Business Chapter Paper | EssayIvy.com

Surname 1

Name

Course

Tutor’s Name

Date

Business Chapter Paper

Question One

A balance sheet and income statement are examples of financial statements (Nickels 2016). They

summarize all financial transactions that have occurred over a certain period of time, usually one

year. The balance sheet details assets on one side and liabilities and owners’ equity (capital) on

the other side. In a balance sheet, the asset side and that of liabilities plus capital should balance.

The balance sheet reports the state of assets, liabilities and capital that a business has, showing

the difference between expenditure and income over the previous period. The income statement

shows the financial performance of a firm over a certain period of time. This is done by

summarizing all the cost of goods sold, expenses and revenues gained over the period giving a

view of all the profits and losses the firm made over the stated period (Alexander, 184). Income

statement gives investors and analysts with data required to establish the firm’s financial

position. This enables the investors and analysts to calculate various profitability ratios. Income

statement also shows if the business made profits or losses over the stated period. The operating

margin provided by the income statement indicates how well the business is managed and how

dividends are distributed to the shareholders. The balance sheet explains more deeply the

relationship between assets and liabilities while the income statement details the relationship

between expenses and revenues. Income statement and balance sheets can be used to summarize

Surname 2

and report accounting data. This data is important to the firm manager, creditors, debtors,

shareholders and the tax authorities.

Question Two

Being the owner of a planning service or any business, one is often faced with so many risks and

uncertainties, making finance availability to be very necessary to ensure continuous operation by

the firm. As a financial manager, one is supposed to interpret results provided by accountants

and make decisions that will increase profits for the business by improving financial

performance of the business. Financing of a business is important to ensure its ultimate survival.

The owner or finance manager in a business has the obligation to plan for resources, efficiently

budget for the resources, and source for funds, seek credit followed by managing it, advice on

top financial matters, and be able to manage taxes and device mechanisms to establish fraud

within the company (Nickels, 505).

Most firms fail due to; insufficient funds to start business, misappropriation of funds and

inadequate expense control (Nickels, 505). Short term financing is required when a business has

the need to acquire inventory so as to ensure the customer gets high value services by availing

the necessary goods and services in time. A firm can raise needed capital through borrowing,

selling of equity or retaining profits. Short farm financing refers to the capital which is needed

for a year or less by a business. Short term financing can be gotten through trade credit. This is

where goods and services are bought earlier but the actual payment occurs at a later agreed date.

This is the most widely used as it is less expensive and fairly convenient. Most suppliers opt for

a promissory note where the buyer agrees to pay a specific amount of money on a certain date.

Commercial banks offer different forms of short term financing. These include secured loans

Surname 3

where the borrower provides collateral of significant value. Commercial banks also offer

unsecured-loans which don’t require collateral (Nickels, 514). These loans are given to

customers who are considered financially stable or those with a strong relationship with the

bank. An alternative source of short term financing is commercial finance companies where the

borrower is not necessarily a member but must offer something tangible as security. Short term

loans can also be gotten from family and friends or through grants. Short term loans are easier to

access hence ensures a company progresses with its activities efficiently.

Question Three

When investing for the future (retirement), one needs to diversify by investing in

different places so as to reduce the risks involved by spreading them out. One needs to prepare

well by setting long term goals which are achievable. The earlier one starts investing for the

future, the more likely money will work to achieve the set objectives hence they will be able to

make a good amount of money for the future. Younger people have more years to recover from

any potential losses hence can invest in more risky projects. The older ones, however, tend to

avoid potential risks. The level of risks one accepts to invest in is directly proportional profits

levels realized by the business. As one invests, he/she should follow his set goals. The project

may change with time due to change in goals, increase in risks or even due to poor investment

environment (Jones, 2016).In business, savings is equal to investments. One can save in a

special bank account with no tax exemptions, in a private company’s retirement account or with

special government agencies mandated to deduct and save cash of citizens on behalf of the

government (known as retirement benefits). The other form of investment is through asset

allocation. The most common method of allocating assets is mostly through security bonds, cash

and cash equivalents or through stock markets. An investor needs to identify the right mix when

Surname 4

investing in asset allocation, which takes a lot of time and effort. Government/ sovereign bonds

are issued by the government and have interest rates and a specific maturity period. In bonds, the

risk is limited and income is also guaranteed. Investing in stocks makes the buyer of stock a

member of a corporate company. Stockholders act as owners of a business hence they are openly

involved in the achievement or failures of an investment (Nickels, 533). The ability of a

stockholder to make profits or losses depends on the objectives of the business or company. Cash

and cash equivalents are examples of liquid assets which lay “idle” in a business but are easily

convertible into cash after a short period of time.

