Marketing Strategy for Apple Ipod

Executive Summary The focus of this report is on the Apple iPod that has created increasing demands in various outlets. The iPod allows consumers to download their favourite music but also books, movies and now even allows one to surf the internet. In this reports you find an extensive analysis on how Apple has became such a huge company within its market and will show us how the popularity of the iPod has seemingly helped Apple to be become one of the most well known brands worldwide. In order to do this, the main areas of discussion I am going to focus upon are the company itself. I will look at the firms’ internal and external Marketing environment in order to provide an insight in what position the firm is in. Furthermore, I will look at the competition they are facing and what affect this have upon their marketing strategy. I will also provide recommendations will be provided on how Apple can strengthen their position in the market. Introduction Established in April 1976, Apple, develops, sells, and supports a series of personal computers, portable media players, mobile phones, computer software, and computer hardware and hardware accessories. Rather than releasing multiples of little products to try and win over consumers through market saturation, Apple releases higher end, high quality, and user friendly products. They believe in bringing in simplicity and innovation to the mass market and for that reason have been extremely successful. As of September 2007, the company operates about 200 retail stores in five countries and an online store where hardware and software products are sold. Its products include the Macintosh line of desktop and notebook computers, the Mac OS X operating system, the iPod music player and a portfolio of software and peripheral products for education, creative, consumer and business customers. [1] Apple introduced its first iPod portable digital music player. The product has proven unbelievably successful; over 100 million units have been sold in the six years since its introduction. In 2003, Apple's iTunes Store was introduced, offering online music downloads in integration with the iPod. The service quickly became the market leader in online music services, with over 3 billion downloads by August 2007. Steve Jobs announced that iTunes had reached 4 billion downloads during his keynote address at the 2008 Macworld Conference & Expo. [2] Apple is recognized as an unparallel in computer designing and compatibility. The sleek and state of the art design of the Apple’s products snatch away the consumers mind quite easily than the rest. The Apple iPod The iPod is the fastest selling music player in history. Apple has sold over 100 million iPods since the player’s introduction in October 2001, [2] although sales have said to have started slowing; the company currently enjoys a Microsoft-like domination of the MP3 player market. From the early iPods to the new iPod touch, it has gone through a significant change and has opened the user’s world from the palm of their hands. In January Apple reported the best quarter revenue and earnings in Apple's history so far. Apple posted record revenue of $9. 6 billion and record net quarterly profit of $1. 8 billion. 42% of Apple's revenue for the First fiscal quarter of 2008 came from iPod sales. [3] Another interesting statistic for this is that 40% of last quarter's iPod sales went to first-time buyers, and just shows that the music player market is far from saturated as some have stated. [4] This iconic product is considered by many to be a must have item. â€Å"The iPod is to music players what Kleenex is to tissue or Xerox is to copiers. †[5] The Marketing Environment Apple operate on a global level with 200 stores in 5 countries. Nowadays Apple is more commonly know for the iPod. The iPod has dominated digital music player sales in the United States and United Kingdom with many companies struggling to find a product to challenge the iPod. Due to the ever-changing market, businesses like Apple need to monitor the ever-changing business environment and make sure they are going in the right direction. A business can then only plan where it is going if it knows where it is starting from. Finding out where a business is at the moment involves looking at its micro and macro environment. Micro-Environment Porter’s Five Forces The microenvironment consists of those factors that affect the firm directly. This model helps to contrast the micro environment of a firm. (Refer to Appendix A) What we know is that competition in the market is very intense A wrong move could have a harmful affect with your competitors moving ahead of you due to the intensity of the competition in the market. In relation to that, customers are in a strong position as they have more bargaining power and due to the fact there are many substitutes. With the Microsoft Zune 8 it makes it really difficult for new consumers to make a decision between the two. Often customers will pay due to the iPod reputation and its important Apple keep this high. Macro-environment Pest analysis To further analyse the external marketing environment, the macro environment we conduct a PEST analysis. Such external factors usually are beyond the firm's control and sometimes present themselves as threats. PEST is the abbreviation for political, economic, social and technological. (Refer to Appendix B for full PEST analysis) The Competition In the PC market Apple face intense competition form the likes of Dell, Toshiba and HP. Whilst in operating system, Microsoft are the biggest rivals. In both these Apple do not have a great hold. However in the Mp3 market, which is more relevant, Apple have dominated the Market since the release of the iPod. With the competition current coming from SanDisk and Samsung. [12] Its safe to say that although Apple is diversified more than most of its competitors, their differentiation is a biggest strength because they spend so much on R, which is what seperates them from their competition. SWOT Analysis A summary of Apples SWOT analysis is that Apple are in a very strong position because it has a powerful brand name and is recognised globally, coupled with its huge fan base of consumers gives them many strengths within the market. The fact that they are so popular in the mp3 market gets them a lot of attention within the media. Only Microsoft due to being Apples biggest competitor will get a large amount of media coverage. The iPod itself in terms of ease of use and innovative technology means that it is very difficult to match. Only the Microsoft Zune 8 can compare to the design and usability. Although may have been released to late in order to make real challenge against the iPod. For Apple to overcome the potential threats, they must continue to be inventive and explore opportunities globally. R + D and product innovation are of the utmost importance. Apple must continue to improve and be innovative to remain market leaders, otherwise other companies may capitalise on any kind of drop in standards. Although one of the largest digital music sellers in the world, iTunes face a bit of competition from Amazon as well as Myspace, Apple have a target on their backs and only takes a company with good resources to challenge them. for full SWOT analysis refer to Appendix C) Marketing Objectives Due to Apples secretive attitude, finding real evidence of real goals is difficult. What we can deduce however is that although iPod sales are starting to slow they still want to maintain high turnover and profit. That’s the major objective of any of its competitors. Also from resea rch over various sources Apple are aiming hoping to: †¢ Improve brand awareness †¢ Improve sales with the iPod touch. †¢ Improve position in the mobile phone market, with the help of the SDK for the i-phone (Aiming to sell 10 million iphones this year Improving sales of the iPhone and the touch, as they are the ‘in’ products which everybody wants, would help them gain a enormous amount of revenue and help spread the brand. Marketing stratergy I think Apples main stratergy is there appeal to their customers. What you find in general with many of their products more btter looking than the competitions. One thing we can see is Apple building on the popularity of the iPod. It appeals to the Mass market. Now appeal less as a computer company and more of a electronics company and seem more user-friendly. Apple have a differentiation stratergy. Apple products are known to have a unique appeal, with its sleek designs a userbility. Due to this it gets a lot of attention from consumers and the media. Without much advertising or marketing on their part. They give something new and unique to talk about which everybody gets pulled in to. With the iPod there not only selling a mp3 player, there selling a social chic. Everybody has one and everybody wants one. Target Market Target market †¢ Apple Ipod focused particularly at those between the age of 12-25, consistent with their advertising. Bright colours and and a man dancing. It will appeal to both males and females †¢ People who have a passion or interest in music and/or literature †¢ Technology enthusiasts The iPod appeals to the mass market, everyone is a potential customer. Young or old. They have music, literature and podcasts all avaiable for the iPod owners. The simplicity and sleek design is what attracts people. Although the latest ones (the touch) are exp ensive, and may be aimed at higher and older earners. Marketing mix The marketing mix consists of four elements: Products, Price, Place and Promotion, better known as the 4p’s. The marketing mix can only be made when the target customer is known, which I have done above. |Product |Price | | | | |This product allows consumer’s to download not only their |When initially launched into the mp3 market, Apple utilised pricing | |favourite music but also books and photos. Nowadays with the|strategies in the form of psychological and skimming prices. Most of | |latest versions of the iPod you can watch videos and surf on|the websites have the iPod touch at ‘? 199. 00. ’ This makes consumers | |the internet with one small device. Apple have introduced |think it is much cheaper than ‘? 200. 00’ but in reality it is only a | |updated versions of the iPod starting from the first iPod in|pound less. The high price is on the basis of the companies | |2001 to the iPod touch (refer to appendix D). These are |popularity, and the unique design of the ‘touch’. It will also attract| |extension stratergies to increase the product life cycle of |an image of quality with their products. | |the iPod. | | | |[pic] | |The fact that the is product differentiated making it unique| | |will make product both functional and desirable to potential| | |consumers. | | | | |Promotion |Place | | | | |By promoting the iPod it will satisfy the needs of the |Apple has many distribution channels, from their online Apple Store, | |customers. Consumers will gain better understanding of the |to their retail stores and many resellers around the world. Indirect | |product and how it works. All in all advertising and |distribution where third parties are involved in the sales process are| |promotions will bring more awareness to their products and |also used. These resellers will sell to the smaller firms who cannot | |potentially more sales. |aford to buy directly from Apple. | |Apple's promotion strategy, was the surprise element that it| | |attached just before they released the iPod. There was a |The iPod is available to purchase at most major stores within the UK. | |heavy speculation and curiosity regarding the product and |From specialist electronic stores to supermarkets. Stores from Apple | |everyone was watching out for it. It allowed fans and |retailers to Tesco sell the iPod. They are also available all over the| |enthusiastic tech and entertainment media to spread the word|internet from places like Amazon to ebay. A countless amount of | |of the gadget even before its release. Just when iPod was |retailers will stock the iPod such is its popularity | |launched Apple advertised extensively for the iPod, this is | | |where the infamous commercial showing a man listening to the| | |songs on his iPod and dancing. A similar stratergy has been | | |used throught the release as with increasing the popularity | | |of iTunes. | Evaluation of the Apple Strategies The overall position of Apple is profitable as sales have increased over the last years. Sales of the iPod have been increasing since it had been released. Although sales for this quarter have been said to be slow. [pic] Source: wikipedia[2] This has been reflected in their strategies to expand through the introduction of newer more innovative designs and this is why they are market leaders in the mp3 market. Apple has a lot of few different range ranges of iPod products, like the shuffle, the nano, the video and touch. All of which have different prices. This is a good strategy as it appeals to a wide mass market. The fact that Apple append very little on Advertising on their products compared to many of its firms, is down to the general buzz and interest of their products. There teasing with products entices the media and technology enthusiast tin wanting more. However this may not always be the case, for apple to consider more advertising may be important. The differentiation approach sets Apple apart from its competitors however Microsoft is challenging Apple. They have the money and resources to match. It would be fairly foolish to think that Apple is too strong in the market. They need to continue to invest a lot of money in R+D. With products like the iPhone and the Touch it can be said they are going in the right direction, in achieving innovative, unique designs. I also think Apple have a huge opportunity in supporting the whole education system. It has the money and resources to do this. Possibly negotiating contracts with schools and universities, for pod casts even computers could put Apple in a challenging position in the computer market. Having agreements with universities, and schools can increase there popularity and awareness. Conclusion â€Å"Apple has nearly 250 stores worldwide and now derives 20 per cent of its revenue from them. And those numbers are growing. In the quarter to the end of September 2007, for example, Apple reported that its retail stores accounted for $1. 