Research Korner: Financial Analysis

Corporate Finance : Case Study of Tomkins plc

Introduction             Businesses are developing to suffice the need of the society. In any current business organization, progress that the company is making is recorded as basis for, among a host of other essential things, decision-making and as a benchmark for measuring the firm’s performance for the period under scrutiny (Daroca, FP & Nourayi, MM 1996). A financial situation analysis is one such measure that documents current and future financial situation in an attempt to determine a financial strategy to help achieve organizational goals. In any contemporary operating organization, progress that the company is making is recorded as basis of assessing the stewardship of management and for making economic decisions. A financial statement analysis is one such yardstick that takes into consideration current and future financial situation in an attempt to determine a financial strategy to help achieve organizational goals. Various accounts from the published financial statements are evaluated in relation to each other to form performance indicators, which are then compared to ‘established’ standards. Financial statements are, according to Pike, R & Neale, B (1999; 15), the ‘universally accepted tools for analysis of a business entity’. If properly understood, they let the users know how good a company looks and how well it has been doing. They are, at best, an approximation of economic reality because of the selective reporting of economic events by the accounting system, compounded by alternative accounting methods and estimates (Barton, D., Newell, R & Wilson. G, 2002). The purpose of financial statements is to provide users (business owners, lenders, managers, suppliers, customers, attorneys and litigants and employees and job seekers) with a set of financial data that, in summary form, fairly represents the financial strength and performance of a business (Pike, R & Neale, B 1999; 15). They reveal opportunities and provide protection against financial pitfalls. Ideally, financial statements analysis provides information that is useful to present and potential investors and creditors and other users in making rational investment, credit and other similar decisions (Barton, D., Newell, R. & Wilson. G. 2002). Further, they are comparative measurements of risk and return to make investment or credit decisions as they provide one basis for projecting future earnings and cash flows.   About the Company[1]             Tomkins plc is the mother of a large number of subsidiaries that are organized into two separate business groups: Industrial & Automotive and Building Products. Basically, both businesses have strong market positions and technical leadership and own some of the best-known brands in their respective fields.  The group is listed in both London and New York stock exchange with revenue in the 1st half of 2008 of 2.9m USD and over 33,000 people worldwide i.e. 21,635 employees with 73 production facilities for their Industrial and Automotive sector and 11,817 employees with 65 production facilities for their Building Products sector. As of the first half of 2008, the group revenue is quite impressive despite of the current global financial crisis compared to other global businesses.   SWOT Analysis             The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. (Bradford, R.W., Bradford R.W,  Duncan, J. Peter, & Brian Tarcy ,1999). This section addresses hypothetical key strengths, weaknesses, threats and opportunities for TOMKINS PLC establishment in United Kingdom. Table 1. SWOT 	 		 			 			 			 			 			Strengths: 			 			 			 			 			 			Weaknesses: 			 		 		 			 			<ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Infrastructure in place</li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Basis for strong management team </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Possibility to evolve into range of offerings </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Location is highly suitable </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Very focused management/staff </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Well-rounded and managed business </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Marketing plan in place</li> 			</ul> 			 			 			<ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Focus maybe too narrow </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Lack of awareness amongst prospective customers </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Potential need for larger premises </li> 			</ul> 			 			  		 		 			 			 			 			 			Threats: 			 			 			 			 			 			Opportunities: 			 		 		 			 			<ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Major player may enter targeted market segment </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Economic slowdown could reduce demand </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Market may become price sensitive </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Market segment's growth could attract major competition 				</li> 			</ul> 			 			 			<ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Market segment is poised for rapid growth </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				New markets offer great potential </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Distribution channels seeking new services </li> 				<li class="MsoNormal" style="punctuation-wrap: simple; text-autospace: none; vertical-align: baseline"> 				 				 				Potential to diversify into related market segments </li> 			</ul> 			 		 	                         Basically, firms are competing to achieve above normal return, but being monopoly is not the only way to achieve it. Firms can differentiate themselves with others through innovation: competing to be different. Although the innovation itself maybe profitable, the innovating firm itself may not profit from it. Therefore it is important to establish complementary assets alongside firm’s innovative capability to capitalise majority of the gain (Teece, 1986). Scholars refer the development of complementary assets as the sixth force (Grant, 2001), in addition to Porter’s seminal five forces model (Porter, 1980). Another major problem for companies not profiting from their innovation is that they spend too much time on seeking and creating innovation but “inability of corporation to turn knowledge into practical applications and profit” (Leonard-Barton et al., 1996). Firms need to look deeper into their knowledge base, and often to exploit hidden knowledge inside the firm is more profitable than to explore new knowledge. This is partly because of the cost saving. However, when hidden knowledge inside the firms are well exploited, it is important for the firm to innovate through reconfiguration of existing knowledge and/or seeking new knowledge externally (Kluge et al., 2001).             When the knowledge of an innovation is spill over across firms, companies expect appropriability to fall during the life cycle of a technology as the cumulated search efforts and the fraction of agents knowing the code increase. However, this long-term trend may be counteracted by a number of strategies designed to limit or to compensate the fall in appropriability. The most promising way of achieving competitive advantage through innovation is to continuously innovate, and innovate in a way that competitors are unable to catch up through their incremental innovation and unmotivated for radical innovation. An interesting case would be TOMKINS PLC, a company constantly improves the services/products that suits to the taste of different nations.       