Separation of Ownership and control, and agency costs Assignment

Division of Ownership and control, and office costs - Assignment Example The supervisory group is answerable for maintaining the business and accepting choices as and when required however have practically irrelevant case on gainfulness. In such associations, division of possession and control is unmistakably noticeable. Numerous creators have portrayed this relationship, between the investors and the administration of the firm, as ‘pure office relationship’. This idea will be additionally talked about in the exposition with the assistance of ‘agency theory’. The idea of isolating possession and control was meant to help the organizations to accomplish the sole witticism of benefit amplification. This idea held the view that associations should find some kind of harmony between benefit boost and advancement of society, which is corporate administration. In the later segment, various hypotheses related with division of possession and control will be broke down to decide the expense of organizations. The idea of division of possession and control was first presented by Berle and Means in the year 1932. The office hypothesis clarifies that the proprietor (investors) of the firm is the head and the person who assume the liability of running and dealing with the business (the executives) is the operator. Both the head and the operator think about their own benefits. The Principal attempts to plan the administration framework for amplifying his utility. Similarly, the operator attempts to deal with the firm for satisfying his utility. On the off chance that utility of both head and the operator corresponds, the two of them appreciate increase in their individual utility. In any case, frequently the utility of the specialist varies from that of the head, and the operator attempts to boost his utility at cost of the head. To limit such frequencies, head needs to present inside control, which brings about an additional expense. Subsequently, the idea of detachment in proprietorship and control is identified with office cost. For limiting the cost, the organization hypothesis acquainted diverse administration with be trailed by the organization. Regularly organizations

Reading Summary Essay Example | Topics and Well Written Essays - 250 words - 2

Understanding Summary - Essay Example Thus, culture has developed as significant issue in universal business and contemporary business elements as the workforce progressively include individuals originating from various foundation of culture, race and nationality. Accordingly, comprehension of diverse qualities turns out to be massively basic components of contemporary organizations. The article ‘Making it Overseas’ shows why the ostracize chiefs will in general bomb in their abroad. The creators accept that absence of social seeing antagonistically impacts exile managers’ execution as they will in general apply conventional method of working which may not comply with the worth arrangement of the host countries. They should be set up to adjust and join social estimations of different countries when working abroad for picking up the trust of the individuals and interpreting the requirements of nearby people into solid business objectives. The creators stress that ostracize supervisors should be better mindful of scholarly capital and manufacture it through comprehension of culturally diverse comprehension. Besides, they should put forth attempts to fabricate socio-mental capital by being adaptable in their methodology and thinking so they can associate genuinely with their accomplices and partners from various

Aspects of Alzheimers Essay Example | Topics and Well Written Essays - 250 words

Parts of Alzheimers - Essay Example As indicated by the paper the other viewpoint is the issue of pressure the executives; where one is required to adjust their pulse because of the connection among Alzheimer’s and hypertension. This is on the grounds that; the pressure hormone, cortisol conducts broad harm in the memory cells of the cerebrum. In this light, as one ages or creates ailments, the body loses the common capacity to control cortisol levels in the blood. Accordingly, it is pivotal to figure out how to adjust worry to maintain a strategic distance from memory misfortune and improve retention.This paper traces thatâ regular practice is indispensable to the anticipation as in nursing, one is consistently bustling keeping an eye on the necessities of patients to the degree there is brief period for oneself. This is terms of mental and physical exercise; where one should practice twenty minutes day by day to keep the cerebrum dynamic. All these, in the nursing calling, require a practically absolute upgra de on one’s way of life to stay aware of a sound body and keep away from the danger of contracting Alzheimer’s because of inertia and terrible eating routine this is all under the pretense of a bustling timetable and a requesting calling. The most fascinating realities about Alzheimer’s as I would like to think lie in the avoidance of the said condition. This is on the grounds that; anticipation of the condition depends on a couple of changes to one’s way of life so as to shield the probability of the condition from happening and living healthy. Such changes in the way of life incorporate keeping up a sound eating routine as it impacts one’s memory.â  â â â â â â â â â â

Repercussions of an introvert personality Essay Example

Repercussions of a thoughtful person character Essay Example Repercussions of a thoughtful person character Essay Repercussions of a thoughtful person character Essay This report intends to clarify and legitimize the repercussions of a loner character, amazingly in an occupation which includes open contact. It is done as such by thinking about different components which would influence an individual character. The word character starts from the Greek word persona, which means veil. It is strikingly fascinating to be learned about the auditoriums of the antiquated Latin-talking world, wherein the veil was not utilized as a plot gadget to camouflage the personality of a character, yet rather was a show utilized to speak to or epitomize that character. An individual character might be characterized as the all out example of trademark perspectives, feeling promotion acting that establish the people particular strategy for identifying with the earth (Kagan and Havemann 1976) Personality is a far reaching idea yet it is exceptionally individualistic and one of a kind without anyone else. Character of an individual is controlled by the manner in which they see or respond to the world outside them. So as to decipher a character, it is critical to discover what spurs them, mull over their reasoning procedure, their method of responding to circumstances. The procedure of character in this way coordinates the procedures of observation, inspiration and learning. (Huczynski and Buchanan 1991) Personality, dominatingly, are of two outrageous kinds of character; social butterfly and self observer. Anyway recently there is a third term which is stylish; ambivert, utilized for characters that fall among social butterfly and self observer. A lay keeps an eye on portrayal of self observers character is depicted as an individual who is bashful, needs social abilities, won't talk, is pulled back and antagonistic. In any case, Introversion isn't equivalent to timidity, however loners may likewise be bashful. Loners pick single over social exercises by inclination, while modest individuals stay away from social experiences out of dread. (Whitten 2001) Myers Briggs says a self observer gets vitality from their interior universe of feelings and thoughts. (CIO 1995). Loners may not really be quiet individuals yet individuals who stay quiet by decision. They are here and there tranquil, thoughtful (intelligent) and acknowledge request. (Huczynski and Buchanan 1991). Thoughtful people have consistently been condemned of being desolate, modest and so on. Its value referencing Marti Laney portrayal of a contemplative person as somebody who is a decent audience, who appreciates time alone, seems quiet and is independent. Inner-directedness isn't equivalent to timidity, however thoughtful people may likewise be modest. Self observers pick lone over social exercises by inclination, while timid individuals maintain a strategic distance from social experiences out of dread. The different qualities of a self observer character have been examined and bantered with different ends. Anyway a couple of qualities are a crucial and can't be ignored as a trademark. The trait of a self observer draws out a procedure of their feelings, musings, and perceptions inside. Numerous a period loners are seen as social individuals; yet uncover not as much as outgoing individuals do. Thoughtful people take as much time as is needed to think before they react or respond in a given circumstance, and build up their thoughts by reflecting secretly. Self observers character attributes are all in all energetic, however not forceful. So, they are progressively private, and less open. Anyway at work environment, when chief or a senior requests the status or a clarification for a pending task, it will be viewed as impudent with respect to a representative to be quiet. The worker is relied upon to shout out and be liable. It is exceptionally observational that a self observer won't be chosen or can't continue an occupation including open contact. Quiet won't be conceded for self preoccupation of a person. A few self observers arent characteristically modest and can initiate discussions with anybody; they do talk and tune in to individuals. Be that as it may, most thoughtful people abstain from hitting a discussion with somebody. In contrast with out going natured individuals, Introverts come up short on the strategy of talking up without anyone else. Theyd rather have significant discussions about the profundities of human spirits and brains, yet discover hardly any chances (those arent the standard discussions at work during ordinary briefings or board room gatherings). While working in an organization any great job including open get in touch with, it is a piece of the ordinary everyday practice to make introductions. Contemplation of an individual will make the crowd of the introduction bring up issues on the capacity of the person. This can bring about significant levels of demotivation and can bring about side covering of the worker during introductions.