25bn of the company's $6. 2bn revenues – a 42 per cent increase over 2006. †[14] Since the release of the iPod, about half of Apple's revenues come from music and iPods. Interest in the iPod and iPhone has made other apples products popular, like the Mac whose sales have increased. Apple has demonstrated how to create real, breathtaking growth by dreaming up products so original and imaginative that they have taken industries by storm. To maintain control in the mp3 player market, they need to maintain their quality and strategic marketing plans if they want to keep ahead. Apple leads the industry in innovation and many other things like design features. Sony, Microsoft, Creative are all right behind Apple. The battle of the MP3 players will surely be an excellent example of competition that breeds better products, with Apple taking the first step with the iPod Touch and iPhone. The iPod was ground-breaking technology that was absorbed by mainstream culture, and now has become the epitome of portable audio. Companies such as Apple will need to be self-motivated if they are to stay ahead of the game. Differentiation and innovation is the key in maintaining their dominance. Apple has a high competitive advantage because of its excellent product image. They use simplicity and lustrous designs to appeal to customers. The electronic market gets connected more and more with the entertainment market. With already the market leader in the digital sales market, it would not be surprising to see Apple move in to TV. Appendices Appendix A [pic] Source: Corporate Stratergy finntrack. com[8] (Rivalry Calling the level competiton in the mp3 industry as intense is an understatement. The this case we have the like of Sony, Samsung and Creative, with many more in the whole market. Apple commands 70 percent of the MP3 player market. 10] However with concerns of the MP3 market being saturated, its puts more pressure on businesses to succeed. With the innovative designs like the iPod touch and the iPhone it shows why apple are leading the market. (Threat of Substitutes Countless substitute products are available for the iPod whether they are actually better or even appeal more is a different matter, but the threat is still very high. The more diffe rentiation th less like a switch to a substitute will occur. To date no company have come close to meet the popularity of the Apple products. Reason being the innovative designs and ease of use have convinced most customers to stick with Apple. Higher prices need to be justified by the differentiation of the product. Substitutes such as the Sony NW-(A806), Microsoft Zune 8 and many others, can still attract many customers but with imaginative designs like the iPod Touch leaves many companies playing catch up. (Threats of new entrants Although it is possible, its unlikely. Start up costs would be very high so little chance new entrants would enter a very competitive market unless they have a very differentiated and innovative product. Existing firms have established themselves in the market and have created strong brand awareness. (Bargaining Power of Customers The bargaining power of customers is high due to the fact it is easy to switch to a substitute where quality or price, even both is better elsewhere. With so many substitutes of similar quality, its down to the business to make their products more appealing. Apple have done this with their strong vision to build innovative, unique products and have made their products easy to use. (Bargaining Power of suppliers Suppliers don’t have much power over larger corporations like Apple. With the booming chinese economy, Apple can change suppliers without any major consequences, if they are in disagreement over price and quality. However Apple have built a strong relationship with their suppliers, with strict procedures and this in turn helps Apple achieve it targets. â€Å"Our business environment is competitive and fast-paced. Our suppliers must understand this dynamic and be agile and flexible in responding to changing business conditions. †[11] Appendix B Political: | |Governments with stricter laws on copyright | |An anti-american agenda may be brought against them. Some people may choose not to use american products | |Economical: | |Inflation currently has increased in UK and the US and may affect current sales of ipods which have already slowed. |Global economy in a down turn | |The exchange rate will also affect Apple as they are importing or exporting goods within the int ernational market. | |Social: | |Again Anti-american agenda may cause potential customers to but from another company. | |A generally aging british population, so many may be put off by the technology | |As much as it is a iPod culture, it can go away as quickly as it came. People may find something else which is better and| |more value for money. | |Technological: | |Many substitutes available from iRiver, Samsung and sony | |Competition moving away from copy protection on songs. Such as amazon. | |Peer-to-peer file sharing applications like Limewire and Kazaa are still extremely popular. Although this is a problem | |with the music industry on a whole. This still however affects iTunes. | Appendix C Strengths: †¢ The products itself appeals to both males and females †¢ All the iPods starting from the very first have a great reputation amongst it customers for its userability. †¢ Great technology underpinnings that allow the creation of powerful products. Allows them to attract a huge customer base due to their innovation and technology †¢ Very user focused and always committed to a superb user experience, in all their products †¢ Limited edition ranges, increases product life cycle. Limited editions ranging from U2 to BMW Weaknesses: †¢ High prices may push potential customers to competitors with substitutes at a better price. †¢ Technology is changing at a faster rate than ever. For Apple to remain profitable, they must invest huge amount of money in their R&D to remain competitive. †¢ Questions over reliability of the iPod [2] Oppurtunities: †¢ iPod was is revolutionary technology that has become part of mainstream culture, Apple can capitalize on that †¢ To develop themselves in to other markets due to the reputation they earned from the iPod. New designs may be available to boost sales and extend the product life cycle e. g. the iPod touch. †¢ iPods have also gained popularity for use in education. Apple offers more information on educational uses for iPods on their website. [13] Threats: †¢ Very high level of competition, a lot of substitutes, possibly offering cheaper prices i. e. iRiver †¢ Cheap fakes being made of the iPod and the iPod shuffle †¢ Concerns of market being extremely saturated. †¢ Competition, with the like of Amazon in digital sales [7] Appendix D [pic] Sources: Wikipedia [2] and Mactracker Apple Inc. Model database References: 1. http://en. wikipedia. org/wiki/Apple_Computer 2. http://en. wikipedia. org/wiki/Ipod 3. Apple Reports First Quarter Results(January 2008), [Accessed date: 14th March 2008]-http://www. apple. com/pr/library/2008/01/22results. html 4. Tim Conneally, (February 2008) Nearly 3% of America became iPod converts over the holiday, [Accessed date: 14th March 2008]- http://www. betanews. com/article/Nearly_3_of_America_became_iPod_converts_over_the_holiday/1204309531 5. Betsy Morris, (March 2008 ) What makes Apple golden, [Accessed date: 9th March 2008] – http://money. cnn. com/2008/02/29/news/companies/amac_apple. fortune/ 6. Q/A with apple employees and analysts(January 2008): Reading the runes for Apple [Accessed date: 5th March 2008]-http://www. guardian. co. uk/technology/2008/jan/10/apple. steve. jobs#swot 7. Jefferson Graham, (March 2008), Amazon takes on Apple with copy-protection-free music [Accessed date: 20th March 2008]- http://www. usatoday. com/money/media/2008-03-25-sony-music service_N. tm 8. Corporate strategy [Accessed date: 25th March 2008] -www. finntrack. com/corporate_strat. htm- 9. http://www. tutor2u. net/business/strategy/porter_five_forces. htm [Accessed date: 25th March 2008]- 10. Leander Kahney, (March 2008)How Apple Got Everything Right By Doing Everything Wrong [Accessed date: 27th March 2008]-http://www. wired. com/techbiz/it/magazine/16-04/bz_apple 11. Apple and Procurement [Accessed date: 29th March 2008]- htt p://www. apple. com/procurement/ 12. Jeremy Horwitz(August 2006) iPod maintains 75. % share of U. S. MP3 player market [Accessed date: 31st March 2008] http://www. ilounge. com/index. php/news/comments/ipod-maintains-756-share-of-us-digital-music-player-market 13. iTunes U and mobile learning[Accessed date: 2nd April 2008] http://www. apple. com/education/itunesu_mobilelearning/ipod. html 14. John Naughton(March 2008) Core values that turned Apple into the best store in town [Accessed date: 4th April 2008] http://www. guardian. co. uk/media/2008/mar/30/marketingandpr. apple Bibliography

F1 Grenades

F1 – fragmentation grenades Introduction World War two plays a major role in our conception of human history, because, unlike the senseless massacre of World War one, it stands for an ideological struggle between Good and Evil. This deadly and bloody war between the allies and the axis alliance lasted for six years. At the end of the war victory was claimed by the allied powers, which were: Britain, France, the U. S, the Soviet Union, China, Canada and Australia. Canada plays an important role to the successful victory of the allied power because of their strong support of combat using f1 -fragmentation grenades. BodyA. First supporting idea (topic sentence): The f1 – fragmentation grenades were very small but that was a great advantage to the user. I. It provided soldier with personal artillery they could carry in their pockets. II. When the grenade was thrown, it was visible to the enemies since it was so petite. III. The grenade was small so it also had to be light w eighted, which meant it could be thrown further than larger grenades. B. Second supporting idea (topic sentence): The f1 grenade was very small but it still was lethal as an artillery shell. I. The grenade held 60 grams of explosion which could do a lot of damage.II. If there were a group of enemy troops attacking together, the grenade could come into play because a gun can’t kill all the enemies at once, unless there was collateral damage but that even couldn’t give a guaranteed kill. III. The grenade can kill an enemy with one explosion is the enemy is in the direct vicinity, of the projectile when it detonates. C. Third supporting idea (topic sentence): The f1 grenade had an excellent design which gave very good advantages to the user. I. The exterior of the grenade was notched which prevented hands from slipping off the grenade when throwing it.II. There is safety ring on the grenade so that the striker lever is not triggered accidently. III. It has a steel exterio r so it can facilitate fragmentation upon detonation. Conclusion The allied power was able to claim victory against the axis alliance because of their Canadian army’s powerful and impressing weapons which named them the premier fighters of the war. The f1- fragmentation grenade should be displayed to the public in the Canadian war museum; so that others can see what strategies did Canadians come up with when it comes to artillery weapons needed for war. .

