1 工商管理导论讲义-2010[1].9.20

Fundamentals of Business

Lecture 1

Setting Up a Business

Ⅰ.Objectives and Tasks

A、Be familiar with the major forms of business.There are four, namely, sole

proprietorship, partnership, corporation and franchising.

B、Know the advantages and disadvantages of the different forms of business.

C、Memorize the related technical terms.

Ⅱ. Major contents

There are four major forms of business in a market economy: Sole proprietorship, partnership ,corporation and franchising.

1.Sole Proprietorship

● Definiti on：A sole proprietorship is a business owned and controlled by one person. Advantages

★Simple to Establish ★Freer in Decision-Making

★Easy to Keep Operational and Financial Secrecy

★Less Tax Burden ★Exclusive Use of Profits

Disadvantages

☆Unlimited Liability ☆Limited Access to Capital

☆Limited Managerial Expertise

2.Partnership

● Definition：A partnership is an association of two or more persons to carry on as co-workers of a business for profit. (By the US Uniform Partnership Act.) Advantages

★Improved Access to Capital and Credit

★Greater Possibility for Good Management

★Definite Legal framework ★Better Prospects for Growth

Disadvantages

☆Unlimited Liability ☆Internal Conflicts

☆Problem of Continuity

3.Corporation

● General Introduction：If your business keeps growing and needs huge sums of capital, you may have to choose a different form.

To form a corporation, at least three incorporators are needed.

All the incorporators are limited liabilities.

A corporation is a legal person.

incorporators elect directorate

(Board Chairman, CEO) elect president

Advantages

★Limited Liability ★Easy to Expand

★Separated Ownership and Management ★Continuous Life

Disadvantages

☆Double Taxation ☆High Organizing Costs ☆Lack of Secrecy

4.A Special Form: Franchising

● Definition：Franchising is a licensing agreement, under which the franchisor grants the franchisee the right to sell or use the former’s products, service or method in return for a royalty from the latter. The franchisor also assists the franchisee in financing, selecting, business site, organizing, training, purchasing, advertising and other management activities. It is an agreement/arrangement, whereby a business owner called franchisor, allowed other franchisees to use its trade mark, trade names, or copy rights under specific conditions.

Advantages

★Instant Recognition

★Enjoying some Independent as a Sole Proprietor

★Receiving Training Guidance ★Less Difficulty Getting Bank Loan Disadvantages

☆The Franchise Fee Might be So High

☆Less Control

Ⅲ.Business Expressions.

1.setting up a business

2.students of business

3.account for

4.sole proprietorship

5. partnership

6.corporation

7.franchising 8.license/permit

9.shareholder 10.board director

11.business strategy 12. financial information

13.unlimited liability 14.business assets

15.managerial expertise 16. marketing

17. Uniform Partnership Act 18. share profit and losses

19. dissolution 20. divide assets

21. law firms 22. accounting firms

23. real estate firms 24. general partner

25. limited partner 26. sources of capital

27. extend credit 28.raise fund

29. go broke/bankrupt 30. withdraw capital

31. sales revenues 32. legal person

33. bonds/ securities 34. collateral/mortgage

35.the termination of the business

36. dividends 37. income taxes

38.double taxation 39.corporation charter 40. industrial relations

Notes: Uniform Partnership Act (UPA)

（美）统一合伙条例[ 是美国关于合伙企业的法规。它是为确定和管理合伙人之间的关系和制定的。它规定，合伙企业得依合伙人订立合同（协议）的方式成立，无需政府批准，但须由合法的目的，有些行业如律师业医师业等须事先申领执照，才能开业，并受法律保护。]

Ⅳ. Items to be checked

Four forms of business.

Business Case

Hongya Case

The Founding of Hongya

Zhang Weida graduated from Department of Garments, College of Light Industry three years ago and has worked for a textiles company ever since. Highly regarded by his boss for his outstanding performance at work, he got a promotion last year and became a departmental manager. It is likely that he will make another move up the ladder and become a vice president of a division. However, he always felt that he was nobody but a hired hand ―making bridal dresses for others.‖ At a schoolmates’ reunion party, he found that Cheng Hao, the most gifted student of his class and now a deputy division chief of the Municipal Commission of Economy and Trade, was not content with his position either. After several lengthy and in-depth talks, they decided to resign together and set up a fashion shop of their own.

They named their shop Hongya, with Zhang Weida as President and Cheng hao Vice Prisident. The start-up capital was 70,000 yuan, of which 30,000 yuan was contributed by Zhang and 10,000 by Cheng, and the balance borrowed from a bank. They decided to start with retailing. Buying is mainly the responsibility of Zhang, and he often visits Guangzhou and Shanghai for purchasing. Cheng, in charge of selling, basically works in the shop, although occasionally also does some purchasing.

