This website uses cookies to ensure you have the best experience. Learn more

The Effect Of Credit On Consumers That Impact On Firms

691 words - 3 pages

The effect of credit on consumers that impact on firms
Fundamentals of Business
The effect of credit on consumers that impact on firms

Firms will not exist without the presence of a consumer, they depend on consumers, so when a consumer is affected by some changes, the same applies to firms. Example of extracts below illustrate.

Example 1
Extract from, Monday, 30 June 2008 Credit crunch hits NI motor market First it was the housing market, but now motorists are also feeling the pain of the credit crunch as well as rising fuel prices and hikes in car tax. On Belfast's Boucher Road, no-one wants to hear any talk about recession. Consumer confidence is seen as being low enough without further media comment on the downturn. And yet here in the heart of the city's motor industry, falling sales and redundancies are the reality. It's not just that there are fewer buyers around, tighter credit controls are also hitting sales. A sales director at a major dealership ...view middle of the document...

The rescue plan, which also includes a re-negotiation of its banking covenants, is in response to what the house-builder described as a "significant downturn" in the UK housing market. The announcement from Taylor Wimpey came as fresh evidence emerged of the scale of the downturn facing the industry. According to the Bank of England, mortgage approvals, which provide an indication of future demand, fell to a new record low in May. Mortgage lending also fell sharply to £4.1bn from £6.2bn in April and well below consensus forecasts. The troubled house-builder said it had also agreed with its lending banks to relax the terms of its £1.9bn revolving credit facility to focus on operating cash flow rather than pre-tax earnings.

Example 3
Extract from Bloomberg·com Barratt to Cut 1,000 Jobs as Divisions Closed, Merged By Tim Barwell July 3, 2008 (Bloomberg) - Barratt Developments Plc, the U.K.'s worst-performing homebuilder this year, plans to cut about 1,000 jobs as it closes and merges divisions. Barratt will close two divisions and a further eight will be merged into four, company spokesman Dan Bridgett said in a telephone interview today. The reduction may affect 1,000 jobs, about 15 percent of the company's total workforce, a person familiar with the plan said. Bridgett declined to confirm the number of job cuts, or potential savings, when asked by Bloomberg News. Barratt, based in Newcastle Upon Tyne, joins rivals Persimmon Plc and Taylor Wimpey Plc in cutting jobs as U.K. homebuilders grapple with the most widespread housing slump for 30 years. Taylor Wimpey said yesterday it will cut 900 jobs after failing to secure additional financing from investors. Barratt is in talks with banks to refinance part of its £ 1.7 bn ($3.4 billion) in debt to avoid potential breaches of its loan conditions.

Note: A firm must determine onset whether the prices it charges for its goods/services as a proportion of its total sales or volume, exceeds its average individual consumer's income and therefore depend on whether a consumer can secure credit for financing the purchase, and closely monitor the changes in macroeconomic environment.

Other Essays Like The Effect of Credit on Consumers That Impact on Firms

The Effect Of Highspeed Trains On Society

1261 words - 6 pages The Effect of Highspeed Trains on Society A major reason in favor of the construction of high-speed trains in America is to relieve airways and traffic congestion. First, delays at airports are costly. Larry Johnson, director of the Center for transportation Research at Argonne National Laboratory near Chicago, calculates that passengers lose more that twelve million hours each year in delays at O'Hare airport alone. In 1986, according to the

The Effect of Temperature on Air Pressure

1419 words - 6 pages contract as temperatures increase and decrease. When the molecules are kept in confined space they exert pressure that may be greater than or less than the pressure outside the container. This causes the container to expand or contract because of the pressure inside. As determined by the experiments, temperatures a great effect on air pressure. As the temperature increases, so does the air pressure. As the temperature decreases, so does the air pressure. When allowed to cool, the air pressure will eventually reach an equal pressure to the pressure in that area. This information could be useful in the study of meteorology, thermodynamics, and in engineering.

The Effect of Videogames on Student Achievement

2785 words - 12 pages a modest link between electronic media consumption and obesity, smoking, drinking, and violence. The study focused largely on TV and movies as the basis for the first three, but specifically mentioned the effect of videogame violence as increasing the risks of violence in teens. The research in this study concluded that “brief exposure to violent video games increases aggressive thoughts, feelings, and behavior” (Escobar-Chaves & Anderson

The Effect of Religion on Hamlet's Decisions

1310 words - 6 pages The Effect of Religion on Hamlet’s Decisions For as long as history has been recorded, most humans have turned toward religion to guide them through everyday life. Religion often contains a moral code governing the conduct of human affairs. Most religious people also believe in a life after death in which one’s actions during their time on earth determine whether they are privileged in their afterlife and go to Heaven or punished and go to

