HSBC Case Study: Financial Ratios in Corporate Accounting Analysis

This project delves into the application of financial ratios within corporate accounting, using HSBC as a case study. The research explores the research problem of HSBC facing issues with financial reserve funds, impacting their financial reports and shareholder funding. The project objectives include determining the importance of financial reserves for financial service providers like HSBC, evaluating the benefits of financial reserves, and measuring their impact on corporate accounting. The research questions investigate the importance of financial reserves, their benefits, and their impact on HSBC's corporate accounting. A literature review examines the significance of financial reserves for financial service providers, highlighting their role in meeting financial obligations and facilitating future aspects. The project also outlines a data collection plan, ethical considerations, and references. The project emphasizes the importance of financial reserves for financial service providers like HSBC, highlighting their role in ensuring financial stability and facilitating future growth, with the importance of proper accounting practices.

Applied Business Research

Table of Contents
Project Topic - USE OF FINANCIAL RATIONS IN CORPORATE ACCOUNTING – A case
study on HSBC ...............................................................................................................................1
Research Problem........................................................................................................................1
Research Objectives....................................................................................................................1
Research Questions.....................................................................................................................2
Literature review.........................................................................................................................2
Importance of reservation for financial service providers..........................................................2
Benefits of financial reserve for financial providers...................................................................3
Importance of reserve on corporate accounting..........................................................................3
Data Collection Plan...................................................................................................................3
Ethical Consideration..................................................................................................................4
REFERENCES................................................................................................................................5

