Business

Business Policy and Strategy

Discuss your opinion of US businesses being interested in doing business with China. What are your main concerns?           

China has turned out to be the one of the countries that has a fast growing economy. Due to the growing economy, it attracted America into a trading relationship. According to the business statistics done, there has been continued steady growth in the trade between the two countries. In 1986, the total trade was 7.9 billion dollars and by 2003, the figure had risen to a hundred and seventy billion dollars (Fulford, 2000). The two countries were ranked among the third largest trading Partners. For the United States of America to continue doing business with China, it is required that the US has to work harder in business practices. That is, they have to be patient because business takes place slowly and there might be some difficulties.

The concerns that might be addressed are the challenges experienced between the two countries. For example, there might be language barriers because the two countries use different national and official languages. Loyal mediators may be used in this case if there is no common language. There could also be relationship barriers between the companies that want to trade. This might be so because they are unfamiliar to each other. A relationship manager or public relations manager can be used to solve the situation. Cultural barriers might be another area of concern. Some products might be against the culture of one nation hence a trade barrier. In such a case, such products can be exported to other countries. America has a great opportunity to continue trading or doing business with China because they have accepted globalization hence, they have a chance in the market space

Discuss the importance of the calculation and interpretation of ratios, to complete an effective financial ratio analysis.

Financial ratio analysis is studying and interpreting the relationship of the various financial variables namely, current ratio, liquidity ratio, quick ratio, working capital among others. They are sourced from a business or company’s financial statement. Financial ratio analysis is the calculation and comparison of ratios that are derived from the information in a company’s financial statements. Ratio analysis helps the business to realize trends in a business and to compare how it is doing with the performance of other businesses in the same industry. If studied correctly, ratio analysis will show important early warning signs that enable a company to solve its business problems before the company collapses. These ratios can be used to tell about a company’s financial position and attractive for investment (Fulford, 2000).

Investors who might be interested in investing in a certain company are assisted by ratio analysis figures to evaluate whether the company is fit enough to be invested in. The public would also ask for statements of the financial ratio analysis in case they want to be shareholders of the company. Financial ratios assist in measuring the profitability of the business by working out the different profitability ratios. This way, profitability ratios show exactly how a business is performing. By using liquidity ratios, a business identifies its level of liquidity. To be able get this, assets are divided to the liabilities. For a business to be stable, the assets must be more than the liabilities. Having the opposite of this, shows the business is not sound. Ratio analysis helps calculate the operating efficiency of a company or business by using turnover ratios. All turnover ratios are worked out so that the performance of the business is checked on how it using the resources available. Lastly, accounting ratios are useful because they make complex calculations precise.

References:

Fulford, J. (2000). The Accountant’s Guide to Advanced Excel. Bedford row, London:  Cengage Learning EMEA.