Financial Analysis Typically, financial measures as well as the relationships utilized in performance measurement are designed to stress outcomes with minimal or no consideration of the decision processes of the manager. The traditional or conventional measures of performance are based on periodic profitability indicators without the consideration to particular variables that drive these measures (Daroca and Nourayi, 2002). Performance in the past is mainly based on conventional accounting and measures based on market performance. Specifically, these measures include the evaluation on net income, return on equity/capital employed, earnings per share as well as share-price return. Some financial outrages have put corporate governance in the business spotlight. Basically, the issues and interest in the subject corporate finance can be traced back at least to the eighteenth century and economists such as Adam Smith. Certainly, there is probably little new in the existing debate involving to financial negligence, except for the range of the financial and economic consequences which replicate the greater importance of finance in the current economy. The purpose of this part of the paper is to examine the financial context of corporate governance of TOMKINS PLC. It attempts to evaluate the performance of the company in terms of financial reports. Basically, corporate governance has significant implications for the performance of the financial sector and, by addition, the economy as whole. Well-organized resource allocation is supported by strapping shareholder control rights, which assists investment in fresh development actions and confines the scope for corporate over-investment. Apparently, investment decisions are further linked to corporate governance insofar as investors prefer to invest in appropriately supervised corporations and be apt to avoid investing in ambiguous environments. In this way, the investor assurance created by sound corporate governance provisions and the security of minority shareholders encourages the financial market progress by encouraging share ownership and capable capital allocation across firms. Transparent financial reporting is necessary to sending efficient corporate governance. For the last ten years, the engineering and machinery industries in United Kingdom have seen the rapid growth of the number of firms offering financial situation analysis services.  This serves as a proof that more and more organizations are realizing the importance the analysis of their financial situation in order to keep up with the demands of the business world.    Analysis of Information <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> 	<li class="MsoNormal" style="line-height: 200%"> 	Dividends and Share Price</li> </ul> Table 1.  Dividend Information 	 		 			 			 			  			 			 			1997 			 			 			1998 			 			 			1999 			 			 			2000 			 			 			2001 			 			 			Apr-02 			 			 			Dec-02 			 			 			2003 			 			 			2004 			 			 			2005 			 			 			2006 			 			 			2007 		 		 			 			 			Interim (GBp per Share) 			 			 			3.06 			 			 			3.5 			 			 			4 			 			 			4.6 			 			 			4.6 			 			 			4.6 			 			 			8 			 			 			4.6 			 			 			4.83 			 			 			5.07 			 			 			5.32 			 			 			5.32 		 		 			 			 			Final (GBp per Share) 			 			 			 			8.39 			 			 			9.67 			 			 			11.15 			 			 			12.85 			 			 			7.4 			 			 			7.4 			 			 			0 			 			 			7.4 			 			 			7.77 			 			 			8.16 			 			 			8.57 			 			 			8.57 		 	 Source: http://www.tomkins.co.uk/tomk/ir/shservices/divinfo             In accordance to the previous years of performance, Tomkins plc dividend for their shareholders reaches its peak in year 2000 and slows down as the new millennium enters.  However, as seen in the cycle, the dividend shows positive future even though there are crisis in the global business.  Even tough the 2007 is a failure as compare to their previous years of operation, the downfall of 7.4 in 2001 was still promising since the dividend as of 2007 becomes 8.57.        Figure 1. 2009 Share Price Last Trade: 16:35  02/03/2009 With regards to share price, the group was currently experiencing some impact of the global financial crisis in which their current price fell to 1.5 in London Stock Exchange and 0.24 in New York Stock Exchange.  This surge down is hopefully not too terrible for the performance of the group.  However, the group should create and innovate extensive ways to maintain their profitability and progress.   <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> 	<li class="MsoNormal" style="line-height: 200%"> 	Income Statements</li> </ul>             From the given summary of income statement (see figure 2), as of 2007 Tomkins Plc's net profit margin fell 0.83%. This along with an increase in selling, general and administrative costs has contributed to a reduction in net income. The return on Assets fell to 1.12%, return on equity fell to 3.42% and return on investment fell to 1.45%.  Basically, we can deviate from these values that TOMKINS PLC is not expressively performing not only in UK alone but also to other parts of the world.  As we can see in figure 2 both the revenue and net income of the company suffers from a decline particularly in 2007 net income.   Figure 2.  Summary of Revenue and Net Income of TOMKINS PLC Source: www.ft.com             From the given situation and results of revenue and net income of TOMKINS PLC Ltd., it seems that the company is not expressively performing in their industry. Thus, the organization still needs to evaluate not only their business strategies but also the political, economic, and cultural factors of their host country i.e. United kingdom. It is not whether the business is in a market oriented status or not, but the important thing is the value of their products as perceived by the consumers. The business norms in United Kingdom and global community have been changing and are becoming more compatible with international codes and norms after a series of economic reforms (Barton, D., Newell, R. & Wilson. G. 2002). Given the nature of the UK economy and the large potential of the market, doing business with UK requires a continuous process of learning, caution for instability, and flexibility to catch opportunities.   ·                                         Balance Sheet and Cash Flow             From the information gathered and as seen in Figure 3, the 2007 cash reserves at TOMKINS by 37.34m. However, the company earned 393.54m from its operations for a Cash Flow Margin of 9.34%. In addition the company generated 8.69m cash from investing, though they paid out 435.73m more in financing than they received. From this discussion, it shows that TOMKINS PLC performed very well in 2005 compared to their performance in 2007 or even in 2009.As seen in the figures, cash flow often describes as the amount of cash being received and spent by a business during a defined period of time, sometimes tied to a specific project. Cash flow can be used to determine the performance of a certain company.  With this regards we can see that TOMKINS PLC cash flow is declining after the expressive performance in 2005.  Moreover, the increase of cash reserves of TOMKINS PLC generated in 2005 was used in 2006 development and expansion projects. According to the website TOMKINS PLC, their decline in terms of their sales performance is because of their current marketing strategies.  With this regard, the company needs to evaluate the effectiveness of their current marketing strategy.  There should have a careful evaluation in order gain business success.   Figure 3.  Summary of Cash Flow of TOMKINS PLC Source: www.ft.com   In financial analysis, the balance sheets of company reports conform to the financial ratios. The purpose of ratios is to find out how profitable the company is, we can calculate if company has enough liquid resources to pay its creditors, employees and finance charges. It is a useful to shareholders to find out their value of shares. Ratios are most powerful and simplest tool to evaluate company’s performance and its validity (Riahi-Belkaoui, A 1998). Atril & Mclaney (2004) mentioned that by calculating a relatively small number of ratios, it is often possible to build up a reasonably good picture of the position and performance of a business. Ratios help to highlight the financial strengths and weaknesses of a business, but they can not, by themselves, explain why certain strengths or weaknesses exist, or why certain changes occurred. Just by details investigation will find the reasons. Ratios can be grouped into certain categories; each of them identifies a particular aspect of financial performance or, position.  In this paper, we’ll be considering the liquidity ratios and debt ratio of TOMKINS PLC. Liquidity ratios show how quickly the company can meet its short-term obligations using its current assets (Riahi-Belkaoui, A 1998).               Figure 3.  Summary of Liquidity Ratios of TOMKINS PLC Source: www.ft.com   It is evident in the computations that TOMKINS PLC was performing expressively in 2005 and slows down as the years went up. However, the entry of 2009 shows good future for the group. This means that TOMKINS PLC is always bale to meet their current liabilities using their current assets (cash, inventory, receivables). As shown in the figure, the company should now start to use their assets to grow the business.  