money sectionmoney sectionBusiness valuation involves issues that extend beyond internal factors, such as the company's balance sheet, quarterly profits and projected earnings. Business valuation requires consideration of external factors as well, especially conditions in the overall economy. Economic factors such as interest rates and the company's market share also affect the value of a business, signaling potential investors whether the company is a good buy.
In economic analysis, the discount factor is the measure of how people value time. Simply put, it is an estimate of how much less something is worth if it is received in the future. A positive discount factor indicates that, the further time progresses, the less desirable an asset. Discount factors have a range of applications in behavioral economics.
Stocks are sometimes referred to as equities, because each stock represents a unit of equity ownership in the company that issued it. When a stock price rises, it offers investors a return on their investment. Stock prices rise and fall in response to supply and demand. Supply and demand change over time in response to various economic factors.
When a company chooses to measure how much of two goods it can produce, it creates a production possibility graph. This chart is also termed a "production possibility frontier," or, PPF. When making this graph, a business considers many variables: Its access to resources, strengths and skill set. Because a company's ability to produce two distinct items is not always equal, the chart reveals a bowed-shape curve instead of a linear function.
Banks engage in complex financial transactions as a matter of doing daily business. To take stock of their performance and satisfy external regulations, banks produce financial statements, much like other types of business. Banks are subject to guidelines and regulations that impact the financial accounting process alongside issues such as performance and prospects for the future.
Arbitrage pricing theory, also known as APT, is an asset pricing model used to estimate the price of stocks based in their expected return. This model was first developed in 1976 by renowned economist Stephen Ross. The principle behind arbitrage pricing theory is that a stock's price should be the discounted value of the stock's end of period price. Investors who use arbitrage pricing theory look for imbalances in the market where assets are priced either above or below their true value.
The International Monetary Fund is an effort among prominent individuals in multiple countries to assist governments with lending and financial issues. The IMF created the debt sustainability framework as a tool that countries can use to determine if they are on the right track when it comes to debt issues.
Locational interdependence is a complex term that combines geography with business relations. The idea behind this theoretical concept is to see how an area of space, like a specific geographic area, helps a business with its profit making. Unlike other theories of geography that state businesses need cheap places to be located for low costs, locational interdependence argues a business needs a place where profits are easily made because of the location.
Hazel Henderson once said, "Trying to run a complex society on only a single indicator like the Gross National Product is like trying to fly a Boeing 747 with only one gauge on the instrument panel." Indicators of sustainable economies include measures of employment, spending and production of goods and services. Economic analysts follow trends in indicators to measure whether the general economy is worsening or improving.
The United States Department of the Treasury issues securities to finance the operations of the U.S. government. Treasury bills are short-term securities the Treasury sells at a discount via weekly auctions. The discount represents the interest paid when the Treasury redeems the bill at the full price at maturity. Brokers and traders buy and sell Treasury bills on open security markets, and, when the price drops, the discount is higher and the resultant interest rate increases. When the price rises, the interest rate drops. Even though Treasury bills pay little interest, investors are willing to buy them because they consider…
When companies get customer orders for goods and services, the company has to deliver the commodities to the customers by a set time frame. Sequences of steps are involved in the process. The company must consider some factors in determining order processing times.
The United Methodist Church organizes itself into local churches, districts and then larger "Conferences," which cover either entire states or parts of states. Sixty-three UMC Conferences exist throughout the U.S. This organizational makeup is important when figuring United Methodist pastors' salaries as the Conferences have substantial leeway in determining how much a pastor is compensated. For example, each Conference sets minimum salaries for pastors in the region. Other factors also exist, such as more pay for pastors with experience.
At the core of every successful business or organization is a well-functioning accounting system. Accounting systems provide a computerized method of recording and keeping track of daily, monthly and yearly financial operations of a business. Additionally, small and large businesses use accounting systems to generate data that enables them to make accurate management decisions. However, whether an accounting system works to meet these objectives depends on a number of factors.