Germen Cilivization --The Holocaust Essay Example | Topics and Well Written Essays - 750 words

Germen Cilivization --The Holocaust - Essay Example The requirement of religious conversion compared to the compulsion that Turkish nationality was the only accepted guiding ideological principle prior to the Armenian Genocide (Haperen, Have and Kierman 48). However, failure of the Jews to convert to Christianity heightened hatred and fear that translated into what became known as racial anti-Semitism driven by unconfirmed biological theories. Based on Dalton (4) German National Socialism (Nazism) made anti-Semitism an integral part of them arguing that the history of humans was determined by biological struggle amongst populations of different racial backgrounds. Additionally, the Nazis proceeded to view the Jews as the driving force behind communism internationally. The Nazis also referred to the Jews as responsible for finance capital that drove the world to impoverishment and economic crisis. Jews to the Germans were a potential danger just like the United States had viewed the Germans, Japanese, and Italians. In reiteration, the Nazis stripped off from the Jews their rights, dispossessed their property, forced them to live in communities, and deported as well as mistreated them. For instance, failure to convert to Christianity led to the renunciation of rights and defense under the law. Consequently, the Jews were annihilated because of their cultural, social, religious, and ethnic attributes all in for the reason that they were the cause of Germans’ misfortunes, and that whether they converted to Christianity or were born in Germany, they remained Jews and not true Germans to be spared from the war (256-257). In order to define Germany as a pure racial community, Hitler introduced racial policy and foreign policy (Fulbrook 189-190) as described in the Mein Kampf book in 1924. Through the racial policy, Hitler established laws and policies for implementation of the Nazis and that regarded the Aryan race or master race as the

Educational Law and Students with Disabilities Essay

Educational Law and Students with Disabilities - Essay Example This has been realized by the formulation of a number of legislation that made it mandatory to offer the same educational standards and facilities in all public schools for the disabled children. These legislations gave children protection under the law that acted as a safeguard to their right of education. This paper seeks to highlight educational law and students with disabilities. The article from the New Jersey Times by Erin Duffy/The Times of Trenton highlights the plight of Trenton school district’s Life Skills program in Daylight/Twilight High School. In the article, Duffy gives information pertaining to the situation regarding the plight of education for disabled children. She uses testimonies garnered from a member of staff at the institution who claims to have witnessed the below par educational practices with regard to the Life Skills program at the school. Of particular interest is the case of a disabled youth who is termed as problematic, which leads him to being punished by washing the hallways and washrooms during class time. Another example of student neglect is the case of a Liberian student who gets robbed nearly everyday by his classmates, and there has been no intervention from the teachers. The situation at the institution is further aggravated by the fact that there exists no set school curriculum to cater for the immediate learning requirements of the disabled children in the institution. According to Duffy’s source who goes by the name Deborah Downing Forston, there is cheating when it comes to what the teachers are supposed to teach. This is exemplified by her statements that these students are subjected to the same repetitive learning content everyday of the week throughout the term. Forston claims there is lack of motivation in both the teachers and students which is characterized by low expectations caused by what she termed as a complete lack of learning within the program (Duffy, 2013). Duffy highlights the plight of the disabled students and some concerned members of staff by putting her job on line when she condemns the way things are run at the school with regard to the Life Skills program. In a second article reporting on the same issue after about a week, Erin Duffy is able to learn the history of the institution with regard to education and students with disabilities. Duffy tells of the improving situation not only in Twilight/Daylight High School, but throughout the Trenton area with similar Life Skills programs. According to Duffy, this is being done by efforts from the district’s education Superintendent Francisco Duran who is coordinating visits to schools to assess the situation and formulate policies and instruction of improving the situation. These improvements will include training special education teachers and according to Duran, to broaden and expand life skill activities by increasing the activities for students with higher levels of disabilities (Duffy, 2013). According to Forston the whistle blower, the approval of resolutions by the school board to address this dire situation by investing more attention and funds is long overdue. This will go a long way in alleviating disabled children’s chances of making it out on their own after school. She recognizes earlier efforts by the district’s special services director Stuart Barudin, because the Life Skills p

Marketing Communications Plan Essay Example | Topics and Well Written Essays - 2500 words

Marketing Communications Plan - Essay Example Within a period of four years, Innocent became a food and drink company with fastest growth in the U.K resulting in growth in turnover from ?0 to ?10.6 million over the same period (Trott, 2008). In 2003 it obtained a market share of 30% in U.K and an intense distribution with 4,500 outlets across the U.K (DATAMONITOR, 2004). In 2004, its turnover stood at ? 15 million with an investment of just ?280,000 (DATAMONITOR, 2004). The company has introduced several new flavors of smoothies and drinks since its inception which is one of its critical success factors (DATAMONITOR, 2004) . The report shall now delve into developing an Integrated Marketing Communications Campaign for Innocent Drinks in an attempt to sustain its competitive edge and make it stand out from its rivals. The SOSTAC framework shall be used along with a feasibility analysis and shall conclude with recommendations of existing and new products. Context Analysis The SWOT and PEST model for Innocent Drinks is as follows: SWOT Analysis Strengths: Innocent Drinks has become one of the top smoothie brands in U.K in a period of just four years from its inception. Its turnover has increased from ?0 to ?10.6 million over the same period (Trott, 2008). The company has emerged as a market leader in U.K smoothies market by managing to capture a tremendous 30% share (Jones, 2008). The company has managed to obtain 50% brand awareness and press coverage significantly higher than that of its major rival, PJ (Appendix 1) ((DATAMONITOR, 2004). It enjoys excellent relationship with its distributors, the retailers, including U.K’s leading stores such as Sainsbury’s and Boots (Lincoln & Thomassen, 2007). It launched a first of its kind birthday party in 2003 which was attended by all its major retailers (Thomas, 2009). Weaknesses: The company suffered a temporary decline in its sales in 2008 due to recession. Its sales fell by 29% in the period 2007-2009 (MarketWatch:Drinks, 2008). However, the fact th at its major rivals racked up profits worth 25%-30% in the same period was a cause of concern (MarketWatch:Drinks, 2008). The recession revealed several flaws in the company’s strategies which include targeting the wrong customers (young professionals), faulty international strategy, no differentiating factor, no benefits-based ad campaign, targeting a niche product to the mass market, no innovation in packaging and failure to introduce new products in recent years (Mellentin, 2010). Another area of concern is the fact that while its rivals have managed to obtain a 60% mark-up on every bottle, Innocent manages to make only 3p-4p worth of profit on each bottle (Mellentin, 2010). Opportunities: The market for smoothies has been growing unlike the market for juices which has occasionally seen a downward trend. There is enormous potential in the ?70 million British smoothie market which has seen double-digit growth over the years (Mellentin, 2010). The rate of annual growth is es timated at 30% (Mellentin, 2010). The company has enormous potential ever since Coca Cola’s purchase of stake in the company (Mellentin, 2010). Furthermore, 75% of the European market still remains untapped by Innocent Drinks (Mellentin, 2010

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Violent Sports should be Banned Essay To start with, Sports is basically an activity done for pleasure, which needs physical effort and skill. Some people, who dedicate themselves to this activity, consider it as a passion to compete against others in their skill, ability and spirit. Sports also help in inculcating a certain discipline as well as the spirit of brotherhood or the ‘team spirit’ in the sports persons. Sports ideally are not meant to do anything with violence. Sports for some is a mode of attaining fame, for some it is their job. Some do it as their hunger to compete and win, while the others take it as an enjoyment to watch. But, in today’s scenario, the sports that include aggressive activities are gaining more popularity, as they present much a way of entertainment to the spectators. Since the youth are more volatile by nature they enjoy these ‘violent sports’ such as boxing, kick boxing, wrestling etc. Today’s Young generation does not make an effort to know the grave dangers that these sports put. The dangers that these sports cause are susceptibility to major accidents that may even prove to be even worse than fatal. The injuries which may be for lifetime may be a cause of greater torture and helplessness than death itself. Certain instances in the past, such as the accident of Fred Guirrero and ‘Umaga’ because of accidents during the match have resulted in their death in the arena themselves. Also, these violent sports are responsible for major injuries to the sportspersons, such as rupture of the spine, brain haemorrhage, excessive blood loss, irregular clotting etc. Not only the sportspersons are affected by these kinds of sports, but also, the viewers get an indirect impact on them. Young children as well as adults, try to imitate the actions that take place in these sports. Statistics say that almost 15000 deaths take place annually in the USA because of people imitating the sportspersons of boxing, wrestling, sword fighting etc. Repeated watching of such sports unconsciously affects the very psyche of the young which ultimately reflect in their behaviour in their social environment. One of the major causes of ‘road rage’, shooting spree by teenagers in their own schools and colleges, acts of suicide, involvement in murders, loots etc, are the consequences of being in constant influence these ‘violent sports’ and other such activities. What is the logic behind sportspersons indulging themselves in such inhuman activities and the viewers watching blood smeared sportsmen in  the ring with broken limbs? It seems greed of money is prompting certain people to participate in such type of violent activity. Also, it is very contradictory to the spirit of sports that they spread violence and suffering instead of providing pleasure and joy. So in my opinion I strongly refute the proposition of those who argue in support of the continuation of such ‘violent sports’. They should be allowed neither to continue on human as well as moral grounds.