Zhang closely follows fashion trends and market demands, and the goods he purchases are sold out as soon as they are brought into the shop.

Within 6 months, the two of them have already made 30,000 yuan, enough to pay back the bank loan. Encouraged by the booming business, they have decided to enlarge the business space by taking over the tea shop next door whose business is dull. Zhou Husheng, the owner of the tea shop, was reluctant to sell his business outright, but agreed to value the shop at 30,000 yuan and invest the money in Hongya. Besides, he decided not to take part in Hongya’s day-to-day management, because he is not familiar with the fashion business.

In return, however, he asked for 21% of Hongya’s profit, saying that 21% is about half of his share of Hongya’s equity. Having weighed the pros and cons, Zhang and Cheng agree to Zhou’s request and sign an agreement with him to that effect.

Discussion

1. What type of business is Hongya? What kind of relationships are there among Zhang, Cheng and Zhou?

：Partnership.Zhang and Cheng are General Partners, and Zhou is Limited partner.

2. Why do Zhang and Cheng agree to Zhou’ s request for investing in Hongya?

If Zhou agreed to sell his tea shop for more than 30,000 yuan, should Zhang and Cheng buy the tea shop rather than agree to let Zhou invest in Hongya?

Because it is more cost-efficient in this way.They shouldn’t buy the tea shop. Because after they repay the bank loan (30,000 yuan), they only have 40,000 yuan to run their business. And if they buy the shop by more than 30,000 yuan, their running capital is only less than 10,000 yuan. It has a great disadvantage for their business.

3. What are the pros and cons of equity financing compared with debt financing

(e.g. bank loans)?

Investing in Hongya:

Advantages: 1. No Interest on Loan

2. More Running Capital

Disadvantage: 1. Pay the dividend to Zhou Continuously

2. Give Up Part of Ownership

Loan from Bank:

Advantages: 1. No dividend

2. Overall Ownership

Disadvantages: 1. Interest on Loan

2. Less Running Capital

Chapter 2

Marketing: an Overview

Ⅰ.Objectives and Tasks

To know the functions of marketing.

To know the contents of the marketing mix.

To know ―what is market segmentation?‖.

Ⅱ.Major contents

1.What is marketing?

Interpretations of marketing

a). ―Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.‖ (Philip Kotler)

b). Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer.

c). Marketing is getting the right goods and services to right place at the right time at the right place with the right communication and promotion.

2). What is the aim of marketing?

―The aim of marketing is to make selling superfluous so well that the product or service fits him and sells itself.‖ (Peter Drucken)

2. The Functions of Marketing

Marketing function are those inescapable economic activities found through out the marketing system, three major categories:

1) Exchange a). Buying b). Selling

concerned with the exchange of goods form seller to buyer

2). Physical Distribution

Transportation Storage

Concerned with the movement of goods from the place of production to the point of consumption and with the safekeeping of goods in depository.

3) Facilitating (辅助)

Financing Marketing research and information

Risk Taking Product standardization and grading

concerned with the function that aid in the performance of the other functions

3. The Marketing Mix

The marketing mix is a set of guidelines or decisions combined with the marketing activities to form purposeful marketing plans and strategies.

Components of the marketing mix that compose a cohesive marketing program can be illustrated as follows:

-Product: a good, service, or idea to satisfy the consumer’s need.

-Price: what is paid for the product.

-Promotion: a means of communication between seller and buyer.

-Placing: a means of getting the product into the consumer’s hand.

They are called the four P’s – a useful short-hand reference to the marketing mix.

4. Market Segmentation

Dividing a market into segments according to customers’ needs , wants and interest is called market segmentation.

Factors of market segments

Geographic Variables Demographic Variables

Psychographic Variables Product-use Variables

Ⅲ.Business Expressions

product-oriented 2. white elephant

bulk buying 4. discount price

marketing mix 6. channels of distribution

7. customer value 8. customer satisfaction

9. value chain 10. supply chain

11. marketing network 12. product concept

Ⅳ.Items to be checked

Understand the functions of marketing Understand the 4P’s of marketing Understand the factors of market segmentations

Chapter 3

Products and Pricing

Ⅰ.Objectives and Tasks

To know the procedures in development of new products.

To understand the strategy of pricing.

Ⅱ. Major Contents

Definition of product :

A product is a good, service, or idea consisting of a bundle of tangible and Intangible satisfactions that a consumer receives in exchange for money.