Interdependence is the dynamic of two or more parties being mutually dependent and responsible to each other. Financial interdependence can exist on various levels -- from individuals sharing domestic responsibilities to national economies' interdependent relationships through formalized global agreements. The latter is in part due to the growth of cross-border financial investments and movement of assets across borders, as well as the growing ability of national financial markets to influence global financial markets. Global financial agreements and domestic partnership agreements illustrate two very different types of financial interdependence.
With the ever-changing state of the economy, economic evaluations have become essential for organizations to use when trying to make decisions regarding their economic future. A proper economic evaluation looks at both costs and benefits associated with new ideas. The organization compares two new ideas by analyzing components of each. The costs and benefits are identified, measured and evaluated to determine which idea would be most beneficial to the organization.
Grand Teton National Park, Yellowstone's Old Faithful, cattle ranches, rodeo and backpacking are just a few things that come to mind when one thinks of Wyoming. For business owners, however, Wyoming offers a host of economic benefits that make the state an appealing home for new and relocated businesses alike.
Historically international prosperity has been measured in strictly financial terms. But currently a movement is emerging to redefine the wealth of individual countries in a broader fashion to include quality of life factors such as health, job security, environmental factors, workplace safety and even a population's general degree of happiness.
Sometimes, the personal affinities of others causes prejudicial issues and unfavorable attitudes, or bias, against a specific group of people. Although people may have a bias against men, the majority of historic gender issues revolve around prejudice against women. Some cultures mandate equal treatment of women, while other cultures treat women as inferior to men. Even in countries with supposed equal gender rights, women often receive less pay than men and have less work responsibilities.
The business life cycle is a measure of the ebb and flow the of the overall economy, tracking everything from production to income to employment. The term "business cycle" is interchangeable with the term "trade cycle" -- they refer to the same cycle that maps the alternating periods of prosperity and depression inherent in any economy.
Economic interdependence is prominent phenomenon whereby countries dependent on each other for the resources they do not have. Resources are scattered unevenly across the globe, and no country can fully rely on itself without having to depend on the resources from other countries. Nonetheless, many factors have fuelled this type of interdependence between countries.
No business functions as an isolated entity. There are environmental factors that each business manager must learn to address if the business will survive. Environmental factors constitute threats a business faces, but also can provide opportunities for businesses that use them to their advantage. Perceptive business managers understand how to identify environmental factors and work to find solutions to problems that can cause changes throughout their operating environment.
An endogenous factor in economics is something that is explained or calculated from within the model being studied. This is as opposed to an exogenous factor, which is something that comes from outside the model or thought experiment under examination. Which is which, exogenous or endogenous, depends upon what it is that is being examined and within what economic model.
For both countries and individuals, economic prosperity is the key element to quality of life and is also necessary for the nation to be competitive in the world economy. As economies move from production-based to ones based on creativity and innovation, they must grow in ways that strengthen industries, create good jobs and encourage economic investment. To increase wealth and living standards, the economy must promote and sustain diversity, innovation, competition and entrepreneurship.
Economic factors have a huge impact on your small or medium-size business. While you don't have to be an economist to understand these forces, gaining a rudimentary knowledge is helpful. With a better understanding of the economy, small and medium businesses can make better decisions about the direction of their firms.
Economic growth does not depend solely on competition for the lion's share of profits in the market between industrialists or entrepreneurs. Social factors, such as education and the importance of social status, as well as cultural factors, including religion and customs, also have an impact on an economy's progress. Contrasts between countries with comparable reserves of resources and equal population can show how such factors have the ability to become a barrier for economic growth.
An economic factor is an element within the economy of a particular state that determines the economic activity of that state and its financial stability. Such factors are inflation, employment, demand and competition. All these aspects of a national economy are studied by either macro- or microeconomics and have significant importance for the growth of national economies.
Global warming is the increase in the average temperature of the Earth. The causes for global warming are multiple, including the activity of individuals and the economic activity of nations. The economic factors that significantly contribute to the process of global warming are the increased demand for goods, the production process, the developing economies and competition among states within the global economy.
