Examine current interest rates and rates of inflation, and evaluate the impact of these rates on...

Question

Examine current interest rates and rates of inflation, and evaluate the impact of these rates on short-term decisions that must be made for the two firms you are researching for your final project. You will also examine ethical considerations that impact the industry as a result of the Sarbanes-Oxley Act of 2002, including to what extent this act has impacted the core cash flow management of the companies you are researching. Companies: Adidas and Nike
The following critical elements must be addressed:
II. Assessment of the Economic Climate A. Assess the current interest rates for their impacts on short-term financial markets and instruments. Cite specific evidence that supports your conclusions. B. Assess the current rate of inflation for its impacts on short-term financial markets and instruments. Cite specific evidence that supports your conclusions. C. Referring to the goal of the Federal Open Market Committee, which is to provide a monetary supply that facilitates constant and moderate expansion of the economy, assess the Federal Reserve’s plans (e.g., the likelihood of changes to monetary policy and/or regulations) for their potential impact on short-term financial markets and instruments. Cite specific evidence that supports your conclusions. D. Examine the ethical (e.g., regulatory, tax) considerations that impact the industry within which your firms operate as a result of Sarbanes-Oxley. To what extent do these realities impact their core cash flow management? Provide specific examples to illustrate.
Use companies Adidas and Nike
See attached Rubric

tae_636556234874856038_115652_1.pdf

Ckreta · Accepted Answer

3
Adidas and Nike 
Adidas and Nike 
Introduction 
	In this assignment, on the basis of annual and financial report of the company i.e. Adidas and Nike, I will be analyzing the financial and annual reports of these both the companies. I will be answering all the questions relating to impact of interest rates and inflation rates on short term financial markets and instruments of the company.
Answer 1
	The current interest rate of Nike and adidas is 1.22% and 6.65% respectively (as of Sep, 2017). The interest rate has considerable impact on short term financial market and instruments. The movements in the interest rate are immediately reflected in the current market prices. The price of the tools of the capital market such as shares and bonds represent the present value of discounted cash flow, where the rate of interest is always in the denominator. The trend in the rate of interest and always moving in the opposite direction as the prices of fixed income securities and shares. With the increase in the rate of interest, the investors started expecting high return on the investment which leads to decrease in prices of bonds and shares (Doc. Ing. BoÏena Chovancová). 
Answer 2 
	The Current rates of inflation for Adidas and Nike is 1.6% and 2.1%. Inflation rate also impacts the short term financial market and instruments. Inflation erodes the short term investment of the company such as commercial paper.

Examine current interest rates and rates of inflation, and evaluate the impact of these rates on short-term decisions that must be made for the two firms you are researching for your final project....

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