For the Module 3 SLP assignment, please address the following questions in a 2- to 3-page paper.
For the Module 3 SLP assignment, please address the following questions in a 2- to 3-page paper. You will need to review some concepts from Module 2.
- Assess the overall financial health of your organization. What are good and bad signs, if any, in your assessment? Measures of financial health may include sales and/or profit increases or decreases, if employees are being hired or laid off, major new orders being placed or orders being cancelled. These are some but not all measures that could be looked at, but if you are using an unconventional organization, you may have to get a little creative here.
- To what extent is your organization's financial health affected by fiscal and monetary policy? Please give at least one specific example.
Use information from the modular background readings as well as any good quality resource you can find. Make sure you cite all resources you use and provide a reference list at the end of your paper.
Length: 2?3 typed and double-spaced pages.
In addition to the overall quality, depth, grammar, and organization of the paper, the following will, in particular, be assessed:
- Analytical ability in relating monetary policies to the specifics of your organization.
- Your ability to relate Federal Reserve activity to your specific organization.
Upload the completed assignment to the SLP dropbox for this module.
COG Cabot Oil & Gas Energy
Running Head: PRODUCTION, UNEMPLOYMENT, AND INFLATION MODULE 1: SLP Trident University
Module 1 SLP
Course Number: ECO202
Dr. Thomas Kernodle
13 December 2015 PRODUCTION, UNEMPLOYMENT, AND INFLATION 2 I chose COG Cabot Oil & Gas Energy. It was ?incorporated on December 14, 1989, as an
independent oil and gas company engaged in the development, exploitation and exploration of
oil and gas properties?. The Company has primarily focused on two plays: the Marcellus Shale in
northeast Pennsylvania and Eagle Ford Shale in south Texas.
A reason I chose this company is because of recent and historical price fluctuations in the oil
market. The relation between shale and oil as substitutes in the space of energy sources makes
me interested in the macroeconomic impact on this company. The nature of energy requirements
is such that the need for energy resources is almost unlimited. As a result, it is interesting to
understand how macro environment in the US as well as the world, especially in oil producing
nations could impact at a firm level.
3 indicators that this firm must take into account; Price of crude oil- also called Brent oil. ?Brent Blend is a combination of crude oil from
15 different oil fields in the North Sea, primarily refined in Northwest Europe, and is the
major benchmark for other crude oils in Europe or Africa?. Most prices of different types
of oil are quoted in terms of Brent crude price. It is expected that as Brent price declines,
demand for shale would reduce, as they are substitutes of each other. A GDP movement is another indicator of demand for energy sources. A well performing
economy will need more energy translating into greater demand for shale oil. GDP trends
are also mirrored in unemployment data, retail sales data and weather forecasts. These
forecasts are effective indicators for seasonal demand for energy sources. An unusually
severe winter would increase demand for energy for heating purposes. PRODUCTION, UNEMPLOYMENT, AND INFLATION 3 Housing starts is another vital indicator that tells the firm about the future of the economy
and the place for new demand for energy that accompanies economic changes. Greater no
of houses implies positive consumer sentiment. This will translate into higher demand for
infrastructure and all those industries that feed into housing. PMI is an indicator of economic health of manufacturing sectors specifically. PMI
provides ?an advance indication of what is really happening in the private sector economy
by tracking variables such as output, new orders, stock levels, employment and prices
across the manufacturing, construction, retail and service sectors?.
COG Cabot Oil & Gas Energy must be focused on indicators that reveal the level of
demand in the future, and the production/price levels of energy sources that can substitute
for shale oil. Future demand is best forecast with GDP figures as well as indicators that
tell us about consumer and producer expectations of the future.
It must also consider price movements of crude oil, which is its traditional substitute.
Though we have alternatives like solar energy, wind energy and even nuclear energy, the
towering role of oil cant be ignored. In fact there are definite patterns in the movements
of the dollar, gold prices and oil prices. These patterns are used to predict future oil
prices, which determine the scope of alternative energy sources like shale oil. OPEC
Member Countries produce about 43 per cent of the world's crude oil and 19 percent of
its natural gas. However, OPEC's crude oil exports represent about 60 per cent of the
crude oil traded internationally. Therefore, OPEC can have a strong influence on the oil
market, especially if it decides to reduce or increase its level of production and this makes
the indicator for OPEC prices critical to COG. PRODUCTION, UNEMPLOYMENT, AND INFLATION REFERENCES
1. Brent Blend: http://commodities.about.com/od/Energy/fl/Crude-Oil-Brent-versus- WTI.htm
2. Europe - http://useconomy.about.com/od/worldeconomy/p/european_union.htm 4 PRODUCTION, UNEMPLOYMENT, AND INFLATION 5 3. Company Choices: https://tlc.trident.edu/content/enforced/67842-ECO202-DEC2015FT- 1/Modules/Module1/137551SLP1%20Choices%20PDF.pdf?
4. Economic Indicators to know: http://www.investopedia.com/university/releases/? no_header_alt=true
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