Main Determinants of Business Performance and Economic Factors Affecting Competitive Environment

Business Finance and
Economics

Table of Contents
Question 1........................................................................................................................................3
Main determinants of business performance and distinguish whether these are micro- or
macroeconomic. Discuss the economic factors that affect the competitive environment of an
organisation..................................................................................................................................3
Question 2........................................................................................................................................4
Role of accounting within an organisation and highlight its importance with respect to both
reporting and decision-making....................................................................................................4
Question 3........................................................................................................................................5
Distinguish between the major financial statements and explain the layout and terms used
within each Statement..................................................................................................................5
Question 4........................................................................................................................................6
Calculate and interpret the following ratios for XYZ Plc............................................................6
Question 5........................................................................................................................................8
Management accounting and discuss how this is important for planning, control and decision-
making within an organisation.....................................................................................................8
REFERENCES..............................................................................................................................10

Question 1
Main determinants of business performance and distinguish whether these are micro- or
macroeconomic. Discuss the economic factors that affect the competitive environment of
an organisation.
Micro Environment Factors
 Suppliers: As suppliers have authority, they will influence the company's growth. When
the manufacturer is the sole or main manufacturer with their goods; the customer is not
critical to the supplier's operation; and the supplier's inventory is an integral part of the
customer's final piece and/or business, that distributor wields control (Cepiku, 2020).
 Resellers: Whether a company's product is sold by third-party resellers or industry
mediators such as supermarkets, wholesalers, and so on, certain resellers have an effect
on the company's marketing performance. For example, when a retail vendor has a good
reputation, that reputation may be used to advertise the product.
 Customers: Whether they sell certain goods and services towards customers can be
heavily influenced by who the consumers are (B2B or B2C, local or foreign, etc.)
regarding their motivations for purchasing the product.
 The population at large: The Company has a responsibility to the general public. Every
decision taken by the organisation must be seen in the eyes of most people and how much
it affects them. The government has every right to assist them in fulfilling certain
objectives, as well as to discourage them from doing so.
Macro Environment Factors
 Popular economic changes, such as country/region, age, race, educational attainment,
household behaviour, unique influences, and developments, have an influence on
different consumer segments.
 Economic factors: Both the organization's efficiency and the customer's judgement
process are affected by the economic climate (Dabbicco and Mattei, 2021).
 Natural/physical forces: It is essential to consider the Earth's regeneration of
environmental assets like trees, agricultural goods, aquatic products, and so on. Natural
non-renewable commodities such as oil, gas, minerals, and others can also have a bearing
on the organization's production.