Final Exam Study Guide

Final Exam Study Guide - Final Exam Study Guide GB 112...

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Final Exam Study Guide GB 112 Study Guide Be able to list and explain the objectives of a business: - Profitability : Need to be able to create a profit to support employees, costs, etc. -Maximize shareholders’ wealth -dividends plus capital gain=total return -dividend percentage= dividend payment / original stock price -capital gain percentage= (current price-original price)/ original price -Social Responsibility : This refers to the overall way in which a business attempts to balance its commitments to relevant groups. A full commitment to social responsibility requires a carefully organized and managed program. 1. Social responsibility must be considered a factor in strategic planning. 2. A committee of top managers must develop a plan detailing the level of management support. 3. The organization must conduct occasional audits , systematic analyses of its success in using funds earmarked for its social responsibility. -Ethical behavior : is based on the beliefs of what is right and what is wrong- based on an individual’s values and morals. Be able to list and explain the major functional areas of a business : -Accounting -production -Marketing -information technology -Sales -Human Resources -Customer Service Understand the term “stakeholder” and be able to list the major stakeholders of a business -Stakeholders are any entity that a company has a responsibility to: -shareholders -investors -customers -lenders -suppliers -community members -employees -government -These groups and individuals who are directly affected by the practices of an organization are the organizational stakeholders. Most companies that strive to be responsible to their stakeholders. Be able to explain the different types of business organizations and to discuss the advantages and disadvantages of each Sole Proprietorship : These are owned and operated by one person. -Advantages: Low start up costs, tax benefits, independent, owner has all control -Disadvantages: Unlimited liability- a sole proprietor is personally liable for all debts incurred by the business. Proprietorship dies when the owner dies, and owners find it hard to borrow money because banks see them as risky business. General Partnership : A sole proprietorship multiplied by the number of partner-owners -Advantages: Businesses grow by adding new talent and money, and owners find it easier to get loans
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-Disadvantages: Unlimited liability- each partner may be liable for all business debts. There is also a lack of continuity. Because of these fallbacks, general partnerships are the least popular. -Alternatives: A limited partnership allows for limited partners who cannot take active roles in operations but invest money and are liable for debts only to the extent of their investments. Master limited partnership
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Final Exam Study Guide - Final Exam Study Guide GB 112...

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