Tuesday, May 19, 2020

Main Causes And Consequences Of Financial Crisis Finance Essay - Free Essay Example

Sample details Pages: 3 Words: 807 Downloads: 4 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? The U.S public policy which encouraged home ownership related the financial crisis. This led to the extension of mortgage lending which term sub-prime mortgages to unqualified credit requirement people. A dramatic rise in mortgage delinquencies and foreclosures in the United States triggered the ongoing financial crisis (Causes of Financial Crisis 2007-2010). Don’t waste time! Our writers will create an original "Main Causes And Consequences Of Financial Crisis Finance Essay" essay for you Create order Complex financial securities, less effective of the ratings agencies and corporate governance (Ivan Png, Financial Crisis 2008, P.5), liquidity shortfall in the U.S banking system, taking too much risk, increase leveraging and moral hazard of the bankers were many causes of the financial crisis. Regulators and central bank governors did not effectively supervise on the financial institutions. This was another cause of financial crisis. All of these directly and indirectly factors caused the financial crisis. The collapse of real estate, housing markets caused the value of mortgage-backed securities to fall sharply which damaged financial institutions globally. The financial crisis resulted world-wide slowdown in global growth and economic activities, decline in international trade, rising unemployment rate, rising income insecurity and impact on low-income group, and adverse consequences for banks and financial markets around the globe. The Group of Governors and Heads of Supervis ion hold meeting on 12 September 2010 for reforming the existing inefficient regulation to withstand financial shocks. 2. The main causes and consequences of the financial crisis There were too many players and factors contributing to the financial crisis. The U.S government provided home ownership opportunities to low income borrowers. C:UsersUSERDesktopExisting_Home_Sales_Chart_-_Mar_09b.png Figure 1: U.S. Existing Home Sales, Inventory, and Months Supply December 2005- June2009 The figure 1 shows the number of homes for sale increase (red column) but the homeà ¢ÃƒÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬ÃƒÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¾Ãƒâ€šÃ‚ ¢s rate of sale decreases (blue column). That mean the supply of home exceeds the demand of home. The figure 1 also shows the length of month taking to sell home (black line). The housing market downs. The probability of foreclosure increased because most of the mortgages were given out on a variable interest-rate basis. The lending institution assumed that housing value would appreciate. But the increase in the money market interest rates occurred housing value down which caused the lendersà ¢ÃƒÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€š  ¬ÃƒÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¾Ãƒâ€šÃ‚ ¢ assets worthless. C:UsersUSERDesktopSubprime_crisis_-_Foreclosures__Bank_Instability.png Chart 1: Subprime Mortgage Crisis: à ¢ÃƒÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬ÃƒÆ'†¦Ãƒ ¢Ã¢â€š ¬Ã…“Vicious Cycleà ¢ÃƒÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬Ãƒâ€šÃ‚  of Foreclosure and Bank Instability The lending institutions bundled sub-prime mortgages and variety of assets together and sold to capital market investors around the world so called mortgage-backed securities, MBS. Therefore the problem spread globally when borrowers could not afford to repay their mortgages (Khatiwada and Emily McGirr, Current Financial Crisis, P. 1). This is one of the main causes of financial crisis. Complex credit derivatives such as collateralized debt obligations (CDOs) and credit default swaps (CDSs), were toxic illiquid assets in the current financial crisis. The leading providers of financial institutions were heaviest users of these derivative contracts to against risk exposure, serious losses and to raise funds. The complexity of these instruments, accompanied by questionable credit ratings assigned to various those derivatives and severe liquidity crisis, resulted in huge write-downs of those derivatives value worldwide which led to financial crisis (Rose and Hudgins, Bank Management Financial Service, P. 306). Credit rating agencies were less effective and careless in assessing of the Lending Institutions (original source of loans) for giving investment grade, ratings to mortgage-backed securities, and collateralized debt obligations transactions. The Lending Institutions could sell their bad loans and risk exposure to global investors because of high ratings by bundling these bad loans into MBS and CDO securities. This impact effected on globally when the loans were default. Therefore rating agencies were one of the causes of financial crisis because financial institutions could not do too much complexity instruments without the high ratings, AAA (Credit rating agencies and the subprime crisis, Impact on the crisis). The combination of moral hazard with imperfect corporate governances was another cause of financial crisis. They were not effectively overseeing the management of a financial institution. They just took more business and more profit to get more commissions and bonuses. The more business implied more risk which led to financial meltdown. Weak business conditions, lack confidence of investors and worried counterparties led financial institutions facing liquidity deficit thereby they are insolvency. Stock market prices and market liquidity fell simultaneously because of crisis. The financial meltdown led the whole economy to recession, and many large and small financial firms failed. The whole world is interrelated so that the global economic activities turndown and international trade also declines. The unemployment rates rose because of the sever economy with a lot of businesses bankruptcy. As financial institutions and stock market have eroded, the retirement savings and investment of many individuals have lost value so the most poor were impacted seriously. All of these are the consequences of crisis. 3. The impact of risk management, leverage and incentives on the crisis

