socio-economic

Examples of socio-economic in the following topics:

• Cash

  • Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country.

• Overview of the International Business Environment

  • Socio-cultural: The social environment of a given region can have a significant impact on success.
  • Economic – The standard of living is different from region to region, and recognizing the value of a given market in terms of spending power, currency, and market size is critical to deciding upon expansion.

• Comparing the Fields of Finance, Economics, and Accounting

  • Finance, economics, and accounting are business subjects with many similarities and differences.
  • Economics is fundamentally the study of cause and effect.
  • Finance, economics, and accounting overlap in a lot of areas.
  • Part of that prediction incorporates economics.
  • There are few strong delineators between finance, economics and accounting.

• MVA and EVA

  • ., and EVA is an estimate of a firm's economic profit.
  • In corporate finance, Economic Value Added or EVA, is an estimate of a firm's economic profit – being the value created in excess of the required return of the company's investors (being shareholders and debt holders).
  • The idea is that value is created when the return on the firm's economic capital employed is greater than the cost of that capital.
  • EVA is net operating profit after taxes (or NOPAT) less a capital charge, the latter being the product of the cost of capital and the economic capital.
  • The firm's market value added, or MVA, is the discounted sum (present value) of all future expected economic value added: MVA = Present Value of a series of EVA values.

• Types of Exchange Exposure: Short-Run, Long-Run, and Translation

  • Foreign currency exposures are categorized as transaction/ short-run exposure, economic/ long-run exposure, and translation exposure.
  • A firm has economic exposure / long-term exposure to the degree that its market value is influenced by unexpected exchange rate fluctuations.
  • Economic exposure can affect the present value of future cash flows.
  • Any transaction that exposes the firm to foreign exchange risk also exposes the firm economically, but economic exposure can be caused by other business activities and investments which may not be mere international transactions, such as future cash flows from fixed assets.
  • A shift in exchange rates that influences the demand for a good in some country would also be an economic exposure for a firm that sells that good.

• Sunk Costs

  • The sunk cost is distinct from economic loss.
  • The economic loss is the difference between these values (including transaction costs).
  • In this sense, the sunk cost is not a precise quantity, but an economic term for a sum paid in the past, which is no longer relevant to decisions about the future.
  • The sunk cost may be used to refer to the original cost or the expected economic loss.

• Externalities

  • An externality is an effect of an economic action, the cost or benefit of which is shouldered by someone outside the transaction.
  • Producers and consumers may neither bear all of the costs nor reap all of the benefits of the economic activity.
  • Standard economic theory states that any voluntary exchange is mutually beneficial to both parties involved in the trade.
  • A voluntary exchange may reduce total economic benefit if external costs exist.
  • Here, overall cost and benefit to society is defined as the sum of the economic benefits and costs for all parties involved.

• Economic Order Quantity Technique

  • Economic order quantity is the order quantity that minimizes total inventory holding costs and ordering costs: ${ Q }^{ * }=\left( \frac { 2DS }{ H } \right) ^{ \frac { 1 }{ 2 } }$.
  • Economic order quantity is the order quantity that minimizes total inventory holding costs and ordering costs.

• Limitations of Financial Statements

  • Financial statements can be limited by intentional manipulation, differences in accounting methods, and a sole focus on economic measures.
  • The limitations of financial statements include inaccuracies due to intentional manipulation of figures; cross-time or cross-company comparison difficulties if statements are prepared with different accounting methods; and an incomplete record of a firm's economic prospects, some argue, due to a sole focus on financial measures .
  • High-profile cases in which management manipulated figures in financial statements to indicate inflated economic performance highlighted the need to review the effectiveness of accounting standards, auditing regulations, and corporate governance principles.
  • However, other methods such as full cost accounting (FCA) or true cost accounting (TCA) argue that an organization's health cannot just be determined by its economic characteristics.
  • Therefore, one needs to collect and present information about environmental, social, and economic costs and benefits (collectively known as the "triple bottom line") to make an accurate evaluation.

• Other Considerations in Capital Budgeting

  • The real option creates economic value by generating future decision rights for management.
  • A key feature is that the real option creates economic value by generating future decision rights - specifically, by offering management the flexibility to act upon new information such that the upside economic potential is retained while the downside losses are contained .
  • Real investments are often made not only for immediate cash flows from the project, but also for the economic value derived from subsequent investment opportunities.
  • For example, firms usually undertake research and development investments to strategically position themselves for the economic value from commercialization when market conditions turn favorable.