Question Four

Employee motivation is important to ensure a business meets its objectives efficiently.

Employees make up the organization and their motivation can help increase their existence in a

certain organization. The world is experiencing a changing professional environment depending

on one’s skill and abilities. For an employer to retain the best employees, he/she need to motivate

the employees periodically. Motivation can aid worker’s realize individual interests in

conjunction with the organizational goals. Maslow believed that employees needed motivation

and encouragement to enable them meet the basic needs of life which are food, shelter and

clothing; for security by ensuring the employee is safe within his/her environment; so that they

can feel loved at their workplace; and to promote their self-esteem by giving them the feeling of

loving themselves and loving other people. Maslow believes that employee motivation brings

about self-actualization making them motivated to expand into new levels (Abraham, 62).

According to the Herzberg’s Two Factor Theory, associating an employee with certain products

of the organization can help them feel loved, accepted, and eventually motivated. Herzberg

believed that assuring employees that their job are secure, periodic increase of their salaries,

Surname 5

promoting employees to high rank positions within the organization, ensuring the working

environment within the organization is hygienic for human existence and ensuring employees

relate well socially and inter-personally can help motivate them to work better. Employees must

relate within themselves through certain events such as team-building events (Herzberg, 36)

Question Five

When hiring, the employer must understand that employees are most important in any

business enterprise, big or small, because they facilitate the enterprises’ accomplishment or

letdown. Every country has certain set laws, rules and statements regulating the employee

employer relationship which should be adhered to and followed to the letter in any hiring

process. These include factors such as minimum wages, maximum hours that an employee

should be at work and things like ways in which the employee will remit taxes to the

government. Before hiring, you should do monitoring and evaluation about the firms current

plans and its future goals (Billikopf, 10). Monitoring and evaluation helps the employer know the

specific abilities and skills they need from the employee who qualifies for the set position and

also their tasks and responsibilities. Then, you should write the best job description so as to

capture the best skills from people who read it. When advertising the position, an employer must

focus on the best channels to make sure every suitable candidate gets an opportunity to hear

about the vacancy. After the set deadline reaches, qualified individuals should be shortlisted and

called for an interview immediately. During the interview, you should ask questions that test the

interviewees’ skills and abilities without venturing too much into their personal lives. You can

let the interviewee ask questions so as to rate what they value most in their day to day life. Each

interviewee should give a range of their expected salaries during the interview. After that, the

employer should give the best candidate the job formally, for example, by writing a letter to offer

Surname 6

the job. It is important for the employer to include the organizations policies in the letter. The

employee should be oriented upon officialyl report to work. After some days, the employer

should take time to explain to the employee the need to create a plan which will help him/her

meet the organizations goals and objectives effectively (Process, 9).

Surname 7

References

Alexander, David, Anne Britton, and Ann Jorissen. International financial reporting and

analysis. Cengage Learning EMEA, 2007.

Billikopf, Gregory Encina. Labor management in agriculture: Cultivating personnel

productivity. University of California, Division of Agriculture and Natural Resources,

Agricultural Issues Center, 2003.

Herzberg, Frederick. "The motivation-hygiene concept and problems of manpower." Personnel

Administration (1964).

Investing - Ultimate Guide To Retirement - Money Magazine On Cnnmoney".

http://money.cnn.com/retirement/guide/investing_basics.moneymag/index4.htm?iid=EL

Maslow, Abraham. "From Psychotherapedia Jump to: navigation, search Abraham Harold

Maslow (April 1, 1908–June 8, 1970) was an American professor of psychology at Brandeis

University who founded humanistic psychology and created Maslow's hierarchy of needs."

Nickels, William G., James McHugh, and Susan McHugh. Understanding Business 11

ed.

2016.

Process, 9. "9 Ways To Improve Your Hiring Process". Business News Daily,

http://www.businessnewsdaily.com/7155-startup-hiring-tips.html.

Place new order. It's free, fast and safe

Paper type

Deadline

Page count

550 words

Total price: $ 15.00

Our customers say

Jeff Curtis

USA, Student

"I'm fully satisfied with the essay I've just received. When I read it, I felt like it was exactly what I wanted to say, but couldn’t find the necessary words. Thank you!"

Ian McGregor

UK, Student

"I don’t know what I would do without your assistance! With your help, I met my deadline just in time and the work was very professional. I will be back in several days with another assignment!"

Shannon Williams

Canada, Student

"It was the perfect experience! I enjoyed working with my writer, he delivered my work on time and followed all the guidelines about the referencing and contents."