History, And Development Of Human Culture - 1831 Words

Culture Event Anthropology is more or so the study of human reaction and why they do things. Anthropology deals with the origins, history, and development of human culture. Culture event are in a sense in social event that is practiced by many usually in a certain time period or certain place. The reason why any given person paripates in any events may highly vary. Anything from dances to drama, life performances, galleries, school performances, reastraunts and so forth are places/events that can define a reaction to a certain culture or time phrase in life. A certain event or place can lead others to believing or implying something that they would not have though if it were a different envy. Some believe that by people attending a certain event it can say so much of a person or people, other even maintain that in fact people attending could have nothing to do with why they are there. More so it can be a simply conscience that that person id there. The partition to certain events fro m people’s life do in fact merge to that of a certain culture and how it came to be that. That certain event has been practiced though out history. This is why I chosen to do my Cultural Event on Starbucks consumers and what is it that triggers them to meet their with friend and others so frequently. Starbucks is a well-known coffee company especially in the United States. Starbucks has been round since 1971, but when it first opened it would only be a single store in Seattle where it isShow MoreRelatedRepresentation Of Class And Class Struggle1166 Words   |  5 Pagesvalues of other cultures and the articulation of race in the historical development and Capitalism. Thus they assert that the past, and present practices and histories of other races, cultures’ and cultures practices thwart the totalizing attempt of the earlier theorist like Gramsci and Bourdieu. Chakrabarty and Hall argue that other societies local as well as cultural practices [Chakrabarty], as well a s the articulation of race [Hall], play an intricate part in historical development as they integrateRead MoreAdditionally, In His Book â€Å"Distinction,† Bourdieu Discusses1321 Words   |  6 PagesBourdieu discusses cultural capital and the way people use classes of classifications while classifying one another. As habitus, fields and cultural capital develop distinct of different class factions within social spaces, of the â€Å"sacred† sphere of culture that legitimates social order. Therefore, people undoubtedly know their place within society as well quickly identify other individuals who are within their class are other factions of society that are not parts of the upper class via their pretentiousRead MoreBarbarian Virtues Paper817 Words   |  4 Pagesï » ¿ Theories of Development: Scholarly Disciplines and the Hierarchy of Peoples In chapter four of his book â€Å"Barbarian Virtues,† Matthew Frye Jacobson connects the theories and beliefs used to interpret relationships to the development of humans over time. He states that scholarly methods in academics have been used to systematically rank different groups of people. Jacobson discusses many academic disciplines used in these theories such as, anthropology, genetics, biology, psychology, andRead MoreWestern Culture And Its Influence On Modern Culture1235 Words   |  5 Pagesinfluence on America. This is not to say that the prevalence of these institutions is not specific to the United States’ culture, but present in all cultures labeled as inherently â€Å"western.† The concept of institution is an idea constructed by humans, and as a human construct, the idea must have implemented itself successfully into human culture to be present today. Western culture (today primarily North America and Europe), has developed from a focus on a stro ng reliance on the concept of institutionsRead More greek Essay607 Words   |  3 Pagespeople think of ancient cultures and civilizations, they don’t think about the kind of influences they might have had on our society. One of those cultures having the most influence being Ancient Greece. The Ancient world of Greece is far from ancient in the arts, philosophies, ideas, architectures, governments, religions, and everyday life of the people in the latter half of the twentieth century. Come, discover and explore the civilization that forms the foundation of human history. Come, step into theRead MoreCommunication Is The Basic Of Human Existence1163 Words   |  5 Pagesdaily life, some people consider that it’s the basic of human existence (Nà ©meth, 2015). But what is communication and why it is so important for us? Today I will talk about â€Å"communication† and discuss its importance. Long time ago , ancestors of human beings were living in caves, picked fruits in the trees as food, ate raw meat. And at that time, communication has been a necessary survival skill of them. Just think about that, when ancient humans were hunting a huge animal, they cannot face the hugeRead MoreGuns, Germs, And Steel, Diamond Chronicles History1728 Words   |  7 Pages Human cultures and societies have developed at various rates and achieved different levels of progress over thousands of years, resulting in some societies being labeled as more advanced than others. More advanced societies experienced complex technologies, evident in their tools and innovations, and more refined cultural structures such as social class and government systems. Other societies experienced slower rates of development as they maintained rudimentary lifestyles with simple technologiesRead MoreThe Full Scope Of Human Life871 Words   |  4 PagesHumans are an interesting species because of the strong nee d humans have to fully understand what it truly means to be human. Many fields such as history, psychology, and sociology all offer a perspective in the study of humanity, but there are distinguishable from anthropology. Anthropology differs from other humanities fields due to its holistic nature, comparative research methods, and the strong emphasis on fieldwork and participant interaction. Anthropology is the study of people throughoutRead MoreKarl Marx s Theories Of History And The Theory Of Human Nature Essay1714 Words   |  7 Pageswill aim to discuss and determine with reference to Marx’s deterministic theory of history and the theory of human nature, if human beings are essentially the product of socioeconomic forces. In addition to one criticism of his theory of human nature. Firstly, this paper will explain Karl Marx’s deterministic theory of history and the theory of human nature. According to Karl Marx’s deterministic theory of history, human society is determined by the material conditions. Marx was heavily influenced byRead MoreEdward Bernett Was An English Anthropologist And The Founder Of Cultural Anthropology984 Words   |  4 Pagesresearching the prehistory and the history of man could be used to compare and reform modern societies. Therefore, through the use of the comparative method and historical ethnography, which included travel logs, Tylor attempted to reveal the stages of development of cultures/civilizations. Tylor’s defines culture and civilization as a â€Å"phenomena related according to definite Laws-Methods of classification and discussion of evidence- Connexion of successive stages of culture by, Permanence, Modification

