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Comparison Between Stock Market Technical Analysis and Fundamental Analysis

There are typically two schools of thought when it comes to the course: you have stock market technical analysis and the other one is fundamental analysis. The two approaches could not have been more different although interestingly enough, they have more commonalities if you are willing to go beyond the muck-raking.

Technical analysis

This type of approach skips on the company finance and instead focuses solely on the price fluctuations. Its advocates believe that all you need to know is already integrated in trends and patterns of the indices. to spot these trends, they use complicated algorithms and the most advanced forex or stock trading software that will collates historical data and input it into the system. Each depression and expansion are reflected in the prices which are updated religiously. If the company has a history of performing well-regardless of any new information that causes its stocks to plunge-it's still going to be a good bet in the future. While volatility would scare most people, proponents of stock or forex trading analysis actually welcomes it because that is how they make their profits.

Fundamental analysis

Now, fundamental traders do not rely on the market movements alone. They base their decision on the data that reflect the company's financial standing or mutual fund analysis and add that to other non-financial data like industry news, trading partners, and even the political condition of the locality where the company is doing business in. For example, if the head honcho of company A dies suddenly, you can expect the value of the company stocks will falter. But if the similar company merges with company B, which has the financial resources to bring company A to another level, you can expect stocks to skyrocket.

Naturally, this takes an enormous amount of work and focus because you really need to soak up all the information that comes up about the company you are interested in. You have to factor in the credit risk, market projections, internal management structure, organizational chart, and stock valuations to make sure that if the company is doing well, it's not a fluke.

A perfect blend

But really, there is no law against using both approaches to better position you in the stock or forex market. Technical analysis is often time seen as the preference of the impatient people because of its short-term character. Fundamental, meanwhile, can be likened to the turtle in the children's parable "The Tortoise and the Hare." You may move slower but you are going to win in the end. But by mixing both systems and maybe purchasing a stock or forex trading analysis software, you can choose from among the companies that are doing well based on industry data then using the tools in technical analysis to verify the potential of that company.

What You Really Wanted To Ask About Automation Projects And Now You Don't Have To

Any of the automation projects that your company may contemplate undertaking should be preceded by some very specific questions and explicit answers. First of all you need to determine what the objective is for wanting to take on any of the automation projects. More specifically, what is the competitive edge that you are trying to achieve by automating some part of your business. During the process of answering this question you should find out the details on such topics as what are the current action of competitors in the market. You should define as many of the demands that are in the marketplace as you can. Also it would best for you to know what technologies are available to help you complete your possible automation projects.

Going down to a lower level of definition, it would be to your advantage to look inside your own company to find out what are the targets for your in-house systems that could support automation. Find out if the systems are in place to be able to do this support now and in the future. Find out if there are plans or movements toward supporting technology for automation projects. If there is no support now what is the plan for future support and when can it happen. The availability of systems support for automation is necessary for automation projects to be considered for any business. Once it is determined that there is or will be systems support for automation projects there should be well-defined detail of the level of support that can be expected from in-house systems. Actually there could be a situation where automation projects and system support them could be implemented simultaneously to achieve the proper level of increased production efficiency.

Company personnel have to be involved in the tasks that are part of any automation project that you might endeavor. One or more teams of employees should be formed to perform the analysis concerning possible automation. Not just any employees will do, those that could successfully assess and implement the correct automation must be involved. Usually management is not aware of the difficulty and the demands that an undertaking of automation will make on a business, physically, financially, and psychologically. Those folks who have vision for positive company change should be involved. Employees who have the most technical experience, like engineers, computer operators, equipment operators, and mechanics are the ones that might be best. This does not mean that they alone should be selected. Those folks that manage these types of function would also be very good members. The tasks for such teams should include the evaluation of new employee skills that might be needed to support automation, what levels of maintenance might be needed for automation, and what levels of computers might need to be available.

The evaluation that is done by a project team should include an audit, then possible simplification of any existing automation before attempting to set up new automation. A detailed audit will force a close scrutiny of current capabilities and let the project team become aware of the strengths and weaknesses of current operations. There should be an application of the adage "Don't buy what you don't need". Close scrutiny will help to apply this principle and keep the cost of a project down.

In deciding what is the optimum way to apply automation, you need to determine what is the best combination of equipment to achieve the desired result. To do this it is a good idea to have more than one alternative combination of equipment that will fill the need. There can be a range of possibilities in these alternatives, technically and economically. There may even be a way to mix and match different types of equipment to get different alternatives. Not only would the technical ability of any given solution be examined, but also the economic impact of that alternative solution on the business would be scrutinized. You are not interested in throwing money at automation solutions, so you want to get the best technical solution in place that has the lowest cost possible. You should use net present value as one of the ways to calculate the economic feasibility of any alternative. Be sure and include both physical and perceived benefits in the calculations. The solution that you decide to use should have a positive net present value as a result of this calculation. This will provide one concrete way to compare alternatives before implementation. An optimum automation solution should contain any part of the existing compliment of current automation that can be useful with the new automation that is purchased.

Why Consider Offshore Banking for Your Personal and Financial Privacy in this Post 9-11

The point is, by moving assets offshore, you regain control. Within the United States, you must play according to federal rules - rules that get a little less citizen-oriented every year. Offshore, there are entire jurisdictions organized to play by your rules. You design the game, and you get to be the winner

There are major concerns concerning privacy. You will hear a staggering number of horror stories from people whose lives have been indelibly marked by corporate and governmental intrusion.

If you're like many Americans, you probably assume that the Constitution ensures your unalienable right to privacy. Unfortunately, you're wrong. The Fourth Amendment - the national guarantee most often cited when people talk about confidentiality - specifies only that "the right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures shall not be violated and no warrants shall issue, but upon probable cause...."

The men of 1787 who drafted this legal tenet clearly meant to protect privacy as it pertained to property. They wanted a right to unthreatened ownership of land and personal possession. Our founding fathers lived in a world where people shared common norms of morality. They didn't need to sort through the questions that plague a global information-service economy. They didn't need to worry about how one man might decide to use (or share) private financial information about another. They didn't foresee an era in which sophisticated communication systems could instantaneously interact, calling up, comparing and exchanging information about you or me within a matter of several seconds.

In other words, they didn't foresee the 21st century post 9 /11. Today, the greatest threat to your individual privacy has nothing to do with property theft.

It has to do with access to information about you and your activities. Where you live and work, the names of your children, your medical and psychiatric history, your arrest record, the phone numbers you dial, the amount of money you earn, the way you earn it, and how you report it to Uncle Sam after if s yours - these are the information tidbits that will undoubtedly remain stored in lots of different places as long as you keep your money within U.S. borders.

An offshore financial involvement offers you and your family the one and only escape from this government-endorsed conspiracy. Just as you can legitimately make more money oversees than you could ever hope to earn in this country, you can also look forward to enjoying your foreign profits in an atmosphere of complete confidentiality. In money havens scattered from Hong Kong west to Aruba and south to the Netherlands Antilles, you can benefit from iron-clad secrecy laws that strictly forbid any bureaucratic review of your personal financial records. That means you can legally guard your assets from the overzealous inspection that has become part and parcel of U.S. banking and investment portfolio management.

If you're like most upper- and middle-income Americans, the federal government alone maintains nearly 150 separate files on you. According to one recent analysis, Uncle Sam currently has computer tabs on 10 billion files, a virtual treasure trove through which an army of eager bureaucrats can search and snoop. The state in which you reside probably holds another dozen or so active computer files on you. And the Census Bureau routinely updates its records. Any minute of any day, its computer system can spit out your basic data: sex, race, ethnic origin, marital status, employment situation and place in the household pecking order. Most important, it can legally pass any or all of that information along to other interested branches of government.

Then, of course, there's the Internal Revenue Service. The IRS knows how much money you make, and where it comes from. The Social Security Administration probably knows more than you do about your employment earnings history. If you served in the armed forces, you're permanently listed in the archives of the Veterans Administration as well as your service branch.

Are you a borrower? If so, then at least one credit bureau (and probably several) keeps a file on you. Lenders nationwide can request from any one of these independent business operations a slew of information about your income, debts, employment history, marital status, tax liens, judgments, arrests and convictions.

Still another category of consumer investigation companies collect information about the health habits and lifestyles of likely employment and insurance applicants. How do these agencies get their information? Mainly from the friends, neighbors, employers, landlords and other casual professional associates of those they are investigating.

What does the law have to say about this blatant invasion of privacy? What are your rights when it comes to keeping your financial life confidential?

You don't have many. And the ones you do have are steadily eroding. The bottom line is that while the U.S. Supreme Court has recognized your constitutional right to privacy in some cases, it has repeatedly failed to extend that right to "informational privacy." In other words, you have very limited ability to curtail the collection, exchange or use of information about you or your personal financial situation.

