Wacoal International Aspect

Tai Wassails general financial overview, from the year 2007 to year 2010, its total liabilities has been most 500 to 600 million baht, but in 2011, it has rose up to about 1,000 million baht, which will be further discussed in the later topic. As for its righteousness, it has been quite stable for the past five years, ranging from around 4,000 to 5,000 million baht. Capital Structure Debt Financing vs.. parking ara Equity Financing A firms capital structure consists of debt financing and common honor financing.siamese connection Wassails debt o equity ratio is very low, so we post see that it culls to use equity financing over debt financing. there are several reasons to a firms financing decision by looking at the advantages and disadvantages of each method. When a firm chooses to use debt financing, it would have to pay the cost of debt, which is the elicit expenses. Advantage of using debt to finance is that the interest payments can be deducted from the business income taxes. However, disadvantages include the high cost of interest rates and high luck of bankruptcy when a rims unable to repay the debt.We can assume that Thai Waco do not prefer to finance its funds through debt due to these two advantages. Thai Waco instead chooses to use more of the equity financing it would be through the use of retained earnings or through the issuance of smart stocks. Advantage is that it will not have to keep up with the costs of interest payments to bank loans or debt finance, allowing the capital to be used solely on business activities. The funding source for Thai Wassails operations and investments came from its UAPITA and accumulated profits, without any debts carrying interest burdens.According to the financial statements at end 2010, the fellowship had total liabilities of Baht 582. 96 million and shareholders equity of Baht 5,036. 50 million. The companys liabilities shown in the financial statement consisted mostly of trade report payable and accru ed expenses, which explains why the total liabilities have risen up to 582 million baht in 2010 compared to 2009. Long-Term Investments Thai Waco has registered long-term investments total of around 2,059 million baht, s compared to 1,586 million baht in the previous year, which shows an increase of 473 million baht.This was due to the largely increase in investment in debt securities and debentures. Thai Wassails long-term investments are classified into three segments. First segment includes the investment in related companies consisting of around 912 million baht. With its outstanding investments in other(a) companies within the same group through cross-shareholding, such investments can support its related industries, which would in turn contribute to the companys operations. Second segment includes investment in other companies consisting of around 41 5 million baht.By investing in several other businesses, Thai Waco could disruption its risk over such business diversificatio n. These companies have their own management authority, so there wont be any interference of Thai Waco as they are completely independent. As the result of such investments, the company could be well assured of the support in the steady supplies of materials, components, products, services, know-how, together with favorable dividend benefit from the Meanys okay performances.The last segment is the investment in debt securities consisting of around 731 million baht. Reducing Foreign Exchange rate Risk Thai Wassails business operation relies heavily on imports and exports in the foreign currencies, so they are exposed to the risks from foreign exchange rates fluctuation. Therefore, the company uses financial instruments such as the forward contracts in order to reduce exposure to such fluctuations in foreign currency exchange. It will help to shelter Thai Waco from movements in exchange rate by establishing the ate at which was agreed upon to be settled.