Wednesday, May 6, 2020

Comparing and Contrasting Jenkins Poem He Loved Light,...

Both poems have been written about death dying and the loss of loved ones, in a once thriving Welsh mining community. The first poem by Mike Jenkins is a reflection and remembrance by a Father who tragically and suddenly lost his son in a horrific and unfortunate disaster that happened in Aberfan in 1966, where many young lives were lost. The second poem by Duncan Bush in 1995 was written when he was riddled with the disease Pneumoconiosis hence the title of his poem. Pneumoconiosis is a disease contracted by miners who worked underground toiling unaware of the affect the dust was having upon their lungs. Both men lived through an era where Welsh mining was booming because of the need for coal. This brought great commercial success†¦show more content†¦Duncan Bush, however, sets out some sentences to promote the importance of the sentence; by setting the sentence out on its own he draws attention and emphasis to that content. Mike Jenkins on the other hand does not set out certain sentences for special attention. Neither does he set out a certain structure for how many lines should be used in each stanza’s. Both use relatively the same amount of stanza’s making the poems look a lot alike in set up. ‘He loved light, freedom and animals’; the author has chosen the title carefully to make the poem sad he does this by describing a sweet adorable young boy. It is set in quotation marks, so obviously someone has said this about the young lad or, the title has been used before by another author and Mike Jenkins must have thought it fitting to use this as a fitting description for his son. Maybe these words were said in his funeral or put on the young boy tombstone and this is why Mike Jenkins has used these words as his title. The title gives the reader information about the young boy and what his life would have been like before his untimely death. Also, these words are three unrelated words, showing a boyish emotional response to three things a child would love. ‘Pneumoconiosis’; if the reader has never come across this word it captures his attention because as a city person the word is unfamiliar to my ears. By it being an

