Liabilities, Financial Management

Assignment Help:

Liabilities

The company must take into account the nature of its liabilities as well as its solvency position.

Cash Flows: Besides the investment yields, money flows as paid contributions and flows out as pension expenditure in the company. The pension expenditure is calculated depending on the number of pensioners and the average funded pensions. The contributions depend on the total salaries of the insured persons.

Solvency Capital: Solvency capital is the amount by which the total assets of the company exceed the sum of its reserves. It functions as a buffer against the variation of the investment results. Because the reserves of a pension insurance company must always be fully covered by its assets, a non-positive solvency capital means a bankruptcy. Therefore, the development of the solvency capital is an important factor in policy evaluations. The legislation prescribes various minimum and target levels for the solvency capital of a pension insurance company. The basic quantity is the solvency border, which depends on the structure of the company's investment portfolio. The lower border of the target zone is twice the amount of the solvency border. The position of the solvency capital relative to these levels is an indicator of the solvency risk of the company.

 


Related Discussions:- Liabilities

Estimate the companys wacc, Assemble all other inputs/assumptions based on ...

Assemble all other inputs/assumptions based on the past data. Use your best judgment to have the most reasonable estimates. Tasks 1. Prepare an Excel spreadsheet containi

M.r, capital structure

capital structure

Discuss the objectives of financial statements, Question: The Statement...

Question: The Statement of Principles for Financial Reporting sets out the principles that should underlie the preparation and presentation of general-purpose financial stateme

Evaluate the under-pricing or over-pricing, Assume that you work with a lar...

Assume that you work with a large financial consulting firm. You are one of the junior financial consultants there specializing in IPO issue. A team of foreign investors has recent

Exchange rates, Exchange Rates The prices at which one country's c...

Exchange Rates The prices at which one country's currency can be changed into that of other country. Although perceptions in the currency markets of the privacy of a count

OPERATING CYCLE, discuss the applicability of operation cycle in avegetab...

discuss the applicability of operation cycle in avegetable growing business

Show the transaction risk, Q. Show the Transaction risk? This is the ri...

Q. Show the Transaction risk? This is the risk occur on short-term foreign currency transactions that the actual income or cost may be different from the income or cost expecte

Cost of retained earnings , Cost of Retained earnings (K ) Retained ea...

Cost of Retained earnings (K ) Retained earnings are that portion of EPS that is retained by the firm.  This may be measured as the rate of return which the existing share hol

Finance, a) Describe five factors that should be taken into account by a bu...

a) Describe five factors that should be taken into account by a businessman in making the choice between financing by short-term and long-term sources.

Equity share valuation.., Mount Hutt Ltd. just paid dividend of $2.20 per s...

Mount Hutt Ltd. just paid dividend of $2.20 per share. The dividends are expected to grow at a constant rate of 4% per year, indefinitely. If investors require an 11% return on Mou

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd