Notes, summaries, assignments, exams, and exercises for Economics for Baccalaureate

Supply Chain Management

Effective supply chain management ensures product availability in the required quantity and quality, at the right time, and under optimal financial conditions. It involves three key functions:

Core Functions

• Purchasing: Acquiring necessary raw materials, products, and/or services in the right amounts, timing, quality, and at the lowest cost.
• Storage: Ensuring timely access to items in adequate quantities and qualities.
• Inventory Management: Maintaining optimal stock levels to maximize service and minimize costs.

Purchasing Decisions

Key parameters considered in purchasing decisions:

Decision Parameters

• Quality: Product characteristics ensuring suitability for intended use.
• Price: Total cost of the purchased product, aiming for

Essential Business & Financial Definitions

• Start-up: A new business

• Benefit: An advantage or gain

• Idea: A concept or thought

• Problem: A challenge to solve

• Solution: A way to solve a problem

• Product: A good for sale

• Service: A helpful action or work

• Customer: A buyer or user

• Target Audience: The intended group of people

• Competition: Other businesses in the market

• Business Plan: A roadmap for a business

• Marketing: Promoting products or services

• Funding: Money for a business

• Earn: To receive money for work

• Income: Money received regularly

• Sales: Transactions of goods or services

• Profit: Money earned after costs

• Goods: Physical products

• Savings: Setting money aside

• Budget: A plan for money management

Synonyms for Key Business Terms

• Start-up: New company, new venture

• Benefit:

Chapter 1: Introduction to Finance

Finance is the study of how and under what terms savings (money) are allocated between lenders and borrowers. Here are some key concepts:

• Real assets: Tangible assets.
• Financial assets: Claims on real assets.
• Flow of savings: Savings flow from households to governments and businesses.
• Financial intermediaries (indirect claims): Invest on behalf of investors (e.g., chartered banks, pension funds, mutual funds).
• Market intermediaries (direct claims): Brokers (e.g., insurance).
• Credit crunch: Financial intermediaries raise loan costs due to an inability to secure financing on reasonable terms.

Crown corporations, like Hydro Quebec, are also major borrowers.

Types of Financial Assets

• Non-marketable financial assets: Invested

Incoterms: Understanding Responsibility and Risk in International Trade

Understanding Credit, Debt, and Insurance

Credit Rule of Thumb: Product should outlive its payment; don't use credit if the purchase is beyond earnings capability.

Factors That Influence Credit Score:

• Billing history (35%)
• Length of bill payment history (15%)
• Amount owed (30%)
• New credit lines (10%)
• Types of credit (10%)

FICO Score:

300-850; above 800 is great; below 620 is not good (high risk); 40% of Americans have a score under 600.

Credit Bureaus:

TransUnion, Equifax, Experian (each has its own credit score).

Types of Entries in a Credit Report:

• Identifying Info
• Public Records (bankruptcies, civil judgments, and tax liens)
• Inquiries
  • Soft Inquiries (i.e., a credit

Basis Property Acquired as Gift

If donor ABFMV, then dual basis applies (1 gain basis & 1 loss basis). Where GB=DonorAB & LB=FMV prop. If sellpr>DonorAB D1EAB=DonorAB @ date of gift. If sellpr,

Scott has decided to dispose of these assets that he received as a gift. Compute his realized & recognized g/l on these disposals: a. In 2000, he received stock with a FMV of 88k. The donor’s AB was 100k. He sells the stock for 72k this year. Gain basis=100k Loss basis=88k Amtreal=72k-Lossbasis88k=(12k) RecogL.

In 2001, he received land with FMV of 42k. The donor’s AB was 50k. He sells the land this year for 45k. Since sellpr b/w AB & FMV. No g/l permitted.

Nicky receives a car from Sam as a gift. Sam paid 48k for the car. He had...

Equity

Equity is the residual interest in the assets of a company after deducting all its liabilities. It represents the financing resources that are not borrowings.

Components of Equity:

• All contributions made by owners
• Reserves, share premiums & equity instruments
• Retained earnings, prior losses & profit/loss of the period
• Grants, subsidies, donations, and bequests received
• Valuation adjustments & hedging transactions

The Balance Sheet: A Fundamental Accounting Identity

The Balance Sheet represents the fundamental accounting equation:

USES OF FUNDS = SOURCES OF FUNDS

This equation highlights that a company's assets (uses of funds) are financed by either its liabilities or equity (sources of funds).

Static vs. Dynamic Vision of Financial Statements

While...

Enterprise Location

The location of a business is usually considered when the business is first setting up. We may come across two kinds of problems: location and dimension. First, we should research the market and see if our product has any demand or interest, and analyze the level of competition. Then, we should analyze raw materials’ supply, the job market, the cost of the land where the business will be located, transportation facilities, government influence and laws, facilities for investing and acquiring money, and finally, the region's economic development.

Enterprise Structures

Holding

The parent company buys the shares of the subsidiaries or branches, so the parent is the owner. The parent makes the most important decisions because,...

The salary structure encompasses various concepts a worker receives monthly. This includes the base salary, the principal amount for work performed. Bonuses are also part of the compensation, often based on personal characteristics such as age or years of service. Job characteristics also influence rewards and goals. In Spain, workers are entitled to two extra payments annually: one in summer and one at Christmas. The summer bonus, paid in July, covers the first six months, while the Christmas bonus, paid in December, covers the second half of the year. Each extra payment equals 30 days of salary. All of this is regulated by the collective agreement of each sector. These agreements, between employee representatives, unions, and business representatives,...

Annual Accounts

A. Model Structure and the Annual Accounts

These should be prepared in accordance with the Commercial Code, the Revised Corporate Law, and the Law of Limited Liability Companies as provided in the General Accounting Plan.

They should be formulated within a maximum of three months after the end of the fiscal year.

The General Accounting Plan provides two different models of annual accounts:

• Normal
• Abbreviated

Abbreviated annual accounts facilitate this requirement for individual entrepreneurs and small and medium-sized corporate businesses.

B. Depositing Accounts in the Commercial Register

Once developed, the annual accounts may be filed and advertised in the Commercial Register.

Sole proprietors are not required to deposit their annual...