The issues of Cyber Security in Finances

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Cyber Security Corporation is a defence system for corporate clients, primarily based in the United States. The company was established and the director is Thomas D. Smith, William Boyle is the CEO of cyber Security Corporation, had seen its peak success over the last few years of its formation. Traditionally in the field of information technology cyber security has meant protection of confidentiality, integrity and availability of information. An estimated 80 - 85% of critical infrastructure is owned or operated by the private sector, addressing cyber security and critical infrastructure readiness in collaboration with the private sector is crucial.

The New York State Office of Cyber Security (OCS) chairs the activities of the Public/Private Sector Cyber Security Workgroup, which is taking proactive steps to foster collaborative partnerships and information sharing across critical infrastructure sectors and organizations. The Workgroup comprises high-level private sector executives and State agency commissioners to represent critical industry sectors, including telecommunications, financial and economic, utilities, public safety, health, food and education/awareness.

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http://www.cscic.state.ny.us/partnership/

WHAT IS CYBER?

Cyber is the ability to operate in cyberspace to achieve the result that you intend and not those intended by your advisories, competitors or cyber criminals.

The use of innovative technology and interconnected networks in operations improving productivity and efficiency, but also increase the vulnerability to cyber security is not addressed and integrated appropriately.

PROBLEM FACED BY CYBER SECURITY CORPORATION (CSC):

The company has been directly hit to face against a critical problem which may not been revealed in this criteria. The company has an issue of deflection between the domestic manufacturing of cyber security and the effects of hacking consistency. The company also need the possible framework to factor in the intangible strategic benefits of domestic manufacturing into the factory location decision. The company have look to the main problem of technological field which can be evolving rapidly to a different location and to a distinct cyber security process.

A major international media company purchased a significant online business, but the acquisition was vulnerable to attack after senior executives failed to ensure robust and redundant supplier and Internet service provider support. In April 2007, the small northern European country of Estonia was nearly brought to its knees after three weeks of attacks on key websites-including government, banking, and business

THE CYBER WAR LINES:

Dozens of western corporations have seen vital business data lost or stolen because of inadequate controls and neglect of security in outsourcing contracts to India, China, and the Philippines.

Criminal attacks on the Internet's systems and cyber espionage are on the rise, and, in the case of domain and address theft, are increasing exponentially. Cyber criminal gangs are increasingly motivated by the potential gains from extortion, theft of credit card details, and abuse of private information. Sophisticated, persistent groups particularly organized criminal gangs and state or corporate espionage agencies are targeting specific enterprises to steal intellectual property and conduct fraud or other money-making activities. Moreover, according to the most recent Symantec Internet Security Threat Report1, attackers are now creating global networks that support coordinated criminal activity. All this sophisticated criminal activity has driven up the costs of defence and recovery. http://www.acus.org/docs/071212_Cyber_Attack_Report.pdf

In this environment of heightened risk, the Federal government has an essential role to play in cyber security and information assurance (CSIA) research and development (R&D). As in other science, technology, and engineering fields of critical importance to the Nation, Federal leadership should energize a broad collaboration with private-sector partners and stakeholders in academia and the national and industry laboratories where the bulk of Federal research is carried out. Such a partnership can chart a national R&Dagenda for strengthening the security of the Nation's IT infrastructure.

SOURCES OF FINANCE:

Businesses essentially need finance for the short-term and the long-term. Two key sources of finance are internal sources and external sources. 'Internal sources' refers to money they can raise from within the corporation. This may include profit, or perhaps better management of existing resources. External sources mean raising money from outside the corporation.

(http://www.sehta.co.uk/useful_contacts/sources_of_finance )

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External Sources of Finance: - External Sources of finance are several in numbers. Finance that comes from outside the business is called external finance. It involves the business owing money to outside individuals or institutions.

(http://www.fao.org/docrep/W4343E/w4343e08.htm )

STRATEGIC BENEFITS:

This author focuses on three aspects of foreign investment analysis that are infrequently considered in evaluating domestic projects, the difference between project and parent cash flows, incorporating political risks such as expropriation and currency controls, and factoring in inflation and exchange rate changes in cash flow estimates. It also evaluates the various methods used to incorporate in the investment analysis the additional risks encountered overseas. These points are brought out in the process of working through the International Diesel Corporation Case. The ability to perform a capital budgeting analysis is one of the most valuable skills we can provide our students; this case is designed to make them aware of many of the intricacies involved in doing such an analysis.

The Federal report should also review private sector cyber security and information assurance practices and countermeasures to help identify capability gaps in existing technologies, and should engage the private sector in efforts to better understand each other's views on cyber security and information assurance R&D needs, priorities, and investments. Federal agencies supporting cyber security and information assurance R&D should improve communication and coordination with operators of both Federal and private-sector critical infrastructures with shared interests. Information exchange and outreach activities that accelerate technology transition should be integral parts of Federal cyber security and information assurance R&D activities.

http://www.nitrd.gov/pubs/csia/csia_federal_plan.pdf

LIQUIDITY RATIOS:

Definition: - Liquidity can be defined as 'The ability of an asset to be converted into cash quickly and without any price discount.'

