Newspaper Articles on Financial Accounting Analysis Research Paper

Introduction

The multinational corporations (cement) who are operating their operation in Bangladesh have identified the going getting rigid (tougher) gradually amid a muscular show by few numbers of local companies who are very ambitious. A many the many multinational corporations in cement sector, Holcim, Lafarge cement and so on are now leading the cement business. Scan cement is also the leading multinational leading cement company.

They hold their position among top ten.

Main text

Though they are the leading companies in the world they only cover around 1/3 of the Bangladesh market. It is said by the official of the above-mentioned multinational companies. They also said that the local companies dispute this proportion. They are (local companies) are hovering around 20% of the total demand.

Scan cement of Heidelburg group which is working in Bangladesh for about a decade biggest companies among the foreign companies) has “only 12% market share said the industry officials. This is the only company for the last couple of years which has expanded capacity in Bangladesh.” (Ahmed, 18 May 2008). The spokesman of Holcim cement, Shankar Kumar Roy said on a press briefing that the market share of Holcim cement is only 8 percent. In spite of bringing three plants in quick success about 6 years back as it planned to come as the most powerful cement company in the country.

Lafarge, the world’s first largest cement producing and marketing company in the world is struggling to survive. The same passion is going on for the second-largest cement company Cemex (The Dubai-based multinational cement company). Emirates is now in the position to stop the production in Bangladesh.

They come with a big bang. Now their market share has been reduced to around 20%. Said Aminul Haque , senior vice president of Bangladesh cement manufacturers Association.

““They arrived in such a quick manner and with so much capacity and financial muscle that we thought local companies would have to simply fold up and watch their show.” Said Haque (Also the managing director of the premier cement). Now they are struggling to compete leaving the local companies to dictate the market for the first time in many years.” (Ahmed, 18 May 2008). Shaw cement who came in the Bangladeshi market in 2001 is acting as the pioneer for the local companies. So in the light of the above discussion it is crystal clear the local firm of Bangladesh ate dominating the market of cement.

The giant multinationals who came up with the huge financial and technological support can’t cope with the local companies. Here the assumption what they have taken is failed. They did get the virgin market in Bangladesh and they had the huge financial support.

Their assumption was that they would set up a monopoly market here. But due to the proper analytical ability of the cement producing firm of Bangladesh and their innovation accounting theory make the multinationals go on the way to lose. (The Daily Star, 13 May 2008)

According to the accounting theory, the more the supply, the less is price. That means whenever supply goes up. Then the price of the production goes down. So here price and supply here a negative relationship. But in the world market in ease of the rice we see as the production of rice grows, the prices of rising gradually increase. Now we will discuss the newspaper topics published in the Daily Star, Dhaka May 13, 2008 in the heading “UN says 2008 rice production to increase in Asia.” (The Daily Star, 13 May 2008).

“Now it is forecast that the rice production in Asia, Africa and Latin America is going to hit the new record level in 2008” (the share center. (19 May 2008). It is also assuming that the price of rice could remain high and could also go up. However the forecasted rice production id shocked due to the severe storm/cyclone in Myanmar which has damaged a lot of rice fields.

“World paddy production 2008 could grow by about 2.3 percent, reaching a new record level of 666 million tones, according to our preliminary forecast,” said FAO rice expert conception Calpe.

The growth of production could even be higher if the recent wants to produce more rice leas to expansion According to the rice market monitor. But the recent cyclone in Myanmar could bind the forecast to fail. Said FAO officials. ““The cyclone damage could worsen the current global rice production outlook” said an FAO official. “The cyclone struck when paddy farmers were harvesting their dry season crop accounting for 20 percent of annual production” (Daily Times, 18 May 2008)

“Myanmar may need to turn to neighboring countries such as Thailand and Vietnam for rice import the FAO said this could lead to further pressure on world prices” AgWeb.com. (15 May 2008).

In spite of this severe disaster, the paddy production is expected to surpass 600 million tone benchmarks. The paddy production in Africa is projected to increase by 3.6 percent to 23.2 million tonnes in the year 2008.

The paddy production in Latin America and the Caribbean is also expected to grow by 7.4 percent to 26.2 million tonnes.

As per the index of FAO rice price, the price of rice has increased by 76 percent (approximately) between the last December and April.

In spite of this growth, in rice production the price of rice is going up because of imposing ban on exporting rice by the rice exporting countries. They are afraid of the scarcity in their own countries.

So in the light of above discussion it is clear to us that the theory of Accounting “The more the supply the less the price” is absolutely correct.

The rice prices are going up due to the unequal distribution of rice from the rice-producing countries to rice importing countries. (The Daily Star, 13 May, 2008).

At the end of the Monday 12, 2008 the maximum companies’ share prices are going up In spite of world’s wide threat of inflation due to high oil prices the share price of maximum companies goes up.

We know the theory of positive Accounting says the price of stocks totally depends upon the companies’ performance that means of a company has high revenue positive rate of return good operating profit then the stocks price goes up. More specifically when the company has high growth rate law loan and liability then the shareholder is willing to buy that kind of share.

Generally the shareholders find profit in two ways from the share first one capital gain and second one is dividend.

The capital gain depends upon the information about the market. The shareholder is very much familiar with the words speculation insider trading etc. when the market is efficient that means all information is available for the stockholder then there is a low possibility for insider trading and speculation. But if the market is not efficient then a group of people who are close to the management gets the information about the company performance earlier and become benefited more than the others.

Now let us the Asian stock market on the 12th May, 2008. We know Japan is the largest stock market in Asia. I have shut before the quake closing 64 percent up China.

Taiwan and Singapore also ended in the black despite their modest gain. On the other hand the shanghai stock market went up despite the inflation in china hit 8.5 percent in April. This is the highest event inflation in china for last decades which was supposed to lead by the 22.1 percent rise in food prices.

