Business Finance: Working Capital, Sources, and Valuation
Within the economic and financial structure of a business relationship, there exists a close connection between financing and its consequences. Therefore, there must be equilibrium between assets, equity, and liabilities.
Working Capital
Working capital represents the financing of current assets with long-term liabilities. From an asset perspective, capital flow is numerically equivalent to the portion of current assets funded by long-term liabilities.
FM: ANC-PNC PN + capital = Current = AC-PC
Period
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Financial Instruments and Metrics
Key Financial Ratios and Metrics
Net Profit (NetP)
NetP = Total Assets – Payable Liabilities
Return on Financial Assets (R.finan)
R.finan expresses the capacity for reward of owned funds. It represents the performance obtained before distribution to partners/shareholders, calculated as: Net Income / Equity (Owned Funds).
Leverage
Leverage is the relationship between assets and equity, indicating the investment (assets) made by the company for every dollar of equity.
Leverage
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Business Financing Methods
The goal of this essay is to show the advantages and disadvantages of various methods of financing. It includes three ways: credits, crowdfunding, and business angels, which are presented one by one.
Bank Credits
The most famous method of financing is bank credits. Banks may grant a credit, but most of the time, it includes a high price to pay when it comes time to pay back. The latest values actualized on the Bank of Spain’s web page are from 2016, when the Annual Percentage
Read MoreDiamond’s Strategies: Customer Focus, Tech Investment, and Market Expansion
Diamond’s Customer-Centric Approach
Diamond is a customer-focused organization that prioritizes service excellence. By focusing on customer service and its quality, Diamond aims to establish customer satisfaction and loyalty, ultimately driving sales and profit growth.
To enhance customer service quality and satisfaction, Diamond has established the Service Development Section and Customer Care Department. The Service Development Section focuses on enhancing the customer experience of mobile and web-
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Six Sigma
Definition
Six Sigma is a data-driven methodology used to improve business processes by reducing defects and errors, minimizing variation, and increasing quality and efficiency, aiming for near-perfect quality.
Purpose
Six Sigma focuses on identifying and eliminating the root causes of defects and variations in processes, ultimately leading to improved quality and customer satisfaction.
Origin
The term “Six Sigma” originated in manufacturing as a means of quality control, but it has since been
Read MoreUnderstanding Organizations: Key Concepts and Management
Understanding Organizations: Key Concepts
An organization is composed of people, environment, strategy, specialization, coordination, and communication. It is a system containing elements, objectives, inputs, and outputs.
Strategic Concepts and Management Elements
Hard Elements: Strategy, structure, systems.
Soft Elements: People, management style, competencies/capabilities, underlying processes.
Strategic Dimensions
Scope: Size and composition of the target market (can be narrow or broad).
Scale: Whether
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