Macro-Economic Factors that Affect a Business
There are macro-economic factors which affect a business and there implications need to be considered when planning ahead.
The interest rate is the basically the cost of borrowing, the price of money. If money is borrowed it is the percentage over and above the original loan that has to be paid back. The interest rate is a vital tool of economic management for the government. Adjusting the interest rate is a key part of the government’s monetary policy. Interest rates are set by the Bank of England's Monetary Policy Committee. They will set the rate according to the prevailing economic conditions and the inflation target they have been set. If
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Further more Potarts is a highly geared company with loans representing 60% of their capital. Such a company has to pay interest on its borrowings; Maria should therefore pay off these loans before interest rates exist.
Potarts is regularly importing materials from Spain and exporting goods to the US so they would find fluctuations in exchange rates a source of considerable uncertainty. It has been forecasted that the pound will strengthen and you will be able to get more euros for a pound. This will benefit Potarts as with the appreciation of the pound imports will be cheaper. There is less fluctuation in the £/$ rate as it stays around 1.65-1.70 however there is still a small amount of appreciation. This would make exports harder to sell abroad as export prices appear to rise because foreign traders have to give up more of their currency to get the same amount of £s.
Inflation is usually defined as a sustained increase in the general price level. It is best understood as a fall in the value of money. Inflation can also create uncertainty within a firm as forecasting expected sales revenue can be made very difficult. This is partly because of the price changes and partly because the presence of inflation makes it likely that the government will make changes to its economic policy. This will make it hard
Apple Incorporation is one of the biggest high technology company that operates worldwide. Is was established on April 1, 1976 in California by Steve Wozniak, Steve Jobs and Ronald Wayne.The company is known for designing and manufacturing several technology devices include Smart Phones (iPhone), Tablets, iPods, iPads, Mac, Apple TV, Apple watches as known as smart watches, it also produce software’s like the OS X and iOS operating systems, and offers several online services such as iCloud, Apple Pay, Apple Care. The company strategy is to designee and enhances its own operating systems, software, hardware and other services by providing customers with new developed technology.
The provision and use of personal protective equipment could include using gloves, glasses, earmuffs, aprons, safety footwear, dust masks.
Exchange Rates: The Exchange Rates are other important global factors for which company’s ultimate revenue is affected. For example sudden major change in the Exchange rate of UK with other countries is a great threat or facility for TESCO PLC business.
Firstly Inflation is an upward movement in the average level of prices. Its opposite is deflation, a downward movement in the average level of prices. The boundary between inflation and deflation is price stability. Inflation can either be negative or positive; it could mean making products more expensive. There are a number of effects of inflation that can
Please note that this Assessment document has 8 pages and is made up of 7 Sections.
Please note that this Assessment document has 8 pages and is made up of 7 Sections.
5.) Changes with “interest rates, rates of economic growth, fiscal and monetary policies of the government, inflation, deflation, consumer credit availability, consumer debt levels, tax rates and policy, unemployment trends, oil prices, and other matters that influence the availability and cost of merchandise, consumer confidence, spending and tourism could adversely impact the Company’s business and results of operations” (macysinc.com, pg.78).
The United States is the leading economy across the globe and experienced several tribulations in the recent past following the 2008 global recession. Despite these recent challenges, there are expectations among policymakers and financial experts that the country will experience solid economic growth. Actually, financial analysts have stated that the U.S. economy will be characterized by increased consumer spending, increased investments by businesses, reduced rate of unemployment, and reduction in government cut. Some analysts have also stated that the country’s economy will strengthen in 2014 with an average of 2.7 percent or more. However, these predictions can only be understood through an analysis of the current macroeconomic
A macroeconomic event that would affect firms is unemployment rates. High unemployment rates have a big affect on the economy. A high percentage amount of people unemployment means the loss of disposable income for consumers to spend.
In this way, the Fed manages price inflation in the economy. So bonds affect the U.S. economy by determining interest rates. This affects the amount of liquidity. This determines how easy or difficult it is to buy things on credit, take out loans for cars, houses or education, and expand businesses. In other words, bonds affect everything in the economy. Treasury bonds impact the economy by providing extra spending money for the government and consumers. This is because Treasury bonds are essentially a loan to the government that is usually purchased by domestic consumers. However, for a variety of reasons, foreign governments have been purchasing a larger percentage of Treasury bonds, in effect providing the U.S. government with a loan. This allows the government to spend more, which stimulates the economy. Treasury bonds also help the consumer. When there is a great demand for bonds, it lowers the interest rate.
Business Administration The idea of studying business administration has appealed to me greatly and has encouraged me to further develop my education following this path. I have a keen enthusiasm to pursue a degree in Business Administration as I enjoy the challenges it sets and find the many different areas of business you are able to branch out into, very exciting! From research about the subject I'm expecting to greatly further my learning of how businesses operate and be able to then put my knowledge into practice. I am confident within myself and find communication with others easy.
1. What factors contribute to the rapid pace of change in business? Is the pace likely to accelerate or decrease over the next decade? Why?
Starting a business is the latest trend. Just take a look at Instagram. Several profiles have the caption ‘Entrepreneur’. At this very moment, there is someone, somewhere working on an idea, a business plan or launching a startup. Entrepreneurship is on the rise like never before. The flexibility and independence that comes with being one’s own boss is attractive and worth taking the leap in starting a business. However, most people don’t know that being an entrepreneur is a grueling journey that can be very lonely and stressful at times. According to the Small Business Administration (SBA), 50% of businesses fail during the first year. Starting a business can be a scary task, but the
Financial Management is a critical aspect of any business in order to achieve a sustainable and efficient cash flow. It is essential in maintaining the link between a business’s future financial goals (profit maximization) and the resources that it has in order to achieve its objectives. Businesses demand certain common goals that increase a bussiness's all around achievement, Some of which involve; growth amongst assests, An increase in efficiency in all areas of the business whether it be management or not. And the ability to meet short term and long term debts. Finacial management undertakes the responsibility to implement and acheive these goals for the business using a range of strategies shaped to meet the needs of the business and
1. The most significant challenge to business success you see in this rapidly changing global economy;