comment on DRAGONS` DAN

The people who discoverd the product is asking for 80000 investment and it constitutes 15%of the shares,therefore we can calculate the total asset is 533333 which is quite enough.And the dragon who asked more,and entrepreneur promised 35% of the shares which might be 228571 and the quickest in the market,develop the market range,finally,got the offer.Another dragon who gives the 5% each year 5 years.
The entrepreneur is 19 years old who finished A-level,also had the experience doing export and import between China.

In my personal opinion,the idea is quite good,but I donnt think it has a market in China,even exporting products to China,on the one side,it might be less competitive compared to the similar products in China,and asking 80000 which is large amount of money,most of the retailers in UK such as WHSMITH prefer the products produced from China.

RATIO

ECONOMICS

INCOME STATEMENT

it helps me a lot!!!!!!!!!!!!!!!!!!!!!!!!!!!!FROM MICA

FORMULA ABOUT BALANCE SHEET

total asset:non-current asset+current asset
total liability:non-current liability+current liability
net asset:total asset-total liability
net value(net asset):non-current assets+working capital(net current asset)-non-current liability
capital employed:net assets+non-current liability
non-current assets+working capital/net current liability
total equity+non-current liability
current assets:inventory+receivables+cash and other cash equivalents
working capital:current asset-current liability
asset employed:net current assets+non-current asset=capital employed

assets=liabilities+equity
annual provision for depreciation=initial costs-residual value/expected lifetime

BALANCE SHEET

"7"

A supermarket decides that it will open as normal on Christmas Day.



Generally speaking,as a consumer, I strongly anticipate that there are lots of shops or malls opening on Christmas Day with attractive decoration.However what will it influence the company?There are three sides which should be taken into considerations.

Consumers:

In most western countries,Christmas Day has the same treatment with Spring Festival in China,people are definitely hang out with family or friends celebrating this paramount day.A majority of consumers wish to shopping with friends and enjoying the Christmas atmosphere during shopping.Therefore,the demand on this special day will increase with an unexpected rate.Consumers will expend more than in normal days.



Company:

As I said before,the demand on Christmas Day will be inelastic and increased sharply,it is an vital opportunity for most of the companies to open as normal in order to meet the high demand,as a consequence,getting more revenue during the day.High percentage of the businesses survived only because they take well advantage of the particularly high demand in certain days,and become competitive among thousand businesses,at the same time because of the high demand,most of the companies reduce the prices of the products in this certain days as a strategy to have more quantity sold.Probably,they sell the products which is out-of date but will receive a good result,because of the demand for the products and high profits.In the real world,on Christmas day, most of the businesses prefer opening rather than closing.



LABOUR:
Labour is the greatest and the most valuable assets in the company.In this case,assume the business opens on Christmas Day,they should pay labours extra money,because they work more extra time on Christmas Day,which they are not supported to do.If the company is not following the law,they may be sued by the trade union.However,labours may feel lonely and demotivated,it leads to the low productivity but sales may not increase and cost is high but the company have to pay the extra money may be more than working days to the labours even though the productivity is low,therefore the company should think about it or taking other choices,such as employ part-time labours but the problem for them is hard to training them in a shot time period.

8 short tips

1.liquidity:the ability to convert an asset into cash without loss or delay.

2.Gearing: focuses on long-term liquidity and shows whether a firm`s capital structure is likely to be able to continue to meet interest payment and to repay,long- term borrowing

EQUITY:funds provided to set up the business,fund expansion and purchase fixed assets



3.DEBTORS COLLECTION PERIOD=debtors/sales *365

4.creditors payment period =creditors/purchase*365

5.average stock:is the average amount of stock stores in the warehouse

stock turn:it is the cycle of the stock by a period of time


6.ROCE(return on capital employed:is a measure of the value of the profit over resources used by business

return on capital employed:operating profit/capital employed

7.GP (gross profit):the revenue minus costs of sales.The gross profits shows how efficiently a business is converting its raw materials or stock into finished products.

8.NP(net profit): net profit is calculated by subtracting a company's total expenses from total revenue thus showing what the company has earned (or lost) in a given period of time (usually one year). also called net income or net earnings.

Moving to China

"APPENDIX A"



1.80%of all employees are in the union membership,the problem is that the a majority of the labour may ask high wages if necessary, it can directly impact the fixed costs and push up the total costs which might bring the negative effects to the company profits and liquidity,also high costs may lead to cash-flow,shortage of demand for example.Problems which can be a dangerous situation for company in a long-term run.