There are, in fact, laws that authorize the invasion of your privacy. One of them is The Bank Secrecy Act of 1970 (Public Law 91-508). Its name is a deceptive misnomer because instead of protecting confidentiality, it gives our government outrageous authority to review and investigate personal and business bank accounts. The law requires all U.S. banks to maintain records of deposit slips and the front and back of all checks drawn over $100. Since it would cost so much to keep these records on hand, banks are allowed to routinely microfilm all your checks - regardless of value. So they do. All of them!

The law also demands that banks maintain records of any credit extension (other than a real estate mortgage) that exceeds $5,000. Banks must report all cash transactions, deposits or withdrawals, in excess of $10,000. They are required to ask you for your Social Security number or taxpayer identification number before any new checking or savings account can be opened. If you do not supply this number within 45 days of the request, your name, address, and account numbers are put on a list for inspection by the Treasury Department.

Even more to the point, you would wonder why any American with the economic option of moving offshore and into an atmosphere of utter financial privacy would choose to.

Better and there are plenty of foreign financial centers willing to make you an offer that's hard to refuse.

To ensure your own financial privacy, you must do two things. First, you must minimize the amount of information that gets created about you. Second, you need to verify and limit access to the information that already exists.

That may sound like elementary advice, but remember, the experts say that we ourselves provide government and private industry with most of the data they maintain on us. In fact, one study concludes that more than 72 percent of the time, investigators obtains their information from the very people they are monitoring.

So, out of respect for the fact that you will probably want to keep some portion of your assets within the United States, take a minute and consider ways that you can protect yourself from unnecessary invasion of privacy. Just to get you thinking along the right track, here are some practical suggestions.

First, be aware that that not all domestic bank are alike. They all fall under U.S. banking regulations, but some are more privacy-oriented than others. For example, a number of financial institutions have recently started photographing and fingerprinting customers before completing even the most routine transactions. Don't do business with that kind of place! Instead, look for a bank that's willing to ensure the highest possible level of financial confidentiality.

A good way to identify the right institution is to ask for a written contract that sets down the ground rules for your professional relationship. Make sure your contract includes at least these two provisions: the bank must notify you whenever anyone asks to see your records; and you reserve the right to periodically see and correct any records the bank may keep on you.

A second rule of thumb is to conduct low-profile banking. Think about it. By reviewing nothing more than your monthly checking account statement, an investigating agent could learn a lot about you - where you shop, the restaurants you frequent, the names of friends and relatives, your religious and political affiliations, even the private clubs at which you have a membership. In essence, the account provides a panoramic view of your everyday lifestyle.

You should aim to reduce the clarity of that view. For instance, use your checking account for only ordinary, everyday expenses - mortgage or rent payments, utility bills, car loans. Then, for more sensitive purchases, open and maintain a second account - preferably offshore. Better yet, handle these through a registered trade name. Simply set-up a company and conduct your discreet transactions through its checking account. It's easy to implement this strategy. Your business must be registered, of course, either at the county or state level (or both). It's perfectly legal as long as you register it and use it without intent to defraud, and it will give you a flexible, low-key way to legitimately preserve your privacy.

To keep a low profile, you should probably avoid the wide array of privacy-insurance gimmicks that are around these days. Ultimately, things like invisible ink (meant to protect your checks from the bank's photocopy machine) and red checks (again, intended to limit reproduction) are only going to work against you because they bring attention to you and your account. That's not your goal. You want to preserve privacy, so, you must try to blend in, become invisible within a system that constantly searches for the slightest deviation from routine procedure.

When it comes to investments, be forewarned that some - like interest on bank accounts and dividends from a brokerage account - are automatically reported to the government. Others are known only to brokers, bankers, and fund managers. Still others are not reported to anyone. Within this last (and most appealing) category, there are a number of sub-divisions. For example, information about your commodity futures, options, and non-dividend-paying stocks must be made available for disclosure, but only if someone asks for it. Data relevant to a foreign bank account is reportable to the government, but you are the one who reports it. And investments such as municipal bonds, gold and silver, foreign currency, diamonds, art and other collectibles are not reportable to anyone, not necessarily known to anyone, and not available for disclosure until the investment is sold.

Again when it comes to investment, consider the benefits of working through a registered trade name. Brokerage firms accept corporate accounts, and these accounts are used by individuals as well as by large corporations. A professional corporation can trade under its own name, and if titled properly, will ensure the anonymity of the real owner. You should know that your privacy is maintained only at the trading level. Outsiders can still gain access if the brokerage firm chooses to reveal the true owner.

To maintain financial and personal privacy in your correspondence, consider renting a post office box. This, together with a registered trade name, can do a lot to ensure at least a significant amount of confidentiality.

Finally, keep tabs on your credit records. There are about two thousand separate credit bureaus in this country, and they all carry data that could potentially be used against you. Under the Fair Credit Reporting Act, you can demand to know what is in your file. If you disagree with any of the information you find in it, you can insist that another investigation be done. If that second go-around doesn't resolve the matter, you can enter your own statement of explanation as a permanent part of the credit file.

Within the United States, it's possible to work like a dog, diligently and ferociously safeguarding the limited privacy that our legal system still allows. Frankly, the incredibly rich don't need to bother. They're already protected by sophisticated investment plans - usually they include offshore involvements. The very poor don't make much effort either. They're too busy making ends meet, and Uncle Sam isn't vigorous in pursuit of information about them. They don't have enough money to make it worth his while. Finally, of course, there are the very crooked. They don't spend time protecting a legal right to privacy because illegal activity keeps them pretty well-occupied and camouflaged.

That still leaves a lot of people. People like you whose level of success makes them aware of how the government systematically deprives them of personal financial privacy but who hesitate to take any drastic action.

By moving a portion of your money offshore, you can give yourself an immediate escape valve. You can stop chasing that elusive goal of onshore privacy, and in the process, you can walk away from the frustration and aggravation that are part of that quest.

You can find out what life is like on the other side of excessive government regulation and bureaucratic red tape. You can, for the first time in your life, discover what true financial freedom feels like.

If you want to design an international investment plan that's tailored to your specific needs, you must establish a one-on-one, professional relationship with an experienced offshore financial consultant. When it comes to structuring a foreign involvement that's sensitive to your genuine concerns about privacy, the same advice holds true.

Nevertheless, there are four basic privacy benefits that apply to almost every offshore venture and can be, implemented in virtually any foreign financial center.

Domestic banks are in bad shape - worse shape, in fact, than most foreign banks. More banks failed in last number of years than at any other time since the depths of the Great Depression. Of course, your money is insured by the FDIC, but what would happen in the event of a universal banking crisis? Federal agencies could never handle the massive run on banks that would ensue. Having some money tucked away, in a safe and secure foreign account may be just

Remember, too, that in times of trouble, governments tend to persecute the financially independent by means of price controls, rationing, foreign-exchange controls, prohibition of foreign accounts, confiscation of property, and high taxes. War, and sometimes just the threat of war, can bring with it the sting of government restrictions.

History has also taught that discrimination can rise up and attack even the powerful within a society. At various times, in various places, Jews, Blacks, Asians, Protestants, Catholics and many others have been singled out for disdain. Unfortunately, governments are not immune to their own prejudice. Under federal authority, people around the world have had their property taken away. Sometimes they have also been imprisoned and even killed.

That's why smart investors living in politically and socially explosive countries often keep the bulk of their money offshore. Overriding (and rational) fears of government expropriation push them into a no-choice position. As Americans, we can be far less fearful. Nevertheless, there is growing concern about creeping federal authority over individual economic liberty. As a result, quiet transfers of money and assets have become common.

If the essence of financial privacy means limiting the information that is available about you, then it seems wise to act before the fact. Don't wait until a period of unrest brings you and your assets under federal scrutiny. By then, it will be too late. You won't be able to protect what you've got because Uncle Sam will probably decide to "protect" it for you.

If you have the proper government credentials and just $ 150, you can gather the following information and material on just about anyone: checks (both front and back copies), bank statements, signature cards, loan applications, deposit and withdrawal slips, and all bank communications. Even more to the point, you can get it without your suspect ever knowing about the probe.

Domestic banks typically release records in the event of civil litigation, court proceedings, and in some IRS audits. A private foreign bank, on the other hand, can protect you from any such invasion. By owning your own offshore bank, for instance, you ensure that all your financial decisions (and the papers that authorize them) are beyond the reach of domestic rules and regulations. Provided your dealings are structured as bank transactions rather than as individual or corporate ones, Uncle Sam has limited authority over the size or frequency of your transactions.

One of the most important privacy benefits you get from an offshore involvement is protection against overly aggressive competitors. Countless fights have taken place in U.S. courtrooms, many of them involving large sums of money and vengeful antagonists. The inclination to sue at the least provocation is on the verge of becoming an epidemic. And the likeliest targets are the people with the most money.