2. Product is a commod ity or service that satisfies a customer’s needs

3. 菲利普。科特勒：可提供于消费市场上，以引起留意，获取,使用，并满足欲望或需要的一切东西。

A Types of products

Two categories: Consumer products and industrial products

Consumer products:Goods and services for use by consumers

convenience goods shopping goods specialty goods

B. Industrial Products

Industrial products are goods and services purchased by businesses to produce consumer or other industrial products

Development of New Products

1.Generating New product Idea （新产品）创意构思

2.Screening 筛选

3. Development 研制，开发

4. Testing 试销

5. Commercialization 上市（投放市场）

Product Life Cycle

Five stages:

introduction stage growth stage

maturity stage saturation stage decline stage Pricing

1. Nature and importance of Pricing

Definition of Price : Price is the money or other consideration (including other products and services) exchanged or the ownership or use of a product or service. Pricing is a critical marketing decision in that price has an immediate impact on a firm’s profits.

Profit Equation

profit= (unit price＊quantity sold) –total cost

2. Identifying Pricing Constraints and Objectives

Identifying Pricing Constraints

1). consumer demand 2). stage in the product life cycle

3). single product versus a product line 4). cost of producing and marketing the product

5). types of competitive markets

1. Pure monopoly

2. Oligopoly

3. Pure Competition

B. Identifying Pricing Objectives

1). Profit 2). Sales 3). Market share 4). Unit Sales

5). Survival 6). Social Responsibility

Break—even Analysis

Break-even point (in units)= Total fixed costs÷ (price-variable cost)

Definition: Break-even Analysis is a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. Pricing strategies

skimming strategy

penetration strategy

loss leader pricing strategy

odd pricing strategy

price lining strategy

Ⅲ. Business Expressions

intangible attribute 2. consumer product

3. convenience goods

4. shopping goods

5. specialty goods

6. industrial product

7. feasibility 8. marketability

9. pilot model 10. commercialization

11. equilibrium price 12. break-even

13. fixed costs 14. variable cost

15.double-edgesword 16. skimming strategy

17. penetration 18. toss leader pricing strategy

19.odd pricing strategy 20 price lining strategy

21. price sensitive 22. pricing war

Ⅳ.Items to be checked

Be familiar with the procedures in development of new products.

Be clear about the strategy of pricing.

Memorize the related business expressions

Chapter 4

Channels of Distribution

Ⅰ.Objectives and Tasks

1.Have a clear idea about the nature and importance of marketing channels.

2. be familiar with different intermediaries (middlemen) and functions performed by them.

3. know the different types of shops.

4. know the modes of transportation.

Ⅱ. major contents

A. Defining marketing channels of distribution

B、Function of distribution

Marketing Channels make possible the flow of products and services from a producer, through intermediaries, to a buyer.

Intermediaries go by a variety of names:

1.middlemen:Any intermediary between manufacturer and user markets.

2.Agent or broker : Any middleman with legal authority to act on behalf of the manufacturer.

Agents work as manufacturers’ sales representatives on a relatively permanent basis, while brokers work as go-betweens for sellers and buyers on a deal-by-deal basis.

3.wholesaler: A middleman who sells to other middleman, such as retailer; usually applies to consumer market.

4.Retailer: A middleman who sells to consumers.

5. Distributors: Usually used to describe a middleman who performs a variety of distribution functions, including selling, maintaining inventories ,extending credit, and so on.

6.Dealer: an imprecise term that can mean the same as the distributor, retailer, wholesaler, and so forth. Virtually synonymous with middleman.

B. Functions performed by intermediaries

Intermediaries make possible the flow of products and services from producers to buyers

1.Time Utility

2. Place Utility

3. Ownership Utility

4. Information Utility

5. Form Utility

Transactional Functions involving

-buying -selling -risk taking

b). Logistical (distribution) function involving

-assorting : creating product assortments from several sources to serve customers.

-storing

-sorting (repacking)

-transporting

c). Facilitating Functions involving

-financing -grading -feedback

C. Retailing

A). By lines of goods handled已经营品种分类

1.General-merchandise stores一般商店(杂货铺)—department store, general store, discount store.

2.Single-line stores 专业店(经营商品类型单一的商店，如体育用品商店，照相器材店等)

3.Specialty stores 特品店.

