Business Review

Earnigs Per Share

• Net Income
• Total Shares

• Total Debt
• Total Assets

Price Per Earnings

• Market Value
• Earnings Per Share (EPS)

• Current Assets
• Current Liabilities

• Current Assets (minus inventory)
• Current Liabilities

How big of a company the managers have created using the owners investments

• Leverage =       Total Assets
•                   Total Owners Equity

Accounts Recievable

• Cost of Goods Sold
•        Inventory

Helps determine optimal amounts of product to keep in your inventory

EPS measures how much profit the company makes per share of stock

• EPS =       Net Income
•              Number of Shares

Total Owners Equity divided by the number of shares outstanding

Cash payment of profits to owners. Declared on  a "per share" basis  ($2.00 a share)

• 1) Right to Private Property
• 2) Right to keep profits
• 3) Freedom of Choice
• 4) Fair Competition

Real Estate and everything attached to it

Property other than real estate

Property generated by a persons creative activities

• 1) Monopolizing Markets (Sherman Antitrust Act) ((railroad))
• 2) Price discrimination, tying and exclusive agreements that substantially lessen competition (Clayton Act)

Elements

• 1) Voluntary Agreement (acceptance made freely and voluntarily)
• 2) Consideration (Must involve something of economic value... money, goods, services.. so consideration is just another word for money
• 3) Contractual Capacity (Both Parties must have legal ability to enter into the contract.

• 1) Under 18
• 2) Mentally Unstable
• 3) Mentally Incapable
• 4) Insane
• 5) Intoxicated

• 1) Statutory Law
• 2) Common Law
• 3) Administrative Law

Written Laws established by federal, state, county or city governments

Unwritten Laws that are established by judicial decisions; such law in the United States was inherited from English Law

Regulations established by administrative agencies

• 1) Disputes between an individual and the Government
• 2) Disputes between two individuals (*individuals can be any form of private party and can include businesses)

• Arbitration - binding, and non binding
• Mediation - always non-binding

Agency Law allows an individual to assign another person the power to act and to enter agreements. The two parties (the principle and the agent) enter into and agency agreement.

Prinicple wishes to have specific task accomplished

Agent acts on the principles behalf

A legal document that authorizes a person to act as another persons agent.

A set of statutory laws that addresses the rights of buyers and sellers, transfers of ownership, the legal assumption of risk, and warranties. A warranty defines the terms that the seller will honor.

• Is a warrenty that allows the buyer to assumer that:
• 1) Seller has a clear title to the product (not stolen)
• 2) Product will perform the function(s) for which it was produced and sold for
• 3) It will perform as advertised

Covers many more terms the seller will honor. For example, an auto manufacturer might offer a 5 -year, 50,000 mile warranty on a vehicle during which it will fix any defects on the car

a tort is a civil wrong inflicted on other people or their property

form of tort where someone "hurts" another by deception or manipulation

establishment of a businesses legal responsibility to be diligent in the design, production, sale and consumption of products

• Criminal - dispute between government and individual
• Civil - dispute between two individuals and a fine may be imposed

-Dispute can be heard again if lower court errs

acting in a way that is inconsistent with the organizations ethical standards

Choosing actions that promote your personal interest at the cost of others

Altering records to present inaccurate information to managers, owners, and/or potential investors

informing superiors or authorities of illegal or unethical organizational behavior

The conduct of a business including employees, customers, vendors, the local community, or even society as a whole

Protects Whistleblowers

basically a compliance officer. Responsible for assessing ethical implications of a companys activities, making recommendations regarding ethical policies and disseminating information to employees

They report to the CEO and are interested to uncovering or preventing unethical and illegal actions

Set standards for all organizations - big and small, commercial and non-commercial. Firms must follow these regulations.

• 1) be profitable
• 2) obey the law
• 3) be ethical
• 4) be a good corperate citizen

• 1) Sole Proprietorship
• 2) Partnership
• 3) Corperation (known as a C Corperation)
• 4) S Corporation
• 5) Limited Liability Company

• *Advantages
• 1) Ease of formation
• 2) Least Costly form of ownership to begin
• 3) Total decision-making authority and control
• 4) Minimal Legal restrictions
• 5) Ease of Discontinuing

• *Disadvantages
• 1) Single owner status
• 2) Unlimited Liability
• 3) Owner is individually responsible for all losses of business
• 4) Limited Skills and capabilities
• 5) Limited Access to capital
• 6) Challenges in transitioning the business to other owners

• *Advantages
• 1) Aquisition of complementary skills and talents
• 2) Flexibility of division of profits
• 3) Larger pool of capital with the ability to attract more partners
• 4) minimal government regulation

• *Disadvantages
• 1) Unlimited Liability
• 2) Challenges in accumulating additional capital
• 3) Difficulty in changing partners
• 4) Potential Lack of continuity
• 5) Bound by the law of agency

The partnership is held responsible for the decisions and behavior of each partner. Any partner can bind the partnership to contracts or legal obligations without the approval of the other partners.

Risk only their investment

A corporation!

Rules by which the corporation is run

preffered stock conveys special ownership rights

Common stock conveys no special priveleges but does convey voting rights to the corporation

• 1) Top - Stockholders
• 2) Next - Board of Directors who ellect the....
• 3) TOP Management... CEO/COO/CFO
• 4) Middle Management (MGMT btw...)
•             -division lead
•             -Plant manager
• 5) Supervisiory

No single individual that is responsible ------ this makes the government very nervous....... very... very nervous.....

• 1) Sale of stock/financing reporting
• 2) Full Disclosure
• 3) Due Diligence

• 1) Limited Liability
• 2) Single Taxation
• 3) Unlimited Life

Restrictions: Number of shareholders

• Taxed like a partnership
• ... not limited to number or type of owner(s)

Two companies becoming one!

One firm buying another

• 1) Horizontal - two in same industry
• 2) Vertical - Two in different industries

Quantity of goods and services that consumers are willing to buy at different prices

Quantity of goods and services that businesses are willing to provide at those different prices

mulitply the # of companies shares by the close (price per share)

more money today better that money you will have but don't have yet....

• 1) Ensures fair competition
• 2) Promotes Social responsibility and economic health
• 3) corrects market failures and ethical lapses

Fines for punishment...

To give businesses a second chance when unable to meet contractual obligations

measure of how broadly or narrowly defined the range of included activities are

amount of money spent implementing the decisions

Is the cost of what you gave up, not the sum of alternatives but the benefit of the single alternative

• 1) Product
• 2) Price 
• 3) Place
• 4) Promotion and Service

To analyze its competitive advantages, plans and actions

• 1) Products and services (narrow production line, specialized services)
• 2) Price (allow customer to pay for it before or after the fact) Higher prices means lower volume
• 3) Promotion (advertising, salesmanship)
• 4) Place or Distribution Channel (Location or distributor)
• 5) Service (customer service)

focusing on needs of the customer based on their geographic location

focusing on the attributes of the market based upon gender, age, income, education,etc.

puting people into groups based on beliefs or ideas they have

• -cash
• -accounts recievable
• -inventory

• -Property. plant and equipment
• -accumulated depreciation
• -Total fixed assets

differnece between the revenue brought in by the sales and the costs of making the products for sale

The number of workers

The talent of the work force

• 1) Plan
• 2) Source
• 3) Make
• 4) Deliver
• 5) Return