Let's say you become involved in a business situation that ultimately leads to a lawsuit. If you bank within the United States, a court may award your competitor legal access to any or all of your financial records. In the process, your privacy may be seriously jeopardized. If, however, your records are kept offshore, they are impervious to court orders.

Another important benefit involves the right to maintain a healthy distance between creative ideas and your competitors. For example, let's say you have a formula or patent that you want to protect. If you decide to copyright the idea here, you must disclose it to the Copyright Office, Immediately; your million-dollar concept becomes part of the public domain. Before you have time to establish a firm market, the idea can be reformulated with minor revisions and translated into your strongest competition.

Instead of going to the appropriate onshore office to file your formula, why not convert it into financial information? Call it "the exhibit to an agreement between a scientist and the formula's owner." If the formula's owner just happens to be an offshore entity, the exhibit is likely to be protected under the bank secrecy laws of the foreign jurisdiction.

Have you ever been the target of ugly gossip or intentional misinformation? It's sometimes based on nothing - just lies and innuendo. Other times, the story has a kernel (or more) of truth. And that's even more difficult to handle.

Most of us have a few skeletons in our closet. When it comes to financial privacy, however, those bones take on particularly ghoulish contour. Past mistakes - from car repossession to a personal bankruptcy, draft evasion, or a minor criminal record - can haunt you for a very long time. Credit bureaus maintain all their information for at least seven years; and often for even longer.

The truth is, we do not live in a perfect world. People do not dismiss the past from the present. They are not willing to judge associates only on the grounds of firsthand experience. If, for whatever reason, you are interested in separating your past from you present.

Financial privacy is a must. You will never have it within the domestic financial environment. Offshore centers, however, can guarantee that today is what matters. Yesterday is essentially irrelevant.

There is a more subtle concern that some people have about separating their personal identities. Even if they have no past mistake to hide, they want (and need) to make a clear distinction between various current financial involvements. For example, doctors have a very particular professional image in this society. To protect their medical practice they must appear above and beyond many of the investment projects that the rest of us can implement.

What would you think of a doctor who decided to invest in a bar? Probably not much. Yet he has every right to experiment with profitable ventures. By handling his affairs offshore, he can keep a desirable distance between his Manhattan medical practice and his Miami Beach bar and grill.

Privacy is a relative concern. It can mean virtually nothing to one person while it means everything to the next. Only hermits know complete confidentiality, and they pay a high price for it. They're isolated from everything. Nobody knows anything about them but, then, they don't know about anybody or anything.

Most of us don't want privacy when it costs that much. At the same time, very few of us want to just hand-over the details of our financial lives to the government. Instead, we want some middle-ground, some halfway point between hyper-sensitive secrecy and flagrant economic exposure.

Offshore banking can help you regain control your personal and financial privacy.

It is an option in the post 9 /11 era that you should take seriously for yourself and your family's financial and personal privacy.

Integrating Your Marketing Message and Keyword Analysis Into Your Search Engine Optimisation Project


This article is about choosing the best keywords to match your marketing message and website content.


I was once described by one of my longstanding clients as a chameleon due to my ability to adapt to changing circumstances and assignments. I have consulted companies for twenty years in the IT and financial services and one of the first lessons I learned in business is that you need to change to market conditions and you need to monitor the state of the market frequently.. Continuous market appraisal and competitive analysis is essential to succeed. I haven't written a book, I don't have an impressive list of fortune 500 or FT 100 companies I have consulted for. There is a good reason for this. I wanted to help the little guy. I wanted to help the small business entrepreneur that wants to grow his business and needs help from time to time in promotions, campaigns and events without spending tens of thousand of dollars, sterling or Euros in doing so.

How do all the parts fit?

The web is your most important marketing channel if you are marketing your products or services on the internet. The features and benefits of your products or service must be clearly expressed to your target audience in a very short, concise and accurate message. Once your message is formulated it should be integrated into all your marketing efforts, such as your website, printed material, TV and Radio advertising, with the goal of becoming an effective product promotion.

This article will briefly explain what Search Engine Optimisation (SEO) is, the steps to create a marketing message and how to integrate it into an SEO strategy. Let's first start with SEO.

What is Search Engine Optimisation?

Search Engine Optimisation (SEO) is about directing traffic to a page on your website to achieve a goal. All pages of your website create an impression on your visitor. If the first impression is relevant to the visitors search results, and he's motivated, he will purchase from you. The goal of a home page is substantially different to the goal of a landing page. Landing pages are designed to achieve the highest conversion rate possible towards meeting a goal, obtain product data or sign up for a demo, newsletter or free offer. Home pages have the objective of getting you through the page on a path where the visitor wants to go,that meets his needs or solves his issue. SEO will get the visitor to the home or landing page while the marketing message that's incorporated in the pages will help the visitor decide.

How do I optimise my website? How do I create a marketing message? And how does a business integrate them?

I'll explain how to optimise website pages. Businesses and careers may rise or fall on the outcome of online marketing programs. That's why a well optimised website pages will help your business grow. The fundamental cornerstone of SEO is: keywords and unique optimisation of pages - not only for the home page but all the pages in your website. Choose relevant keywords for your products or services and place them in:

(a) domain name

(b) page URL

(c) page title

(d) page description

(e) page content

(f) Keyword meta tag

(g) Headings

What is a Keyword Analysis? How do I choose the right keywords?.

First do this.Create a spreadsheet with 10 columns with the following headings going across the page:

1 Keywords - chosen by you and from your analysis.

2 Keyword density

3 Keyword percentage

4 Monthly Local Searches for keywords and from your analysis.

5 Monthly Global Searches for keyword term from your analysis.

6 Number of competitors for keyword term - manually by you.

7 Keyword Efficiency Index - calculated by you

8 Commercial Intent Factor - extracted from online commercial index

9 Non Commercial Intent Factor - extracted from online commercial index

10 Date Tested

Read the following paragraphs to calculate or extract the data required to complete the fields in the spreadsheet and make notes.

Keyword Analysis:

(i) if you are selling products or services on the internet, think about them and your competitors.

(ii) Look at your competitors and analyse their behaviour from a marketing perspective.

(iii) What are their distribution channels?

(iv) What are their marketing channels?

(v) How do the distribution and marketing channels differ from yours?

(vi) Decide what problems your products or services solve for your customers.

(vii) Think about the features of your products or services. Are the products or services differentiated from your competitors? If so in what way?

Whilst doing all this make a list of keywords that describe your product/service. Write down anything that comes to mind - anything. Create groups/families of keywords - similar to themselves but different. You should end up with groups of similar keywords that are all related to your product. Using a relevancy scale like 100%, 80% or 60% grade all the keywords according to your opinion of relevancy to your products.

How do I get to know how many people are using keywords who want my products/services?

Thankfully Google can help you for free. To get to know how many people are searching for your products/services using your groups of keywords you can use Google External Keyword tool. Place all your keywords in the appropriate box and tick the box for "results for my keywords only". You can also do an advance search in the local country and local language of your targeted market. The number of searches locally and globally will display (a guesstimate by Google but pretty accurate) will display, plus a competition factor, and if you uncheck the box that says "results for my keywords only" you will get suggestion keywords as well.

How do I choose which keywords are the best to use?

Now you have groups of your keywords - the list that you put together and grouped into families as well as the suggested keywords from Google. For each keyword you have the number of local searches (the country and language you have inserted) and the number of global searches (on the whole Google network). The best keyword is that which is searched by the greatest number of people and where the competition factor is the lowest. When you have competing keywords it's difficult to know which one.

Now Complete the 10 column spreadsheet.

A. Keywords - chosen by you Insert the keywords in column

1. For each keyword complete.

2 Keyword density - Copy and paste the content of one of your website pages into a word count program.. Extract the keyword density and keyword count for your chosen list of keywords.

3 Keyword percentage - extracted from your word density analysis

4 Monthly Local Searches for keywords - Find Google suggestions. From the Google results list find your keywords and extract the number of local and global searches for the latest month.

5 Monthly Global Searches for keyword term

6 Number of competitors for keyword term - In the Google search box manually insert the keywords and from the search engine results page extract the numbers of pages/competitors found by Google.

7 Keyword Efficiency Index - You need to insert a formula as: number of local searches squared (SV*SV) divided by number of competitors.

8 Commercial Intent Factor - extracted from online commercial intent index

9 Non Commercial Intent Factor - extracted from online commercial intent index

10 Date Tested

The keyword with the highest index is the one most likely to incorporate into your website page and Marketing Message. However you must also look at the commercial intent factor of the keywords to determine if the keywords is of a non commercial value or commercial value.

Which Keyword do I choose? Only you can chose which one.

The last column of the spreadsheet is dedicated to testing. You will probably not get the desired results you want first time around. So it is imperative to TEST.

Marketing Message and Search engine optimisation in more tail. There are two tools to help you here: they are approximate but are helpful in assisting you. The first is the keyword efficiency index and the second is the behavioural index.

