Definition of Assets, Liabilities, and Shareholder Funds - Essay Example

Management By Business of Definition of Assets, liabilities and shareholder funds and how can be used to ascertain the financial health or otherwise of a company? Asset An asset is a monetary reserve owned by a business entity that is expected to provide future economic benefits (Hellriegel & Slocum, 2002). A company’s total Assets could include materials and components purchased and held in stock, finished products still held, customers’ promises to pay for products when sold on credit and fixed assets such as building and machines Assets = Liabilities + Owners’ Capital Liability A liability means an entity’s obligations to other entities that entail the transfer of assets or provision of services in the future to those other entities because of past transactions or events. Examples of liabilities include debts repayable, deferred revenue and current-year loan and note payments (Sveiby, 2007). Liabilities = Assets – Capital Shareholders’ funds Shareholders’ funds are a gauge of the shareholders entire interest in the business represented by the sum of share capital and reserves (Hellriegel & Slocum, 2002). Shareholders funds are the balance sheet value of the shareholders interest in a company. Capital = Assets – Liabilities In order for a business to be economically health, the company’s total assets should be more than its total liabilities. Current assets such as cash, receivables, and securities should be able to cover liabilities. If a company‘s assets significantly exceed its current liabilities, the company may not be putting its wealth to the most excellent use. Definition of intellectual property and forms of legal protection available to intellectual property. Intellectual property laws are laws set by countries with inventive home based industries to promote innovation by regulating the replication of inventions, identifying symbols, and creative expressions (Draft, 2002). These laws include patent rights; trademarks; copyrights and trade secrets. Patent rights protect inventions or patent (Management notes). Patent rights guarantee the originator, a unique right to avoid others from creating, using, and selling the inventor’s patented contraption for a predetermined span of time especially 20 years in return for the confession of the invention’s information to the civic under the stipulations of the social contract. Another form of intellectual property is copyrights; the right of owning written work like a book, document, a patch of code or software application (Hellriegel & Slocum, 2002). This property is protected by a set of rights granted by the law of jurisdiction to the author of the original work and according to the World Intellectual Property organization rights protected by copyright include; the owner’s right to permit or prohibit, duplicate, allotment, public presentation, transformation, broadcasting, and version (Draft, 2002). More over, trademark is a word, symbol, device, or name used to designate the foundation of the goods and to differentiate them from other goods in the market (Management notes). Trademarks are exclusive to exact brand, product, or individual and consequently need to be secluded in the concern of preserving a product’s identity (Patents and data protection). In other words, trademarks refer to a distinctive indicator used by either individuals or organizations to identify itself to customers or consumers (Patents and data protection). Essentially, it enables the indication, that, the products or services originate from exceptional entity and designated for a particular market. In case of any infringement on the trademark, the owner may initiate legal proceedings to prevent unauthorized use of the trademark. Advantages of a Gantt chart It helps in the planning of a project. One can see at a glance the project tasks and time schedules (Clark, 2002). A Gantt chart is suitable for small projects that fit on a single sheet. Gantt chart exhibits dependencies amid tasks using focussed arcs to link associated activities. The key feature of in the Gantt chart is the duration taken by each task of the project in question Limitations of Gantt Charts A Gantt chart can be useful in the early stages of a project – mainly by helping to put into perspective the various phases of activity (Management notes). It serves as an excellent communications tool for the project manager and provides a basis for doing preliminary resource and financial estimates. However, as a project moves forward and the activities become more complex and detailed, the Gantt chart has limitations, which include, the difficulty in showing how diverse phases of a project are correlated. In essence, it overlooks numerous stages and assumes activities form a network. It is imperative to note that, a slight delay in any one-activity result to ultimate delay in commencing prospective activities. This trend is however difficult to detect by using the Gantt. Furthermore, the Gantt does not indicate the hypothetical results but rather, predicts and gives an analytical value. Similarly, the Gantt chart does not indicate the percentage of the total population. More over, these charts are not able to indicate the phases that are remaining to complete the project within the stipulated period (Management