Personal Finances and Loans Solutions » tenancy http://www.personal-finances-advisor.com Make your financial advice personalized Fri, 14 May 2010 13:47:04 +0000 en hourly 1 http://wordpress.org/?v=3.0 Resolving the basic debt management problems /resolving-the-basic-debt-management-problems/ /resolving-the-basic-debt-management-problems/#comments Fri, 14 May 2010 13:47:04 +0000 admin http://www.personal-finances-advisor.com/?p=73 A classic example of this happened to a client of mine: an appliance manufacturing company. The sales and production departments worked together to ensure that stock was delivered on time to cover sales promotions. Things were going well, customers were buying appliances through the promotions, and back orders almost ceased to exist. Yet, while sales managers were making record bonuses, production managers were not seeing any change in their bonuses.When the partnership met, this gap was brought to the attention of the Sales and Production vice presidents. They were told that production managers and supervisors were starting to get angry that salespeople were making huge bonuses while they did all the hard work. The two partners decided to split the promotion sales bonuses evenly between Production and Sales to deal with the inequality and provide mutual benefits to both partners. As a result, the partnership between
Production and Sales worked so well that after a two-year period, both groups got record high bonuses. The partnership moved from resolving a logistics issue to making design improvements based on customer feedback that Sales passed along to Manufacturing. The partnership worked so well, in fact, that the vice president of Sales told me one day: “I can’t even remember what it was like when we were not working together in partnership.”

]]> /resolving-the-basic-debt-management-problems/feed/ 0 Credit status will persist as hard evidence /credit-status-will-persist-as-hard-evidence/ /credit-status-will-persist-as-hard-evidence/#comments Sat, 21 Nov 2009 19:54:05 +0000 admin http://www.personal-finances-advisor.com/?p=64 123Aggregate financial ratios give a reliable picture of the state of the highyield market and should not be neglected irrespective of technical factors. Technical factors driving the high-yield market can change fairly quickly but credit status will persist as hard evidence and change only slowly over time. The most important fundamental measures are:

  • Free cash flow generation
  • Refinancing calendar
  • Access to capital markets (bank lending standards)
  • Reported earnings and earnings outlook
  • Equity performance
  • Growth prospects
  • CAPEX needs
  • Leverage trend
  • Coverage trend.

Leverage and coverage ratios are particularly important for the analysis of high-yield issuers. We find significant correlations between the spread levels of selected high-yield issuers and their coverage ratios and their leverage ratios.

]]> /credit-status-will-persist-as-hard-evidence/feed/ 0 The flows of pension funds and payday loans /the-flows-of-pension-funds-and-payday-loans/ /the-flows-of-pension-funds-and-payday-loans/#comments Wed, 11 Nov 2009 11:17:34 +0000 admin http://www.personal-finances-advisor.com/?p=61 98Fund flows measure the amount of money that comes into or leaves the open-ended mutual funds during a given period. Coupon payments are not included. The flows of pension funds, hedge funds and insurance companies are not tracked in this number. Nevertheless, there is a high correlation between high-yield market total returns and mutual fund flows. The reason is that mutual funds account for a big part of secondary trading.

During a period of high market uncertainty and increasing negative event risks the correlation with equity markets tends to rise. Fund flows in the high-yield market are directly related to the developments in the equity market.

Fund Flows are a function of:

  • Expected risk
  • Interest rates
  • Inflation
  • Default rates
  • Economic outlook
  • Event risk
]]> /the-flows-of-pension-funds-and-payday-loans/feed/ 0