Impact of Leasing on Financial Stability of Ernst & Young: Challenges and Mitigation Strategies

This research paper analyzes the impact of leasing on the financial stability of Ernst & Young, along with the challenges faced by the company and ways to mitigate financial issues. The study aims to understand the significance of leasing and its impact on the financial performance of the company. The literature review covers themes such as the impact of leasing on financial stability, challenges faced by E&Y while performing leasing activities, and ways to mitigate financial issues. The research methodology includes a research design and proposed data collection and analysis. The study is of significance to E&Y and its competitors.

Project Proposal

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Background.................................................................................................................................3
Research objectives and research question.................................................................................4
LITERATURE REVIEW................................................................................................................4
RESEARCH METHODOLOGY.....................................................................................................9
Research design...........................................................................................................................9
Proposed data collection and analysis.......................................................................................10
TIME SCALE ...............................................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Background
The leasing is being defined as a process through which company uses an asset for a
particular period of time and gives back to the owner. This is a good method of using the asset or
any other machine for a particular period of time without getting the ownership. The present
research is based on Ernst & Young which is a private company dealing in professional service
industry. The company was founded in the year 1989 and deals in different services like
assurance, tax advisory, financial consulting, legal aspect, digital strategy and many other related
services. The company requires the use of leasing in order to improve the working of the
business to a great extent. The current proposal will outline the impact of leasing over the
financial stability of the company. Along with this there will be discussion relating to the carious
challenges which the company might face because of leasing. Along with this, different ways
will be analysed for mitigating the financial issues created because of leasing in proper and
effective manner.
Significance
In the current advance world, the company requires to use the latest technology so that
they are ahead of all and have a competitive advantage. Hence, it is not necessary that every
company has enough finance to buy the machine or equipment. So in this case they can go with
the option of the leasing. The current company Ernst & Young is being used because they might
require the facility of leasing more. In addition to this, the present research is of significance to
the company on which study is conducted and also the competitors. This is because the
recommendation made to E&Y can be used by other competitors as well.
Rationale
In the current competitive environment, it is not necessary that company has all the
machine and equipment to use. Hence, in this situation the company can undertake the use of
leasing as the method for using the machine or equipment without being the owner. This is the
reason for the selection of leasing and its impact as our research topic. Also, this study will help
the company in analysing the situation and try to save the money so that it can be used in better
and effective manner. Moreover, this was also of academic and personal interest of the

researcher and will help them to increase the knowledge relating to the concept of leasing and
related elements.
Research objectives and research question
Aim
To understand the significance of leasing and its impact on financial performance of company. a
study on Ernst & Young.
Objective
 To analyse the impact of leasing on the financial stability of E&Y.
 To determine the challenges faced by E&Y while performing the leasing activity in their
business.
 To find out ways in which mitigation of the financial issues can be overcome.
Research Question
1. What is the importance and impact of leasing over the financial performance of the
company?
LITERATURE REVIEW
Theme 1: To analyze the impact of leasing on the financial stability of E&Y
According to Alkhazaleh and Al-Dwiry (2018) leasing is the legal & biding contract in
which one party agrees to rent the property owned by another party. There are several reasons for
which parties indulge into the leasing contract in turn accomplishing the organizational objective
can become possible. There are several objectives which can be attained by taking leasing into
organizational process such as reducing cost, having flexibility in executing operational
activities, etc. It leads the business to obtained the outcome like being capitalized and increasing
in assets & liabilities that is shown in the balance of company. It positively influences the
position of organization in respect to achieve higher stability. In against to this, Nizam and et.al.,
(2019) stated that it is the legal agreement which inclines the complexity of the business and
influences functioning in adverse manner. The main reason that has been recognized for this
impact of leasing on organization is no availability of equity and ownership that does not allow
the firm to make strategic decision. It affects the stability of organization in longer run. On the
other side, Stancheva-Todorova and Velinova-Sokolova (2019) depicted that leasing is the
financial arrangement in which firm or person pays to use long term assets for a particular

