Summary: “Even as the cost of crude oil has soared in recent years, the amout pumped from the ground hasn’t” During the Financial Tsunami, the price of oil isn’t decreasing but increasing. The economy should not work in that way. The imbalance between supply and demand keeps pushing prices higher. “When a product is in short supply, the price rises, and the companies that make it usually produce more so they can cash in. Supply eventually outstrips demand and the price goes down..” The oil companies have to find more oil fields, but it is more and more difficult.
Connection: In chapter 2, demand and supply are very important to the market. They can control people’s desire to consume. The article provide a good example. Normally, when the supply decrease, the price increase for sure, then the companies will try their best to produce more to earn money. Once the supply outstrips demand, the price of the product goes down. Changes in demand also is effective in this case. Since the demand goes down, less people are going to buy the product. Of course the price goes down. There are a lot of elements to affact the market.
Reflection: This is very confusing. During the Finalcial Tsunami, the demand of oil suppose to decrease. But it really didn’t. Also it is very difficult to find big, untapped oil fields, which people often called “elephants”. When the oil companies can’t keep their output level of oil, the supply decreases and stays in a low level. This is why the price of oil seems never goes down. I heard someone said that the oil in the Earth is running out, and until 2025 there is no more oil to pump. This is scary because when we don’t have gasoline, how can we drive cars?
Article: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/26/BUHH10S61B.DTL
Thursday, October 15, 2009
Tuesday, September 22, 2009
Economics 12- a Dismal Science
Summary: The article explain why Economics called “dismal science”. It was first told by Thomas Carlyle in December 1849. “In particular, Carlyle was criticising the economists belief in supply and demand which stood in sharp contrast to his idealised view of a slave society.”People in the Victorian age thought black people were inferior to white people. Carlyle is the one. But many economists believed in equality and freedom of the people. Economics support for black emancipation and the ending of slavery system. Therefore in Carlyles’s mind, economics is ”Quite abject and distressing...dismal science... led by sacred cause of Black Emancipation”.
Connection: At the beginning of Economics 12, Mr. Bach(my lovely business teacher) asks us to do some research about this topic “Why do we called Economics the ‘Dismal Science’”. I think he wants us to know the history of economics. Once we figure out the history of something, we can learn the knowledge quicker and deeper, also easier to understand them. One of the main point of economics is “free trade”. This coincides to the Black Emancipation. The Blacks hoped the word “freedom” for many years. “Free” is a bridge and bring economics and Black Emancipation together.
Reflection: I really hate the word ”dismal”. It is pretty negative. But economics is a good thing. It is the social science that studies the production, distribution, and consumption of goods and services. But economics is totally different from pure science such as chemistry， biology. While most of the environmental conditions can be controlled during the experiment in pure science, economic experiments are conducted under conditions that cannot be easily controlled. Same as the weather, economy changes in every moment. People never know what will happen next. For example, many people lost money in the recession that happened to us last year.
Article:http://www.economicshelp.org/2008/07/why-is-economics-called-dismal-science.html
Connection: At the beginning of Economics 12, Mr. Bach(my lovely business teacher) asks us to do some research about this topic “Why do we called Economics the ‘Dismal Science’”. I think he wants us to know the history of economics. Once we figure out the history of something, we can learn the knowledge quicker and deeper, also easier to understand them. One of the main point of economics is “free trade”. This coincides to the Black Emancipation. The Blacks hoped the word “freedom” for many years. “Free” is a bridge and bring economics and Black Emancipation together.
Reflection: I really hate the word ”dismal”. It is pretty negative. But economics is a good thing. It is the social science that studies the production, distribution, and consumption of goods and services. But economics is totally different from pure science such as chemistry， biology. While most of the environmental conditions can be controlled during the experiment in pure science, economic experiments are conducted under conditions that cannot be easily controlled. Same as the weather, economy changes in every moment. People never know what will happen next. For example, many people lost money in the recession that happened to us last year.
