Describe the schematic structure/relationships of a firm from its sources of capital to sales and fiscal and monetary policies. Do the firms actions feedback or interact with government economic policy?© BrainMass Inc. brainmass.com March 4, 2021, 6:36 pm ad1c9bdddf
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1. Describe the schematic structure/relationships of a firm from its sources of capital to sales and fiscal and monetary policies. do the firms actions feedback or interact with government economic policy?
- Capital Structure: Arguably, the role of the of a firm's management is to increase the value of the firm to its shareholder's while observing applicable laws and responsibilities (4). The firm's capital is often defined as the assets available for use in the production of further assets (1). In other words, the firm's structure includes capital or the assets less liabilities, which represents the ownership interest in a business. Another way of looking at capital is as a stock of accumulated goods, especially at a specified time and in contrast to income received during that specified time period. It is the firm's accumulated goods devoted to production, which are calculated to bring income into the firm (2). Although large firms often use present value techniques and the capital asset pricing model to assess the feasibility of an investment opportunity, CFOs of small firms still rely on the payback criterion. In capital structure policy, financial flexibility appears to be the most important factor in determining the amount a/corporate debt. Corporate finance practice appears to be influenced mostly by firm size, to a lesser extent by shareholder orientation, and least by national influences (3). The proportion of the firm's capital structure supplied by debt and by equity is reported as either the debt to equity (D/E) or as debt to value ration (D/V), the latter of which is equal to the debt divide by the sum of the debt and the equity (4).
- In the broadest sense, the firm's sales are an exchange of goods, services, or other property for money. In other words, the firm's sales have to do with profitability of the firm's structure. For example, gross profit of the firm is calculated as sales minus all costs directly related to those sales. These costs can include manufacturing expenses, ...
This solution explains the schematic structure/relationships of a firm from its sources of capital to sales and fiscal and monetary policies. It also explains whether the firms actions would feedback or interact with government economic policy.