Perlocutionary Acts Definition and Examples

Perlocutionary Acts Definition and Examples In discourse act hypothesis, a perlocutionary demonstration is an activity or perspective achieved by, or as a result of, saying something. It is likewise known asâ a perlocutionary impact. The differentiation between the illocutionary demonstration and theâ perlocutionary act isâ important, says Ruth M. Kempson: Theâ perlocutionary act isâ the resulting impact on the listener which the speaker expects ought to follow from his articulation. Kempson offers this outline of the three interrelated discourse acts initially introduced by John L. Austin in How to Do Things With Words distributed in 1962: A speaker articulates sentences with a specific importance (locutionary act), and with a specific power (illocutionary act), so as to accomplish a specific impact on the listener (perlocutionary act). Models and Observations A. P. Martinich, in his book, Communication and Reference, characterizes a perlocutionary go about as follows: Naturally, a perlocutionary demonstration is a demonstration performed by saying something, and not in saying something. Convincing, maddening, actuating, soothing and motivating are regularly perlocutionary acts; however they could never start a response to the inquiry What did he say? Perlocutionary acts, interestingly with locutionary and illocutionary acts, which are administered by shows, are not customary but rather characteristic acts (Austin [1955], p. 121). Convincing, enraging, inducing, and so forth cause physiological changes in the crowd, either in their states or conduct; customary acts don't. An Example of a Perlocutionary Effect Nicholas Allott gives this perspective on a perlocutionary demonstration in his book, Key Terms in Pragmatics: Consider an exchange with a prisoner taker under attack. The police arbitrator says: If you discharge the youngsters, well permit the press to distribute your requests. In making that articulation she has offered an arrangement (illocutionary act). Suppose theâ hostage-taker acknowledges the dealâ and as an outcome discharges the youngsters. All things considered, we can say that by making the expression, the mediator realized the arrival of the kids, or in increasingly specialized terms, this was a perlocutionary impact of the articulation. Yelling Fire In her book, Speaking Back: The Free Speech Versus Hate Speech Debate, Katharine Gelber clarifies the impact of yelling fire in a jam-packed setting: In the perlocutionary case, a demonstration is performed by saying something. For instance, in the event that somebody yells fire and by that demonstration makes individuals leave a structure which they accept to be ablaze, they have played out the perlocutionary demonstration of persuading others to leave the building....In another model, if a jury foreperson pronounces liable in a court in which a blamed individual sits, the illocutionary demonstration of announcing an individual liable of a wrongdoing has been embraced. The perlocutionary demonstration identified with that illocution is that, in sensible conditions, the blamed individual would be persuaded that they were to be driven from the court into a prison cell. Perlocutionary acts will be acts naturally identified with the illocutionary demonstration which goes before them, however discrete and ready to be separated from the illocutionary demonstration. The Accordion Effect Marina Sbis, in a paper titled, Locution, Illocution, Perlocution, notes why perlocution can have an amazing impact: Perlocution has no upper outskirt: any significant impact of a discourse demonstration might be considered as perlocutionary. On the off chance that breaking news shocks you so you excursion and fall, my declaration has not exclusively been accepted valid by you (which is now a perlocutionary impact) and in this manner astonished you, however has likewise made you trip. fall, and (state) harm your lower leg. This part of the supposed accordion impact concerning activities and discourse activities specifically (see Austin 1975: 110-115; Feinberg 1964) meets general assent, aside from those discourse demonstration scholars who want to confine the thought of perlocutionary impact to proposed perlocutionary effects.... Sources Allott, Nicholas. Key Terms in Pragmatics. Continuum, 2011.Gelber, Katharine. Speaking Back: The Free Speech Versus Hate Speech Debate. John Benjamins, 2002.Martinich, A. P. Communication and Reference. Walter de Gruyter, 1984.Sbis, Marina. Locution, Illocution, Perlocution in Pragmatics of Speech Actions, ed. by Marina Sbis and Ken Turner. Walter de Gruyter, 2013.