First I'll explain the keyword efficiency index.

For each keyword you calculate the number of searches squared divided by the number of competitors. The result is a relative factor and the highest factor for the group of keywords' chosen is theoretical the best to use. This is the keyword efficiency index. You can introduce a relevancy factor that reduces the factor calculated by a percentage. The percentage reduction factor for a keyword that 100% relevant is NIL, for 80% relevancy its 0.2 reduction, for 60% its 0.40, for 40% relevancy its 0.60, for 40% relevancy its 0.60 reduction, for 20% relevancy its 0.80 reduction.

The second tool to use is the buying behavioural index. Back in 2007, Microsoft Ad Centre Labs, introduced "Detecting Online Commercial Intent" algorithm that was designed to display two levels of commercial intent: informational and transactional. The index is divided into commercial or non commercial intent to buy. You can integrate this value into your keyword analysis spreadsheet.

What's Next?

Well you now know what SEO is and the keyword placement strategy. Now you should think about your marketing message.

What's a Marketing Message?

Your marketing message is the attention grabber for your prospects. It tells them how you can solve their problem, the benefits you bring to them, why they should trust you, and above all else you should answer the following question:

"If I am your ideal customer why should I buy from you and not from one of your competitors?"

A marketing message needs to describe:

A. What you do for your customers

B. How you solve your customers needs, or problems or issues and

C. How you help potential clients understand the solutions.

How do I create a Marketing Message?

There are basically five investigative phases I propose you should follow:

a. Identify your target audience.

b. Identify the issues your target audience experiences

c. Present solutions to you target audience

d. Demonstrate the results of your solutions

e. Differentiate yourself from the competition

Your marketing message should be brief, clear and concise. It should last less than 30 seconds. In the first 15 seconds it should be engaging and at the end of the conversation it should prompt your prospect to say "tell me more".

I firmly believe that an effective marketing message is the key to your success on the internet. Your marketing message needs to generating leads, Your products/services should add value to your customers and provide benefits to your prospects as well as increasing your profits. A powerful marketing message and products/services delivering real value and benefits creates an enormous advantage for your business. The integration of keywords into your Marketing Message and SEO Strategy. You have all the pieces of the jig saw. To complete the picture you need to piece together the keywords into the marketing message and marry them into your SEO strategy for specific pages of your website.

Strategies for Restructuring Troubled Development Projects and Businesses

as Published in the Real Estate Institute of British Columbia Input Magazine, Spring 2011, Vol. 39 Number 2

Development Projects

Maximizing recoveries from failed real estate development projects and businesses requires a comprehensive business approach regardless of whether formal remedies of foreclosure, receivership, bankruptcy proceedings, or listings with real estate agents are intended. Experienced restructuring and industry specialists who seek business solutions by working with a debtor's management and other key advisors or stakeholders can often increase project recoveries.

The following are seven steps for dealing with failed development projects. These can also be applied to troubled businesses such as hospitality operations in hotels and resorts.

1. Diagnose the underlying causes of the failure. The first step in the restructuring process is to understand the primary reasons for project difficulties and the possible steps that might be taken to maximize recovery. For instance, sufficient market research is often not undertaken before designing a development project. Market research should help to determine a number of key variables:

  • Likely volume of demand and absorption period
  • Type of product that should be built
  • Who prospective buyers are and how to reach them
  • Estimated selling price
  • Competing supply from other projects

This information constitutes a foundation for sound financial models but often this work is not completed adequately, if at all. One example is a multi-family residential project we looked at in Calgary in late 2008. It was designed for mostly larger units starting at $450,000 per unit and averaging over $600,000 per unit. Our market research for the Calgary multi-family market found that 85% of all MLS sales occurred at prices of $350,000 or lower for 2007 and 2008. This was one of many projects that had missed the market.

2. Identify continuing danger signs and underlying reasons for failure or poor performance and take immediate action. When embarking on a restructuring process it is important to "stop the bleeding" quickly to avoid compounding existing financial problems, while conducting an overall analysis to develop potential solutions. Examples include curtailing expenditures that have limited immediate return, such as halting any pre-marketing for a product that is not suited to the market, reducing the cost of inputs (e.g. expensive appliances) because of price sensitivity, or replacing ineffective management staff who continue to make poor decisions or who block constructive actions.

3. Determine the objectives of management and owners and ensure they are compatible with those of the other key stakeholders. When development projects or businesses get into difficulty we seldom see the owners or managers look externally for help. In many cases pride is a factor, control over decision making is unnecessarily guarded, and admissions of mistakes or lack of experience are avoided. Lenders and non-management investors are generally focused on obtaining assurance that their investment is protected and will be recovered. The lenders and non-management investors are more likely to question the capability and the integrity of owners and managers when access to key performance information is curtailed, management becomes unresponsive, or if there is a perception that management is hiding problems. The best restructuring outcomes occur when the interests of the debtors and the lenders can be aligned on a win-win basis and the solution is developed and implemented transparently. However, if trust breaks down and adversarial positions become entrenched, financial and reputational losses are often the outcome.

4. Assess all key management personnel. Management deficiencies often underlie troubled real estate projects or businesses. It may be the lead manager, the owner, or supporting management in marketing, development, or finance that lacks the experience or required capabilities. Assessing the capability of management staff is imperative to determine the capability for assisting with the identification of the project's main problem areas and to execute workable solutions. Finding ways to augment or replace specific management skills and experience is often the greatest challenge but is crucial to maximizing recovery from the project. The need for competent management personnel is accentuated in management-sensitive businesses such as hospitality operations.

5. Ensure adequate monitoring and reporting of the continuing development activities. When projects get into difficulty, regular and accurate reporting to lenders or to owners and investors usually stops. Often management is struggling and does not have adequate information to make sound decisions, let alone report to others about problems for which they do not have workable solutions. In virtually every restructuring situation, the quality and timing of information needs to be improved to enable good decision making by management and to keep key stakeholders informed and supportive of the progress being made.

6. Consider all options for restructuring and recovery including value-added options. Owners and managers involved with projects often get locked into their standard approaches (e.g. trying to maximize the amount of density rather than develop the density that can be marketable at a profit in a tough market), and they may remain committed to past decisions that no longer make sense (e.g. keeping construction in-house when outsourcing it would significantly reduce costs and risks). Often developers do not do the detailed analysis or know where to look for value-added solutions. Also, asking for help means giving up control, which developers are generally reluctant to do. Our experience is that owners and managers who have enough at risk will want to salvage the best out of a difficult situation. They will usually be receptive to working with lenders and investors and considering other approaches for adding value. Lenders often get locked into standard approaches as well, supporting the completion of an ill-designed project, commencing standard foreclosure proceedings, or listing the assets for sale with a broker when none of these actions capture the additional value that may be possible with other value-added options developed through sound analysis and experience.

7. Utilize the proper legal framework to assist in the restructuring. Sound analysis, problem diagnosis, identification of solutions, and effective implementation accounts for 95% of the restructuring effort required to maximize values of failing real estate projects. Less than 5% of the restructuring effort should involve determining and managing the proper legal framework to be utilized. The normal "going concern" legal framework should be maintained if possible. Unfortunately, the situation often deteriorates to the point where a legal insolvency or restructuring framework (formal proposal to creditors, Companies' Creditors Arrangement Act - "CCAA" arrangement, receivership, etc.) is required for various reasons. These reasons may include protecting some of the stakeholders' interests (e.g. minimizing directors' liabilities or preventing further erosion of a supportive secured creditor's position), or helping with the implementation of specific solutions (e.g. attracting new capital or financing). However, implementation of these frameworks should not detract from the work required to develop and implement the best business solutions.

Hotel and Resort Properties

Hotel and resort properties include hospitality operations that are unique for three reasons. First, they have perishable inventory that is written off every day: rooms that are not let; restaurant seats that are not occupied at each sitting; capacity for golf rounds or ski visits not filled. Second, they have an extremely high service component to support a positive customer experience, which leads to high labour costs. Third, there are often many brand differentiators and commodity suppliers in the market. These reasons make hospitality operations one of the most management-sensitive businesses in the market. This accentuates the need for the thoughtful management assessment and analysis raised earlier in the seven key steps for dealing with development projects.

Resort properties are usually a combination of a residential development and hospitality operations. Generally, the prime objective for the owners of a resort is to maximize the return from the real estate development. The hospitality operations are usually considered amenities to assist the developer with the sale of the real estate development and the profitability of the hospitality operation is not a key objective. Most often the challenge is to maintain the cost of the amenity at reasonable levels.

Applications to Refinancing or Sale Solutions

Dealing with the issues outlined in the seven steps above, and setting out the results in a well-designed refinancing proposal or sale process adds significant value to troubled real estate projects and hospitality operations. Another key component of refinancing or sale packages is the financial models and projections provided. The financial models need to be based upon sound assumptions and provide for sensitivity analysis so the user, manager, or an existing or new lender or buyer can easily determine the range of reasonably predictable results. The financial models should also be easy to update or modify at any time to take into account changes in key variables or actual results.

