Working Capital Management: Funding and Financing
Policy Coverage in Working Capital Management
Funding requirements, from the point of view of temporality, have the following classification:
- Permanent: The resources at all times of operation of the business are needed. Their absence means significantly altering the nature of operations.
- Temporary: These are, by their nature, flexible and can be reduced according to seasonal needs or decisions taken by the administration.
The hedging policy establishes the criteria that permanent needs be funded long-
Read MoreEconomics: Key Concepts and Principles
Economics: Key Concepts
Economics: Social science that analyzes the most efficient way to use our scarce resources.
Scarcity: We have unlimited wants but limited resources.
Opportunity Cost: Most desirable alternative given up when you make a choice.
Factors of Production: Land, labor, capital.
Absolute Advantage: The producer that can produce the most output or requires the least amount of inputs (resources).
Comparative Advantage: The producer with the lowest opportunity cost.
Terms of Trade: Both countries
Read MoreEconomic Participants, Roles, Taxes, and Production Factors
Economic Participants
Everyone who produces, consumes, or distributes products participates in the economy. We can divide the participants into three types: households, businesses, and the government.
- A household is all of the people who live together. Normally, a household is the same as a family. However, someone who lives by himself is a household, and so are friends who live together.
- Businesses buy and sell goods and/or services.
- The government includes central, regional, and local government.
The
Read MoreAgricultural and Industrial Sector Evolution Analysis
Evolution of the Agricultural Sector
Until the end of the 1950s, this sector was defined as traditional agriculture with two basic features:
- A factor endowment characterized by labor-intensive and poorly paid work, and low capital-output.
- Balanced food supply and demand, with traditional agricultural products playing a key role.
With the economic growth of the 1960s, these traits altered:
- Migration from the countryside to the city implied a decrease in the agrarian population.
- Urbanization and a rising
Financial Ratio Analysis: Liquidity, Debt, and Asset Turnover
Liquidity Ratios
Liquidity ratios measure a company’s ability to meet its short-term obligations.
- Current Ratio: Current Assets / Current Liabilities. An ideal value is between 1.5 and 2. A ratio less than 1.5 may indicate problems with short-term payments and a higher probability of insolvency. A ratio greater than 2 may suggest that the company has idle current assets and low profitability.
- Quick Ratio (Acid-Test Ratio): (Realizable Assets + Available Assets) / Current Liabilities. An ideal value
Marketing Essentials: Target Markets & Strategies
Marketing Essentials: Target Markets and Strategies
Marketing is the crucial task that links a business to its customers by identifying and fulfilling their needs. It ensures the right product is available at the right price, in the right place, and at the right time.
Understanding Markets
Markets refer to the group of consumers who are interested in a product, have the resources to purchase it, and are legally permitted to do so.
A target market is the specific segment of the market that a business
Read More