Dallas Business Consultant Elijah ClarkDallas Business Consultant Elijah Clark

Content Management Systems CMS

Stay Updated With a CMS

With some websites, having fresh content is mandatory to gain new and repeat clients. With a Content Management System (CMS), you can keep your site updated with the latest news articles, products, and services. You have full control over what you want to put on and take off your site.

Updating:

Your website needs to be easily upgraded with new content on a regular basis. A CMS gives you full control so that you can easily add new updates and blogs to your website without having to call a programmer to do it for you.

Results:

All content can be managed through a simple user interface that allows for quick task completion. The Administration area is easy for all to use, and can involve multiple access levels for various management controls.

With a CMS, you can easily implement and manage:

  • Article publishing
  • Website forums
  • Photo galleries
  • Surveys and polls
  • Projects
  • Interactive event calendars
  • Complex data entry forms

A phenomenology research method

Based on my research of a phenomenology, it uses descriptive analysis to capture experiences (Sanders, 1982). The method evaluates experiences and brings them closer to lived phenomena (Sanders, 1982). A phenomenology study is a method used for unfolding human experience by examining the uniqueness and commonalities of events and circumstances. A phenomenology approach is recommended for continually evaluating biases and presuppositions (Sanders, 1982). A phenomenology study focuses on understanding the meaning of human experiences by analyzing the pure and unencumbered visions of experiences. A phenomenology research design comprises of three components, which are a) determining limits of who and what is to investigate, b) data collection, and c) phenomenology analysis of data (Sanders, 1982). The data collection techniques used in phenomenology research include in-depth, documentary, and observation. Additionally, it is essential that interviews conducted are recorded and transcribed.

Additional Reading

Sanders, P. (1982). Phenomenology: A new way of viewing organizational research. Academy Of Management Review, 7(3), 353-360. doi:10.5465/AMR.1982.4285315

Finding a graphic artist

There are plenty of graphic artist within the crowded market. If you have not found one yet, then ask a friend, family member, or stranger on the street. Chances are one of them will claim to be or know a graphic designer.

The right artist should not only be creative, but they should also understand how to create artwork that is marketable. Designing is the easy part, but knowing what to design, who to design for, and how to direct, entertain, persuade, and attract attention with your artwork is the difference between having good artwork and effective artwork.

Don’t give up on your business

We’ve all been there

Online exposure is generally about making simple modifications to portions of your website and networks. When viewed individually, these adjustments may seem like incremental improvements, but when combined with other social and optimization efforts, they could have a noticeable impact on your social networking and online traffic.

If you’re anything like most new businesses, you’ve possibly created a brand new website or social network page and hoped that users would magically show up at your site and purchase whatever you were selling or promoting.

After a few weeks and with nothing more than a few stray people showing up at your page, you make the decision to try and “optimize” your website and campaigns with your main keyword in hopes that your site might rank high in at least 1 of the millions of search engines. Another few weeks go by and still no luck.

At this point, you might give up and choose to either rebrand your networks for a different target market or simply quit after losing all hope. Well, news flash, as you may have figured out by now, this is not the right way to go about fixing things.

The best thing that you can do for your “failing” business is sit back and develop a strategy for success.

Projecting your business revenue

Projects profit & Loss

The profit and loss statement (also known as the “income statement”) is the most common of the standard financial reports that bankers and investors will expect to see in a business plan. It shows the revenue, the expenses, and the net profit or “bottom line.”

Projected balance sheet

The balance sheet is one of the three standard financial statements. Unlike the profit and loss statement, which measures activities and their effect on profitability during a given period, the balance sheet is a snapshot of the business’s financial position.

Projected cash flow statement

The cash flow statement is a valuable tool for understanding and planning the organization’s cash flow. The cash flow statement is not a snapshot like the balance sheet. Instead, it measures the change in cash during a period.

Why your business goals need milestones

Milestones cover the business’s major events and achievements that need to occur to keep the strategy on track for success. Milestone events are strategically important for your business and provides an outline of dates as to when the events should take place.

When developing milestones, have in order:

  • Name of the task / goal
  • Due date for the goal
  • Budget for the goal
  • Person responsible for completing the goal

Once your milestones are in order be sure to let your business partners know that you need to follow the milestones. Additionally, the milestones should be tracked and analyzed with real results.

