Report into Barclays Financial Performance Analysis

Report into Barclays Financial Performance Analysis The following report is aimed at comment the findings of Barclays PLC financial performance analysis. The first section presents an internal and external analysis. The second comments a series of financial ratios. Finally, the last section concludes. Introduction Banks are an important part of the financial system. They channel financial resources from individuals who have surpluses to individuals who lack capital. Banks transfer these assets in the form of loans. Loans are evaluated and classified according to the default probability (risk). In this manner, Banks assure that lenders invest their wealth in trustable projects, that is, economically viable (Arnold, G., 2008). Banks, then, subside the research task from lenders and allow them to get a safe and constant return rates in a determined timeframe and conditions (Valdez, S., 2007). As any business, Banks are aimed at increasing the wealth of the owners. Banks employ accounting systems and economic models to measure their financial performance. Accounting and economic models evaluate: 1) whether the wealth of the owners is augmenting, and 2) at what extent (Atril, P., McLaney, E., 2008). They provide several financial indicators which help business management to control the enterprise performance; among them, the financial ratios are widely used. The purpose of this report is to comment the findings discuss how bank (Barclays PLC) overall performance should be evaluated. The first section presents a review of Barclays internal and external performance. The second section evaluates Barclays financial performance. Finally, the last section concludes. A review of Barclays internal and external performance Barclays is one of the worldwide leaders in financial services. It was founded in 1690 in the UK. Barclays has operations in 50 countries spanning over Europe, the US, and Africa. Its headquarters are located London, UK and employs 153,800 people worldwide (BARCLAYS, 2009). Barclays retail banking includes personal customers, home finance, local business, consumer lending and financial planning (DATAMONITOR, 2010). Internal performance Barclays capital strength has provided the company with resilience to cope adverse market conditions. For example, the companys liquidity pool increased to  £127 billion at 31st December 2009 from  £43 billion in 2008. Hence, cash flows allow the bank to negotiate better selling conditions in their product portfolio (BARCLAYS, 2009). Barclays has kept its lending growth volume regardless global economic situation. The bank has reduced its derivative assets; therefore, its balance sheet size has been reduced (BARCLAYS, 2009). However, Barclays operations are threatened by its weakness in cost management. Its subsidiaries in Western Europe registered detrimental costs in 2009. Thus, the bank may face difficulties in its expansion plans (BARCLAYS, 2009). On the other hand, Barclays mobile banking services have experienced a significant growth due to smart phones popularization. This new service portfolio is likely to reduce workload in banks branches; therefore a significant cost reduction may be achieved during the fiscal year 2010. Even though, internet and credit transaction fraud has also risen. Hence, information security investments may undermine cost management accomplishments (BARCLAYS, 2009). Barclays is pursuing to expand its operation in India and UAE. Even the bank has been present in both countries since 1970s; it does not have a considerable penetration. These markets have attractive conditions to increase the bank market share. Therefore, an expansion strategy for India an UAE is foreseeable (BARCLAYS, 2009). External performance Barclays impairment losses in 2009 affected banks profitability. This effect was present despite balance sheet size reduction. Disposal of these legacy assets is one of the main banks objectives for fiscal year 2010 (BARCLAYS, 2009). UK government legislation regarding Asset Protection is aimed at improving customers trust by clearing up banks balance sheets. However, there is no a complete strategy on this matter. These uncertainties add pressure on financial markets, making difficult banks capitalization. Besides, a more competitive environment will be roomed (BARCLAYS, 2008). Finally, mergers and consolidation in banking industry will make more difficult, for Barclays, to adjust pricing levels and protect their market position. However, Barclays has the resources and skills to tackle challenging business environments (BARCLAYS, 2009). Barclays financial performance ROE ROE ratio presents negative trend in the last three years. The cause of this behaviour was the increase in the operation costs, 25%, plus a drop of 25% in the interest income. The net effect was a drop of drop of 77% in the net income in 2009. In 2008, Barclays acquired Lehman Brothers, thus, the total financial figures of the bank were affected. This buy clarifies the abrupt changes in costs and interest incomes. Positive results of this acquirement may be reflected in one or two years; it can be said that this normal behaviour of acquirements (BARCLAYS, 2008). ROA ROA was also hit by the Lehman Brothers effect; the indicator fell 50% from 2007 to 2009. Total assets were duplicated during 2008 and the net income after taxes was a little bit higher than in 2007. However, in 2009, Barclays made a restructuration in its total assets and was able to reduce them a 44%, that is, total asset were almost the same than in 2007. Unfortunately, net income after taxes also dropped 44%. ROA indicator was, then, almost the same than in 2008. ROA hid the company efforts to align the bank to the pre-acquisition levels (BARCLAYS, 2009). Net Interest Margin Net interest margin improved in 2009. It surpassed 2007 value. Assets are producing more Interest profit than in 2007. This can be interpreted as a positive effect of the Lehman Brothers acquisition, since the asset combination is generation more income. However, the increment in operation costs undermined the net effect of these results (BARCLAYS, 2009). DuPont This indicator clearly shows the Lehman Brothers acquisition effects. The equity multiplier registered a growth during 2008. The net profit margin was almost 300% higher than in 2007. However, the asset utilization went down 518%. The net effect was a low ROE (BARCLAYS, 2008). In 2009, the equity multiplier, and net profit margin felt down 49.48%, and 63.45% respectively; whereas, asset utilization grew 281%. Even though, ROE ratio was the lowest one in the studied period. This erratic behaviour was caused by the total asset amount. Each indicator by itself does not provide enough information regarding how well the company is doing it. For instance, asset utilization seems to be worst than in 2007, therefore, the implication would be that