However, the company should be still be observant to their financial ratios i.e. not too low so as to drive creditors away with respect to the level of risk present. Since quick ratios are perceived as a sign of the company’s financial strength or weakness, the figures in the previous table shows the relative stability of the financial strength of TOMKINS PLC. A higher number would indicate stronger financial performance, and a lower one means weaker performance.             Apparently, the high financial leverage ratios of a company provide an implication that the organization is solvent in the long-term.  With this regard, the debt ratio shows the TOMKINS PLC’s position to meet it long-term obligation or liabilities. Debt ratios are dependent of the company’s classification of long-term leases and other items as long-term debt (Pike, R & Neale, B 1999). Pike, R & Neale, B 1999, stated that this is the gauge with which the financial strength of a company is a sign of the ratio of capital that has been funded by liability, counting preference shares. A higher debt ratio (which means the company has low equity ratio) does not give the firm’s creditors the security they require from an organization (Pike, R & Neale, B 1999). The firm would, as a result, find difficulty in raising supplementary financial support coming from outside sources if the firm wishes to take such action. Therefore it reveals that the higher the debt ratio, the harder it is for the company to raise funds from the outside.   Recommendations             Today, most companies like TOMKINS PLC find it impossible to create any kind of sustainable competitive advantage based on product alone. It is common knowledge that every one of the successful companies sought and found a precise understanding of how it could create a customer-centered competitive advantage. Thus, there are numerous aspects that every management should tackle. In TOMKINS PLC, the key internal strengths are the appropriate and effective marketing strategies used. On the other hand, the flaws of the marketing strategies implemented by the company serve as its major internal setback. Then again, the continuous effort of every company likes TOMKINS PLC to improve its operational standards is the ultimate solution to emerging conditions brought about by different occurrences such as stiff competition, globalization, technological innovations and others.             Based on the business strategies used by the company and the analyses presented, TOMKINS PLC is indeed a company that has achieved success in the engineering and  machine industry. Nonetheless, the company still has to perform other strategic moves so as to maintain its successful status. With the identified weakness and threats of the company, the following strategic moves are recommended: 	<li class="MsoNormal" style="text-align: justify; line-height: 200%"> 	Focus on strengthening foreign market 	access through consumer studies, partnerships with retailers and product 	development.</li> 	<li class="MsoNormal" style="text-align: justify; line-height: 200%"> 	Enhancement of promotion or marketing 	activities.</li>             There are reasons behind these recommendations. One of which is the growing competition in their industry. Considering the activeness of TOMKINS PLC’s rivals in enhancing their businesses, the strategies of the companies should focus on two major essentials: profit increase and market growth. These two factors are important not only in keeping TOMKINS PLC afloat in the industry but also in supporting other internal or external projects of the company. Another reason for these strategic moves is the capability of TOMKINS PLC to put them into action. Aside from the finances, the company needed to increase their access to other foreign markets not only United Kingdom for market growth and technologies for increased profit. In other words, these two predicted strategic moves are not only beneficial for the company’s current status but feasible as well. Since it is recommended for the company to expand their distribution to other foreign countries, then it is also likely for the company to have partners with other local retailers in order to distribute its products to other foreign locations while it continues on applying its direct business model to other areas. One of the important strategies that TOMKINS PLC may consider is to operate alongside a local business partner. This will help the firm adapt easily to the new and foreign business environment (Overby, 2000). A local partner can also assist in learning the culture, practices, regulations and means of interaction in the area. This will support the company’s consumer study efforts. More importantly, a foreign business partner can also help in achieving progress faster. Training the staff becomes even more important in foreign business ventures. The workforce must be supported fully particularly in adapting the business’ new concepts, standards and technologies (Humberg, 2003). The management should ensure that the local staff is also well-adjusted to the new system so as to encourage them to contribute more for the business.   Conclusion In order for a certain business to sustain their development, they should regularly assess the value of their portfolio. Stakeholders should be given importance by the company. Stakeholders, sometimes also called sponsors, or management, are extremely important to the business. Financial information is important to them because they are the ones that give political as well as resource support for the project. However, normal stakeholders are people that are influenced by any business decisions - they include stockholders but are hot limited to just that. They also include employees, surrounding businesses, competing businesses, neighborhoods of the business, customers, etc. When that business makes important decisions, including bad ones - everyone is affected by it. Thus, from this we may say that stakeholder typically refers to anyone who has a direct financial stake in a company, therefore financial report are important for them. This does include shareholders if the company issues stock, any other owner/partner and employees. Although it is argued that the vendors servicing a business and even the competing business have a financial stake in the company, these entities are beyond the scope of the definition.   Bibliography: Atrill, P & McLaney, E 2004, Financial Accounting for Decision Makers, 4th edn., Prentice-Hall, New Jersey.   Barton, D., Newell, R. & Wilson. G. 2002, When Is a Good Time to Make Strategic Advances? during a Crisis, of Course. The McKinley Quarterly, pp. 77+   Bradford, RW, Bradford RW, Duncan, J Peter, & B Tarcy 1999, Simplified Strategic Planning: A No-Nonsense Guide for Busy People Who Want Results Fast!, Chandler House Press, ISBN: 1886284466   Daroca, FP & Nourayi, MM 1996, Performance Evaluation and Measurement Issues, Journal of Managerial Issues, vol. 8, no. 2, pp. 206+.   Grant RM 2001, Contemporary strategy analysis : concepts, techniques, applications (4th ed ed.). Blackwell Publishers: Malden, MA   http://www.ft.com   Humberg, C 2003, Successfully Moving In and Setting up Business in China. TUV Rheinland World News, 4-5. Assessed: March 03, 2009 from <http://www.us.tuv.com/news/newsletter_pdfs/related_articles/janfeb03/successfullymoving.pdf>   Kluge J, Licht T, Stein W, McKinsey & Company 2001, Knowledge unplugged : the McKinsey & Company global survey on knowledge management. Palgrave: New York, NY   Leonard-Barton D & Doyle JL 1996, Commercialisation Technology: Imaginative Understanding of User Needs. In RS Rosenbloom, WJ Spencer (Eds.), Engines of Innovation: U.S. Industrial Research at the End of an Era. Harvard Business School Press: Boston, Massachusetts   Tomkins Plc.  2009, Company Report. Assessed: March 03, 2009, Available from: http://www.tomkins.co.uk.   Overby, S 2000, ‘Taming the Dragon’, Inc.com. Assessed: March 03, 2009, Available from <http://www.inc.com/articles/2000/05/19141.html>   Pike, R & Neale, B 1999,Corporate Finance and Investment Decision and Strategies, 3rd edn., Pearson Education Limited, England.   Porter ME 1980, Competitive strategy: techniques for analysing industries and competitors. Free Press: New York   Riahi-Belkaoui, A 1998, Financial Analysis and the Predictability of Important Economic Events, Quorum Books, Westport, Connecticut.   Teece DJ 1986, Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research Policy 15(Issue 6): 285-305       	   	 		 		 		 		[1] 		All information are from http://corporate.Tomkins 		Plc.com/

Corporate Finance : Case Study of Tomkins plc

Introduction Businesses are developing to suffice the need of the society. In any current business organization, progress ...

