...Profit = TR – TC How to increase profit: 1. Increasing the number of products sold (at the same price). 2. Increase the profit on each product sold (i.e. increase the per unit profit) – either by: * decrease per unit cost * increase price Gross profit Gross profit = Total Revenue- Variable Costs Net profit Net profit = Total Revenue – Total Cost Profit Margins The amount of total revenue (%) that is kept as profit. profit margins = profit / total revenue x 100 To increase profit margins, the firm needs to reduce costs or add value. Gross profit margins Gross profit as a % of total revenue. Gross profit margin = gross profit / TR x 100 Note – if VC fall, gross profit margins will increase. Net profit margin Net profit as a % of Total Revenue. Net profit margin = Net profit / TR x 100 Both VC and FC must fall for net profit margins to increase. 3 Ways of increasing profit margins: 1. Increase net profit margin / gross profit margin by reducing VC per unit. 2. Increase net profit margin by increasing price. 3. Increase net profit margin by reducing FC. Return on Capital Employed (ROCE) ROCE is the amount of profit gained from an investment as a % of the capital (finance) spent on an investment. ROCE = Net profit / Capital invested x 100 ROCE is used to see: * how profitable an investment is * how efficient management is How to increase ROCE 1. Increase profitability without investing any more capital. ...
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...ARE PROFITS THE ONLY BUSINESS OF BUSINESS? Supply and demand is at the root of everything, where exchange of goods and services is involved between producers and consumers for mutual benefits. These mutual benefits involve an exchange that provides value to the consumer and profits to the producer. It is not at all farfetched to think of these as basically human characteristics. At the beginning of a spectrum is the producer and at the end of the same, is the consumer. They interact with each other and with the governmental law regulating their transactions. In this economic system, what will be produced is determined by what will yield the greatest profit. From the readings, Milton Friedman and Robert Almeder recognize the merits of a profit-driven economic system. They do not quarrel over the importance of profits. But they do quarrel over whether or not business firms have obligations beyond making profits. A consumer may be a pet owner who feeds and provides care for a beloved animal, a doting grandparent who buys toys and clothes for the grandkids, an individual who wears contact lenses or hearing aids, a patient who buys prescription medications, or vehicle owner. Should a consumer have certain expectations from the suppliers and producers of the products that he buys? Can we trust corporations that they will not produce what will jeopardize the human life? Was Ford to be blame in the pinto case? Must we wait for the characters like “Erin Brokovich” to fight on behalf...
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...ReadingNote that the reader might best be served to first read the document Introduction to Organizations to understand the overall general nature of all organizations. As noted in that document, today's leaders are faced with continual change in their organizations. Consequently, today's leaders should have a strong sense of what their organizations are about. This document will accomplish that for nonprofit leaders. An organization is a collection of resources arranged to accomplish an overall goal. The purpose of a nonprofit organization is to meet one or more needs in a community. Each nonprofit describes its overall purpose in a mission statement. (Very simply put, the word "nonprofit" means an organization that does not distribute a profit.) Typical types of nonprofit services are advocacy, arts, civic, cultural, education, health and human service. Nonprofits range in size from extremely large (e.g., Red Cross, large hospitals, etc.) to...
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...DON HONORIO VENTURA TECHNOLOGICAL STATE UNIVERSITY Bacolor, Pampanga GRADUATE SCHOOL 1st Trimester, S.Y. 2016-2017 A. “Business is not only for profit but also for nation-building”. What is Business? An organization or economic system where goods and services are exchanged for one another or for money. Every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis in order to make a profit. What is Profit? The surplus remaining after total costs are deducted from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in an enterprise. Profit is reflected in reduction in liabilities, increase in assets, and/or increase in owners' equity. It furnishes resources for investing in future operations, and its absence may result in the extinction of a company. As an indicator of comparative performance, however, it is less valuable than return on investment (ROI). What is Nation-building? Nation-building is constructing or structuring a national identity using the power of the state. Nation-building aims at the unification of the people within the state so that it remains politically stable and viable in the long run. Nation builders are those members of a state who take the initiative to develop the national community through government...
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...MGMT 570 ISSUE PAPER ARE PROFITS THE ONLY BUSINESS OF BUSINESS? CONSUMER NOTIFICATION AND PRODUCT RECALL BY KOLAWOLE OLAYINKA 03/30/2013 ARE PROFITS THE ONLY BUSINESS OF BUSINESS? Supply and demand is at the root of everything, where exchange of goods and services is involved between producers and consumers for mutual benefits. These mutual benefits involve an exchange that provides value to the consumer and profits to the producer. It is not at all farfetched to think of these as basically human characteristics. At the beginning of a spectrum is the producer and at the end of the same, is the consumer. They interact with each other and with the governmental law regulating their transactions. In this economic system, what will be produced is determined by what will yield the greatest profit. From the readings, Milton Friedman and Robert Almeder recognize the merits of a profit-driven economic system. They do not quarrel over the importance of profits. But they do quarrel over whether or not business firms have obligations beyond making profits. A consumer may be a pet owner who feeds and provides care for a beloved animal, a doting grandparent who buys toys and clothes for the grandkids, an individual who wears contact lenses or hearing aids, a patient who buys prescription medications, or vehicle owner. Should a consumer have certain expectations from the suppliers and producers of the products that he buys? Can we trust corporations that they will not produce...
