Studying The Different Types Of Ratio Analysis Finance Essay - Free Essay Example

Sample details Pages: 5 Words: 1465 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? Ratio Analysis is a technique used for financial analysis in which the figures are converted according to the ratios allotted for some useful assessment in comparison with the ratios of the past years and setting a bench-mark for the future years. This technique is very useful so as to establish the trends and bring in light, the strengths and weaknesses of the firm. The ratio analysis includes ratios that which are made up from the financial statements of the firm and includes key factors like profitability ratios, return on capital employed, liquidity ratios, working capital management ratios and capital structure ratios along with the stock market ratios. Don’t waste time! Our writers will create an original "Studying The Different Types Of Ratio Analysis Finance Essay" essay for you Create order The health of any company is clearly visible in the ratio analysis and gives the interpreter a clear picture when it is compared with the performances of previous years and other similar industry competitors. (Droms W.G., 2003) RELEVANCE OF RATIO ANALYSIS: Helps in assessing the firms performance: This technique is highly beneficial in assessing the financial health, profitability and operational efficiency of the firm. It ensures that the weaknesses of any firm will not go unnoticed as each and every fine detail is mentioned in the statements which will again be reflected in the ratios found out. Easiness of comparison within industry competitors: This technique is essential so as to compare the returns of the concerned firm with the industry standards and other leaders of the industry. Determination of financial health: This technique is used by the firm so as to know about the financial health of the firm in regards with the improvement or deterioration. It helps in setting out the direction of a companys action as the output is right out in front. Beneficial for budgeting and forecasting: The technique is used by the firm so as to know about the financial health of the firm in regards with the improvement or deterioration. It helps in setting out the direction of a companys action as the output is right out in front. Long Term Solvency: This technique is also widely used for its relevance in determining the financial health of the company down the line after few years due to various ratios like leverage ratios and capital structure ratios. (Steffy W., Zearley T., Strunk J., 2007) Weakness of ratio analysis: Many big companies operate in different business departments, thus it is difficult for them to compare against industry average. Inflation has played a key role in distorting the balance sheets as the written value is sometimes not even near to the original value, since the depreciation charges and cost of inventory is substantially affected by it. Different accounting practices being followed in the industry makes it more difficult for them to compare with other competitors. (Brigham E.F., Houston J.F., 2007) Profitability ratios: This ratio basically tells the analyst whether the business is making profit or is at some loss. It also lets the management know whether their strategy has been successful, if any related to the increase of profit margin. Gross Profit ratio: (Gross profit/sales)*100 % For 2008 = (62784.73/313923.68)*100 = 19.99 % For 2009 = (82404.96/494429.8)*100 = 16.66 % For 2010 = (102025.19/682784.01)*100 = 14.94 % Net Profit ratio: (Net profit/sales)*100 % For 2008 = (31392.36/313923.68)*100 = 9.99 % For 2009 = (43164.5/494429.8)*100 = 8.73 % For 2010 = (53454.35/682784.01)*100 = 7.83 % These ratios indicate the capacity of the company to generate profit or to control its business. The firm has seen the gross profit ratio and net profit ratio decline from 2008 to 2010. This has been primarily due to the fact that the firm has seen the sales figure increasing and not so great increment in profit share in it which might be possible due to the poor management of the funds or assets of the company. Share-holders ROCE: (Profit/Shareholders fund)*100% For 2008 = (31392.36/46215.25)*100 = 67.92 % For 2009 = (43164.5/92640.79)*100 = 46.59 % For 2010 = (53454.35/150838.46)*100 = 35.44 % Overall ROCE: (Profit/ (Shareholders fund + Borrowed Capital))*100 % For 2008 = (31392.36/46215.25)*100 = 67.92 % For 2009 = (43164.5/92640.79)*100 = 46.59 % For 2010 = (53454.35/ (150838.46 + 14822.87))*100 = 32.26 % The firm has been experiencing a drastic drop in the return on capital employed. This has happened primarily due to drop in the increasing rate of profit and huge increments in sales happening. Liquidity ratios: Liquidity imitates any firms ability to meet the short term obligations against the assets owned by the company which are readily convertible into cash. Current assets are mentioned as working capital as this is the capital which is used in day to day expenditure of the company. Current ratio: (Current assets/ Current liability) For 