Financial Institutions Lending Essay Example | Topics and Well Written Essays - 1000 words

Financial Institutions Lending - Essay Example It is calculated by dividing total debts by total assets. A debt ratio of greater than1 indicates that a company has more debt than assets -a debt ratio of less than 1 indicates thata company has more assets than debt. Used in conjunction with other measures of financial health, the debt ratio can help investors determine a company's level of risk. A lending risk assessment ratio that financial institutions and others lenders examine before approving a mortgage.Typically,assessments with high LTV ratios are generally seen as higher risk and, therefore, if themortgage is accepted,the loanwill generally cost the borrower more to borrow or he or she will need to purchase mortgage insurance. A debt service measure that financial lenders use asa rule of thumbtogivea preliminaryassessment about whether a potentialborrower is already in too muchdebt.Receiving aratio ofless than30%means that the potential borrowerhas an acceptable level of debt. A general termdescribinga financialratio that compares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds. The higher a company'sdegree of leverage, the more thecompany is considered risky. As for most ratios, an acceptable levelis determined by its comparisonto ratios ofcompanies in the same industry.The best known examples of gearing ratios include the debt-to-equity ratio (total debt / total equity), times interest earned (EBIT / total interest), equity ratio (equity / assets), and debt ratio (total debt / total assets). 5. Solvency Ratio One of many ratios used tomeasure a company's ability to meet long-term obligations. The solvency ratio measuresthe size ofa company's after-tax income, excluding non-cash depreciation expenses, as compared to the firm's total debt obligations. It provides a measurement of how likely a company will be to continue meeting its debt obligations. Thus, credit quality can best be evaluated by analyzing the probability of a company running out of both cash and profits at any given moment. To evaluate the possibility of a company running out of cash, lenders generally look at a cash budget for the firm. They evaluate various scenarios and try to determine how likely the ending cash balance will be negative, implying a need for outside funds that may not be forthcoming if the company is not profitable. The extent of the credit losses that then arise if a firm does run out of cash is a function of the collateral or seniority status of each debt, as well as the value of the total assets of the company in bankruptcy. Essentially, credit analysis can be simply conducted by comparing the company's average Times Interest Earned (TIE) ratio over the past few years to that of the cross-sectional average TIE of groups of firms with the same public credit rating, such as the same Moody's or S&P letter rating for which public data are available. Then set the company's starting credit rating equal to that which most closely matches the TIE of the firms with a given letter credit rating. Next, the trend in

Management Assignment Example | Topics and Well Written Essays - 750 words - 3

Management - Assignment Example Through evaluation, the company is able to come up with strategies for dealing with the changing environment. Owing to the fact that technology is rising at a fast rate, it is important for organizations to come up with methodologies for incorporating beneficial technology into their system (Dyro, 2004). This will help an organization make adjustments in areas that need improvement. Evaluation helps in monitoring and checking the operations of an organization. This helps to identify whether a company is getting the fullest outcome from its input. This will assist a company change the strategies for delivering more results to the clients (Mittenthal, 2002). Companies should not overstress SWOT appraisal since an organization may concentrate too much on its strengths and forget about the weaknesses. SWOT is an appreciable tool for reflecting how the company is performing but it is not overtly beneficial in proffering a competitive advantage. This is because SWOT may emphasize only on t he advantages and positive sides of a company (Daft 2009). 