The reserves in banks must correlate with the deposits made by customers. A decrease in ratio allows banks to extend and make new loans increasing money supplies. An increase in the ratio counteracts this process lowering availability. The discount rate charge also play a role in monetary policy. This policy is the cost the Feds ensue to depositing businesses when borrowing short-term loans.
Some of the very important factors are: Government stability effects businesses in a great range by competing with businesses to lower their costs, transparency is another important factor where anything the business does is revealed to the government and the government know exactly what they are up to. Economic policy of government on businesses is also a very essential factor that effects businesses for example, government sets up rules and frameworks according to which the businesses compete with one and another, so from time to time government changes these rules which forces the businesses to change the way of their set ups. There are also beneficial political factors that help businesses in various ways, these factors can be defined as apprenticeships and funding of schools and colleges which will enhance the skills of the population that will affect McDonalds in having more skilled workers to work for them which will
Minimum wage represents a government involvement in a nation economy, although businesses are often wary about the prospect of the government making major economic decisions. In the U.S., Congress sets a federal minimum wage that businesses must follow. Individual states can also create separate minimum wage laws above the federal law. Intervention from the federal and state government can create a difficult business environment. Governments may choose to increase minimum wage on an arbitrary basis, making it difficult for companies to hire individuals at a consistent market rate.
Financial Analysis A company’s strengths and weaknesses are better understood by their financial statements such as Income Statement, Cash Flow statement, and Balance sheet. As Financial consultants, our goal is to help CanGo understand their financial statements and where CanGo needs to improve to gain the competitive edge in the market. Every company needs to understand their own financials before analyzing the market or industry. After analyzing CanGo’s efficiency ratios, we found them to be very un-attractive for investors. For example, CanGo has a very high receivables turnover rate.
In the next chapter we learn how sellers set the prices in which we pay for an item, why things cost what they do and not what they are worth. The key to prices are sellers that can sell their products as close to the cost of making the item. In a regular market, prices are the key. Businesses cannot afford to charge a higher price, customers are normally looking for a lower price and the lower the better, in today’s economy. Many customers ask the question, “What affects prices?” We learn that things happen beyond the sellers’ and buyers’ control to raise and lower prices in today’s market.
Political Risk: Environmental risk: External risk, each location and its business practices will influence the likelihood of each risk, but some to consider are natural disasters. Example: - Flooding. - Bushfire. Technological risk: External risk, to keep your business current, and relevant to the needs of your customers there are instances where it may be important to keep up with technological developments. Example: - Monitor what is happening with
|Learning objective |Place in Assessment | |1.1 Explain reasons for change in a business environment |Question 1 Page 1 | 1. Explain why change happens in a business environment. You should include at least three reasons in your answer. [1.1] Changes happen in a business due to political, economical, social or technical reasons and these reasons are all reactive. Political changes are changes that occur outside of the business and therefore out of the businesses control, say for instance a change in the law which could affect the business and it has to change the way it runs things to fulfil the requirements of the law.
“Another negative factor was a 6.6 percent drop, on an annualized basis, in federal defense spending.” She supports that the decrease in GDP is directly related to the decrease in government spending g which proves how fiscal policy can affect overall economic growth. Monetary policy can be defined as: A central banks changing of the money supply to influence interest rates and assist the economy in achieving price stability, full employment, and economic growth. The article discusses how decline in economic growth can in part be due to uncertainty of interest rates which is directly controlled by the Federal Reserve. The author supports this idea by showing that uncertainty of interest rates has affected business investments and the slowing of the housing
1. Prepare a S.W.O.T. analysis for Bass Pro Shops. What types of strategies do you recommend based on your analysis? Strengths: Catalog Sale, Internet sales, Email Client Base, Stores are tourist sites Weaknesses: Minimal employee training, employee salaries are low causing high turnover rate, not located in every state Opportunities: expansion across the United States, and expansion into Canada Threats: Competitors Taking shares of the market, bad media stating Bass Pros Shops does not uphold their promises about economic development, Ever changing market in customer needs and wants 2.
M3 - Assess the Implications of the Legal and Financial Aspects that will Affect the Start up of the Business Introduction: For this task I will explain how I will set up the business, how it will affect my cash flow and my limited financial resources. Additionally, I will explain where I have to be careful if my business has unlimited liability. What will I have to take into account if I purchase a franchise and what is expected from the franchiser when I do. The final consideration I will take is how all of these factors will affect my business when it comes to achieving your aims and objectives set for the business. The one major problem that faces new start-up businesses, especially small enterprises launched by solo entrepreneurs, is a lack of cash flow.