The high rate of inflation makes the investors to concern because it will hit the consumer and the government will ultimately increase the interest rate and impose restrictions on loans eventually cording economic expansion.

Now some figures are showing about the 12th May 2008, Stock market all over the world.

Tokyo – closed 0.64 percent higher

Shanghai – Chinese share prices closed 0.37% higher.

Taipel : closed 0.43 percent higher

Singapore – closed 0.57 percent higher

Kuala Lumpur: closed 0.6 Percent higher

Mumbai closed 0.74% higher.

Finally we can say that because of good profit and performance of the companies the price of the mostly stocks goes up and for low revenue and worse performance the stock price goes down (The New Age, 19 May 2008).

In the percent world inflation is the most thinkable cause of concern for every country. Now all but every country ate trying to fight against of control inflation. Inflation is that thing that leads the economy of a nation to the way of worsening. Now the term inflation is turning into the global issue. The giant economic power like USA, Russia, China, and India are fighting against inflation.

In the sense of Accounting the more the inflation rate is higher the more the worse condition of the economy of a country Accountants. Find that inflation occurs due to excess supply of money sow productions decrease value of local currencies against the international currency like us dollars scarcity of goods etc.

Now our discussion is on about the topic “Newmarket economies under threat from high inflation” (The New Age, 19 May 2008), published on the New Age Dhaka on May 19, 2008.

The recent market economies of the former soviet unions have shrugged off the global credit crunch. But they are facing the problem of lower economic growth due to the upgoing inflation.

The prediction about gross domestic product of Estonia, Bulgaria, and Ukraine was about 6.00 percent this year down from 7.3 percent in 2007.

These Soviet block countries are facing the rampant inflation problem. It causes to this economic slowdown. This economic slowdown ultimately affects the price of consumer goods.

“A more restrictive international funding environment together with interest rate rise to combat inflation could reduce domestic credit growth and limit growth in domestic investment” said a London-based Bank (Gulfnews.com. May 19, 2008).

So from the discussion it is very much clear that inflation is a negative term of economy and it causes serious problem to the economy of a nation. An accountant here says to find out the cause of inflation and to increase the ability to earn more money for the common people. If this is down then it is expected to a good control over economy (The Sydney Morning Herald. May 17, 2008).

The price of oil in international market is growing very swiftly. Due to the excess rise in fuel, the British Airways is finding threat to earning growth. British Airways, the third-largest carrier in Europe, are now may take decision to cut routes as record fuel price and slowing economics.

Willie Walsh, the chief executive officer of British Airways predicted a ‘Particularly difficult’ first quarter after the hazardous and noisy inauguration of the upcoming destination at London’s Heathrow Airport and dropped it to a 700,000-pound bonus. The CEO has also made an prediction that fund costs may goes up by 1 billion pounds this year and ordered a review about the ability of the British Airways, including the expense and network.

“These are pretty good results and they have met targets,” said Nick van den Brul, an analyst at BNP Paribas in London with an “Underperform” rating of the share. (Business Day, 17 May 2008). The stock went up 9 pence to 233 pence after its previous going 7.8 percentages. The pares go down this year to 25 percent and values BA at 2.69 billion pounds.

On the other hand, the biggest carrier of Europe, Air France- KLM group has gone down 16 percent and the second-largest carrier in Europe, the Deutsche Luftharssa of Germany is down 5.8 percent.

At the end of March 31, 2008, the net income rose to 680 million pounds from 290 million pounds that were for the last year (Lagorce, 16 May 2008).

Another thing can’t be left unmentioned and that is it has 10 percent operating profit for this year which has across the record landmark. The premium traffic growth was 4.4 percent as the carrier lured corporate flyers on routes between the U.S.A. and London.

Summary

For the last few months, people are not willing to give bookings as they were used to. At the same time Jet fuel cost increases. That’s why the earnings have come under pressure.

In the light of the above discussion it is very much clear to us that, cutting routes is the best way for British Airways to protect earnings. If they want to maintain all of their routes, then it would be very difficult to maintain their earnings.

References

The Daily star, (2008) “The more the production of rice, the more rise in price.” Dhaka, 2008.

The Financial Express (2008). Local cos dominate cement market as market as multinationals find the going tough. The Financial Express, Dhaka.

Ahmed, Mushir (2008). Local cos dominate cement market as multinationals find the going tough. The Financial Express. Dhaka, Web.

thesharecentre. (2008). Today’s business news- business stories that might give you an edge 2008 Investment and Business News Ltd. Web.

Businees Day, 2008. BA may cut routes to protect earnings. Web.

The Financial Express (2008). Local cos dominate cement market as market as multinationals find the going tough. The Financial Express, Dhaka.

The New Age. (2008). Web.

The Daily Star. (2008). UN says 2008 rice production to increase in Asia. Web.

Daily Times- Leading News Resource of Pakistan. 2008. 2008 rice production to climb in Asia, Africa, L America. Web.

AgWeb.com. (2008). FAO Sees Larger 2008 Rice Crop. 2008 AgWeb.com – The Homepage of Agriculture. Web.

The Daily Star, (2008). “Asian stock close mostly up” Dhaka.

The New Age, (2008). New market economies under threat from high inflation. Web.

Gulfnews.com. May 19, 2008. EBRD raises eastern Europe growth call.

Al Nisr Publishing LLC 2007. Web.

The Sydney Morning Herald. 2008. BA may cut routes to protect earnings. “British Airways is likely to cut routes to protect Earnings”. Web.

Lagorce, Aude (2008). British Airways’ profit more than doubles, tops view: Airline to pay its first dividend since 2001; CEO won’t take bonus.MarketWatch. Web.