acquisition was a bad deal for the bank. In the case of the Equity multiplier, the conclusion would be the same. But, the net profit margin figure seems more realistic and clearly shows that a growth of 10% in two years justify the buy (BARCLAYS, 2008). The ultimate result is indicating that the new company is expected to have a return in equity of 6.28%. However, this metric does not include dividend amounts; thus, investing in the new Barclays firm may still be attractive. DuPont exercise shows that any indicator does not have all information at glance, thus, they should be used in combination in order to provide relevant and useful information. By decomposing ROE in three different ratios, it is possible to understand the effect of total assets and the operating revenue into the companys investing profile. Besides, it is clear the effect of the increment in the cost of the sales and operations. From the graph, it can be seen that Lehman Brothers firm made a massive sales and their expenses were under control. However, it can be inferred that liquidity may be one of the relevant factors that pushed former owners to sell it. This thesis is aligned to the main causes of the 2007s global financial crisis. Therefore, the acquisition w as justified and was a good opportunity to improve the banks financial performance (BARCLAYS, 2009). Net Interest Margin This ratio shows a negative trend. The lowest value was registered in 2008. However, during this year the interest income registered the highest value during the period. In 2009 the interest income dropped 24.18% but asset were reduced almost 50%. Even though, they continued 12.34% above the 2007 value. The net effect was 25.24% below the 2007 mark. It is important to say that 2009 is a good result and shows how the bank is trying to move the new company to the levels in which the former one was operating. It can be inferred that the strategy is to stabilize the bank and then increase the profits. Acquisition was, again, the event that impacted the ratio behaviour (BARCLAYS, 2009). Earning base Earning base is indicating that bank is acquiring more assets which are directly implied with the profit generation, that is, that it is lending more money to customers. It is clear that in 2008, due to acquisition, the bank owned a series of assets which were overloading the cost structure. In 2009, the situation improved since assets were re-structured and their number was reduced. This indicator should not be higher than 50%. The rational is that banks earning assets are loans, thus, bank should ensure they payment of those loans whit its assets. Therefore a healthy ratio level may be around 50% (BARCLAYS, 2009). Operating Efficiency Ratio and Wage ratio The operating efficiency ratio shows that bank is struggling with its operating expenses. In 2007, the ratio was 187%, which means that bank was investing two resource units to produce one. In 2008, this indicator grew almost 2.5 times. However, the bank made a very good effort and reduced the figure 32%. When wage ration is included in the analysis, it presents a drop in 2008, due to redundancy. However, the operation expenses did not diminished; therefore the operation efficiency ratio did not improve. It can be implied that work force is not the biggest expense, as many author claim, but a combination of inefficient process and asset sub-utilization. Unfortunately, annual reports did not provide deep information (BARCLAYS, 2008, 2009). Interest Income / Total Assets and Interest Rate Risk Ratio The first ratio provides information regarding how much interest income is produced by the total assets that bank owns. This indicator shows a growing trend with a little drop in 2008 due to the total assets acquired from Lehman Brothers. Thus, Barclays is improving its asset utilization. Talking about interest risk ratio, this indicator should be ideally around 100% to ensure that all loans are backed up with assets. However, the bank registered values below 10%. On the other hand, this indicator also shows a growing trend, which means that this figure is going to improve in the future. This indicator also supports the 2008 acquisition (BARCLAYS, 2009). Liquidity Risk Ratio Cash is the blood of the business. This ratio is relevant because indicates the capacity of the bank to convert its asset in cash. This indicator showed a negative trend with a peak in 2008. Its value has never been below 90% which indicates that bank has no cash flow issues. However, it highly depends in the asset restructuration. According to the 2009 annual report, asset management is one of the key objectives of the current management board. Thus, liquidity risk ratio will improve during the next years (BARCLAYS, 2008). Capital Risk Ratio Capital risk ratio shows at what extent the bank is prepared to afford its long term compromises. Values on this indicator shows that bank is in a very good position since its long term compromises do not represent a high percentage of its total assets; the lower this indicator the best. However, it shows a growing trend accelerated by the 2008 acquisition. It can be inferred that management team is trying to either improve the bank resource availability, by long-term instruments, or restructuring the acquisition cost. The peak in 2008 can be explained by the heterogeneous asset combination post-acquisition (BARCLAYS, 2008, 2009). Conclusions After analysing Barclays bank ratios, it can be inferred that the acquisition of Lehman Brothers was an organic growth during crisis times. Thus, Barclays took advantage of the economic situation in 2008. Its solid cash figures allowed the bank to reject the bail-out plan from the UKs government. This action increased the customer preference for the bank. After acquisitions, the ratios tend to show bad results. However, this is somehow expected, since new components are added to the operation and a new organization is created. In the case of Barclays, these variations were not significant to the overall company performance. Finally, internal and external performance measurement is a complementary part of the ratio analysis. Ratio analysis is highly dependent on accounting information and the standards to gather that info. Thus, the results may vary if another set of accounting rules is applied. Internal and external performance measurement provides the background information to understand the number, trends and behaviours of the ratio result. Hence, both analyses are complementary rather than exclusive. Ratios provide a standard and normalized way to compare and analyze information, but they are meaningless by themselves. Ratio value is important, but it adds nothing to management process if it is not translated into coherent and relevant series of events which explain the root cause of that percentage. Thus, a good selection of indicator and measurements will guide the company to better results.

