Notes, summaries, assignments, exams, and exercises for Economics for Vocational training

Dividend Policy and Corporate Financial Strategy

Income and Dividend Distribution

• High Concentration: High income leads to higher dividend distribution for shareholders.
• Low Income: Low-income companies often face high borrowing rates, struggle to meet debt obligations, and have limited tax advantages.
• Highly Profitable Firms: These companies prefer to invest rather than incur debt, maintaining a low leverage ratio.
• Tax Impact: Income tax levies influence dividend presence. Corporate tax deductions for dividends can be favorable depending on the tax rate.

Market Efficiency Theories

• Weak Form: Future price movements can be estimated based on past prices and quotations.
• Semi-Strong Form: Market prices incorporate all public information, though not necessarily

General Features of the Tax

• Levied on goods and services: This tax applies when a professional or business entity purchases goods or services for their business operations.
• Calculation by tax rate: VAT is calculated by applying a percentage to the transaction amount. Current rates include 16% for the standard rate, 7% for small businesses, and 4% for the reduced rate.

Tax Rate Categories

• Regular Rate: Applies to all goods and services not classified as reduced or super-reduced.
• Reduced Rate: Applies to general food items, housing, and hospitality services.
• Super-Reduced Rate: Applies to medicines, bread, cereals, milk, cheese, eggs, fruits, vegetables, books, newspapers, and magazines.

Transactions Outside the Scope of VAT

The law considers the following...

Company Formation: Legal & Tax Procedures

When creating a company, promoters should consider market testing their idea, planning, and analyzing their operations after the necessary investments and sources of financing. If this decision is positive, and once the legal form and name of the company are chosen, a series of actions and formalities must be conducted for it to become legally constituted and start carrying out its activity. The incorporation process requires a series of formalities before various government agencies. Private entities such as administrative agencies, consultancies, and business associations can also perform preliminary work for a fee. Information can also be found in specialized publications addressing these issues....

Open Market Operations (OMO)

Open Market Operations consist of transactions involving:

• CV assets, cash, or term deposits (plazos).
• Granting guaranteed loans (prendaria).
• Taking deposits.

The issuance and placement of ECB debt certificates are performed with fundamental objectives: the control of interest rates, the management of system liquidity, and the overall monetary policy stance.

Basic OMO Mechanism

When the Central Bank (CB) seeks to increase the money supply in circulation, it buys assets or provides loans. (This is typically used to stimulate the economy, increase growth, and may lead to inflation.)

Conversely, when the CB wants to reduce the money supply, it sells financial assets back to the economy or captures deposits.

OMO Instruments

The...

The Finance Function: Objectives and Funding

The finance function is responsible for the administration and control of financial resources used by a company. It aims to achieve the following key objectives:

• Obtain the necessary financial resources for the company's productive activities at minimum cost.
• Determine the most appropriate financial structure for the company.
• Select the types of investments necessary to support the company's productive activities.

Classification of Funding Sources

Funding sources can be classified in several ways:

By Ownership

• Equity Financing (Own Sources): These funds originate from the company's operations and resources contributed by owners. Repayment is not required.
• Debt Financing (External Sources): These are funds

Balance of Payments

The Balance of Payments (BP) is the systematic record of all economic transactions between the residents of a country and the rest of the world. It consists of two primary accounts:

Current Account

This account tracks trade in goods and services, as well as unilateral transfers. The current account shows a surplus when the income from exports and transfer payments exceeds the value of imports and net transfers to foreigners.

Capital Account

This account records the purchase and sale of financial assets, including stocks, bonds, land, and bank deposits. A surplus occurs when income from the sale of these assets to foreigners exceeds the payments made for the purchase of foreign assets.

The BP Curve

The BP curve represents the various...

Provisions for Pending Receipts

This passive account is used when an entrepreneur needs to account for operations where the final invoice or formal document is pending. It is replaced once the correct invoice is provided.

Advances to Suppliers and Future Supplies

This active account represents amounts your company provides for future supplies. It is used for specific items and never for the payment of an unpaid invoice. These remain pending before the reverse transaction occurs.

VAT and Treasury Account Management

The subscription is charged with the Treasury; a given money amount is earmarked to reflect the VAT. This includes VAT paid for purchases and the remaining VAT balance.

Customers with Pending Invoices

This form is used when, for accounting...

Profit and Loss (Income Statement)

The profit and loss statement, also known as the income statement, summarizes a company's revenues, costs, and expenses during a specific period.

A) Operating Result

• Income:
  • Income from holdings
  • Product sales
  • Service provisions
  • Other regularly obtained income
• Operating Expenses:
  • Purchase of raw materials, components, and merchandise
  • Salaries and Social Security (SS)
  • Rent, supplies, repairs, and conservation expenses
  • Amortization (Depreciation)

B) Financial Result (I-II)

• I) Financial Income:
  • Interest and dividends received
• II) Financial Expenses:
  • Interest paid

C) Result Before Taxes (A + B)

D) Net Result (After 30% Corporate Tax)

Balance Sheet

Assets

1. Non-Current Assets
   • a) Intangible
   • b) Tangible (Material)
2. Current Assets / Circulating

MP01 → Communication and Customer Service

• Maslow's pyramid - Piràmide de Maslow

• Presentation - Presentació

• Email - Mail

• Podcast - Podcast

• Postcard - Postal

• Oral communication - Comunicació oral

• Verbal communication - Comunicació verbal

• Marketing - Màrqueting

• Gestures - Gestos

• Customer service - Atenció al client

• Meeting - Reunió

• Customer - Client

• Supplier - Proveïdor

• To supply - Proveir

• Interview - Entrevista

• Discourses - Discurs

• Volume - Volum

• Silences - Silencis

• Pauses - Pauses

• Voice - Veu

• Rhythm - Ritme

• Personal barrier - Barreres personals

• Speech - Discurs

• Dialogue - Diàleg

• Call - Trucada

• Communication: Comunicació

• Service: Servei

• Letter - Carta

• Message - Missatge

• Receiver - Receptor

• Sender / issuer / dispatcher - Emissor

• Social media - Xarxa social

• Non-verbal

Sales Organization

Our company, operating in the tertiary sector, is dedicated to providing services directly to the customer. Therefore, we utilize a direct distribution channel: Manufacturer to Final Consumer.

Pricing Policy

Our company aims to achieve the following objectives:

• Achieving permanent market presence.
• Generating short-term market returns.
• Promoting and positioning our products and services, defending against or acting proactively against competition.

The price of our products and services is set by referencing three key methods. We consider:

• The costs (Cost & Selling Price Range).
• The maximum price that can be set on the market.
• An analysis of the company's advantages and disadvantages against the competition.

Legal Form

Our legal structure...