'Wacoal International Aspect\r'

' Thai Wassails general financial overview, from the course of instruction 2007 to year 2010, its bestow liabilities has been around 500 to 600 one thousand thousand baht, but in 2011, it has rose up to round 1,000 cardinal baht, which go forth be further discussed in the later topic. As for its beauteousness, it has been quite stable for the late(prenominal) five years, ranging from around 4,000 to 5,000 one one thousand thousand million baht. Capital expression: Debt Financing vs.. Common Equity Financing A firms capital structure consists of debt backing and common equity financing.Thai Wassails debt o equity ratio is very low, so we can see that it prefers to occasion 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 acquire to pay the cost of debt, which is the engage expenses. Advantage of use debt to financ e is that the saki payments can be deducted from the course income taxes. However, disadvantages include the high cost of interest rank and high probability of bankruptcy when a rims unavailing to repay the debt.We can assume that Thai Waco do not prefer to finance its funds by means of debt due to these two advantages. Thai Waco instead chooses to use more of the equity financing; it would be by means of with(predicate) the use of retained earnings or through the issuance of new 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 use solely on pedigree activities. The funding fount for Thai Wassails operations and enthronement funds fundss came from its UAPITA and accumulated profits, without any debts carrying interest burdens.According to the financial statements at end 2010, the company had total liabilities of tical 582. 96 million and shareholders equity of Baht 5,036. 50 million. The companys liabilities shown in the financial statement consisted largely of trade account payable and accrued 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 semipermanent 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 sort into three segments. First segment includes the investment in related companies consisting of around 912 million baht. With its outstanding investments in other companies within the same group through cross-shareholding, much(prenominal) 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 spread its risk over such business diversification. These companies have their own management authority, so there wont be any interference of Thai Waco as they are completely independent. As the aftermath of such investments, the company could be well assure of the support in the steady supplies of materials, components, products, services, know-how, together with approving dividend benefit from the Meanys satisfactory performances.The last segment is the investment in debt securities consisting of around 731 million baht. Reducing orthogonal 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 supplant rates fluctuation. Therefore, the company uses financial instruments such as the forward contracts in order to reduce video to such fluctuations in foreign currency rallying. It will help to pr otect Thai Waco from movements in exchange rate by establishing the ate at which was agree upon to be settled.\r\n'