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Study on the Determinants of Corporate Borrowing

Study on the Determinants of Corporate Borrowing CHAPTER 1: The determinants of corporate borrowing was an empirical research, hence a terrific amount of prior researches focused on exploring the determinants of corporate borrowing, since 1960s. Corporate borrowing decision effects remained as an area of growing interest for researchers in the last three decades, as the presence of the a phenomenon has been evidenced even in the most developed capital markets of the world (Guedes Opler, 1996). In addition, the sales growth was defined as a pinpoint determinant for firm financial decision towards firm sales growth opportunities and financial debt capacity, in the same studies. The debt and equity remained main areas of interest which were observed for decision making in corporate finance of the governance systems. As the earlier researches explored the factor of debt maturity but usually did not focus on sales growth as determinant of corporate debt (Myers Stewart, 1977). In addition, the same study focused on including and exploring the sales growth of firm as a determinant of corporate borrowing. Firms, in general, financed projects with long-term debt to avoid riskiness of project and hide the mismanagement activities under the cash flow of project, the cash flows were obtained from investment of the project before the debt maturity date (Guedes Opler, 1996). While same studies further addressed an important issue for firm, if the projects were financed with short-term debt. For instance, according to Barclay, Michael, Clifford and Smith (1995) that the term and conditions for maturity of debt of firms were reduced with growth opportunities, and raised with the size and credit quality of firm. Myers and Stewart (1977) also suggested firms to shorten debt when cost of contracting was high. Firms activities to finance long-term debt, with aspect to attaining firms growth opportunities such sales growth; had significant impact on short-term debt of the firm due to increased level of inventory and level of failed to sustain receivables turnover (Stohs, Mark Mauer, 1996). Further, the same studies defined that less risky and probably larger firm used long-term debt financing with meager growth opportunities, so the liquidity risk was highly involved for firm short-term borrowing decision. According to Diamond and Douglas (1991a) debt risk was defined as the borrower risk or the ability of borrower to repay interest, principle amount and timely fulfill claims terms. Froot, Kenneth, David and Stein (1993) addressed that loss of projects could be a caused by short-term debt if project has high refinanced interest rate and imperfections of credit market. Firms also experienced the distress for indirect cost of financial such that loss of inventory or the incremental proportion of inventory held and decline in the receivable turnover for the purpose of firm sales growth. Rizzi and Joe (1994) addressed the sales growth and risk that only high quality firms were able and sustained in the credit market for long term borrowing, while the low quality firm screened out from long term debt market. While the available short term debt market had high risk for low quality firms, even that firms financed to cope up growth opportunities, usually firms growth opportunities were identified with sales growth of the firm. 1.2 Problem Statement The debt financing was considered as one of the crucial issues in the corporate financing, the sales growth of the firm was one of the major determinants of the corporate debt financing. The purpose for the study of sales growth and debt financing is that this is the crucial issue for firms that how efficiently to avail firms growth opportunities such that sales growth. The objective of this research study was to explore and know that how borrowing decision of the firm such that short term debt was affected by the sales growth of the firm. The fundamental purpose of study was to observe the impact of sales growth in detail by Guedes and Opler (1996) and Saumitra (2002) presented the detailed information regarding the determinants of corporate borrowing such as sales growth and the firm debt financing decision in Pakistan. The scope of this study was to analyze the impact of sales growth on corporate borrowing such that short term debt financing decision of the firm to avail growth opportunities of the firm on the basis of debt financial decision factors. 1.3 Hypotheses The central query was raised in front of firms to borrow new financing as cope up the growth opportunities of the firm in the form of sales growth opportunities. New investment was required for the operational and the manufacturing activities of the firm whether to use debt financing or not, if the debt financing decision was to be used so the lender and borrower noticed that at what level of risk and the sales growth of the firm may affect the short term debt financing decision. In selection of the financing decision; firms past, current and expected activities was crucial for lender and borrower, such that sales growth, inventory held, and liquidity condition of the firm. Many Authors as Guedes and Opler (1996) and Saumitra (2002) discussed the sales growth as a main factor affecting to debt financing decision of the firm in research. The Hypothesized relationship of the variable is provided below: H1: There is positive impact of sales growth on corporate borrowing. H2: There is a positive impact of inventory held on corporate borrowing. 1.4 Outline of the Study The research presented the introduction of the thesis in chapter one, which included the problem statement of the study, scope of research, hypotheses etc. Literature review of the study was presented in chapter two with review by different authors on impact of sales growth on corporate borrowing. The research methodology was described in chapter three with justification of the selection of variables, sample size, sampling technique and statistical technique used in analysis of the study, and also developed model were described. After processing of data, the analysis interpretation of the results was described in the chapter four with hypothesis assessment summary. The summarized findings, conclusion, discussions, implications and recommendations, and suggested future directions for the empirical research on impact of sales growth on corporate borrowing was defined in chapter five. References and appendixes for the study were given in chapter six and at the end of study respectively. Chapter-2 LITERATURE REVIEW A lot of research has already been conducted in the field of identifying the best determinants of Corporate Borrowing by various researchers. Most of the research work suggested that the corporate borrowing vary from company to company and similarly from decision factor to factor. Marsh (1982) addressed that the borrowing decisions were taken by firms both by raising debt or finance, here question raised for corporation, what level of financing is required and which financing decision would be better for firm health. The firms borrowing decisions biased over its target level of debt, if its debt was below the target level of debt, so, the decision of debt financing would taken, otherwise financing decision was taken by firms due to signal of existing level of borrowing was above its target level of debt. The significant flotation costs for existence of corporations means that companies required to plan issues with objective to minimize both costs of its target ratio deviation and flotation costs. Over time fluctuating, it gave rise to infrequent issues of firm with its targeted debt ratio and firms clearly identified that what its level of target is. Miller and Rock (1977) debated over debt and explained two points; first, shift issue occurred in firm decision towards either equity or debt due to any change in level of tax, hence issue effect either temporary lasting until equilibrium level was restored, or shift issue remained permanent over target ratio of firms. The second point were elaborated that the probability of firm financial distresses and systematic risk level influenced the target debt levels of firm, it was defined that the highly operating risk of firm used the less level of debt financing. Myers, Brealey and Schaefer (1977) argued that companies avoid fixed interest rate of long term debt due to uncertainty of future rates of inflation and instead of long term debt rely over variable rate of short term debt. Barges (1968) explained the ability of a firm towards sales growth rate and capacity of debt, the explanation were shown with two factors, first the expected growth rate of future earnings of firm and the probability of expected sales growth and earnings of firm. Generally, high rate of expected future earning signify a greater capacity of a firm to carry debt; hence low expected future earnings mean the opposite. The degree of uncertainty for any level of expected future earnings for debt capacity of firm was served by knowing a limiting factor. Barclay et al. (1995) showed that credit quality and size moderately effect on firms to augment its debts term to maturity, and firms debt falls with growth opportunities. In a related article, Stohs et al. (1996) defined that larger firms most likely used the long term debt to avail the growth opportunity of its sales. The earlier studies examined the corporate debt maturity on behalf of issues of incremental debt rather than to investigate the maturity of liabilities of firm on balance sheet. By studying the liabilities to assets on balance sheets could answer some uninvestigated questions about impact of sales growth on corporate borrowings. Myers et al. (1977) suggested that agency cost and problems of debt can be controlled by firm to shortening the worth of its debt with respect to the volume of its sales. While some firms gain incentives from liquidity risk to borrow long term debt, it may not be able to compensate investors to bear credit risk of long-term debt for the sake of sales growth; it may indicate the low quality projects (Diamond Douglas, 1991.) and (Stiglitz, Joeph Weiss, 1981). Hence the low-quality firms cant sustain their position or can be screened out from long-term debt market, only high credit quality firms can be stable and able to borrow long-term debts. In contrast, larger firms were defined for long run as having higher likely possibilities to survive than smaller firms (Queen, Maggie Richard, 1987). Brick, Ivan and Ravid (1985) examined that interest payments affect the borrowers and lenders with respect to firms volume of sales due to different time patterns. The interest text shield was argued that borrowers seek to maximize the present value by accelerating interest payments, while lenders priorities to diminish the present value of tax charges by slow downing interest payments. Leff (1979), Khanna and Palepu (2000) addressed that the dominant perspective and minimizing perspective of transaction costs on business groups plays a crucial role on firms affiliations with these groups to overcome the barriers in an inefficient market. The view of transaction cost minimizing is characterized by weak governance system of firms, in part due to weak legal institutions or under developed intermediaries. Increase in the external financing investment cost may occur due to association of agency cost problems with market imperfections. However, this study will not develop and test the hypothetical views of business groups. Mitchell (1991) finds no support on the firm choice to match their asset maturities with maturity of debt issues. In a similar on debt issues, Guedes and Opler (1994) argue that high grade firms with large investment issue short-term debt. Diamonds (1991) predicted that active participants part in short-term credit markets was taken by the higher-rated firms to avail growth opportunities of the firm. Auerbach and Alan (1979) also argued that growth rate of sales and leverage are inversely proportion because the interest payment of tax deductibility was considered less valuable to the larger or fast growing firms. The firms annual sales growth rate in total assets was used as a growth rate of proxy. Asset maturity was defined as an important factor for corporate borrowing and plays stable role to predict