Financial Management Dissertation Topics For Eye-Catching Dissertations!

Firms use many options to finance their assets especially expensive equipment that is required to continue the production activities. The most common financing option in the U.K, includes lease financing, which does not transfer the ownership to the lessee but allows the use of the asset in the form of regular rent payments. This type of arrangement is an operating lease, which is different from a financial lease that gradually transfers ownership to the lessee. Other options include warrants and convertibles securities, warrants allow the purchase of an underlying asset at a minimal price, and convertible securities provide a chance of ownership upon maturity. Each method has its pros and cons, and it depends on the needs of the firm to exercise any particular option. The firms mostly used the lease financing option as it is the most feasible. It allows the ownership of hard assets like equipment and soft assets like IT, and software, etc.

The world trade organization is an international body that is formulated to promote trade among countries. The organization is responsible for creating global markets and facilitating cross border transactions. WTO not only aids in commodity trading buy also involve in services trading like telecommunications and banking. It also deals with the issue regarding intellectual property rights. World trade organizations hold meetings with delegates of different nations to reduce barriers to free trade and discuss issues regarding the quota. The dispute settlement panel of the organization plays a significant role in settling the trade-related disputes among countries. The organization helps the information about international markets and creates an alignment between different countries' policies. WTO is often criticized for promoting an international market at the cost of domestic markets in many countries.

The liquidation procedure involves selling the company's assets to pay back the creditors it can be voluntary or compulsory and might involve the court. Some certain acts and laws govern the procedure of liquidation in the U.K such as the Insolvency act of 1986, companies act 2006 and, the insolvency rules 2016. It is the prime responsibility of the law enforcement agencies to enforce the liquidation process, once the court has granted the orders. The procedure is often very complexed and companies take help from the expert often the insolvency specialists.

The accounting money measurement concepts have the underlying assumption of a stable currency. The concept records the transactions at their monetary value and ignores the impact of inflation or changing the value of the currency because of any other factor. If the financial statements are recording the transactions on the value of money and not updated regularly for inflation-related adjustments, they will show a distorted picture of the business. The transactions from different accounting periods cannot be treated equally and no comparison can be drawn unless there is an adjustment for the value of money. If KFC wants to implement the money measurement concept in an unstable economic environment, it needs to set some ground rules for the cost adjustment. Either a factor of inflation can be added or the values can be tied to an inflation index for automatic adjustments. The actual purchasing power of the currency at any given time should be considered while recording the transactions at face value. The transactions can reflect an exaggerated and inflated price for purchases if they will not be adjusted to the real value of money.

Banks are required to maintain certain amounts of currencies to ensure that they can pay their financial obligations and liabilities. In the case of banks the main liabilities ae the consumer's deposits. Regulators and governments impose certain regulations to ensure that banks maintain a certain percentage of their deposits in the form of currency reserves to maintain the depositor’s trust. In addition to currency reserves, banks often hold government securities as a safe and liquid instrument as per the statutory reserve’s requirement of the regulator. The U.K did not impose any reserve requirements on its banks for a long time and even the taxpayers had to pay the bailout for banks during the major financial crises of 2008. There were minimal capital adequacy requirements and little equity to absorb any losses. The banks of England have agreed to maintain a reserve ratio of 12.5% and finance houses a minimal ratio of 10%. This ratio provides the customer with a safety cushion in case of any unforeseen event or large withdrawals from the banks. Further, the government's and bank of England's guarantee ensures that any customer can withdraw his money at any time from his bank. The main guarantee for the U.K bank’s consumers is the backing of the government to the entire backing system.

The financial management of multinational corporations is especially difficult due to their unique nature and large business structure. These companies have foreign subsidiaries and derive revenues from other countries, so cross-currency variations need to be in consideration for their financial management. These companies’ sales revenues, assets, and liabilities van be in different currencies. Also, these companies are often listed in the stock markets of foreign countries and have to comply with the local regulations for reporting as well. The tax regulations, legal and regulatory environment, and political and economic factors in other countries are significantly different from that of the U.S. Multinational firms need to be competent in different types of environments. Multinational firms take advantage of cross-currency variations, lower labor costs, and tax incentives in different countries. But there is an additional cost for these companies to maintain internal controls and be compliant with the local laws. Multinational corporations also enjoy the benefits of diversification and generate more revenue from various sources. Their capital structure is also affected by local factors like the cost of debt in the country. These companies have steady cash flows and enjoy the revenue from multiple markets so they have more cash and less reliance on debt.