Thoughts for the New Year, part 3

Thoughts for the New Year, part 3 The hell of fall semester is finally over and I have resurfaced from my cave of despair to blog again! Ive made this post two years in a row at this point, and I figured that it would only be appropriate to make one this year. Also, these posts are basically the only point all year where I reflect about my life, and I think I need that :P Sidequest 1: Learn the building numbers â€" 99% complete. Im SO CLOSE. I just had an embarrassing moment this year where I had no clue where building 24 was, so I cant quite give myself 100% on this. Sidequest 2: Get my Pirate Certificate â€" 25% complete.  In my defense, Im really trying to take the sailing class next semester, so maybe Ill get this to 50% before I graduate. Turns out varsity fencing is THE BEST and I never want to leave so Im okay with never completing this sidequest :) Sidequest 3: Collect 60 free t-shirts â€" ~50% complete. This is a wild and probably incorrect estimate, but honestly, Im sort of over the free t-shirt craze. This is probably because career fair t-shirts are pretty much my entire day to day wardrobe and this has not changed for the past two years. You get tired of wearing different Jane Street shirts every day. Sidequest 4: Get a cool internship/externship â€" 100% complete!  While this is technically completed because of last years internship at PlayStation, I have still not acquired one for this year because most of the companies I want to work for started their recruiting cycles super late (and I got rejected/ghosted from some of the big ones I applied to, RIP). Stay tuned!!11!!11! Sidequest 5: Pull a cool hack â€" ???% complete.  ??? Sidequest 6: Study abroad as many times as physically possible â€" 0% complete. Okay, I SWEAR Im going to do GTL next year. I actually did apply very half-heartedly this year, but with no intentions of doing it anyways because I need to work on my research project over IAP :P Sidequest 7: Beat Imposter’s Syndrome â€" 45% complete.  I think that this semester, I felt like I belonged at MIT the most out of any semester that Ive been here. This would have increased this percentage to like, 75% on its own. But I do feel shitty and sad about getting rejected from a lot of jobs, so Im going to subtract 30% from that total :,). Im pretty god damn awful at technical interviews. I think Im getting better with practice, but Im still pretty bad. Definitely worse than the MIT average :P. Sidequest 8: Survive the winter without a winter coat â€" 0% complete.  Ive given up on this. Im old and its too damn cold out. Sidequest 9: Build a thing â€" 40% complete.  I think I could theoretically build most of the basic things. I planned on building my own loft this year, but decided against it because a. its a lot of work and b. my boyfriend wound up doing all the building and he didnt want to build a loft, lol Sidequest 10:  Find something I genuinely love to do â€" 50% complete. Note that this is the first year that this sidequest actually has a number value. Long tangent and explanation incoming, per usual. I think the last year was the year that I actually found projects that I genuinely enjoyed working on, and that was really inspiring after suffering through three joyless semesters of CS requirements, I was honestly getting pretty damn sick of this school. I found a UROP where I do independent research thats relevant to my life interests01 who wouldnt love working with games and robots though??? . Im pretty much carrying out my own study using technology that I built myself. I might even be published by next semester if I get everything working this IAP! I also wrote some cool papers for classes I conducted ethnographic research into dating app culture at MIT for the class Petey taught last semester, and did an in-depth analysis of a TV Tropes page for T.L. Taylors Games and Culture this semester. I love writing papers, which is a truly hot take here at MIT, but every time I had a research paper due for a class, I truly relished the opportunity to dig down deeper into a subject that I didnt know much about before. To be honest, this focus on more research based projects is not the direction that I saw my life going in I was sort of resigned to becoming a regular old software engineer for the first two years of my MIT experience. But I think Ive realized that this should be my backup plan, because I really think that I can do more with my skills than become a software engineer02 read: code monkey . Working as a programmer this summer in PlayStation, my literal dream company, sucked the soul out of me more than I thought possible. And honestly, I suck at computer science granted, thats a comparison to people at MIT, but Im awful at technical interviews and havent gotten the hang of them after countless hours of practice. Maybe I just have Impostor Syndrome, but I think its telling that Ive enjoyed all my design-heavy UROP projects far more than I have enjoyed any software project in my entire MIT career. Im still trying to give it a shot. I applied to a lot of software internships03 and got rejected from a lot of software internships for next summer, as well as product management and product engineering internships. I think that having technical experience is important to actually gaining hard skills. But I cant see myself as a software engineer forever. Im rapidly approaching a crossroad that Ill have to navigate in senior fall. I think that I have three options that Ill have to choose from. Note that these are in order of preference. Apply to the Media Lab for graduate school (masters/PhD program).   Pros: Continue my research in games, learning, and robot collaboration. Participate in a ton of cool projects, and create a few myself! Meet some of the coolest people in the field! Maybe even form a startup! Learn about job opportunities beyond just being a software engineer, and gain the qualifications to get those jobs. Cons: I will be a broke grad student for a while. At minimum two years, even more if I get in to the PhD program. I dont know concretely what sorts of jobs I would get with this higher powered degree. I dont really want to go into academia. Its really hard to get in to the Media Lab and I may not be qualified straight out of undergrad. Apply to the MEng program to get a masters degree in a year. Pros: You get a masters degreein a year. Thats pretty dope. Gives an extra year of buffer before applying to real world jobs, and also I could apply for better jobs with a masters degree. Cons: Might be hard to find a TA-ship (which is how you get funded for the degree). Apply to jobs in the real world, preferably in 1. UX design 2. product management and 3. software   Pros: $$$ Start living *real life* $$$ Cons: I will probably be miserable pretty quickly if I do not get a job in UX design or product management. Im not really sure what Im going to do here. I will have to do at least two of these things, which doesnt bode well for my stress levels come next fall. If I boost my GPA enough this spring, Ill be able to apply to the MEng program and I probably wont have to worry about jobs for another year. If Im not able to, Ill have to apply to jobs. Ill be able to apply to the Media Lab either way because they dont care about your GPA, thank the lord. I might even have to do all three because MEng funding isnt necessarily guaranteed, and if I didnt get into the Media Lab or get funding for an MEng, I would definitely want a job as a backup. Next fall is gonna be a wild, wild ride. You might be wondering how I came up with that completion percentage for Sidequest 10. In short, I think I know what I like to do, and what makes me tick. I like my research, and I like doing research for topics that Im interested in. I like designing technology. I like thinking about technology at a high level and thinking about how users might interact with it. I want my career to be something related to UI/UX and not to algorithms, low-level systems design, compilers, or anything thats just pure coding. But theres always a but I still dont know exactly know what Im going to do with that knowledge. Looking out into the future, any of the three options I mentioned above seem possible. I have no idea what next fall will bring. It sort of feels like applying to college all over again.  I do hope that this will be the last significant crossroad that Ill have to encounter in my life, but honestly, it probably wont be, so I better start getting used to it. In retrospect, though, I think that the evolution of my reflections over the last three years is noticeable. Freshman year, I had my first existential crisis and realized that life is ultimately meaningless04 which is true, and still depressing if i think about it too hard . I also realized that I had no idea what to do with my life at MIT, and described this feeling as such: Now, let’s describe MIT as an ocean of possibility. Once you’re in it, you can basically head in any direction you want and land on solid ground. Such is the nature of this school, and this is one of many reasons it’s one of the best colleges out there. However, to go back to the analogy: once I reached the figurative ocean, my boat broke down, dumping me into the deep end and soaking my map, leaving me paddling in no particular direction whatsoever. I no longer feel quite like this. I think that Ive commandeered a boat fromsomewhereand paddled it in the general direction of forwards. Ive almost reached the mainland. I just need to decide which one of three rivers will carry me there, and Im sort of stalled at the confluence of all three of these rivers trying to decide. Good analogy? Not really, but lets move on. Life is still meaningless, but I dont think Im paddling aimlessly in my MIT career any longer. Sophomore year, I was writing from probably the lowest point in my MIT career. I realized that I hated computer science. I realized that I wasnt even very good at it, and regretted not exploring any of the other countless opportunities that MIT provides. I still am not computer sciences biggest fan, but I do think that knowing how to program is basically like knowing how to read in the current day and age. Maybe not quite that important, but its unequivocally useful to know how to program. And I do appreciate being able to create cool side projects and make games with the programming skills that Ive learned. Did I need a computer science degree to do this? Probably not. But having a computer science degree gives me marketable skills in case getting a masters degree doesnt work out for me. I still regret not exploring more opportunities within MIT. I realized that I should have been a 6-9 instead of a 6-3, but its too late now. I wish that I hadnt gotten started in the Media Lab so late, and wish that I had explored more Media Lab classes in freshman and sophomore year. I wish that I had time to take more evolutionary biology and genetics classes. I wish that I was good enough at math to understand more math and physics classes. I do regret all of these things. But I think that Ive found a little niche in the world of MIT that I fit into, and that Im pretty good at. And thats something that Im really grateful for, because I think that gives me the support I need to explore similar fields and find something that Id be interested in working on as a career. And really, thats something that freshman Nisha and sophomore Nisha would have both died to have. I think progress has been made. Stay tuned for next year, when Ill hopefully have a better idea of which road life will lead me down. Post Tagged ##and also complicated ##life is hard ##ugh adulting who wouldn't love working with games and robots though??? back to text ? read: code monkey back to text ? and got rejected from a lot of software internships back to text ? which is true, and still depressing if i think about it too hard back to text ?