Not sticking to the plan will cause your strategy to fail.

Strategic business sourcing

Effective Sourcing

Most all businesses have some form of sourcing to other individuals or companies. Strategic sourcing is an approach that formalizes the way information is gathered and used so that a business can leverage its consolidated purchasing power to find the best possible values in the marketplace.

Developing an understanding of your sourcing power will allow you to make certain that you are saving the most money by finding the most affordable sourcing opportunities.

Sourcing should not always focus on the financial savings, but should also consider tasks and quality of the service.

Things to consider when sourcing:

  • What are your buying needs
  • What type of professional do you need
  • What maximum price do you want to pay
  • What volume do you want to purchase
  • How do you plan to project manage
  • Will you be able to meet deadlines

Initial Public Offering (IPO)

Initial Public Offering
Initial public offerings (IPOs) are transactions in which businesses publicly sell their common stock within an inefficient market. In the IPO market, sellers often have more company information than buyers and insider trading is considered legal. The day in which the IPO begins trading, the stock price is likely to close higher than its original value in an attempt to sell the stocks in aftermarket trading. Within the aftermarket trading is where the value reflects the true stock price, as buyers and sellers bargain transactions. A benefit of IPOs is that they grant liquidity to company owners and raise company capital. Taking a company public is when daily operations are overseen by corporate officers who are monitored by shareholder-appointed board of directors.

The Hypothesis
Selling shares in the aftermarket can be referred to as spinning. The term spinning defines IPOs that are immediately sold in the aftermarket and are spun for a quick profit. As firms try to prevent their willingness to participate in underpricing, they may hire a lead underwriter with a highly ranked analyst. This process is known as analyst lust hypothesis. Both the spinning hypothesis and the analyst lust hypothesis are associated with the changing issuer objective function hypothesis. First-day returns create low-frequency movements in underpricing that is less common than hot issue markets. The change in underpricing is known as the changing risk composition hypothesis. The hypothesis states that riskier IPOs are underpriced more often than less-risky IPOs. IPOs are underpriced as a way to entice investors to participate within the market. The realignment of incentives hypothesis is similar to the changing risk composition hypotheses in that its ownership changes instead of pricing relations in average underpricing.

Market Efficiency
Market efficiency is when stock price values are determined by all publicly available information. According to the efficiency market hypothesis, no one investor has the ability to outperform the stock market based on private information. Consequently, stock values are equally priced because of market efficiency. Furthermore, market efficiency requires investors to use their skills and knowledge to interpret the information to achieve profitability.

Market Inefficiency
Market inefficiency creates undervaluation for investors looking to buy into the market. Additionally, it creates overvaluation in which investors can sell. An inefficient market opposes an efficient market by stating that stock prices are not priced accurately and deviate either above or below their true value.

The hypothesis states that issuing firms are willing to accept underpricing when they hold constant the level of characteristics and managerial ownership. Within the changing issuer objective function hypothesis issuers are more likely to leave money on the table considering they place more attention and value on hiring a lead underwriter. Consequently, they are less concerned with avoiding underwriters with a history of excessive underpricing. This method of doing business is referred to as analysts lust hypothesis.

IPO proceeds are functions based on the choices of underwriters and auction and bookbuilding contracts. The changing issuer objective function hypothesis states issuers may put weight on proceeds from future sales and side payments instead of IPO proceeds. Within the changing issuer objective function issuers hire prestigious underwriters who charge by leaving more money on the table. Decision-makers of the issuing firms pay the price because they receive side payments and positive analyst coverage.

To launch an IPO, company’s work with investment banking firms as advisors and underwriters. As an underwriter, the bank purchases the IPO shares from the company and distributes the shares to the market. Underwriters advise issuers on pricing decisions. When an underwriter receives compensation for their recommendation, it creates an incentive to recommend a lower offer price. Bookbuilding is used to price and allocate IPOs. If there is an excess demand for shares, underwriters make the decision to whom to allocate those shares. With bookbuilding, underwriters can allocate who receives hot IPOs. Money on the table is when underwriters have influence over venture capitalist and issuing firm executives. Allocating IPOs allows for underwriters to continually underprice stocks. Decision-makers gain profits in their personal accounts when hot IPOs are allocated to them.

