Professional Documents
Culture Documents
Révisions
Révisions
Working capital: Money, which is available for immediate use, rather than money which is
invested in land or equipment
Banking :
They are different types of banks :
Retail banks
Commercial banks
Online banks
Central banks : they control the monetary system
Banks lend money at higher rate the money than the cost of the money they lend.
They have credit profiles : how much debt they have outstanding. They calculate the
percentage of indebtedness from all your other debts.
Some firms prefer not to borrow money from banks because it’s very expensive and bank
deadlines are rigid, they could get penalties. There is more freedom without banks because
they can choose where they spend money.
They can be listed or not. Often, they have open spaces which convey an image of fluidity
and free circulation of ideas to be more creative.
The architecture could be flat organizations. The aim is making workers feel at home so that
they don’t back home. The perks are generous : free food, bikes, naps... in order to create
family atmosphere.
Investors bet on the likelihood of future profits. Rumors and speculation about possible
mergers, acquisitions, takeovers and joint ventures between companies can make them
attractive to investors.
Stocks : they are issued by companies so that they can raise capital and grow. Stocks
compose the company’s equity.
Shares : they give the shareholders voting rights at shareholder meetings and they receive
dividends, which is the revenue paid from the company’s profit.
Bonds : it’s a form of a debt security, the issuer owes the holder a debt. Bondholders are
creditors to the company, they are entitled to the payment of interest at fixed intervals and
to the repayment of the principal at maturity date/ The average return of bonds is higher
than shares but it’s riskier.
The functioning of the stock market : On the stock market, shares and bonds and other
securities are sold and bought at prices which fluctuate according to the performance of a
company, as well as its reputation as any bad publicity can make the share price plummet.
A stock index measures the trends observed on prices of selected stocks exchanged on the
stock market. The index calculates an average from the selected stocks (40 for the CAC40). A
company goes public when it chooses to issue and sell its shares to the public through an
operation called Initial Public Offering (IPO).
Investors and shareholders could be at a disadvantage if they know less than the firms’
insiders meaning members of the firm’s management. The latter could use non-public
information for their own benefit : this would lead to insider trading which is prohibited by
the law.
Its role is to guarantee the faire dealing of securities market to avoid fraud, and to facilitate
the formation of capital.
The law has provided a program promoting and protecting whistleblowers : those who
reveal the fraudulent dealing of firms or banks and they get rewarded 10% or 30% of the
penalty.
2 main standards : IFRS in the world and US GAAP used in the USA.
They are compulsory or mandatory for listed firms. The parent company must create
accounts as well as subsidiaries. Small and medium company can use the standards which fit
better to their profile.
Some statements :
Balance sheet
Profit & Loss account
Retained earnings
Cashflow statement (operations, investments and finance)
Summary of accounting policies
Financial statements :
Balance sheet : it provides the information on what the company owns (assets) and what it
owes (liabilities). It also shows the value of the company after its obligations have been met.
Liabilities: sum of the obligations the company has to other parties such as creditors or
suppliers.
Profit and loss account : it recapitulates the company’s income and expenses over a period
of time (year, quarter...).
The top line shows the revenue : total amount of income from the sale of goods and service.
The bottom line calculates the net profit.
Types of expenses :
Advertising
Accounting fees
Depreciation
Maintenance
Insurance
Rent Wages Taxes
Balance sheet : how much the company worth ?
Management control : it’s the procedure used to achieve the company’s goals, so as to have
a clear strategy, measuring performance and taking steps to improve results.
internal audit : it’s performed by company’s auditors. They report to management the issues
related to business practices, internal control, risk management.
External audit : it’s performed by an independent CPA every year in all the public
companies. This is the safest way to be informed about a company’s financial health and
creditworthiness for shareholders and stakeholders.
It can also be needed when a company want to change strategy (expansion, reorganization).
They permit to harmonize firm’s processes and methods to avoid future mistakes.
Controversies
They provide almost 100% of listed company.
They also represent an oligopoly with little room for competitors and block new entrants.
Losing a customer is not such a problem so that they are not encouraged to provide the best
security. It’s becoming harder and harder to distinguish which auditing firm is better because
they tend to harmonize their processes.
There is a lack of boundaries in the missions because they can audit and offer consulting
services at the same time which can lead to a lack of independence.
Investors can now vote on executives’ compensations following the “say on pay” provision.
I
n the UK, the government is working on a project : the number of audits any of the Big Four
can undertake/ Also, the firms may change auditors every 10 years.
Unfortunately, there have been new cases of accounting and auditing misconduct lately,
with for example a resurgence of consulting activities at auditing firms.
They are elected by shareholders, can vote or veto. The frequency of meeting is specified in
the company’s bylaws.
Depending on their size and type, some firms may adopt a two-tier structure with an
executive board and a supervisory board.
Members :
Chairman : he is the leader of the organization and is responsible for running board. He
represents the company and communicates with public and shareholders.
CEO : he is the top manager and reports to the chairman and the board.
Conflicts of interest : this is the case when someone in the company takes decisions which
will only benefits him and not the whole organization.
Golden parachutes : this is the metaphor given to final pay package given to the CEO’s and
top executives in some firms when he leaves the organization after a merger or a takeover.
The solde trader : this is the simplest form of business organization where one individual
owns the company, provides the capital and personally assumes all responsibility for debts
and losses.
The downsides are that it’s very demanding, time-consuming and the sole trader bears all
the risks.
Family governance : when the business belongs to the same members of a family. They are
synonymous with risks (disputes, disagreements, loss of control, diverging interests).
Theme IV : Information systems and new
technologies
Chapiter 8 : Information systems and technologies
Information system : it regroups all the hardware, software and infrastructure which are
used for the diffusion of information. It also includes the trained staff who is able to create
and organize the system.
Chatbot : it’s a type of bot used for interacting with users as if in a normal conversation.
They pop up on websites to replace the traditional hotline and offer to help by answering
various questions.
Machine learning :
It’s a sub-category of System based on algorithm to make extremely complex correlations
between vast sums of data. Deep learning is based on neuronal network. It’s an analogy with
human brain.
Big data : it refers to the large volumes of data circulating in information systems.
Data is mined as if it was a raw material and crunched meaning that algorithms make sense
out of them by operating complex calculations, classifications and correla.
The GAFAM's
It regroups the following companies : Google, Apple, Facebook, Amazon, Microsoft.
Teleworking
This is a form of nomad work that most jobs are eligible for except physical jobs which
require a presence. It as been made possible thanks to VPN.
Cloud computing
Issues of information system :