recape last lecture economic environment for business
TRANSCRIPT
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RECAPE LAST LECTURE
ECONOMIC ENVIRONMENT FOR BUSINESS
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ECONOMIC ENVIRONMENT FOR BUSINESS
• MICROECONOMICS POLICIES?
• MACROECONOMICS ?
• HOW MACROECONOMICS POLICIES EFFECT ON ORGANISATION’S ID, FD AND DD?
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ECONOMIC ENVIRONMENT FOR BUSINESS
• ID: ECONOMIC POLICY
• FD: MONETARY POLICY
• DD: FISCAL POLICY
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POSITIONS OF FINANCE DEPARTMENT
TITLES OR POSITIONS OF THE MANAGEMENT OF THE FINANCE DEPARTMENT IN THE ORGANISATION
• IMPORTANCE?• WHY YOU SHOULD KNOW THIS?
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POSITIONS OF FINANCE DEPARTMENT
• INFORMWHAT IS FINANCIAL INFORMATION?
• WHAT IS NON- FINANCIAL ATION?
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POSITIONS OF FINANCE DEPARTMENT
1. VICE PRESIDENT FINANCE / FINANCE DIRECTOR2. CHIEF FINANCIAL OFFICER - CFO3. FINANCIAL CONTROLLER / FINANCE MANAGER4. TREASURER5. FINANCIAL ACCOUNTANT/ MANAGEMENT
ACCOUNTANT6. FINANCIAL ANALYST7. BUSINESS ANALYST
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POSITIONS OF FINANCE DEPARTMENT
8. HEAD OF CREDIT CONTROL SECTION OR SUPERVISOR OF ACCOUNTS PAYABLE
9. HEAD OF ACCOUNTS RECEIVEABLE / SUPERVISOR OF ACCOUNTS RECEIVABLE
10. ACCOUNTS ASSISTANT / FINANCE ASSISTANT
11. ACCOUNTS CLARK / DATA ENTRY
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POSITIONS OF FINANCE DEPARTMENT
• ACCOUNTS CLARK / DATA ENTRY OFFICER?
• ACCOUNTS ASSISTANT / FINANCE ASSISTANT
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POSITIONS OF FINANCE DEPARTMENT
• HEAD / SUPERVISOR OF ACCOUNTS RECEIVEABLE?
• HEAD / SUPERVISOR OF ACCOUNTS RECEIVABLE?
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POSITIONS OF FINANCE DEPARTMENT
1. FINANCIAL ANALYST?
2. BUSINESS ANALYST?
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POSITIONS OF FINANCE DEPARTMENT
1. FINANCIAL ACCOUNTANT?
2. MANAGEMENT ACCOUNTANT?
3. TREASURER?
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POSITIONS OF FINANCE DEPARTMENT
1. VICE PRESIDENT FINANCE / FINANCE DIRECTOR?
2. CHIEF FINANCIAL OFFICER – CFO?
3. FINANCIAL CONTROLLER / FINANCE MANAGER?
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FINANCIAL SECURITIES AN MARKETS
• WHAT IS FINANCIAL SECURITY MEAN?
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FINANCIAL SECURITIES AN MARKETS
• A FINANCIAL SECURITY IS A LEGAL INSTRUMENT THAT REPRESENTS EITHER AN OWNERSHIP OR A CREDITOR CLAIM ON A COMPANY
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FINANCIAL SECURITIES AN MARKETS
• TWO BASIC KIND OF SECURITIES ARE OF CONCERN TO THE FINANCIAL MANAGER
• DEBT SECURITY
• EQUITY SECURITY
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FINANCIAL SECURITIES AN MARKETS
WHAT IS DEBT SECURITY?
• A DEBT SECURITY ARISES WHEN A FIRM BORROWS MONEY.
• THE FIRM INCURS A LIABILITY TO REPAY THE AMOUNT OF MONEY BORROWED AT SOME FUTURE MATURITY DATE
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FINANCIAL SECURITIES AN MARKETS
WHAT IS EQUITY SECURITY?
