Financial and economic literacy for managers PDF

Running head: FINANCIAL AND ECONOMIC LITERACY FOR MANAGERS
Financial and Economic Literacy for Managers
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FINANCIAL AND ECONOMIC LITERACY FOR MANAGERS1
Table of Contents
Assignment Question 1....................................................................................................................2
A) Environmental Factors that apply in the External and Internal Spheres of a Firm...........2
B) Performance of the Walmart Company............................................................................4
C) Demand and Supply..........................................................................................................6
Assignment Question 2....................................................................................................................7
Assignment Question 3....................................................................................................................8
A) Interpretation of Financial Ratios of Zenobia Plc.............................................................8
B) Present Value....................................................................................................................9
C) Net Present Value..............................................................................................................9
Reference...................................................................................................................................10
Appendix........................................................................................................................................13

FINANCIAL AND ECONOMIC LITERACY FOR MANAGERS2
Assignment Question 1
A) Environmental Factors that apply in the External and Internal Spheres of a
Firm.
The business economic theory uses the quantitative methods and the relevant economic theories
for evaluating the various key factors that contributes in the creating a diversity in the
organizational structures. The key organizational structure in which the relationship of the firm
with the labor, product market and capital. Rising competition and within the era of the
globalization it is key for the management of the company to take managerial decision that will
make the business prospect of the company viable in the future (Ward and Begg 2016). The
business economics or the managerial economics deals with evaluating the various kinds of
business factors and tools that are used by the management of the company for the decision-
making. The key theory behind the business economic theory is the decision-making analysis
done by the management, which involves evaluating various kinds of choices and selecting the
possible outcome from the event (Stiglitz 2017).
Various internal and external factors directly influence the operations of the business
firm. The key factors, which play a significant role in the operations of the company, which
influence the workings of the company, should be analyzed and evaluated so that the company
evaluates and forecast for the same. The internal factors evaluated are the cost and production,
profit management and the capital management done by the company. The external factors
recognized were the Demand Analysis and the pricing decisions and the relevant policies and
practices.

FINANCIAL AND ECONOMIC LITERACY FOR MANAGERS3
External factors such as the demand analysis and the forecasting is dependent on the
general business condition and the macro economic conditions under which the company
operates. The forecast for the demand and the productivity level will help guide the company
about the expected demand from the market and the relevant scenario under which the business
conditions operates. The forecast will guide the company for making business strategies and
accordingly decide the work plan for the enlarging the profits of the company. The pricing
decisions and the relevant policies of the company with respect to the same is the other key
relevant external factor for the company. The pricing of the product is dependent on the business
conditions under which the company operates and other micro and macro-economic conditions
like the inflation rate, GDP growth rate and the demand and supply forces in the market are the
key factors that needs to be evaluated and analyzed. Internal factors such as the profit
management strategy followed by the company is the key factor, which affects the internal
business environment band, determines the long-term prospect for the company (Yellen 2017).
The operating margin trend and the relevancy strategy followed for the maintenance of the same
is the key approach, which should improve the prospect of the company in the long term. Cost
and the production analysis for the company is the other relevant key internal factor, which
might affect and influence the operations of the business. The Capital Management done by the
company in terms of the source of borrowing done by the company may play a significant role in
the company (Naudé 2014). The management of the company should consider an optimum level
of equity and debt for the company depending on the business conditions and the risks in the
company. The capital expenditure and investments determines the allocation capability of the
company and the efficient utilization of the capital of the company.