Evaluation of business and financial performance of goldcorp - Free Essay Example

Most of the tools and methods which are required to be used in this research thesis are detailed in several papers of ACCA curriculum. However, after learning those tools, I did little to practice and apply them in real world scenarios. This research report provides me with an opportunity to apply those tools and methods to a practical company. I believe that by pursuing this topic of research, I would gain a deep understanding of a companys financial reporting procedures and methods. This will help me a lot in my future professional life as a qualified accountant. The Industry and Company The industry which I chose for my research work is the gold mining industry. Mankind has been mining gold as early as the first millennium BC. Today, the industry has become a multi-billion dollar cash cow and many large corporations from around the world are its participants. The company I am researching for my work is Goldcorp Inc. Based in British Columbia, Canada, Goldcorp is one of the largest gold producers in the world with 16 operations and development projects in 6 countries (citation from Wikipedia). In 2009 alone, the company managed to produce about 2.42 million troy ounces of gold and earned topline revenues of about $2.7 billion (citation). Reasons for Selecting Goldcorp I selected Goldcorp as my primary research company due to the following reasons: As stated above, Goldcorp is one of the largest gold producers in the world and is a key player in the gold mining and extraction industry. I believe researching a market leader in one of the oldest industries in the world can be both exciting and informative. The company fits the definition of a global company. It has operations in more than 6 countries. Researching a global company will help me understand the effects of global economy on a multi-national concern. I think that can be very useful knowledge for my career progression. Gold has been one of the most important safe havens of investment since the economic crisis hit the developed nations in the mid-2007. Analyzing the effects of volatile gold prices on gold extraction companies can be an interesting case for research. The Competitor In order to research and analyze a companys financial and business performance, it is essential to compare it with a suitable competitor. The company which I chose to compare with Goldcorp is Barrick Gold Corporation. Barrick Gold is another leader in the gold mining industry. The company is also based in Canada and has produced nearly 7.7 million ounces of gold. The revenues of Barrick Gold in the year ending December 2009 were nearly $8.1 billion. Objectives of the Research The primary objective of this research thesis is to analyze the financial performance and position of Goldcorp Inc. I will analyze various financial aspects of the company like profitability, liquidity, financial risk and investment view. Financial data for the past three financial years will be used to evaluation the performance. After the analyze of the financial situation, I will recommend whether the company is a good investment choice or not. The secondary objective of the research work is to analyze the companys business performance. This will be done by analyzing the effects of the global economy and various industrial factors on Goldcorp. The effects of various forces which influence the competitiveness of the company will also be studied in detail. Research Methodology I will use various tools and methods to complete my research objectives. In order to carry out the financial analysis, I will primarily use financial ratios. Various ratios will be calculated using a Microsoft Excel Spreadsheet and I will use them to perform a trend analysis of the companys performance for the past three years. I will also compare the most recent financial ratios of Goldcorp with its key competitor to make a judgment with regards to its financial performance and position. For the business analysis, I will use strategic business models. The strengths and weaknesses of the company will be analyzed using the infamous SWOT Analysis. Further, I will also use Michael Porters Five Forces framework to identify the effects of the key industrial forces on the performance of Goldcorp. Information Gathering Collection of information is one of the most important parts in any research work. The quality of research being done highly depends on the information which is used for the research. Information sources are of various types and they provide various qualities of information. Majorly, sources of information are categorized in two general types: Primary Sources Secondary Sources Primary Sources These sources of information contain the firsthand account of events, transactions, occurrences, experiments, etc. Naturally, primary sources of information are generated for a specific purpose and are highly reliable. In a business report like this one, primary source of information can be interviews with company officials, questionnaires and email correspondence with relevant staff members of the subject company. Despite being reliable and accurate, sometimes primary sources of information can be biased. Secondary Sources These sources of information contain secondhand accounts of events and transactions. Secondary sources are generally less reliable than the primary sources, mainly because they are generated for different purposes. Examples of secondary sources include business journals and newspapers, internet and companys annual reports including financial statements. In my thesis, I mainly used secondary sources of information. I ensured that the data I use is reliable and accurate. Following table shows the information sources I used for the collection of information: Sources Use of Information Source Collection Technique Annual Report (2009, 2008 and 2007) of Goldcorp Inc. and Barrick Gold Corporation I used the annual reports of both the companies extensively during my research. They provided me not only with the financial statements, which were used to calculate the ratios, but also with a great deal of information about the companies operations and its financial performance. I downloaded the annual reports of both the companies from their respective websites (the investor section). I saved pdf copies of the reports and also printed out certain pages (like the financial statements) which I used a lot. Websites of Goldcorp and Barrick Gold Corporation In the information age, the usefulness of websites can never be ignored. I used the official websites of both companies for various purposes. I got various statistics about the companies from their sites, like the amount of gold reserves they hold, etc. While I surfed the websites, I wrote every piece of important information in a separate word file along with the links to the page in which the information was present. This helped me to re-visit the page when required and also in the preparation of my List of References. Reuters.com I used this website extensively to do preliminary research the companies. Reuters has tons of information on companies like their recent share prices, summarized financial statements, latest articles and news, etc. I downloaded various pieces of information from Reuters to use in my project. This includes the company overviews as well as the relevant news articles. Google Finance Google Finance is a very user-friendly website. I used this site to primarily see market capitalizations of the companies, find about the competitor companies, watch share price charts, etc. The company pages on Google finance are very dynamic and they change all the time. Therefore, I bookmarked the relevant company pages on my browser and visited them every now and then to update myself. Online Newspapers Editions One of the most important sources of information I used in this research were the online newspaper articles. Newspapers like New York Times, Telegraph, Wall Street Journal, etc. had very interesting articles on my subject companies. These helped me a lot in knowing various facts as well as executive comments about the companies. Every time I came across a relevant article, I