notes). Consider the following data, which is indicating phases of a particular project and respective period expected to be spent. The data is applied in constructing a Gantt chart as indicated below. Gantt chart Activity Task one Task two Task three Task four Task five Duration in days 8/1/00 -2/3/00 11/1/00-5/2/01 14/1/00-5/2/01 2/3/01-2/3/01 initializing Courtesy of CLARK, W. (2002). The Gantt chart; a working tool of management. London, Pitman Disadvantages of the Gantt chart As the project, progresses and activities become more, complex and detailed the Gantt chart does not become a useful management tool instead other tools like the pert and CPM network diagrams are used (Hellriegel & Slocum, 2002). It does not show how the various phases of a project are related to each other. In other words, it overlooks the fact that the activities form a network. A Gantt chart may only display triple constructs of a project such as time scope and cost of a project. It does not show the critical path, which is necessary for the completion of the project. Definition and differences between personal ethics and moral and professional ethics Personal ethics are moral values that are concerned with human conduct concerning rightness and wrongness of person’s actions. Ethics guide the decision making process of an individual in accordance to society‘s morals and values (Business ethics). Professional principles refer to the morals that an individual must hold on to in respect of their job descriptions in their professional life and sets the standards for professional practice (Draft, 2002). People hold different personal ethics, but for professional ethics, individuals adhere to similar professional ethics set by a specific profession (Sveiby, 2007). A conflict between professional and personal ethics arises whereby the personal values held by an individual contradict with his or her professional ethics (Management notes). It is observable that, individual posses a set of diverse principles where one chooses between personal morals and professional values, which are in oppose morals (Hellriegel & Slocum, 2002). Many times when individuals are in such a conflict of values, most of them tend to give in to job demands and take professional values without giving a priority to their own principles. Only a small number of persons in society uphold a balance of individual principles with professional decisions. Process/steps should be used when conducting a risk assessment and who should undertake this task An individual should undertake the risk assessment task with the necessary technical proficiency, training and skill to exercise the assessment (Draft, 2002). The steps below should be followed when undertaking the risk assessment task; find something with the potential to cause injury or ill health to those exposed to hazard and unsafe conditions in the organization (Health and safety). Decide the category of the workforce who might be harmed for example the workforce ,customers, members of the public minority persons and workers with unique needs and how. Evaluate the magnitude of the risk arising from the danger. The risk can be calculated by a mathematical formula, Risk = (Likelihood of occurrence) x (Severity of hazard) considering the current controls, legal requirements, work practices, other risk assessments, operation guidelines and industry standards (Health and safety). Record your findings i.e. write down the foremost hazards and conclusion, draw up an action plan prioritizing the procedures to be taken in relative to the magnitude of the risks (Draft, 2002). Review your assessment and consider the following when deciding whether a review is necessary; changes in occupation practice, changes in equipment, changes in categories of employees and any change in legislation. Reasons for and against current Banking regulation and Oversight regime The new banking regulation will help alleviate general risks posed by shadow banking entity. Shadow banking refers to a credit intermediation involving firms and activities outside the normal banking system. It is significant to note that, the shadow banking system can pose a severe problem of causing systematic risk either directly or through the interconnectedness with the habitual banking. Additionally, the regulation facilitates edifying up of advantage and risks in the system. On the other hand, the current regulation has is aimed at enhancing alternative source of funding and maintaining the bank’s liquidity level. More over, current regulation directive is an alternative for commercial banking governance and the policy to protect the public interest against financial abuse. However, regulation limits the performance of the banks References Basic Business ethics Lecture notes. CLARK, W. (2002). The Gantt chart; a working tool of management. London, Pitman DAFT, R. L. (2001). Management. Chicago, Dryden Press. HELLRIEGEL, D., & SLOCUM, J. W. (2002). Management. Reading, Mass, Addison-Wesley Pub. Co. Health and safety lecture notes. Project Fundamentals and Management tools lecture notes. Patents and data protection lecture notes STONER, J. A. F. (2012). Management. Englewood Cliffs, N.J., Prentice-Hall. SVEIBY, K. E. (2007). The new organizational wealth: managing & measuring knowledge-based assets. San Francisco, Berrett-Koehler Publishers. Read More