The Hong Kong banking sectors does have innovate opportunities for small and medium-sized enterprises

Abstract The Hong Kong banking sectors does have innovative opportunities for small and medium-sized enterprises upon extending the customer base within the global marketplace. However, SCB and HSBC will need to adopt such approach to financial planning and management which deploy an effective banking network by linking towards a better financial approach determining financial statement in its value and strength. This research represents better framework for analysis and crafting of financial patterns of SCB and HSBC in their business strategy pointing to the management as well as execution of finance factors into SME context. This research investigation can be that the banks involved can achieve better financial status and competence without experiencing much delinquency of such financial statements found in cash flows and balance sheets with HK banking competencies for managing business relations as well as engagements with other banking sectors (in, Venkatraman and Henderson 1998).           INTRODUCTION   1.1  INTRODUCTION Financial statement is an important indicator wherein the strength of SCB and HSBC is looked upon in its business strategy towards SMEs in Hong Kong, there can accounts for delinquency and such pricing relationships in such financial statement understanding. The comparative analysis of SCB and HSBC can be supported by such case study evaluation and is backed up with qualitative and quantitative approach for research study as the banking sector in HK is aware of determining strength over delinquency when talking to effective presentation of financial statements in such cash flows and balance sheets of the two banks that can be ideal for SME assimilation into the HK region.             Background for the research Financial Institution such as the SCB and the HSBC incurs a useful potential to play major role in finance through SME companies in Hong Kong. With increased global competition, the finance function can be exploited to allow HSBC for instance, to gain financial advantage in the HK market stance as there can be delinquency of banking operations affecting the overall indication of the financial statement and its ways.  There has to be comparative case study between SCB and HSBC respectively. The methodology value by then, can be based on literature studies of the two banks through such reviewed studies on small and medium-sized in HK with the objective of understanding the background of the bank’s financial strength and how it relates to pricing opportunities as the banks do strive to become more finance competitive. The data required for case analysis have been collected by interviewing several senior managers of SCB and HSBC within a standard questionnaire. Aside, SCB and HSBC’s annual reports and statements have been referred for the collection of accurate data. The main objective of the research is to understand how the two banks developed good financial strength over the years, avoiding delinquencies to the financial statements. Thus, analyzing history of the company, its strategy and goals, strategies as well as the process they used to bring the company to the position as of the present.   For example, major banking decisions should involve the volume and timing of orders and deliveries and the packing of items in consolidation. There are several constraints influencing the level of stock and the speed of the material flow along the banking logistics chain. The level of stock and the speeds the material flow also depend upon the nature of the supply and demand. Transportation or shipping involves such matters as the modes of transportation, utilization of available capacity, scheduling of transportation equipment and maintenance of transportation facilities. Next comes capacity planning. The management of both long-term and short-term demand drives the level of capacity required.  The study examines different banking approaches to determine whether a bank will be associated with good financial concepts and will focus on certain clients. Hong Kong is a Chinese-dominated society with different types of banks and this allows for cross-section of cases in order to test the reality and applicability of research over financial statements with specific relationships such as pricing within the banking service ways. In order to clarify objectives of whether there is a indication of delinquency of SCB and HSBC statements that can adhere if there impose a good borrower of the banks into customer awareness and such hypothesis are developed as below.             RESEARCH HYPOTHESES H1. There is effective strength into financial approach of SCB in comparison to HSBC knowing whether certain profitable company shown in the financial statement would be more attractive borrower H2. There is no effective strength into financial approach of SCB in comparison to HSBC knowing whether certain profitable company shown in the financial statement would be more attractive borrower   CONTRIBUTIONS TO RESEARCH AND PRACTICE   The research calls for precise execution of factual knowledge supporting financial strength over delinquency within SCB and HSBC as geared towards SME’s in HK. Hence, for practice the recognition of resources to research and its evidences will amiably be a part of the whole continuum basically, achieving details of banking finance statements through cash flows and balance sheets and the underlying issues within finance sectors of SCB and HSBC in order to fully adopt and execute in the hope of maintaining good banking business in Hong Kong.   RESEARCH APPROACH The ideal research approach significant for this study is by means of vivid realization and precise applications of a comprehensive and detailed research paradigm through assimilation, collation and clear understanding of research information and evidences in forms of relevant research materials as directed to financial aspect of the banks as supported by reliable case studies presented through academic journals and articles as based on the topic. The content involvement within the literature plays a vital factor also for the research approach to value application of financial approaches within SCB and HSBC case patterns and such financial context and principles.             THE REVIEW OF LITERATURE   SMALL AND MEDIUM SIZED ENTERPRISES The ability of SMEs to gain competitive advantage is thought to be related to issues of marketing, market research, marketing strategy, new product development, the technologies and processes and, the manufacturing and operations strategy adopted and not only have SMEs limited financial resources in terms of acquiring suitable technology, but they also lack human capabilities, which contribute to a general lack of skills and knowledge within the organization to cope with new ideas, concepts and technologies. The relevance of innovation in gaining and maintaining enterprise competitiveness has been widely addressed in the managerial literature (in, Freeman, 1997; Chan et al., 1993; Grosse, 1996; Medina, 1996). Successful enterprise analysis clearly shows that triumph mainly derives from innovation oriented managerial and organizational processes. First, the innovation process involves huge financial resources, and is quite risky (in, Baldwin and Scott, 1987). Then, such elements are undoubtedly better managed by big firms because of the greater funds available and the possibility of diversifying risks implementing several research projects. Moreover, it often happens that innovations allow diversification strategies which may be better pursued by large organizations rather than SMEs. With specific respect to product innovation, it is critical to have already established commercial channels enabling economies of scale in production and sales activities. In particular, the primary research