A hot IPO is considered an IPO that is expected to spike in price immediately upon trading. Spinning creates incentives for issuers to select bankers who underprice. The term spinning was formed when the underwriters for the firms allocated hot IPOs to brokerage accounts. The analyst lust hypothesis states that the coverage of analyst is an important factor when choosing a lead underwriter. Considering underwriters are not paid high fees for providing analyst coverage, issuers pay via the cost of underpricing. However, a concern with the analyst lust hypothesis is that it does not consider conflict of interest between managers and pre-issue shareholders, which could benefit pre-issue shareholders in situation where the analyst coverage produces higher market value.

Trade-off and Pecking-order Theories

Trade-off and Pecking-order Theories
A profitable company requires less need for external financing. To satisfy financial needs, firms will often turn to debt. A profitable company usually relies on less debt. However, according to the trade-off theory, the more cash flow a profitable firm has, the more debt it will generate. As the debt capacity accumulates, it will be used to capture tax shields and leverage benefits. Within the trade-off theory, managers seek optimal capital structure. Trade-off theory translates into empirical hypothesis as it predicts a relationship between average debt ratios and asset risk, profitability, tax status, and asset type. The pecking order theory has no optimally well-defined debt ratio. Financial distress is not a concern for the pecking order theory, and tax shields are a more attractive method to use according to the model.

The pecking order theory is built on the struggles of obtaining cost efficient financing. The theory suggests that managers should use bonds because they are a lesser risk for stock price declines. Considering firms know they will need cash within the future to manage profitable projects, they accumulate the cash today, so they will not have to forcibly go to capital markets when financing is needed. Nonetheless, because of the additional cash, managers are tempted to purchase and will likely generate wasteful spending on activities.

Pecking order theory explains the variances of debt ratios, rather than the target adjustment model based on static trade-off theory. The pecking order theory can be rejected if financing flows with the target-adjustments specified. However, the trade-off theory may appear to work, which will create false positive results from time patterns of capital expenses, which creates reverting debt ratios.

Applicable Industries
Pecking order is unlikely to do well for companies investing into intangible assets. Trade-off theory works well within industries that have room for growth and expansion. Mature industries that can practically predict their future like Coca-Cola have nothing to lose by using external funds. In 2014 The Coca-Cola Company (Coke) had a long-term debt of $19,063 million and a net income of $45,998 million. The debt ratio at Coke is optimal and is maximizing its market capitalization value at their debt levels. The company has a long-term debt of less than one year’s current net earnings. Consequently, a single year earnings can pay the debt.

Intel is a company that follows the pecking order theory, particularly because of its high-risk industry. Although the company is large, considering the technology industry is forever changing at a rapid pace, the company struggles to remain relevant, which creates the industry to be high risk. Because of the large market and competition, the company has to create innovative products and quickly get them to market. This causes a problem by not allowing revenue to fund the company’s growth, and the firm has to rely on debt to satisfy the market.

In addition to the theories, capital structure is beneficial as it presents the type of financing a firms uses. The mixture of methods includes equity and debt. To determine the right type of capital structure, firms often use a combination of debt and equity in order to maximize their market value. With leverage, a firm can lower its weighted average cost of capital. However, leverage increases financial risk of firms that must service their debt regularly. Trade-off theory helps determine the most optimal debt-to-equity ratio. Pecking-order theory allows for firms to finance themselves through retained earnings. When there are no retained earnings, the firm issues debt, and as a last resort may issue equity. Debt informs investors that management is confident with servicing the debt, and equity signals that the firm may be overvalued and could trigger a stock price fall. In regards to management, pecking-order theory suggests capital structure is rooted to agency theory and suggest that financial decisions are affected by the firms’ attempt to minimize shareholder supervision. Pecking-order theory seems to focus on examining the financial behaviors of larger firms, which have a larger borrowing capacity.