2008 = (44584.73/11561.84) = 3.86 For 2009 = (100200.45/21344.94) = 4.69 For 2010 = (180632.43/29942.21) = 6.03 This ratio indicates the capacity of the firm to pay off its debts within the time frame of a year with current assets in hand. The industry standard is considered to be 2:1. In our case, the company has been experiencing a sharp increase in this ratio. This has happened due to the fact that the company is keeping most of the money from the profits or sales in banks and are not investing it into the business. Quick ratio: ((Current assets stocks)/ Current liability) For 2008 = (40879.01/11561.84) = 3.53 For 2009 = (92789.01/21344.94) = 4.35 For 2010 = (165809.56/29942.21) = 5.54 This ratio emphasizes on the fact that not all assets are easily and instantly convertible into cash including the likes of stocks. In our firm, it has increase a sharp increase in the ratio from 2008 to 2010. This is also due to the same reason for keeping most of the cash in the bank and not investing it into business. Working Capital Management: This ratio basically emphasizes on how well the assets or services of the company are being utilised. This would gauge a firms capability to use the credit it receives from the market and in turn receive the investment from the debtors as quickly as possible. Stock Holding Period: (Average stocks/cost of sales)*365 For 2008 = (3705.72/251138.95)*365 = ~ 6 days For 2009 = (7411.44/412024.84)*365 = ~ 7 days For 2010 = (14822.87/580758.82)*365 = ~ 10 days This ratio tells the analyst about the time frame that the firm has to keep the stocks with them before they are sold into the market. This ratio is increasing from 6 to 10 days in the end which is not a matter of concern. Debtors Collection period: (Debtors/ Total Sales)*365 For 2008 = (7411.44/313923.68)*365 = ~ 9 days For 2009 = (15564.02/494429.8)*365 = ~ 12 days For 2010 = (35574.9/682784.01)*365 = ~ 20 days This ratio tells us the capability of the firm to collect money from its debtors as not all business transactions are done in cash. Here we see that the time frame has increased more than double for collection which is not a good sign and the company should follow up closely with the clients and put a bit of pressure on them in the permissible limit. Creditors payment period: (Creditors/cost of sales)*365 For 2008 = (8300.81/251138.95)*365 = ~ 13 days For 2009 = (16601.62/412024.84)*365 = ~ 15 days For 2010 = (24605.97/580758.82)*365 = ~ 16 days This ratio tells us the time frame that the company takes before handing out the payments back to the creditors. The time frame has been increasing from 2008 to 2010. This is a good sign as this means that the money which is handed out late to the client can help the firm in any investment for that period or to earn interest on it. Capital Structure ratios: Financing of a company is done either by equity or debt. Equity allows the directors of the company to decide at their own discretionary. But, debt financing involves an element of greater risk and an obligation to pay off the investment along with the interest to the concerned institution or investor. Gearing ratio: (Borrowed Capital/ (Shareholders fund + Borrowed capital))*100 For 2010 = (14822.87(14822.87 + 150838.46)) = 8.95 % This ratio is not applicable for 2008 and 2009 as the company was all financed by equity capital and was not using any borrowed capital or long term loan. But, in 2010, the firm borrowed capital from the market which is a good sign as it helps the company in reducing the taxes as the interest paid for loan is included after deduction of interest. Interest cover: (Net Profit/ Interest) For 2010 = (53454.35/ 1482.29) = 36 times Since the company had no borrowed money in 2008 and 2009, thus it was not entitled to pay any interest. But, after borrowing money in 2010, it was clearly visible that the company had more than enough funds to cover the interest to be given to the concerned institution or investor investing in the firm. Dividend Cover: (Net Profit/ Dividends) For 2008 = (31392.36/3261.03) = 9.62 times For 2009 = (43164.5/4743.32) = 9.1 times For 2010 = (53454.35/5336.24) = 10.02 times The company is in a strong position to pay out the dividends to its share holders which would further instil confidence in the investors to invest more. CONCLUSION: After analysing through the reports of the company and glancing through the ratios, we come to the conclusion that the company is in desperate need of proper management which can take suitable actions. These actions include primarily increasing the gearing ratio of the firm which looks very low. This would in-turn solve most of the problems by saving the money from going into the tax and diverting it as interest. Another key suggestion might be to decrease the money in the bank and invest it into the company, so that the company can experience greater growth rates and an increased opportunity for the investors as well. The firm should also keep a close eye on the debtors collection period ratio as the time has more than double within 3 years which is not a good sign.