New Projects

The key steps and issues discussed above should not be reserved only for real estate projects or businesses in trouble. They are good principles to be applied to new or proposed projects as well; if they were, fewer real estate developments and hospitality properties would end up in distress.

Budget and Financial Management

There are three main phases to the local government budget process:

1. Budget Preparation - Budgetary guidelines are established based on the annual plan and goals

2. Budget Adoption: Budgets are adopted by the government

3. Budget Execution: Implementation of the budget consistent with nationally established accounting procedures and policy with oversight mechanisms to ensure funds are properly spent.

Guidelines established by the Government Finance Officers Association's (GFOA) steer the local government budget process. These guidelines include:

1. Establish Broad Goals to Guide Government Decision Making - Strategic Planning Process

2. Develop Approaches to Achieve Goals- Objectives and Activities to Achieve

3. Develop a Budget Consistent with Approaches to Achieve Goals

4. Evaluate Performance and Make Adjustments

There is no question that these guidelines create a sound finance and budget process. But, as is evidenced by the current financial state of most local governments, additional standards are required to ensure the long-term fiscal sustainability of a community.

Persisting with processes that create annual budgets based on past budgets with incremental changes, does not take into account the volatility of the economic environment in which we are operating. Nor does it provide for future stability.

While Zero Based Budgeting is an old tool; when used correctly it provides a process for budgeting, which promotes a more thorough operational analysis which can be based on an analysis of current and future variables affecting revenues and predicting outcomes for more than a single budget year. In particular, costs associated with personnel and benefits, the largest percentage of most government budgets, must be reviewed and analyzed based on long-term liabilities. Additionally, long-term planning for infrastructure maintenance should be should be based on a ten to twenty year horizon, not the traditional five-year planning scenario. This process requires more intense and focused planning, including a realistic environmental scan that provides a thorough understanding of the impact of growth and future service needs, coupled with changing economic conditions and other factors that impact service delivery.

To be successful, the budget process must be a fluid process, revenue projection and expenditure analysis must be ongoing and not a once a year static process. Adopting a process similar to what successful companies utilize requires looking at governmental management in a different way than we have in years past. In the private sector, successful companies routinely incorporate "what if scenarios" or projected outcomes which might be triggered by certain events and constantly monitor those events and the potential impact on the budget. In local government, we should be examining potential "trigger events" such as weather phenomenon and its potential impact, economic or community issues and other variables including political shifts, which may affect not only the stability of resources, but the services required.

The economic, political and cultural components of our communities are constantly changing. Therefore, the way we budget and plan for services must be more inclusive and consider both the current and long-term impact of these variables. Efficient and effective local government management requires long-term sustainable solutions not just annual budget 'quick fixes'.

To accomplish this goal,

Managers must learn to be adept at

Determining when to contract services and when to add the necessary overhead to provide direct services with City employees.

Establishing fund reserves for future growth and needs for capital planning and infrastructure on a long-term basis.

Managing growth and not letting the growth drive service demands.

Knowing how and when to restructure the city organization and keep staff focused on the bigger picture-the vision of the elected body and its citizenry.

Recognizing that government is not always the answer to a service delivery problem

Thus, managers must learn to create alternative solutions to service delivery by asking different questions including:

What are the Services we provide? What services should we provide? What is the true (total) cost of that service-dollars, people, infrastructure, overhead etc.? Is there a way to provide this service more cost effectively and efficiently?

Why do we provide this service? Does it really meet a current need? Do our citizens really want this service? Does it truly promote and protect health safety and welfare of our citizens? In other words is it truly a CORE services that is a necessity that should be funded by local government? If so,

Who should provide this service?-County? City? Private? Can we give up control/turf to improve the service or make its delivery more efficient by finding a better provider(s)?

How should the service be provided? Are there different types of service delivery that might work better? Is there a new technology which can provide the services more cost effectively in the long run?

In summary, local government finance and budget management is more than a standardized set of guidelines and processes; it can and must be innovative and visionary, seeking long-term fiscal sustainability.

Financial Analysis on an Oil Corporation Takeover

Gulf Oil Corp.--Takeover

Summary of Facts

o George Keller of the Standard Oil Company of California (Socal) is trying to determine how much he wants to bid on Gulf Oil Corporation. Gulf will not consider bids below $70 per share even though their last closing price per share was valued at $43.

o Between 1978 and 1982, Gulf doubled its exploration and development expenses to increase their oil reserves. In 1983, Gulf began reducing exploration expenditures considerably due to declining oil prices as Gulf management repurchased 30 million of their 195 million shares outstanding.

o The Gulf Oil takeover was due to a recent takeover attempt by Boone Pickens, Jr. of Mesa Petroleum Company. He and a group of investors had spent $638 million and had obtained around 9% of all Gulf shares outstanding. Pickens engaged in a proxy fight for control of the company but Gulf executives fought Boone's takeover as he followed up with a partial tender offer at $65 per share. Gulf then decided to liquidate on its own terms and contacted several firms to participate in this sale.

o The opportunity for improvement was Keller's principal attraction to Gulf and now he has to decide whether Gulf, if liquidated, is worth $70 per share and how much he will bid on the company.


o What is Gulf Oil worth per share if the company is liquidated?

o Who is Socal's competition and how are they a threat?

o What should Socal bid on Gulf Oil?

o What can be done to prevent Socal from operating Gulf Oil as a going concern?


Major competitors for obtaining Gulf Oil include Mesa Oil, Kohlberg Kravis, ARCO, and, of course, Socal.

Mesa Oil:

o Currently holds 13.2% of Gulf's stock at an average purchase price of $43.

o Borrowed $300 million against Mesa securities, and made an offer of $65/share for 13.5 million shares, which would increase Mesa's holdings to 21.3%.

o Under the re-incorporation, they would have to borrow an amount many times the value of Mesa's net worth to gain the majority needed to gain a seat on the board.

o Mesa is unlikely to raise that much capital. Regardless, Boone Pickens and his investor group will make a substantial profit if they sell their current shares to the winner of the bidding.


o Offer price is likely less than $75/share since a bid of $75 will send its debt proportion soaring, thus making it difficult to borrow anything more.

o Socal's debt is only 14% (Exhibit 3) of total capital, and banks are willing to lend enough to make bids into the $90's possible.

Kohlberg Kravis:

o Specializes in leveraged buyouts. Keller feels theirs is the bid to beat since the heart of their offer lies in the preservation of Gulf's name, assets and jobs. Gulf will essentially be a going concern until a longer-term solution can be found.

Socal's offer will be based on how much Gulf's reserves are worth without further exploration. Gulf's other assets and liabilities will be absorbed into Socal's balance sheet.

Gulf Oil's Weighted-Average Cost of Capital

o Gulf's WACC was determined to be 13.75% using the following assumptions:

o CAPM used to calculate cost of equity using beta of 1.5, risk-free rate of 10% (1 year T-bond), market risk premium of 7% (Ibbotson Associates' data of arithmetic mean from 1926 - 1995). Cost of equity: 18.05%.

o Market value of equity was determined by multiplying the number of shares outstanding by the 1982 share price of $30. This price was used because it is the un-inflated value before the price was driven up by the takeover attempts. Market value of equity: $4,959 million, weight: 68%.

o Value of debt was determined by using the book value of long-term debt, $2,291. Weight: 32%.

o Cost of debt: 13.5% (given)

o Tax rate: 67% calculated by net income before taxes divided by income tax expense.

Valuation of Gulf Oil

Gulf's value is comprised of two components: the value of Gulf's oil reserves and the value of the firm as a going concern.

o A projection was made going forward from 1983 estimating oil production until all of the reserves were depleted (Exhibit 2). Production in 1983 was 290 million composite barrels, and this was assumed to be constant until 1991 when the remaining 283 million barrels are produced.

o Production costs were held constant relative to the production amount, including depreciation due to the unit-of-production method currently used by Gulf (Production will be the same, so depreciation amount will be the same)

o Because Gulf uses the LIFO method to account for inventory, it is assumed that new reserves are expensed the same year that they are discovered and all other exploratory costs, including geological and geophysical costs are charged against income as incurred.

o Since there will be no more exploration going forward, the only expenses that will be considered are the costs involved with production to deplete the reserves.

o The price of oil was not expected to rise in the next ten years, and since inflation affects both the selling price of oil and the cost of production, it cancels itself out and was negated in the cash flow analysis.

o Revenues minus expenses determined the cash flows for years 1984-1991. The cash flows cease in 1991 after all oil and gas reserves are liquidated. The cash flows derived account for the liquidation of the oil and gas assets only, and do not account for liquidating other assets such as current assets or net properties. The cash flows were then discounted by net present value using Gulf's cost of capital as the discount rate. Total cash flows until liquidation is complete, discounted by Gulf's 13.75% discount rate (WACC), come to $9,981 million.