highlighted that the banks inability to allocate better finance ways will be in favour of more banking growth in certain areas. INFORMATION ON SCB AND HSBC   Standard Chartered Bank (SCB) SCB is known and trusted for having high standards of corporate responsibility as the bank is committed to building sustainable business through social inclusion, environmental protection and good governance, by combining the global capabilities with deep local knowledge, SCB develop innovative products and services to meet the diverse and ever-changing needs of individual, corporate and institutional customers in some of the world's most exciting and dynamic markets. There is about SCB in terms of their SME Banking which offers variety of products and services to help small and medium-sized enterprises manage the demands of growing business through providing global support in Standard Chartered, the bank knows that doing business in today's economic climate is challenging and situations as well as business needs can change overnight as the SCB can help SMEs in HK for such business expansion plans. The SME Banking team is dedicated to the people and the business thus, helping SME business reach ample potential by means of customize product packages, responsive services and access to expert advice incurring effective business operations. Thus, at SCB such benefits are possible such as enjoying of preferential pricing on business transactions, gain rewards on banking services rendered and have unlimited access to products and services through SCB  relations executives. Thus, there can be about cash management when dealing to SME ways such as for example, when making important business decisions, it's vital that the business have accurate and updated financial information in Standard Chartered, the bank provide tools needed to manage business cash flow efficiently and effectively. Then, at SCB SME Treasury Services plays a vital role, by having such international network of more than 1,500 branches in 50 countries across Asia, SCB gives unlimited access to expert advice and regular market updates at SME Treasury Services, the services and solutions are designed to help minimize foreign exchange risks and have competitive rates for a range of foreign currencies. Standard Chartered Bank, in their products will help businessmen to manage their exposure on the foreign currencies and interest rates that are associated with international trade. Thus, allowing cross-border financing by having products and services in order to meet cross-border financing needs of subsidiaries, affiliates or associates that are incorporated in diverse jurisdiction to that of the parent company. The presence of SME Mortgages can be effective through loans to help finance owner-occupied and investment property purchases ideal for commercial use within Hong Kong. Adopted at: <http://www.standardchartered.com/about-us/en/index.html> As the Standard Chartered Bank is one of the pace setters in Asian and African corporate citizenship. Its chief operating officer presented some of the company’s work at Ethical Corporation’s recent Asia conference in Hong Kong with the fact that Ben Hung, the Hong Kong-based chief operating officer of Standard Chartered bank, is well versed in corporate responsibility bodes well for the future of corporate citizenship awareness across the region. Hung’s brief was to discuss how the company handles its approach to corporate social responsibility across region where differences in operating environments are particularly marked. Standard Chartered has 12 senior managers in Hong Kong, the other of its two main bases being London. One third of the Hong Kong senior team are women. Hung acknowledged that although this is a start the company is “by no means perfect” on this area of diversity.   SAMPLE SCB FINANCIAL STATEMENTS Cash flows from operating activities Profit before taxation 629,526 561,759 Adjustment for : Dividend income ( 713) ( 713) Depreciation 18,491 30,372 Gain on disposal of property, plant and equipment (81) (259) Gain on disposal of securities available-for-sale (33,479) (17,416) Amortization of premium less accretion of discount on securities available for sale 25,081 29,394 Operating profit before working capital changes 638,825 603,137 Changes in working capital: Deposits and placements with banks and other financial (5,027,400) (1,486,186) institutions Securities purchased under resale agreement 13,524 862,851 Securities held for trading (1,034,043) 81,126 Loans, advances and financing 249,170 (2,257,691) Other receivables (533,417) (254,483) Statutory deposits with Bank Negara Malaysia (13,441) (92,000) Deposits from customers 5,366,317 5,700,099 Deposits and placements of banks and other financial (597,271) (2,661,184) institutions Securities sold under repurchase agreements (1,177,842) 1,345,942 Bills and acceptances payable 136,865 347,201 Recourse obligations on loans sold to Cagamas (189,263) (10,750) Other payables 571,000 306,527 Cash (used in)/generated from operations (1,596,976) 2,484,589 Income taxes paid (219,891) (201,763) Net cash (used in)/generated from operating activities (1,816,867) 2,282,826 Cash flows from investing activities Dividend received 713 713 Purchase of property, plant and equipment (12,845) (21,424) Proceeds from disposal of property, plant and equipment 81 259 Purchase of securities available-for-sale (14,603,129) (12,133,870) Proceeds from disposal of securities available-for-sale 16,067,641 10,782,002 Net cash generated from/(used in) investing activities 1,452,461 (1,372,320)   Assets   Cash and balances at central banks 8,991 11,813 7,698 Financial assets held at fair value through profit or loss 9 19,344 13,082 15,715 Derivative financial instruments 10 18,441 12,721 13,154 Loans and advances to banks 11 21,108 16,750 19,724 Loans and advances to customers 11 151,953 119,550 139,307 Investment securities 13 52,230 46,037 49,497 Interests in associates 257 206 218 Goodwill and intangible assets 6,217 4,459 6,179 Property, plant and equipment 2,302 1,767 2,169 Deferred tax assets 522 492 519 Other assets 11,890 7,653 8,601 Prepayments and accrued income 3,571 3,618 3,268 Total assets 296,826 238,148 266,049 Liabilities Deposits by banks 14 26,846 21,994 26,233 Customer accounts 15 160,242 130,176 147,382 Financial liabilities held at fair value through profit or loss 8 13,117 8,420 9,969 Derivative financial instruments 10 19,235 13,390 13,703 Debt securities in issue 16 27,254 24,953 23,514 Current tax liabilities 131 410 68 Other liabilities 17 13,733 11,198 11,357 Accruals and deferred income 3,008 2,430 3,210 Provisions for liabilities and charges 42 56 45 Retirement benefit obligations 18 356 466 472 Subordinated liabilities and other borrowed funds 19 13,279 10,805 12,699 Total liabilities 277,243 224,298 248,652 Equity Share capital 20 701 667 692 Reserves 21 18,324 12,683 16,161 Total parent company shareholders’ equity 19,025 13,350 16,853 Minority interests 22 558 500 544 Total equity 19,583 13,850 17,397 Total equity and liabilities 296,826 238,148 266,049 * Amounts have been restated as explained in note 30 on page 61.             Indeed, in Hong Kong, where Standard Chartered Bank PLC generates approximately one-third of its revenues, the banking environment has changed rapidly in recent years. This has forced financial institutions to become more nimble and creative with customer offerings or to pay  high price for failing to do so. Beginning in the mid-1990s, the Hong Kong Monetary Authority (HKMA) deregulated interest rates on short-term time and savings accounts, as well as demand deposit (checking) accounts. Interest rates became highly competitive, but parity products made it much more difficult to attract or retain customers based on rates alone. At roughly the same time, virtually all of Asia was impacted by the “Asian Economic Crisis,” a major economic downturn that sent property values plummeting by up to 60%. Sales volumes slowed to a trickle, creating fierce competition among banks for a smaller number of loans. This squeezed margins razor thin, as financial institutions fought to retain their customers.  