period. There are several aspects which are required to be taken into process of business in turn
getting appropriate ability to coordinate with prevailing circumstances can become possible. This
can allow the organization to receive number of benefits in respect having significant strategy to
meet deadlines can become possible. It can provide assistance to the firm to lower monthly
payments that gives convenience in managing operational practice which helps in getting
positive outcome.
In the views of Tănase, Calotă and Oncioiu (2018) there are several factors that has
influence on the operational efficiency of business. The one of the major element that is need to
analyzed in respect to attain information related with its impact on functioning. The element is
managing pattern for the expenditure in turn achieving higher opportunities for the growth and
development can be accomplished. Leasing permits business to have more cash available than
purchase as lower expenses has to be incurred in order to maintain financial stability. On contrast
to this, Thavaseelan, Krishnapillai and Santhirasegaram (2021) there is potential early
termination of liability that makes company to take decision so that potential end of lease costs
like excess wear & tear. In addition to this, firm can affected negatively as overcoming
obligation in turn making relevant decision can become possible. This financial leasing basically
is associated with having risk associated with the particular assets. The main reason behind
obtaining the risk which can hamper processing is due to engage in financing the purchase of
tangible assets. The risk can be limited to the assets derived and can be handled appropriately by
focusing on taking relevant course of action. It becomes essential for the organization to pay
attention the risk evaluation for the particular transaction in turn making effective decision that
can allow receiving ability to have higher profitability can become possible.
In against to this, Yusuf and BİLİCİ (2021) said that there are various goals of the
business which are predetermined by firm for having advanced practices so that coordinating
with changing requirements of firm can become possible. This can provide assistance in
impacting favorably by enabling organization to receive ability to avoid technology
obsolescence. For example- E&Y is one of the multinational organization that offers quality
performance by making relevant action. Leasing is one of the significant factor that is
contributing in success of firm by ensuring relevant functioning of business. The main fact
underlying this includes gaining capability to avoid technology obsolescence so that higher

advanced service can be offered. It is positively influencing the processing of organization by
boosting the performance in turn achieving leading firm in sector has become possible.
Theme 2: To determine the challenges faced by E&Y while performing the leasing activity
in their business
According to ALI and et.al., (2021) there are several challenges which influences the
functioning of organization due to implementation of leasing activities. The leasing activities
which can be exerted by firm in respect to get profitability & stability in turn having proper
compliance with requirements of business can become possible. The activities comprise
operating, financing, synthetic, leveraged, tax oriented, etc. the one of the major issue that is
faced by the organization by implementing the leasing practices is concerned with lack of
qualified personnel for managing the related process. For example- E&Y is one of the
international company that pay attention on conducting operations on larger scale by taking
leasing activities into process. Having experienced & qualified personnel becomes crucial for the
enterprise in turn better objective accomplishing can become possible. This is one of the major
concern to have higher qualified & experienced employees in business in turn monitoring &
controlling leasing practices. On the other side, Chiu (2022) stated that to become successful in
the current working environment evaluating the effectiveness of the particular decision become
important. It is important for the firms to focus on particular leasing activities by analyzing the
term of agreement. The main reason behind this drawback is that larger agreement duration
brings drawback that impact the functioning of company by bringing complexity into process of
firm.
In the view of Fahad and Scott (2021) organization faces issues which pay attention on
affecting the functioning of organization so that higher profitability & stability situation can be
derived. From the evaluation of the information it can be specified that there are various
complexity that arise while adopting the leasing process into functioning. The main reason that
be articulate for the difficulties in the procedure of the company is delay payments and bad
debts. These all leads to impact the functioning of business by affecting efficiency of conducting
the operational activities. There is complexity found in overcoming the expenses like
depreciation and interest. In against to this Kuhnen and et.al., (2022) there are few major issues
that are required to be taken into process for understanding the crucial challenges that can be
experienced by organization while conducting leasing activities. This includes the issues like

making initial analysis of all contract in order to established data that have to be processed.
Initial recognition and classification of the lease liability is difficult to conduct which brings
complexity for the organization. Identification of lease modifications, subsequent measurements
& are calculation, making new estimation depending on the nature & term of lease, etc are the
major concern that impacts the processing of enterprise. In order to have higher level of
efficiency that has influence on the working of firm. On the basis of this, it can be interpreted
that there are various challenges that rise while executing the leasing activities into process in
turn affects the smooth processing of firm.
In the views of Roy and et.al., (2022) there are few requirements of business which is
required to be taken into process in turn having relevant outcomes that can allow to incline the
productiveness and higher efficiency in turn greater objective accomplishment can become
possible. Tax consideration is found to be the one of the most crucial benefit that can be obtained
by taking leasing activities into the process. It highly affects the efficiency and productiveness of
organization as it only transfers the benefits and does not provide significant results. The stamp
duty and unhealthy competition for managing the operational functioning of the business
influences the processing of firm. On contradict to this, Lappen (2019) articulated that each
method of financing & operational activities has few limitations which are required to be
evaluated in respect to comprise significant understanding of its impact. The major issue that has
been identified from the analysis include gaining understanding about the related accounting
standards. There are few conventions which are needed to be implemented by assessing the
impact & benefits of leasing activities. For this purpose, there is requirement to highlight crucial
factors which makes it time-consuming process. On the basis of this, it can be interpreted that
these are the challenges that are faced by firm.
Theme 3: To find out ways in which mitigation of the financial issues can be overcome
In the views of Schoonover, Mont and Lehner (2021) there are certain methods which
can be applied by businesses for having relevant action in order to overcome the prevailing
situations. The one of the crucial method that can be implemented by business for handling the
issue involve hiring the highly qualified personnel. Having effective & higher knowledge
possessing employees can allow the firm to ensure that corrective approach for managing the
operational activities is exerted. This can be helpful for firm to get confidence that recording &
analyzing the business performance by recording corrective effective of leasing activities. It