My Experience Of My Reading Life - 822 Words

Thinking back on your life, and all the books you have ever read can be overwhelming. Most people have read over hundreds of books and everyone has a different opinion on reading and a different story of why or why they do not read. For me my reading life has been different from most of my friends. From my earliest experiences to now there has been a huge change in how I read and what I think of it. The earliest I can think of someone reading to me is when I was about two years old. I have this picture of my grandma reading Teddy and the Duckling to me on the couch and we are both smiling. I can remember being read books when I was little especially before bed. My mom and dad would always come in my room and tuck me in, so I had them read†¦show more content†¦The most frustrating part is how long it takes me to read books and articles. I need to be completely focused on reading at times and it is hard for me to stay focused on books because there is nothing but words to look at making it feel never ending. This annoys me the most because while everyone else is done, I am still reading. Sometimes I compare reading to swimming; I like being able to do it and I feel good after, but it gets old and sometimes I feel as if it is a waste of time. I wish I could find a book that kept my attention long enough for me to finish and be able to say I have finished a book in a decent amount of time without skipping pages. Also, my vocabulary is not stretched out as it probably should be so at times I am stumped on words, or in writings, I cannot think of any good, powerful words that sound more educated or I have a hard time spelling them so I choose an easier word that I know how to spell. At this point in time, I do not particularly care for reading much because it takes me awhile to read and it does not keep me interested long enough. APUSH is a class I have struggled with because the readings go in one ear and out the other because they are not keeping me interested and they make me fall asleep, at least they did at the beginning. Even though I do not care for books, I really like poetry because it is short, but powerful. Poetry is interesting to me because you can say so littleShow MoreRelatedWhat Were Your Reading Experiences As A Child?766 Words   |  4 PagesWhat were your reading experiences as a child? My reading experiences as child was an interesting combination of biblical short stories, Nancy Drew novels, and vinyl recordings of classic Disney fairytales. The most valuable experience I can remember from childhood was my weekly visits to the school’s library. The smell of the card catalog and challenging myself to locate books using the Dewey Decimal system gave me greater appreciation for literature and most importantly built a foundation forRead MoreMy Reflection On The Writing Our Own Pact 1361 Words   |  6 Pages My Reflection During this semester, I have done various work such as reading and writing. This work includes reading articles from the book and writing essays. Some of the work I did was a challenge at the beginning, but I was able to persist and overcome those barriers. During the time I been in this class, I have learned many important strategies that have helped me improve in various ways. One major method that has improved my academic skills and quality in education have been the use of theRead MoreReflective Essay On Lucille787 Words   |  4 Pagesit can impact a person’s life so profoundly. Yet, it is no surprise at all. Many often meditate on how a book can mean so much, when rather people should question how a book cannot mean more. At least, that is what I have come to wonder as I review the way each book has provided me with a new experience and challenge for my imagination. With every book I read, a part of who I am is molded or altered in a submissive response to the authorit y literature reigns over my life. Not giggling is near impossibleRead MoreMy Learning