the debt maturity of a firm. Myers et al. (1977) argued that long-term assets of firm can support to gain more long-term debt. In contrast, Titman, Sheridan and Wessels (1988) analyzed debt maturity on the basis of balance sheet and viewed the evidences that smaller firms rely on higher proportion of short-term debt with objective to minimize long-term debt flotation costs. Barclay et al. both addressed that smaller firms more likely with growth opportunities rely on a smaller proportion of debt that would exceeds 3 years. Myers and Stewart (1977) expressed the views on these evidences that debt maturity is used by firms to control interest conflicts between debt and equity holders. The preceding papers provided useful approaches for firms debt maturity choices; hence the measure had various limitations. First, the term-to-maturity in the corporate borrowing provided the information just about incremental financing choices. The debt maturity average of the firms existing liabilities test relate to the terms-to-maturity of debt issues to balance sheet variables such as asset maturity or return on assets (Stohs et al. 1996). Myers et al. defined the borrowing decisions of firms by using two indicators for growth: sales growth and growth of firm total assets. The research study focused to examine the behavior of firm borrowing decisions and concluded that; to prevent the agency cost of long term debt, most of the firms proffer short term debt decisions instead of long term debt. While Froot et al. (1993), Lucas, Deborah and McDonald (1990), and Kale, Jayant and Thomas (1990) examined the firm growth with three indicators of growth: sales growth, growth of firms total assets and growth of employing size of firm, and concluded that firm growth is independent of firm size. To study firms complete size distribution, the several alternative forms of samples were used, so, the variables were leading each others, while the definite relationship for alternative form of samples were crucially assumed and it was derived that firm growth decreases with all three indicators for agency cost of long-term debt financing , hence the sales growth were certain. Loughran, Tim, Ritter J. (1995) accentuated the importance of firm growth, debt financing decision and changes in market structure. Mansfield addressed that debt financing is better when growth opportunities of firm were available and demanded, so the profitability of firm was certain and debt financing was benefited as the tax advantage of firm. DeAngelo and Masulis (1980) examined the financing decisions of firm and showed that firm value was being affected by the financing decisions of the firm, if the firm has to avail certain growth opportunities, so the debt financing decisions was defined as an effective tax advantage and resulted decline in non-debt tax shields. Firm financing decision except debt financing resulted without tax shield beneficiaries, debt interest and principle payments were excluded from earnings of firm before tax applied and included the net short term losses in taxable income and then the corporate taxes was being applied over taxable income. Hence it was addressed that the profitability of firm and the proportion of profitability over assets was affected by the corporate tax. Gan (2007) addressed to normalize the loan payment balances of prior debts and lending decisions. It was explained that the payment of debt balances of loans slowly and present value of generated profits exceeded the present value of total payments which were gradually paid. It has also an impact over firm capital and the proportion of debt over capital, the ratio of firms capital was reduced with the excess of debt. Firms health with proportion of debt to capital explained that healthy capital was being shown from the borrowers willingness to repay gradually loan payment, and lenders willingness to lend. Debt financing and loan payments has also an impact over firm net profitability and the proportion of net earnings over firm total assets or return on assets, it must be paid even in bed time of firm, so well, required payments reduces the firm profitability and return on assets. The proportionate of earnings over total assets showed the efficiency of firm that how well the firm has utilized its assets to bear the cost of financing. Return on assets and prior debt to capital worth was used by means of lenders amount and implicitly measure the worthiness of firm capital. Dedoussis and Afroditi (2010) argued the problems with characteristics of a firm such as assets value or growth opportunities were communicated inability of firm to outside lenders, so that investment decisions were affected by net worth of firm if the discrepancy exists between firm internal and external financing. Hayashi (1982) explained that marginal profitability was covered by firms to expanding the business and sales of firm with bearing the moderate changes in firm expenditure. The described expansion were done by corporations with various financing decisions, it was suggested that the debt financing is better to avail if the market was shown under green signals of demand, if the markets demand were not shown so the firms prevent the debt financing because of interest payment which must be paid even in bad time of cash flows. Hadlock (1998) assumed that financiers were indecisive about the factual value of firms assets, so expectations were formed based on the investment amount that firm requests to carry out. If the firm requested for the maximum amount subsequently the investors were not capable to discriminate between firms with large resources or low resources. So the large assets of firm with low claims send a green signal to investor to putting money for debt investors. While it send the signal to equity provider to cutting the amount of investment if the money is required for new project establishment because it shorten its net earnings as well as the earning of shareholders. CHAPTER 3: RESEARCH METHOD 3.1 Method of Data Collection Data was obtained from the website of Karachi Stock Exchange KSE-100 Index and Joint Stock Companies Balance Sheet Analysis specified by State Bank of Pakistan in periodical listed on the KSE (2004-2009). The period of study covered with data of five years as sample of 2005-09. The opted sample size of all cement sector firms was taken from Karachi Stock Exchange-100 Index and the firms whose data were not available in the sample year of 2005-09 were excluded from the study. The objective behind the insertion of the firms in the sample was to explore debt financing behavior of cement firms significantly rely over sales growth opportunities or not. The major issue of data availability was faced in this research. The source of secondary data was adopted for the sampled data collection of this research study. In accordance with the research studies limitations three firms of cement sector were excluded from the study because two of the firms were newly listed and introduced in the Pakistani market and third was dropped from the KSE-100 Index during sample years of the study. The observed and expected aspects regarding the sales growth and debt financing was analyzed in this research. The external data sources were used to cope up the purpose of collection of data, such that general business publications, State Bank of Pakistan, companys annual reports, internet publications and books were used. The data required for study was completely dependent over the published and secondary data sources, as the sources defined above. 3.2 Sample Size The study selected all cement sector firms listed over KSE-100 Index as sample size for the research analysis. Total of 21 firms were listed over KSE-100 Index, hence, the firms whose data was not available during the sample year of 2005-2009, were excluded from the study, therefore three firms were excluded from the study because two of the excluded firms were newly listed and third was delisted over KSE-100 Index during the sample years. The impact of sales growth of firms on the corporate debt, which were listed on KSE-100 Index, was analyzed on the basis of the selected sample of 18 cement firms. 3.3 Research Model Developed From the various determinants of corporate debts which affected debt financing decision of the firms, this research study included only sales growth and inventory to analyze the impact of sales growth on corporate debt, the sales growth was measured by two variables one was directly change of current year sales with respect to last year sales, and second was level of inventory held by firm. The short term debts were used as a major dilemma for firms to face debt claims in swift time. The constructed mathematically model provided below; CD = a0 + ÃŽ ²1SG + ÃŽ ²2IH + ц Where: CD= corporate debt was measured as the change of short-term debt with respect to last year debt. SG= sales growth of firm with respect to last year sales of the firm. IH= inventory held by firm during the year. ц = the error term 3.4 Statistical Technique To examine the impact of sales growth on corporate borrowing, the multiple linear regression analysis (MLR) as a statistical technique was used for analyzed research study over selected sample firms; the SPSS software was used to test the secondary data. Multiple Linear Regression Analysis technique was used for prediction of sales growth with respect to last year sales and inventory hold by firm defined as the studied variables had an impact on corporate borrowing decision especially on short term financing. The identified technique was used to analyze the empirical behavior of firms financings with studied independent variables (sales growth and inventory hold) on dependent variable i.e., Corporate Borrowing (short-term financing discussed in the previous chapter). According to the characteristics of research study and variables used in this study, the multiple linear regressions; a multivariate analysis was appropriate to used than univariate investigation. In such a way the referenced studies also suggested to use the multivariate analysis technique. The intensity of sales growth impact on corporate debt during year 2005-2009 was observed on the basis of studied independent variables i.e. sales growth and inventory hold by firm during the year. CHAPTER 4: RESULTS All firms of cement industry listed on KSE-100 Index were selected as sample for this research study, and Multiple Linear Regression Analysis was taken as a statistical technique for analysis of this research study. This research was tested and analyzed by using multivariate technique for the prediction of impact of the sales growth with respect to last years sale and inventory hold by firm on corporate borrowing decision especially on short term financing. The identified technique was used to examine the impact of the studied independent variables (sales growth and inventory hold) on dependent variable i.e., Corporate Borrowing (short-term financing discussed in the previous chapter). 