downloaded it to my computer in order to access it later. I maintained a separate folder for each such article. ACCA Textbooks I used my old text books to revise my financial ratios concepts as well as various strategic business models like Porters Five Forces and SWOT. Limitations of Information Gathering Research and Analysis Economic Analysis The economy of the world has been through a tough time in the last three years. In the second half of 2007, the developed economies started to suffer from one of the worst economic crisis since the Great Depression in 1930s. The epicenter of the financial crisis was the subprime and housing market in the US, which collapsed in 2007. The high interest rates in the US in 2007 forced many people holding subprime mortgages to default on their payments. The high default rates translated into a large number of foreclosures, which increased the housing inventory held by banks and financial institutions. Since almost all of these subprime mortgages were securitized in financial products, they were held by various US and European banks as investments. When the housing and subprime market started to collapse, these securitized products lost their value rapidly, thereby forcing large banks and financial corporations to make huge writedowns in their financial statements. Soon the crisis engulfed the entire financial and banking industry with many well-known names like Lehman Brothers getting bankrupted. Housing giants like Fannie Mae and Freddie Mac were nationalized in order to avoid their bankruptcy. The effects of the economic meltdown were not just limited to the financial and banking sector. Many other industries suffered greatly from the crisis. Gold played a key role in the international economics during the recession. Since the beginning of the crisis, gold was seen by many investors around the world as a potential safe haven investment. This increased investment in the precious metal in the last two years. Gold prices have therefore, seen significant increases and news highs have been tested frequently. Gold mining companies like Goldcorp and Barrick Gold have seen steady rise in their revenues over the last three years, despite the economic slowdown. This was mainly due to the high prices of the gold in the last few years. Industry Analysis The gold mining industry has been a key economic sector in the 20th century and its importance has increased much more in the last few years. As discussed above, the economic turmoil had turned gold into one of the most desired safe haven investments. The gold mining industry involves all activities from the extraction process to the eventual refining and sale. The growth of the mining industry is largely related to the price of gold in the international markets. This is because the price of gold determines the profits a company will make by the extraction process and eventual sale. Most of the gold extracted by the mining players is actually used for jewelry purposes. A much lesser percentage is used as a financial asset by major corporations around the globe as well as many central banks. According to Dollardaze.org, a market research blog, nearly 52% of the gold present in the world is in the form of jewelry (https://dollardaze.org/blog/?post_id=00479cat_id=20). The chart below illustrates this: Most of the demand of gold also comes from the Jewelry sector. In 2006, this sector was estimated at nearly $44 billion. This is followed by investment sector and the industrial sector (which includes electronics, dentistry and decorative applications) (citation). The supply of gold is much more segregated. Most of the gold was extracted and mined by South Africa as of 2006, with China and Indonesia following it (citation). Industry Life Cycle Business Analysis In the business analysis, I will analyze the effects of various competitive forces on Goldcorp Inc. I will also study the strengths and weaknesses of the subject company. Porters Five Forces This strategic business model was introduced by the well-known Harvard professor, Michael Porter in 1980. Below, I have applied the model to Goldcorp Inc. Threat of New Entrants The threat of new entrants in the gold mining industry is quite low. This is mainly due to the principle entry barrier of large sums of capital. The entire chain of gold mining and extraction is very capital intensive and it requires large sums of capital. Construction of mines and production facilities require a significant amount of long-term finance, which is difficult to obtain by new entrants. Apart from that, acquiring a suitable mine itself is very difficult because the gold reserves are limited and the already-known reserves are controlled by large mining corporations. The low threat of new entrants influences the margins of gold mining companies including Goldcorp positively. Bargaining power of suppliers The main thing required to gold mining corporations is land on which mining operations can be performed and gold can be extracted. Since land which is suitable for mining is limited, the bargaining power of suppliers is considerable high. Lands are normally controlled by governments of various nations and it is usually leased to the mining corporations under long-term agreements. The approval and permits to mine these lands can very expensive. Further, there is normally much competition regarding the acquisition of land by gold mining corporations because many major companies bid to acquire the same piece of land. Therefore, the high bargaining power of suppliers puts up a negative pressure on the margins of Goldcorp Inc. Bargaining power of buyers Gold is a commodity. This means that gold provided by one company is not very different from gold provided by other companies. Purity levels can be different but the price of gold normally incorporates that. Therefore, the buyers of gold have a significant power over the suppliers of gold. The price of the gold is decided by the international supply and demand; therefore buyers look for best contractual terms rather than low prices. The high bargaining power of buyers also exerts a downward pressure on the gold mining corporations. Threat from substitutes products Gold is a precious metal and has many substitutes like diamonds, silver, platinum, etc. However, despite the wide range of other precious metals, they are relatively less widely accepted. Gold has the prestige of being a worldwide alternative currency and it is accepted in almost any country. Therefore, the threat from substitutes is low at present from other precious metals. However, it can be argued that the other precious metals are gaining significant popularity and they may become as important as gold in the coming years. Current the threat from substitutes is low and does not affect the profitability or performance of Goldcorp largely. However, in the coming years, this may change. Competitive rivalry As discussed above, the price of gold is determined by the market forces. Therefore, the gold mining corporations does not compete on the basis of price. Further, gold is a commodity, so the competition is also not largely based on quality. The primary competition element between gold companies is the gold reserves. Gold corporations spend large sums of capital to acquire reserves and use them to mine gold. Reserves are the main strength of a gold corporation and the basis of inter-company competition. As of December 2009, Barrick Gold Corporation has the highest amount of proven and probably gold reserves, amounting to nearly 139.8 million ounces (https://www.barrick.com/GlobalOperations/GlobalOverview/default.aspx). Goldcorp ranks second on the basis of proven and probable gold reserves held, which amounts to 48.75 million ounces as of December 2009 (https://www.goldcorp.com/investors/reserves_resources/). SWOT Analysis SWOT Analysis is generally used to access the strengths and weaknesses of an organization. It also analyzes the opportunities present for a company in the business environment along with potential threats. Strengths of Goldcorp Reserves Goldcorp has a large amount of gold reserves spanning in various parts of the world. In the gold mining business, reserves are the backbone of any