2.Compared to the annual pay of factory between CELLTON FACTORY and IN CHINA,salary paid to the labour in CELLTON FACTORY is 9-fold to in China,which is a good news for shareholders and investors who want to relocate the factory in China in order to gain a high level of profits.For shareholders,they may get more dividend with high level of growth in profit return,their shares can be more valuable and they can sell shares at a high price.And both of shareholders and investors are motivated when they receive the profit return



"APPENDIX B"

3.Net present value shows the positive figure at 5.7m,and this is a quite big value for the company(Net present value is the value which the company may gain in the future transfer into the current situation),+5.7 represents the meaningful situation of the economy for the company and it will encourage not only labours but stakeholders to achieve the objectives.Labours may be motivated as a result increasing the productivity and reducing the unit cost and the company will become more efficient and competitive.



"APPENDIX C"

4.Even though both sales revenue and net profit indicate the increasing trade 15% and 5% respectively.However it is evident the increasing of the net profit is one-third of the sales revenue,it may tell us the cost is increasing at the same time.The net profits may increase at a increasing costs,and increasing in costs may higher than net profits,which can be a problem to company



5. Capital employed(measured of the value of the resources used by a business) is 500m.It shows a large amount of money spent on resources,the resources are valuable and it indicates the price of the products are likely t be high,because of the resources/materials(variable costs) is high.High price may affect the demand for the products.

"APPENDIX E"
6.Compared the two line graph,it is clear that factory in China(450) gets the break even earlier than in CELLTON FACTORY(600).It will reduce the risks for the company and make the company safe(marginal safety).Capacity in China is greater than CELLTON FACTORY with 1000 and 800,the benefit for this is the company may get more profits because they have the ability to produce more,and can solve the emergency situations like if there is a high demand in a short period of time,the company with high level of capacity may overcome the problem quickly and flexibly.
Also,we can see that the variable costs in China is 18.5,which is lower than in CELLTON FACTORY with 25per unit,it means the variable costs of every product produced in China saves 6.5,if the company produce same quantity of products in both factory,the costs of the products produced in China will lower,therefore the company in China,can have such pricing strategy such as loss leader(which set a considerably low price in to the market in order to break the order of the market)and keep the price to gain more profits .They sell the same price to retailers which means that the company may gain more profits in China because of the low variable costs and fixed costs in China...

tired........

Not moving to China

1.The context indicates than HURBANK which produced luxury clothing and accessories.This can be a point which supports the main argument.Because,to be honest, according to the background of China,the level of development is not increasing as much as we expected,compared to other developed nations.Selling luxury products might be suitable for high level of consumers in China which only constitutes under 10%of whole population,therefore,producers may not sell as many as they expect,and the profit can not be satisfied as a consequence,it is a risk to sell luxury products in China.

"APPENDIX A"
2.Said that the labour productivity compared to five years ago is increasing by 40%,which shows the positive number,we can`t compare this figure with China because there is not data shows the productivity in China,but we know it is a good situation for CELLTON FACTORY.labours` satisfaction can be a factor which resulting in the increasing the productivity and because labours are satisfied with their works,it can reduce the labour turnover which can reduce the company additional training costs and increase the morale around the company affects the increasing in productivity.Absenteeism can relieve as well,it directly has correlation with the quality of the products and profits,as the absenteeism reduced,the quality of the products can be improved sharply which makes more profits for the company.high level of absenteeism can cause delay the production and machines may be depreciated and out of date over times,it can lead to high variable unit cost and less profits.

3.The shirts returned is almost none in CELLTON FACTORY compared 1%in China,it may illustrates the products`quality produced in CELLTON FACTORY is higher than China,it related to the reputation of the company (which is intangible asset)and loyalty of the products,the quantity demanded might be inelastic if the company has good reputation.Consumers may have loyalty to your company`s products because of the level of quality.If the elasticity of quantity demanded is inelastic, the company can rise the price if necessary and consumers may still expense as before,it can relate to the high dividend to shareholders.

"APPENDIX B"
4.The relocation costs in China is 22m,which is incredibly a huge amount of money,and it is also a risk for shareholders and investors.High fixed cost can level up the total costs,profits may reduce and even may get a loss,and small scale business can not afford this amount,if the company decided to relocate to China,the way where to raise this finance is problem. If borrowed from bank as a long-term loan, the high interest should be taken into consideration,and such non-current liabilities should be accounted into company balance sheet.

5.Lead time to retailers in CELLTON FACTORY is 3 weeks less than in China,it impacts on retailers,it may reduce the costs of the products supplied because the retailers may more happy about the high efficiency of the production and reducing the wastage to reduce the unit cost.