B). By ownership 以所以权分类

1.independents 个体店

2. chain stores 连锁店

3. voluntary chains 自愿连锁店

C). By Geographic Location 以地理位置分类

neighborhood shopping center 邻里商业中心

community shopping center 社区商业中心

regional shopping center 地区商业中心

D). By type of Operation 以运作方式分类

1. In-home or Direct selling家居销售与直销

2. Catalog selling 目录销售

3. Electronic sales (E-sales) 电子销售

Distribution Channels 分销渠道

1.Channels for Consumers Goods 消费品分销渠道

2. Channels for Industrial Goods工业品分销渠道

E. Modes of Transportation

1.Marine Transportation

a. Conference Line Vessels 海运公会班轮

b. Non-Conference Line Vessels 非海运公会班轮

c. Tramp Ships 不定期货船

d. Charter Ships 包租赁船

2.Air Transportation

3.Overland Transportation

4. Pipeline Transportation

Ⅲ. Business Expression

1.wholesaler

2. retailer

3. discount store

4. general store

5. specialty store

6. mail-order-house

7. vending machine

8. virtual store 9. agent

10. broker 11. distribution channel

12. channel level 13. intensive distribution

14. exclusive distribution 15. selective distribution

16. distribution center 17. distribution

18. stock control 19.wheel of retailing 20. chain store

Ⅳ. Items to be checked

Be clean about the functions of middlemen

Memorized the related business expressions

Chapter 5

Promotion

Ⅰ.Objectives and tasks

Know objectives and functions of advertising.

Be familiar with the major types of advertising media.

To remember personal selling process and modes of sales promotion.

Ⅱmajor contents

The definition of advertising:

advertising is a paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor.

purposes : Advertising is used to publicize a

new product, or to remind the public that a product is still around or, most commonly,to show the advantages, utilities, and features of a product in comparison with rival products.

functions: 1. to inform 2. to persuade 3. to remind

Objectives: 1.to provide information 2. to create interest

3. to persuade

4. to generate immediate sales

Tasks: the AIDA formula

AIDA is derived from the first letter in each of the major tasks of advertising: to attract Attention , to draw Interest, to create Desire and to prompt Action. Promotion Mix: The combination of the promotional tools

is called the promotion mix.

Tools that are commonly used for promotion are advertising, sales, promotion, personal selling, public relations,publicity,etc.

There are two types of advertising:

Product advertising and institutional advertising. The former focuses on individual products while the latter is used to create a positive image for an organization.

The major types of advertising media:

1.newspaper

2. television

3. radio

4. direct mail

5. magazines

6.internet

7. outdoor

8. others

Personal selling

The selling process can be broken into the following seven steps.

1.To Prospect 物色（潜在顾客）

2. To Qualify 确认

3 To Approach 接触（顾客）4. To Make Presentation 演示

5. To Handle Objection 处理（顾客）不同意见

6. To Close 成交

7. To Follow-up 售后跟踪

The purpose of sales promotion is to create consumer awareness and push sales of a firm’s product or service.

Modes of Sales Promotion

1.point-of-sale displays

2.speciaty advertising

3.contests

4.sweepstakes

5.coupons

6.permiums

7.trade stamps 8. trade shows 9.sponsorship

Public relations and publicity

Public relations is a tool with which a firm builds good will among the public and maintains a positive image of itself.

Publicities refers to new reports about firm’s goods, services , or the firm itself.

Ⅲ. Business Expressions

promotion mix 2. product advertising

3. institutional advertising

4.outdoor billboard

5.yellow pages

6. advertising agency

7. make presentation 8. handle objections

9. point-of-sale displays 10.sweep stakes

11. coupon 12. trade stamp

13. trade show 14. public relation

15. publicity 16. word of mouth

17. marketing database 18. advertising objective

19. information advertising 20. media vehicles 21. allowance

22.sales-force management 23. sales quota 24. price packs

Ⅳ. Items to be checked

Know the function of advertising Know the contents of promotion mix

Be familiar with the modes of sales promotion Memorized the related business expressions

Chapter 6

Money and Banking

Ⅰ.Objectives and Tasks

To understand the importance and characteristics of money.

To know the functions of money.

To be familiar with the types of money and the financial systems.

Ⅱ.Major contents

1.what is money?

Money is something that people accept as

payment for a good on service. It must be

generally acceptable to those who are

exchanging goods and services in markets.

2. Characteristics of money

stability (of value) 稳定性scarcity 稀缺性

portability 便携性durability 耐用性

uniformity 统一性Divisibility 可分割性Acceptability 合法实用性

3.Functions of money

a. Money serves as a medium of a exchange 交换媒介的作用

b. Money serves as unit of a count 价值尺度

c. Money serves as a standard of deferred payment 延迟支付的标准

d. Money serves as a store of value储藏价值

4.Types of money

a.M-1: 狭义货币

The most common definition of money is M-1,which include the most liquid (spendable), forms of money: currency, demand deposits,

and other ―checkable‖ deposits.

b.)M-2广义货币

A broader definition of money is M-2, which consists of everything in money M-1 plus time deposits, money-market mutual funds’ and other items, which cannot be spent directly but can be easily converted to spendable forms.

5.The financial system

In the US, this system is made up of commercial bank saving and loan associations, mutual saving banks,credit unions, and insurance https://www.360docs.net/doc/129185049.html,mercial banks

Services provided by commercial banks

1.)taking in deposit

2.)making loans

3.) providing services in currency exchange,

letters of credits and banke r’s acceptance.