Venture Capital, Owner Financing Trade Credit - Free Essay Example

Sample details Pages: 3 Words: 957 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Compare and contrast essay Level High school Did you like this example? Venture Capital Venture capital represents a type of private equity capital that used to finance firms that are at the early- stage for elaboration of new products and services or at the development stage. The investors for venture capital, known as limited partners that comprise both wealthy individuals which have financial capital and institutions that have large amounts of available capital such as private state funds, pension funds, donations, foundations, insurance companies and mutual funds. Venture capital is also referred as risk capital which normally invested in private company. It involves investments in unquoted companies with growth potential and is generally medium to long term in nature made in exchange for a stake in a company. A venture capitalist can be an individual or investment firm who makes venture investment is expected to bring their managerial and technical expertise along with capital to their investments (en.wikipedia.org 2014). Young st art-up companies with high growth potential, most often in high technology industries such biotechnology and information technology(IT) turn to venture capitalists for funding as they cannot raise capital in the public markets and unable to a secure abank loanor complete adebt offering due to lack of collateral. These companies have a limited operating history and need additional funds in developing their business. By investing in small, unproven and less mature companies, venture capitalists assume high risk in exchange for significant influence on company decision and a portion of companyà ¢Ã¢â€š ¬Ã¢â€ž ¢ ownership (en.wikipedia.org 2014). There are three major types of venture capital which include business start-ups, business development and management buyouts. In the stage of business start-ups, venture capital organization provide capital to the firms that need funding for marketing and product development to enable them to get off the ground. While, in the stage of business development, venture capitalists organization may be willing to provide development capital for a company which wants to expand or invest in a new product or new market. The third type of venture capital is management buyouts which is the purchase of all or part of a business from its owner by its managers. Owner Financing Finance from the ownersà ¢Ã¢â€š ¬Ã¢â€ž ¢ personal sources is nearly always the initial source of finance for a business, whether from the owner or from family connections. At this stage because many assets are intangible, thus external financing is an unrealistic prospect and may be difficult to obtain (accaglobal.com 2014). As many small companies have weak financial base, they generally use internally generated funds in the form of personal savings or borrowing from family, relative and friend to start up a business. Trade Credit Trade credit is an important source of short-term finance, especially for small and fast growing companies. It is a kind of credit which defined as an arrangement to purchase of goods and services by one trader to another without making immediate cash or cheque payments(en.wikipedia.org 2014). A limit is usually set, commonly called credit terms once a business enters into trade credit arrangements with its suppliers (accaglobal.com2014). For example, a customer could set cash or cheque payment to be made within 10 days from the date of the invoice and this may give customers an advantage of obtaining any early payment discount. By using trade credit, small companies are able to delay payments to suppliers for goods and services that already purchased, which is useful in managing cash flow. One of the most important benefits of using trade credit is the reduction of transaction costs which involved in paying and managing invoices between suppliers and buyers. As trade credit separates the payment cycle from the delivery cycle and pay bills periodically instead of every time that goods are delivered, it helps in reducing the transaction costs. The amount of days of the credit term is determined by the company which allowing the credit to customers and is agreed upon both parties (accaglobal.com 2014). The indirect costs of making maximum use of trade credit include the loss of early payment discount and the loss of supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s goodwill. VASILESCU, LAURA GIURCÃÆ'„à ¢Ã¢â€š ¬Ã… ¡(2011) VENTURE CAPITAL OPPORTUNITIES AND LIMITS IN FINANCING THE SMES. Jul2011, Vol. 13 Issue 3, p107-110. 4p. https://web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=a3144830-ff08-475c-b230-435d8bd91e06%40sessionmgr113vid=0hid=124 en.wikipedia.org(2014) Venture Capital [Online] Available from :https://en.wikipedia.org/wiki/Venture_capital#Types [Accessed 9th November 2014] https://en.wikipedia.org/wiki/Venture_capital#Types https://www.boundless.com/finance/textbooks/boundless-finance-textbook/obtaining-capital-methods-of-long-term-financing-14/types-of-financing-107/ven ture-capital-456-3808/ Dagogo, Daibi W(2009) THE EFFECT OF VENTURE CAPITAL FINANCING ON THE ECONOMIC VALUE ADDED PROFILE OF NIGERIAN SMEs. Vol. 5 Issue 5, p37-51. 