Project Topic - USE OF FINANCIAL RATIONS IN CORPORATE ACCOUNTING – A
case study on HSBC
Research Problem
Business determine and face many issues and problems which need to understand with
appropriate and suitable study. Research problems are those which arrive at the time of
beginning of an investigation (Barnes, 2016) A research problem is a define clear statement
about a concern or a thing which need to be improved. On the basis of define study, a problem
statement for HSBC is define as follow:
“To utilise the financial reservation and resources properly for improving corporate accounting –
A case study on HSBC”.
It found that from past few days, HSBC facing a major problem of lack of financial
reserve fund which impacted their work. This aspect impacted their overall financial reports and
thus shareholders provide lack of funding. Hence, business want to improve this section and
problem properly with appropriate understanding of this research.
Research Objectives
Objectives are define as general guideline on which project mainly focused on. It work as
a blueprint which support in define the outcome in better and definite manner so that appropriate
and suitable gain could be estimated (Berger, Imbierowicz and Rauch, 2016). Below are the
objectives by considering project on HSBC bank which work as a leading financial providers in
the world:
Aim: “To utilise the financial reservation and resources properly for improving corporate
accounting – A case study on HSBC”.
Objectives:
 To determine the importance of financial reservation for financial service provider like
HSBC
 To evaluate the benefits which could be drawn by financial reservation for HSBC
 To measure the impact of finance reservation on corporate accounting of HSBC bank
These objectives enables and support in resolve the problem statement of HSBC. Along
with this, they also become able to manage things properly whose reflection cold be estimated on
company accounts.
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Research Questions
These work as a major consideration which facilitate to prepare questionnaire for a
survey. A research plan includes and depicts about research questions for the project which
completely emphasis on objectives (Christensen, Nikolaev and WITTENBERG‐MOERMAN,
2016). HSBC study need to estimate this thing properly so that better and definite outcome could
be sourced.
 Is it really important for financial service provider to maintain and manage finance as a
reserve?
 What will be the benefits which financial providers could be gain through financial
maintenance?
 What will be the impact of financial reservation on corporate accounting of HSBC?
Literature review
For a study, it is really essential to utilise suitable and appropriate sources for deriving
appropriate outcome on the study. For this consideration, a research plan need to be evaluated
about various response of differ number of scholars so that better understand for the topic could
be done. HSBC study on use of financial rations in corporate accounting will define below:
Importance of reservation for financial service providers
According to the Damodaran (2016), reserve is a beneficial consideration for a business
organisation to ensure and meet with financial obligations properly. Reserve is an important
consideration for financial service providers as well because many times they used to face
depression when many of the individual delay in their payment. It also support them to fulfil
immediate claims for large payment. Thus, to deal with such constraints, financial reserve enable
to deal with such situation.
As per the Ehrhardt and Brigham (2016), financial reserve enables and support in
facilitating future aspects properly so that better and definite gain could be estimated. This will
assist and define better and supportive return so that effective gain could be underpin.
HSBC need to maintain and manage financial reserve for their betterment which assist
them to deal with any unfavourable situation. Although, they are one of a largest and best
financial service provider in the world where money requirement arise at any point of course.
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Benefits of financial reserve for financial providers
As per the view point of Eisenberg (2017), reserve is an aside profit or surplus of a
company which strengthen the business to met with future contingencies and losses. In other
words of Barnes (2016), reserve define as such amount which kept safe from the profit to
maintain and manage smooth flow of operations so that better and definite working adjustment
could be done.
There are several benefits lead to get drawn up by the reserve for financial providers like
HSBC. Such benefits could be define and underpin as strength to business, met with
contingencies of future etc.
As per the view point of Warren and Jones (2018), which define benefits from financial
reserve are that it enable and support manage to drawn better working and provide strength to
functions. Along with this, another benefit which could be gain by HSBC through financial
reserve is that they suppose to met with future contingency where large amount would get to
paid. Such benefits have to understand by the HSBC properly so that future obligations could be
deal out in better and definite manner.
Importance of reserve on corporate accounting
As per the view point of Berger, Imbierowicz and Rauch (2016), accounts of a company
reflect their position to maintain contingency and working operations summary. It is really
important for a business to maintain reserve which define to shareholders and stakeholders a
sense of safe feeling. HSBC need to maintain appropriate reserve and need to present in their
books of accounts as well. This will guide management to work on future plans which simply
lead to craft better and definite records. Thus, better working management suppose to get done.
HSBC have to understand the importance of reserve and its impact on corporate accounting as
well.
Data Collection Plan
Plan for data collection
Activities Time/ Method Size
Research Approach 2 days and Survey 80
Methods of collection Primary method of 80
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questionnaire within 5 days
Sampling Random Sampling/ 10 days 80
Source Personal Interaction 80
Ethical Consideration
Such data is appropriate in tenure and completely ethical in nature. Data sources are
reliable and valid in nature where books and journals could be utilise. Moreover, the data gather
through the questionnaire method which target 80 respondents. All sources are relevant and
related with business projects.
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REFERENCES
Books and Journals
Barnes, P., 2016. Stock market efficiency, insider dealing and market abuse. Gower.
Berger, A. N., Imbierowicz, B. and Rauch, C., 2016. The roles of corporate governance in bank
failures during the recent financial crisis. Journal of Money, Credit and Banking. 48(4).
pp.729-770.
Christensen, H. B., Nikolaev, V. V. and WITTENBERG‐MOERMAN, R. E. G. I. N. A., 2016.
Accounting information in financial contracting: The incomplete contract theory
perspective. Journal of accounting research. 54(2). pp.397-435.
Damodaran, A., 2016. Damodaran on valuation: security analysis for investment and corporate
finance (Vol. 324). John Wiley & Sons.
Ehrhardt, M. C. and Brigham, E. F., 2016. Corporate finance: A focused approach. Cengage
learning.
Eisenberg, M. A., 2017. Legal models of management structure in the modern corporation:
Officers, directors, and accountants. In Corporate Governance (pp. 103-167). Gower.
Warren, C. S. and Jones, J., 2018. Corporate financial accounting. Cengage Learning.
Online
What is an Accounting Reserve and Provisions? Advantages of reserve fund and Provisions.
2018. [Online]. Available through
:<http://onlineaccountreading.blogspot.in/2014/07/reserve-and-
provisions.html#.WtGhtvF94l8>.
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