4.)issuing credit cards

5.)financial counseling

6.Saving and Loan Associations

Savings and Loan Associations

1储蓄与贷款社

按法律组成的金融公司，主要是将其股票出售给私人，用其所得款项投资于住宅抵押贷款。投资者的利益以股票股利形式取得。

2储蓄贷款协会

美国根据联邦或州法律成立的金融机构，其特点是向投资人出售股票并将收入主要用于住房抵押贷款，投资人取得股息而不是存款利息。

a. Mutual savings banks 互助储蓄银行

美国的一个合作性储蓄银行，由银行的所有存款人共同经营管理并提供个人贷款，保险库出租服务，以及负责处理信托基金等业务。

b. Credit unions 信用合作社（存款互助会）

c. Other financial institutions

7.Money Supply and Federal Reserve Systems

● Federal Reserve Systems (美)联邦准备制度

（即美国中央银行制度。根据1913年12月23日威尔逊总统签署的―联邦准备法‖于1914年正式成立。其目的是实行弹性通货，从事商业票据再贴现使银行检查更健全有效，以及实现高度就业和稳定物价水平等。其业务包括:(1)集中会员银

行法定准备金；（2）对会员银行从事放贷贴现及票据清算，成为银行之银行；（3）统一钞票发行；（4）管理信用，这是联邦准备制度的主要业务和功能；（5）代理国库）

Federal Reserve Banks (FRB) (美)联邦储备银行

[ 即美国中央银行。其主要业务是：(1)发行货币;(2) 发行国家证券；（3）控制各商业银行储备金。全国划分为12个区域，各设一家联邦储备银行执行中央银行的任务。]

Federal Reserve Board

联邦储备委员会

[即Board of Governors of the Federal Reserve System.是美国联邦储备银行（即中央银行）的领导机构。由总统题名，参议院通过的七名委员组成。其主要职责是制定货币政策，决定联邦准备金向会员银行提供贷款的贴现率，调节美国货币的供给。]

Federal Open Market Committee (FOMC)

(美)联邦公开市场政策委员会[美联邦准备制度监理委员会下属机构之一，成立于1930年。其任务是统一指挥公开市场操作并加强其效用。]

Ⅲ.Business Expressions

denomination 2. paper note 3. inflation 4. circulation

5. legal tender

6. transaction

7. medium of exchange

8. store of value 9. unit of account 10. liquid 11. checkable

12. time deposit 13. mutual fund 14. demand deposit 15. checking account 16. withdrawal 17. credit union

18. portfolio 19. securities 20. savings account 21. currency exchange 22. letters of credit 23. banker’s acceptance

24. draft 25. access card 26. credit card 27. debit card

28. financial counseling 29. home mortgage

30. mutual savings bank 31.persion fund 32. Fed 33. reserve requirements 34. discount rate

Ⅳ.Item to be checked

Be clear about the types of money Understand the financial system

Know the functions of commercial banks Memorize the related business expressions Chapter 7

Financing

Ⅰ. Objectives and Tasks

To know sources for short-term financing To know long-term sources of funds

To understand the related technical terms

Ⅱ. Major Contents

1. Trade credit a)商业信用b)同业贷款，信用交易：售方给买方的信贷

2. Commercial paper 商业票据[贸易商行或企业或贷款中使用的各种短期或转让票据。这些票据包括票汇（尤其是商业承兑汇票和期票）。商业票据类似公司债券，只使是到期较快，一般为6个月或少于6个月。这些期票在商业票据市场上通过经纪人卖给公众。与mercantile paper 同义]

3。Open account

赊销[指一种记帐交易方式。即出口商将货物售给国外的进口商后，不立即收回货款，而是记入进口商之帐，于一定时期（一月或一季)进行结算，由进口商汇付货款。采用记帐结算，卖方承担的风险较大，这种交易也称payment on open account （记账交易）

4. Promissory note (P/N)

a)本票

b)期票[由出票人签出的保证在见票后或在一定的日期无条件付给受款人一定金额的票据

5. Debt capital

借入资本[企业借入供经营业务用的资本。通常是通过接洽银行贷款。发行公司债券（Bond)或者信用债券（debenture)来实现的。企业停业时，借入资本应优先偿还。]

6. Retained earnings

保留收益[公司纳税后利润额减全部股息分配以后所剩余的部分。也称保留收入（retained income)或累积收入(accumulated income)或未分配利润（undistributed profits),保留收益一般占公司利润的50%左右它是企业扩大生产规模或经营规模的重要资金来源。]

7. Depreciation

折旧(指国家，公司资产的摊销。)