2 Evaluation should not be done on specific employees and staff. These people are considered as the most significant body of any organization. This is because the employees provide the labor force that is needed in accomplishing the company’s objectives. ... Setting of levelheaded goals is a crucial factor for a company’s success; this can be achieved by involving the employees in decision making of these goals. Goals set by the managerial can be unrealistic to employees; this because managers will set high goals inorder for the company to realize more output. This eventually lowers the morale of the employee’s hence poor performance. When employees are involved in setting of the company’s goal, realistic goals are addressed hence motivating them, and this results in good performance (Daft and Marcic, 2010). For a company to conduct superior evaluation, it should consider the employees as their priority. Employees are the most significant body in an organization, hence the company should be very careful not to lower the morale of the workers when they are conducting their evaluations. This can be achieved through involving them in decision making of the companies goals because realistic goals will be addressed. In th e evaluation process, the company should reward the employees who do a superior job. This will help boost their morale hence working aggressively to achieve the goals of he company. An efficient evaluation process should not only consider the company’s well being, but it should also consider the well being of employees. The salaries and wages should be reasonable, this will avoid oppressing and under paying the employees. The company’s evaluation should show the employees that they care for them. This can be through the company’s effort to educate potential employees on their talents and capabilities. This will ensure that the skills of the employees are improved, hence working to

A Covenant Is An Agreement Between Two People Religion Essay

A Covenant Is An Agreement Between Two People Religion Essay A covenant is an agreement between two people or two groups that involves promises on the part of each other. The concept of covenant between GOD and his people is one of the most important theological truths of the Bible. A covenant, in the biblical sense, implies much more than a contract or simple agreement. A contract always has an end date, while a covenant is a permanent arrangement. Another difference is that a contract generally involves only parts of a person, such as a skill, while a covenant covers a persons total being.    In theology and Biblical studies, the word covenant principally refers to a number of solemn agreements made between God and the children of Israel, as well as to the New Covenant, which involves all who turn to God through Christ.  [1]   Firstly, the entire Bible Covenants can be viewed as Conditional and Unconditional Covenants. The unconditional Covenants are those covenants bound to deliver regardless of obedience or disobedience. God still fulfils these covenants with the Covenanted. Genesis 12:15 reveals; God grants Abram land and descendants without any specific condition being attached. While the conditional covenants (as shown in Gen. 17; the covenant of circumcision) are those with a condition attached. That is, this covenant will bring either blessing or cursing depending on obedience or disobedience. The Bible speaks of several different covenants, and the opinions of Bible Scholar differ in terms of grouping. However, the following are the generally accepted groupings: ADAMIC COVENANT: This can be thought of in two parts: the Edenic Covenant-Innocence. This is found in Genesis 1:26-30; 2:16-17. The Edenic Covenant outlined mans responsibility toward creation and Gods directive regarding the tree of the knowledge of good and evil.  [2]  The Adamic Covenant-Grace included the curses pronounced against mankind for the sin of Adam and Eve, as well as Gods provision for that sin as stated in Genesis 3:15. We see in this verse Gods plan for salvation through Christ. The phrase, you will strike his heel refers to Satans repeated attempt to defeat Christ during His life on earth. He will crush your head foreshadows Satans defeat when Christ rose from the dead. A bruise on the heel is not deadly, but a crush on the head is. Already God was revealing His plan to defeat Satan and offer salvation to the world through His Son Jesus Christ.  [3]  God finally fulfilled this covenant through Christ life, death and resurrection NOAHIC COVENANT: This was an unconditional covenant between God and Noah specifically and extended to humanity in general through Christ. This covenant has three parts: (1) God promised humanity that He would never again destroy all life on earth with the Flood. (2) God promised to preserve the seasons of the year. Each season will come in its time as long as the earth remains. (3) God gave the rainbow as a sign that He will keep the covenant. To this day, God has kept this covenant. The earths order and seasons are still preserved and the rainbow reminds us of Gods faithfulness to His Word. Christ, who is Gods Word is the preservation of the earth thus; God fulfilled this covenant through Christ. God blesses and commands Noah and his sons, that they should be fruitful and multiply, and populate the earth. He places all plants and animals under human command, forbids eating meat with the blood still in it and forbids murder ABRAHAMIC COVENANT: Genesis Chapters 12-17 show God