International Business: Key Concepts and Considerations
Foreign Portfolio Investment
Foreign Portfolio Investment refers to investment in businesses located outside Canada through stocks, bonds, and other financial instruments. It allows Canadians to spread out their investments, which is less risky than investing in just one area. It also provides greater choice and opportunity.
Importing
Importing is bringing products or services into a country for use by another business or for resale. The majority of Canada’s imports come from the US.
Global Sourcing
Global
Read MoreDemand, Supply, and Elasticity in Economics
The demand curve
The law of demand establishes thatwhen price goes up there is a decrease in quantity demanded, and when price goes down, there is an increase in quantity demanded. We illustrate this by movements up and down the demand curve.
Shifts in the demand curve
-Financial ability to pay for the product
An individual’s income, or the purchasing power of their income after taxation
Availability of loans/credit and the interest rate that must be paid on loans or credit card
Read MoreLabor Force, Productivity, and Aggregate Supply & Demand
The Labor Force
The labor force in an economy is defined as the total number of workers who are available for work. Basically, all males and females, normally 15-16 years and over, who can contribute to the production of goods and services. As well as actually employed people, it also includes those unemployed, as these people are available for work.
The size of the labor force depends on factors such as:
- The total size of the population of working age
- The number of people who remain in full-time education
Cash Flow Forecasting for Business Success
Forecasting Cash Flow
Cash Flow Definition
- Cash flow: The sum of cash payments to a business (inflows) less the sum of cash payments (outflows).
- Liquidation: When a firm ceases trading and its assets are sold for cash to pay suppliers and other creditors.
- Insolvent: When a business cannot meet its short-term debts.
Importance of Cash Flow Planning for Entrepreneurs
Cash flow planning is vital for entrepreneurs because:
- New business start-ups are often offered much less time to pay suppliers than larger,
Key Business Ratios and Financial Analysis Techniques
Accounting Ratios
Ratio Analysis looks at the pairing of financial data in order to get a picture of the performance of the organization.
- Ratios allow a business to identify aspects of their performance to help decision-making.
- Ratio Analysis allows you to compare performance between departments and over time.
- Five different types of ratios can be used to measure:
- Profitability – how profitable the firm is.
- Liquidity – the business’s ability to pay.
- Asset Efficiency Ratios – Firms need to use their assets
Economic Theories: Classical, Keynesian, Monetarist, and More
Historical Evolution of Economic Thought
Classical Economics (Ricardo, Mill, and Say)
Classical economists believed in an “invisible hand” without state intervention in the market. They posited that market forces (supply and demand) would maximize the production of goods and services and prevent unemployment.
Keynesian Economics
Keynes advocated for state intervention in the economy. He developed a theoretical framework to explain the Great Depression, arguing that waves of pessimism could negatively
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