RECAPE LAST LECTURE ECONOMIC ENVIRONMENT FOR BUSINESS.

RECAPE LAST LECTURE

ECONOMIC ENVIRONMENT FOR BUSINESS


• MICROECONOMICS POLICIES?

• MACROECONOMICS ?

• HOW MACROECONOMICS POLICIES EFFECT ON ORGANISATION’S ID, FD AND DD?


• ID: ECONOMIC POLICY

• FD: MONETARY POLICY

• DD: FISCAL POLICY

POSITIONS OF FINANCE DEPARTMENT

TITLES OR POSITIONS OF THE MANAGEMENT OF THE FINANCE DEPARTMENT IN THE ORGANISATION

• IMPORTANCE?• WHY YOU SHOULD KNOW THIS?


• INFORMWHAT IS FINANCIAL INFORMATION?

• WHAT IS NON- FINANCIAL ATION?


1. VICE PRESIDENT FINANCE / FINANCE DIRECTOR2. CHIEF FINANCIAL OFFICER - CFO3. FINANCIAL CONTROLLER / FINANCE MANAGER4. TREASURER5. FINANCIAL ACCOUNTANT/ MANAGEMENT

ACCOUNTANT6. FINANCIAL ANALYST7. BUSINESS ANALYST


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


• ACCOUNTS CLARK / DATA ENTRY OFFICER?

• ACCOUNTS ASSISTANT / FINANCE ASSISTANT


• HEAD / SUPERVISOR OF ACCOUNTS RECEIVEABLE?

• HEAD / SUPERVISOR OF ACCOUNTS RECEIVABLE?


1. FINANCIAL ANALYST?

2. BUSINESS ANALYST?


1. FINANCIAL ACCOUNTANT?

2. MANAGEMENT ACCOUNTANT?

3. TREASURER?


1. VICE PRESIDENT FINANCE / FINANCE DIRECTOR?

2. CHIEF FINANCIAL OFFICER – CFO?

3. FINANCIAL CONTROLLER / FINANCE MANAGER?

FINANCIAL SECURITIES AN MARKETS

• WHAT IS FINANCIAL SECURITY MEAN?


• A FINANCIAL SECURITY IS A LEGAL INSTRUMENT THAT REPRESENTS EITHER AN OWNERSHIP OR A CREDITOR CLAIM ON A COMPANY


• TWO BASIC KIND OF SECURITIES ARE OF CONCERN TO THE FINANCIAL MANAGER

• DEBT SECURITY

• EQUITY SECURITY


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


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.


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


IN THE USA, THERE ARE THREE BASIC FORMS OF BUSINESS ORGANISATION

1. THE SOLE PROPRIETORSHIP2. THE PARTNERSHIP3. THE CORPORATION


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


SOLE PROPRIETORSHIP

• IT IS THE EASIEST BUSINESS FORM TO ESTABLISH

• IT IS THE MOST COMMON FORM OF BUSINESS ORGANISATION


PARTNERSHIP

• A PARTNERSHIP IS A BUSINESS ACTIVITY CARRIED ON BY TWO OR MORE PERSONS WHO INTEND TO SHARE THE RESULTING PROFITS OR LOSSES


TWO TYPES OF PARTNERSHIP SHOULD BE NOTED:

1. GENERAL PARTNERSHIP

2. LIMITED PARTNERSHIP


GENERAL PARTNERSHIP

• UNDER THIS AGREEMENT, ALL PARTNERS ARE LIABLE FOR THE DEBTS OF THE BUSINESS.

• THIS IS THE MOST COMMON FORM OF PARTNERSHIP AGREEMENT


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.


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,


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.


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

RECAPE LAST LECTURE ECONOMIC ENVIRONMENT FOR BUSINESS.

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