( http://www.investorwords.com/2837/liquidity.html )

CURRENT RATIO:-

An indication of a company's ability to meet short-term debt obligations; the higher the ratio, the more liquid the company is. If the current assets of a company are more than twice the current liabilities, then that company is generally considered to have good short-term financial strength. The current ratio is calculated as

Current ratio = Current Assets / Current Liabilities

The company's current ratio is not satisfactory when compared to previous years. The current ratio in 2007 was satisfactory. Whereas, in 2008 it has gone down this is because of the stock that has been accumulated with the company which could be due to the decline in the orders of the company in the recent months. Another element that has played a large role in the decreased level of current ratio is bank overdraft. The overdraft of the company has increased steeply in, which is not good for the company. And it also indicates that the company is taking overdraft because there is no inflow of cash from other sources.

QUICK RATIO: - An indicator for a company's short-term liquidity. The quick ratio, also known as the acid test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. The quick ratio is calculated as

Quick Ratio = Current Assets - Inventories / Current Liabilities

( http://www.investopedia.com/terms/q/quickratio.asp )

The quick ratio of the firm is very low. This could be due to the industry in which the company is dealing. But the quick ratio of the year has not declined to a large extent. From this we can say that the quick ratio has been affected a lot by loan overdraft and trade payables. The trade payables' level is acceptable but the overdraft from the new territories has increased by more than 9 times which has added to the company's problems.

WORKING CAPITAL:- Working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth.

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( http://www.yourdictionary.com/working-capital )

Working capital = Current Assets - Current Liabilities

Working capital = $100,000,000*5% = 5,000,000

Net current assets/Working capital of the company has dropped significantly. The company needs working capital to meet its daily needs and it has decreased. It is considered the blood of the company. The company cannot continue normally if it has insufficient working capital. The decline is due to the bank overdraft again and also cash. The cash in the company is almost nil which is due to the trade receivables. The company is not collecting its funds from the debtors as fast as it is paying its creditors, which has lead to the company to face such conditions.

STOCK DAYS:- Stock days can be explained as the ratio of a company's annual sales to its inventory, or equivalently, the fraction of a year that an average item remains in inventory. Low turnover is a sign of inefficiency, since inventory usually has a rate of return of zero.

(http://books.google.co.uk/books?id=Q8MVitN4WhwCHYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"pg=PA173HYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"dq=inventory+days+definitionHYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"client=firefox-a#v=onepageHYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"q=HYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"f=false )

A Cyber securities corporation stock day has increased by around possible annual days which show that the company has been manufacturing more stock than the required quantity. This could be justified by looking at the company's past because the company was doing very well in their recent years, it is agreeable that the company was manufacturing more stock than the demand in the market.

RECEIVABLE DAYS:- The amount of time a company is willing to give a customer before accounts receivable are due are called Receivable days. The number of days extended depends on the industry. If a company shortens the receivable days too much it could lose customers, but if it gives customers too much time to pay their bill then they might face a cash shortage.

(http://www.businessdictionary.com/definition/debtor-days.html )

The company has been too lenient in selling the stock on credit and not collecting the money from debtors. This is clear from the data given which shows that the time taken to collect the amount from debtors has gone. This could not be good for the financial health of the company.

PAYABLE DAYS:- Payable/Creditor days is an indication of a company's creditworthiness in the eyes of its suppliers and creditors, since it shows how long they are willing to wait for payment. Within reason, the higher the number the better, because all companies want to conserve cash. At the same time, a company that is especially slow to pay its bills (100 or more days, for example) may be a company having trouble generating cash, or one trying to finance its operations with its suppliers' funds.

(http://books.google.co.uk/books?id=hAUWyfnpoakCHYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"pg=PT207HYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"dq=creditor+days+defineHYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"client=firefox-a#v=onepageHYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"q=HYPERLINK "#v=onepage&q=&f=false"&HYPERLINK "#v=onepage&q=&f=false"f=false )

Year

2007

2008

Payable/Creditor Days

59.11 days

82.06 days

The figures from the creditor days show that the company has delayed the creditors for too long when compared to the previous year. The creditor days has increased by 21 days from 2007 to 2008, which is not good for the relation of the company with its suppliers.

CASH CONVERSION CYCLE:- The cash conversion cycle expresses the length of time, in days, a company takes in order to convert resource inputs into actual cash flows. This cycle looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.

(http://books.google.co.uk/books?id=zEILNC8aMMwCHYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"&HYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"pg=PA209HYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"&HYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"dq=cash+conversion+cycle+definitionHYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"&HYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"client=firefox-a#v=onepageHYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"&HYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"q=cash%20conversion%20cycle%20definitionHYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"&HYPERLINK "#v=onepage&q=cash%20conversion%20cycle%20definition&f=false"f=false )

Year

2007

2008

Cash Conversion Cycle

100.69 days

161.77 days

The cash conversion cycle of KKC in the year 2008 is around 162 days, where as in the year 2007 it was just 101 days (app.). This shows that the company is unable to sell its products as fast as it has to pay its creditors. This condition could be dangerous for the company's working capital management.