• AN EQUITY SECURITY REPRESENTS OWNERSHIP IN THE FIRM.
• PEOPLE PURCHASE EQUITY SECURITIES ARE ENTITLED TO RIGHTS AND CONDITONS THAT ARE DIFFERENT FROM THOSE OF THE FIRM’S CREDITORS.
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FINANCIAL SECURITIES AN MARKETS
FORMS OF BUSINESS ORGANISATION
THE KINDS OF SECURITIES USED IN A BUSINESS DEBPEND TO A LARGE DEGREE ON THE FORMS OF ORGANISATION SELECTED BY THE OWNERS
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FINANCIAL SECURITIES AN MARKETS
IN THE USA, THERE ARE THREE BASIC FORMS OF BUSINESS ORGANISATION
1. THE SOLE PROPRIETORSHIP2. THE PARTNERSHIP3. THE CORPORATION
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FINANCIAL SECURITIES AN MARKETS
SOLE PROPRIETORSHIP
• A FIRM OWNED BY A SINGLE PERSONS WHO HOLDS THE OWNERSHIP RIGHTS TO ALL THE ASSETS AND WHO IS RESPONSIBLE FOR ALL THE FIRM’S DEBTS
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FINANCIAL SECURITIES AN MARKETS
SOLE PROPRIETORSHIP
• IT IS THE EASIEST BUSINESS FORM TO ESTABLISH
• IT IS THE MOST COMMON FORM OF BUSINESS ORGANISATION
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FINANCIAL SECURITIES AN MARKETS
PARTNERSHIP
• A PARTNERSHIP IS A BUSINESS ACTIVITY CARRIED ON BY TWO OR MORE PERSONS WHO INTEND TO SHARE THE RESULTING PROFITS OR LOSSES
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FINANCIAL SECURITIES AN MARKETS
TWO TYPES OF PARTNERSHIP SHOULD BE NOTED:
1. GENERAL PARTNERSHIP
2. LIMITED PARTNERSHIP
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FINANCIAL SECURITIES AN MARKETS
GENERAL PARTNERSHIP
• UNDER THIS AGREEMENT, ALL PARTNERS ARE LIABLE FOR THE DEBTS OF THE BUSINESS.
• THIS IS THE MOST COMMON FORM OF PARTNERSHIP AGREEMENT
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FINANCIAL SECURITIES AN MARKETS
LIMITED PARTNERSHIP
• UNDER THIS AGREEMENT, A PARTNERSHIP HAS ONE OR MORE GENERAL PARTNERS. OTHER INDIVIDUALS MAY BE DESIGNATED A LIMITED PARTNERS, WHOSE LIABILITY IS LIMITED TO THE AMOUNT STIPULATED IN THE AGREEMENT.
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FINANCIAL SECURITIES AN MARKETS
LIMITED PARTNERSHIP
• THE LIMITED PARTNER NORMALLY DOES NOT SHARE IN THE MANAGEMENT OF THE BUSINESS BUT SHARE IN THE PROFITS TO THE EXTENT SPECIFIED IN THE AGREEMENT,
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FINANCIAL SECURITIES AN MARKETS
CORPORATION
• A CORPORATION IS A LEGAL ENTITY CREATED UNDER THE LAW AND EMPOWERED TO OWN ASSETS, TO INCUR LIABILITIES, AND TO ENGAGE IN BUSINESS OPERATIONS.
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FINANCIAL SECURITIES AN MARKETS
SEVERAL CHARACTERISTICS OF THE CORPORATION FORM ARE IMPORTANT:
1. IT IS FORMED UNDER THE LAWS OF A SPECFIC STATE / COUNTRY
2. IT EXISTS APART FROM ITS OWNERS3. IT IS ADVANTAGEOUS OF LARGE BUSINESS OPERATIONS4. LIMITED LIABILITY5. PERPETUAL EXISTENCE6. ESAE OF TRANFERRING OWNERSHIP