4.1 Findings and Interpretation Primarily, the regression technique in SPSS was applied on collected data. The resulted output of data showed that the data has no multicolinearity issue, while the normality issue was found in the data, to resolve normality issue of the data; so all the transformation techniques were used. By applying all the transformations, the studied variables found to be insignificant, so it was described that the data was highly volatile in Pakistani market so the normality issue was ignored to predict the variables. As the multicolinearity issue was not in the data, so the study initiated to analyze the results. The analysis and interpretation of the results was defined in following section of the research. Table 4.1: Model Summary Model R R Square Adjusted R Square 1 .722 .521 .510 Table 4.1 demonstrated summary of the regression model. The Adjusted R square was best for prediction of model as per the number of variables used. The Adjusted R square of 51% in the above table showed that the both of the predictors of corporate borrowing combined together explained 51% variation in whole model, while the remaining was residual variance as latent and not included in the prediction of the model. In other words, Adjusted R square showed that 51% variation in outcome was explained by the population of the study. Table 4.2: ANOVA Model Sum of Squares Df Mean Square F Sig. 1 Regression 3.766E8 2 1.883E8 47.289 .000 Residual 3.464E8 87 3981969.306 Total 7.230E8 89 The table 4.2 represented the significance of estimated linear model of the study, the sig value of ANOVA supported the model fitness for this research study file regarding applicability of the regression technique, ANOVA table was consistent for examination of the models ability to predict any variation in observed dependent variable such that corporate borrowing. This was absolutely understandable from the sig value of .000 which showed that the linear regression model was perfectly momentous for the conducted research. Table 4.3: Coefficients Model Unstandardized Coefficients Standardized Coefficients t Sig. Collinearity Statistics B Std. Error Beta Tolerance VIF 1 (Constant) 1082.629 295.525 3.663 .000 Inventry 7.543 1.179 .593 6.399 .000 .641 1.561 SG .307 .152 .188 2.026 .046 .641 1.561 The table 4.3 represented crucial results for regression model of this study. Sig column of above table demonstrated that all variables of the study were significant and all independent variables of the hypothesis of this research study had significantly influential intensity over dependent variable of the study. Sig column demonstrated that the un-standardized coefficients of variables is zero or not; when the sig value was higher or equal to .05, the un-standardize coefficients considered as zero; and when the sig value was lower than .05, then the un-standardize coefficients of the model was not considered as zero. The value of column B demonstrated that one unit varies in independent variable consequence change in dependent variable with the weights equal to the weights of column B. The VIF column showed the existence of multicollinearity issue in the studied independent variables. As all of the VIF values found less than 2, so this identified the least acceptable level of multic ollinearity in the study. 4.2 Hypotheses Assessment Summary The studied hypothesis was sales growth of the firm has significant positive impact on corporate borrowing decisions to finance in short-term credit market. The firms sales growth characteristics had variation in current year sales of firm with respect to last year sales and the level of inventory hold by firm during financing years. In this study each of the sales growth variable and inventory variable as firms sales growth characteristic for corporate borrowing were tested and concluded in the outcome. TABLE 4.4 : Hypotheses Assessment Summary S.NO. Hypotheses ÃŽ ² SIG. RESULT H1 There is a positive impact of sales growth on corporate borrowing. 0.307 .046 Accepted H2 There is a positive impact of inventory hold on corporate borrowing. 7.543 0.000 Accepted CHAPTER 5: DISCUSSIONS, CONCLUSION, IMPLICATIONS AND FUTURE RESEARCH 5.1 Conclusion The results of the study suggested that sales growth has positive impact on corporate borrowing which identified the significance of sales growth impact in Pakistani market. The second variable of the study was also identified the significance impact in Pakistani market and had intensity to impact over corporate borrowing. The results of this study were not matching with referenced studies conducted by Guedes Opler (1996), and these results had also shown consistency with the study conducted by Barclay et al. The studied results varying because the matched studies were conducted in various countries, so the firms environments and circumstances of the countries usually differed to make financing decisions accordingly. 5.2 Discussions Firm sales opportunities played a vital role in defining the firms sales growth but these growth opportunities varied over volatility in environmental growth of the countries, hence, this dilemma was not with the study of Guedes Opler (1996), because in his study the level of inventory hold by the firm over the year was playing a significant role. Variations in the corporate borrowing were highly explained by the level of inventory held by firm over the year. While sales growth of the firm concluded same results with consistent to the research study of Barclay et al. 5.3 Implications and Recommendations This research study was limited to the cement sector firms listed on Karachi Stock Exchange of Pakistan only. The data was taken from annual reports of all cement sector firms. This research suggested it was not necessity that only firms sales growth has impact on corporate borrowing or the corporate borrowing decisions was affected only by sales growth and inventory factors such type of other borrowing factors should be carried out and analyses in other countries of the Asia as well, as to have inclusive idea about the impact of sales growth on corporate borrowing. Furthermore, the research study also suggested that other factors of corporate borrowing discussed in the chapter one should be researched as to have perfect idea for the debt financing decisions of the firm. For instance, this research study can also be replicated efficiently in other developing countries. 5.4 Future Research This research study may helped various management of the firm, investors and other research conductors in analyzing and observing the debt behavior and financing decisions of firms to achieve sales growth opportunities of the firm. The students whose intention is to research on either debt financing behavior of the firm or to study the growth behavior of the firm with respect to debt can be benefited by this study. Furthermore, the cement sector will become advantageous from this study because the study clarifies the impact of sales growth of firm on corporate short term borrowing. CHAPTER 6: REFERENCES Auerbach Alan (1979). Share valuation and corporate equity policy. Journal of Public Economics, 11, 291-305. Barclay, Michael J., Clifford W. Smith Jr. (1995). The maturity structure of corporate debt. Journal of Finance, 50, 609-631. Barges A. (1968). InstituteGrowth Rates and Debt Capacity. Financial Analysts Journal, 24, 100-104. Brick, Ivan, and Ravid S. (1985). On the relevance of debt maturity structure. Journal of Finance, 40, 1423-1437. DeAngelo, H., and Masulis R. (1980). Optimal Capital Structure under Corporate and Personal Taxation. Journal of Financial Economics, 8, 3-29. Study on the Determinants of Corporate Borrowing Study on the Determinants of Corporate Borrowing CHAPTER 1: The determinants of corporate borrowing was an empirical research, hence a terrific amount of prior researches focused on exploring the determinants of corporate borrowing, since 1960s. Corporate borrowing decision effects remained as an area of growing interest for researchers in the last three decades, as the presence of the a phenomenon has been evidenced even in the most developed capital markets of the world (Guedes Opler, 1996). In addition, the sales growth was defined as a pinpoint determinant for firm financial decision towards firm sales growth opportunities and financial debt capacity, in the same studies. The debt and equity remained main areas of interest which were observed for decision making in corporate finance of the governance systems. As the earlier researches explored the factor of debt maturity but usually did not focus on sales growth as determinant of corporate debt (Myers Stewart, 1977). In addition, the same study focused on including and exploring the sales growth of firm as a determinant of corporate borrowing. Firms, in general, financed projects with long-term debt to avoid riskiness of project and hide the mismanagement activities under the cash flow of project, the cash flows were obtained from investment of the project before the debt maturity date (Guedes Opler, 1996). While same studies further addressed an important issue for firm, if the projects were financed with short-term debt. For instance, according to Barclay, Michael, Clifford and Smith (1995) that the term and conditions for maturity of debt of firms were reduced with growth opportunities, and raised with the size and credit quality of firm. Myers and Stewart (1977) also suggested firms to shorten debt when cost of contracting was high. Firms activities to finance long-term debt, with aspect to attaining firms growth opportunities such sales growth; had significant impact on short-term debt of the firm due to increased level of inventory and level of failed to sustain receivables turnover (Stohs, Mark Mauer, 1996). Further, the same studies defined that less risky and probably larger firm used long-term debt financing with meager growth opportunities, so the liquidity risk was highly involved for firm short-term borrowing decision. According to Diamond and Douglas (1991a) debt risk was defined as the borrower risk or the ability of borrower to repay interest, principle amount and timely fulfill claims terms. Froot, Kenneth, David and Stein (1993) addressed that loss of projects could be a caused by short-term debt if project has high refinanced interest rate and imperfections of credit market. Firms also experienced the distress for indirect cost of financial such that loss of inventory or the incremental proportion of inventory held and decline in the receivable turnover for the purpose of firm sales growth. Rizzi and Joe (1994) addressed the sales growth and risk that only high quality firms were able and sustained in the credit market for long term borrowing, while the low quality firm screened out from long term debt market. While the available short term debt market had high risk for low quality firms, even that firms financed to cope up growth opportunities, usually firms growth opportunities were identified with sales growth of the firm. 1.2 Problem Statement The debt financing was considered as one of the crucial issues in the corporate financing, the sales growth of the firm was one of the major determinants of the corporate debt financing. The purpose for the study of sales growth and debt financing is that this is the crucial issue for firms that how efficiently to avail firms growth opportunities such that sales growth. The objective of this research study was to explore and know that how borrowing decision of the firm such that short term debt was affected by the sales growth of the firm. The fundamental purpose of study was to observe the impact of sales growth in detail by Guedes and Opler (1996) and Saumitra (2002) presented the detailed information regarding the determinants of corporate borrowing such as sales growth and the firm debt financing decision in Pakistan. The scope of this study was to analyze the impact of sales growth on corporate borrowing such that short term debt financing decision of the firm to avail growth opportunities of the firm on the basis of debt financial decision factors. 1.3 Hypotheses The central query was raised in front of firms to borrow new financing as cope up the growth opportunities of the firm in the form of sales growth opportunities. New investment was required for the operational and the manufacturing activities of the firm whether to use debt financing or not, if the debt financing decision was to be used so the lender and borrower noticed that at what level of risk and the sales growth of the firm may affect the short term debt financing decision. In selection of the financing decision; firms past, current and expected activities was crucial for lender and borrower, such that sales growth, inventory held, and liquidity condition of the firm. Many Authors as Guedes and Opler (1996) and Saumitra (2002) discussed the sales growth as a main factor affecting to debt financing decision of the firm in research. The Hypothesized relationship of the variable is provided below: H1: There is positive impact of sales growth on corporate borrowing. H2: There is a positive impact of inventory held on corporate borrowing. 