Final Exam Part 2 Flashcards
Main Barriers to Trade (4)
Economic
Ethical, Legal and Political
Social and Cultural
Technological
Quota
Limit to how many products you can import
Embargo
Prohibition of importation of certain products
Strong Currency
A country’s exports are expensive but other countries goods are cheap due to exchange rate
*Weak currency = opposite
Exchange Rate Risk
Fluctuations in the exchange rate will determine the profit of a product.
Countertrade Agreements
Strategies companies use to get involved in international trade
Bartering products for products instead of paying
Licensing
Strategies companies use to get involved in international trade
Pay royals or fees to use name, logo, brand, etc.
Contract Manufacturing
Strategies companies use to get involved in international trade
Hiring a foreign company to produce your product but selling it in your name
Offshoring
Strategies companies use to get involved in international trade
Re-locating your company to a new country to
Join Venture
Strategies companies use to get involved in international trade
Sharing costs and operations of a business between a foreign company and a local partner
Strategic Alliance
Partnership formed to create competitive advantage
Which business form typically allows owners to pull the most money out of their business?
S-Corp
Which business form is double taxed?
C-Corp
Income Statement
Financial Performance
- revenue, expense, or profit
- how much it paid in interest
- amount of sales
- how much its costs of goods sold were
Balance Sheet
Financial Position
- asset, liability (debt or equity)
- how much debt it has
- how much money it owes its suppliers?
- how much it has in accumulated deprecation
