ACCOUNTING CASE STUDY- EXECUTIVE SUMMARY Study Example | Topics and Well Written Essays - 500 words

ACCOUNTING - EXECUTIVE SUMMARY - Case Study Example Since CCL is an existing client for GE Capital, it should approve the loan at a lower interest rate of 4% and, on the other hand, extend the loan payment period to ten years. By doing this, it will achieve their strategy of keeping existing customers. The CCL financial statements indicate that it generates sufficient cash flow of a net earnings of $97.120 that is able to finance the interest payment of the new loan on a monthly basis. On the other hand, the CCL debt to equity ratio will not exceed 4: 1 when the new loan is included as required by CEF (Dirubbo). Loan disapproval to CCL: Disapproving loan to CCL will not favor the company’s strategy of keeping existing customers. In case the company loses CCL, It will have to find a new client to replace, and this requires the company to incur some costs hence not economical in the end. Hence, the cost of replacing existing clients could enable the company to find and win new businesses. The cost of losing existing clients as compared to finding new ones outweighs in the end. Therefore, to minimize the impact of losing CCL as well as the extra costs of finding new businesses, the company should approve the loan (Plumlee et al.). Short-term plan: The loan approval for $ 306, 000 to CCL to finance the trucking contract between Ford and the supplier is recommendable. The company should reduce the rate of interest from five percent to four percent and extend the period of payment to ten years. This will reduce the monthly payments facilitating provision of monthly reports of financial activities of CCL for the first year of loan repayments. The implementation of the loan approval on an immediate time is required since CCL meets the company’s requirements. This will motivate CCL to continue being clients and even attracting new businesses as well. Medium Term Plan: After the first year, the payments are separated to quarterly submission until the first loan of $ 36,000 is financed within the period of 8 years

Evaluating an International HRM Strategy Assignment

Evaluating an International HRM Strategy - Assignment Example This paper assesses not only the human resource management of ZARA per se but its HRM in relation to expatriate management if it were to enter into joint venture agreement in New Zealand (the host country). To this end, the paper begins with an analysis of the economic environment in New Zealand and its potential relationship with ZARA’s HRM policies. Keeping in view the ageing population pyramid and low female participation rates in New Zealand, hiring expatriates would be necessary as the joint venture team would be a mix of expatriates and host country employees. During this process, cultural training and supporting policies would be necessary to reduce failure rates of expatriate management. Finally, recommendations are offered towards the end regarding the areas that ZARA would need to focus on with respect to strategic human resource management in New Zealand. ZARA, an iconic global fashion brand, was founded by a businessman Amancio Orgega in 1975 owing to his aim of ex panding his factory’s operations by opening a new outlet in La Coruà ±a (don Quijote, 2013). The company has enjoyed great success since its inception with continuous growth in the fashion line being the epitome of ZARA’s overall business strategy. By 1986, the company enjoyed extensive distribution in Spain with outlets in all major cities, whereas two years later, the company decided to open its doors to the global market including its first destination- Portugal (don Quijote, 2013). ... 2. HRM and the Environment ZARA is considering entering into a joint venture in New Zealand which, currently, represents an untapped market for the company. It is, therefore, important to analyze the economic environment of New Zealand at present. The country’s economy now follows the free market mechanism with little government intervention. Its economy is highly export-driven and very competitive. Keeping this in mind, ZARA’s entry into the region could expose it to intense competition from other foreign firms. With an expected growth rate of 2.5% and 3.4%, the country demonstrates high resilience to the global economic downturn that negatively affected the economies of most of the developed world (IHS Global Insight, 2013). On the flipside, New Zealand’s currency appears undervalued compared to the dollar (IHS Global Insight, 2013). This combined with the potential for the housing market in New Zealand to heat up puts it at the risk of facing recessionary effe ct in near future. Furthermore, the low levels of inflation along with high unemployment levels (50%) (IHS Global Insight, 2013) could mean that the cost of hiring locals for ZARA would be low. Consumer spending is also expected to grow modestly which does not present an overly optimistic picture for ZARA. This is because of the high housing debts compared to slow growth in income. Additionally, government’s intention of reverting to modest surplus in 2015 shall result in reduced spending (IHS Global Insight, 2013). Nevertheless, there appears to be growth in consumer spending with the same increasing by approximately 1.2% by 2015 (IHS Global Insight, 2013). On the whole, the consumption picture appears to be mixed and one may expect fair amount of consumer