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

Criteria for Classifying Financial Sources

Companies require financial resources both during their inception and throughout their operational activities to facilitate investments. These financial sources can be classified based on ownership, time, and origin.

Classification Based on Ownership

• Self-Financing: Capital provided by partners and retained earnings (reserves).
• External Financing: Resources obtained from external sources, typically debt.

Classification Based on Time

• Fixed Liabilities: Long-term obligations.
• Current Liabilities: Short-term obligations.
• Permanent Capital Resources: Resources that remain within the company for the long term.
• Short-Term Financial Resources: Resources that remain within the company for the short term.

Classification

Assets

Current Assets

Cash

Money in the form of bank notes, coins, checks, credit card receipts, bank drafts, postal orders, etc.

Bank Deposits

Value of deposits held in financial institutions.

Inventory

Goods purchased for resale.

Accounts Receivable

Amounts owed to the business by customers for goods sold on credit.

Notes Receivable

Written promises to pay a specific sum of money, such as bills of exchange and promissory notes.

Other Receivables

Amounts owed to the business by individuals or entities other than customers.

Non-Current Assets

Land

Property owned by the business.

Buildings

Structures owned by the business.

Furniture and Equipment

Desks, chairs, tables, bookcases, scales, display cases, etc.

Computer Equipment

Central processing units, monitors, keyboards,...

Income and Wealth

Income

Total income received by owners of factors of production.

Income Distribution

How income is distributed among owners of factors of production as wages, land rents, interest, and profits. Depends on two factors:

• Wage differences (if they are small, income distribution is relatively equal)
• Wealth distribution (some countries have broad access to wealth but large income differences)

Wealth

Net asset value of tangible, physical, and financial assets.

Labor Market Dynamics

Labor Demand

Depends on wages, productivity, and prices of goods produced.

Individual Labor Supply

Shows the number of hours an individual is willing to work at a given wage.

Labor supply depends on:

• Wages
• Population
• Labor force participation rate

Aggregate Labor Supply

Represents...

What is E-commerce?

Definition of E-commerce

E-commerce is the process of conducting commercial transactions, such as buying and selling goods or services, using the internet and electronic communication.

Types of E-commerce

• Business-to-Consumer (B2C): Businesses selling directly to individual consumers (e.g., online retailers).
• Business-to-Business (B2B): Businesses selling to other businesses (e.g., wholesale suppliers).
• Consumer-to-Consumer (C2C): Individuals selling directly to other individuals (e.g., online marketplaces).
• Mobile Commerce (M-commerce): Transactions conducted through mobile devices.

Significance of E-commerce

E-commerce is important because it offers businesses the ability to reach a global audience, operate 24/7, reduce costs,...

Financial Manager Responsibilities

A financial manager oversees an organization's financial operations and reporting. They ensure compliance with legal and regulatory requirements and help management make informed financial decisions.

Key Responsibilities

• Financial Reporting: Prepare financial statements, business activity reports, and forecasts.
• Budgeting: Manage budgets and create revenue and budget projections.
• Financial Analysis: Analyze market trends, financial statements, and business performance.
• Financial Operations: Monitor financial operations such as payroll, invoicing, and cash flow.
• Strategic Planning: Formulate long-term business plans and investment strategies.
• Risk Management: Identify and minimize financial risk.
• Compliance: Ensure

ALOS: Average Length of Stay

Total occupied room nights/total bookings

Attrition

Difference between the number of rooms reserved compared to the number of rooms used

Booking Curve

An important tool for yielding that provides a visual representation of the pickup, number of bookings, availability, and yielding capacity of the hotel over time

Pick Up

No. of reservations between today & day of arrival

Contract

>30 nights + large volume

Group

>10 rooms, contract, deposit

• Corporate: Negotiated rate for a block with a specific company
• Association/Convention: Negotiated rate for a block with trade, professional, philanthropic association
• Government: Negotiated rate for a block with a qualifying government agency

Transient

Ind & groups

• Retail: Market

Production

Processing raw materials to create products that are ready for consumption. Production also includes the assembly of goods. This department exists in companies that belong to the secondary sector. In general, the primary sector (agricultural and fishing) and the tertiary sector (services) do not have this functional area.

Purchasing

Obtaining and analyzing quotes/prices from suppliers, buying at the right time by coordinating with the warehouse supervisors.

Sales

Organizing sales promotions, looking for new customers, preparing the best quotes/prices.

Marketing & Advertising

Dissemination of information about the company's products. Persuading potential clients to buy the company's products through promotions, advertising, sales…

Commercial

Providing...

Bank Liabilities & Financial Operations

Deposits: Core Bank Liabilities

A deposit is a contract or transaction involving the transfer of money to a bank account.

Types of Deposits:

1. Demand Deposits: Normal deposits for frequent, on-demand access to funds. They are more liquid and less costly for the depositor.
   • Current Accounts: Deposit accounts not primarily for earning interest or savings, but for the convenience of business or personal clients.
   • Money Market Accounts: Less liquid, offering higher interest rates. These are interest-bearing deposit accounts based on current money market rates, typically requiring a higher minimum balance to earn interest or avoid fees.
   • Savings Accounts: Less liquid, offering lower interest rates. These accounts

External Analysis: To detect Opportunities and Threats

Internal Analysis: To discover Strengths and Weaknesses

PEST Analysis: used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact on their business now and in the future

Political • Change to the political system very often forces business to change its approach. Economic • Changes in the market conditions, such as the presence of new competitors, or simply changes in the economy. Social • Changes in society or culture, such as demographic change, Technological • Technological innovation can force changes in production techniques

SWOT: done to try to access the CURRENT & FUTURE situation of a product, brand, business… (at the beginning...

International Business Terminology

Certificate of Origin

A certificate of origin (CO) is a document that certifies the country of origin of goods being shipped. It is required by customs authorities of the importing country.

Intellectual Property

Intellectual property (IP) refers to legal rights that result from intellectual activity in various fields. Common forms of IP include patents, trademarks, copyrights, and trade secrets.

Transfer of Technology

The sharing of scientific information, technology, and manufacturing know-how between firms, universities, or other institutions is known as the transfer of technology.

Franchising

In franchising, a franchisee is allowed to use a trade name or trademark in offering goods or services to the public in...