Gulf's value as a going concern

o The second component of Gulf's value is its value as a going concern.

o Relevant to the valuation because Socal does not plan to sell any of Gulf's assets other than its oil under the liquidation plan. Instead, Socal will utilize Gulf's other assets.

o Socal can choose to turn Gulf back into a going concern at any time during the liquidation process, all that is needed is for Gulf to start exploration process again.

o Value as a going concern was calculated by multiplying the number of shares outstanding by the 1982 share price of $30. Value: $4,959 million.

o 1982 share price chosen because this is the value the market assigned before the price was driven up by the takeover attempts.

Bidding Strategy

o When two companies merge it is common practice for the purchasing company to overpay for the purchased firm.

o Results in the shareholders of the purchased company profiting from the over-payment, and the shareholders of the purchasing company losing value.

o Socal's responsibility is to their shareholders, not the shareholders of Gulf Oil.

o Socal has determined the value of Gulf oil, in liquidation, to be $90.39 per share. To pay anything over this amount would result in a loss for Socal shareholders.

o Maximum bid amount per share was determined by finding the value per share with Socal's WACC, 16.20%. The resulting price was $85.72 per share.

1. This is the price per share that Socal must not exceed to still obtain profit from the merger, because Socal's WACC of 16.2% is closer to what Socal will expect to pay their shareholders.

o The minimum bid is usually determined by the price the stock is currently selling at, which would be $43 per share.

1. However, Gulf Oil will not accept a bid lower than $70 per share.

2. Also, the addition of the competitor's willingness to bid at least $75 per share drives the winning bid price up.

o Socal took the average of the maximum and minimum bid prices, resulting in a bid price of $80 per share.

Maintaining Socal's Value

o If Socal purchases Gulf at $80 it is based on the company's liquidation value and not as a going concern. Therefore, if Socal operates Gulf as a going concern their stock will be devalued by approximately half. Socal stockholder's fear that management might takeover Gulf and control the company as is which is only valued at its current stock price of $30.

o After the acquisition, there will be large interest payments that could force management to improve performance and operating efficiency. The use of debt in takeovers serves not only as a financing technique but as a tool to hopefully force changes in managerial behavior.

o There are a few strategies Socal could employ to ensure stockholders and other relevant parties that Socal will takeover and use Gulf at the appropriate value.

o A covenant could be executed on or before the time of the bid. It would specify the future obligations of Socal management and include their liquidation strategy and projected cash flows. Although management might respect the covenant, there is no real motivation to prevent them from implementing their own agenda.

o Management could be monitored by an executive; however, this is often costly and an ineffective process.

o Another way to ensure shareholders, especially when monitoring is too expensive or too difficult, is to make the interests of the management more like those of the stockholders. For instance, an increasingly common solution towards the difficulties arising from the separation of ownership and management of public companies is to pay managers partly with shares and share options in the company. This gives the managers a powerful incentive to act in the interests of the owners by maximizing shareholder value. This is not a perfect solution because some managers with lots of share options have engaged in accounting fraud in order to increase the value of those options long enough for them to cash some of them in, but to the detriment of their firm and its other shareholders.

o It would probably be the most beneficial and the least costly for Socal to align its managers concerns with that of the stockholders by paying their managers partly with shares and share options. There are risks associated with this strategy but it will definitely be an incentive for management to liquidate Gulf Oil.


o Socal will place a bid for Gulf Oil because its cash flows reveal that it is worth $90.39 in a liquidated state.

o Socal will bid $80 per share but limits further bidding to a ceiling of $85.72 because paying a higher price would hurt Socal's shareholders.

How Far the Financial Analysis Scheme Can Be Effectively Employed by Lending Institution?

When it comes to lending to a borrower, the credit lending institutions invariably are in a position to adhere to certain rules and regulations. There should be a systematic approach during the course of adopting the financial analysis scheme and the following steps can be adopted for effective implementation of the scheme:

Preliminary investigation: During the course of preliminary investigation by the credit managers, the following activities are to be necessarily conducted namely:

· Conducting the visits to the units and factories;

· Conducting an interview with the management of the company and such exercise should be effectively utilized in gathering as much information as possible;

· The nature of business should be understood properly;

· The operating cycle differs from one industry to another industry and the credit manager should gain knowledge about the operating cycle of the industry;

· The history of the company, background, capability of the management, the net worth of the promoters outside the business, if any, should be investigated thoroughly and required information should be gathered and

· Wherever necessary, necessary OPL from other bankers should be obtained.

Examining the financial performance:

The credit manager should take sufficient time in examining the annual reports submitted by the company. During such examination, he should study scrupulously the notes on accounts and schedules to the balance sheet and profit and loss account. He should also make necessary modifications/split the information wherever necessary.

Spreading and common sizing quantitative analysis:

Towards understanding and analyzing the quantitative performance of the company the following tools are found to be highly useful namely; Income statements, details of sales performance during the period, balance sheet, profit and loss account, receipts and payments account, funds flow statement, cash flow statement, details of ratio analysis like liquidity ratio, solvency ratio and marketability ratio etc.

During the course of interface conducted with the top management and credit managers, information about the following can be easily ascertained namely; historical trend, industry comparable, projection and current trend etc.

Such interface can be conducted using the resume submitted by the borrowers, auditor's reports on the financial reports and tools employed for arriving various credit risks namely; management risk, financial risk, business risk and market risk etc.,

Interpretive analysis:

In order to gather sufficient information about the interpretive analysis, the following tools are found to be highly useful namely; trend analysis, variance analysis, comparative analysis, analysis of social accounts and surrogate analysis.

Sanctioning of the limits:

It is the responsibility of the credit manager to ensure that need based limits are sanctioned and towards this end, the request for credit should be structured effectively so that it matches with repayment sources and income generation.

Wherever necessary, the personal guarantee of the directors can be stipulated.

Follow up:

The loan accounts should be properly followed up and strategic plans should be formulated so that the loan accounts are monitored on monthly basis and a special task force can be utilized for this purpose.

The credit manager should emphasize more importance towards recovery aspects and there should not be any compromise in this connection at any point of time.

6 Essential Functions Of Financial Analysis Tools

Truly the development of the World Wide Web has enhanced the selection of financial analysis tools as well as opportunities for market participants to maximize their skills. Often, the advices and information supplied by blogs, forums, social media sites, mainstream, etc. are overwhelmingly high. The almost infinite supply of information directed most of market participants' attention on sorting through the vast information and less consideration to the information's value, relevance and authenticity.

Even the most thorough and avid investors can only manage or control a small portion of the existing information. So in order to efficiently or accurately evaluate and sort out relevant data, market participants turn to reliable financial analysis tools.

To create an investment insight, the usual finance tools work on two essential types of information known as fundamental stocks and technical data. Through the years, these tools have given market participants comprehension on market actions.

These tools have improved dramatically and they can present a more structured and actionable data that are automatically acquired from various reliable sources. These types of tools each have designated functions that vary depending on market participants' and establishments' needs.

A tool and service may contain the following functions and benefits:

1. It can model the effect of multiple options. The small and medium size establishments usually find this function valuable in creating business-planning decisions. It can show users the possible results of minor changes. It can provide a budget and forecast reports within minutes.

2. It allows a company to make comparisons to other companies being in the similar industry. Aside from yearly trend analysis, it can highlight key ratios in the company that need improvement. It can support current sales and profitability by measuring the correct profit targets or asset base. It exhibits the influence of every ration on equity return.

3. It can make assessments and comparisons on a client's financial status with business peers. In addition, it can identify the most profitable location for a certain business by performing assessments on various locations.

4. A service provider may constantly acquire updates on client information via the internet for analysis. That service can transfer a trial balance document into a certain tool and provide users with charts, ratios and graphs for better comprehension on a company's periodical performance.

5. It can create integrated income statements, cash-flow statements and balance sheets. Users are assisted in creating projections, budgeting, forecasting as well as data analysis. By incorporating itself to useful applications, it can promote convenient data entry.

6. It presents a wide range of business analyses for sole proprietorships and non-profits. In addition, it can offer an extensive range of financial analytics and diagnostics.

The development of financial analysis tools provides market participants with the capacity to assess the efficiency or effectiveness of investment decisions by presenting a more structured and robust financial model and analysis. Make an effort to learn about each type of tool so you can determine which amongst them can best support your needs.

How to Write a Business Plan - Financial Analysis

Your business plan will include a Financial Analysis of your business. When you are writing this section it is best to enlist the help of your business accountant or an experienced financial professional to help you put together an in-depth, structured account of your businesses financial assessment.