The housing and construction industry is a leading indicator of the state of the economy. That is, it usually starts to falter prior to the start of the recession. This held true for the 2008 recession, when the housing and construction industries began struggling as early as 2006. For those who are in the housing and construction industries, it may be discouraging to know that business may start to struggle without prior warning. However, the economic factors that affect housing materials can give industry professionals a warning of what's to come.
When you create a marketing plan, you are attempting to gain exposure for your company or product to increase revenue. Before you begin writing a marketing plan, there needs to be a comprehensive planning process that will help to ensure the plan's success, according to business expert Darren Dahl in his article "How to Write a Marketing Plan" for "Inc." magazine . Part of that comprehensive planning process is understanding the economic factors of a marketing strategy and how they will affect your plan.
In economies other than command economies, the nation is subject to the regular peaks and valleys of the business cycle, expanding in good times and periodically declining into a recession. A nation's internal economic factors affect the duration and intensity of an economy's expansion and contraction and signify the overall health of an economy as well as its individual sectors.
Several economic factors impact the success of a business. Certain factors, such as raw material and labor costs, manufacturing overhead, advertising and shipping costs, can be controlled directly by the business, while other factors, such as unavailability of resources and a down market, may require a change in how the business responds to the shaping influence. Changing economic factors may require an initial upfront investment that reduces long-term expenditures.
Children's pastors have the responsibility of helping children grow spiritually. Churches generally employ childrens' pastors, although they can work in other ministry capacities, such as for nonprofit organizations.
Understanding economic factors that influence business is important for anyone seeking to be financially successful. The factors reach across the world, making every global economic event far reaching to local economies. Many businesses use economist's predictions for determining future influences that could affect their profits.
For a nation's economy to flourish, a number of financial factors are needed to support long-term economic growth and development. These are core economic requirements that all countries share. Economic growth is defined as the increase of real gross domestic product (GDP), which takes into consideration the rate of inflation.
Factors that are external to a company impact its performance much as internal factors. Some are economic factors. Economic factors in the remote environment are not within the control of a company, but its management has to make decisions keeping them in mind such factors. They include economic growth, inflation and unemployment.
Green technology is something many businesses will consider in the coming years, for various reasons. Some businesses will realize that renewable energy is profitable. Other businesses will realize that getting involved in green technology will not only make money, but they will benefit from the ethical way their business may be judged. However, all businesses can expect criticism at some stage either about their product or even their ethical credentials.
Imagine the complex matrix that determines why U.S. stocks fluctuate. Multiply that by dozens of countries and you have an idea of why currencies fluctuate the way they do. There are financial, political, social and economic factors that determine the value of one currency against the next. And they are all rising or falling relative to each other.
Project feasibility, as the term suggests, is the likelihood of success or failure for a particular project. Factors in project feasibility could be intrinsic, such as the make-up of the project team, or extrinsic, such as government or economic factors. Assessing the economic factors of project feasibility is an important exercise in undertaking any project. Economic factors could include the relative power of buyers and suppliers in the market, the number of competitors, the availability of substitutes and other factors. While economic factors are generally out of the control of a business's decision makers, it is still useful and important…
Whether you're a business owner or a consumer, you may notice shopping and spending trends in your area fluctuate based on the country's current economy. Trying to market a product or a business is difficult in hard economic times due to the lack of consumers and profits. Some economic factors are more devastating to companies than others and ultimately, marketing issues also depend on your company and what it provides to the people.
A standard way economists measure growth is by assessing the country's gross domestic product, or GDP. The GDP indicates how many goods and services are produced by a nation. Wealthier nations typically have a higher GDP than poorer nations. However, a 2009 "Time" magazine article explains economists also measure wealth and growth by assessing a country's resource distribution. Many factors affect a country's ability to grow economically.
Economists often measure economic growth by inflation-adjusted increases in a nation's gross domestic product (GDP), the aggregate measure of economic activity. An alternate measure is the rate of increase in personal incomes, measured by per capita GDP. Rates of economic growth vary across nations, causing many economists to ask what factors contribute to that growth. Knowing what factors determine economic growth helps explain the differences in prosperity that exist across nations.