There was also a considerable amount of industry consolidation, as financial institutions merged or acquired other banks that were a good fit. Even Standard Chartered got into the act, acquiring the assets of Chase Manhattan Bank’s Hong Kong-based retail banking business. Thus, Standard Chartered Bank knew that to stay ahead of some of its more agile competitors and retain its best customers, it needed to reinvent itself in the area of service. The company turned to Oracle [Siebel] to address these many challenges. “In the past, it was fine to have relatively standard products and sell them in standard ways--and the ample margins would ensure a profit,” Parker remarked. “We decided that, strategically, the ground that we needed to play on was brand assurance, customer focus, and quality service.” The bank recently moved swiftly and decisively to develop and implement a sweeping change program called Customer One. Designed to achieve market differentiation and enhance employee satisfaction, the ambitious business transformation strategy sought to strengthen the bank’s brand identity and help the bank become more customer-focused and performance-oriented. Apart from the Bank's on-going support in extending loans to small and medium-sized enterprises, SCB has also joined with the government and private sectors to set up various activities in support of SMEs, such as radio programs, exhibitions, seminars, advice on investment opportunities and SME fairs to promote the distribution of quality SME goods. In addition, the Bank has SMEs Online services, which allows SME customers to conduct financial transactions with the Bank through their personal computers.     HSBC HSBC’s strategic direction reflects its position as ‘the world’s local bank’ with its uniquely cosmopolitan customer base. Group strategy is aligned with the key trends shaping the global economy. HSBC recognizes that emerging markets are growing faster than developed economies, world trade is expanding at a greater rate than GDP, and life expectancy is increasing virtually everywhere. HSBC is, therefore, reshaping its business by investing primarily in the faster growing emerging markets and, in developed markets, focusing on businesses which have international connectivity. The first half of 2008 saw the most difficult financial markets for several decades, marked by significant declines in profitability throughout much of  industry, with consequent recapitalization and restructuring as the HSBC was not immune from the turmoil.       Financial strength maintained HSBC’s commitment to maintaining its financial strength is unwavering. HSBC remains both strongly capitalized and liquid. The tier 1 capital ratio was 8.8 per cent and tier 1 capital grew by US$6.2 billion during the period. We have maintained our key credit ratings, generated good profitability in adverse market conditions and continued to focus investment on our strategic priorities. The principal concerns in this environment have been risk management, strict cost control, supporting customers and continued investment to support long-term strategic ambitions in broad-based and resilient revenue streams continue to provide stable platform from which to achieve strong, long-term performance. The economic and financial environment in the first half of the year deteriorated progressively. In the major developed economies where we operate, economic growth slowed as asset prices, particularly of residential property, declined; this in turn affected consumer confidence and hence spending. In credit markets, illiquidity remained a major issue, with trading volumes low and no sign of resumption of normal activity levels in the securitization markets.             HSBC’s strategic direction reflects its position as ‘The world’s local bank’, combining the largest global developing markets banking business and a uniquely cosmopolitan customer base with an extensive international network and substantial financial strength. The Group’s strategy is aligned with key trends which are shaping the global economy. In particular, HSBC recognizes that, over the long-term, developing markets are growing faster than the mature economies, world trade is expanding at a greater rate than GDP and life expectancy is lengthening virtually everywhere.  HSBC’s strategy is focused on delivering superior growth and earnings over time by building on the Group’s heritage and skills. Its origins in trade in Asia have had a considerable influence over the development of the Group and, as a consequence, HSBC has an established and longstanding presence in many countries.  HSBC is progressively reshaping its business by investing primarily in faster growing markets and, in the more developed markets, by focusing on businesses which have international connectivity. Central to these reshaping activities is a policy of maintaining HSBC’s capital strength and strong liquidity position.                       HSBC FINANCIAL STATEMENT     Depreciation, amortization and impairment ................................................ 1,766 1,184 1,338 Gains arising from dilution of interests in associates ................................. – (1,076) (16) Revaluations on investment property .......................................................... (27) (48) (104) Share-based payment expense .................................................................... 427 413 457 Loan impairment losses gross of recoveries ............................................... 10,436 6,635 11,547 Provisions for liabilities and charges .......................................................... 107 282 707 Impairment of financial investments .......................................................... 418 18 86 Charge for defined benefit plans ................................................................. 234 342 385 Accretion of discounts and amortization of premiums ............................... (461) (392) (57) 12,900 7,358 14,343 Change in operating assets Change in prepayments and accrued income .............................................. 2,294 (2,280) (2,789) Change in net trading securities and net derivatives .................................. (29,675) 10,487 (15,459) Change in loans and advances to banks ...................................................... 1,605 (357) (8,565) Change in loans and advances to customers ............................................... (76,452) (66,739) (65,147) Change in financial assets designated at fair value .................................... 2,923 (5,872) (7,488) Change in other assets ................................................................................. (1,826) (924) (11,405) (101,131) (65,685) (110,853) Change in operating liabilities Change in accruals and deferred income .................................................... (4,219) 547 4,572 Change in deposits by banks ....................................................................... 20,947 29,661 2,933 Change in customer accounts ...................................................................... 63,277 84,496 115,310 Change in debt securities in issue ............................................................... (16,522) (1,086) (11,403) Change in financial liabilities designated at fair value ............................... (181) 5,755 6,549 Change in other liabilities ........................................................................... 6,093 3,875 8,886 69,395 123,248 126,847 Cash and cash equivalents comprise Cash and balances at central banks ............................................................. 