BUS600 Chapter 5 and 6 Summary + Class Notes - 10/22/2011

Lecture of 2 chapters { Chapter 5 and 6 }

Day5 - Quantitative Analysis (Page 159)

Taked about Group assignment this week (From ULearn):
Using at least three tools/concepts in the Quantitative Analysis and Finance Chapter, decide how are you going to fund your start up and why. Spend at least 30 minutes in your group, come to an agreement, upload 250-1000 words of your plan (mention the concepts/tools) to your learning journal. It is fine for each one to upload the same text, but variation and your own ideas are encouraged.

Class Notes:

Getting other people's money:
1) Sell Stock
2) Bond
3) Loan (must pay interest)

Learn 3 concepts and tools.

Goal:
Numbers & facts ==> Solve the problem systematically ==> Decision Making.

Tool 1) Decision Tree
Tool 2) NPV Page172-173
Tool 3) IRR Page 175
Tool 4) Bell Curve, statistics
Tool 5) Regression Analysis Page 189

Day 6 - Finance
Finance - Strategy & Decision Making
Accounting - Deal with Info and facts, book keeping, database

Business structure

• Proprietorship
• Partnership LLP
• Corporation { S-Corp, C-Corp }

C-corp pays double tax 40%, Stock - open market
S-corp 100 stock holder max

Beta  - Page 206
Bata = -1 Opposite of market movement
Bata = 0 Cash only

Index { ? }
S&P 500
Wilshaire 500
Nikki 225
Dow Jones 30 { Disney, GM, IBM, MS, Cisco, Amex, Coca Cora, etc.}

• Bonds (Bank interests vs Coupon, trade off )
• Stock Price/Earning P/E ratio, Growth rate, why earning = $0 but stock has value? because of  Book value (Assets)
• Option - Page 221 Buy/Sell before the stated date, advantage and risk

R Squared

http://en.wikipedia.org/wiki/Coefficient_of_determination

T Test

http://en.wikipedia.org/wiki/T_test

  

(Assignment) Solving OB problem in workplace

Problem summary:

Your company is growing to 150 employees.  Being an international company, you have excellent employees from many culture backgrounds.  However, since about 1 year ago, they naturally break into ethnic groups A, B and C.  The groups started to develop conflicts and hurt company communications and collaboration.  e.g. group A believes group B are too aggressive, group B thinks group C are too selfish, group C talks about how lazy group A is.

As the leadership, your group needs to solve the problem.  Apply the theory and the practices in the textbook to design a brief solution (200-500 words).  Insert the solution to your learning journal.

Review of the problem:

1) The employees are "naturally" break into groups about 1 year ago. Is there any change in management at the time?
2) Why ethnic groups? Normally people are grouped by job functions in a company.
3) As this summary describes, this is an international company so the problem may be conflicts among oversea subsidiaries located in the different countries.
4) If the conflict is happening in the same location/office, then there must be a specific reason.

Solution:

If 3) is true, the problem may happen just because they are lacking the knowledge of custom in each country. For example, Spanish takes longer lunch time (so many people go home to eat lunch) but can we say they are lazy? The company can provide an internal class to learn different cultural issues and international communications. Many global companies as I knew of provides such a course so far. 

If 4) is true, this is more serious. (I've been working for a multi-cultural global company, but so far, I never seen people group by ethnically and blame each other) Management needs to find out what is going on among people. One solution is having one-on-one meeting with employees. Management must tell them the content of the discussion does not affect any individual evaluation.

(Group) Assignment 2 – How to read financial statement

Financial Data: Apple Inc. Q3 2011 Unaudited Summary Data (http://images.apple.com/pr/pdf/fy11q3datasum.pdf ) 

This table shows Apple's Q3 2011 quarterly revenue (as net profits). Data is arranged by operation segments and by product basis in 2 tables, while both should indicate the same amount of the total revenue; 28.571 billion USD.  This amount is almost double of a year ago.  

My Notes and Analysis.

Apple Q3 is April to June time period.

iPad2  release – March 25 2011

iPhone 4  release – Jan 11 2011 (Verizon) March 2011 (AT&T)

The reasons for sales increase (From Group Meeting 10/10/2011)

1.       Obviously the sales revenue during the 3^rd quarter is due to iPad2 and iPhone4’s new release.

2.       Japan, Pacific, European sales increased dramatically. Popularity in oversea compare to the other smart phone products. (62% of the sales came from oversea)

Speaking of my analysis above, I agree with the financial reports in Apple’s Press Info – Time Record Revenue and Earnings (7/19/2011) http://www.apple.com/pr/library/2011/07/19Apple-Reports-Third-Quarter-Results.html

All the analysis and numbers are true regarding sales facts and same my analysis.

Regarding forward looking statements from the press, I had the following feedback.

This company’s product concept development has been done by Mr. Steve Jobs and he was literally a genius in the history.  There was a claim that even Microsoft copied Apple’s concept regarding PC, and Apple makes both hardware and software while Microsoft does software only.

The company is probably OK for a while after Mr. Jobs death  because they just announced a new release iPhone4S (Some said 4S is a for Steve, BTW) However, they need to understand the importance of the next generation of the current product lines so that they continue to be the leader, since other companies ready to copy the similar products with lower costs. e.g.  Amazon, Google, Samsun.  

What I think of Apple is, they are just very expensive. Not only tablets or smart phones, I love even Apple’s PC/Notebook, and also SW development tools!!  However I end up with using DELL and Microsoft due to cost efficiency…

The next hot business opportunities for these IT companies may be cloud business, means that services thru the internet via portable devices.  However, I would warn the society with such centralization, if internet is down, everything becomes not available.