Q1
Investors look for a balance of risk and reward when deciding whether to buy stock. Any tools that they can use that reflect future values and the risks of an investment are useful. The benefits of return on equity (ROE) and earnings per share (EPS) are important because they reflect the overall view of business performance (Lasher, 2017, p. 582).
ROE uses the company’s net income and its equity to determine a percentage. It was interesting for me to note that the net income is provided on the income statement, and the equity comes from the balance sheet. Best practice is to use an average of equity over a period of time because the information on the income statement is for a specific fiscal year (Fernando, 2020). Potential investors use this percentage to compare with other businesses in the same field. Without comparison, the percentage is meaningless.
The EPS is determined using the actual stock profit and the number of its common outstanding shares (Nasdaq, 2018). If an investor is looking for a company’s specific stock information, the EPS is important to consider. The nice thing about the EPS formula is its flexibility. An investor can determine the EPS growth rate and the prospective EPS growth rate.
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Q2
As an investor you allocate capital with the expectation that in the near future you will have financial return or simply gain an advantage in the industry you are operating within. Being an investor can be a risky business and involves so many elements specifically capital restructuring, this refers to the change in leverage by shifting the mix of debt and equity (Lasher, 2017). What does this mean and how does this happen? This can be done by a firm starting out with about $2 million in equity and zero debt, the firm then borrows $5 million, buy its own stock and saves the rest of the shares – the firm has traded some of its quity earned for debt. Investors can then use ROE and EPS to mearure business performance over time, return on equity (ROE) and earnings per shares (EPS) offer the results of operations and the effects of financing and is the resson it is so important to investors specifically when the investor is considering buy company stock (Lasher, 2017). In addition, EPS is often taken as indictation of the future earning power of the company/firm and it is therefore a major determinant of the stock market price (Lasher, 2017). Hence the reason why investors invest in firms/companies because of the potential future earnings that lie ahead.
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Q3
ROE or otherwise known as return on equity offers a gauge of profit-generating efficiency (McClure, 2020). According to McClure (2020), ROE helps investors determine weather a company is a lean profit machine or an inefficient operator. When a company has a high rate of return on equity it makes the company more popular to investors because they know that not only will they get back what they invested but that they can also make a profit. So ROE is very important to investors and should be equally important to the business as well. ROE is calculated by dividing a companies net income by its shareholders equity, thereby arriving at a measure of how efficient a company is generating profits (McClure, 2020).
EPS or otherwise known as earnings per share are important because they measure the net earnings attributable to each share of common stock (Basu, 2020). According to McClure (2020), servicing additional debt cuts into net income, and selling more shares shrinks earnings per share by increasing the total amount of shares outstanding. It is very important for an investor to monitor a companies ROE as it should be updated every year and is important to watch how much the company is bringing in. In addition, earnings per share is important to the investor because it lets the investors known what how well their investment will turn out. Overall, ROE and EPS are measures of business performance in that they include both the results of operations and the effects of financing.
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Q4
As the world advances in all aspects and the supply and demand increase many under-developed or non-developed countries have become moer development in the last few years based on their resources that they have been able to provide to other countries. Dealing with these foreign markets comes with currency exchanges and rates that follow up with supply and demand. The foreign exhange market operates much like other financial markets, but it is not just centrally located in a specific place like a stock exchange (Lasher, 2017). It essentially is a network of financial personnels around the world that assist in any and all financial needs. With any foreign exhange of currency or product comes risk, risk politically, in transactions or translations and this is why it is equally important to ensure that when doing business in foreign markets that your business is aligned with what it takes to operate in a foreign place.
The production of consumer electronic equipment, is said to be be done mostly in the Far East which is true. This can range from computers, tvs, tablets or printers, when we think about Asia is the prime hub for all things right about now, clothing, cars and specifically electronics. The projected revenue for consumer electronics is to reach $207.443m by the end of the year. The user penetration is set to increase by over 15% in the next five years and in comparison to the rest of the world, most revenue from this segement is generated in China (statistica.com). This trend really is not good for Americans or American brands/companies simply because Americans are now conditioned to buy from these foreign countries. Buying from foreign markets is indeed cheaper, you are able to make a good profit off the products sold and the shipping and labor is generally reasonable, with all of the good components to doing business overseas American brands/companies have no reason to be completely sourced domestically. If the trend continues, America will no longer be the hub or the main resource for just about anything.
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Q5
The United States has many reasons to retain its standing as the world’s largest economy, approximately 24.9 trillion reasons – in dollars.. According to Focus Economics, the United States will retain its title as the world’s largest economy until 2023 (Focus Economics, 2017, para. 1). At that time it will be behind the Brazil, Russia, India, and China ( BRIC) economies by 10%. Currently, “the United States stands alone as the highest GDP earner in the world, representing about 20% of the total global output” (Focus Economics, 2019). The United States has many positive characteristics that support its growth and status. Some of these include: infrastructure, natural resources, an educated workforce, and a large body of agricultural exports.
However, as we have recently found, our economy and the world can change very quickly. Many countries experienced a stagnation of businesses. As a result of the global pandemic, U.S. citizens have struggled to stay in business, stay employed, and stay healthy. Our discussion prompt asks us to examine the production of consumer electronic equipment and how it has expanded to the Far East. Although this trend seemed worrisome when this question was written, I don’t know if the United States has a choice now. We need to find business and innovate wherever we can develop it.
