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

Finance Concepts: Ratios, Markets, and Risk

1. 1. Types of work in finance subareas

   Be able to recognize the types of work in subareas of finance such as investments, financial management, international finance, etc.

2. 2. Basic ratio categories to know

   Know the basics of the different ratio categories (e.g., liquidity, asset management, profitability).

   Liquidity — a ratio that measures the relationship between a firm's current assets and current liabilities.

3. 3. Average collection period ratio

   Know what the average collection period ratio measures.

   The average number of days between the date a credit sale is made and the date the purchaser pays for that sale.

4. 4. Time value of money concept

   Know that money in the future is worth less than money today.

   (Time

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Executive Summary

Corporate Social Responsibility (CSR) is a way of managing companies based on the management of the impacts that their activity generates on their customers, employees, shareholders, local communities, the environment, and society in general.

Introduction to CSR Practices

This report will examine different ways a company practices CSR, focusing on three key pillars:

• Employment & Community (People)
• Environmental Protection (Planet)
• Ethical Business Growth (Profit)

Employment and Community Engagement

Companies must pay attention to factors affecting the well-being of everyone, not just their employees, in areas where the company has its plants and offices.

Collaboration with local sports, cultural, or economic activities can improve...

Vocabulary 1

• 1) A mortgage is a loan to buy property.
• 2) Money you put in the bank is called a deposit.
• 3) Money paid to a retired person is called a pension.
• 4) Securities representing part-ownership of a company are called stocks or shares.
• 5) The money invested in a business is its capital.
• 6) Bonds are interest-paying securities issued by companies that need to borrow money.
• 7) A takeover is when a company gains control of another one by buying its stocks.
• 8) A merger is when two formerly separate companies join together.

Vocabulary 2

• 1) Conglomerates: Groups of companies that have joined together.
• 2) Depositors: People who place money in bank accounts.
• 3) Deregulated: Abolished or ended rules and restrictions.
• 4) Fines: Sums of money paid as penalties

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Key Concepts in International Trade and Globalization

Foundations of Trade

Humans began trading due to a lack of self-sufficiency.

The Spread of Commodities: Sugarcane Example

Inhabitants of New Guinea discovered that sugarcane is sweet and easily cultivated. Due to the increased human appetite for sweets, sugarcane spread geographically:

1. From New Guinea to Southeast Asia.
2. To India.
3. From India, traders took it to China and what is now Iran, and so on.

Trade Agreements and Barriers

GATT (General Agreement on Tariffs and Trade)

An agreement designed to reduce tariffs and other barriers to international trade.

Tariffs

Taxes placed on certain imports or exports, which typically stifle trade.

Quotas

Restrictions on the amount of imports a country may receive....

Financial Statement Analysis

Creditors, investors, management, and regulatory authorities all have a vested interest in analyzing a company's financial statements.

Purpose of Financial Statement Analysis

Creditors: Assess a company's ability to repay debt by focusing on cash flow measures.

Investors: Evaluate a company's potential for dividends, cash flow generation, and growth to make informed investment decisions.

Management: Conduct ongoing analysis of financial results, comparing them to internal operational metrics for performance evaluation.

Regulatory Authorities: Ensure compliance with accounting standards and regulations, particularly for publicly traded companies.

Methods of Financial Statement Analysis

1. Horizontal and Vertical Analysis

Horizontal

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**PART B**

1. Understanding Price Elasticity of Demand

Price elasticity of demand measures the responsiveness of demand to changes in price. It indicates how much demand will change in response to a given price change.

Elasticity of Smartco's Fruit Products

Smartco operates in a competitive industry where price elasticity is high. This means that even small changes in price can significantly impact demand for their fruit products.

Predicting Smartco's Market Activities

The high price elasticity of Smartco's products influences their market activities in several ways:

• Pricing: Smartco must maintain competitive prices to attract and retain customers.
• Promotions: Promotions can reduce price elasticity by increasing product awareness and loyalty.

**PART

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Major Issues in Joint Ventures

1. Joint venture name and its legal nature (limited liability company or not)
2. Scope and scale of production or operations
3. Investment amount, unit of currency, and equity (ownership) distribution
4. Forms of contribution (cash, technology, land, or equipment)
5. Responsibilities of each party
6. Technology or knowledge transfer
7. Marketing issues, such as focusing on export market or local market
8. Composition of the board of directors (in EJVs)
9. Nomination and responsibilities of high-level managers
10. Joint venture project preparation and construction issues
11. Labor management (various human resource issues)
12. Accounting, finance, and tax issues (the currency unit of accounting)
13. Alliance duration
14. Disposal of assets after expiration
15. Amendments, alterations,

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Global Strategic Alliances in International Business

Global Strategic Alliances (GSAs) are crucial cross-border partnerships in international business. They represent collaborations between two or more firms from different countries, aiming to pursue mutual interests by sharing their resources and capabilities.

Types of Global Strategic Alliances

Equity Joint Ventures (EJV)

Equity Joint Ventures (EJVs) involve the formation of legally and economically separate organizations. These entities are created by two or more parent organizations that invest financial and other resources, such as land, facilities, equipment, materials, intellectual property, or labor. Ownership percentages in EJVs can vary, commonly including 50/50 splits or other agreed-...

International Trade and Export Marketing

Key Concepts in Exporting

31) The only marketing mix element applicable solely in export selling is Place.

32) Which of the following is not true about personal selling? E) To have a face-to-face meeting is not a requirement.

33) Export marketing requires all of the following except: E) Reaching retail customers.

34) The possible arrangements of responsibilities for handling exports include all except: E) Through an export department of an embassy.

35) Research has shown that exporting firms tend to: C) Receive unsolicited export orders.

Global Trade Dynamics

36) According to recent data on percent market share, which country is a dominant player in international trade? B) China

37) Governments commonly use activities...

Marketing Strategy and the Marketing Mix

A strategic plan defines a company's overall mission and objectives. Consumers are at the center. The goal is to create value for customers and build profitable customer relationships. Next comes the marketing strategy, which is the logic by which the company creates customer value and profitable customer relationships. The company decides which customers it will serve and how.

Customer-Driven Marketing Strategy

Market Segmentation

The marketer must determine which segments offer the best opportunities. Consumers can be grouped in various ways based on geographic, demographic, psychographic, and behavioral factors. The process of dividing a market into distinct groups of buyers is called market segmentation....