1.4 Outline of the Study The research presented the introduction of the thesis in chapter one, which included the problem statement of the study, scope of research, hypotheses etc. Literature review of the study was presented in chapter two with review by different authors on impact of sales growth on corporate borrowing. The research methodology was described in chapter three with justification of the selection of variables, sample size, sampling technique and statistical technique used in analysis of the study, and also developed model were described. After processing of data, the analysis interpretation of the results was described in the chapter four with hypothesis assessment summary. The summarized findings, conclusion, discussions, implications and recommendations, and suggested future directions for the empirical research on impact of sales growth on corporate borrowing was defined in chapter five. References and appendixes for the study were given in chapter six and at the end of study respectively. Chapter-2 LITERATURE REVIEW A lot of research has already been conducted in the field of identifying the best determinants of Corporate Borrowing by various researchers. Most of the research work suggested that the corporate borrowing vary from company to company and similarly from decision factor to factor. Marsh (1982) addressed that the borrowing decisions were taken by firms both by raising debt or finance, here question raised for corporation, what level of financing is required and which financing decision would be better for firm health. The firms borrowing decisions biased over its target level of debt, if its debt was below the target level of debt, so, the decision of debt financing would taken, otherwise financing decision was taken by firms due to signal of existing level of borrowing was above its target level of debt. The significant flotation costs for existence of corporations means that companies required to plan issues with objective to minimize both costs of its target ratio deviation and flotation costs. Over time fluctuating, it gave rise to infrequent issues of firm with its targeted debt ratio and firms clearly identified that what its level of target is. Miller and Rock (1977) debated over debt and explained two points; first, shift issue occurred in firm decision towards either equity or debt due to any change in level of tax, hence issue effect either temporary lasting until equilibrium level was restored, or shift issue remained permanent over target ratio of firms. The second point were elaborated that the probability of firm financial distresses and systematic risk level influenced the target debt levels of firm, it was defined that the highly operating risk of firm used the less level of debt financing. Myers, Brealey and Schaefer (1977) argued that companies avoid fixed interest rate of long term debt due to uncertainty of future rates of inflation and instead of long term debt rely over variable rate of short term debt. Barges (1968) explained the ability of a firm towards sales growth rate and capacity of debt, the explanation were shown with two factors, first the expected growth rate of future earnings of firm and the probability of expected sales growth and earnings of firm. Generally, high rate of expected future earning signify a greater capacity of a firm to carry debt; hence low expected future earnings mean the opposite. The degree of uncertainty for any level of expected future earnings for debt capacity of firm was served by knowing a limiting factor. Barclay et al. (1995) showed that credit quality and size moderately effect on firms to augment its debts term to maturity, and firms debt falls with growth opportunities. In a related article, Stohs et al. (1996) defined that larger firms most likely used the long term debt to avail the growth opportunity of its sales. The earlier studies examined the corporate debt maturity on behalf of issues of incremental debt rather than to investigate the maturity of liabilities of firm on balance sheet. By studying the liabilities to assets on balance sheets could answer some uninvestigated questions about impact of sales growth on corporate borrowings. Myers et al. (1977) suggested that agency cost and problems of debt can be controlled by firm to shortening the worth of its debt with respect to the volume of its sales. While some firms gain incentives from liquidity risk to borrow long term debt, it may not be able to compensate investors to bear credit risk of long-term debt for the sake of sales growth; it may indicate the low quality projects (Diamond Douglas, 1991.) and (Stiglitz, Joeph Weiss, 1981). Hence the low-quality firms cant sustain their position or can be screened out from long-term debt market, only high credit quality firms can be stable and able to borrow long-term debts. In contrast, larger firms were defined for long run as having higher likely possibilities to survive than smaller firms (Queen, Maggie Richard, 1987). Brick, Ivan and Ravid (1985) examined that interest payments affect the borrowers and lenders with respect to firms volume of sales due to different time patterns. The interest text shield was argued that borrowers seek to maximize the present value by accelerating interest payments, while lenders priorities to diminish the present value of tax charges by slow downing interest payments. Leff (1979), Khanna and Palepu (2000) addressed that the dominant perspective and minimizing perspective of transaction costs on business groups plays a crucial role on firms affiliations with these groups to overcome the barriers in an inefficient market. The view of transaction cost minimizing is characterized by weak governance system of firms, in part due to weak legal institutions or under developed intermediaries. Increase in the external financing investment cost may occur due to association of agency cost problems with market imperfections. However, this study will not develop and test the hypothetical views of business groups. Mitchell (1991) finds no support on the firm choice to match their asset maturities with maturity of debt issues. In a similar on debt issues, Guedes and Opler (1994) argue that high grade firms with large investment issue short-term debt. Diamonds (1991) predicted that active participants part in short-term credit markets was taken by the higher-rated firms to avail growth opportunities of the firm. Auerbach and Alan (1979) also argued that growth rate of sales and leverage are inversely proportion because the interest payment of tax deductibility was considered less valuable to the larger or fast growing firms. The firms annual sales growth rate in total assets was used as a growth rate of proxy. Asset maturity was defined as an important factor for corporate borrowing and plays stable role to predict the debt maturity of a firm. Myers et al. (1977) argued that long-term assets of firm can support to gain more long-term debt. In contrast, Titman, Sheridan and Wessels (1988) analyzed debt maturity on the basis of balance sheet and viewed the evidences that smaller firms rely on higher proportion of short-term debt with objective to minimize long-term debt flotation costs. Barclay et al. both addressed that smaller firms more likely with growth opportunities rely on a smaller proportion of debt that would exceeds 3 years. Myers and Stewart (1977) expressed the views on these evidences that debt maturity is used by firms to control interest conflicts between debt and equity holders. The preceding papers provided useful approaches for firms debt maturity choices; hence the measure had various limitations. First, the term-to-maturity in the corporate borrowing provided the information just about incremental financing choices. The debt maturity average of the firms existing liabilities test relate to the terms-to-maturity of debt issues to balance sheet variables such as asset maturity or return on assets (Stohs et al. 1996). Myers et al. defined the borrowing decisions of firms by using two indicators for growth: sales growth and growth of firm total assets. The research study focused to examine the behavior of firm borrowing decisions and concluded that; to prevent the agency cost of long term debt, most of the firms proffer short term debt decisions instead of long term debt. While Froot et al. (1993), Lucas, Deborah and McDonald (1990), and Kale, Jayant and Thomas (1990) examined the firm growth with three indicators of growth: sales growth, growth of firms total assets and growth of employing size of firm, and concluded that firm growth is independent of firm size. To study firms complete size distribution, the several alternative forms of samples were used, so, the variables were leading each others, while the definite relationship for alternative form of samples were crucially assumed and it was derived that firm growth decreases with all three indicators for agency cost of long-term debt financing , hence the sales growth were certain. Loughran, Tim, Ritter J. (1995) accentuated the importance of firm growth, debt financing decision and changes in market structure. Mansfield addressed that debt financing is better when growth opportunities of firm were available and demanded, so the profitability of firm was certain and debt financing was benefited as the tax advantage of firm. DeAngelo and Masulis (1980) examined the financing decisions of firm and showed that firm value was being affected by the financing decisions of the firm, if the firm has to avail certain growth opportunities, so the debt financing decisions was defined as an effective tax advantage and resulted decline in non-debt tax shields. Firm financing decision except debt financing resulted without tax shield beneficiaries, debt interest and principle payments were excluded from earnings of firm before tax applied and included the net short term losses in taxable income and then the corporate taxes was being applied over taxable income. Hence it was addressed that the profitability of firm and the proportion of profitability over assets was affected by the corporate tax. Gan (2007) addressed to normalize the loan payment balances of prior debts and lending decisions. It was explained that the payment of debt balances of loans slowly and present value of generated profits exceeded the present value of total payments which were gradually paid. It has also an impact over firm capital and the proportion of debt over capital, the ratio of firms capital was reduced with the excess of debt. Firms health with proportion of debt to capital explained that healthy capital was being shown from the borrowers willingness to repay gradually loan payment, and lenders willingness to lend. Debt financing and loan payments has also an impact over firm net profitability and the proportion of net earnings over firm total assets or return on assets, it must be paid even in bed time of firm, so well, required payments reduces the firm profitability and return on assets. The proportionate of earnings over total assets showed the efficiency of firm that how well the firm has utilized its assets to bear the cost of financing. Return on assets and prior debt to capital worth was used by means of lenders amount and implicitly measure the worthiness of firm capital. Dedoussis and Afroditi (2010) argued the problems with characteristics of a firm such as assets value or growth opportunities were communicated inability of firm to outside lenders, so that investment decisions were affected by net worth of firm if the discrepancy exists between firm internal and external financing. Hayashi (1982) explained that marginal profitability was covered by firms to expanding the business and sales of firm with bearing the moderate changes in firm expenditure. The described expansion were done by corporations with various financing decisions, it was suggested that the debt financing is better to avail if the market was shown under green signals of demand, if the markets demand were not shown so the firms prevent the debt financing because of interest payment which must be paid even in bad time of cash flows. Hadlock (1998) assumed that financiers were indecisive about the factual value of firms assets, so expectations were formed based on the investment amount that firm requests to carry out. If the firm requested for the maximum amount subsequently the investors were not capable to discriminate between firms with large resources or low resources. So the large assets of firm with low claims send a green signal to investor to putting money for debt investors. While it send the signal to equity provider to cutting the amount of investment if the money is required for new project establishment because it shorten its net earnings as well as the earning of shareholders. CHAPTER 3: RESEARCH METHOD 3.1 Method of Data Collection Data was obtained from the website of Karachi Stock Exchange KSE-100 Index and Joint Stock Companies Balance Sheet Analysis specified by State Bank of Pakistan in periodical listed on the KSE (2004-2009). The period of study covered with data of five years as sample of 2005-09. The opted sample size of all cement sector firms was taken from Karachi Stock Exchange-100 Index and the firms whose data were not available in the sample year of 2005-09 were excluded from the study. The objective behind the insertion of the firms in the sample was to explore debt financing behavior of cement firms significantly rely over sales growth opportunities or not. The major issue of data availability was faced in this research. The source of secondary data was adopted for the sampled data collection of this research study. In accordance with the research studies limitations three firms of cement sector were excluded from the study because two of the firms were newly listed and introduced in the Pakistani market and third was dropped from the KSE-100 Index during sample years of the study. The observed and expected aspects regarding the sales growth and debt financing was analyzed in this research. The external data sources were used to cope up the purpose of collection of data, such that general business publications, State Bank of Pakistan, companys annual reports, internet publications and books were used. The data required for study was completely dependent over the published and secondary data sources, as the sources defined above. 