FINANCIAL AND ECONOMIC LITERACY FOR MANAGERS TABLE OF CONTENTS
Added on 2019-12-28
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FINANCIAL AND ECONOMIC LITERACYFOR MANAGERS
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3Q. 1..................................................................................................................................................3(A) Analyze how globalization affects consumers and firms......................................................3(B). Movement along the demand curve and the shift in the demand curve...............................3(C). Compare and contrast economies of scale and diseconomies of scale.................................4(D). Analyze the determinants of supply. Give examples from a sector of your choice,example, retail, oil and gas..........................................................................................................5Q. 2..................................................................................................................................................6(A)Imperfect competition market structure.................................................................................6(B) Explain the barriers to entry for a monopoly firm.................................................................6(C) Analyze the environmental policies used by governments to address market failure...........7(D) Explain the circular flow of income......................................................................................7(e) Analyze the macroeconomic concept of unemployment. Use the data provided to plot UKunemployment over any 20-year period between 1980 and 2015...............................................8Q. 3..................................................................................................................................................8(A) Examine the four basic financial statements, including formats and purpose......................8(B) Analysis of five financial ratio..............................................................................................9(C) Four phases of management accounting.............................................................................10(D) Compare and contrast relevant and irrelevant cost.............................................................11Q 4.................................................................................................................................................11(A)Concept of risk and return....................................................................................................11(B) Concept of capital Structure................................................................................................11(C) Amortization Schedule........................................................................................................12(E) Calculation For choosing Project out of two: For getting best result among method 2method have been chosen as NPV & IRR.................................................................................12Conclusion.....................................................................................................................................14REFRENCES.................................................................................................................................15
INTRODUCTIONEconomy literacy is a very effective tool for the growth of the company, basic economyconcepts are applied to save, spend and share the money. Financial economy states that idea toearn the money and make it profitable for the firm. This report includes the globalization effecton consumers and firm and also the movement of demand curves. Moreover, it includes themarket structure competition and the circular flow of income as well. In addition to this, examinethe financial statements and the concept of capital structure or analyze the four phases ofmanagement accounting of capital structure or analyze the four phases of managementQ. 1.(A) Analyze how globalization affects consumers and firmsConcept of globalization: Globalization is concept of free trade across worldwide used byvarious government to boost their economy. It is economic trend that started in 20th century.South-east Asia followed free market system, trade barrier were removed and free trade allowedcompetition to spread around the world. Impact on consumers: Some consumers express concern about working condition ofoverseas work (Almenberg and Dreber, 2015). Fare trade movement is a result, fair tradeitems are produced by workers who receive fair and larger competition for goods thatproduce. The internet is one of the important boosting force of globalisation. Consumerscan bypass the local merchant and search the world to find product they desire.Impact on Firm: Globalisation has given a platform to trade in international market forlocal dealers and SME's. Major impact can be seen in Competition at world level,Exchange of technology, Knowledge and transfer of information etc.(B). Movement along the demand curve and the shift in the demand curveWhen quantity demand of commodity changes due to change in its price, keeping otherfactors constant it is known as change in quantity demand. It is expressed as movement alongwith same demand curve. There can be either a downward movement (expansion) in demand oran upward movement (contraction of demand) along the same demand curve.
There can be either a downward movement (expansion) in demand or an upward movement(contraction of demand) along the same demand curve (Babiarz and Robb, 2014). Movementalong the demand curve can be understood by below diagram 1. Expansion in demand is shown by downward movement from A to B. Quantity demand risesfrom OQ to OQ, due to fall in price from OP to OP1,2. Contraction in demand is shown by an upward movement from A to C. Quantity demandfalls from OQ to OQ2 due to rise in price from OP to OP2.(C). Compare and contrast economies of scale and diseconomies of scaleEconomies of scale are defined as the cost advantage that an organization can achieve byexpanding its production in long term. These are the advantages of large scale production oforganization. Cost advantage can be achieved by lowering average cost per unit. In a long termconcept economies of scale are achieved when there is an increase in sales of an organization. Sofrom it saving in the organization increase which enables organization to obtain raw material inbulk. These benefits are called as economies of scale (Babiarz and Robb, 2014).
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