Glass Menagerie and Streetcar Named Desire - Comparing Amanda Wingfield and Blanche Dubois :: comparison compare contrast essays

A Comparison of Amanda Wingfield And Blanche Dubois In today's rough and tough world, there seems to be no room for failure. The pressure to succeed in life sometimes seems unreasonable. Others often set expectations for people too high. This forces that person to develop ways to take the stress and tension out of their lives in their own individual ways. In the plays "The Glass Menagerie" and " A Streetcar Named Desire" written by Tennessee Williams, none of the characters are capable of living in the present and facing reality. Two of the characters are Amanda Wingfield and Blache Dubios. In order for these characters to deal with the problems and hardships in their lives they retreat into their own separate worlds of illusion and lies. Amanda Wingfield is mother of Tom and Laura. She is a middle-aged southern belle whose husband has abandoned her. She spends her time reminiscing about the past and nagging her children. Amanda is completely dependent on her son Tom for finical security and holds him fully responsible for her daughter Laura's future. Amanda is obsessed with her past as she constantly reminds Tom and Laura of that " one Sunday afternoon in Blue Mountain when she once received seventeen gentlemen callers" (pg.32). The reader cannot even be sure that this actually happened. However, it is clear that despite its possible falsity, Amanda has come to believe it. Amanda also refuses to acknowledge that her daughter Laura is crippled and refers to her handicap as " a little defect-hardly noticeable" (pg.45). Only for brief moments does she ever admit that her daughter is crippled and then she resorts back into to her world of denial and delusion. Amanda puts the weight of Laura's success in life on her son T om's shoulders. When Tom finally finds a man to come over to the house for diner and meet Laura, Amanda blows the situation way out of proportion. She believes that this gentlemen caller, Jim, is going to be the man to rescue Laura. When in fact neither herself nor Laura has even met this man Jim yet. She tries to explain to Laura how to entertain a gentleman caller; she says-talking about her past " They knew how to entertain their gentlemen callers. It wasn't enough for a girl to be possessed of a pretty face and a graceful figure although I wasn't slighted in either respect.