As the world environment changes, the needs of its citizens will also change. In many respects the United States became a dominant world power in 1898 at the end of the Spanish-American War (US Department of State, n.d.). Since then, the US continued to thoroughly develop its infrastructure and supporting economic systems. However, the trend for developing global relationships strengthens both partners. Our global partners are getting stronger and trading with other countries. One example of our successful trading partners is China. In 2023, China will have a GDP of 19.5 trillion (Focus Economics, 2019), which will be much closer than any of the other large economies in the top ten.
As Americans develop their lifestyles to fit our circumstances, we may need to refocus on what is important. It looks like very soon we will not be the largest economy in the world. Personally, I believe the United States will need to continue to grow its economy in creative ways, and address its growing debt problem (Duffin, 2020), to assure its survival.
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Q6
In this post, I mainly analyze the case of Amazon fires employees for leaking customer email addresses and phone numbers to show the problem and solutions of customer or employee data information leakage in the e-commerce industry.
In this case, the user whose personal information was leaked received a spam email, which interfered with the user’s normal life (Palmer, 2020). Amazon admitted that its employees had accessed customer data and notified customers whose information was leaked. At the same time, Amazon stated that no other user information was shared. Amazon experienced a similar incident in 2018 when it fired an employee who disclosed a customer’s email address to a seller. This is enough to show that there is not one case of information leakage infringing on privacy.
In the process of handling this case, Amazon only took steps to dismiss employees, but it refused to disclose how many employees were fired, the number of customers affected by the incident, or why it shared information with third parties (Palmer, 2020). I think management has not successfully dealt with this situation. Obviously, the same measures as in 2018 cannot solve the root of this problem. This is because, within a company, the management ethics in employee relations is a set of behavioral standards and ethical judgments that help determine right and wrong behavior, focusing on the organization’s ethical values (Snell et al., 2016).
Human resources departments need to make efforts when training employees to comply with policies (Snell et al., 2016). If an organization’s employees do not comply with the organization’s policies and procedures, the organization will not be able to fully comply with the regulations (MetricStream, n.d.). Amazon needs to invest in employee training, and employees need to understand the organization’s culture and its ethical boundaries. In addition, it is worth mentioning that employees also want to maintain privacy within the organization, so they want the company’s direct and indirect protection. The importance that enterprises attach to privacy will directly reflect the image of corporate ethics and culture. And corporate ethical culture is crucial to the development of an organization.
I think risk management policies are effective in managing information leakage. Companies can take active measures to protect confidential information and trade secrets by describing the consequences of violations and dialogue with employees about these risks (MetricStream, n.d.). Legal issues need to be considered first. It is often useful to include some clauses in the employee’s contract documents to remind employees of their obligations (Allthingstalent, 2020). As I mentioned before, the human resources department must conduct ethics training for employees. In order to minimize the possibility of employees leaking confidential data, all members should receive appropriate training on handling company data. Informing in advance that measures such as the need to monitor employee email accounts and Internet usage will help determine where the leak occurred. With the development of technology, technology can play an important role here in the form of a learning or training management system, making it easy to conduct and track multiple training programs.
According to the European Commission’s guidance on data breaches, it is known that if personal data breaches occur in European countries, companies, companies that own personal data must immediately notify the supervisory authority (European Commission, n.d.). In addition, if personal data leakage may bring high risks to your rights and freedoms, you as an individual must also be informed. For individuals, individuals can complain to the National Data Protection Agency (DPA) about the company involved.
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Q7
In this case, Apple was accused of inhumane treatment of its employees in China in 2011. Chinese law stipulates that employees can not work overtime for more than 36 hours a month, but Apple has made employees work overtime for about 98 hours, and can only rest one day every two weeks, which seriously infringes on employees’ rights and interests. And before employees can work for apple, they have to sign an anti suicide contract to ensure they don’t try to commit suicide because of the massive deaths in 2011. Even if someone wants to end their lives, Apple has installed suicide nets outside all dorm windows so people can be caught and put back to work. Apple treats Chinese employees unethically for the company’s interests and the number of products. Apple has set standards and started auditing hundreds of companies that produce components for its equipment, threatening to remove business from those who violate labor laws, sent teams to investigate, and reiterated its commitment to “ensure safe and fair working conditions for everyone in our supply chain.”. (Bloomberg, 2018)。 But Apple’s supply chain is huge, and it is difficult to implement the regulations, so it is difficult to change the situation in a short time. Apple should focus on the basic needs of its employees, even if not local. The subsequent standards and supervision of Apple show that apple is beginning to focus on the interests of its employees and will not oppress its employees for the sake of its economic interests. Management defines Apple values as “the quality, customs, standards and principles the company as a whole considers desirable. They are the basis for us to do things and do things. In total, they see Apple as a unique company. ” So Apple’s moral culture may focus on serving customers and product quality.
In recent decades, EU policies have sought to obtain high employment rates and strong social protection, improve living and working conditions, and protect social cohesion. The EU aims to promote social progress and improve the living and working conditions of European people on labor law, which complements the policy measures adopted by EU countries by setting minimum standards. From annual leave, flexible working hours to social security programs, mandatory employee benefits in Europe are the best in the world. So in Europe, Apple employees can sue apple under labor laws.
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Q8
Discuss what you think this could do too employee moral and engagement after this has been controlled.
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