6.The change in the value of the pound relative to the Chinese currency is -18%,which show than there is a increasing to the value in China,oversea companies may costs more to achieve the same amount of money in 10 years ago,it can demotivate the investors and shareholders to put money in China,and the costs are higher than before in transfer into British currency,as a result,the profits they earn are much less.

"APPENDIX C"
7.Both sales revenue and net profit for the ending 1 June 2008 increased 15% and 5% respectively,compared with the previous year,and net profits shared one-third of the total sales revenue,which is considerably high,it shows how successful the company,it also shows how potential the company is relevant to the sustained increasing in SR and NP.

SUMMERY "USING OBJECTIVES AND STRATEGIES"

Objectives:the goals or targets should be achieved in order to realise the aims of the organisation.
Corporate objectives:the goals of the whole organisation.(coordinate the business and to give the sense of the direction)
Functional objectives:the targets of each of the functional areas of the organisation based on corporate objectives.(ensure that authority can be delegated without loss of coordination)

Relationship between corporate objectives and functional objectives:
--SURVIVAL:functional objectives are to assist the business to be survival(For example:choosing the appropriate stock in order to reduce the waste of the raw materials and it will increase the profit per unit)
--PROFIT MAXIMISATION:functional objectives will assist the business will its profit(increase capacity utilisation,makes the capacity efficient and reduce labour turnover and absenteeism)
--GROWTH MAXIMISATION:increase the share to increase the finance,and expand the market if necessary and more training programmers)
--DIVERSIFICATION:develop niche market to order to provide additional finance to overcome cash-flow problems and to achieve economics of scale(when there is a high output,the average cost per unit is lower)
FUNCTIONAL OBJECTIVES ARE MADE TO ENSURE THE CORPORATE OBJECTIVES ARE MET


SMART OBJECTIVES:
S--SPECIFIC:clearly defined
M--MEASURABLE:quantifiable(should have a certain number which the business are able to achieve)
A--AGREED(achievement):the managers and subordinates are involved into the targets
R--REALISTIC:the objectives should be realistic and no conflict with other objectives
T--TIME SCALE:which the business should have the time limitation

BUSINESS STRATEGICS
STRATEGY:the long-term or medium-term plans designed to achieve the objectives

RELATIONSHIP BETWEEN FUNCTIONAL OBJECTIVES AND STRATEGIES

HELLO!EVERYONE

Long time no see !!!I miss all of you so much .....xxxx
Any comment from new AS business studies and economics students is very welcome!!!!
It is the way to communicate each other and also an opportunity to improve my weakness hahaha!Anyway,I woke up ,going to continue my work!!!!

Pricing strategies and tactics

Pricing strategies:are used to reach market objectives
1.price skimming:is a strategy in which a high price is set to yield a high profit margin
2.penetration pricing:low prices are set to break into the market or to achieve sudden benefit in market share
3.price leadership:involves the large companies set a market price that all small firms should follow
4.price taking:involved small firms follow the price which set by a price leader.
5.loss leadership:set a very low price in order to encourage consumers to buy other products
6.psychological pricing:to give a impression of value
7.cost-plus pricing:price set is the average costs of a product plus a sum to ensure a profit

Formula revision in UNIT 2

Measuring profitability:
Two ways to measure profitability are the net profit margin and return on capital
1.net profit margin:
net profit before tax/sales

2.return on capital (invested):
net profit before tax/capital invested

Labour turnover: is the proportion of the employees leaving a business over a period of time
number leaving a business over a given period of time/average number employed over a period of time

Absenteeism:the rate of absenteeism is the proportion of employees not at work on a given day
number of staff absent on 1 day/total number of staff

Absenteeism rate for a year:
total number of days lost/total number of days that could be worked *number of staff

Unit costs:
total costs/units of output

Punctuality:
deliveries on time/total deliveries

Capacity utilisation:
actual output per annum/maximum possible output per annum

Cash flow Forecast-Budget Niche market!

So tired to do blog.....anyway I should resume my blog...exams coming soon...especially business,still painful....

Today I did the BUS mock,I thought it should be fine,but actually,it isn`t...I misunderstood the last part in question 1(9marks)

Today I am going to talk about the limitations of budget,cash flow forecast and niche market.

Cash flow forecasting disadvantages:
1.Mistakes can be made in both costs and revenue
2.Unexpected cost increase can lend to inaccuracies and misleading in forecasts
3.Wrong assumption ca be made in forecast,maybe poor market research,and it will also make the forecast inaccurate.