Economic growth is the potential of a country to produce more. Technically, a country does not actually have to create more products or services for economic growth to increase. However, many financial organizations look at the gross national product or other examples to gauge how much the economy has grown. Several major can influence this growth depending on the nation.
Economic growth and the factors that cause it to occur have fascinated economists for years. Understanding what causes economic growth helps explain why some countries are wealthy and others poor. Despite decades of research, however, the economics profession has reached little consensus on what factors generate economic growth. Various economists have offered different ideas about what influences growth.
Sustained economic growth increases the standard of living in a country and stimulates high employment rates. Higher employment rates encourage business growth and production, further expanding the economy. In countries that impose federal income taxes, higher employment translates into an increase in tax revenues for the federal government, helping to support and expand federally funded programs. The supply factors that effect economic growth include the supplies of natural resources, human capital, technology and capital goods.
The economic environment of business is affected by internal and external factors. An internal factor that affects the business environment is the cost of labor, materials, processes and procedures. Internal factors can be improved through company projects. On the other hand, external factors can also affect a company's business environment and the business has less control over these factors. The primary influences on a business are: political, economical, social and technological.
Many economic factors affect retail sales which can have a positive or negative impact on businesses. The state of the economy decides the type of impact economic factors have on retail companies. The economy consistently faces factors that can change its growth and decline, thus affecting everyone.
In this time of sluggish growth, India's economy continues to grow at a 6.8 percent clip. The size of the Indian economy is projected to outstrip Germany's by 2025, and if present trends continue, India will be the third largest economy in the world by 2035, lagging only the United States and China. Because of the combination of rapid growth and an expanding population, economists regard India as an emerging economic global superpower.
An inflationary gap is when there is a period of excess demand that leads to an overall increase in the prices of goods and services. When demand exceeds supply, prices will increase because consumers will bid up prices based on a shortage.
Marketers and finance departments spend countless hours and dollars scrutinizing competitors and consumer demands when determining the appropriate price for a product or service. While some economic factors, which affect price, can be anticipated, many of these economic factors are a product of the overall economy or the economic structure of the market the firm is operating in.
According to an U.S. Recycling Economic Information Study, the recycling and re-use industry consists of more than 56,000 recycling establishments in the United States. Over 1.1 million people are employed in the recycling industry in America alone, earning an annual payroll of nearly $37 billion and grossing over $236 billion in yearly revenues. The recycling industry represents an important force in the U.S. economy by contributing to job creation and economic development. Several factors come to play to determine the economic viability of recycling
Businesses make economic decisions everyday. Entrepreneurs have to make decisions on how to run their business so as to make a profit. They have to make choices on matters such as what they will produce, how they will produce it and how to finance the production. Economic theory assumes a rational approach to decision-making that may not always be borne out in the real world.
Supply and demand are among the most frequently discussed concepts in economics. Demand represents the amount of a good or service that consumers are willing to buy at a given price level. Under the law of demand, price and quantity demanded are negatively related, so when the price declines, demand rises, and vice versa. However, economists identify other factors besides price that influence the level of demand. These factors include income, the prices of related goods, and consumer tastes, among others.
Economic growth refers to the increase in prosperity and wealth of a nation or country. Generally, economic growth is used as a synonym of GDP (gross domestic product). Economic growth is a top priority for policy makers around the world. It is generally agreed that a number of factors influence an economy to grow, including productivity increases, population growth, better educated and healthier work force, and the ease of doing business.
Day trading refers to buying and selling stocks within a one-day time frame. Canada has a number of financial institutions, located primarily in Toronto, that have day-trading facilities, including investment and commercial banks, non-bank institutions and big multinational companies. Another type of day trader trades financial securities for his own account. This type of day trading can be done in Canada through a range of brokerage firms.