Everything Happens For a Reason Essay

â€Å"I believe that everything happens for a reason. People change so that you can learn to let go, things go wrong so that you appreciate them when they’re right, you believe lies so you eventually learn to trust no one but yourself, and sometimes good things fall apart so better things can fall together.† – Marilyn Monroe. I believe in everything happens for a reason. Have you ever thought about everything that takes place might have a reason? Day by day you make mistakes; you say the wrong things; you show off; you make someone else smile; you do a good deed; etc. But, those have reasons. You make a mistake because you don’t understand or didn’t pay attention; you make someone else smile because you have a good heart; you show off because that’s what everyone does; you do a good dead because that’s who you are. Everything happening for a reason is a way of coping with the disasters in someone’s life. People tend to question if everything does happen for a reason and that’s because most refer to a higher power such as; God. They tend to wonder if the drastic situations that happen, really did have a reasoning behind it. When someone tends to question a reasoning, most of the time, it’s because the death of a loved one. I have these feelings a lot. Why ? My great grandfather died before I was born from suicide and my best friend also committed suicide last year. 10 years ago; my grandfather died because he was a alcoholic, that same year my uncle passed from a blood clot in his brain. My other grandfather passed away 2 years ago from pancreatic cancer. Sometimes I tend to wonder why these things happen to people who mean so much to me and then other times I get it together and say it was time. The things that tend to happen in people’s lives always have a positive and negative effect. Most people tend to look at the negative effect, instead of coping with the positive effects. Most negative effects deal with someone lying to you or leaving you. You learn to never trust anyone and that’s your way of coping. Where if you were to think of the positive effects, they lied so you would learn to strive for the truth; they left so that way the bad things could fall apart and the good things fall together. â€Å"Everything happens for a reason, though the reason is not always as clear as would like it to be.†-Unknown

Rice and Genetic Engineering essays

Rice and Genetic Engineering essays Rice is the main food for about one-third to one-half of the world's population. A mature rice plant is usually two to six feet tall. In the beginning, one shoot appears. It is followed by one, two, or more offshoots developing. There are at least five or six hollow joints for each stalk, and a leaf for each joint. The leaf of the rice plant is long, pointed, flat, and stiff. The highest join of the rice plant is called the panicle. The rice grains develop from the panicles. (Jodon, 300) Rice is classified in the grass family Gramineae. Its genus is Oryza and species O. sativa. It is commonly cultivated for food in Asia. Some varieties of rice include red rice, glutinous rice, and wild rice. (Jodon, 303) The kernel within the grain contains most of the vitamins and minerals (298). The kernel contains thiamine, niacin, and riboflavin (299). Rice has many enemies that destroy a majority of the rice crops. The larvae of moth, stem borers, live in the stems of the rice plants. Some insects suck the plant juices or chew the leaves. Birds, such as bobolink, Java sparrow, or paddybird, would eat the seeds or grains. Disease causing factors such as fungi, roundworms, viruses, and bacteria also destroy the rice plants. Blast disease is caused by fungi which causes the panicles containing the grains to break. (Jodon, 300) There are various types of rice grown all over the world. A majority of rice grown is cultivated rice. When rice is grown with water standing on the fields, it is called lowland, wet, or irrigated rice. Rice plants grown in certain parts of Asia, South America, and Africa are called upland, hill, or dry rice because they are raised on elevated lands that cannot be flooded, but with plentiful rainfall. Wild rice is grown along lake shores of Canada and the Great Lakes. It is usually eaten by people in India. Scented rice is the most expensive because is has long grains and tastes like p...