Trade-off theory focuses on bankruptcy cost and debt, which states there are advantages to debt financing. Pecking-order theory focuses on financing from internal funds, and using external funds as a last resort. Trade-off theory has dominated corporate finance circles. The pecking-order theory assumes there is no capital structure. Additionally, pecking-order can easily be applied to small firms considering smaller firms borrow based on their needs rather than optimal capital structure. Increased financial leverage affects a company’s WACC. With financial leverage, the company’s WACC decreases until optimal debt ratio is achieved, after which, the WACC rises with more debt. Increasing the debt of the capital structure also increases the tax benefits considering the interest is tax deductible. The company’s market capitalization is increased when WACC is decreased considering trade-off theory assumes the company’s risk of bankruptcy.

Dividend and Non-Dividend Stock Valuation

Dividend and Non-Dividend Stock Valuation
Investors who invest in stocks often like to receive returns on their investment in the form of dividends. However, not all companies opt to offer dividends to their investors. There are three variables that affect the valuation of a dividend and non-dividend paying stocks and how stock valuation is influenced. Those variable influences include size, timing, and uncertainty of cash flows that the asset will generate for investors over its lifetime.

Company that does not pay dividends.
A company offering dividends is a potential signal to investors that the company is settling down and that its growth days are over. Dividends often depend on the size of earnings, and are key in determining the value of equity. Google Inc. is a company that actively invests in future company growth initiatives. Google does not offer dividends as the company hopes to continue its expansion into new business ventures. Taking into consideration the size of Google as a company, it is highly likely that the company will provide dividends at some point in the future. The dividend growth model can be calculated as the stock value equals next year’s dividends divided by the required rate of return difference and the constant growth assumption in dividends. A dividend growth model evaluates and considers dividends within share value and growth.

Merits and/or pitfalls of using the dividend growth model
Organizations that are likely to pay dividends in the future can benefit from using the dividend model. Investors can gain a return on their investment by purchasing stock from non-dividend paying companies and then resell those stocks for a profit. The problem with this method is that the stock is only worth what the next investor is willing to pay. If a company does not pay dividends and instead reinvest the profits into other investments, it could raise the value of the shares to be sold. The concern with using the dividend growth model is that it does not include risks. Furthermore, the model is only effective for company’s that pay dividends and is growing at a constant rate.

How variables affect the valuation of a dividend paying stock and a non-dividend paying stock.
Dividend paying stocks usually perform better than non-dividend paying stocks, considering the immediate value. Non-dividend paying stocks such as Google could use the model to predict future growth rate if Google were to ever start paying dividends. Cash dividends are generally easier to measure. Considering Google is a well-known stable company, if it were to ever begin paying stocks, the model could assume that the dividends would be constant for a time. As an investor, dividend-paying stocks are often a better investment as it can predict a return on investment. In determining equity value, both dividend and earnings-based models can be used.

The Gordon Growth Model is a good way of calculating a stock value. However, it can only used with company’s that pay a regular dividend at a constant rate. Consequently, the model is only effective for stable companies. In addition, it will only work if it the assumptions are continually proven accurate. The model also values the company based on investor payment and assumptions and does not consider anything other than the dividend when valuing the company. Investors and analyst like the model because It is an easy and simple to use method for generating assumptions. For lower dividend paying companies with high dividend growth, the Gordon growth model may not be appropriate. Regarding the dividend growth model, its shortcoming is that the model assumes the growth will be constant. However, there is no guarantee that the growth will be constant as it can be cut. A solution to this shortcoming is to move toward a two-stage or multi-stage dividend discount model (DDM). A multi-stage DDM estimates that a dividend will grow over a number of years at a certain rate.

A dividend discount model (DDM) is a way of applying net value analysis to estimate the future stock dividends and how much it will payout. The dividends calculated are then discounted back to their current value. DDMs assess the stock value based on growth rate. The projected growth rate is compared to the associated discount rate, and the current value is then determined. If the current value is more than the future market value, then that stock is undervalued, which is good for purchasing. The model is an effective tool used by many investors and analyst looking to select stocks. A disadvantage of the model is that it is not suitable for company’s that do not pay dividends. While DDM does not explicitly consider risk, it does assist in estimating the market risk premium. The DDM requires long-term growth rate data in dividends. The advantage of DDM is its simplicity of use.

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