company. Not just the gold reserves, the company holds a large amount of silver as well as copper reserves as shown in the following table: Table and source These reserves provide a substantial strength to the companys asset base. Diverse Mining Operations Goldcorp has not concentrated its mining efforts in one particular region. In fact, its operations exist in various countries and regions including Canada, United States, Mexico and Central and South America (source). The geographical diversity in helps to minimize the regional risk factors present in individual territories and countries. Weaknesses of Goldcorp Less Diversification in Revenue Base Despite the strength and recognition of Goldcorp, the company has certain weaknesses like all other major corporations. Although, Goldcorp deals in various precious metal products, but its revenue base is relatively less diversified. The prices of precious metals are normally positively correlated. This means that in the event of a decline in prices of the metals like gold and silver, the revenues of Goldcorp can be negatively affected. Prone to Exchange Rate Fluctuations Further, the business model of the company is also prone to variances in the global exchange rates. Fluctuations in currency prices have serious effects on the profits of the company and this is evidenced by the large decline in the profitability of the company in 2009 (see profitability analysis below). Opportunities available Acquisition of more reserves Goldcorp owns a large amount of precious metal reserves but there are still various untapped gold resources. Many countries like India and China have huge reserves and Goldcorp can make deals with respective governments to mine them. The company has enough financial strength to expand beyond its conventional gold reserve sources. More Diversification As pointed out in the weaknesses of Goldcorp, the company has a relatively less diversified revenue base. The opportunity to diversify is present in the external environment and it will enable Goldcorp to ensure against falling precious metals. The competitor of Goldcorp, Barrick Gold Corporation holds interest in oil and gas properties as well besides its conventional precious metal business. Therefore, Goldcorp can also mitigate its risks by more diversification. Threats Competition One of the major threats faced by Goldcorp is the intense competition in the gold mining industry. The companies present in the sector normally compete on acquiring mines and pieces of land. With the gold prices soaring to new highs, it is very likely that new competitors, especially state-sponsored companies might step up their mining operations, making the marketplace even more competitive. Volatile price of Gold Another threat to Goldcorp is the volatile price of gold. Gold prices are normally determined on market related factors like supply and demand. Therefore, the variance in the prices of the precious metal can have substantial effects on the revenues of Goldcorp. A steep fall in the price of gold in the international market can cause a serious blow to profitability. Financial Analysis This section will deal with the financial aspects of Goldcorp Inc. In order to perform a better analysis, I will compare the key financial aspects of the company with its competitor, Barrick Gold Corporation. Profitability Analysis Revenue Analysis The topline revenues of Goldcorp have surged consistently in the last three years. The year-over-year increase in revenues has been 13% in 2009 and 10% in 2008. Most of this increase was a direct result of rising gold prices in the international markets. The increasing appeal of gold as a safe haven investment has led to the surge, which in turn positively affected the revenues of the company. This is illustrated by the following graph, which shows the price of the precious metal for the past 5 years: Besides the sharp increase in the prices of gold, the company also benefitted from increasing its production levels. In 2009, the production of gold increased by nearly 4%, whereas in 2008, it increased by more than 13%. The competitor company, Barrick Gold Corporation, also managed to considerably increase its revenues. Its sales increased by 7% in 2009 and 27% in 2008. A comparison of Goldcorp and Barrick Gold sales is given below: Just like Goldcorp, an increase in the annual production as well as rising gold prices helped Barrick Gold to improve its revenues. Net Profit Margin The net profit margin ratio is commonly used to determine the efficiency of an organization in converting its revenues of profits. It helps the analysts and investors to understand the underlying cost structures of the company. Net margin ratio is calculated by dividing the net profits of an organization with its revenues. Higher net margin ratios means that the organization has effective cost controls in place and the profitability is, therefore, better. The net margin ratio of Goldcorp was 8.82% in 2009, which decreased substantially from 60.99% in 2008 and 20.85% in 2007. The competitor, Barrick Gold, suffered substantially in the last three years, as its net margin ratio declined from 18.61% in 2007 to negative 52% in 2009. As the above chart illustrates, there has been a substantial decline in the net margin ratio of Goldcorp in 2009. By looking at the financial statements, it can be seen that the decline occurred despite a 13% increase in the revenues, which leaves with just one explanation; the decline is caused by a sharp plunge in the revenues. A deeper look in the income statement shows that the earnings from mining operations of the gold giant actually soared by nearly 34% last year, which was mainly due to strict cost controls of Goldcorp. The operating expenses rose minimally by 2% despite the jump in sales. This cost effectiveness primarily resulted from very low production costs of the company as compared to its competitors. This is illustrated in the chart below: It can be seen that the cash production costs per ounce of Goldcorp were very low in all the last three years as compared to Barrick Gold. Despite the low cast costs of production and increasing operating earnings, Goldcorp was not able to translate much of its sales into net profits. As it turns out, this was mainly due to a huge loss on foreign exchange transactions suffered by the company in 2009 as compared to a large gain in 2008. Most of the loss mainly resulted due to translation of future income taxes denominated in currencies other than US dollars like Mexican peso and Canadian dollars (pg 128, Goldcorp Annual Report 2009). As mentioned before in the SWOT Analysis, Goldcorp faces a significant threat from adverse currency movements and this huge loss is an example of such a threat actually effecting the profitability of the company. Barrick Gold Corporation also managed to increase its revenues during the last year, but the companys profitability was adversely affected as it eliminated its gold sales contract to un-hedge its gold reserves and benefit from rising gold prices. But the elimination of gold contracts cost the company more than $5 billion, eating up the revenues and turning them into an annual loss. Return on Equity Return on equity determines the amount of profit an organization earns as a percentage of its shareholders equity. This ratio shows the return a company is able to generate by using the funds provided by the equity investors. These funds include the share capital as well as the retained profits. Return on equity is calculated by dividing the net profits with the shareholders equity. A higher return on equity implies that the organization is effectively utilizing its shareholders equity to invest in projects which generate high returns. The return on equity of Goldcorp was 1.55% in 2009, which declined substantially from 9.86% in 2008 and 3.55% in 2007. On the other hand, the return on equity of Barrick Gold was negative 5.08% in 2009, which declined from 5.08% in 2008. The above chart illustrates that the return on equity of both the companies fell significantly in 2009, but the decline in Barrick Golds returns were much dangerous. The reason behind the plunging ROE of Goldcorp is the declining profits of the company. As discussed above, Goldcorp managed to earn decent operating earnings but failed to translate them into net profits, mainly due to a huge exchange rate loss. In order to access the companys profitability situation without the exchange rate effects, I calculated the adjusted net profits of Goldcorp, in which I eliminated the exchange rate gains and losses for a deeper analysis. 