Consumer Spending Amongst Americans Set to be Stronger than Last Year

consumer shopping

It has been suggested that the increased spending by many Americans over the Christmas period may not be taking as much of a toll on them this January as it may have in previous years. Every year, many people who cannot really afford it end up spending a fortune on things such as entertaining, going out, new clothes, parties, and of course presents for loved ones. This results in a huge number of consumers finding themselves in financial dire straits during the early part of the year, as they struggle to get back on track with their finances having overspent at Christmas.

However, recent figures based on the Problem-Driven Consumer Index suggest that while some people are still having to reduce spending in January, the effects of Christmas overspending may not be as bad this year as they were in January 2015. The index is put together by the Georgetown Institute for Consumer Research, and officials from the institute said that the figures suggested that retail spending may be increasing compared to last year. This was based on the fact that the index was close to forty percent higher this January compared to last.

Contrasting reports from Commerce Department

Despite the encouraging figures and report from the consumer index with regards to what spending levels may be like this year, a very different picture has been painted in separate date that has been released by the Commerce Department. These were figures relating to December 2015 consumer spending, which showed that purchases at American retailers fell by 0.1 percent and this reflected the weakest year since 2009. This suggests that the consumer spending outlook for this year may not be as impressive as the index suggests. Continue reading

South Dakota Petition to Cap Bad Credit Loan Interest Rates

Downtown Sioux Fall, South Dakota

Downtown Sioux Fall, South Dakota

If public officials aren’t tackling the matter of bad credit loan lending then the general public will. At least that’s the idea behind a couple of new petitions circulating across South Dakota that would change the way payday loan establishments conduct their business.

In South Dakota, bad credit loan lenders charge interest rates on average 574 percent. Also, The Mount Rushmore State is one of the states in the nation to not cap payday loan interest rates. This allows retail payday loan stores like Dollar Loan Center and online websites to make a killing of their borrowers. Indeed, there have been attempts to reform the industry with capping interest rates but they have failed.

One petition is seeking to cap interest rates at 36 percent and is being sponsored by South Dakotans for Responsible Lending.

Steve Hildebrand is co-chair of the bipartisan organization and he says that there is “great disdain” within the general public regarding high interest rates that payday loan lenders charge the poor, especially those who are desperate. Continue reading

Sears May Consider a Sale-Leaseback Deal


Sears, Roebuck & Company more commonly referred as Sears saw its stock soar as the company considered a proposal about a sale-leaseback deal. The American Multinational Departmental Store Chain is considering implementing the solution at a time when it is facing increased competition in the market from new chains wanting to take their share of the market.

The Company is running quite low on cash and needs it to stay afloat in the current economic situation. Last year, the struggling retailer had to take a $1 Billion loan just to save itself from running out of cash and continuing its operations. Its dire need for cash has forced it to think about the proposal in which around 300 of its stores will be sold to real estate investment trust and then they will be leased back. No information has been released about the revenue this deal, if allowed to go through, will generate. However, it is a solution for the company to earn instant cash and regain its capital assets of a period of 10-15 years that is there is a change in which the company continues to perform in the market.

Investors of Sears are confident and feel happy about the idea as the company will also be allowing investors to purchase stocks in the trust. This was seen on early Friday morning as the stocks of sears rose by more than 30% in early morning trading. The move is aimed at reshaping the balance sheet after the company suffered its ninth consecutive quarter loss. The Company expects a third quarter loss in consistent with the loss experienced in the same quarter in the previous fiscal year i.e. $310 million. Continue reading

Report: Late Payments on Credit Cards Jump, Debt Falls in Q3


Americans will be spending a large portion of their free time this month at shopping malls, electronic outlets and department stores. On top of being bombarded with advertisements and sale posters by retailers, they will be accompanied by a list, bags and credit cards – also temporarily chucking fiscal responsibility out the window.

Prior to the official beginning of the holiday shopping season, credit reporting agency TransUnion published a report on credit card debt in the third quarter of the year late last month. Its figures came with mixed results.

According to the report, more consumers fell behind on their credit card payments. Between the months of July and September, the rate of credit card payments overdue by at least 90 days increased from 1.27 percent in the previous quarter to 1.36 percent. The figure is down from 1.5 percent from the same time a year ago. A positive number to show consumers are tackling their debt hurdles. Continue reading

Significance of Financial Ratios in Evaluating the Financial Performance of a Company

Quality and Price RatioFinancial ratios are considered to be the best tool for evaluating the financial performance of a company. Different financial ratios highlight different aspects of the financial performance of a company. Following is a brief introduction to the ratios that are used in ratio analysis.

Profitability Ratios

Stakeholders of the company are interested in the profitability of the company because the dividend payout depends upon the profit of the company. Therefore, in order to decide whether to continue the investment in a company the stakeholders of the company consider whether they are being benefited by the company.

Gross Profit Margin


Gross Profit Margin = Gross Profit/ Total Revenue

Gross profit margin helps the users of the financial statements assess the ability of the company to maintain an efficient difference between the total revenue and the production cost. This ratio indicates whether the company maintains a healthy margin over the sale of its products or services, and whether the cost of production of the company is reasonably low or unacceptably high. Continue reading

Potential Countries for Business Expansion

world mapWith the exponential rise in globalization, it has become difficult for a company to thrive without a significant global presence. Most companies are considering investment in the developing economies. The three countries that have shown significant economic growth in the recent past are; India, Brazil, and China. This article would include a brief evaluation of the economic, social, and technological environment of these countries.


India is one of those economies in the world that have shown an exponential rise in economic development in a very short period of time. A number of companies with significant global presence are establishing their operations in India. There are a number of factors that have influenced the pace of economic development in India. Some of those factors include; availability of skilled labor at a reasonable price, availability of resources, and a welcoming attitude to foreign investments.

Indian economy is growing at a rapid pace therefore the economic environment of the country can help a business earn higher revenues. Indian economy is very friendly to foreign investment and there are potential tax credits available for the international businesses. The human resource available in India is skilled and easily available. Continue reading

How to Assess the Financial Health of a Company

company healthThe most important thing to do before investing in a company is assessing the financial health of the company. A rational investment is the one that is done after a comprehensive analysis of the financial performance and financial position of the company. Different investors have different goals therefore the assessment differs in accordance with the goals of the investors.

Some investors seek short term gains therefore they are more interesting in holding the stocks in a company for trading rather than for long term. In this case, investors are more interested in the market performance of the shares of the company. On the other hand, some investors seek to invest in a company for a long term. In this case, a deeper evaluation of the financial information of the company is necessary in order to determine whether the company will be able to give out a decent dividend to its investors. Following are the factors that must be considered in both the cases.

Factors to Evaluate In Case of Short Term Investment

For short term investment, the scope of analysis is confined to the market performance of the shares of the company. Different analysts rate the shares of the company to recommend the investors whether they should sell, hold, or buy the shares of a company. These analysts conduct extensive evaluation of the financial health of the company. Some of the factors be consider in this case are listed below: Continue reading