Chapter2 – Ethics
Business Ethics is the behavior that a business stay attached to in its daily dealings with the world. The ethics of a particular business can be diverse. Many businesses have gained a bad reputation just by being in business. For some people, businesses are just making money, and that is only the bottom line. Making money is not wrong at all. It is more important in which some businesses conduct themselves that brings up the question of ethical behavior – social responsibility.
There is a framework to help solving ethical dilemmas: Stakeholder analysis. There are three steps: First, making a list which made of all potentially affected parties. Second, to do an evaluation of all the harms and benefits that s particular action will have no those involve. Third, to determine each of the affected parties’ rights and responsibilities.
Stakeholder Analysis (SA) is a methodology used to facilitate institutional and policy reform processes by accounting for and often incorporating the needs of those who have a ‘stake’ or an interest in the reforms under consideration. With information on stakeholders, their interests, and their capacity to oppose reform, reform advocates can choose how to best accommodate them, thus assuring policies adopted are politically realistic and sustainable. Stakeholder Analysis provides an idea of the impact of reform on political and social forces, illuminates the divergent viewpoints towards proposed reforms and the potential power struggles among groups and individuals, and helps identify potential strategies for negotiating with opposing stakeholders.
Stakeholder Analysis is a critical tool in clarifying the micro political economy of a policy area and can help identify interested parties that should be incorporated in the decision-making process, in addition to understanding the basis for their inclusion.
Chapter 3 – Accounting
1.The Balance Sheet-
The listing of what a company owns and owns at a point in time. A balance sheet, also known as a "statement of financial position", reveals a company's assets, liabilities, and owners' equity (net worth). The balance sheet, together with the income statement and cash flow statement, make up the cornerstone of any company's financial statements. If you are a shareholder of a company, it is important that you understand how the balance sheet is structured, how to analyze it and how to read it.
2.The Fundamental Accounting Equation – Assets = Liabilities + Owners’ Equity
3.The Eight Basic Ratio for Financial Statement Analysis- A method of analyzing statements and comparing them to industry standards.
The current ratio is a measure of liquidity. It helps us to answer the question: 'If a business had to pay off all its current liabilities tomorrow, would it have enough current (liquid) assets to make the payments and avoid insolvency?
All you do is divide current assets by current liabilities, as shown below:
If the current ratio is less than 1, the business has more current liabilities than current assets - it is in danger of failure.
If the ratio is high, perhaps above 2, the business has more than enough current assets. It might be a good idea to use some of the value to buy fixed assets or increase employment and try to improve business efficiency.
The ideal current ratio is between 1 and 2 - just enough to be getting on with.