giving Abraham several promises. He promised that He would make Abrahams name great, that he would have numerous physical and spiritual descendants, and that he would be the father of a multitude of nations. God also made promises regarding a nation called Israel. In fact, the geographical boundaries of the Abrahamic Covenant are laid out on more than one occasion in the book of Genesis. Another provision in the Abrahamic Covenant is that the families of the world will be blessed through the physical line of Abraham. Circumcision is to be the permanent sign of this everlasting covenant with Abraham and his male descendants and is known as the covenant of circumcision. To give Abrahams descendants all the land from the river of Egypt to the Euphrates. Later, this land came to be referred to as the Promised Land however the land specified by the Abrahamic Covenant also includes the modern nations of Saudi Arabia, Omen, Yemen, Turkey, Iraq, Syria, Lebanon , Jordan, Kuwait, UAE, and several other nations within the Middle East Region. To make Abraham a father of many nations and of many descendants and the land of Canaan as well as the entire middle-east to his descendant. Through Abrahams family tree, Jesus Christ was born to save humanity. Through Christ, all people and all nations of the earth can have a relationship with God and be blessed beyond measure. This whole covenant is fulfil through the life, death and resurrection Christ Jesus. MOSAIC COVENANT: The Mosaic Covenant was a conditional covenant that either brought Gods direct blessing for obedience or Gods direct cursing for disobedience upon the nation of Israel. Part of the Mosaic Covenant was the Ten Commandments found in Exodus 20. The history books of the Old Testament detail how Israel succeeded at obeying the law and how they also failed miserably at obeying the law. Deuteronomy 11:26-28 details specifically the blessing/cursing designed. Gods plan to save mankind and to maintain a perfect relationship with man failed, as man constantly breached the covenants and broke the laws. Man was charged to obey about 2, 713 Commandments, judgments and ordinance of God.  [4]  This plan for redemption was fulfilled in Christ (through Christ death on the Cross), who was the only human who obeyed and fulfilled all the laws. God promised to make the children of Israel His special possession among all people if they obey God and keep his covenant; to make them a kingdom of priests and a holy nation. To give the children of Israel the Sabbath as the permanent sign of this covenant DAVIDIC COVENANT: The Davidic Covenant amplifies the seed aspect which was detailed in the Abrahamic Covenant as revealed in 2 Samuel 7:8-16. God promised that Davids physical line of descent would last forever and that his kingdom would never pass away permanently. This kingdom, furthermore, would have a ruling individual exercising authority over it. There will come a time when someone from the royal line of David will again sit on the throne and rule as King. This was fulfilled in Christ Jesus as shown in Luke 1:32-33. During Jesus life, He was referred to as the Son of David (Christ Genealogy) thus fulfilling this covenant that David throne shall be established forever. Among theologians, the opinion is unanimous that Christ fulfils the Davidic Covenant. The book of the generation of Jesus Christ, the son of David, the son of Abraham  [5]   Thou Son of David, have mercy on us.  [6]   THE NEW COVENANT (COVENANT OF GRACE): The covenant of grace, then, spans the whole of redemptive history from Gen 3:15 till the coming of the Lord. Whereas in the Mosaic Covenant, salvation/blessing was to be merited by works; but in the Covenant of Grace it is received by faith alone in the works of Christ (death and resurrection). It is through faith in Christ as the second Adam, especially in His life, death and resurrection, that Gods people receive eternal life. This Covenant theology teaches that Jesus, as the second Adam, came to save lost sinners (Tim 1:15). His work is not simply to open up the possibility of salvation, but to save completely those who come to God through Him (Heb 7:24). That is why the writer of Hebrews declared: Neither by blood of goats and calves, but by His own blood He entered in once into the holy place, having obtained eternal redemption for us  [7]   The Christian New Covenant resembles the theological concept of a new relationship between God and man mediated by Jesus which necessarily includes all people, both Jews and Gentiles nations. Christians believe the New Covenant ends the original sin and profane death for everyone who becomes a Christian and cannot only be a renewal of the Mosaic Covenant since it seemingly accomplishes new things. Christian laws of faith claim that a New Covenant of the replaces/fulfils or completes Gods Mosaic covenant. The only reference in the Hebrew Bible that uses