15p. 1 Diagram, 4 Charts. https://web.a.ebscohost.com.tarcez.tarc.edu.my/ehost/pdfviewer/pdfviewer?sid=7236747c-426e-4a6a-8964-3f636959e061%40sessionmgr4003vid=0hid=4114 accaglobal.com(2014) Business Finance and The SME Sector [Online] Available from:https://www.accaglobal.com/my/en/student/acca-qual-student-journey/qual-resource/acca-qualification/f9/technical-articles/business-finance.html[Assessed 9th November 2014] www.accaglobal.com/my/en/student/acca-qual-student-journey/qual-resource/acca-qualification/f9/technical-articles/business-finance.html academia.edu(2011) Descriptive analysis on the pattern of SME financing in Malaysia [Online]Availablefrom:https://www.academia.edu/4916487/Descriptive_analysis_on_the_pattern_of_SME_financing_in_Malaysia https://www.academia.edu/4916487/Descriptive_analysis_on_ the_pattern_of_SME_financing_in_Malaysia accaglobal.com(2014) Trade credit is probably the easiest and most important source of short-term finance available to businesses[Online] Available from:https://www.accaglobal.com/my/en/business-finance/types-finance/trade-credit.html [Assessed 9th November 2014] https://www.accaglobal.com/my/en/business-finance/types-finance/trade-credit.html https://www.ipedr.com/vol4/11-F00028.pdf(tr) https://en.wikipedia.org/wiki/Trade_credit(2014) Trade credit [Online] Available from: https://en.wikipedia.org/wiki/Trade_credit [Assessed 9 November 2014] Don’t waste time! Our writers will create an original "Venture Capital, Owner Financing Trade Credit" essay for you Create order

Philosophy Life Examination Free Essays

My Life Examination First of all, my previous essay was a part of my life examination. I am glad you caught me on plagiarizing because now I really know that you read all of our essays. Unfortunately a few of my classmates and I did have doubts about it. We will write a custom essay sample on Philosophy Life Examination or any similar topic only for you Order Now Also, I feel like I can argue a lot for plagiarizing, but that is not what this assignment is about. Even though I agree with Sergey Trufanov’s ideas about life in general, I do not feel like I can explore them further and simply reciting them would also be considered as plagiarism. But I do have my own conclusions about life examination, disappointments, and death. I cannot say that I am a philosopher, just like I cannot say that I can speak English. In order to claim that, a person needs to be comfortable using his tools to be considered a professional, which unfortunately, I am not, but I do believe that my ideas deserve to exist and to be explored in philosophical ways. Life examination. To examine life you need to test it, challenge it. Everyone knows that you won’t know till you try, but for some reason not everyone does it. In my opinion it is better to do something and regret it than not do anything and regret not even trying. It refers even to the smallest things, like a new flavor of ice-cream. How would you know that you do not like it unless you taste it? Trying things is the only way to figure them out. I have so much of personal experience about trying new things, and it proved itself every single time. Like when I came to United States five years ago; I did not speak a word of English, I did not know how to drive, I was scared beyond belief, but trying new things got me to where I am. It is okay to be scared, but it is not okay not to challenge your fears and examine life in every way possible with everything that raises questions. Here I agree with Socrates â€Å"The unexamined life is not worth living. † Disappointments. Disappointments are worthless. They are based on our expectations of results. If you do not want to be disappointed, stop waiting for things and people to meet your expectations. We all are our own people. We do not live to please everyone around us. Why expect everyone around me to please me, if I am not doing it for everyone else? Why expect a sunny day and get disappointed if it rains? I am not the center of the universe, so why should it be sunny for me? We are causing things to upset us and at the same time we are blaming everyone and everything else. Of course people are selfish, it is just a human nature, but if we are selfish, why do we let things ruin our lives simply by expecting good things to happen? Everyone is trying to do whatever makes them happy and feels good. Why get disappointed if it upsets us. People are so controversial. Death. I agree with Arthur Schopenhauer on the subject of death. Crying for dead is like crying for someone who was never born. Why we are so scared of death? We all know that we are going to die, so I believe that being ready for it is more important than being scared of it. But how can we be ready? Well, examining life to its fullest would do the trick. Doing new things, answering