8. Debt financing

举债筹资，借款融资[企业为筹措流动资金，或为替换债务证券或期票而举借的长期贷款。]

9. Equity financing

股权融资，股票筹资[企业发行股票的办法筹措资金。]

10 Capital Structure

资本结构，资本构成[指企业的资本在它的几个要素间的分布比率，如普通股股份，优先股股份，长期债券，短期债券以及公积金各占的百分比。]

11. Cash flow

a)现金流，现金进出额[企业在一定期间内收入于支出现金的数额。]

b)周转及扩充现金[企业的利润与折旧费用之和作为周转资本和扩大生产之用的现金。它可作为衡量企业财力的一种标志。]

12. Preferred stock=preference share

优先股：指对公司红利及公司清算时剩余财产的分配均享有优先权，但没有公司对经营控制权的股票。

13。Common stock/share

普通股，在美国和加拿大指一般的无固定利息的股票或股份。它在优先股要求权得到满足之后在公司的利润和资产方面给予持股人以无限权力的公司股票的公司股本。普通股票代表持有人在公司中的财产或所有权。]

14.Liquidation

清理，清算[指企业或公司由于无力偿还债务而停止营业所进行的清理。清理分自动清理和强制清理两种。前者一般由股东决定，后者须经法院判定。]

1.Short-term Financing

The most common sources of funds are as follows:

a). trade credit b). bank loans

c). commercial paper d). factoring accounts receivable

1) Trade Credit

Trade credit is an agreement whereby the seller provides goods on services to the buyer without asking the latter for immediate cash payment.

There are three types of trade credit

a) open account

In the seller’s accounting book, trade credit is entered as account receivable from the buyer, while on the buyers accounting book, the same is entered as account payable to the seller.

b) promissory note

A promissory note is an unconditional written promise by the buyer to make repayment, together with interest, to the seller on a particular date.

c) draft

A draft on bill of exchange is an unconditional order in writing signed by one party (drawer) requesting a second part (drawer/payer) to make payment in lawful money immediately on at a determinable future time to a third party (payee) .

Types of draft

-commercial draft

-banker’s draft

-sight draft

-time/usance draft

-clean draft

-documentary draft

2). Loans and Lines of Credit from Banks

Commercial banks are an important source of short-term funds because they offer, among other financial services, loan and lines of credit to their clients.

There are two types of loans, secured and unsecured.

3) Commercial Paper

For large and very credit-worthy firms, there is another option for short-term fund-raising-issuing commercial paper.

It has a face value but is sold under that value. At the end of a specified period (usually 30 to 270days) the issuing firm buys back the paper at the face value.

4). Factors

Factors are collection agents who buy accounts receivable under their face value from firms who are in need of cash.

2. Long-term Sources of Funds

There are two sources:

a). Internal source—retained earnings and depreciation.

b). External source—debt capital.

1).Retained Earnings

Profits made by a firm from its operation is kept for its future growth are called retained earnings.

2) Depreciation

Depreciation means dispersing the cost of a firm’s asset over its useful life.

3) Long-term Loans

Long-term loans usually extend for 3 to 10 year and have many advantages:

a). can be quickly arranged b). be easier to keep secret

c). can easily be matched to th e borrower’s needs d). If the firms needs change, the loans usually contain clause enabling it to alter the loan’s terms.

Disadvantages:

a). The borrower may have to pledge long-term assets as collateral

b). sometimes, the amount of the needed funds simpl y exceeds a lenders’ ability on willingness to accommodate.

4)Bonds Firms can sell bonds as their second source of long-term funds

5) stock Stock is a major source of equity financing for compensations.

3. Debt On Equity Financing

Debt financing means obligations to pay loan lenders or bonds buyer a fixed amount of interest regardless of the firms financial conditions.

Equity financing:

Unlike bond holders who are creditors of the issuing company, stock holders are the owners of the company.

4. Features of Bonds

Bonds carry a face value and have a maturity date. It is interest bearing.

5.Features of stock

1) Preferred Stock

Preferred stock usually carries a fixed dividend and is callable.

Preferred stock enjoys certain privileges:

When dividends are declared, the preferred stockholders are the first to be paid.

In case the company goes bankrupt, the preferred stockholders have the privilege to claim on the company’s assets before the common stockholders.

Disadvantages:

The preferred stockholders do not have voting rights as common stockholders

2) Common Stock

1、Common stock cannot be recalled and it represents permanent ownership of the issuing company

2、The common stockholders have the rights to participate in business operations of the company.