the wording new covenant is found in the Book of Jeremiah, Chapters 30-33 (Gods promise of restoration), (Jeremiah 31:31-34). The New Covenant is a covenant made with the nation of Israel which speaks about the blessings which are detailed in the Abrahamic Covenant. In the New Covenant, God promises to forgive sin, and there will be a universal knowledge of the Lord (verse 34). It even appears that the nation of Israel will have a spec ial relationship with their God (verse 33). The New Testament makes a clear distinction between Mosaic Covenant (Covenant of Law) and Covenants of Promise (Covenant of Grace). The apostle Paul spoke of these two Covenants, one originating from Mount Sinai, the other from the Jerusalem above (Gal. 4:24-26). Paul also argued that the covenant established at Mount Sinai, the Law, is a ministry of death and condemnation (II Cor. 3:7, 9) a covenant that cannot be obeyed because of mans weakness and sin (Rom. 8:3). But the Covenants of Promise (Eph. 2:12) are Gods guarantees that He will provide salvation in spite of mans inability to keep his side of the agreement because of sins nature. Christ death ushered in the New Covenant under which we are justified by Gods grace and mercy rather than our human attempts to keep the law. And Jesus Himself is the Mediator of this better Covenant between GOD and man (Heb. 9:15). Jesus sacrificial death served as the oath, which GOD made to us to seal this New Covenant. He is determined to give us eternal life and fellowship with Him, in spite of our unworthiness. As the Book of Hebrews declares, The word of the oath, which came after the law, appoints the Son who has been perfected forever (Heb. 7:28). This is still Gods promise to any person who turns to Him in repentance and faith. Under this New Covenant, GOD would write His Law on human hearts. This promised action suggested a new level of obedience, a new knowledge of the LORD, and a new forgiveness of sin. The New Testament, which itself means New Covenant, interprets the work of Jesus Christ as bringing this promised Covenant into being. In Luke 22:20, when Jesus ate the Passover meal at the Last Supper with His disciples, He spoke of the cup as the New Covenant in My blood. When the apostle Paul recited the tradition he had received concerning the Last Supper, he quoted these words of Jesus about the cup as the New Covenant in My blood (I Cor. 11:25). Jesus is referred to by the writer of Hebrews as the Mediator of the New Covenant (Heb. 9:15; 12:24). The new covenant, a better covenantestablished on better promises (Heb. 8:6), rests directly on the sacrificial work of Christ. The new covenant accomplished what the old could not: removal of sin and cleansing of the conscience (Heb. 10:2, 22). The work of Jesus Christ on the cross thus makes the Old Covenant obsolete (Heb. 8:13) and fulfils the promise of the prophet Jeremiah-Christ is the fulfilment of all the Covenants. CHINYERE C. CHUKWU

A Little Mistake - Original Writing :: Papers

A Little Mistake - Original Writing â€Å"Alex please report to the office, Alex to the office please,† blared over the loudspeaker into the English classroom. â€Å"Ooooooooohhhhhh!!!† the class replied in standard form, implying I must be in trouble. But I was in trouble and I knew it. I walked to the office and waited in a chair for the assistant principal to come and lecture me about how what I did was wrong. However, I wasn’t wrong, at least I didn’t think so. Tick-tock, tick-tock, seconds seemed like hours as I waited for my dreaded sentence. (What would it be? Detention for a week? A month? A year?) From one of the back offices, a big dark shadow moved closer to me. Suddenly, the shadow became Mr. Schuler, standing in front of me. â€Å"Alex, come in my office, please,† he said in his stern tone. Following him into the office, I felt like a midget next to his giant stature and was intimidated from all of the rumors that he was as strict as Miss. Trunchbell from Maltilda with his punishments. Mr. Schuler sat down shuffled through the disciplinary form that had been filed for me. â€Å"It says here that you left class without the teachers permission.† â€Å"Yes, that’s†¦part†¦of†¦what†¦happened,† I stuttered, while trying to hold back the tears from running down my face. It was my first time ever really getting in trouble at school and I feared my parents would kill me, plus sitting across from the beast we referred to as Mr. Schuler was a pretty intimidating situation of its own. â€Å"You know that was wrong, don’t you?† he replied. â€Å"Yeah,† I said, composing myself, â€Å"but there is an explanation for it. You see, I was working on this project and someone thought I was being mean to them, so they ripped up the paper that I had written all my notes on and I started yelling so the sub hollered at me to go to the office and I left the classroom and was going to come to the office