3.2 Sample Size The study selected all cement sector firms listed over KSE-100 Index as sample size for the research analysis. Total of 21 firms were listed over KSE-100 Index, hence, the firms whose data was not available during the sample year of 2005-2009, were excluded from the study, therefore three firms were excluded from the study because two of the excluded firms were newly listed and third was delisted over KSE-100 Index during the sample years. The impact of sales growth of firms on the corporate debt, which were listed on KSE-100 Index, was analyzed on the basis of the selected sample of 18 cement firms. 3.3 Research Model Developed From the various determinants of corporate debts which affected debt financing decision of the firms, this research study included only sales growth and inventory to analyze the impact of sales growth on corporate debt, the sales growth was measured by two variables one was directly change of current year sales with respect to last year sales, and second was level of inventory held by firm. The short term debts were used as a major dilemma for firms to face debt claims in swift time. The constructed mathematically model provided below; CD = a0 + ÃŽ ²1SG + ÃŽ ²2IH + ц Where: CD= corporate debt was measured as the change of short-term debt with respect to last year debt. SG= sales growth of firm with respect to last year sales of the firm. IH= inventory held by firm during the year. ц = the error term 3.4 Statistical Technique To examine the impact of sales growth on corporate borrowing, the multiple linear regression analysis (MLR) as a statistical technique was used for analyzed research study over selected sample firms; the SPSS software was used to test the secondary data. Multiple Linear Regression Analysis technique was used for prediction of sales growth with respect to last year sales and inventory hold by firm defined as the studied variables had an impact on corporate borrowing decision especially on short term financing. The identified technique was used to analyze the empirical behavior of firms financings with studied independent variables (sales growth and inventory hold) on dependent variable i.e., Corporate Borrowing (short-term financing discussed in the previous chapter). According to the characteristics of research study and variables used in this study, the multiple linear regressions; a multivariate analysis was appropriate to used than univariate investigation. In such a way the referenced studies also suggested to use the multivariate analysis technique. The intensity of sales growth impact on corporate debt during year 2005-2009 was observed on the basis of studied independent variables i.e. sales growth and inventory hold by firm during the year. CHAPTER 4: RESULTS All firms of cement industry listed on KSE-100 Index were selected as sample for this research study, and Multiple Linear Regression Analysis was taken as a statistical technique for analysis of this research study. This research was tested and analyzed by using multivariate technique for the prediction of impact of the sales growth with respect to last years sale and inventory hold by firm on corporate borrowing decision especially on short term financing. The identified technique was used to examine the impact of the studied independent variables (sales growth and inventory hold) on dependent variable i.e., Corporate Borrowing (short-term financing discussed in the previous chapter). 4.1 Findings and Interpretation Primarily, the regression technique in SPSS was applied on collected data. The resulted output of data showed that the data has no multicolinearity issue, while the normality issue was found in the data, to resolve normality issue of the data; so all the transformation techniques were used. By applying all the transformations, the studied variables found to be insignificant, so it was described that the data was highly volatile in Pakistani market so the normality issue was ignored to predict the variables. As the multicolinearity issue was not in the data, so the study initiated to analyze the results. The analysis and interpretation of the results was defined in following section of the research. Table 4.1: Model Summary Model R R Square Adjusted R Square 1 .722 .521 .510 Table 4.1 demonstrated summary of the regression model. The Adjusted R square was best for prediction of model as per the number of variables used. The Adjusted R square of 51% in the above table showed that the both of the predictors of corporate borrowing combined together explained 51% variation in whole model, while the remaining was residual variance as latent and not included in the prediction of the model. In other words, Adjusted R square showed that 51% variation in outcome was explained by the population of the study. Table 4.2: ANOVA Model Sum of Squares Df Mean Square F Sig. 1 Regression 3.766E8 2 1.883E8 47.289 .000 Residual 3.464E8 87 3981969.306 Total 7.230E8 89 The table 4.2 represented the significance of estimated linear model of the study, the sig value of ANOVA supported the model fitness for this research study file regarding applicability of the regression technique, ANOVA table was consistent for examination of the models ability to predict any variation in observed dependent variable such that corporate borrowing. This was absolutely understandable from the sig value of .000 which showed that the linear regression model was perfectly momentous for the conducted research. Table 4.3: Coefficients Model Unstandardized Coefficients Standardized Coefficients t Sig. Collinearity Statistics B Std. Error Beta Tolerance VIF 1 (Constant) 1082.629 295.525 3.663 .000 Inventry 7.543 1.179 .593 6.399 .000 .641 1.561 SG .307 .152 .188 2.026 .046 .641 1.561 The table 4.3 represented crucial results for regression model of this study. Sig column of above table demonstrated that all variables of the study were significant and all independent variables of the hypothesis of this research study had significantly influential intensity over dependent variable of the study. Sig column demonstrated that the un-standardized coefficients of variables is zero or not; when the sig value was higher or equal to .05, the un-standardize coefficients considered as zero; and when the sig value was lower than .05, then the un-standardize coefficients of the model was not considered as zero. The value of column B demonstrated that one unit varies in independent variable consequence change in dependent variable with the weights equal to the weights of column B. The VIF column showed the existence of multicollinearity issue in the studied independent variables. As all of the VIF values found less than 2, so this identified the least acceptable level of multic ollinearity in the study. 4.2 Hypotheses Assessment Summary The studied hypothesis was sales growth of the firm has significant positive impact on corporate borrowing decisions to finance in short-term credit market. The firms sales growth characteristics had variation in current year sales of firm with respect to last year sales and the level of inventory hold by firm during financing years. In this study each of the sales growth variable and inventory variable as firms sales growth characteristic for corporate borrowing were tested and concluded in the outcome. TABLE 4.4 : Hypotheses Assessment Summary S.NO. Hypotheses ÃŽ ² SIG. RESULT H1 There is a positive impact of sales growth on corporate borrowing. 0.307 .046 Accepted H2 There is a positive impact of inventory hold on corporate borrowing. 7.543 0.000 Accepted CHAPTER 5: DISCUSSIONS, CONCLUSION, IMPLICATIONS AND FUTURE RESEARCH 5.1 Conclusion The results of the study suggested that sales growth has positive impact on corporate borrowing which identified the significance of sales growth impact in Pakistani market. The second variable of the study was also identified the significance impact in Pakistani market and had intensity to impact over corporate borrowing. The results of this study were not matching with referenced studies conducted by Guedes Opler (1996), and these results had also shown consistency with the study conducted by Barclay et al. The studied results varying because the matched studies were conducted in various countries, so the firms environments and circumstances of the countries usually differed to make financing decisions accordingly. 5.2 Discussions Firm sales opportunities played a vital role in defining the firms sales growth but these growth opportunities varied over volatility in environmental growth of the countries, hence, this dilemma was not with the study of Guedes Opler (1996), because in his study the level of inventory hold by the firm over the year was playing a significant role. Variations in the corporate borrowing were highly explained by the level of inventory held by firm over the year. While sales growth of the firm concluded same results with consistent to the research study of Barclay et al. 5.3 Implications and Recommendations This research study was limited to the cement sector firms listed on Karachi Stock Exchange of Pakistan only. The data was taken from annual reports of all cement sector firms. This research suggested it was not necessity that only firms sales growth has impact on corporate borrowing or the corporate borrowing decisions was affected only by sales growth and inventory factors such type of other borrowing factors should be carried out and analyses in other countries of the Asia as well, as to have inclusive idea about the impact of sales growth on corporate borrowing. Furthermore, the research study also suggested that other factors of corporate borrowing discussed in the chapter one should be researched as to have perfect idea for the debt financing decisions of the firm. For instance, this research study can also be replicated efficiently in other developing countries. 5.4 Future Research This research study may helped various management of the firm, investors and other research conductors in analyzing and observing the debt behavior and financing decisions of firms to achieve sales growth opportunities of the firm. The students whose intention is to research on either debt financing behavior of the firm or to study the growth behavior of the firm with respect to debt can be benefited by this study. Furthermore, the cement sector will become advantageous from this study because the study clarifies the impact of sales growth of firm on corporate short term borrowing. CHAPTER 6: REFERENCES Auerbach Alan (1979). Share valuation and corporate equity policy. Journal of Public Economics, 11, 291-305. Barclay, Michael J., Clifford W. Smith Jr. (1995). The maturity structure of corporate debt. Journal of Finance, 50, 609-631. Barges A. (1968). InstituteGrowth Rates and Debt Capacity. Financial Analysts Journal, 24, 100-104. Brick, Ivan, and Ravid S. (1985). On the relevance of debt maturity structure. Journal of Finance, 40, 1423-1437. DeAngelo, H., and Masulis R. (1980). Optimal Capital Structure under Corporate and Personal Taxation. Journal of Financial Economics, 8, 3-29.