Answer To: Marking Criteria(i) Introduction 5%(ii) Critically analyse the macroeconomic indicators ofthe chosen...
Riddhi answered on Apr 10 2021
Table of Contents
Executive Summary ………………………………………………………………………….2
Introduction……………………………………………………………………………………2
Macroeconomic indicators…………………………………………………………………….3
Entry mode and FDI Policy……………………………………………………………………5
Sources of finance…………………………………………………………………………….6
Opportunities in United states…………………………………………………………………8
Risk of doing business in United states……………………………………………………….9.
Conclusion and recommendation…………………………………………………………….10
References…………………………………………………………………………………….10
Appendix: Corporate Governance policies between United states and United Kingdom……11
Executive Summary
ABERFORTH SPLIT LEVEL INCOME TRUST INC is the company listed in the London stock exchange in the business of procuring investment and lending and the returns on such investment be distributed among the shareholders after paying taxes. The company is willing to invest in united states and expand business operations in the country to take benefit of larger customer base and market cap. To start its operations company is willing to understand the macroeconomic indicators, FDI Policy, entry route, opportunities and risk and sources of available finance which are all outlined in the report ahead.
Introduction
An MNE is the enterprise that has its headquarters in the home country and operating in the other countries. These companies have presence in more than one country and their objective is to gain presence of their economy in the world and create a global brand. To this report, we have selected the company of ABERFORTH SPLIT LEVEL INCOME TRUST PLC. Which shall be an MNE. This company is an investment company that is close ended and the objective is to give access to high level of income to the shareholders and assist in capital growth by investing in the diversified portfolio of debts to the small companies in United Kingdom. This company was found in 2017 and has its headquarters in the city of London. The objective of this report is to expand the business services of the company in United states of America and have its presence in the one of the largest democratic economy of the world. The company is listed in London stock exchange and is planning to expand its operations in the American investment market to get access of more investment opportunities in the country of united states of America.
Macro-economic indicators of United states of America
The company shall understand the type of opportunities available in the country looking at the population, wealth holding of the people, their income group, geographical locations, and other such factors. The United states of America is commonly known as USA consists of total of 50 states with a population of 328 million people and area of 9.8 million square kilometers. The capital of the country is Washington D.C., and the most populated city is New York city. The country accounts for the GDP to the extent of quarter of the world GDP and in terms of market exchange rates it is considered as the world’s largest economy. The country holds 29% of the total wealth in the world. The country has a famous monument named statue of Liberty which is a symbol of freedom which is created in honor of goddess Liberty.
The macroeconomic indicators of the country include GDP, Employment Figures, Industrial Production, Consumer spending, Inflation, Home sales, Home building, Construction Spending, Manufacturing Demand, Retail Sales and Bottom Line.
Gross Domestic Product is the estimate of growth and production of the actual production of goods and services in the economy. GDP is an indicator as to whether the economy is growing fast or slow and for that measure the department of commerce reviews the change in GDP on a quarterly basis based on the activity of consumer spending, foreign trade, government spending, etc. The government does an estimate three times a year preliminary first estimate, revised second estimate and final report. The GDP per capita of the united states of America on comparison of data from 2015 to 2019 has increased from 56,787 USD to 65,076 USD. The GDP Growth rate in Dec 2020 was 4.3% which is the data reviewed quarterly and GDP Annual growth rate as per Dec 2020 should be around -2.4%. The unemployment rate has been reducing from 5.3% in 2015 to 3.7% in 2019. Unemployment rate has increased considerably in the pandemic of Covid19 to the extent of 6.2% in Feb 2021 and in March 2021 to the extent of 6%. This will help their human resource in procuring good resource in the process of employment. The inflation rate of the economy as per Feb 2021 stands at 1.7% and the interest rate as per March 2021 is 0.25%.
The balance of trade in the economy because of pandemic has been severely affected and has a deficit of 71,078 USD Million as per Feb 2021 and Current account deficit of -1,88,484 USD Million as per Dec 2020. The PMI of manufacturing is 59.1 points as per March 2021, Non-manufacturing is 63.7 points and services is 60.4 points as per March 2021. The Corporate tax rate of the country is 21% and personal tax rate is 37% as per 2020. The availability of hospital beds is 2.77 bed per 1000 people, 17.11 hospitals per one million people, 2.74 doctors per 1000 people and 11.74 nurses per 1000 people.
Debt to GDP Ratio.
The Debt to GDP Ratio indicates the ratio between the debt of the country and its GDP. The Lower Debt to GDP Ratio defines that the economy has sufficient GDP to repay the debt and need not require any further debt. The debt to GDP Ratio in the 3rd quarter of 2020 for united states...