Exam 1 Comm Review Sheet

Exam 1 Comm Review Sheet - How Business Works Review Sheet...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
How Business Works Review Sheet: Sessions 1-8 Course Introduction The objective of business: To create value The determinants of value: The quantity, timing and opportunity cost/ uncertainty (including risk) associated with the expected future benefits Valuation : the value of something is the present value of the future benefits to be received by its owner The different forms of capital: create value Human capital (people): labor, brings in the costumers, if you want a raise, then boss says no so you quit, you aren’t valuable enough to the company, if you don’t want the job someone else will Real Capital (assets): tangible (product/goods) vs. intangible capital (trademarks, patents, goodwill, brand) Financial Capital (Debt and Equity): money that people invest. You create value by having the financial capital be less than the returns/ benefits. Without financial capital we don’t have any money for Real or Human capital. Business Environment Creating Wealth: Land - real capital Labor - human capital Capital - financial capital Knowledge - intellectual Capital (imbedded in Real & Human Capital) Revenue: the total amount of money a business takes in during a given period by selling goods and services. Expenses: Profits: the amount of money a business earns above and beyond what it spends for salaries and other expenses Losses: when a business’s expenses are more than its revenues The concept of risk: the chance an entrepreneur takes of losing time and money on a business that may not prove profitable, Uncertainty about the future quantity and timings of benefits The relationship of risk and return: investors require a higher return for a higher risk (to compensate). When exposed to more risk their 2 choices are price or hedge the risk. The forces that frame the business environment: Global business - international competition and free trade, improvements in transportation and communication, war & terrorism, global changes Economic & Legal -minimum taxes and regulations, freedom of ownership, contract laws, tradable currency, elimination/ minimization of corruption Social - diversity/ multicultural, aging/ graying of America, two income families, single-parent families Competitive - Customer expectations, restructure/ empower Technology - productivity, E-commerce, Responsiveness to Costumer
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Current trends in business: 1) agricultural/ manufacturing 2) service industries 3) future? Rise of information & communication technology, globalization, doing business 24/7, educated consumers, aging workforce, increasing diversity, pyramid vs. web, self directed empowered employees, communication skills, decision-making skills, teamwork, leadership, continual learning How Economics Affects Business Difference between macroeconomics and microeconomics: Behavior of people and organizations in particular markets (individual) vs. nation’s economy as a whole (summation of microeconomics) Four “what’s” of an economic system What is produced?
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern