All GLG News Analyses Filed Under: Corporate Treasury & Finance

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Working Capital - Internal Audit and Control - Accounting Standards

October 30, 2009

Analysis of:A Crash Course in Working Capital | www.cfo.com

The referred Article speaks of  the importance of working capital, internal audit and  proper financial statement and how these interact to provide a proper business growth environment. In my analysis below I give my thoughts on these aspects.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Central Bank Policy - Gold - Dollar - Accounting and the Gold Standard

October 8, 2009

Analysis of:Central Banks in Europe Hold Rates Steady | www.nytimes.com

The policy of Central Banks over the last year has left the  monetary system in a state of limbo. The value of the dollar in terms of  bullion and other commodities is taking a beating.  The increasing value of gold in currency terms reminds one of the days of the gold standard and the benefits of having gold as a store of  value. In this analysis I take a look at how this increasing value of gold may effect   internal controls and corporate financial policies.

The Lesson of Lehman Brothers

September 6, 2009

Analysis by: GLG Expert Contributor

Analysis of:Lehman Brothers, the bank that bust the boom | www.telegraph.co.uk

It is self evident that Lehman Brothers would still be in existence today had they rewarded Fuld and his cronies for not changing the risk structure of the bank, and not leveraging it into oblivion. The lesson here is one that all professional business people know full well, but some seem to have forgotten, bonuses should be aligned to key performance indicators (KPI's) that genuinely add value to the company's bottom line.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

CDS Regulation , Accounting and Economic Effects

August 16, 2009

Analysis of:Derivatives Plans Spark Doubts on CDS | www.ft.com

 CDS have created problems for some time now. The proposal to regulate CDS over the counter sales will in my opinion create more problems than it will solve. This is especially in the context of the triple regulation suggested - SEC, CFTC and a dispute regulatory mechanism for the turf between the two bodies. In this analysis I look at the accounting and economic problems that this will create.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Accounting and Financial Risk in the Background of Declining Credit Availabilty

June 16, 2009

Analysis of:Liquidity, Crime Woes Shake Up Chief Risk Officers | www.cfo.com

The current situation of non availability of credit is leading to a position where Chief Risk Officers and CFO's will have a difficult time in funds management, meeting profitability targets and running a business. Funds constraints  will make it difficult to extend credit to customers when financial institutions and creditors are making credit vanish. Such a situation may also lead to conditions where accounts may be stage managed simply to keep creditors at bay. In this analysis I look at the peculiar conditions which I expect to come to play in the coming years and suggest that better control systems need to be in place not just in organizations but also in the wide spread global capital village.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Cost of Capital - The Formula Which No Longer Makes Sense In A Changing World

May 27, 2009

Analysis of:A Losing Formula | www.cfo.com

The financial world is changing and undergoing metamorphosis. Companies like GM and Chrysler are insolvent. Stock indices gyrate for no reason. Financial giants regularly go bust these days - so it seems. In this scenario what we have is a situation where the basic formulae for computing the cost of capital and such basics as beta and delta are becoming misleading. It is just not possible to calculate the systematic risk attached to a market or the unsystematic risk of a security. In this analysis I look at where this confusion is heading and how we may soon see a sea change in the way in which financial costs based on accounting statements are calculated.

Treasurers at the Helm - From Backroom to the Boardroom

May 7, 2009

Analysis by: GLG Expert Contributor

Analysis of:Crisis multiplies strains on company treasurers | www.ft.com

Treasurers used to rely on the accounting and finance department  to provide the numbers to forecast cashflow requirements and generally accept these as given to determine their cashflow forecasts, liquidity requirements and risk.  Today's Treasurer needs to be a Corporate Finance expert to ensure the figures provided are in fact reasonable and to ensure cashflow forecasts are accurate and complete.  In fact, as the crisis bites deeper, they also need to assist their senior management team in identifying near-liquid assets that may be converted, as well as support the organization in identifying out of the box opportunities to tap into further lines of credit, and present the company to creditors and would be creditors in a professional and successful manner. Finally, as financial markets continue their roller coaster ride, and even respectable financial institutions are at risk of default, existing financial risk management responsibilities have become essential to corporate survival.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Price of Financial Innovation - Pitfalls in the Road

April 30, 2009

Analysis of:Fed Chief Warns Against Stifling New Ideas | www.ft.com

The price of financial innovation can be like the ends of a pendulum. I would compare it to say research in medicine - except that there are no clinical trials for financial products. Just as thalidomide created major deaths/deformaties  relating to the birth of children in the 1960's so CDO's without adequate testing have created mayhem in the first years of this century. I draw the parallel between thalidomide and CDO's because in both cases there was said to be great innovation without adequate backup research and testing. Bernanke in the referred article speaks of the good of financial innovation. I agree - but then clinical and proper testing of financial products is equally necessary for financial products. This is the emphasis of my analysis below.

Shock Tactics for Risk Takers - Abacus Consulting, financial services

February 9, 2009

Analysis by: GLG Expert Contributor

Analysis of:US Plans to Curb Executive Pay for Bailout Recipients | www.nytimes.com

 It will only be by such shock tactics that the pain might be remembered for generations to come to try to prevent them from acting with such irrational exuberance in the future.  Where are all these disgruntled executives going to go?  Who is going to pay these numbers?  No shareholders are going to sit by and witness golden handshakes and 'hello' bonuses any more.  Reality has to come to these people too!   The old chestnut that we need to pay these exorbitant salaries and bonuses to attract the talent just doesn't wash any more.  This so-called 'talent' has literally brought most of the world's leading economies to their  knees. 

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Bailout Scenario, Executive Pay and Declining Productivity

February 6, 2009

Analysis of:US Plans to Curb Executive Pay for Bailout Recipients | www.nytimes.com

We are today in a situation where socialist practices are making their way into capitalist economies. The restriction on executive pay is only one such instance. The players in the market themselves are to blame for this situation which is not very healthy for capital development and economic growth. All this is coming in the context of the TARP and TARP2 (yet to be finalized) programmes. In this analysis I take a look at how this will impact productivity and have adverse effects on financial management and the growth of capital markets and growth.

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