Financial Management and Corporate Finance
What is Financial Management?
It achieves the maximization of our income.
What Constitutes Financial Management?
- Analysis of Financial Opportunities: Transforming savings into efficient investments, requiring attention to financial market offerings, seeking minimal risk with maximum utility.
- Managing Money: Adequately accounting for income and expenditure, and properly analyzing ways to keep track of money, are options to raise funds.
- Investments and Assets: Each purchase or investment should mean growth
Macroeconomics: Key Concepts and Indicators
Macroeconomics studies the performance of the entire economy. It deals with the economy as a whole, while microeconomics studies the behavior of individual markets, prices, and products.
Key Macroeconomic Variables
- Gross Domestic Product (GDP): Measures total production.
- Consumer Price Index (CPI): Indicates the evolution of prices and inflation.
- Activity, Unemployment, and Occupancy Rates: Indicate a country’s employment situation.
Economic Indicators
- Controlled inflation allows families to manage their
Understanding Price Formation: Supply and Demand Dynamics
Training Price
Price is the amount of money you must pay to purchase a particular good. In market economies, prices are formed through the interaction of supply and demand, assuming perfect competition. The requirements for perfect competition are:
- A large number of buyers and sellers (no monopoly).
- No single buyer or seller can influence prices independently.
- Buyers and sellers do not act in coalitions to impose prices.
- No price fixing by authorities.
- Full information about traded goods is available.
Forecasting Methods and Techniques for Businesses
Forecasting
Forecasting is predicting or estimating future events.
Forecasts are made on many different variables. Operations and supply chain managers need forecasts to plan output levels, purchases of services and materials, workforce and output schedules, inventories, and long-term capacities.
Demand Patterns
The repeated observations of demand for a service or product in their order of occurrence form a pattern called a time series.
There are five basic patterns of most demand time series:
- Horizontal
- Trend
- Seasonal
- Cyclical
- Random
Key
Read MoreTrade Barriers and Protectionism: Impact on Global Economy
Barriers to Free Trade and Protectionism
Protectionism is one of the most controversial questions in the productive system, from the remotest origins of international trade, for both politicians, economists, and businessmen.
Generally, the mercantilism of the 16th, 17th, and mid-18th centuries was a great advocate of a favorable trade balance, meaning exports exceeding imports. It was maintained that if one country had a surplus, another country must necessarily have a deficit. However, we can find
Read MoreThe Great Depression: Causes and Recovery Attempts
The Great Depression
Causes of the Depression
- Overproduction (Industrial): Purchasing power was insufficient to absorb increased production before 1929.
- Liquidity Crisis: A lack of monetary resources to address the payment of debts, causing a cascade of defaults that resulted in the closure of industries and banks. The desire to sell goods at any price forced down prices (deflation).
- Fall of Consumption: Caused by unemployment, reduced purchasing power, fear of dismissal, falling agricultural prices,