Financial Balance and Solvency Analysis for Businesses
Financial Analysis of Balance
Financial Balance
Financial balance refers to finding a suitable proportionality between the masses reflecting financial sources (net and liabilities), internally and in comparison to the investments made by the company.
You should consider:
- A relevant proportionality between personal and external resources, which enables the satisfaction of interest and principal of the debts contracted as they produce their maturities.
- Adequate resources other than proportionality between
Key Economic Concepts: Demand, Production, and Monetary Policy
Demand and its Determinants
D = Pa, Y, Pb, GO = Pa, r, z, H
Real normal demand increases with increasing income.
- Luxury goods: Demand increases with increasing income.
- Necessities: Demand decreases with increasing income.
Substitute Goods: Demand increases with an increase in the price of a connected good.
Complementary Goods: The quantity demanded decreases with an increase in the price of a connected good.
Production Possibilities Frontier (PPF)
The PPF illustrates three concepts:
- Resource Scarcity: The
Business Financing: Internal and External Sources
Self-Financing
Self-financing consists of funds generated by the company and intended to expand or continue its activities. During a fiscal year, the company generates a certain amount of resources that may have two origins:
- The result of the exercise: If the firm is profitable, it can assign a portion of the profits to investments in the company.
- The repayments made: In each fiscal year, the company estimates the loss of value suffered by the plant and records it as an expense that is not an immediate
Sales Department Functions and Market Research Techniques
Sales Department Functions and Market Dynamics
The sales department carries out the activities necessary to deliver consumer goods or services produced by the company to the consumer. Its primary functions include market analysis, marketing, and sales. The sales department coordinates with other departments, including:
- Production department
- Finance department
- Human resources department
Understanding the Market
The market is where the buying and selling of a product occur, conducted between two economic
Read MoreProductivity and Competitiveness in the Canary Islands
Productivity and the Canary Islands’ Economy
Understanding Productivity and Efficiency
Productivity (P) is a key factor in production. In the market, it translates to competitiveness. Another related concept is efficiency, which differs from productivity. Efficiency can be measured both in production and in the market. There are two main types of efficiency:
- Technical Efficiency: This involves maximizing the quantity produced (Outputs) with the minimum amount of factors (Inputs) used in the production
Inflation Impact, Financial Tools, Eurozone Policy, Economic Growth
Effects of Inflation
Loss of Buying Power: When inflation occurs, the prices paid by economic agents increase. Consequently, the purchasing power of money decreases.
Uncertainty: Prices contain valuable information for economic agents to make decisions. Inflation alters prices, destroying their informative capacity and provoking uncertainty.
Loss of Competitiveness of Domestic Production Overseas: Inflation will decrease the volume of exports of goods and services.
Unemployment: Two effects of inflation
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