Article:http://www.economicshelp.org/2008/07/why-is-economics-called-dismal-science.html
Tuesday, May 19, 2009
Chapter16: Tax return for kids
Summary: The article talks about why we should file a tax return for kids. Basically children earn less than the basic personal amount, which was 9600 dollars in 2008; they still should file a tax return for a minor. First of all, one reason is to report income the child may have earned from casual, part-time or summer employment. “Filling a tax return early in life can bolster the amount that can later be socked away in an RRSP.” Now TFSA makes this strategy even more palatable. Young people starting their first jobs, and in the lowest tax bracket, are discouraged from making RRSP contributions until they get into a higher tax bracket.
Connection: In chapter 16, we learned about tax return. Not just adults but also teenagers need to file a tax return, even though their tax payment is small. After children file a tax return, they can put some of the money into TFSA (the recent introduction of the tax-free savings account), which is same as RRSP (Registered Retirement Savings Plan). These two accounts let us save our money for our retirement and lower our income taxes. The only difference is, TFSA is for lower tax bracket, and RRSP is for higher tax bracket.
Reflection: When I was 16, my mother told me to file a tax return. The only thing I knew from that time is to let the government created my file. After I read this article, I understand everything. Even teenagers need to plan their retirement. Once we plan it earlier, we could have a comfortable retirement. More over, RRSP/ TFSA are a kind of life insurance. They work the same way to protect ourselves. Also RRSP has another benefit, which can lower the income. Since we have a higher income, we suppose to pay more taxes, or get a lower tax return. But when we purchase RRSP, we can pay fewer taxes, or get a higher tax return.
Article: http://www.canada.com/business/story.html?id=1462907
Connection: In chapter 16, we learned about tax return. Not just adults but also teenagers need to file a tax return, even though their tax payment is small. After children file a tax return, they can put some of the money into TFSA (the recent introduction of the tax-free savings account), which is same as RRSP (Registered Retirement Savings Plan). These two accounts let us save our money for our retirement and lower our income taxes. The only difference is, TFSA is for lower tax bracket, and RRSP is for higher tax bracket.
Reflection: When I was 16, my mother told me to file a tax return. The only thing I knew from that time is to let the government created my file. After I read this article, I understand everything. Even teenagers need to plan their retirement. Once we plan it earlier, we could have a comfortable retirement. More over, RRSP/ TFSA are a kind of life insurance. They work the same way to protect ourselves. Also RRSP has another benefit, which can lower the income. Since we have a higher income, we suppose to pay more taxes, or get a lower tax return. But when we purchase RRSP, we can pay fewer taxes, or get a higher tax return.
Article: http://www.canada.com/business/story.html?id=1462907
Thursday, April 2, 2009
My Favorite Article: What is a Cash Discount?
Summary: This article talks about what is a cash discount, “a cash discount is a marketing and client relations strategy that is often employed to provide consumers with added incentive to do business with a particular company.” Sometimes the cash discount might be a percentage, sometimes it could be an amount. There is only one purpose, which is to encourage people to pay for goods and services using cash, but not some alternative form of payment, such as credit cards. Both vendor and client are offered by the cash discount. When the client makes a payment within ten days of the issue date, a discount is applied.
Connection: In chapter twelve of the text book, we can find some basic information of a cash discount. Actually cash discount is very attractive to people. However, most of the people don’t like paying cash, because they don't have such a large amount of cash in their wallet, or they want to use credit card more to earn air points. But business wouldn't think that way. They know that if there is a higher population of using credit card, there will be a higher chance to lose money. Not everyone pay off their bills on time. That is the most effective problem.
Reflection: I am very interesting about cash, discount, that kinds of thing. Everything about money is my favorite. This really attracts my attention. In case, we just need to pay in cash, which is the same amount when I pay in credit card, then I can have a discount to deduct the amount. That means we can pay less money than the item’s regular price. This is such a great thing to us. Just a little process, can actually save our money. Deal!