Abuse of monopoly power Essay

Imagine what it would be like if there was only one bakery in your home town, and no possibility of opening up a new one because of the fact that there are no shops for rent. People who are looking to get their hands on freshly baked bread would have no choice but to go to the one bakery. We say that the baker is a monopolist; that is, he is the only baker in the market and is thus able to set the price at whichever levels he wants. Chances are that the price of bread is going to be considerably higher than if the baker had to compete with others for consumers. The result, as this lesson deals with, is market failure as a result of the abuse of monopoly power. MONOPOLY POWER AND MARKET FAILURE A monopoly exists when there is only one producer of a certain product. Other firms are prevented from competing with the monopolist because of the very high barriers to entry. Because of this, the monopolist is a price setter – it can itself decide what price to charge so long as it covers the cost of production. It is often argued that Microsoft has a monopoly on the operating system market, making consumers pay a very high price for Windows as they buy a new computer. Another example comes from supermarkets, which may acquire a monopoly in a neighbourhood if planning permission to build other shops is denied. It can then sell the same products as it would sell before, but for a much higher price. Hence, in such markets, the price and quantity demanded of the product do not reflect a true equilibrium – abuse of monopoly power is a kind of market failure resulting from the ability to charge a higher price than it otherwise would. Moreover, the quantity on the market is restricted below what is socially optimum by the monopolist. This results in a welfare loss, as consumer surplus is not maximised, which is represented by the grey triangle in the diagram below. Examiner Tip However, in cases where we have a negative externality (e. g. pollution) it would actually be good to have a monopolist that restricts the quantity – the welfare loss would rather be a welfare gain in this case. Government intervention is common in the case of monopolies, if they abuse of their power and damage consumers’ welfare. Possible responses include: ?Legislation – competition policies to ensure that markets are not dominated by one firm only, as the EU proceedings against Microsoft show. ?Regulation – for example, planning regulations could be relaxed to allow more shops to open in the same area where the supermarket operates. ?Nationalisation – this is the case of national monopolies where the state takes over a business and regulates prices in the social interest. E. g. Following the financial crisis of 2008 banks, insurance companies and car manufacturers were nationalised in the USA and UK. ?Trade liberalisation – allowing foreign firms to compete in the national market contributes to breaking up monopolies that were formed due to the lack of internal competitors. What you should know ? Monopolies act as single producers in a market and can set prices and quantity. ?Their power may be abused, damaging consumers’ welfare. ?Government intervention can limit abuse of power through legislation, regulation, nationalisation and trade liberalisation.

Financial Analysis of Victoria Secret Essay

INCOME STATEMENT ANALYSIS Victoria Secret appears to be a profitable company. Victoria Secret is part of L Brands whose operating income was at $ 211 million, up by $24 million from the last quarter. Specifically at Victoria’s Secret, sales increased by 4% to reach 5.4 billion but operating income decreased by 6% to 1.71 billion. It appears that Victoria Secret’s major expense was their Cost of Goods Sold, COGS, which totaled at 1.3144 billion. The gross profit percentage as at February 2013 was 47.87% (NASDAQ, 2014). BALANCE SHEET ANALYSIS Assets of Victoria’s Secret have steadily increased in the last three fiscal years. As at November 2013, return on Assets was at 12.73% up from 12.2% in January 2013. Return on equities has been high as well, at 105.39% in January 2012, up from 44% in 2011. Liabilities have also sadly increased in the last four years. Expenses have increased from $630 million in August  2013 to $645 million in November 2013 (L Brands, 2014). The Cost of Goods Sold has decreased however, from $1.527 billion in August 2013 to $1.314 billion in November 2013. Total liabilities were at $7.456 billion in November 2013, up from $6.933 billion in August 2013 (NASDAQ, 2014). STATEMENT OF STOCKHOLDER’S EQUITY Retained earnings were in the negatives for Victoria’s Secret stockholders. As at November 2013 it was -$519 million. Common stock was at $153 million but treasury stock was at a negative of -$740 million (NASDAQ, 2014). STATEMENT OF CASH FLOWS The net cash provided as a result of operating activities as at January 2014was at 1.279 billion