StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Identifying Long Term Trends SLP - Essay Example

Cite this document
Summary
As company expansion into other regions remains a critical decision to Fedex Corporation, the financial managers should take decisive steps to ensure success because the expansion process is not risk free. In there expansion to Canada finance managers need to consider several…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER95.6% of users find it useful
Identifying Long Term Trends SLP
Read Text Preview

Extract of sample "Identifying Long Term Trends SLP"

FedEx Corporation FedEx Corporation (Forbes, Balance Sheet Value as at 31stDecember Market value as of 09 March Costof CapitalShort term debt Long term debt 1Long term debt 2Long term debt 3Preferred shares Common Equity428,00091.7916.75%$428,000$1,251,000$1,367,000$1,667,000$2,557,000$15,917,000 As company expansion into other regions remains a critical decision to Fedex Corporation, the financial managers should take decisive steps to ensure success because the expansion process is not risk free.

In there expansion to Canada finance managers need to consider several economic variables including interest rates, inflation rate, unemployment rates, exchange rate, real gross domestic product, and the level of stock market as a way of assessing the markets future conditions while establishing there business in the region. Fedex corporation may not have sufficient funds to fully invest there business in Canada, and as a result the financial managers may decide to source some funds from a financial institution.

However, these funds will be associated with an interest rate set by the lender. During inflation period, the interest rates will tend to be higher, this will affect the amount of interest that will accrue to the loan borrowed (Mankiw, 2012). Financial managers of Fedex corporation should therefore, consider interest applicable before deciding where to source there funds. As an economic variable, the stock market affects FedEx Corporation, Canada’s expansion program. This is because the stock market index based on Canada’s stock exchange gives a prediction of the expected future value of stock prices.

In case, there is a high value index FedEx Corporation should continue to carry out its expansion to Canada because the financial managers expect high profits as a result, of rapid economic growth accompanied by low levels of unemployment. Financial managers need to also determine the rate of inflation in Canada before carrying out there investment. If inflation is high it then means that consumers prices will be high, and in turn will affect how they spend there money (Mankiw, 2012). If inflation is high FedEx Corporation will fix the prices of there services high, and as a result, consumers will not use the services because they cannot afford it.

During inflation, it is extremely difficult for FedEx to determine how much income to generate, this is because it is difficult to determine the demand for there services at the higher prices (Mankiw, 2012). In addition, the financial managers of FedEx Corporation should focus on the trends of the real gross domestic product as it gives a measure of what the economy produces goods and services besides giving an accurate measure of changes in the price levels. In addition, the financial managers of FedEx Corporation should take into consideration the changes in Canada’s unemployment rate.

With both cyclical and frictional unemployment affecting the customer’s disposable income, there is a need to familiarize with Canada’s unemployment rate. More importantly, the financial manager of FedEx Corporation should find out Canada’s unemployment rate, as it depicts the productivity of the country’s workforce that affects the economy (Baumol & Blinder, 2012). Just as FedEx Corporation intends to expand into Canada the expected changes in the exchange rate are more likely to affect the expected profits.

More significantly, the financial managers should take into consideration the difference between the nominal exchange rate and the real exchange rate (Baumol & Blinder, 2012). If the domestic currency is expected to appreciate, the financial managers of FedEx Corporation should undertake the global expansion program. This is because the exported services offered by them will be cheap as compared to domestic made goods thus, boosting its production. In conclusion, it is essential for the financial managers of FedEx Corporation to consider the effects of the economic variables on the expansion plan.

This is because the economic variables affect the economic growth and environment in terms of the growth expansion strategy. Because the focus, of FedEx Corporation is to set high levels of profits it should take decisive steps to ensure success because the expansion process has minimal risks. ReferencesBaumol, W. & Blinder, A. (2012). Economics: principles and policy. Mason, OH: South-Western Cengage Learning.Forbes.com (2012). FeDex Corporation. Retrieved March 12, 2012, from http://finapps.forbes.com/finapps/jsp/finance/compinfo/FinancialIndustrial.jsp?tkr=fdx&period=qtrMankiw, N. (2012). Principles of economics.