questions, exploring the unknown, all of that makes death just one of the projects. Possibly one the last ones, but we do not know, till we try. We are scared of death because we do not know what is waiting for us after we leave this world and this life. But exploring everything here and now makes it easier and simpler to move on and accept the fact that we are done. Thinking that after we die the world will not be the same is just another example of human selfishness. How many people have died before us? How many will die after? And the universe is still here, it is still growing, it is still alive. One death is just one drop in the ocean; it will not change the world. And Schopenhauer’s quote â€Å"Matter, which now lies before you as dust and ashes now, dissolved in water, will settle as crystal, will shine in a metal, scatter electric sparks in a galvanic voltage show the power, that by expanding the strongest connection, turn the earth mass into metal; and not only that: by itself it will embody in plant and animal, from its mysterious womb will produce the very life, the loss of which you are so afraid of in your narrow-mindedness† shows that we never die completely, therefore being afraid of death thinking that without us the world will not be the same is very much silly. As you can see, in this essay I did not use any philosophical terms, but this is My Life Examination, in my life I do not use terms, I use simple language because like Einstein said â€Å"If you can’t explain it simply, you don’t understand it well enough. † How to cite Philosophy Life Examination, Essay examples

Australian Housing Prices Global Housing Watch

Question: Describe about the Australian Housing Prices for Global Housing Watch. Answer: For years now, the Australian Property Bubble has been an ongoing debate. Many believe that Australian houses are significantly overpriced (Janda 2014). According to the IMFs Global Housing Watch, Australia is one the most expensive places to buy a house (Jericho 2014). It is ranked number three, after Canada and Belgium. This year June, Sydney property prices for established houses rose by 3.2 percent. By 2015, Sydney had the highest median house price among capital cities at $929, 842 (Jericho 2014). It is worth noting that the house prices in the Australian real estate market are expected to continue rising. Reasons behind Surging Housing Prices Low-Interest Rates Low-interest rates have characterized Australia since 2008 (HSBC Warns 2014). As a result, the borrowing capacity increased for the countries citizens owing to the lower repayment rates. In turn, this led to record levels of secured home loans to investors. Besides, the ten years before the beginning of the financial crisis saw the tripling of housing prices in the country. During this time, banks had the ability to create money through the money creation process each time they administered a loan (HSBC Warns 2014). As a result, the money created by banks increased significantly. The increased money in circulation caused by excessive lending was a major driver of the rise in housing prices. Limited Government Releases of New Land Around 1980, Australian states began implementing rigid planning laws that control the use of land (House Price Rises 2016). Mainly, these were systems of land rationing where developments were banned in all areas except the selected regions. Consequently, this created an extreme property price inflation due to the limited supply amid high demand for land. Over time, property prices increased significantly. In turn, this increased the cost of development and eventually led to the rise in house prices in the country. Pressures of Supply and Demand Housing prices in the country rise faster that income because of the pressures of demand and supply. Structural economic and development changes have led to increased urbanization. It is noteworthy that this increased urbanization has made urban land scarce (Australian Population Growth 2010). Therefore, as the population size increases, the scarcity of land increases. Over time, the growing demand for land and housing in urban areas for the available land puts pressure on the prices of houses to increase (Janda 2014). As a result, the prices of homes have become increasingly unaffordable to many individuals in Australia. Unfavorable Tax System By and large, the Australian tax system favors existing home homeowners and investors more than the savers. Investors are given substantive tax deductions as incentives to invest in the country. To make investment attractive, Australia has also allowed negative gearing for investors to claim losses against their taxable income (Janda, 2014). Thus, they are more motivated to invest in housing developments. In the process, citizens are sidelined and charged exorbitant taxes on their earnings. Consequently, this makes an investment in housing and other forms of property rather expensive (Rasche and Williams, 2005). Investment Rule Changes for Foreigners In 2008, the Australian government enacted legislations that relaxed