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...The Application of the Profit Function in a Business’s Growth Differential Calculus May 24, 2014 The application of calculus in a business is extremely important since calculus is considered as the study of changes. Its complexity in the study of changes has become one of the humankind’s greatest tool for analyzing changes in the marketplace. The profit function was created with the main purpose for businesses to understand how the changes in revenues and in costs would generate a profit or not profit at all. A profit can be generated when the amount of revenues is higher than the amount of costs. When a business starts, is normal to not gain any profit at all, in fact, most of the time, a business tends to lose money in its first year. However with that information, a business can analyze the money loss of that year and determine any gaps or holes that prevents the maximization of the profit and have a more prosperous result for the following year. For instance, if a company suffer a loss in profit, they can analyze the profit function to determine the main reason of why there was not a positive profit. If they see that the problem of the profit function was a low revenue then they can regulate the sale of products or services and price control, or if the problem lies in the cost function, they can adjust or lower the costs and expenses made by the business. The graph of a profit function can show at what time of the year the company tends to...
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...After graduating high school, I never had an immediate plan or intended major of what I wanted to do. I started off working full time and taking general education courses at College of DuPage. At the time I didn’t have any guidance or help from my family and always felt like the black sheep. After taking intro to business courses, I truly enjoyed marketing. I fell in love with the innovation and creativity forces that were driven behind branding, promoting, and selling. During my newfound epiphany, I worked at goodwill. Goodwill is a not for profit business that strictly builds its capital and success from blind donations. For 40 hours a week I would dig through perpetual garbage bags filled with clothes from target, Walmart, and come across...
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...When we operate a business, maximizing company’s wealth is more suitable than maximizing its profit as a goal of the business, it is because maximizing profits relates to profits only, and it assumes away the problems such as uncertainty of returns and the timing of returns, while maximization of the market value of the owners’ equity has take into all the considerations of all the financial decisions, such as wealth for the long term; risk or uncertainty; the timing of returns; and the stockholders’ return. Maximization of profits is regarded as the most commonly cited goal, always concern with the operational plans, but it is not a suitable objective at all, because there are many alternatives inside this outlined goal, For example, does that mean a short term or long term maximization target? Or what kind of profit is the target focuses on? It is not a fully appropriate objective, partly because it does not specify the timing or duration of expected returns. Is the investment project that will produce $100,000 return 5 years from now more valuable than the project that will produce annual returns of $15,000 in each of the next 5 years? An answer to this question depends upon the time value of money to the firm and to investors at their interest. Another shortcoming of aiming at maximizing profit is that it does not consider the risk or uncertainty in the process of making profits. Some investment projects are more risky but the profit cannot reflect this situation. As...
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...Silver Lining Outreach Support Center (SLOSC) Mental Health Community Outreach Programs provide individuals diagnosed with mental health issues the opportunity to establish and maintain a variety of supports flexible enough to meet their changing needs. Services are provided with a person-centered philosophy that encourages the individual’s active participation in determining their goals and the strategies developed to achieve them. Silver Lining Outreach Support Center (SLOSC) Programs include: * Supported Housing through our Independent Housing Program (IHP) assists individuals with establishing safe, affordable permanent housing by: * Assisting with the search for an apartment, moving expenses, security deposits and rental assistance when appropriate * Securing basic furnishings and household supplies * Providing advocacy and support to maintain their independent living situation. Bridge Services at SLOSC works with individuals receiving other SLOSC assistance to: * Provide community-based supports to adults who are struggling to manage or make progress in their pursuit of the quality of life they desire, and seek greater levels of wellness, independence, and personal satisfaction and success in their lives. * Support people in the development of their recovery goals focusing on physical health, independence and coordination/instruction related to accessing transportation. SLOSC Assisted Competitive Employment (ACE) and Supported...
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...------------------------------------------------- Management Accounting ------------------------------------------------- AGSB (Regis – MBA Program) Business is not only for profit but for nation building In many organizations, businesses are built mainly for the purpose of profit generation. Most successful businesses are those who are successful enough to continuously generate sizable profits in their business activities. Business, according to Merriam-Webster Dictionary is a usually commercial or mercantile activity engaged in as means of livelihood. It is the nature of a business to generate profit for it to be sustainable and for it to survive. In many economically successful countries, nation building has always been given much importance. Patriotism has been deeply rooted in the beliefs and culture of these nations. An example of this is Japan. Japan had suffered severely during the Second World War especially after being hit by two atomic bombs. It was considered as one of the most damaged countries after the war. Yet, Japan emerged to be one the strongest economic superpowers today. The success of Japan is mainly attributed to the discipline and patriotism of its populace. The same could be said about South Korea, who was also devastated after the war, yet emerged to be one of the economic powers today. Business success and national economic progress has always been a positive correlation. In economic terms, one basis for national progress is increase in the...
