans. Wendy’s has a debt to assets ratio of 34.93% while Bob Evans is 43.68%. When it comes to debt to asset ratios, the company with the lower percentage has the lowest risk. Therefore, Wendy’s is more desirable than Bob Evans. In the area of debt to equity ratios, Wendy’s comes in at 84.31% while Bob Evans comes in at 118.71%. Like debt to assets, a low debt to equity ratio indicates less risk in a company. Again, Wendy’s is the less risky company. Finally, Wendy’s has a times interest earned ratio of 4.86 while Bob Evans owns a 3.78. Unlike the previous two ratios, times interest earned ratio is measured on a scale of 1 to 5. The closer the ratio is to 5, the less risky a company is. From the view of a banker, any ratio over 2.5 is an acceptable risk. Both companies are an acceptable risk, however, Wendy’s is once again more desirable. Based on these findings, Wendy’s is the better choice for banks to loan money to because of the lower level of
The word GMO stands for Genetically-Modified Organism and can also be referred to as Genetically Engineered foods, Genetically Modified Foods, and Biotech. Genetically engineered foods are created when one desired trait is isolated and introduced to another plant by inserting the certain gene. The process, considered genetic breeding, and is much more precise than the regular breeding. While GMOs have been in food for 20 years, currently, the controversy and genetically engineered farms are larger than ever. 82% of Americans want GMOs labeled, but majority fail to understand them (Swanson). 90% of all US grown corn, canola, soybeans, and sugar beets have DNA bits from the lab (Woolston). The United States is the top GMO growing country with 70 million hectares of land dedicated to these farms. (Lee). These modified crops and plants for human and animals are created mainly for withstand herbicides or to produce an insectide. “No GMO traits are on the market for bigger yields, drought resistance, enhanced nutrition or any other consumer benefit” (Burnham). Overall, GE foods’ main purpose is to save money for large corporations.
The consistent high spending of capital equipment is the first reason why one would recommend reducing the debt to equity ratio. A company with higher levels of debt is less flexible in being able to adjust to new market demands and conditions that require the company to make new products or respond to competition. Looking at the pecking order of financing, issuing new shares to fund capital investing is the last resort and a company that has high levels of debt, must move to the equity side to avoid the risk of bankruptcy. Defaulting on loans occur when increased costs or bad economic conditions lead the firm to have lower net income than the payments on loans. The risk of defaulting on loans and the direct and indirect cost related to defaulting lead firms to prefer lower levels of debt. The financial distress caused by additional leverage can lead to lower cash flows available to all investors, lower than if the firm was financed by equity only. Additionally, the high debt ratio that Du Pont incurred also led to them dropping from a AAA bond rating to a AA bond Rating. Although the likelihood of not being able to acquire loans would be minimal, there are increased interest costs with having a lower bond rating. The lower bond rating signals to investors that the firm is more likely to default than if it had a higher (AAA) bond rating.
...ll have to face economic, social and crisis to adjust themselves to the new food industry. The world is facing a controversy, a battle between the benefits promoted by the GM food advocates and the tangible results. Consumers must know the consequences of GM Food consumption, nevertheless it is not clear if the governments are trying to hide the truth or the customers decided to ignore it.
In 2012, the global are of genetically modified crops continued to increase for the 17th year in a row at a rate of 6% (25 million acres). The area of genetically modified crops, or biotech crops, has increased almost 100-fold since commercialization in 1996, making biotech crops the fastest adopted crop technology in the history of modern agriculture (“ISAAA”). The biotech boom has changed the way that producers grow their crops, for better or for worse. The explosion of genetically modified crops and foods has stirred a debate whether they are a harmful liability to the environment and to society or they are a beneficial, new technology that can help provide food to the rapidly increasing world population.
A GMO is a plant or animal that has been genetically engineered with DNA from bacteria, viruses, or other plants and animals. Most of the combinations which are used could not possibly occur in nature on its own. The intention of the process is to create a new beneficial trait such as creating its own pesticide or make it immune to herbicides. This would allow the crop such as Bt co...
On the evening of January 5, 1993, Tracie Reeves and Molly Coffman, both twelve years of age and students at West Carroll Middle School, spoke on the telephone and decided to kill their homeroom teacher, Janice Geiger. They agreed that Coffman would bring rat poison to school the following days so that it could be placed in Geiger's drink. After that , they would steal Geiger's car and drive to the Smoky Mountains. On the morning of January 6, Coffman placed a packet of rat poison in her purse and board the school bus. Coffman told another student, Christy Hernandez, of the plan and show her the poison. Hernandez went and informed her homeroom teacher, Sherry Cockrill. Cockrill then informed the school principal, Claudia Argo. When Geiger entered her classroom that morning, she observed Reeves and Coffman leaning over her deck; and when the girls noticed her, they giggled and ran back to their seats. Geiger saw a purse lying next to her coffee cup on the top of the desk. Shortly after Argo called Coffman to the principal's office, rat poison was found in Coffman's purse. Both Reeves and Coffman gave written statement to the Sheriff investigator concerning their plan to poison Geiger and steal her car.
Burberry today is considered one of the leading luxury brands of the word. Here is a synopsis of rise of Burberry:
In the U.S., GM foods have received little public opposition; this is largely due to the fact that food manufacturers are not required to label their products as containing genetically modified ingredients for fear of confusing consumers. Due to the lack of evidence that genetically altered foods are harmful, the Food and Drug Administration considers GM foods to be “generally regarded as safe” (known as GRAS) and no special labeling is required (Falkner 103). In the U.S., genetically modified crops are monitored by t...
GMO stands for genetically modified organism. It is a technique that allows DNA from one species to be injected into another species in a laboratory, creating combinations of plant, animal, bacteria, and viral genes that are unfamiliar to nature. [Whole Foods] Genetically modified organisms were first created in 1983 when a tobacco plant was altered to resist anti-biotics and later in 1990 when genetically engineered cotton was successfully tested. This was a breakthrough for the biotechnology era of agriculture since it allowed the manipulation and creation of food. The six multinational giants that currently dominate the agricultural market include: Monsanto, Dow, BASF, Bayer, Syngenta, and DuPont. [Chemical Cartel] Together these companies have gained government approval, “particularly insect repellent traits and herbicide tolerance for crops, to help farmers improve their crop yields while keeping costs low.” [Moore, 2011] It would appear that these companies might just have the answer to farming problems and potentially world hunger. They seem to have revolutionized the farming industry and the food industry, as we know it.
...rs, setting a good trend for the corporation. They also have a very low debt-to-equity ratio, indicating that they have enough equity to easily pay off any funds acquired from creditors. As a creditor I would feel safe in lending them funds for any future projects or endeavors.
only make up 16.7% of the capital structure. Thus, the credit risk for any credit commitment was not too high
Having a low P/E ratio with respect to the rest of the market, and the replacement cost of the firm being greater than its book value (argument 3), there is a good chance that the current stock price and the proposed offering price are too low. Although long-term debt is a better financing choice, a few of the drawbacks are pointed out. Debt holders claim profit before equity. holders, so the chances that profits may be lower than expected. increases risk to equity, may reduce or impede stock value. However, the snares are still a bit snare.
Thirdly, serial borrowing and repurchase throughout several years is considered. This is essentially the financial policy the company has adopted these years. This policy is less risky measured by coverage ratios and is more acceptable to stockholders. However, UST has imminent challenges and value enhancing objectives to meet. If the company has debt capacity untapped upon, large sum repurchases avoid excessive advisory fee, negotiation time and effort, potentially credit rating charge while immediate significant tax shield benefit is made possible.