Balance of Payment

A balance sheet is a statement of the assets and liabilities of a business going into depth of what the balance of income period.

The impact of CPEC on Pakistan’s exports is also a big question. CPEC will generate 2 way trade so imports will rise as well; Envisioned projects will incur liabilities in foreign exchange for:

The international environment in which the business is operating is very important. The import-export balances, exchange rates, and foreign competition all alter and affect trade. The import-export balance is the acceptable balance of imports and exports in a country. It is measured by the balance of trade and balance of payments. The balance of trade is the difference between a country’s imports and exports, which can result in a trade deficit or trade surplus. The balance of payments is the flow of money in and out of the country. The exchange rate is the rate at which a nations currency can be exchanged for another nations currency. When the exchange rate fluctuates, it can have a large impact on a country’s balance of trade. If the exchange rate moves in a way that domestic currency strengthens, exports will end up costing more when in foreign currency. This will lead to foreigners finding other options and exports will decline. At the

The balance sheet, also known as the statement of financial position, includes an analysis of all the firm’s assets and liabilities. The balance sheet is a description of the firm’s financial standing at an instance in time. When navigating through a balance sheet one notices that it is divided into two sections, the left side includes all of the firm’s assets and the right side lists all of the firm’s liabilities. A firm’s assets accounts for the cash, property, inventory, facility, equipment, and other investments the firm has made in order to operate. The liabilities of a firm are the legal debts and obligations the firm obtains during its course of business. Included on the side of liabilities is the stockholders’ equity, which accounts for the difference between the firm’s assets and liabilities. Stockholders’ equity is a measure of the net worth of a firm. The expression “balance” sheet describes the equilibrium set by the balance sheet identity:

2. What is the difference between the balance of trade and the balance of payments?

The check and balance system is one of the internal controls business use where no one has control of one another. This system involves more than one personal, it separate handling (receipt and deposits) functions from record keeping functions.. This method help keep financial reported more accurate which prevent accounting fraud

The statement of financial position and the balance sheet is statement that reviews the assets, liabilities, and equities that a business is holding at a particular moment in time. These elements: assets, liabilities, and equities; allows the reader of the financial statement to be able to identify what the company owns, owes, and has invested into the company.

The balance sheet is also one of the annual accounts and main financial statements. It contains figures of business’ total assets, capital and liabilities at a particular time. The balance sheet is in two parts, one containing the details of

The balance sheet is a key component in the accounting department of financial statements. The purpose it serves is to show on a specific date the amount of assets, liabilities,

Economic factors: Due to income disparity in Pakistan and the adverse economic conditions, people are tending to save rather than to spend. Moreover, the increase in unemployment rate and inflation rate also supports these assumptions. However, on the other hand, the increase in the wealth of already wealthy people has increased the use of Dine in restaurants which is one of the stimuli for McDonald’s to open a branch in Pakistan. Furthermore, cost of labor has decreased over the years making labor cheap in Pakistan as compared to other countries has also influenced foreign investments. Examples of Economic factors are Growth rate, inflation rate, unemployment rate, interest rates, exchange rates, labor costs, labor supply etc.

According to Federal Reserve Bank of New York, “The Balance of Payment” (BOP) is a statement used by a country to summarize an economy’s transactions with the rest of the world by both private and public sectors for a specified time period, usually every quarter or year. It is known as “Balance of International Payment”, it involves all transactions between a country’s residents and its non-residents involving goods, services and income, financial claims on and liabilities to the rest of the word. If a country has received money, this is known as a “credit”, and if a country has paid or given money, the transaction is counted as a “debit”. Theoretically, the BOP should be zero, meaning that assets (credits) and liabilities (debits) should balance; however, in the reality, this is rarely the case.

Cotton, textile, grains, fruits and vegetables are the major exports and source of foreign exchange earnings. The international trade regulation and competition have caused Pakistani producers to introduce technologies in processing and manufacturing better quality, cost-effective and value-added products, in accordance with the international standards. In addition to this, globalization has opened doors for millions of job opportunities for Pakistanis all over the world. Personal remittances account for 7% of GDP for Pakistan (World Bank, 2015) and not only help in increasing the living standards but also, through private domestic investments, help in economic growth. Furthermore, the free and preferential trade agreements with regional and international economies has allowed the inflow of technology and surplus capital into Pakistan, allowing the development of infrastructure, telecommunication and energy

Most countries in the world give an account each year for their financial transactions with the other countries. In the UK government, the balance of payments became very dominant in 1970 from a desire to defend the strength of the sterling. The balance of payments refers to mainly to trade-related payments and all payments made between one country and the rest of the world. Such payments include personal payments made between individuals in different countries or subscriptions to international bodies such as the United Nation or international aid given to poorer countries. In Britain, the balance of payments account shows the foreign currency that has been spent on imported goods and services and foreign currency, which on the other hand has been earned by exporting goods and services. Many times, such accounts are not in equilibrium, which means that there's a difference between earnings and expenditure. Therefore, when the value of goods and invisibles-services exported exceed the values of imported goods and invisibles, we say that there is a surplus current balance. However, when the reverse occurs, we say that there is a deficit current

The third market is the foreign exchange market or balance of payments. This is where the availability of foreign currency is balanced against the demand for it (Pugel, 2012, p. 564). The term foreign exchange market is used when referring to the exchange rate and the term balance of payment is used when referring to the country’s settlements balance.

The term balance of payments refers to the accounting record of the country’s monetary transaction with the rest of the world. These transactions include the exports and imports of goods and services of the country, financial capital and financial transfers. The balance of payment record is a way to allow countries to recognize potential business partners for trade and to evaluate a country’s performance in the global economic competition. .