13,473 16,651 21,765 Items in the course of collection from other banks...................................... 16,719 23,152 9,777 Loans and advances to banks of one month or less .................................... 244,608 220,136 232,320 Treasury bills, other bills and certificates of deposit less than three months ............................................................................. 28,067 32,684 41,819 Less: items in the course of transmission to other banks ........................... (15,329) (20,339) (8,672) 287,538 272,284 297,009 Interest and dividends Interest paid ................................................................................................. (31,752) (31,002) (32,624) Interest received .......................................................................................... 53,945 47,423 55,970 Dividends received ...................................................................................... 1,339 1,426 407             The HSBC Group has an international pedigree which is unique. Many of its principal companies opened for business over a century ago and they have a history rich in variety and achievement. The HSBC Group is named after its founding member, The Hong Kong and Shanghai Banking Corporation Limited, which was established in 1865 in Hong Kong and Shanghai to finance the growing trade between China and Europe.  The inspiration behind the founding of the Bank was Thomas Sutherland, a Scot who was then working as the Hong Kong Superintendent of the Peninsular and Oriental Steam Navigation Company. Then, HSBC helps SMEs grow as in addition to financial services, HSBC helps small and medium-sized enterprises grow their business by becoming more profitable and productive as well as by providing counseling services. Supported by the Business Environment Council and the Hong Kong Council of Social Service, the Living Business program have ideal components such as the annual HSBC Living Business Awards recognizes socially and environmentally responsible SMEs in Hong Kong, through seminars where SMEs can get practical advice on sustainable business practices and the website which provides information and advice on a range of corporate responsibility issues  The Bank provides various counseling services to help SMEs develop and grow their business. Since 2001, HSBC has supported the Business Advisory Service program organized by the Hong Kong Trade Development Council.   Financial Statements Indeed, objective of financial statements is to provide information about the financial strength, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions and it should be understandable, relevant, reliable and comparable. Reported assets, liabilities and equity are directly related to an organization's financial position. Financial statements are intended to be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently. Then, SCB and HSBC require financial statements to make important business decisions that affect its continued operations. Financial analysis is then performed on these statements to provide management with a more detailed understanding of the figures as these banks are external users can be outside the business but need financial information about the business for diverse number of reasons. They are financial institutions able to decide whether to grant company with fresh working capital or extend debt securities to finance expansion and other significant expenditures.         Cash Flow Statements In financial accounting, cash flow statement or statement of cash flows is a financial statement that shows company's incoming and outgoing money during a time period as the statement shows how changes in balance sheet and income accounts affected cash and cash equivalents, and breaks the analysis down according to operating, investing, and financing activities. As an analytical tool the statement of cash flows is useful in determining the viability of company, particularly there can be accounting standards that deal with cash flow statements. The balance sheet is a snapshot of a firm's financial resources and obligations at a single point in time, and the income statement summarizes a firm's financial transactions over an interval of time. These two financial statements reflect the accrual basis accounting used by firms to match revenues with the expenses associated with generating those revenues. The cash flow statement includes only inflows and outflows of cash and cash equivalents; it excludes transactions that do not directly affect cash receipts and payments. The cash flow statement is intended for providing information on the bank's liquidity and solvency and its ability to change cash flows in future circumstances as well as improve the comparability of performance by eliminating the effects of different accounting methods  and to indicate the amount and probability of future cash flows as involved as the standard financial statement because it eliminates allocations which might be derived from different accounting methods. CONCEPTS OF FINANCIAL STRENGTH   The term “financial strength” is used in this paper to describe the extent to which an entity is constrained by its financial situation in pursuing its strategic goals or policies. An entity is financially strong when it is relatively unconstrained and weak when financial constraints are binding on policy choices. The financial strength of the banks is intimately linked to the successful management of the enterprise. Hence, enterprises with a large market capitalization have either been successful at generating earnings in the past and/or are expected to be profitable in the future. In a competitive market environment, profitability or market capitalization should be correlated with economic efficiency. Thus, these measures of financial strength would reflect efficient production of whatever good or service is produced by the enterprise. In less competitive markets, profitability is less likely to be correlated with economic efficiency and indeed, basic microeconomics demonstrates that a profit maximizing monopolist will produce an output at a lower than socially optimal level and charge a higher than socially efficient price. More generally, short-term profitability may not be reflective of economic efficiency. Random factors which management may not reasonably have been expected to hedge against can impact profitability even if management performance is exemplary and economic efficiency maintained. That said, enterprise financial strength and profitability over an extended period can be said to be accurate summary metrics of the relative efficiency and effectiveness of enterprise performance. Furthermore, what appears to be confusion over micro and macro performance is responsible for a certain lack of general understanding about the importance of central bank financial strength. SCB and HSBC financial accounts do provide useful information on the cost of achieving policy outcomes. Indeed they provide information vital to any discussion as to whether the outputs are being attained at least cost.  The bank deals in financial markets to achieve policy goals, not to maximize its revenues. For this reason the level of operating expenses is a better indicator of the bank’s stewardship of public resources.” In exploring precisely whether financial performance and financial strength of the bank impacts policy performance it must be noted that in a number of countries the bank is financially so strong that it is very difficult to imagine it becoming an obstacle to policy and the focus of the public discussion in those countries is squarely on the micro elements of central bank performance. When the issue of financial strength does arise in those countries, it is difficult to argue that a marginal deterioration in HSBC bank financial strength for instance would be inimical to macroeconomic performance—and indeed in those countries that is correct. For that reason, when central bank losses do occasionally arise there, the debate naturally tends to center not on policy constraints but on the rather remote notion of financial insolvency.         