Experience With Literacy1007 Words   |  5 PagesOne of the most eye opening experiences of my life occurred in the second grade. I would have never thought that doing one simple assignment in elementary school could change my whole perspective on literacy. My understanding of literacy was sparked when I had read my first real book. I remember sitting down on the vividly colorful carpet day dreaming about playing Mario Cart on my Nintendo 64 while everyone was obediently listening to the teacher read a book out loud. It wasn’t that I did not knowRead MoreWalking And Biking : Reading Skills Essay1191 Words   |  5 Pagesprogress through life via milestones, such as learning to walk or ride a bike. Learning to read falls into this category. However, unlike walking and biking, reading skills are not suddenly obtained and then static throughout life. After learning to read initially, an individual’s reading skills, in terests, and purposes further develop and change throughout their life, as though nobody ever truly learns to read. Furthermore, the means by which an individual improves their reading capabilities changeRead MoreLiteracy, The Ability Of Reading And Writing1503 Words   |  7 PagesLiteracy Literacy, the ability of reading and writing plays a very crucial role in an individual’s life and society. A literate individual can make the positive changes in society with his ability. I believe literacy is not only being able to read and write but to make the positive impacts by his understandings. It enables us on how we perceive what is and understand things around us. My experience of reading and writing over the years has developed and enhanced my perception and thinking ability whetherRead MoreWalking And Biking By Eric Carle1192 Words   |  5 PagesIndividuals gauge their progress through life via milestones, such as learning to walk or ride a bike. Learning to read falls into this category. However, unlike walking and biking, reading skills are not suddenly obtained and then static throughout life. After learning to read initially, an individual’s reading skills, interests, and purposes further develop and change throughout their life. Furthermore, the mea ns by which an individual improves their reading capabilities change over time as well.Read MoreMy Parents Always Encouraged Me909 Words   |  4 PagesMy parents always encouraged me to read in order to expand my way of thinking. Throughout the years, I now see that yes indeed reading did expand my mind and in the unimaginable ways as well as helped me grow as an individual. Reading has impacted me both in positive and negative aspects. Whenever I was read to or I reading to myself I remember Dr. Seuss words â€Å"The more you read the more things you know. The more that you learn the more places you’ll go† and day by day seeing the truth of those wordsRead MoreReading And Writing On My Life1574 Words   |  7 PagesIf I said that reading was important to me right now, I would definitely be lying. I can’t sit down for extended periods of time and enjoy a good book like I used to. When I was in elementary school, and even when I was going into high school, I w as never seen without a book. When I was younger I could finish a new book every single week. But it was very easy for me to fall out of love with reading as I was being introduced to new technologies. It started with a Nintendo Wii. Sometimes I find itRead MoreThe Idea Of Sponsors Of Literacy908 Words   |  4 Pagescircumstances; they vary based on the person’s experiences and surroundings. Sponsors of literacy are essential in everyone’s life due to the powerful role they demonstrate on the long run. In my own reading and writing experience, my sponsors of literacy were my childhood memories, my school, and the various resources I’ve used to accomplish an outstanding Multi-Genre Research Paper. The Multi-Genre Paper is the highlight of my junior year of high school, if not my entire highschool career. It’s composed

