Finance Article.docx

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Department
Accounting & Financial Management
Course
AFM 272
Professor
James Thompson
Semester
Fall

Description
Finance Article Let's start talking more about general world news as it relates to finance. Let's start with Japan. Here's an article released yesterday: http://www.bloomberg.com/news/2013-06-19/japan-inc-sits-on-italy-sized-cash-pile-as-abe-urges- investment.html There is an obvious tie in with our course when it talks about the amount of cash Japanese companies are holding. The Japanese government and central bank have been trying to increase investment (by firms). Do you have any thoughts on this or suggestions going forward? If so, we'll send them to their Prime Minister to help get their economy chugging again. Japan Inc. Holds Italy Sized Cash Pile as Abe Urges Spending - Japan stockpiled cash and poured investment abroad, underscoring Prime Minister Shinzo Abe’s challenge to boost nation’s investment and wages - Businesses held 55 trillion yen in direct investment aboard - Problem is lack of corporate governance, role of shareholders should be to urge managers to use cash more profitably - His plan: set targets for increased investment at home and urge businesses to boost wages as they enjoy a bump in profits from falling yen - More than US companies had in liquid assets No guarantee - Lacks steps to increase corporate investment in the domestic economy - Japan’s exports rose more than forecast in May as weaker yen boosted the value of overseas sales - Excess net private savings reflect that Japan has been in of deflation and low growth - Won’t start increasing wages and hiring if it doesn’t see a optimistic future Low Debt - 42/198 (negative net debt) non-financial companies on Nikkei have more cash than debt - Not a good thing because companies should hold some deb
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