Financial Literacy and its Impact

Financial & Economic
Literacy For Managers

Table of Contents
INTRODUCTION...........................................................................................................................3
QUESTION 1...................................................................................................................................4
a. Analysis of impact of globalisation on consumers and companies.........................................4
b. Explanation of the demands curve and shift in demand curve ...............................................4
c. Comparison and differences in between economies of scale and diseconomies of scale ......5
d. Analysis of the determinants of supply in retail sector ..........................................................5
e. Comparison and differences in between substitute and complementary goods .....................6
QUESTION 2...................................................................................................................................7
a. Analysis of the imperfect competition market structure ........................................................7
b. Explanation of the barriers to enter in the Monopoly market.................................................7
c. Analysis of the environmental policies of government to address market failure..................7
d. Explanation of the circular flow of income ............................................................................8
e. Analysis of the macroeconomic concept of unemployment ..................................................8
QUESTION 3...................................................................................................................................8
a. Examination of the four basic financial statements.................................................................8
b. Financial ratios on in financial statement................................................................................9
c. Analysis of the four phase of management accounting...........................................................9
d. Compare and contrast relevant and irrelevant cost...............................................................10
QUESTION 4.................................................................................................................................10
a. Analysis of the risk concept and return ................................................................................10
b. discussion on the concept of capital structure ......................................................................10
c. Calculation of amortization ..................................................................................................10
d. Savings of Gary.....................................................................................................................11
e. Two projects of cash flows....................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Organisations are working in the high competitive markets and success is based on the
decision makings of the managers and leaders (Gathergood, 2012). Financial and economical
decisions are having a huge importance in the business to make it successful so it is essential for
a company to recruit managers which are having expertise in it. Most of the organisations which
are working on the higher level and which are having a higher positions in the market so it is
essential for the companies to make effective decisions on the financial and economical issues.
The present report is based on the Tesco and NEXT PLC which are most recognizable
organisation of the UK, in the starting report in containing details on the globalisation and it
impact on the customers. It is essential for a company to manage equilibrium point in the
demands and supply by which they can maintain a profitable prices for their products and
services.
QUESTION 1
a. Analysis of impact of globalisation on consumers and companies
Internalisation is an essential for a company for the business expansion which impacts on
the organisation and as well as on the consumers which are connected with the company.
Globalisation enhance the scope of dealing which can help to the company to improve their
business by increasing their sales. As well as it provides a scope of new technology to develop
their products accordingly (Lusardi, Mitchell and Curto, 2010). Globalisation impacts on the
consumers and it provides a them a huge range of the products which they can purchase from the
international market. As well as it provides more options of companies by which a consumers
can buy a product which is suitable for them according to the quality and prices.
b. Explanation of the demands curve and shift in demand curve
Demand curves are based on the demands which a company have from the market, it
shows about the demanded products in the market. A demand curve is shows that demands are
lower in the higher prices as compare with the lower prices (Lusardi and Mitchell, 2011). So
basically demands are based on the prices so it is essential for a company to make their products
prices lower as compare to the other companies by which they can have higher demands.

Sources: Demand curve, 2017.
So the demands curves shows that demands has to be fulfilled by a company to manage their
effective prices either it can impact on the price ratio. So they have to manage effective pricing
by managing demands and supply of their products and services.
c. Comparison and differences in between economies of scale and diseconomies of scale
Economies of scale is based on the reduce cost on each level of increasing production it
can help to a company to manage cost effectiveness in their production. Most of the companies
are using the scale of economy to maintain their cost of production. Cost of production is
increased by increase in the units of production. As more units are produced by the company
they has increase their overhead on each unit (Hastings, Mitchell and Chyn, 2010). Economies of
scale is more effective for a company to make it successful. Both are having huge difference
regarding to their work economies of scale is emphasis to manage a standard cost in production
but on the other side diseconomies of scale is not having a control ion the cost.
d. Analysis of the determinants of supply in retail sector
Market determinants are factors which determine the sales and supply of the products.
Some of the determinants are here based on the retail sector which are:
Illustration 1: Demand curve, 2017.