Notes, summaries, assignments, exams, and problems for Economy

Key Business and Economic Terminology

Core Business Definitions

Services

Intangible things that businesses do for consumers that enhance their lives.

Innovation

A new way of doing things.

Online Business

A business that conducts operations by means of the internet.

Outsourcing

Contracting with other companies for services.

Niche

A small, specialized segment of the market based on customer needs discovered through market research.

Corporate Strategy and Structure

Strategic Alliance

Forming a partnership with another company.

Corporate Venture

A new venture started inside a large corporation.

Economic Factors and Resources

Fundamental concepts related to wealth creation and market dynamics:

• For creating wealth.
• Technology has shortened [business cycles].
• Competition

Financial & Banking Acronyms

1. ALM: Asset-Liability Management

2. AML: Anti-Money Laundering

3. KYC: Know Your Customer

4. ASBA: Application Supported by Blocked Amount

BSBDA: Basic Savings Bank Deposit Account

5. IFSC: Indian Financial System Code

6. CBS: Core Banking Solution

7. RTGS: Real Time Gross Settlement

8. SLR: Statutory Liquidity Ratio

9. CAR: Cash Adequacy Ratio

10. MSF: Marginal Standing Facility

11. NBFC: Non-Banking Financial Companies

12. PIN: Personal Identification Number

Economic & Regulatory Terms

13. CCEA: Cabinet Committee on Economic Affairs

14. CECA: Comprehensive Economic Cooperation Agreement

15. CEPA: Comprehensive Economic Partnership Agreement

16. DTAA: Double Taxation Avoidance Agreement

17. ECBs: External Commercial Borrowings

18.

Cash Flow Statement Fundamentals

Operating Activities (Indirect Method Adjustments)

The calculation starts with the Income Statement components:

• Non-cash expenses (e.g., Depreciation) are typically positive adjustments.
• Losses are generally positive adjustments (added back).
• Gains are generally negative adjustments (subtracted).

Balance Sheet Adjustments (Working Capital Changes)

These adjustments relate to changes in current assets and liabilities:

• Current Assets (e.g., Accounts Receivable, Inventory):
  • Increase in asset balance = Cash Outflow (–)
  • Decrease in asset balance = Cash Inflow (+)
• Current Liabilities (e.g., Accounts Payable):

  Note: Accounts Payable reverses the asset logic.

  • Increase in liability balance = Cash Inflow (+)
  • Decrease in liability

Valuation and Capital Structure Concepts

Q1: Perpetual Cash Flow Model (PCM)

Unlevered and Levered Valuation

Scenario: Perpetual Cash Flow Model (PCM) with 30% Debt (D) and 70% Equity (E). Cost of Debt (rD) = 5%, Free Cash Flow (FCF) = $10M, Cost of Equity (rE) = 10%. No Arbitrage.

• Unlevered Value (VU) = $10M / 10% = $100M.
• Levered Value (VL) = VU = $100M.
• Debt in Levered Firm (DL) = 0.3 * $100M = $30M.
• Equity in Levered Firm (EL) = 0.7 * $100M = $70M.

Perpetual Return Calculation

Perpetual Return VU = 1% * FCF.
VL = 1 * ($10M - 5% * $30M) + 1% * 5% * $30M.

Q2: Levered Recapitalization and Financial Distress

This section applies the Perpetual Cash Flow Model (PCM) with a corporate tax rate (Tc).

Project Valuation with Corporate Tax

Project Details:

• Project

Home > IRS

Employment Insurance Report Record and Attestation

Claimant Details

Claimant: THEODORE KATOTIKIDIS

This report covers the period from January 01, 2012 to January 14, 2012.

The following is a record of the questions and the answers that you confirmed and submitted for the reporting period indicated above.

Report Questions and Confirmed Answers

1. Address and Direct Deposit

Have you moved, changed your mailing address, or changed the banking information you provided for Direct Deposit purposes?

Answer: No

2. Outside Canada

Were you outside Canada between Monday and Friday during the period of this report?

Answer: No

3. Work and Wages

Are you self-employed?

Answer: No

Did you work or receive any earnings during the period of this report? This includes... Continue reading "Employment Insurance Report Record and Attestation Submission" »

Understanding the Balance Sheet Structure

The Balance Sheet is a fundamental accounting document that reflects the composition and value of a company's assets, liabilities, and equity at a given time. Its information acts like an economic snapshot of the company's financial position, making it static information related to a specific date. To understand and appreciate the change in equity during the reporting period, it must be compared with data from the previous period.

Legal Requirements for Comparison

The requirement for comparative data is often mandated by law:

Commercial Code Article 35.4: In each of the items in the balance sheet, the profit and loss account, and the financial statement, in addition to the figures for the year closing,

Fundamentals of Entrepreneurship and Business Structures

Defining Entrepreneurship

Entrepreneurship is the process of initiating a business venture, organizing the necessary resources, and assuming the associated risks and rewards.

Social Entrepreneurship: Creating Value

Social entrepreneurship focuses primarily on creating social value by providing solutions to social problems, with a secondary purpose of generating profit and returns.

Key Unincorporated Business Structures

Sole Proprietorship

A sole proprietorship is defined as an unincorporated business owned by an individual for profit. Proprietorships make up the majority of businesses in the United States. This form is popular because it is easy to start and has few legal requirements.

Advantages

What is Negative Business Power?

Negative business power is something an organization acquires by obtaining immense wealth, knowledge, and technology within a country. Such power can cause trouble for both the company and the country. Therefore, the government should take necessary steps to regulate business power, preventing it from emerging as negative business power.

Differences Between Direct and Indirect Expenses/Costs

1. Direct Expenses/Costs

The value of the components, parts, or materials used during the income period.

2. Indirect Expenses/Costs

Expenses that cover the indirect costs of production during the income period. Examples of indirect expenses include transport costs (petrol/repairs), marketing costs (advertising), and administration... Continue reading "Business Fundamentals: Power, Costs, Segmentation, Promotion, and Accounting" »

The Tourist Demand

Evolution of Tourist Demand

1948: The U.N.'s Universal Declaration of Human Rights declared travel as a human right. This has led to the concept of Responsible Tourism we see today.

History: Tourist demand has consistently increased over time. Leiper's Outbound Region model highlights that tourist demand is the outcome of activities and decisions made by individuals in the generating region.

Studies on the Evolution of Tourist Demand

UN (1948): Declared everyone has the right to "relief and leisure, including (...) some periodic paid holidays".

UNWTO (1980): The Declaration of Manila stated the ultimate aim of tourism is "the improvement of the quality of life and the creation of better life standards for all nations." This marked... Continue reading "Evolution & Determinants of Tourist Demand: A Comprehensive Guide" »

Trade

Definition and Types

Trade is the buying and selling of products and services to satisfy the needs of the population. There are two main types of trade:

• Domestic trade
• International trade

Elements of Trade

• Sellers: Individuals or companies that have goods or services they want to sell.
• Buyers: Individuals or companies that buy products.
• Goods: Products that are bought and sold for money.
• Markets: Places where commercial transactions take place (e.g., physical markets, farmers' markets, online marketplaces).

Characteristics of Trade Today

• Large quantities of goods are in constant movement between different regions.
• There is a worldwide network of trading partners.
• Trade, along with transportation, provides jobs for people.
• It is dominated by an ever-