dollars, while the net cash provided as a result of investing activities at -$106 million (L Brands, 2014). The net cash provided as a result of financing activities was also at a negative at -$78 million. The negative cash flows brought about by investing and financing activities imply that they have cost the company more money in their undertaking than they have brought in. However, the large cash flows brought in by operating activities are more than enough to cover the losses brought about by the other categories, so the negative cash flows do not worry me too much. FINANCIAL RATIO ANALYSIS After conducting the financial ratios for Victoria Secrets, it is clear to me that they are able to fulfill consumer demands while maintaining financial stability. Their Liquidity Measures ratios suggests that the company is able to adequately pay for the liabilities while investing assets  in a strategic manner. Net Working Capital to Total Assets results show that Victoria Secret is able to efficiently turn assets and cover short-term liabilities. The company is in fair health, however there is a decline in 2011-2013, suggesting a slight trouble turning their assets into cash fast  enough to cover their liabilities. For their collection period it takes about 7-8 days for Victoria Secret to collect cash, meaning that they collect cash quickly for reinvestment purposes. Victoria Secret depletes and replenishes their inventory at least five times per year to satisfy their consumer demand. Fixed Asset Turnover for Victoria Secret proves that they are able to use their fixed assets effectively towards sales revenues. They are able to generate $4 to $5 of sales for every $1 that is invested in fixed assets. Their debt/leverage measures the low debt to total asset ratio implies that Victoria Secret assets are financed more through equity rather than debt and that they are using a conservative capital structure; ultimately, by keeping their debts low and manageable, they have a financial advantage. However, Victoria Secret may not be taking advantage of their increase profits that comes with financial advantage. Victoria Secret’s gross profit margin is above industry norms, indicating that Victoria Secret is generating strong sales prices that are relative to their cost of goods sold. Victoria Secret’s operating profit margin ratio shows that they have complete and effective control of their operating costs, however their sales could be increasing faster than their operating costs. The net profit margin ratios suggests that Victoria Secret has a some cushioning that will help protect them in case of hard times. Victoria Secret is effectively managing and turning assets into generating earnings and income on new investments. Victoria Secret makes at least $2.50 per share and is generating a significant dividend for their investors, which leads investors anticipating a higher future growth. SALES FORECASTING During performing the sales forecast for Victoria’s Secret, I learned that for most part that Victoria’s Secret has an incline in their profits. They have however hit a few bumps here and there. The causes of this could be more cost for Victoria’s Secret purchasing materials and production of their products. Another reason for this could also be a slower rate in sales than usual. Like I said, for the most Victoria Secret has seen an incline in their profits and sales throughout the years. Performing the percentage of sales forecast for Victoria’s Secret, I established a forecasted sales of 5  percent which means that they would have to have a sales of $2,808 compared to their last years $2,675. This is a very feasible number for Victoria Secret to achieve, considering that majority of their money in assets outweighs their liabilities. The EFN, External Financing Needed, for Victoria Secret is $2,855. This indicates that Victoria Secret would need to obtain External Financing Needed to achieve the $2,808 forecasted sales level, which 5% more of their current sales revenue. SUBSTANTIAL GROWTH RATE ANALYSIS Victoria Secret has had a steady growth over the analyzed period. It has not been too slow or too fast, but one that shows that they are adequately handling the progressive growth of the company. This shows that Victoria Secret is paying close attention to all details of the organization. CONSEQUENCES FACED BY FIRMS THAT GROW AT A RATE THAT IS NOT CONSISTENT WITH THEIR SUSTAINABLE RATE Growing too fast as crazy as it may sound, does have potential consequences for the organizations. These consequences could come in the form of the organization not being able to fulfill customer demand, hire and/or train capable employees to accommodate for the growth, and difficulty in obtaining cash to support the growth. When an organizations too fast it will need more capital to support the growth. On the reverse side, a growth too slow can be as destructive as growing too