Your business plan Financial Analysis should include:

  1. A balance sheet including all of your business assets, liabilities and equity. It will also include your assumed and projected financial information.
  2. Cash flow forecast of anticipated sales. You will need to accurately demonstrate the amount of money coming in on a regular basis minus the expenses you will pay out to give your reader an indication of the cash on hand for operating your business and future growth.
  3. Profit and Loss statement and forecasts. This is a report of total revenues generated minus all of the costs of operation over a specified amount of time. This is typically calculated quarterly or for the fiscal year.
  4. Your Break Even Analysis will demonstrate at what point your business will be self supporting and all costs of operation are covered by the business itself.
  5. Personnel Expenses should be included in the financial analysis. The cost of current management and employee salaries  needs to be included as well as a forecast for growth for the next 3-5 years.

The financial analysis section of your business plan is the most important section when it comes to accessing any funding you may need to assist you in getting your business moving forward. It is also one of the most difficult portions of the business plan to write. You will need help with this because much of the information provided is based on educated guesses and assumptions.

If your business is just starting out or has not opened for business yet, how do you predict what your finances will be? You will need to consult with financial experts who are experienced in doing forecasts and assumptions.

Consistency throughout the business plan is crucial when it comes to making your assumptions and forecasts believable. Go over all sections of the business plan that you have already written and extract all financial clues from them to incorporate them into your financial analysis.

Data Mining and Financial Data Analysis


Most marketers understand the value of collecting financial data, but also realize the challenges of leveraging this knowledge to create intelligent, proactive pathways back to the customer. Data mining - technologies and techniques for recognizing and tracking patterns within data - helps businesses sift through layers of seemingly unrelated data for meaningful relationships, where they can anticipate, rather than simply react to, customer needs as well as financial need. In this accessible introduction, we provides a business and technological overview of data mining and outlines how, along with sound business processes and complementary technologies, data mining can reinforce and redefine for financial analysis.


1. The main objective of mining techniques is to discuss how customized data mining tools should be developed for financial data analysis.

2. Usage pattern, in terms of the purpose can be categories as per the need for financial analysis.

3. Develop a tool for financial analysis through data mining techniques.

Data mining:

Data mining is the procedure for extracting or mining knowledge for the large quantity of data or we can say data mining is "knowledge mining for data" or also we can say Knowledge Discovery in Database (KDD). Means data mining is : data collection , database creation, data management, data analysis and understanding.

There are some steps in the process of knowledge discovery in database, such as

1. Data cleaning. (To remove nose and inconsistent data)

2. Data integration. (Where multiple data source may be combined.)

3. Data selection. (Where data relevant to the analysis task are retrieved from the database.)

4. Data transformation. (Where data are transformed or consolidated into forms appropriate for mining by performing summary or aggregation operations, for instance)

5. Data mining. (An essential process where intelligent methods are applied in order to extract data patterns.)

6. Pattern evaluation. (To identify the truly interesting patterns representing knowledge based on some interesting measures.)

7. Knowledge presentation.(Where visualization and knowledge representation techniques are used to present the mined knowledge to the user.)

Data Warehouse:

A data warehouse is a repository of information collected from multiple sources, stored under a unified schema and which usually resides at a single site.


Most of the banks and financial institutions offer a wide verity of banking services such as checking, savings, business and individual customer transactions, credit and investment services like mutual funds etc. Some also offer insurance services and stock investment services.

There are different types of analysis available, but in this case we want to give one analysis known as "Evolution Analysis".

Data evolution analysis is used for the object whose behavior changes over time. Although this may include characterization, discrimination, association, classification, or clustering of time related data, means we can say this evolution analysis is done through the time series data analysis, sequence or periodicity pattern matching and similarity based data analysis.

Data collect from banking and financial sectors are often relatively complete, reliable and high quality, which gives the facility for analysis and data mining. Here we discuss few cases such as,

Eg, 1. Suppose we have stock market data of the last few years available. And we would like to invest in shares of best companies. A data mining study of stock exchange data may identify stock evolution regularities for overall stocks and for the stocks of particular companies. Such regularities may help predict future trends in stock market prices, contributing our decision making regarding stock investments.

Eg, 2. One may like to view the debt and revenue change by month, by region and by other factors along with minimum, maximum, total, average, and other statistical information. Data ware houses, give the facility for comparative analysis and outlier analysis all are play important roles in financial data analysis and mining.

Eg, 3. Loan payment prediction and customer credit analysis are critical to the business of the bank. There are many factors can strongly influence loan payment performance and customer credit rating. Data mining may help identify important factors and eliminate irrelevant one.

Factors related to the risk of loan payments like term of the loan, debt ratio, payment to income ratio, credit history and many more. The banks than decide whose profile shows relatively low risks according to the critical factor analysis.

We can perform the task faster and create a more sophisticated presentation with financial analysis software. These products condense complex data analyses into easy-to-understand graphic presentations. And there's a bonus: Such software can vault our practice to a more advanced business consulting level and help we attract new clients.

To help us find a program that best fits our needs-and our budget-we examined some of the leading packages that represent, by vendors' estimates, more than 90% of the market. Although all the packages are marketed as financial analysis software, they don't all perform every function needed for full-spectrum analyses. It should allow us to provide a unique service to clients.

The Products:

ACCPAC CFO (Comprehensive Financial Optimizer) is designed for small and medium-size enterprises and can help make business-planning decisions by modeling the impact of various options. This is accomplished by demonstrating the what-if outcomes of small changes. A roll forward feature prepares budgets or forecast reports in minutes. The program also generates a financial scorecard of key financial information and indicators.

Customized Financial Analysis by BizBench provides financial benchmarking to determine how a company compares to others in its industry by using the Risk Management Association (RMA) database. It also highlights key ratios that need improvement and year-to-year trend analysis. A unique function, Back Calculation, calculates the profit targets or the appropriate asset base to support existing sales and profitability. Its DuPont Model Analysis demonstrates how each ratio affects return on equity.

Financial Analysis CS reviews and compares a client's financial position with business peers or industry standards. It also can compare multiple locations of a single business to determine which are most profitable. Users who subscribe to the RMA option can integrate with Financial Analysis CS, which then lets them provide aggregated financial indicators of peers or industry standards, showing clients how their businesses compare.

iLumen regularly collects a client's financial information to provide ongoing analysis. It also provides benchmarking information, comparing the client's financial performance with industry peers. The system is Web-based and can monitor a client's performance on a monthly, quarterly and annual basis. The network can upload a trial balance file directly from any accounting software program and provide charts, graphs and ratios that demonstrate a company's performance for the period. Analysis tools are viewed through customized dashboards.

PlanGuru by New Horizon Technologies can generate client-ready integrated balance sheets, income statements and cash-flow statements. The program includes tools for analyzing data, making projections, forecasting and budgeting. It also supports multiple resulting scenarios. The system can calculate up to 21 financial ratios as well as the breakeven point. PlanGuru uses a spreadsheet-style interface and wizards that guide users through data entry. It can import from Excel, QuickBooks, Peachtree and plain text files. It comes in professional and consultant editions. An add-on, called the Business Analyzer, calculates benchmarks.

ProfitCents by Sageworks is Web-based, so it requires no software or updates. It integrates with QuickBooks, CCH, Caseware, Creative Solutions and Best Software applications. It also provides a wide variety of businesses analyses for nonprofits and sole proprietorships. The company offers free consulting, training and customer support. It's also available in Spanish.

ProfitSystem fx Profit Driver by CCH Tax and Accounting provides a wide range of financial diagnostics and analytics. It provides data in spreadsheet form and can calculate benchmarking against industry standards. The program can track up to 40 periods.

Outsourcing Financial Analysis

Since the start of the outsourcing era, we have found that owners of small and mid sized companies have grown increasingly comfortable outsourcing transactional elements of their finance function such as accounts payable (AP), accounts receivable (AR) or general ledger accounting (GL); however, many remain apprehensive about outsourcing more complex, Financial Analysis and Budgeting processes.

Nevertheless, small medium businesses are beginning to explore outsourcing these more complex processes (financial analysis) as a means to develop a competitive advantage by reducing costs and increasing efficiency amongst a traditionally high cost, skill intensive set of finance activities.

Benefits of outsourcing Financial Analysis Services

  • Enhanced Decision Making- Outsourcing financial analysis services gives management access to faster and more accurate interpretation of financial data. This would result in quick decision taking abilities as they have easy access to the most important data of their company.
  • Better technology- Use of superior technology means that the data can be used on regular basis to advance service levels of company.
  • Cost Savings- 40-60 percent savings in analyst costs
  • Transparency and regulatory compliance: CFAs the world over are turning to financial services outsourcing to achieve improved financial reporting and regulatory compliance with laws such as the Sarbanes-Oxley Act.
  • Significant top-line and bottom-line impact from analytical insights into areas such as cost management, product profitability, inventory, and project appraisals, etc.