SCB and HSBC financial strength is positively associated with good policy performance. Financially weak central banks generate losses which undermine macroeconomic stability and call into question the credibility of their policies. In assessing central bank financial strength a careful examination of the policy regime and the volatility of the economic environment is necessary. Conventional measures of private enterprise financial strength, profitability and capital can be very misleading when applied to banks.   METHODOLOGY   Research Design The descriptive method of research was used for this study. To define the descriptive type of research, Creswell (1994) stated that the descriptive method of research is to gather information about the present existing condition. The emphasis is on describing rather than on judging or interpreting. The aim of descriptive research is to verify formulated hypotheses that refer to the present situation in order to elucidate it. The descriptive approach is quick and practical in terms of the financial aspect.  Moreover, this method allows a flexible approach, thus, when important new issues and questions arise during the duration of the study, further investigation may be conducted.      Quantitative data collection methods are centred on the determination of the weighted mean of the given statements. When these methods are used, the researcher is usually detached from the study and the final output is context free. Measurement, numerical data, and statistics are the main substance of quantitative instruments (2003). With these instruments, an explicit description of data collection and analysis of procedures are necessary. Quantitative approach is useful as it helps the researcher to prevent bias in gathering and presenting research data. Quantitative data collection procedures create epistemological postulations that reality is objective and unitary, which can only be realized by means of transcending individual perspective. This phenomenon in turn should be discussed or explained by means of data analysis gathered through objective forms of measurement. The quantitative data gathering methods are useful especially when a study needs to measure the perception of the respondents regarding the topic. The purpose of the quantitative approach is to avoid subjectivity by means of collecting and exploring information which describes the experience being studied (2003).             The questionnaire was structured in such a way that respondents will be able to answer it easily. Thus, the set of questionnaire was structured using the Likert format with a five-point response scale. A Likert Scale is a rating scale that requires the subject to indicate his or her degree of agreement or disagreement to a statement. In this type of questionnaire, the respondents were given five response choices. These options served as the quantification of the participants’ agreement or disagreement on each question item. The following output was revealed:   Recommendations In this research study, it becomes apparent that SCB and HSBC in their banking strategy is among the vital aspects for SMEs in HK to succeed and meet the goal of having satisfied clients. From this discussion, several important points had been suggested. In order for SCB and HSBC to stay competitive, their pricing strategy must comprise the requirements of the first two of the ten ways in varying the price (see, Appendix two) which are: keep the same price currently charged but give clients greater banking products quality and keep the same price currently charged but give  quantity of a particular item.  In this manner, SCB and HSBC are trying to keep their basic prices for that would meet the demands of the customers regarding music listening.  Great offers with affordable cost have been the basic pricing strategy used because SCB and HSBC knew that there are many competitors in the field.  SCB and HSBC must be able to utilize each chosen business model to generate loyalty among its customers.  They must have the capability of prioritizing their customers giving all they wanted and trying to provide a product that would get them involved in the process.               Appendix One   Research Questionnaire Part I.  Demographic Profile   Directions: Please fill up in all the necessary information about yourself.  Don’t leave any item unanswered. a.      Age  ________ b.      Gender Male ( )                 Female ( )   Part II. Perception of the Study Direction:       Check the number corresponding to your answer                           5          -           Strongly Agree                         4          -           Agree                         3          -           Uncertain                         2          -           Disagree                         1          -           Strongly Disagree     1. Perception of Respondents Regarding SCB and HSBC   Statements 5 4 3 2 1 1. With respect to banking strategy, SCB and HSBC has been able to initiate efficient and effective strategy to meet the needs of the customers.           2. Staff or employees understand the mission, vision, and goal of their present organization as part of their efficient finance strategy           3. SCB and HSBC adopts a financial driven strategy to satisfy the needs of the clients.           4. HK banking industry handles customer relations effectively.           5. With the help of the current SME realization, SCB and HSBC enables to understand and reach out to the needs of clients           6. The management of SCB and HSBC address the need to cope with different financial statement for finance strength and development.           7. The banking management does respond to such ample need to have qualified and competent auditors and finance personnel as part of the business strategy.           8. SCB and HSBC used efficient banking communication approach to satisfy customers.                                   Appendix Two   Examples of Ten ways to vary the Price <li class="MsoNormal" style="text-align: justify"> Keep the same price currently charged but give the customer greater (or lesser) product quality. </li> <li class="MsoNormal" style="text-align: justify"> Keep the same price currently charged but give the customer a smaller (or larger) quantity of a particular item. </li> <li class="MsoNormal" style="text-align: justify"> Change the time of payment, such as by allowing a customer four months to make payment. </li>   <li class="MsoNormal" style="text-align: justify"> Offer a rebate or a dollars-off coupon. </li> <li class="MsoNormal" style="text-align: justify"> Provide cash, quantity, and/or trade discounts. </li> <li class="MsoNormal" style="text-align: justify"> Charge different prices to different types of customers. </li> <li class="MsoNormal" style="text-align: justify"> Charge different prices based on the time of day, month, or year. </li> <li class="MsoNormal" style="text-align: justify"> Offer to accept a trade-in from the customer. </li> <li class="MsoNormal" style="text-align: justify"> Accept partial or full payment in the form of goods and services instead of money</li> <li class="MsoNormal" style="text-align: justify"> Bundle the product or service with other products and services and charge a single price lower than the combined individual prices.</li>           http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=hbc           http://www.corporateinformation.com/CompanySnapshot.aspx?cusip=C82641970

The Hong Kong banking sectors does have innovate opportunities for small and medium-sized enterprises

Abstract The Hong Kong banking sectors does have innovative opportunities for small and medium-sized enterprises upon extending th...