Budget disadvantages:
1.Allocations may be incorrect because the circumstances have changed
2.the both income and costs may increased unexpectedly it also makes the figures inaccurate.

niche market cons and pros:
pros:consumers are willing to pay a high price,has demanded price inelastic

cons:lack of economies of scale may make high costs.

EXTRA WORK 1：PED

PED:the responsiveness of the quantity demanded to a change in the price of the product.

Formula:%ch in quantity demanded/%ch in price

Notes:PED>1:ELASTIC;PED<1:inelastic:ped=1>

When the PED is elastic,if the producers drop the price,they will gain more,when they increase price,they will get a loss.


But when PED is inelastic,producers increase price,they gain more revenue,they loss profit when they decrease the price.


PED is one of the most efficient way to measure economy and market,and there are several important factors :

1.substitute:

Substitute,we can simply treat it as competitors,If a lots of producers produce the same kind o produce.Its quantity demand is elastic,the more substitutes,the bigger PED number are.Therefore,substitute is a main factor which can affect PED.

2. income level:

If there is an increasing in consumer income,the demand may increase,because people have more income than before,it may encourage people buy goods and services.But the problem is people may buy demerit goods,such as cigarette,which has negative efforts on the third parties,cause market failure,and in order to get more profit,producers may over produce demerit goods,make market failure even worse.At last,government may increase taxation to correct it closing to MSC

3.Time:

If there is a new product selling today,people may buy it,as it`s fresh goods,and want to try it.Demand may increase sharply,but....after a period of time,the demand for the product may decrease and keep remain..

4.Taste:

As I said in 3,time is a factor which might affect PED,taste is same as time,after a new product is introduced into market,people are eager to buy it,but different types of people have different tastes...after a period of time, demand for the product may decrease a lot,because of the different tastes.

5.Economics problems:

we know UK economy has deeply recession.People don`t want to expend,the demand for specific(people want but don`t need to buy)goods may decrease, because people may not need it for their normal life.So they don`t have to buy them when there is an recession.

ECO 18th Balance of payment

Balance of payment:a record of money flows coming in and going out of a country.



WHAT IN BALANCE OF PAYMENT?



1.trade in goods



2.trade in services



3.net flow investment income



4.transfer of money







Trade deficit:money going out is more that money coming in

Fashion laptop carry cases

This product is about the laptop carry cases,it is not a new product for us,but the point is it`s fashion and especially for female.It`s easy to understand why more product aimed to female,these product has different attraction points,as for this product,it has slight difference,separated into cold colours and warm colours.And different type of bags are for different size of the laptops.

Pink might be the most popular colour for female,as same as white...they are both attractive colours,it might attract female...

They also provide mini cases,which can just put a small size laptop into it,it might useful,because it is easy to carry,good advantage for females.

But I don`t think it is new attraction product....the reason...

Firstly,when you buy the laptop,you may get the laptop case for free,so people may not buy a new one for fashion.

Secondly,lots and lots producers have already realise this kind of market,it doesn`t make any big innovation about cases...people have more choices....

NEXT,as I know so far, some luxury brands has this kind of product as well,it makes this product has less competitive,people prefer to buy expensive,high quality,well known brands product.Even though your product is better,people won`t buy it....

Also, the price is not acceptable for mid-level income consumers,it`s a limitation.

Eco 17th Macroeconomic and TAX

Macroeconomic equilibrium:

TAXes:

The money which government use to improve health,education,and sort of problems is tax

Category of Tax:

direct TAX:tax which get from the percentage of people`s income and company and cannot avoid.

As we know, people and salary monthly,but they must pay income tax at the same time.This is one way where government get the money from in order to something else to improve specific section.In China the start point is 1600 yuan(160pound),but as your income increase your income TAX will increase as well....income TAX is the one of the main TAX government used to get money from,it plays a important role in government.

Also,company should pay direct TAX as well,it is the percentage of your company profit.Big company pay thousands and thousands TAX to the government.

indirect TAX:a tax levied on the goods and services

another essential TAX is indirect TAX,which we can see it everywhere.Whenever we go shopping and buy something we may noticed that there is VAT(value added tax)a part of the indirect TAX in the end of receipt,in UK is has reduced to 15%.In some luxury goods,such as cars,clothes...etc..government will higher the TAX for controlling.As for cigarette,UK government has higher the TAX,the tax is even more that cost.Furthermore according to the elasticity if higher the TAX on cigarette ,consumer will pay more(inclasticity) the reason why government do that is because it cause negative externality(which affect third parties)it is harmful for our normal life

But it`s not easy to control people not to smoke by using TAX on cigarette,because it`s inelasic even the TAX is high and price is increase,people are likely to buy it as normal.