ORIE ch 1 outline - ORIE 350 CH 1 Outline Ch 1-...

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ORIE 350 CH 1 Outline Ch 1- Introduction to Business Activities & Overview of Financial Statements & the Reporting Process 1. 4 Principle Activities of Business Firms 1. Establishing Corporate Goals & Strategies 1. Goals = state targets toward which the firm directs its energies 2. Strategies = state means for achieving these coals 3. Management sets goals for… 1. the firm as a whole 2. each business unit or product 1. product differentiation strategy = finding a niche for its products; obtaining favorable selling prices for its products relative to competitors to pass along cost increases to customers 2. low cost leadership strategy = emphasize cost control and strive to be the low-cost producer in the industry 2. Obtaining Financing 1. Financing activities = obtaining funds from 2 principal sources; owners & creditors 1. Owners 1. Provide funds to a firm & receive some evidence of ownership 2. Ex: shareholders/stockholders of a corporation receive dividends (distributions) 2. Creditors 1. Provide funds and require that firm repay funds w/ interesting in specific amounts at specific dates 2. Ex: Long term creditors, banks, suppliers of raw materials or merchandise, employees 3. Making Investments 1. Land, buildings & equipment 2. Patents license & other contractual rights 3. Common shares or bonds of other firms 4. Inventories 5. Accounts receivable from customers 6. cash 4. Conducting Operations 1. Purchasing 2. Producing 3. Marketing 4. Administration 2. Principal Financial Statements 1. Annual report to shareholders 1. MD&A (Management Discussion & Analysis) gives reasons for changes in profitability & risk during the past year 2. Final section of the annual report includes balance sheet; income statement; statement of cash flows; notes to financial statements including various supporting schedules & opinion of the independent CPA 2.
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This note was uploaded on 04/05/2009 for the course ORIE 350 taught by Professor Callister during the Summer '08 term at Cornell University (Engineering School).

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ORIE ch 1 outline - ORIE 350 CH 1 Outline Ch 1-...

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