Financial Management Fundamentals
Financial Management I
1. What is a Company?
A business is a system that unites three fundamental factors: production, financing, and marketing. These factors work together to achieve the company’s objectives. A fourth factor, the company’s board, organizes, plans, manages, and controls these objectives.
2. Fundamental Factors of a Company
Production: Determines what, how, and how much is produced.
Financing: Sources the funds required for production.
Marketing: Manages the sale and distribution of
Read MoreManaging Interest Rate Risk: Strategies for Banks
Managing Interest Rate Risk
There are two primary ways to manage interest rate risk:
1. Interest Sensitive Gap Management
- Commercial banks focus solely on interest rates (expenses & income).
- It is the most popular interest rate management strategy.
- This technique focuses on protecting or maximizing a financial institution’s net interest margin (spread), which is the difference between interest income and interest expense.
- The bank’s assets and liabilities are divided into interest rate sensitive and
Market Dynamics: A Comprehensive Analysis of Structures and Macroeconomics
Understanding Market Structures
Market: A mechanism facilitating interaction between buyers and sellers, where goods are exchanged at a set price.
Key Elements of a Market
- Economic Operators: Suppliers, consumers, businesses, and individuals.
- Goods or Services: The items being exchanged.
- Exchange Price: The agreed-upon value for the transaction.
Market Equilibrium
Equilibrium occurs when the desires of consumers and suppliers align, reflected in the intersection of the demand and supply curves. Imbalances
Read MoreSpain’s Socio-Economic Integration Within the European Union
The creation of wealth has allowed Spain to increase social stability and has provided services to companies. Furthermore, European companies have established themselves in Spain, viewing it as an optimal market for their products.
The Use of European Funds
From an economic perspective, the European Regional Development Fund (ERDF) has been crucial. From a social and cultural perspective, the European Social Fund (ESF) is dedicated to providing scholarships for young Erasmus students and promoting
Read MoreConsumer Behavior and Sales Force Optimization
Types of Consumer Behavior
Buyer Types
- Impulse Buying: Unplanned purchases.
- Value/Use-Based Buying: Rational purchases based on needs and benefits.
- Curiosity-Driven Buying: Purchases motivated by a desire for change or novelty.
- Fashion-Driven Buying: Purchases influenced by current trends, regardless of value or utility.
- Habitual Buying: Regular purchases driven by brand loyalty or routine.
- Pleasure-Driven Buying: Purchases made for enjoyment and satisfaction.
- Emotional Buying: Purchases influenced by feelings
PR vs. Advertising: Key Differences, Ivy Lee’s Edicts & PR Models
What are four key differences between Public Relations (PR) and Advertising?
- Media: Advertising relies on mass media, while public relations utilizes owned media.
- Audience: Advertising primarily addresses external audiences, whereas public relations targets both external and internal audiences.
- Scope: Advertising is a specialized communications function; public relations is broader in scope.
- Objective: Advertising sells an organization’s goods/services, while public relations creates a positive environment