Address: http://www.wisegeek.com/what-is-a-cash-discount.htm
Connection: In chapter twelve of the text book, we can find some basic information of a cash discount. Actually cash discount is very attractive to people. However, most of the people don’t like paying cash, because they don't have such a large amount of cash in their wallet, or they want to use credit card more to earn air points. But business wouldn't think that way. They know that if there is a higher population of using credit card, there will be a higher chance to lose money. Not everyone pay off their bills on time. That is the most effective problem.
Reflection: I am very interesting about cash, discount, that kinds of thing. Everything about money is my favorite. This really attracts my attention. In case, we just need to pay in cash, which is the same amount when I pay in credit card, then I can have a discount to deduct the amount. That means we can pay less money than the item’s regular price. This is such a great thing to us. Just a little process, can actually save our money. Deal!
Address: http://www.wisegeek.com/what-is-a-cash-discount.htm
Thursday, March 5, 2009
What are common-size financial statements?
Summary
The article talks about the basic knowledge of Common-size financial statement, which includes the common-size income statement and the common-size balance sheet. In order to better explain these two statements, the article uses a lot of examples. Such as “if Cash was $80,000 and Total Assets were $1,000,000 then Cash will appear as 8% and Total Assets will appear as 100%.” The article use $1,000,000 as the total assets, which is very simple to convert the entire amount into percentage. For example, if the cash is $80,000, so 80000/1000000 is 0.08, which is 8%.
Connection
In the textbook chapter 15.2, we can find the introduction of these two kinds of common-size financial statement. I think the textbook has more details about these two statements. Common-size financial statement is a pretty good way to compare the two companies. The size of the company will not affect the common-size statement, because all the amounts are converted into percentage, and percentages have the same radio, no matter how large the amount is. Therefore, comparing the companies becomes very simple. Even ordinary people could understand the statements and make decision to invest the company.
Reflection
It is very important that compare the companies, because no one wants to buy a company which cannot earn money. Somehow, even though the company is earning money, but if it doesn't have the ability to pay off the loan, this is not a good company that we should invest. Comparing the percentages is easier than the numbers. Percentages are under the same radio, the amounts of the number could not affect them. So this is the fairest method of comparison. Sometimes a high percentage doesn't mean good. For example, debit ratio must be lower than 20 to 30%. If it is higher than 30%, which means the company has too many liabilities. This is not a good situation.
Article: http://blog.accountingcoach.com/common-size-financial-statements/
The article talks about the basic knowledge of Common-size financial statement, which includes the common-size income statement and the common-size balance sheet. In order to better explain these two statements, the article uses a lot of examples. Such as “if Cash was $80,000 and Total Assets were $1,000,000 then Cash will appear as 8% and Total Assets will appear as 100%.” The article use $1,000,000 as the total assets, which is very simple to convert the entire amount into percentage. For example, if the cash is $80,000, so 80000/1000000 is 0.08, which is 8%.
Connection
In the textbook chapter 15.2, we can find the introduction of these two kinds of common-size financial statement. I think the textbook has more details about these two statements. Common-size financial statement is a pretty good way to compare the two companies. The size of the company will not affect the common-size statement, because all the amounts are converted into percentage, and percentages have the same radio, no matter how large the amount is. Therefore, comparing the companies becomes very simple. Even ordinary people could understand the statements and make decision to invest the company.
Reflection
It is very important that compare the companies, because no one wants to buy a company which cannot earn money. Somehow, even though the company is earning money, but if it doesn't have the ability to pay off the loan, this is not a good company that we should invest. Comparing the percentages is easier than the numbers. Percentages are under the same radio, the amounts of the number could not affect them. So this is the fairest method of comparison. Sometimes a high percentage doesn't mean good. For example, debit ratio must be lower than 20 to 30%. If it is higher than 30%, which means the company has too many liabilities. This is not a good situation.
Article: http://blog.accountingcoach.com/common-size-financial-statements/
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