rules for foreign buyers of property in the country. As a result, overseas investors take advantage of the laws to acquire property in the country. Unfortunately, they buy them to land bank and not rent them out because such investors are only interested in their capital growth (Schwab 2009). Additionally, many Australian lenders and banks offer home loans to non-residents to purchase property in the Australian market, thereby contributing to the increase in the countrys house prices (Schwab 2009). Macroeconomic Solutions the Government Can Undertake to Ensure Affordable Housing for the Younger Generation Monetary policies Contractionary Monetary Policies to Increase Interest Rates Levels. The Australian government can implement contractionary monetary policies to increase interest rates in the country. According to Jericho (2014), contractionary monetary policies will lead to a decrease in the supply of money in the economy. A drop in the supply of money will lead to a significant increase in interest rates. Higher interests rate will result in reduced consumption and investment (Naylor n.d). It is worth noting that reduced consumption results in a lower aggregate demand. Likewise, the higher interest rates will increase the cost of borrowing and discourage Australians from taking loans and mortgages (Jericho 2014). The higher interest rates imply higher credit costs, and therefore the demand for housing by foreign investors, and existing homeowners will reduce considerably (Naylor n.d). Increasing Reserve Requirement for Banks. The Australian government should consider increasing the cash reserve ratio for banks. This will increase the percentage of deposits that financial institutions are expected to hold as reserves and maintain liquidity (Rasche Williams 2005). By raising the reserve ratio, the government will achieve a significant decrease of money created and lent by financial institutions to Australian citizens. The government will, therefore, be able to control the amount of lending in the economy as well as the money supply (Rasche Williams 2005). Consequently, a reduction in the money supply will mean that not many Australians and foreign investors will have the money to purchase property in the Australian real estate market. In turn, this will lead to a significant decrease in the demand for houses. Subsequently, a reduction in the level of demand will reduce pressure on the limited supply, thereby relaxing house prices in the country by a substantial amou nt (Jerciho 2014). Fiscal Policies Revenue Policies/Tax policies. The Australian government can use instruments of fiscal policy to reduce the taxation levels for its citizens. By and large, revenue policies affect the level of personal income tax rates, indirect business tax rates, corporate profit tax rates, as well as contributions to social security (Naylor n.d.). Reducing the tax rates for its citizens will result in an increase in the disposable income available for individuals to invest in the real estate market. Additionally, Macroeconomic theory proposes that decreasing tax rates will reduce the level of GNP. Consequently, a decline in GNP will indirectly influence demand for housing by prompting variations in economic variables (Naylor n.d). Decreasing Government Spending. Reducing government expenditure is a contractionary fiscal policy used when the price levels in the country are too high (Dolamore 2016). In this case, the high house prices in the Australian property market can be regulated by a contractionary fiscal policy that reduces competition of the government in real estate property can reduce can substantially reduce pressure on property demand, thereby reducing prices of houses in the country (Rasche Williams 2005). Relaxing Legislations on Land Use The government may also instigate flexible legislations and policies as regards to the use of land in Australia. Also, this can be done through the utilization of under-utilized and state-owned land to enhance affordable housing development through the sale of land, leasing or establishment of a Community Land Trust (Whitzman, Newton Sheko 2015). Furthermore, it should investigate funding mechanisms for affordable housing such as government backing for bond instruments, social housing bonds, and shared equity schemes alongside investors and developers to ensure the development of affordable housing options for the younger generation (Whitzman, Newton Sheko 2015). Furthermore, the state government should facilitate legislations to support the development of affordable housing in Australia financially. Whitzman, Newton and Sheko (2015) suggest that this can be achieved through value capture revenue and state-owned land release such as neighborhood gentrify. It is also the responsibility of the state and local governments to deliver a planning framework that dictates minimum design requirements as necessary to ensure the availability of quality, family friendly and affordable housing for the people of Australia. Urban Planning Reforms The Australian government should explore funding