provides assistance in gaining surety that firm is having relevant resources that are highly
productive & competitiveness in respect to coordinate with changing circumstances. In against to
this, Tayurskaya, Okladnikova and Bibarsov (2020) depicted that in order to ensure that business
is facing growth & development by taking appropriate action in turn higher profitability &
stability of business can be done. This can be exerted by the organization by emphasizing on
major factor that evaluating the circumstances of business in turn requirement can be properly
analyzed. In addition to this, ascertaining needs can solve half of the prevailing complications in
turn larger opportunities to implement relevant pattern of practice can become possible. It allows
to receive the important data that avoids possibilities of inclining complications.
On the other side, Adenuga, Jack and McCarry (2021) said that in order to get the
significant ability to coordinate with the prevailing situation in highly effective manner in turn
greater amount of flexibility in managing operational activities can become possible. This can be
done by the organization through taking the major action such as getting the contract of lease
properly sign for accomplishing all the legal requirements in higher effectual manner. It can
permit the enterprise to ensure that good performance providing course of action is obtained. For
example- E&Y is the largest organization that focuses on receiving higher level of flexibility in
turn managing the functioning effectively by avoiding legal complications. This can be properly
done by having clear & transparent contract that makes easier to apply leasing activities. In
contrast to this, Varzi and Grigg (2019) articulated that overcoming the major issue of negative
credibility can be resolved by making payments on time. It helps in handling the payments and
bad debt clear without any delay in business. This method is helpful in eliminating this problem
in turn accomplishing the organizational objective of deriving higher efficiency & stability can
become possible. This is helpful in receiving the significant procedure to maintain the credibility
in the market. On the basis of this it can be mentioned that these are the challenges in turn higher
productive h results to gain business objective can become possible. On the basis of given
information regarding the prevailing methods h that can be useful in handling the challenges in
turn higher level growth & development to attain success can become possible.
This can be interpreted that there are different types of requirements of business which is
accomplished by firm by taking leasing activities into consideration. There are few benefits like
avoiding technology obsolescence, lower cots, etc impacts the business positively. In addition to
this, there are certain challenges which are required to be overcome involve tax consideration,

lack of experienced & qualified personnel, etc which hampers the financial stability of business.
In order to make the improvement organization require paying attention on having clear contract,
overcoming payment timely, etc.
RESEARCH METHODOLOGY
Research design
Research type
The type of research is being defined as the method through which the research will be
conducted and objective will be attained. There are two different types of research method that is
qualitative and quantitative research. The former relates with the research which undertakes only
the qualitative or non- numeric data relating to the research objectives. On the other hand, latter
involves the data and facts and figures relating to the research objectives and aim (Snyder, 2019).
In the present case of analysing the leasing and its impact on the financial performance the use of
combination of quantitative and qualitative type of research will be undertaken. This is because
of the reason that here the quantitative information will be gathered relating to leasing and this
will be beneficial in attaining the objectives of the business. Along with this, the qualitative data
will also be used in order to support the findings of the quantitative data as well.
Research philosophy
The philosophy is being referred to as the belief which the researcher has relating to the
data which is being gathered and used in the research. for the effective working it is necessary
that the proper methods are being used in order to accomplish the research in better and effective
manner. Hence, there are two types of philosophy that is interpretivism and positivism.
Interpretivism is the one which manipulates the data and prove the objective correct (Pandey and
Pandey, 2021). On the other hand, the positivism is the one which undertakes factual information
relating to the research. In the present case, the researcher will be using the positivism as it
includes the use of factual information relating to the research problem and as a result of this
research objectives will be attained in proper manner.
Research approach
The approach of research is being defined as the plan and procedure which are being used
in order to complete the research in better and effective manner. This is very necessary to be
selected in proper manner so that the objective is being attained in better way. The two type of