fast. Slow growth can have the consequences of wanting or needing to expand their organization, however if they do decide to expand without the support of a sufficient revenue; then the organization runs into potential trouble with investors. If Victoria Secret grew at a rate where it was difficult for them to be consistent with their sustainable rate, then they would have either to find additional funding or consider eliminating some of their debt. IF THE FIRM GREW AT A RATE ABOVE OR BELOW THE SGR, HOW DID IT FINANCE ITS EXCESSIVE GROWTH OR REWARD ITS STOCKHOLDERS FOR THE UNDERPERFORMANCE Since Victoria Secret has a sustainable growth rate that is steady, they did not need to finance an excessive growth or reward their stockholders for an underperformance. Victoria Secret’s continued growth and success will depend on their ability to open and operate new stores and to expand and even remodel existing stores in a manner that is not only timely but also on a profitable basis. Accomplishing their new and existing store expansion goals will depend upon a number of factors, including their ability to collaborate with developers in order to obtain suitable sites for new and expanded stores, the hiring and training of qualified personnel, and the integration of new stores into existing operations. However, there are risks associated with these growths, which could be having a negative effect on their results of operations, financial condition and cash flows. FINAL ANALYSIS Upon my initial analysis on the financial performance of Victoria Secret, I assumed that were a profitable company. After performing the financial ratios analysis, forecast of sales analysis, and the substantial growth analysis; my assumption proved to be correct. Victoria Secret proves to be the most profitable business owned by L Brands. Granted Victoria Secret has had their fair share of bumps in the road, but because of their strategic financial plan, those bumps did not have a great deal of import financial for them. What I have learned from doing the financial analysis on Victoria Secret is that they are an organization who takes knowing their financial performance seriously. They know, understand, and most importantly can successfully create financial strategic plans can serves as a tool for their success, as well as prepare them in case of a â€Å"rainy day†. This is where majority of organizations fail in performing a financial analysis and preparing a financial strategic plan. Most organizations do not want to believe or even admit to the potential of having a â€Å"rainy day†, because in their eyes it sets them up for failure. Victoria Secret obviously knows the importance of embracing the idea of a â€Å"rainy day† and prepares for it, which is one of the many reasons they are such a successful organization. Conducting the financial analysis on Victoria Secret also proves that my prediction about how they are able to turn assets into income to can pay for their liabilities as well as have enough left over to reinvest back into the organization. Victoria Secret clearly understands that growth is crucial for the success of the organization while at the same keeping their growth maintainable without getting themselves into financial trouble. It is clear that Victoria Secret knows the importance of knowing how to do a financial analysis of their organization’s financial performance and using the analysis to build a strategic financial plan. I do believe that if Victoria Secret keeps a diligent watch on their financial performance and does regular financial analysis, they can continue to be a force to be reckoned with that they have been in the retail industry. References Baral, S. (2013). _The Challenge of Attaining Sustaintable Growth ._ Retrieved from http://prj.co.in/setup/business/paper77.pdf Business Town. (2003). _Pro Forma Balance Sheets._ Retrieved from http://www.businesstown.com/accounting/projections-balance.asp Business Town. (2003). _Pro Forma Income Statements._ Retrieved from http://www.businesstown.com/accounting/projections-statements.asp Hoovers. (2014). _Victoria’s Secret Stores, LLC. ._ Retrieved from http://www.hoovers.com/company-information/cs/competition.Victorias_Secret_Stores_LLC.d793812b13b17deb.html L Brands. (2014). _Financials._ Retrieved from http://www.lb.com/investors/financial_information/financials.aspx L Brands. (2014). _SEC Filings._ Retrieved from http://www.lb.com/investors/company_info/sec_filings.aspx Lane, M. (2014). _Percentage of Sales Method._ Retrieved from Business Finance Online: http://www.zenwealth.com/businessfinanceonline/FF/PercentageOfSales.html Lutz, A. (2013). _Why The Lingerie Industry Can’t Compete With Victoria’s Secret._ Retrieved from http://www.businessinsider.com/victorias-secret-will-beat-competition-2013-9 NASDAQ. (2014). _L Brands, Inc. Stock Report._ Retrieved from http://www.nasdaq.com/symbol/lb/stock-report