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

Key Stakeholder Groups and Their Expectations

Understanding the needs and expectations of various stakeholder groups is crucial for business success. Here's a breakdown of major stakeholder groups and what they typically expect:

1. Owners and Investors

   Owners and investors have a financial or other interest in the organization. They generally seek high profits, dividends, long-term growth, and a positive corporate image.

   Example: An owner of company ABC expects a financial return on their investment.

2. Suppliers

   Companies often build strong relationships with suppliers. This fosters shared goals, visions, and strategies. Collaboration between buyers and sellers can deliver the best value to end customers, benefiting all partners.

   Example: Lulu Hypermarket,

Stockholders' Equity

Rights of stockholders to share proportionately in:

1. Profits
2. Management
3. Corporate assets upon liquidation
4. Any new issues of stock of the same class (preemptive right)

Preemptive Right: Protects an existing stockholder from involuntary dilution of ownership interest.

Key Concepts

Additional Paid-in Capital: Indicates any excess over par value paid in by stockholders in return for the shares issued to them.

Retained Earnings: Represents the earned capital of the company.

Lump-Sum Sales: When a corporation issues two or more classes of securities for a single payment.

• Incremental Method: Company cannot determine the fair value of all classes of securities.
• Proportional Method: Determining relative value is available for each class of security.

Microeconomics vs. Macroeconomics

Microeconomics studies the individual decisions of economic decision-makers (companies and consumers as individuals).

• Macroeconomics studies the economy as aggregate decisions of economic decision-makers (groups of consumers, producers, and the government).
  • The government is a group that oversees a community, establishing rules and administering public policy.
  • Some governments are more interventionist at the economy (North Korea, Cuba) than others (US). They make key decisions about what will be produced, how it will be produced, and who will receive the outputs supplied by business.
  • The role of government is to create and administer policy at local, national, and international levels.
  • Locally: they establish rules,

The EU Single Market

Key Freedoms of the EU Single Market

1. Free Movement of Persons: All EU citizens can move freely, reside, and take up work within the EU area.
2. Free Movement of Goods: Goods are not subject to border controls, tariffs, or quotas within the EU. This simplifies and promotes trade between member states.
3. Free Movement of Services: Service providers from an EU state are free to offer their services in any state of the EU single market, even without settling there.
4. Free Movement of Capital: Restrictions on capital and payment transactions between states of the EU single market are prohibited.

Financial Statements

Income Statement

A financial statement that shows the revenues, expenses, and net income of a firm over a period of time.

Statement

What Drove the Progressive Era Movement?

A general belief that government reforms were needed to help end social problems and disorder.

Why Did Many Progressive Reformers Support Prohibition Legislation?

They believed alcohol was a cause of poverty and many other social problems.

What is the Nineteenth Amendment?

Gave women the right to vote.

What Did the Use of Initiative Allow Reformers to Do?

Propose issues and legislation directly to voters.

What Did Major Policies of Theodore Roosevelt's Presidency *Not* Include?

Using subsidies (government payments) to bolster the failing Standard Oil Company.

What Were Woodrow Wilson's New Freedom Platform and Proposals Directly Countering?

Roosevelt's New Nationalism ideas.

What Act Did Woodrow Wilson Seek to Reform

Angel Investors

An angel investor (also known as a private investor) is an individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. The funds that angel investors provide may be a one-time investment to help the business get off the ground or an ongoing injection to support and carry the company through its difficult early stages.

Venture Capital

Venture capital is a type of funding for a new or growing business. It usually comes from venture capital firms that specialize in building high risk financial portfolios. With venture capital, the venture capital firm gives funding to the startup company in exchange for equity in the startup. This is most commonly found... Continue reading "Angel Investors, Venture Capital, Crowdfunding, and Patents: A Guide" »

Why Do Businesses Fail?

Businesses fail for various reasons, including:

• Creating products that customers do not want
• Running out of financial resources
• Failing to investigate their competitors

Competitive Analysis

1. Identifying Competitors

Direct Competitors: Products or services that are similar substitutes for yours and operate in the same geographic area.

Indirect Competitors: Products or services that are not the same but could satisfy the same need or solve the same problem.

2. Assessing Competitors' Strategies, Objectives, Strengths, Weaknesses, and Reaction Patterns

Benchmarking: Measuring the performance of a company's products or processes against industry leaders.

Business Analysis:

• Product line, quality, pricing, discounts

Sales Analysis:

• Sales

Steven Paul Jobs

Steven Paul Jobs (/dʒ/ɒbz/; February 24, 1955 – October 5, 2011) was an American business magnate, industrial designer, investor, and media proprietor. He was the chairman, chief executive officer (CEO), and co-founder of Apple Inc., the chairman and majority shareholder of Pixar, a member of The Walt Disney Company's board of directors following its acquisition of Pixar, and the founder, chairman, and CEO of NeXT. Jobs is widely recognized as a pioneer of the personal computer revolution of the 1970s and 1980s, along with Apple co-founder Steve Wozniak.

Early Life and Career

Jobs was born in San Francisco, California, and put up for adoption. He was raised in the San Francisco Bay Area. He attended Reed College in 1972 before... Continue reading "The Legacy of Steve Jobs" »

Zero-Based Budget

Zero-based budget is a method of budgeting in which all expenses must be justified for each new period. The budget starts at a zero base, and every function within the organization is being analyzed for its needs and costs. Therefore, budgets are built based on what is needed for the upcoming period, regardless of the size of the budget.

Taxes

A compulsory contribution to state revenue. It is mandatory to pay taxes, and they are levied by the government on workers' income and business profits or added to the cost of goods, services, or transactions. Taxes raise money for government services that are later used for the well-being of society.

Fiscal Year

October through September next year. February president proposes. Budget committee... Continue reading "Understanding Budgeting, Taxes, and Statistical Concepts" »