Financial Analysis Services which can be outsourced

  • Financial analysis and research
  • Corporate financial statements
  • Analysis of financial statements- monthly, quarterly, and annual management reports
  • Analysis of portfolio structures
  • Industry reports (fact books and competitor analysis)
  • Financial ratio analysis, break-even analysis, NPV and IRR analysis
  • Budgeting & Forecasting Reports
  • Financial Accounting

Outsourcing financial analysis services is a fast growing way used by many small and mid sized businesses to take care of their financial accounting needs. It may appear risky at some extent but the outsource activity of this job is highly likely to bring you successful and efficient results in real time. While financial analysis outsourcing services have numerous advantages, choosing the right person (service provider) is also critical. Make sure while choosing a service provider for your financial accounting needs they have the experience and technology to service you. The real purpose of financial outsourcing is only achieved when all the services required by the client are provided by the service provider.This allows you to control your business by being able to come up with a considerable decision.

Financial Analysis for Office Lease Transactions


Financial Analysis is defined as the set of principles, procedures and tools that help organize and interpret financial data. Making informed real estate decision requires utilizing economic models designed to improve the quality of the lease or facility decision. More than just a software program, this analysis is the product of formal training in finance combined with years of experience in the commercial real estate marketplace.


The decision to renew a lease or relocate your office facilities requires thorough financial analysis of the anticipated lease costs within the marketplace. This requires the technical ability to analyze the cost associated with various facility decisions. To assist in the decision making process it is prudent to compare "Occupancy Costs" of various alternatives in an "apples to apples" format. This approach is important because what often appears to be the most economical deal on the surface in reality may not be the best alternative after evaluating all economic components of the proposed transaction.

Although the concept of leasing office space is simple, commercial leases have an increasingly complex financial structure. How does a tenant go about determining the true cost of such a lease? A typical office building lease may include the following:

  • Base Rental Payments (fixed or escalated)
  • Additional rent provisions for increases in operating expenses
  • Caps or ceilings on operating expense escalations
  • Periods of abated or reduced rent
  • Contributions (loans) by the landlord for leasehold improvements, architectural fees, IT cabling, moving expenses, leasing commissions and existing lease obligations
  • Parking charges
  • Various options (renewal, expansion, contraction and cancellation)
  • Electrical Capacity (watts per square foot) and H.V.A.C. charges
  • Add on Factors (Rentable vs. Usable Square Feet)
  • Costs to comply with government regulations (ADA )
  • Fees for Construction Management
  • Interest fees for above standard leasehold improvements


Once occupancy costs associated with various lease alternatives are identified and the underlying economics of the proposed lease transaction are understood, the projection of the total occupancy costs over the term of the lease and on an annual basis is calculated. These projected annual cash flows are subjected to discounted cash flow analysis (net present value) at an appropriate discount rate (cost of capital) to account for the time value of money. The results are the Net Present Value or "the price of the deal". To clarify for comparison purposes, I express the discounted present value of the lease as a level rate per square foot which enables the tenant to measure the financial structure of the lease proposals on an "apples to apples" basis. The impact of income taxes can be accounted for by discounting cash flows at a rate reflective of the tenant's after tax cost of debt.

When comparing alternatives, occupancy cost levels both absolute and present value basis are analyzed in terms of rentable and usable square feet to account for differences in common area factors and space efficiency. The result is the "effective occupancy cost per square foot" which provides a meaningful comparison of various lease proposals.

Today, technology provides us with the software to easily implement the financial analysis of lease transactions. Popular software programs include LseMod and ProCalc. However, it is important to understand the principles of this analysis and how various cash flows impact the overall cost particularly when it comes to the art of negotiation.


Effective negotiations require a thorough understanding of the underlying economics of the transaction. I believe great deals are not only found but also negotiated. My financial skill allows me to measure the impact of various economic components on the value of the lease and to quantify the landlord's effective rental rate. In essence, the landlord's effective rental rate is the net profit level from the lease before the building's debt payments expressed on a square foot basis. By viewing the lease from the landlord's perspective it is relatively simple to benchmark the landlord's projected return and measure the impact of various changes in financial components of the lease on the landlord's bottom line. While comparing rental rates and negotiated concessions to other transactions in the market is an excellent indicator of achievable terms the landlord's effective rate is where the rubber meets the road. No two lease transactions even with identical rental rates yield the same return to the landlord. My objective is structure a "win - win" transaction while not leaving any money on the negotiation table. Evaluating the landlord's effective rate during negotiations is a key tool in determining the landlord's bottom line.

The Importance of Business Financial Analysis and Management

Planning and Control are the two most important ingredients to a Successful Business. A Business Plan takes most of the guess work out of Business Strategy and Control through solid Financial analysis. Financial Data provides a way to gauge where you are in your Strategic Plan, telling you where changes in your Plan are necessary. Because of this, Financial Data Analysis and Management are vitally important to running a successful business.

It is extremely important to have a suitable Accounting System installed throughout your business so data acquisition is easy. You cannot manage your Business for Profitability without a good Accounting System. My CPA has a bookkeeper who comes out to the business to help install the Accounting System and show us how to work it. All of this is done with the guidance of the CPA but at a fraction of the cost. A good Bookkeeper is invaluable in helping capture Financial Data. Having an established working Accounting System in place will minimize the fees a CPA charges to analyze your tax liability and prepare your tax returns.

An Accounting System is typically built around the following key Financial Management tools:

- Income Statement (Profit & Loss Statement) - Cash Flow Statement - Balance Sheet - Budget - Breakeven Analysis

By having a Financial Management system in place, you can easily identify early warning signs or spot particularly profitable areas. Not having a system in place to analyze and organize Financial Data makes it impossible to effectively manage, grow and control a business. It makes it impossible to gauge the success (or lack there-of) of your Planning and Strategy. Moreover, used incorrectly, inaccurate Financial Data can be disastrous for a company's livelihood.

An Accounting and Financial Management System is only as useful as it is used systematically throughout an entire business. It is extremely important to implement the system into the very fabric of the business and be used systematically. The Accounting System is a reflection of the health, or lack thereof, of a business and from which business decisions are made. Make sure to set it up right, train your people on it and most importantly, use it!

Two principal objectives of any business are to be Profitable and have Cash Flow to pay obligations. The Income Statement and Cash Flow Statement figure prominently in this area. The Income Statement represents how well a Company is operating, and the Cash Flow Statement shows how well a business is managing its Cash. Profit or Loss on one side and Liquidity on the other.

The trick is to find a good balance between Profits and Liquidity, which when not well planned for, can be very difficult to maintain. Fast Growth with high profits can drain the liquidity of a business, so being Profitable is no guarantee you'll stay in business. The role of the existing and projected Cash Flow and Income Statement is to help you identify problems areas so you can effectively plan for them, such as raising more capital, infusing more equity or obtaining finance. Moreover these two statements help you identify areas which can be better controlled and managed, forestalling the need of additional capital and funding.

The Breakeven Analysis is based on the Cash Flow and Profit & Loss Statement. The Breakeven Statement and Chart is extremely important because it shows the revenue volume from sales that are required to precisely balance the sum of your fixed and variable expenses. The Breakeven Analysis can be extremely helpful when:

- Setting Product and Service Price Levels - Deciding whether to purchase or lease equipment / building - Figuring out profit projections based on various sales levels - Determining if new employees are required - Planning ahead for finance / capital required in the future - Making Strategic Objectives more tangible and achievable - Measuring your Company's progress toward Profit goals

The Balance Sheet records the past effects of company decisions (or lack thereof) and projects the affect of future Plans. The Balance Sheet is a record of the company's Liquidity and Owner's Equity. These variables are directly affected by the Income and Cash Flow statements. The Balance Sheet is the often overlooked Financial but it has a lot of utility:

- Shows the effect of past decisions - Keeps track of a Company Cash Liquidity Position - Records the level of Owner's Equity - Quickly shows the condition of the business

A Budget Analysis compares a Company's Actual Performance to Projected Performance on a monthly, quarterly and annual basis. The Budget is a great tool to guard against excessive, unmitigated expenses and is closely tied to the Strategic Objectives the company has set. Analyzing the Income Statement and Cash Flow Statement projections against Actual Performance is an excellent control tool, which can quickly address problems before they become too severe. Little oversights and mistakes in a Company's Projections spread over time can have a disastrous affect. The Budget Analysis is your guard against that.

Working together, the Income Statement, Cash Flow Statement, Balance Sheet, Breakeven Analysis and Budget Analysis provide a complete picture of a company's Current Operations, Liquidity, Past Operations and Future Viability. Working through an interactive Accounting System can be a very useful tool in determining future business scenarios and analyzing past mistakes. Understanding the financial implications of your Financial Decisions can mean the difference between your company's success and failure. Probably the most important financial is your Cash Flow Statement but understanding all of these financials and how they work together is the key to a company's success. Projections are based on assumptions - make sure these are well thought out and as realistic as possible.