Daily Archives: August 6, 2020

Globalization of markets

Possible Goals If we were to consider possible fi nancial goals, we might come up with some ideas like the following: • Survive in business. • Avoid fi nancial distress and bankruptcy. • Beat the competition. • Maximize sales or market share. • Minimize costs. • Maximize profi ts. • Maintain steady earnings growth. Th ese are only a few of the goals we could list. Furthermore, each of these possibilities presents problems as a goal for a fi nancial manager.

For example, it’s easy to increase market share or unit sales; all we have to do is lower our prices or relax our credit terms. Similarly, we can always cut costs simply by doing away with things such as research and development. We can avoid bankruptcy by….

financial management

Co-operative (Co-op) A co-operative is an enterprise that is equally owned by its members who share the benefi ts of co-operation, based on how much they use the co-operative’s services.5 Th e co-ops are generally classifi ed into four types:

• Consumer Co-op: This provides products or services to its members (such as a retail co-op, housing, health-care or child-care co-op)

• Producer Co-op: This processes and markets the goods or services produced by its members, and supplies products or services necessary to the members’ professional activities (such as independent entrepreneurs, artisans, or farmers)

• Worker Co-op: This provides employment for its members. In this co-op, the employees are members and owners of the enterprise.

• Multi-Stakeholder Co-op: This serves the needs of different stakeholder groups—such as employees,….

Globalization of markets and advanced communications and computer technology

A CORPORATION BY ANOTHER NAME The corporate form of organization has many variations around the world. The exact laws and regulations differ from country to country, of course, but the essential features of public ownership and limited liability remain. These firms are often designated as joint stock companies, public limited companies, or limited liability com- panies, depending on the specific nature of the firm and the country of origin.

In addition to international variations, there are specialized forms of corporations in Canada and the U.S. One increasingly common example is the professional corporation set up by archi- tects, accountants, lawyers, dentists and others who are licensed by a professional governing body. A professional corporation has limited liability but each professional is still open to being sued for malpractice.


financial management

While limited liability makes the corporate form attractive to equity investors, lenders some- times view the limited liability feature as a disadvantage. If the borrower experiences fi nancial dis- tress and is unable to repay its debt, limited liability blocks lenders’ access to the owners’ personal assets. For this reason, chartered banks oft en circumvent limited liability by requiring that owners of small businesses provide personal guarantees for company debt.

Th e relative ease of transferring ownership, the limited liability for business debts, and the unlimited life of the business are the reasons why the corporate form is superior when it comes to raising cash. If a corporation needs new equity, for example, it can sell new shares of stock and attract new investors. Th e number of….

the long-term financing

Corporation In terms of size, the corporation is the most important form of business organization in Canada. A corporation is a legal entity separate and distinct from its owners; it has many of the rights, duties, and privileges of an actual person. Corporations can borrow money and own property, can sue and be sued, and can enter into contracts. A corporation can even be a general partner or a limited partner in a partnership, and a corporation can own stock in another corporation.

Not surprisingly, starting a corporation is somewhat more complicated than starting the other forms of business organization, but not greatly so for a small business. Forming a corporation involves preparing articles of incorporation (or a charter) and a set of bylaws. Th e articles of….

corporate goals,

Partnership A partnership is similar to a proprietorship, except that there are two or more owners (partners). In a general partnership, all the partners share in gains or losses, and all have unlimited liability for all partnership debts, not just some particular share. Th e way partnership gains (and losses) are divided is described in the partnership agreement. Th is agreement can be an informal oral agree- ment, or a lengthy, formal written document.

In a limited partnership, one or more general partners has unlimited liability and runs the busi- ness for one or more limited partners who do not actively participate in the business. A limited partner’s liability for business debts is limited to the amount contributed to the partnership. Th is form of organization is common….