Ⅲ.Business Expressions

short-term financing 2. long-terms financing

3.trade credit

https://www.360docs.net/doc/129185049.html,mercial paper

5. factor

6. account receivable

7. account payable 8. open account

9. promissory note 10. line of credit

11. collateral 12. inventory

13. compensating balance

14. revolving credit 15. the going interest rate

16. face value 17. debt capital

18. corporate bond 19. equity capital

20. retained earnings 21. dividend

22. depreciation 23. stock

24. IOU(I own you) 25. equity financing

26. share 27. debt financing

28. capital structure 29. cash flow

30. utilities companies 31. maturity date

32. principal 33. redemption premium

34. preferred stock 35. callable

36. common stock 37. creditor

Ⅳ.Items to Be Checked

To understand sources for short-term financing

To understand long-term services of funds

To memorize the related technical terms

Chapter 8

Accounting

Ⅰ.Objective and Tasks

To know the functions and contents of Balance Sheet

To know the functions and contents of Income Statement

To know the related technical terms

Ⅱ.Major Contents

1. definition of accounting: The process of identifying, measuring and communicating information to permit informed judgments and decisions by users of the information. --by the American Accounting Association

定义：确认，计量和传递信息，从而使信息的使用者能够做出有根据的判断和决策过程。

2.The ultimate purpose:

is to influence the decisions of users of the information produced.

去影响那些生成信息的使用者做出决策。

3.Particular Purpose

is to help users of accounting information to make more informed decision.

帮助会计信息使用者在信息更为完备的情况下作出决策。

4.Accounting as a Service Function

Accounting information should possess certain key qualitative characteristics, there are:

有用的会计信息应具有某些―性质上‖的特征：

Relevance 实用性Reliability 可靠性

Comparability 可比性Understandability 易懂性Timeliness 适时性

5 Financial and Management Accounting

Financial accounting, which seeks to meet the accounting needs of all the other users. 财务会计旨在满足其他使用者的会计需要。

Management accounting, which seeks to meet the needs of managers

管理会计旨在满足管理者的需求。

6. Balance Sheet资产负债表

1. definition: Balance sheet is one type of financial statement, which reports the financial health of a firm on a specific date. A balance sheet is made up of thee types of accounts, i.e. assets, liabilities and owners’ equity.

Equity

a) 权益b)产权c)资产净值[指公司股东对公司的资产净资实际享有的部分] Good Will

商誉[一般指企业的品牌，声誉，信誉等创造收益的能力。在会计核算中通常只有购入的商誉才在帐簿上和财务报表中予以反映。]

Current Ratio

反映公司短期偿债能力的比例。

计算方法：用流动资产总额除以流动负债总额]

current ratio= current assets÷current liabilities

Quick Ratio

速动比率[即acid test ratio ，速动资产与流动负债之比，表明一个企业以现金偿还流动债务的能力。

Quick assets: 流动资产

[现金和可及时折变现金，并在价值上不至遭受损失的资产。]

debt-equity ratio

负债对资产净值比率：自有股对债务比率[企业的经营资金除来自企业主的投资外还有借入的资金。此比率指企业负债数额与企业拥有的企业净值的比率。这种比率大表明企业的资力薄弱，基础不稳。]

7.Income Statement 损益表

又称operating statement 或profit and loss statement, 记载一企业经营的收入和支出的汇总报表]

The purpose of income statement—is to measure and report how much profit (wealth) the business has generated over a period.

Gross profit: 毛利[指出销售净额减去销货成本及存货损耗后的余额，但不包括推销及管理费用，额外收益和收益的减项。]

Net Profit Margin

净利边际[指销售净利对净销售额的比率，即净利润率。是企业管理最终成果的指标。]

Inventory turnover

存货周转率[年销售额与存货额之比。它反映一定会计期内公司存货周转次数。即旧存货由新增存货所代替的次数。]

Average Accounts Receivable Turnover

应收账款周转率。

其计算公式：

应收帐款周转率=赊销销售净额÷本期平均应收帐款

Return on Investment (ROI)

投资报酬率，投资利润率

[指在一段时间内项目的净收益占该项目平均投资额的比率]

Return on Equity

股本收益率，资本利润[指企业的净利与企业主资产净值的比例这是衡量企业经营效果的主要标志。]

Ⅲ.Business Expressions

managerial accounting financial accounting

financial statement balance sheet

owners’ equity patent

7.copy right 8. current assets 9. fixed assets

10. intangible assets 11.liabilities 12. current liabilities

13. long-term liabilities 14. current ratio

15. quick ratio 16. income statement

17. rental revenue 18. net profit margin

19. inventory turnover 20. average inventory

21. account receivable turnover 22. return on owners’investment

Ⅳ.Items to be checked

To understand the function and contents of Balance Sheet

To understand the function and contents of Income Statement

To memorize the related technical terms

Chapter 9

The Securities Market

Ⅰ.Objectives and Tasks

1.To understand the securities market

2.To know how stock and bond are issued and how they are traded and sold in the market.