All the Worlds a Stage by William Shakespeare free essay sample

All The Worlds a Stage by William Shakespeare All The Worlds a Stage by William Shakespeare is a short poem comparing our lives and the many stages we have to a theatrical play and the many rolls an through in life. Infancy, the stage where he is a baby introduced to the world, crying and puking in the nurses arms. Childhood, this is the stage where he is growing up and starting school with no enthusiasm. The lover, this is the stage where he has a mistress and falls In love with her, while he tries to sing her a song he cant look Into her eyes because hes so shy.The soldier Is when he tries to keep his reputation hinging less of himself and more of others, and always being ready to fight. The justice stage is where he has gained wisdom and prosperity by the many experiences he had in life. The old age stage is when he begins to lose his charm physically and mentally, he also loses his firmness and personality. Finally. Physical and mental lose and death, he begins to become dependent on others like a child and needs constant help from others to perform any tasks; he slowly loses his teeth, eyesight, and taste, until he finally dies.In this paper I will analyze the way William Shakespeare amperes a persons life and Its many stages to a theatrical stage and the many rolls and actor performs, his tone, how he uses explicit details, imagery, repetition, consonance, and any other figurative language he uses in this poem. Tone The tone in this poem in my opinion is that William Shakespeare feels as if everyone ends up the way people do Just because we all go through life as If we were actors on a stage reading a script knowing every step to take till the very end.He Is accepting of death, he knows that everyone goes through every single stage of life assuming they now what do to do next, but no one really does. I came to this conclusion because Shakespeare shows no type of anger or excitement throughout the poem. He is neutral; he Is neither afraid of death nor excited about It. He feels as If everyone has a purpose in life and to find that purpose you have to go through every stage. It doesnt matter how confident you are, how hard you try, or how fast you get through each stage, everyone will always end the same way, dying.Shakespeare knows you cannot skip this part of life no matter who you are. One can only enjoy the time you have and wait for your time to come. He understands no ones life is fully complete until you go through your final stage of life and die. Imagery William Shakespeare uses a lot of very strong visual imagery though out his poem. In line 7-9 one can visualize a little boy In the morning, tired and very slowly dragging himself to school with his satchel, when he says the whaling schoolboy, with his satchel and shining morning face, creeping like a snail unwillingly to school. Another sense of strong imagery is in line 5-6, when he says at first, the infant, mewling and puking In the nurses arms. In this line one can easily picture a nurse holding a baby ho Just came into this world for the first time, whining, squirming, and puking In her arms. In line 9-11 William Shakespeare says the lover sighing like furnace, with a 1 OFF his mistress a song like poem to express his love to her, but his too shy to look her in the eyes while he sings to her. William Shakespeare uses the entire poem All the Worlds a Stage as a metaphor to compare the stages of life to a theatrical stage.He explains how the rolls we play throughout our lives are like the rolls an actor plays on stage. He makes sure to say that no one is ever the same person their entire life, Just s an actor doesnt stay the same throughout a play. William Shakespeare uses strong imagery and metaphor in the poem for us to picture images every stage and how we change all throughout them as we read. Sound Sound is a very big part of this poem, because he uses a specific structure, some rhyme and repetition. The structure of this poem is very important because each stage is in order.He goes from infant, to schoolboy, to lover, to soldier, to Justice, to old age, and finally death. For ones life to start you must be born into this world as an infant; then you slowly grow into a schoolboy, become a lover and then a soldier ring to keep your reputation. You gain wisdom and Justice and then you grow into old age where you lose your appearance physically and mentally. Lastly you become dependent on others and eventually your life is over. This poem also has some rhyme in it but not much. You will not find rhyme in the same line.In line 7 he uses the word whining and in line 8 he uses the word shining to describe the schoolboy, which both words rhyme with each other. He doesnt feel the need to have to rhyme so much in this poem for one to fully understand the metaphor he is conveying. He also uses repetition in the last line of the poem. As he says sans teeth, sans eyes, sans taste, sans everything he repeats sans to let you know he has lost his teeth, eyes, taste, everything as he dies. Theme The theme to All the Worlds a Stage in my opinion is live life to the fullest with no regrets.Everyone should have their own life, and do their own thing. No one should have the same routine every single day, thats boring. Be spontaneous, do things youd never imagine doing. Youd be surprised at the many things one can do in this world at any age; we Just have to be willing to leave our comfort zone and let loose. One should not let another person take over their life for any reason. We should have control of it, and be able to do what we want when we want, and not have to ask for permission. Not everyone goes through each stage of life at the same time, it shouldnt matter how old one is. One should always have time to laugh and have a good time at any time no matter what. In this poem it is very clear that William Shakespeare wants you to understand how one goes through life. One usually goes through life making choices behind choices, living off your decisions and its consequences. We each have our own routine we follow day by day, even if we dont always notice it.Its as if were a character in a play and we follow a script we memorize every day, until something unexpected happens and our role changes. We have to accommodate the new situation into our schedule and try to make it work. We also have time to squeeze in some fun and live. We tend to surprise ourselves from time to time to shake up our lives a little. If you go through your whole life thinking what if isnt healthy, you need to take a risk and throw yourself out there. Have fun and live your life while you still have it.