approach present are inductive and deductive (Mohajan, 2018). The first one relates to coming
up with general principle and setting up the aim and objectives. On the other hand, deductive is
the one which involves setting up of hypothesis and proving the same. In the present case of
leasing and its impact the use of inductive approach will be used. This is being used as in this
proper aim and objectives are set and research is undertaken on that basis only.
Proposed data collection and analysis
Data collection
The success of the research is dependent over use of the data which is being undertaken
according to the research topic and objectives. This is essential because of the reason that in case
the data will not be suitable then this will be affecting the completion of the research. in case the
data is suitable and appropriate for the research then the outcome of the research will also be
good and objectives will be attained. Hence, it is necessary for the researcher that the choice of
data collection selected must be better and good. In general, there are two different sources of
data through which information relating to research can be gathered. The one is primary source
and another is secondary sources (Newman and Gough, 2020). Hence, the former relates to
gathering first hand data that it the data which has not been used earlier and is being included
within the research for the first time. On the other side, the secondary sources of data are the one
which involves use of books, journal, articles and other published sources of data. Thus, due to
this reason the researcher will be using the combination of primary and secondary data. The
primary source of data is being selected by the researcher because this will provide a better
opinion and view of the people relating to leasing. In addition to this, for supporting the primary
responses the use of secondary sources that is views of different authors and scholars will be
used.
Sampling
The sampling is being referred to as the selection of some of the people from the whole
population. This is selected because of the reason that it is not possible that the study is being
done on the whole population. Hence, for this, some of the sample from the whole population are
selected in order to gather the data in proper and effective manner (Nayak and Singh, 2021). In
the present case of analysis and impact of leasing on the financial performance of company the
sample will be selected of 30 employees on the basis of random sampling method. The random

sampling method is the one which provides equal chance of each and every variable has equal
chance of getting selected as the sample for research.
Data analysis
After the proper gathering and collection of the data it is very essential for the researcher
that they must effectively evaluate the data so that proper inferences can be drawn from it. This
is particularly because of the reason that in case the collected data is not analysed in proper and
effective manner then this will be affecting the working efficiency of the researcher and
attainment of objectives of business. The reason behind this fact is that after assimilation of data
it is necessary that it is properly being utilised so that objective and aim of research can be
attained. Hence, for this the use of the thematic analysis will be undertaken (Hafidz and Elihami,
2021). The reason behind selection of this method is that in case the data will be analysed using
this technique then this will be resulting in accomplishment of objectives of research in better
and effective manner. Further, the themes relating to the analysis of the data it is clear that it will
assist researcher in fulfilling the requirement of research to be successful.
Ethical consideration
The ethical consideration involves some of the elements which are essential for the
researcher to follow. This is necessary for the reason that use of ethical aspect assist the
researcher in conducting the study in ethical and morally correct manner. This is necessary for
the researcher to follow because in case the ethical aspect will be followed then this will affect
the working and completion of the research in proper and effective manner. The first ethical
aspect to be considered by the researcher is to take the informed consent of the participant. This
is necessary because in case the consent will not be proper then this will be affecting the working
and outcome of research. along with this another key aspect to be considered is the time duration
of the data. This simply means that data must not be too old and it must not be older beyond the
time of last 5 years.
Research limitation
There are different types of limitation as well which affect the working and completion of
the research. this is particularly because of the reason that in case the research elements will not
be followed in proper and effective manner then this will be negatively affecting the research and
its outcome. The major limitation affecting the study relating to the impact of leasing on
financial performance of company is the limitation of time (Basias and Pollalis, 2018). This was

the major limitation because of the reason that time provided to accomplish the research was
limited but then also researcher managed to complete the study on time. In addition to this,
another limitation of the research was the limited resources. This was because of the reason that
there are less and limited resources and user of resources are many. Hence, as a result of this it
was tough to work in the limited resources but then also researcher tried to manage the study and
attain all the objectives of the study.
TIME SCALE
The time scale involves the division of all the activities of the research and how these will
be sequenced. In accordance to the time scale all the activities of the research are being
mentioned in a sequential manner along with the time which it will take to complete the work.
Hence the timeline followed for accomplishing the research on leasing and its impact on
financial performance the following time scale is being followed-
Activity 1th
Wee
k
2nd
Wee
k
3rd
Wee
k
4th
Wee
k
5th
Wee
k
6th
Wee
k
7th
Wee
k
8th
Wee
k
9th
Wee
k
10th
Week
11th
Week
Selection of
the research
topic
Reviewing
different
literature
relating to
research
topic
Analysis of
different
methods
which can be

used by the
researcher
Preparation
of the
questionnaire
in
accordance
to the
research
objectives
Collection of
the data with
help of the
questionnaire
Analysis of
the collected
data with
help of the
thematic
analysis
Drawing
conclusion
and
inferences
from the
analysis and
recommendi
ng for future

development
Submitting
the final
report
CONCLUSION
From the above report it can be concluded leasing is the legal contract in which one
party agrees to pay rent for using assets over a period. The current report has given emphasis on
formulating the objectives, aims and research question in turn better understanding can be
provided about highlighted subject matter. Present study has involved rationale and significance
of period in turn meeting research objective can become possible. This has given emphasis on
providing literature review by making themes such as identifying impact of leasing on financial
stability, challenges faced and overcoming these issues in turn deeper theoretical knowledge can
be provided. It has used mixed research type for having accurate ability to accomplish
predetermined objectives. Timeline has been involved for gaining appropriate knowledge about
activities & duration for completion of project.

REFERENCES
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