Mason, OH: South-Western Cengage Learning.

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Identifying Long Term Trends SLP Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Identifying Long Term Trends SLP Essay Example | Topics and Well Written Essays - 500 words. Retrieved from https://studentshare.org/business/1590581-identifying-long-term-trends-slp
(Identifying Long Term Trends SLP Essay Example | Topics and Well Written Essays - 500 Words)
Identifying Long Term Trends SLP Essay Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/business/1590581-identifying-long-term-trends-slp.
“Identifying Long Term Trends SLP Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/business/1590581-identifying-long-term-trends-slp.
  • Cited: 0 times

CHECK THESE SAMPLES OF Identifying Long Term Trends SLP

The Economic Environment of the Chinese Foodservices

There are ample market opportunities in China based largely on social trends of restaurant consumption that are favorable for launching a new fast-food brand with sufficient incomes to consume under a moderately-priced business model.... The paper 'The Economic Environment of the Chinese Foodservices' gives detailed information about an ideal market expansion strategy, which based on economic, political and cultural issues that are largely favorable for sustaining market growth in the country....
9 Pages (2250 words) Term Paper

Challenges of Information Technology

The paper "Challenges of Information Technology " says about the IT systems strategy of Microsoft – a major competitor in the global application software industry; reference is made not to the parent firm, based in the USA, but, to its UK subsidiary.... hellip; The growth of Microsoft Corporation in the British market has been closely related to the ability of its leaders to develop strategic plans that can be easily transformed in order to meet the conditions of the company's internal and external environment....
6 Pages (1500 words) Term Paper

Terms of Job Placement

The paper 'Terms of Job Placement' presents Universities that have observed a strong need to develop essential skills among its students to make them good professionals.... These skills not only be helpful for students in getting a job soon after their graduation.... hellip; Companies require graduates who are in addition to having technical skills should be highly adaptable to different types of situations, having the ability to communicate effectively with their peers and subordinates, capable of handling and evaluating information to make it useful for the company, developing strategies at different levels....
9 Pages (2250 words) Term Paper

Strategic International Alliances

It is because of the altering market conditions, strengthened global market competition along with short product… Managers are identifying the fact that in spite of strong and resourceful firms, it is becoming difficult for them to maintain competitive advantage in most of the national markets and they are also not capable of making use of the wide range of technologies which is needed for the creation, production, development as well as marketing of new products....
10 Pages (2500 words) Term Paper

Critical Analysis of the Trends in Vehicle Miles Traveled

In the paper “Critical Analysis of the trends in Vehicle Miles Travelled” the author analyzes legal/political climate, family structure, social/cultural conditions and technological, economical and institutional structure of the American society.... Finished goods will be brought near retailers and consumers negating the necessity of travelling over long distance to acquire them....
7 Pages (1750 words) Term Paper

The Current Trends of Mergers

At the next level, the changes in the firm's financial policies – because of a merger or an acquisition – can cause a decrease in organizational performance either in the short or the long term.... The paper 'The Current trends of Mergers' presents the development of the phenomenon of mergers and acquisitions globally which has been related to the need of the firms around the world to secure their position in the market by increasing their financial strength....
8 Pages (2000 words) Term Paper

Multicultural Management

The analysis will take place to identify what the trends in India are, which will end with a conclusion to identify the changes that are occurring in India and how the culture is affecting the management of multinational companies.... This paper "Multicultural Management" discusses the concept of management intertwines with culture....
8 Pages (2000 words) Term Paper

Academic Leaders in the Educational System

The paper 'Academic Leaders in the Educational System' focuses on leadership which has witnessed rapid alterations in the past decades expanding its implications from the business world to every sphere of modern human life; from profit-centric concerns to socio-cultural dimensions.... hellip; One of the fundamental extensions to the leadership concept can be witnessed with reference to its application in the education system of various economies....
8 Pages (2000 words) Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us