2009 2008 2007 Adjusted Net Earnings (millions of $) 606.80 416.70 509.50 Adjusted ROE 3.92% 2.79% 3.93% Source: Goldcorp Annual Report 2009 The above table shows that the adjusted earnings of the company increased in 2009, thereby increasing the adjusted return on equity as well. Moreover, the returns Goldcorp earned over its shareholders equity are quite consistent, which is a good sign for profitability. Barrick Gold, the main competitor, suffered a major blow to its profitability in 2009. But that was mainly due to a one-time charge in its income statement relating to the un-hedging of its gold contracts. The loss from eliminating the contracts is not expected to continue in the future, therefore, the profits of the company are expected to show a significant rise in the coming years. Overall, the profitability of both companies was masked by various events like exchange rate losses and hedging transactions. Goldcorp managed to improve its profitability as the price of gold and the high demand presented with a suitable opportunity. Barrick Gold also benefited from the favorable environment; however, its hedging decisions cost the company too much to show a better profitability position than its arch-rival. Liquidity Analysis Current Ratio The current ratio is generally used to access the ability of an organization to honor its short-term obligations. It is calculated by dividing the current assets of an organization with its current liability. Higher current ratio normally means that an organization has sufficient short-term assets and resources to pay off the obligations that may arise in the upcoming twelve months. The current ratio of Goldcorp was 2.18 times in 2009, which increased from 1.56 times in 2008 but declined from 2.96 times in 2007. The competitor, Barrick Gold Corporation had its current ratio at 2.79 times in 2009, which increased from 2.23 times in 2008. As the above chart shows, the current ratio of Goldcorp improved in 2009 from previous years figure. The main reason behind the increase in the current ratio of the company was a 111% jump in the current assets, whereas the current liabilities increased by just 51% in 2009. Goldcorp managed to increase its cash balance by more than two folds, suggesting that the company has sufficient liquidity to meet its short-term obligations. But a closer analysis of the various activities that provided the cash is necessary. (millions of $) 2009 2008 Growth Operating Activities 1270.2 866.0 47% Investing Activities (1457.7) (441.7) 230% Financing Activities 799.2 659.9 21% Source: Goldcorp Annual Report 2009 The above table shows that most of the cash is generated by the operating activities. Also, the company managed to increase its operating cash flow in the last year, which suggests that Goldcorp is translating much of its profits into actual cash. This is a good sign and indicates a decent liquidity position. Barrick Gold Corporation also managed to improve its current ratio in the last year. In fact, the competitor had a much higher current ratio than Goldcorp. The balance sheet of Barrick Gold shows that the cash balances of the company are much higher than Goldcorp and increased significantly in 2009. Therefore, on the basis of current ratio, it is safe to argue that Barrick Golds ability to meet its short-term obligations is much higher. Acid Test Ratio Acid Test ratio is another ratio which is commonly used to analyze the liquidity of a company. Inventory is often considered to be an illiquid item in the current assets because it is normally the most difficult to be converted into cash. Therefore, many investors and analysts prefer to take inventory out of the equation in order to better judge the liquidity situation. This ratio does exactly dat. Acid Test ratio is calculated by dividing current assets less inventory from the current liabilities. Goldcorp had an acid test ratio of 1.70 times in 2009, which increased from 1.10 times in 2008 but plunged from 2.37 times in 2007. On the other hand, the acid test ratio of Barrick Gold was 1.92 times in 2009, which increased from 1.54 times in 2008. Like the current ratio, the acid test ratio of both companies also improved in 2009. The inventory of Goldcorp increased by nearly 54% in 2009 but despite the increase in the stocks of ore, the company managed to maintain sufficient liquid assets. A higher amount of inventory is necessary to support a larger sales volume, therefore, the rise in inventory is essential to the expansion of the company. In any way, there is no evidence to support that the increasing inventory is due to stale stock because of the high demand of gold and other precious metals. The competitor, Barrick Gold, also increased its stockpiles of ore by nearly 20% in 2009. This might be due to the same reason, which is to support larger sales. Further, the acid test ratio of Barrick Gold is higher than that of Goldcorp, suggesting that the company is in a better liquidity position. Overall, it is safe to conclude that both the companies have sufficient liquidity levels and are in good position to satisfy their obligations. However, Barrick Gold have higher cash reserves and have better liquidity ratios, which indicates that the company has better liquidity. Capital Structure Analysis Debt to Equity Ratio Capital structure is a very important financial aspect of any organization. A company normally finances its assets and operations with either equity capital or debt capital. In general terms, debt capital is a cheaper source of finance, mainly due to tax credits available on the interest payments. On the other hand, dividends paid to equity financiers receive no tax benefits, which effectively increase the cost of equity financing. Despite the fact that debt capital is less expensive, large amounts of loans or fixed charge capital can seriously increase the financial risk present in the company. Interest payments are normally fixed and do not vary with the companys profitability. Therefore, an organization has to maintain a balance between equity and debt capital to ensure that its cost of capital is low and its financial risk is also tolerable. The debt to equity ratio (also known as gearing ratio) determines the mix of debt and equity financing in a company. For Goldcorp, this ratio was 4.64% in 2009, which increased from 0.04% in 2008 and fell from 7.98% in 2007. On the other hand, Barrick Gold had a much higher debt to equity ratio in all the three years under review. The above chart clearly illustrates that the gearing ratio of Barrick Gold is much higher than that of Goldcorp. The balance sheet of Goldcorp shows that the long-term debt of the company stands at $719 million, which increased by nearly from 5.3 million in 2008 and 1,036 million in 2007. The pattern of increase in the debt capital of Goldcorp shows that the company redeemed a large portion of its long-term debt in 2008 and borrowed more to replace the old debt in 2009. This is also confirmed by the cash flow statement of the company. The low gearing ratio of Goldcorp implies a low financial risk. By reviewing the income statement of the company, it can be seen that the interest expense is significantly lower as compared to the earnings before from operations. In other words, the interest cover of Goldcorp is significantly high, as show in the following table: Interest Cover 2009 2008 2007 Goldcorp 43 18 30 Barrick Gold n/a 69 11 On the other hand, Barrick Gold fell victim to one of the classic outcomes of financial risk. The competitor had a much higher gearing ratio, which means that the financial risk is high. This in turn means that the company has higher interest payments and in times of losses, the fixed interest expense puts up a further negative effect. In 2009, Barrick Gold had negative profits to pay the interest expenses, which resulted in a negative interest cover. Overall, the financial risk of Goldcorp is much lower than that of its competitor. Further, Barrick Gold significantly increased its debt levels in 2009, suggesting even higher levels of risk. Investment Analysis Dividend Cover Dividend cover determines the number of times an organization can pay its dividends from current years earnings. This ratio is calculated by dividing the total annual dividend of an organization with its net profits. A higher dividend cover implies that an organization has sufficient profits to pay its shareholders in the form of dividends. This is interpreted as a good sign by potential investors. Further, high dividend cover also means that the organization can maintain its dividend policy in the future. The dividend cover ratio of Goldcorp Inc was 1.83 times in 2009, which decreased from 11.45 times in 2008 and 3.61 times in 2007. The competitor, Barrick Gold, had a negative dividend cover ratio. As the above chart shows, the dividend cover of Goldcorp fell significantly in 2009. The decline in the ratio came despite the fact that the company maintained its annual dividends at 18 cents per share. The primary reason behind the fall in the dividend cover of Goldcorp was the plunging net profits, which resulted as the company recorded a huge foreign exchange loss, which ate up almost all of its operating profits. Despite the falling profits, Goldcorp maintained its dividends, which might a result of two things: The company expects the exchange losses to reverse in the upcoming years, therefore, a revision in the dividend policy was not considered appropriate. On an adjusted basis and excluding the exchange losses, the company actually managed to increase its revenues and profits. Therefore, Goldcorp maintained its dividend policy as a signal of strength to its shareholders and potential investors. Barrick Gold Corporation also maintained its dividends, despite a sharp fall in profits. As discussed earlier in the profitability analysis, un-hedging of gold contracts resulted in the huge loss posted by the company. The un-hedging is a one-off event and in the coming years, the companys profits are expected to return to normal, therefore, Barrick Gold may have decided to keep the dividend payments stable. Dividend Yield Dividend yield determines the return on investment an investor can earn by receiving dividends from an organization. Dividend yield is calculated by dividing the cash dividends per share paid a company with share price. Investors and analysts normally look for companies with high dividend yield because that implies a higher return on the investment. For the purpose of this RAP, the dividend yield is calculated by dividing the dividend per share with annual closing share price of the companies (at the end of December). The dividend yield ratio of Goldcorp Inc was 0.46% in 2009, which decreased from 0.58% in 2008 and 0.54% in 2007. The competitor, Barrick Gold, had a much higher dividend yield than Goldcorp, as shown in the following graph: The main reason behind the decline in the dividend yield of Goldcorp was a slight increase in the closing share price of the company in 2009. Higher share price means that a higher investment is required to purchase Goldcorps share, whereas the dividends provided by the company remained the same. Therefore, the return provided by the company to its shareholder in the form of dividends effective declined in the last year. The competitor, Barrick Gold, also suffered a decrease in its dividend yield, however the company provided a much higher return to its shareholders in the form of dividends. This means that Barrick Golds shares are much more attractive to potential investors, if the dividend yields are considered. Conclusion Goldcorp is one of the largest gold mining companies in the world. It is a key player in the international precious metal industry and has business interests in various regions and countries around the globe. During the economic recession, which hit the developed markets in the last two years, gold prices have rallied to new highs as the demand for gold as a safe haven investment increased. Most gold companies, including Goldcorp and Barrick Gold Corporation benefited from higher prices and demand. The industry structure of gold mining industry is interesting. The companies face little threats from new entrants as the financial barriers to enter the marketplace are quite high. But since gold is a commodity, the buyers have significant bargaining power. Gold mines around the world are also limited, which gives the suppliers of mining lands considerable power as well. The competition within the market participants is tough as well. The profitability analysis of Goldcorp gave interesting conclusions. The companys profits fell significantly in the last year, mainly due to large exchange gain losses. However, if the exchange losses (which are a very volatile item) are removed from the equation, then on an adjusted basis, the company actually managed to benefit from higher gold prices as well as soaring demand. Goldcorp increased in production in the year and reduced its production costs significantly, thereby achieving higher margins. However, despite the improvement in the adjusted profits of the company, the exchange gain losses cannot be completely ignore as currency prices do pose a very serious threats to companies like Goldcorp. If the company suffers more exchange losses in the coming years, then there may be some serious profitability concerns. On the other hand, the competitor, Barrick Gold, also suffered from a sharp decline in its profitability, mainly due to a large loss relating to un-hedging of gold contracts. Apart from this loss, Barrick Gold also improved its profitability in the last year. Liquidity ratios of both the companies showed that both companies have considerable amount of short-term assets to satisfy their obligations. Goldcorp had sufficient cash reserves on its balance sheet and most of its cash came from operating activities, which suggests that the company is actually converting its profits into cash flows. However, despite a decent cash position, it is clear from the analysis that Barrick Gold had a much better liquidity situation than its competitor. The current and acid test ratios were higher as well as the cash balances. Capital structure analysis of both companies also yielded very interesting results. The gearing ratio of Goldcorp was very low was compared to its main competitor. This shows that the company uses very little amount of debt capital to finance its assets and operations. Less amount of debt implies that the company has low financial risk, therefore, it is in a better position to raise more capital when needed. On the other hand, Barrick Gold Corporation highly geared and has a large amount of debt capital in its capital structure. The investment analysis of both companies revealed that both Goldcorp and Barrick Gold managed to maintain their dividends in the last year despite fall in the profits. The dividend cover ratio of Goldcorp was much higher than its competitor, suggesting that the company might not have any trouble in maintaining its dividend policy in the future on a relative basis. But the dividends of Barrick Gold yielded much higher returns to the shareholders as compared to Goldcorp, which suggests that potential investors may find Barricks shares more attractive. It is safe to conclude that both companies have a decent investment picture at the moment, despite being dented by sharp declines in their profits. Recommendation Overall, I believe that Goldcorp showed a reasonable performance in the last three years despite the economic recession. It is true that the company suffered from large exchange losses but if the company hedge against future currency movements, then it may reduce them to increase its profitability in the future. Goldcorp remains a strong and large company and strong demand in the gold is expected to drive the revenues further up. But still, due to uncertainty in the profits of the company I would rate it at HOLD and would not recommend investing in the company at the moment.