Business turnaround

Business turnaround The Renault company best known for its innovative and design was to undergo a turnaround with the Japanese motor giant, Nissan. The Nissan has a prolonged fame of producing quality engine systems. The two companies agreed to form a major strategic alliance. This alliance would be the fourth largest car making company across the globe. The Renault was to assume $ 5.4 billion of Nissan’s debt.Advertising We will write a custom coursework sample on Business turnaround Renault and Nissan company specifically for you for only $16.05 $11/page Learn More This alliance made sense for both sides since the Nissan Company’s strengths would cover the gaps of the Renault company and vice versa. The Renault was to reduce the much debt owed to the Nissan industry. The success of the alliance would purely depend on the conversion of the Nissan of the Nissan industry into a profitable and rising business as proposed by Schweitzer. An earlier attempt by the Ren ault Company to merge with Volvo was not successful due to the traditional state control of the player countries. Before the idea of turnaround had emerged, Nissan Company was really struggling to earn the estimated profits. The cost of making a Nissan vehicle was extremely high hence; its market price for its products were high compared to other firms in the industry. The company stock had to accumulate since it would pile more than million more cars each single year. This made the company accumulate more and more debts. In order for the company to protect its identity and maintain self-esteem for its people merger was the most appropriate option as at that time. Currently, the turnaround has achieved more success beyond its imagination. Nissan is very profitable, and its identity has been on the upward growth. The successful turnaround of the two companies is due to the mobilization of the Nissan managers through cross-functional teams meant to spearhead radical changes and mainte nance corporate culture by the Renault Company. The Nissan Company made new culture by dramatically breaking its past traditional culture. This enabled it to save money and alienate form the persistent loss making habit associated with the former method. The company had to dismantle the Keiretsu investments to realize its capital locked up in these in this real-estate investment. In a close analysis, the major problem of the Nissan Company was not only financial constraint but also cultural difficulties. Its older employees stuck down more money and power than they did actually perform breeding complacency to the company hence undermining its competitiveness. This culture made the company realize more loses, as its customers did not consider how the company undertook the process. However, what the customer required was well-designed and quality products at affordable prices. The company had no choice but to drop this culture and ditch the seniority rule. The company also revamped it s compensation system and focused on performance. The company also had another culture of blame where in the case of failure it was due to another persons fault.Advertising Looking for coursework on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The success of such turnaround is ensured by building a trust through transparency within the operations of the two parties. In this alliance, building transparency was through keeping promises and providing totally clear and verified reports. The transparency was through ensuring each party knew what the other was doing and had a record the expected outcome. The alliance has moved form cross-function to cross company. The two companies had to set up series of joint ventures and formed legal structures that effected the cross-company plan. The companies set respect as the motivating factor for their combined dealings. Since the Renault was not the Nissan’s prefer red partner bestowing respect was an important aspect for long-term friendship. Generally, Nissan’s identity and culture have been the main cause of its success. The relationship between the two companies has grown greatly despite the fact that at the inception Nissan was more of a leaner than the Renault.