The Effect of Light on Photosynthesis

1206 words - 5 pages The Effect of Light on Photosynthesis Plants need and use the same light of foods as animals but while animals have to eat other things to get their food, plants make it themselves. The way they do this is called photosynthesis. The other ways that plants are different from animals, such as having leaves and root or being green, they are all linked with photosynthesis. In photosynthesis, plants take carbon dioxide

The Impact Of The Environment On Health

834 words - 4 pages Summary and List of Undesirable Substances".) The interaction of a human’s genetics will affect the balance of their environment with disease and health. Genetics play an important role on the environment, because of the trigger that reacts to disease. However, gender and age may also affect the interaction with the genetics and environment. The populations are at an increased risk for many diseases with the environmental components, which may

The Impact of Globalization on Economic Decisions

542 words - 3 pages bottom lines. Some of the headwinds are macroeconomic, such as declining consumer sentiment. Other pressures are the result of planned strategic decisions that were made to grow the business, such as enhancing its value menu and implementing new technology” (Gasparro, 2012). An oligopoly is a “market structure characterized by competition among a small number of large firms that have market power, but that must take their rivals’ actions into

The Impact of Globalisation on Multinational Companies

3257 words - 14 pages in 2013, is now in 195 countries and has more than 30,000 restaurants. This process, because it is difficult to control, some multinational companies responsible for the operation of globalization, it is obvious that there are a variety tasking do it. On the other hand, there are also negative effects of globalization has overshadowed a number of advantages. An example of this is the positive impact on economic development and the more general

Negative Impact Of Humans On The Environment

1694 words - 7 pages The Impact of Humans on the Environment The human population on the planet now tallies in at over 6 billion. Many experts believe this population may double in the next half-century, as expressed in A Special Moment in History by Bill McKibben. Humans are undoubtedly the 'rulers' of this earth, but we have not been good rulers. In fact in our years of monumental growth as a species, our relationship to our kingdom, the

The Impact of Divorce on Children

1258 words - 6 pages well, adults have the means and ability to seek outside professional assistance independently. Children on the other hand, are not as likely to have the ability to identify the source or kind of turmoil they are experiencing. Therefore, it is difficult for us, as adults, to be fully aware of the consequences of divorce on our children. It is estimated that nearly one half of children born today will spend time in a single parent household

The Impact Of Liberalism On International Relations

2052 words - 9 pages this (Mingst, 2008). This was probably the beginning of a coherent belief in a sort of union of sovereign states. Toward the end of the seventeenth century William Penn believed a ‘diet’ (parliament) could be set up in Europe, like the European Union of today (Baylis and Smith, 2001). We can see much of this liberal thinking today in organizations such as the United Nations. Another influential work to have an impact on liberal thinking was

Related Papers

Impact That College Has On Feminism And The Effect That Feminism Has On College

1190 words - 5 pages In our first week’s readings we were introduced to many different articles. These articles all had a central idea, and that was to introduce us to what women’s studies are. We learned a little about the history behind the women’s movement, with many important women who have help mold what feminism is today. In this week’s response paper, I am going to discuss the impact that college has on feminism and the effect that feminism has on college

The Credit Crunch And Its Impact On The Mc Donald’s Corporation

4326 words - 18 pages there is something unique about the company, and that is the brand itself. One obvious reason is the brand recognition already pointed out. So the main strategy followed by Mc Donald’s is the overall cost leadership with aspects of a differentiation strategy regarding the corporate identity. 3.3.1. Mc Donald’s’ strategy after the credit crunch As described above the economic crisis has had a huge impact on consumers in the United States. Mc

The Effect If Merit Pay On Student Acheivement: An Analysis Of Programs And Their Impact

1932 words - 8 pages The Effect of Merit Pay on Student Achievement:An Analysis of Programs and their ImpactTavari TurnerColumbus State UniversityThe Effect of Merit Pay on Student AchievementAn Analysis of Programs and their ImpactEvery community and state at large wants to create the greatest future for the place they are. Parents and taxpayers alike want to ensure that the education system in their community is the best around. They truly understand that the

The Effect Of Sarbanes Oxley On Auditors

2666 words - 11 pages Journal of Finance and Accountancy The Effect of the Sarbanes-Oxley Act on Auditors’ Audit Performance Tae G. Ryu Metropolitan State College of Denver Barbara Uliss Metropolitan State College of Denver Chul-Young Roh East Tennessee State University ABSTRACT The issue of audit reporting for financially distressed firms continues to be of interest to the public and to legislators. Previous studies have consistently shown that auditors