Ⅱ.Major contents:

1. How to raise long-term funds:

1). issue stock for equity financing 2). issue bonds for debt financing

3). What is securities market?

2. The market for dealings of stocks and bonds is collectively called the securities market.

3 . Primary and Secondary Market

Securities markets can be divided into primary and secondary markets.

1)When a new stock or bond is issued, it is handled by primary markets.

2)The overwhelming majority, that is, the existing securities, are traded on the secondary markets.

4.Buying and Selling Stocks

The chief steps:

buyer→ stockbroker →the representative

of listed company on the floor →trading →recording →reporting →informing →charging and commission taking.

5.Bulls and Bears

1).Those who believe the prices will go up are called bulls.

2).Those who believe the prices will go down are call bears.

6.The Bond Market

There are three sources for a firm to raise long-term funds:

1).to issue stocks 2).to issue bonds

3).to obtain a loan from a bank

If a firm needs to raise long-term funds, but does not want to take on new owners, it may issue bonds.

Definition : a bond is actually an IOU, a written contract which stipulates the par value, the maturity date and the rate of interest paid by the issuing company to the bond holders quarterly, semi-annually or annually.

7.Who Buy Securities

They basically fall into three types according to their purpose and strategy: speculators for quick gains, investors for long term return, and

those who are a combination of the above two.

Ⅲ.Business Expressions

1.issue stocks (bond)

2. equity financing

3. debt financing

4. a secured claim

5. securities market

6. primary and secondary markets

7. underwriters 8. broker

9. individual investor 10. New York Stock Exchange (NYSE)

11.stock brokerage 12. Bulls and Bears

13. the stock price movement 14. speculator

15.dividends 16. preferred stock

17. common stock 18. growth stock 19. blue chips

20. speculative issues

21 penny stock: stocks of poorly known, risky firms which have a speculative value.

22 fundamental analysis : analysis of company’s financial condition, management, and industry prospects.

23 technical analysis: analysis of past stock price movements, trends and cycles.

24. markets order 买进指令: a customer’s order to buy or sell stock.

25 day order 当日有效委托书：a customer’s order that is in forc e only for a day.

26. current bid price 当前买进价格：the price some one offer to buy at the present .

27. current ask price 当前卖出价格：the price some one offers to sell at the present.

28. warrants 认股权证：certificate issued by

a corporation that represents an option to buy a stated number of shares at a specified price on or before a specified date. Warrants have a value of their own and may be traded on the open market.

Ⅳ.Items to be checked

To be clear about the securities market

To know how stock and bond are issued and how they are traded and sold in the market

To memorize the related business expressions

Chapter 10

Risk Management and Insurance

Ⅰ.Objectives and Tasks

To know approaches to managing business risks.

To understand the importance of insurance and its principles.

To understand different types o insurance for business

Ⅱ.Major contents

1.approaches to managing business risks

options to choose from:

avoid the risk

control the risk

assume the risk

shift the risk

2.Insurance and Its Principles

These principles are: a insurable interest utmost good faith

Indemnity contribution

Subrogation proximate cause

1)insureable interest 可保权益，保险利益

[申请保险人(applicant)或被保人（insured）基

于其对保险标的的某种权利，而享有的经济利益（包括现存的或可期待的利益），及存在于被保险人与被保险之间的关系。由于具有保险利益，当被保险发生时，将使被保险遭到损害，可以获得保险的赔偿。]

The principle of insurable interest holds that a person may not insure against any risk unless he will suffer a loss if the risk occurs.

2).Utmost good faith principle 最大善意原则

[又称―最大诚信原则‖，使指适用于保险合同，合伙合同和债券发行等的一项法律原则。其作法是要求当事人已方披露某些最低限度的事实情况。如保险法则要求投保人需向承保人提供有关保险标的的资料，同样，承保人也不应该将不利于投保人的条款列入保险单，等等。]

The insured must tell the insurance company every detail he knows that may affect his when fixing premium and paying any claim later.

3).Indemnity 赔偿原则

[同意补偿损害或损失。保险单中使用该术语，表示承诺当损失事件发生时，被保险人的财产损失由保险公司赔偿。]

The principle of indemnity means that in case of a loss, the insured is compensated for the loss and restored to the position he was in at the moment that loss occurred.

4).Contribution 分摊，分担

[根据保险单的面值或投保单总额，由每一个保险人按比例承担的损失的行为（或数额）]

The principle of contribution says that, no matter how many policies are taken out to cover a risk, the amount of compensation that can be claimed in total is still only the indemnity figure.

5). Subrogation 代位权

[一方取代另一方获得法律上的诸项权利。例如，盗窃案发生后保险公司在赔付