mechanisms for affordable housing in the countrys urban areas. According to Whitzman, Newton and Sheko (2015), this can be done through enabling accessory units and laneways that reduce requirements and restructure affordable housing approval procedures. Housing approval processes are made easier by limiting third party appeals, thereby allowing individuals to invest in building their own houses instead of being renters forever (Whitzman, Newton Sheko 2015). What is more, the government could also instigate community housing organizations, developers, investors and the local governments to work together in the Transforming Housing deliberative planning partnership to enhance the affordable housing sector (Affordable Housing 2016). Long-Term Tax-Credit Based Investments The Australian government in collaboration with the Commonwealth states can support a long term, tax credit based investment strategy. Such an approach is bound to increase the availability of affordable housing options for the people of Australia. Such programs can be administered by the Treasury or the Australian Tax Office (Whitzman, Newton Sheko 2015). Besides, this initiative will reduce the adverse effects of the current unfavorable tax system that favors investors and property owners at the expense of the savers and renters. Therefore, implementing tax-credit based investments will offer Australian citizens and residents the opportunity to invest in their own houses at rather affordable rates. Integrated Policy The lack of policy consistency in Australia creates additional risk and acts as a significant barrier to affordable housing in the country. Therefore, improving planning and infrastructure provisions will go a long way in developing affordable housing options in the state (Ma 2016). Primarily, affordable housing initiatives are based on the excellent horizontal integration of land use policies and transport with social infrastructure provision at the metropolitan and local scale of governance (Ma 2016). The state government in conjunction with the metropolitan governments can work together to maintain a lasting urban containment boundary within which there would be a rapid expansion of public transport making more areas available for affordable housing with good access to jobs and services (Whitzman, Newton Sheko 2015). Reference List Affordable Housing Working Group Issues Paper. (2016). 1st ed. [eBook] Australian Treasury, p.416. Available from: https://www.treasury.gov.au/~/media/Treasury/Consultations%20and%20Reviews/Consultations/2016CFFR%20Affordable%20Housing%20Working%20Group/Key%20Documents/PDF/Issues_Paper.ashx [Accessed 15 Oct. 2016]. Australian Real Estate, 2016, Why are housing prices rising faster than wages?. [Online] Available from: https://www.australianreal-estate.com/Real-Estate/news/NewsArticle.jsp?News_ID=5 [Accessed 15 Oct. 2016]. Dolamore, R 2016, Fiscal and monetary policy-renewed international debate. [Online] Parliament of Australia. Available from: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook44p/FiscalMonetaryPolicy [Accessed 15 Oct. 2016]. Global Property Guide, 2016, House price rises accelerating in Australia. [Online] Available from: https://www.globalpropertyguide.com/Pacific/Australia/Price-History [Accessed 15 Oct. 2016]. Janda, M. 2014, Its official: Australia's property prices are out of whack. [Online] ABC News. Available from: https://www.abc.net.au/news/2014-06-12/janda-it%27s-official:-property-prices-are-getting-out-of-reach/5517674 [Accessed 15 Oct. 2016]. Jericho, G 2014, Stimulating Australia: Why Lower Interest Rates May Not Be The Answer. [Online] The Guardian. Available from: https://www.theguardian.com/business/grogonomics/2014/aug/21/stimulating-australia-why-lower-interest-rates-may-not-be-the-answer [Accessed 15 Oct. 2016]. Naylor, T. The Impact of Fiscal and Monetary Policy on the Housing Market. [Online] Duke University. Available from: https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=3162context=lcp [Accessed 15 Oct. 2016]. Rasche, R. and Williams, M. (2005). The Effectiveness of Monetary Policy. 1st ed. [ebook] St. Louis: The Federal Reserve Bank, pp.12-67. Available at: https://research.stlouisfed.org/wp/2005/2005-048.pdf [Accessed 15 Oct. 2016]. Schwab, A 2009, Foreign Buyers Blow Out the Housing Bubble. [Online] Crikey. Available from: https://www.crikey.com.au/2009/09/21/the-role-of-foreign-buyers-in-the-ever-inflating-housing-bubble/ [Accessed 15 Oct. 2016]. The Australian 2014, HSBC Warns Risk Rising On The Housing Bubble. [Online] Available from: https://www.theaustralian.com.au/business/hsbc-warns-house-prices-risk-rising/news-story/662c89d36ed4ef67d8f11d2e1f977037 [Accessed 15 Oct. 2016]. Whitzman, C., Newton, C. and Sheko, A 2015, Transforming Housing: Affordable Housing for AllPartnership options for policy, investment and demonstration projects.' Proceedings of the Affordable Housing Summit, pp.3-30. Available from: https://msd.unimelb.edu.au/sites/default/files/docs/Affordable%20Housing%20Summit%20Options%20Paper_for_web.pdf [Accessed 15 Oct. 2016].