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...The Social Responsibility of Business is to Increase Profit What is the social responsibility of a business? Is it to increase profits as American economist Milton Friedman argues? Is it to make decisions that benefit and protect society? According to the Dictionary of Finance and Investment Terms, social responsibility is the “principle that businesses should actively contribute to the welfare of society and not only maximise profits”. In my view the statement ‘the social responsibility of business is to increase profit’ is true to an extent, however, I believe a corporation’s responsibilities extend beyond just maximising profits. The ‘Narrow View’ argues that profit maximisation is the only objective for a business. Theodore Levitt wrote, “in the end business has only two responsibilities- to obey the elementary canons of face-to-face civility (honesty, good faith and so on) and to seek material gain” Levitt’s opinion could be perceived as realistic to an extent, however, I believe he doesn’t take into account the negative side-effects that business activities can have on society. Friedman strongly rejects any concept of corporate social responsibility that would deter a business’s primary goal of profit maximisation. Furthermore, he argues that only people can have responsibilities, not an artificial being such as a corporation. If an artificial being such as a business was to have responsibilities, however, than I would find it appropriate that it would be inclined to...
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... |Regis MBA | |Business is not only for Profit but also for Nation Building | | |SUBJECT SECTION TRIMESTER |DATE | | | | |TSMANACC R23 1st Term, 3-2011 |April 19, 2012 | |SUBMITTED BY: |PROFESSOR | | | | |Claudette D. Maan |Prof. ELISEO A. AURELLADO, Ph.D | I have always dream of owning my own business but, unfortunately, until now it is still a dream. Becoming the next Bill Gates or Warren Buffet really tickles my fancy. I admire them not only on their brilliant business acumen but also on their philanthropic initiatives. Owning a business is not only about...
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...The Better Business Bureau is considered to be a non-profit organization that relies on funding. This organization is the middle man of the customers and the business. The main purpose behind this organization is to ensure that a particular business is achieving the standards of the Better Business Bureau accreditation standards. There are certain systems and protocols that have been put in place by the BBB to ensure that both the businesses and the customers are being protected. There is a argument resolution procedure in place. This was created and set in place by the council of the Better Business Bureau. These are also made sure to be followed correctly by the local Better Business Bureaus as well. If there is a disagreement that arises...
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...Chapter 1 (page 4-19) Taking Risks and making Profits within the Dynamic Business Environment Business: Any activity that seeks to provide goods and services to others while operating at a profit. Profit is the amount of money a business earns above and beyond what it spends for salaries and other expenses needed to run the business operation. Goods are tangible products such as computers, food, clothing, cards appliances and services include intangible products which cannot be held in your hand such as education, health care, insurance, recreation, travel and tourism. Entrepreneur is a person who risks time and money to start and manage a business. (Sam Walton started Wal Mart, Bill Gates started Microsoft) Revenue is the total amount of money a business takes in during a given period by selling goods and services. Loss occurs when business expenses are more than its revenues. Risk is the chance an entrepreneur takes of losing time and money on business that may not prove profitable. Higher the amount of risk, higher is the profit. Standard of Living: The amount of goods and services people can buy with the money they have. Business provides employment, employees pay tax and the tax is used by the government to build the infrastructure. Quality of Life: The general well being of a society in terms of political freedom, a clean natural environment, education, health care, safety, free time and everything else that leads to satisfaction and joy that goods and services provide...
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...Do you agree with Milton Friedman’s (1970) claim that: “the only responsibility of business is to increase its profits”? Today we live in a world were companies are major actors and influence society on many levels. This is why ethics were brought into the business world. Ethical enterprises follow certain values and moral beliefs and were created with the supposed intention of using that influence in a positive way and protect what surrounds them, whether it is the people who work for the company, the rest of society, the environment etc. Ethics helps companies distinguish what’s wrong or right in a certain situation and act upon it. It bases itself on the idea that a corporation is somewhat responsible for how it affects others, hence the term ‘corporate responsibility’. (Banerjee, 2007) But with time and experience it seems that ethics, although created for a noble purpose, can and are actually used by companies for purposes other than just helping others. The economist Milton Friedman believed that all this social work is the state’s responsibility and a political matter, and that it can induce losses in profit for a company, going against the essence and purpose of a business. He argues we might be better off without it. (1970) This rather negative portrayal of something that was created to do good, although quite realistic, can be discussed and hopefully re-arranged so there is hope that a company can be both socially responsible and profitable. According to Bakan (2004)...
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