Keeping an economy sustainable requires balancing a number of factors that are often inextricably linked to the other, such as monetary policy, levels of capital, government ideologies and trade factors. When certain institutions are in control of some factors but not others, the equation grows more complex. In most cases, a country's economy is influenced by its government, its citizens and even the policies of other countries.
The environmental benefits of recycling are widely known but little is discussed of the economic benefits of recycling. Recycling does provide benefits and adds value to an economy, according to the Pennsylvania Department of Environmental Protection (DEP). These benefits stem from the jobs, products manufactured and sales generated by the recycling industry. National recycling efforts are responsible for maintaining hundreds of thousands of jobs in the US every year.
Economics studies the ways in which families, firms and societies allocate resources to satisfy their needs and wants. Basic classes in economic principles introduce students to such concepts as production, demand and supply. Students also learn about the various factors that affect production of goods, and the levels of demand and supply for them.
Although farming is one of the world's oldest professions, modern farming is affected by uniquely modern economic factors. Farmers in 2010 compete in a complex economic environment where customers choose from produce grown all over the world, and governments provide financial incentives for the production of certain crops rather than others. Although independently minded growers manage to create markets of their own through direct sales and other creative strategies, the majority of American farmers are still at the mercy of both economic factors and the weather.
Economic factors are variables that influence a company's capacity to successfully do business. They may be beneficial or detrimental, and the same factor can have either a positive or negative impact depending on its current status or the type of business it is affecting. Although economic factors create the climate in which a business operates, the success or failure of any company also strongly depends on its own resourcefulness and ability to adapt to these external economic factors.
Economic factors affecting businesses are regulation, access to credit, demand for goods and/or services and technological advancement. Savvy businesspeople need to stay on the pulse of future changes in business in order to compete and advance instead of trying to catch up and adapt later. Employing the latest relevant technologies will increase the economic advantage of any business competing in the global economy.
The study of balancing scarce resources with unbridled desires is easily applied to the restaurant business. Restaurants are constantly devising ways to attract fickle customers to eat at their establishment instead of going across the street. Marketing as well as economic conditions affect a restaurant's chances of success.
An economic scale, more commonly known as economies of scale, is a company's ability to produce goods and services on a larger scale with fewer costs. Economic theory states that as companies grow in size and production capacity, costs decrease from these expanded operations. Adam Smith, author of "The Wealth of Nations," published in 1776, believed that the division of labor and specialization of production duties could achieve advanced economies of scale. This theory has proven itself again through the business factors of technology, efficient capital, trained labor, and cheaper materials.
A nation's economy can be highly volatile and is often a function of a variety of factors. In a strong economy, unemployment is low and consumers enjoy increased spending power. In a struggling economy, more people are out of work and consumer confidence dwindles. As confidence decreases, less money goes back into the economy, causing businesses to become less profitable and jobs to disappear.
Geothermal energy originates as heat from magma within the earth. That energy is used to heat ground water, producing steam and hot water that can be used directly for home heating and a variety of other uses. It can also be used to produce electrical energy. In 2006, the U.S. led the world in on-line geothermal capacity at 2800 MW. Other countries are also exploiting this renewable energy resource, most notably Iceland, which gets 78 percent of its energy needs and 99 percent of its electricity from geothermal sources. Economic viability depends on capital costs, operating and maintenance costs and…
The stock market is perhaps the most dynamic component of the world market, especially the Foreign Exchange or Forex stock trading market. Although the market can be vibrant and active , especially with the potential profit, stock prices are very volatile. It is therefore essential to familiarize yourself with the economic factors that impact the trends in the stock market if you want to participate in it.
Businesses face many economic challenges when trying to make profits. Most of these factors are unable to be controlled by the business, although they can create operations that remain competitive in the economy.
Trading currencies is a fast paced way to both win and lose money. More than US$2 trillion of currencies are traded daily among brokers, traders, banks and individuals. Unlike other stock transactions, when someone wins a trade in currencies, someone else loses. The fluctuations are based on buying and selling one currency against another and can create large losses and equally large wins, offering no assurances either way.
