Session+28+-+Last+Class+Summary+2010

Session+28+-+Last+Class+Summary+2010 - * * * MAKING...

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Unformatted text preview: * * * MAKING BUSINESS WORK SESSION 28 * * * SESSION 28 GOALS AND OBJECTIVES Course wrap up & summary Lecture Materials: Everything we've looked at. 12-2 * * * SO LET'S TALK ABOUT PREVIOUS SESSIONS AND MATERIAL! ANY QUESTIONS? 12-3 * * * LET'S TALK CURRENT EVENTS (WSJ) 12-4 * * * LET'S FINISH UP THE MATERIL FROM OUR PREVIOUS SESSION * * * Now for Our New Topic(s) P-6 * * * LET'S TALK ABOUT THE FINAL EXAM * * * LET'S TALK ABOUT THE COURSE EVALUATION * * * LET'S TALK ABOUT COURSE GRADE * * * LET'S TALK COURSE GOALS & EXPECTATIONS! P-10 * * * Course Goals Literacy about business and managing organizations Comfort with the business world of today P-11 * * * LET'S TALK CURRENT EVENTS (WSJ) 12-12 * * * QUESTION? What's the objective of business? P-13 * * * Answer To Create Value! P-14 * * * The Elements of Value 1.The Quantity of the Expected Future Benefits 2.The Timing of the Expected Future Benefits 3.The Opportunity Cost Associated with the Expected Future Benefits (Including Risk) P-15 * * * Valuation The value of something is the present value of the future benefits to be received by its owner. * * * VALUE E ( Benefits j , t ) n j =1 Value = t (1 + R ) t =1 m [ * * * REWARD = F(RISK) P-18 * * * VALUE R = Rf + RISK PREMIUM Where: R = Required Rate of Return Rf = Risk Free Rate * * * Risk and Return Go Hand-inHand Risk is the uncertainty of something happening, or the possibility of a less than desirable outcome. Other things being equal, investors require a higher return for a higher risk. Required Return Risk If firms or individuals are exposed to more risk, they have two basic choices: Price the risk Hedge the risk P-20 * * * Questions? 1. Whose Value? 2.Who Counts? P-21 * * * Whose Value: So Many Users! Owners Lenders Employees Customers Regulators Society P-22 * * * QUESTION: How is value created? 1. Quantity of Expected Benefits 2. Timing of Expected Benefits 3. Uncertainty of Expected Benefits (Risk) * * * ANSWER With: Human Capital (People) Real Capital (Assets) Financial Capital (Debt and Equity) P-24 * * * Financial Statement Overview Balance Sheet Income Statement Cash Flow Source Use Assets Liabilities Revenue Operations Equity Expenses Investment Other Financing Total Total Net Income * * * IF DONE RIGHT: 1+1=3 (The value of the outputs are greater than the value of the inputs.) It's called creating value! * * * SO HOW DOES A BUSINESS DO IT? IT'S ABOUT COMPETING & CREATING A STRATEGIC COMPETITIVE ADVANTAGE! C-27 * * * QUESTIONS? P-28 * * * Now Some Personal Thoughts From a Coach and Former Player 17-29 * * * So What In The World Should A Hoo Do? * * * BE HAPPY! Shakespeare said it: "Be true to thine own self!" C-31 * * * YOUR CAREER Challenge: Find and do what you are good at, and what you like to do! C-32 * * * Remember Risk and Return Go Hand-in-Hand Risk is the uncertainty of something happening, or the possibility of a less than desirable outcome. Other things being equal, investors require a higher return for a higher risk. Required Return Risk If firms or individuals are exposed to more risk, they have two basic choices: Price the risk Hedge the risk P-33 * * * QUESTIONS? 12-34 * * * SESSION 28 GOALS AND OBJECTIVES Course wrap up & summary Lecture Materials: Everything we've looked at. 12-35 * * * THANKS, AND HAVE A GREAT HOLIDAY! Mr. Kemp ...
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This note was uploaded on 02/23/2012 for the course COMM 100 taught by Professor Kahn during the Fall '10 term at Virginia Tech.

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