Liquidity is the ability of any institution to meet its obligations, especially the short term without any financial damage or losses. Since banks have a lower proportion of equity as compare to their liabilities the risk is high for potential default. The liquidity risk in the banking industry can arise from long term investments in assets by short term liabilities. The liabilities of banks include mainly customer deposits and other bank deposits. Liquidity risk management is an important part of a bank's asset-liability management. There are certain measures taken by the central banks to counter the liquidity risk such as reserve ratios and statutory reserve requirements. The regulatory authorities include the prudential regulation authorities in addition to the central bank. The international Basel records have also established certain parameters for effective risk management across the globe that include minimum capital adequacy requirements.UK financial services authority is also involved in the management of liquidity risk. Liquidity risk can be related to market risk and requires contingency planning. Certain changes in the economic environment can lead to a liquidity crisis. E.g. as a result of the change in any government policy the consumers might decide to withdraw their deposits and create an immense pressure for the banks.

The dividend policy is one of the important corporate decisions taken by the company. It dictates whether the company would return the profits to its shareholders or invest in the business to gain future benefits. In the U.K majority of the companies are paying dividends. Some companies take shareholder's votes to decide about the dividend policy but some declare the final dividends as per their dividend policy without taking any input from the shareholders. The size of the companies also plays a crucial role in the determination of dividend policy. Different companies follow different approaches to dividend some follow the progressive approach and others follow a steadier dividend policy.UK firms in different sectors have higher dividend ratios and low plow back ratios that indicate their reliance on debt to finance their assets and capital investments. The larger firms have lower plow back ratios in comparison to the smaller firms. There are also sector-based differences with technology sector companies that have more flexible payout ratios. The technological companies also have lower dividend yields despite liquidity. The companies that can raise funds easily because of lower interest rates and transaction costs rely more on debt than the capital for expansion and capital expenditures and have high payout ratios.

The startups face unique challenges because of their business structure and lack of expertise. They often face financial challenges as their seed money takes time to get recovered, till the company reaches the beak even point. The startups are also burdened with the expenses of establishing a new business that can range from hiring new employees to software acquisition. In the U.S the companies need to register for starting a new business and get a unique tax identification number. The companies can also protect their businesses by getting a suitable insurance cover. The insurance is especially important in the case of the personal liability structure of the entity, where the owner needs to finance the obligations in case of default. The fintech startups are of particular interest to policymakers and the regulators which impose unique challenges, as they don’t come under the radar of financial regulations. The startups can also get funds in the form of venture capital. Many angel investors invest a large amount of cash after realizing the value and potential of a new business. The companies can also hire experts and professional firms to manage their finances.

Corruption is often the root cause of many financial crimes and often opens doors for more sophisticated techniques for fooling investors. The banking system all over the world has many loopholes that have resulted in Shell companies, tax heavens, and money laundering. The financial crimes of Wall Street are no secret. The 2008 crises of the derivative market were the result of insecure lending and irresponsible creation of debt through credit default swaps. The bankers in their greed for money gamble the entire financial system and many banks had to be bailed out by the U.S government. The gold and silver market is also said to be manipulated by the big players for their financial gain. The loopholes can be traced by observing the money trail of such transactions and identifying their beneficiaries. Investment banks of the U.S are often criticized for initiating the merger and acquisition deals that directly benefits them. These bank's management fee and their share on the transaction money can be traced for the identification of such crimes. With the rise of fintech and digital banking, another aspect of corruption has occurred in the form of data mining. Consumer information protection is part of the bank's obligations and their privacy should be protected

The accounting method followed in the U.K is the GAAP or generally accepted accounting principles. The GAAP method is different from the U.S based International financial reporting standard IFRS primarily of rules. The GAAP is the rule-based system while IFRS relies on the principles of accounting. The GAAP records revenue and expenses at the time of occurrence regardless of the receiving of actual payments and thus ignores the accrual basis of accounting. The development costs can be capitalized in the IFRS but are generalized as expenses in the GAAP system. The income statement is also different and all extraordinary or different items are recorded under the net income. The inventory management in GAAP follows the market value method for evaluation or the initial cost whichever is lower. The cost of inventories includes storage and holding costs and is treated as a negative item that reduces the profitability of the firm. GAAP also allows a choice between LIFO and FIFO rules of inventory. If the inventories are replaced then they would be treated on the replacement cost rather than the market value. The inventory reserves account are treated as contra accounts to inventory accounts and reduces their balance.