Clostridium tetani Essay Example | Topics and Well Written Essays - 1250 words

Clostridium tetani - Essay Example The author has rightly presented that Clostridium tetani is obligate anaerobe and doesn’t grow in the presence of oxygen. Optimal conditions for growing this bacterium are temperature of 37 degrees Celsius, with PH of 7.4. It grows on different nutrient media including agar enriched with blood. When cultivated on agar enriched with blood it manifests alpha hemolisis, but with prolonged cultivation it produces beta hemolisis. Because Clostridium tetani is mobile bacteria and has flagella when cultivated produces the effect of swarming and tends to spread over the complete area of the culture. When cultivated produces very thin and see-through layer of bacteria that is very hard to notice with a naked eye, except on the edges of the colonies. It is difficult to obtain a pure culture of Clostridium tetani, this is why method called Fildes technique is often used, when the bacteria is inoculated on a small area on an agar plate and after incubation of 10 hours another subcultures are made from the edge of the swarming area that is constituted mostly of Clostridium Tetani. In suboptimal conditions, Clostridium tetani forms spores that are relatively resistant. Spores are killed in boiling water for 10-15 minutes, and in the moist heat of 121 degrees Celsius after 20 minutes. Based on the agglutination process Clostridium Tetani is classified in 10 serological types (only type IV doesn’t have flagella and is not mobile).... It is protein based molecule with molecular weight of 150 kDa (Kilo Daltons) and is constitutes of two parts, heavier or B chain with weight of approximately 100 kDa and lighter A chain with molecular weight of 50 kDa. Heavier B chain of this toxin bonds to the cell membrane and helps chain A to enter the cytosol of the cell (Farrar et al. 2000). The A chain than migrates through the axons to the central nervous system. Lighter A chain of the tetanospazmin toxin in the CNS impairs the release of inhibitory neurotransmitters in the brain (GABA-gamma aminobuteric acid and glycine) by degrading protein called synaptobrevin (small membrane based protein). Consequence of this effect is hyperactivity of the skeletal muscles in the body and development of muscle contractions and muscle spasm (Schiavo et al. 1992). Infection with C Tetani may cause development of condition called tetanus. It is disease that is characterized by presence of generalized spasms of the skeletal muscles in the bod y that is produced by the tetanospasmin toxin. It is caused when a wound is contaminated with spores of Clostridium Tetani. C Tetani are widespread bacteria that are present in the soil, dust, manure of domestic animals, our clothing and in about 20 percents of human gastrointestinal tract (Bleck 1995). If the wound is deep enough spores of C. tetani in anaerobic conditions can develop in viable bacteria that start to release toxins. Toxins are released when the bacteria are destroyed and bacterial cytosol along with toxins is released into the human tissues. Incubation period between the infection and occurrence of first symptoms ranges between 3 and 21 days, but that depends mostly on the site of primary infection. As early sign patients may report dysphagia and sore throat and some

How Humanism had Impact on Italian Jews Research Paper

How Humanism had Impact on Italian Jews - Research Paper Example It is not dependant on divine notions of reality. Humanity provides human beings the rights and privileges to defend individual beliefs and interests. This paper focuses on the impact of humanism on the Italian Jews in the fifteenth century. Humanism a cultural, literary and scholarly movement The concept of cultural humanism was originated in the European Age of Enlightenment in the eighteenth century. The Western and Central Europe stepped towards the modern world from the medieval world between the fourteenth and eighteenth centuries. During this time the spirit of cultural humanism was originated by the Renaissance and was adopted by the Protestant Reformation. The power of the Church and the noble class was lost as doubts fell on â€Å"old secular and religious authority†3. The Reformation together with the Enlightenment initiated the developments as â€Å"religious liberty, pluralism and religious toleration†4. At the end of eighteenth century there was a restruct uring of society. This was influenced by the French and American revolutions. Religion was no longer the center of political social structure as all religions became equal in the eyes of the law5 Renaissance humanism was a cultural, literary and scholarly movement. It embraced academic disciplines like â€Å"grammar, rhetoric, poetry, history and moral philosophy†6. ... According to Edwin Wilson, humanism was not the right term used by the literary humanists because their position was exclusive. These humanists did not advocate changes in humanism or society. While the religious humanists believed that scientific knowledge would play a major role in development of human life, the literary humanists did not support this theory. They overtly rejected science. Dr. Firkins of Chicago University described literary humanism as having a â€Å"background that is scholarly, its basis is introspective and retrospective; it looks into its own soul†9. Literary humanism embraced the study of non-science subjects like philosophy, history and literature. It focused on literary culture and encouraged people to improve their lives through literature. It has been seen that religious humanism is often mistaken as part of literary humanism movement10. Scholarly humanism was an important part of the Renaissance movement in Europe in the medieval period. It was di sregarded by the historians of that period as it was seen asâ€Å"degeneration into technicalities†11. Scholarly humanism was the â€Å"first expression† of scientific humanism12. It went through a development process for two centuries until it was met with doubts and controversies in the early fourteenth century. It again emerged in scientific development during the nineteenth and twentieth centuries. Humanism viewed grammar as the base of education as it taught the students the regulations of speech and writing in languages like Latin and Greek. Grammar also helped the students get knowledge of â€Å"classical Greek and Latin prose and poetry†13. Based on this the students were adequately