Walt Disney Solvency and Capital Structure free essay sample

Included in the assets are accounts receivable, office equipment and real estate, while possible debt items are short-term loan interest and long-term bond debt. Usually small debt-to-asset ratios indicates lower lending risk, and a bigger ratio could have as a consequence higher borrowing interest rate and the possibility of some denial of new loans. Time Warner Inc. s Debt to Total Assets Ratio increased from 2010 to 2011, by 9. 8 % and Walt Disney Co. s on the other side only increased by 4. 35 %. Both companies ratios are above the industry average but Walt Disney definitely had not only better numbers but also better behavior from 2010 to 2011. Long Term Debt to Equity Ratio Long Term Debt to Equity | 2011| 2010| Walt Disney Co. October*| 0. 29| 0. 27| Time Warner Inc. December*| 0. 65| 0. 50| Industry Average| 0. 56| 0. 49| The Long Term Debt to Equity Ratio expresses the relationship between long-term capital contributions of creditors as related to that contributed by owners (investors). Long-Term Debt to Equity expresses the degree of protection provided by the owners for the long-term creditors. We will write a custom essay sample on Walt Disney Solvency and Capital Structure or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page When a company has a high long-term debt to equity is considered to be highly leveraged. Walt Disney not only maintained a lowest ratio in relation to Time Warner between 2010 and 2011, but the increased was also smallest (7. 4 %) compared to Time Warner (30 %). Short Term Debt to Total Debt Short-term debt are the companys liabilities that are due to be paid within one year. Short term debt ratio measures whether a company will be able to meet its short-term  debt obligations using a comparison with the companys current assets. Short Term Debt to Total Debt| 2011| 2010| Walt Disney Co. October*| 0. 35| 0. 35| Time Warner Inc. December*| 0. 24| 0. 26| Walt Disneys Short Term Debt to Total Debt ratio stayed the same from 2010 to 2011 and Time Warners decreased by 7. 69 % indicating that the ability to pay for Time Warner is not only better in both years but it is also improving while Disney remains the same. Interest Coverage ratio (Earnings Basis) Interest Coverage Ratio | 2011| 2010| Walt Disney Co. October*| 24. 45| 17. 20| Time Warner Inc. December*| 4. 61| 4. 33| Industry Average | 11. 2| 9. 87| The Interest Coverage Ratio (Earning Basis)   is used to determine how easily a company can pay interest on outstanding debt  using its earnings before interest and taxes . This ratio is calculated by dividing a companys earnings before interest and  taxes  (EBIT) of one period by the companys  interest expenses  of the same period. A high  interest coverage ratio  could be a sign that the company is not using properly the opportunities to increase  earnings  through  leverage and is usually of a particular interest for lenders. The lower the ratio, the higher the companys debt burden and the greater the possibility of bankruptcy or default. Time Warner Inc. s Interest Coverage Ratio increased from 2010 to 2011, by 6. 5 %. Walt Disney Co. s on the other side increased by 42. 2 % with a clear greater ability for the company to take care of their debt interest. Interest Coverage Ratio (Cash Flow Basis) Interest Coverage Ratio| 2011| 2010| Walt Disney Co. October*| 29. 51| 22. 74| Time Warner Inc. December*| 5. 08| 4. 96| Interest Coverage Ratio (Cash Flow Basis) expresses whether the company can meet its interest payments on a cash basis. This can be important if the company has significant non-cash expenses (like depreciation) or non-cash interest expense. From 2010 to 2011, Time Warner Inc. s ratio increased by 2. 4 % and Walt Disneys increased by 29. 8 %. Free Cash Flow Free Cash Flow (in millions)| 2011| 2010| Walt Disney Co. October*| 2,679| 3,815| Time Warner Inc. December*| 1,679| 1,712| Free Cash Flow represents the cash that a company is able to generate after  laying out the money required to maintain or expand its asset base. Free  cash flow is important because it  allows a company to  pursue opportunities that enhance shareholder value. Without cash, its tough to  develop new products, make acquisitions, pay dividends and reduce debt. From 2010 to 2011 Walt Disneys cash flow had a considerable decrease of 29. 8 % clearly showing how Time Warners did much better with a small decrease of 1. 93 %. Solvency and Capital Structure Recap Taking in consideration the ratios used to analyze the solvency and capital structure for Walt Disney and Time Warner we can arrive to the conclusion that Walt Disney shows better results during the two year period from 2010 to 2011. Walt Disney has shown a clear better ability to