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Basic Business Applications

Basic Business Applications. CURRENCY AND RATES OF EXCHANGE. Each country has its own system of coinage and this is known as its currency. The process of finding the value of the currency of one country in terms of the currency of another country is called exchange.

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Basic Business Applications

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  1. Basic Business Applications

  2. CURRENCY AND RATES OF EXCHANGE • Each country has its own system of coinage and this is known as its currency. • The process of finding the value of the currency of one country in terms of the currency of another country is called exchange. • The relative values of the different currencies used to depend upon the amount of gold which a country possessed, but now that we are no longer on the gold standard, their values depend on the political and economic circumstances of the countries concerned. • This relationship of one currency to another is known as the rate of exchange

  3. http://www.x-rates.com/

  4. These values vary from day-to-day and are quoted in most daily papers. The changes in value are brought about by such things as changes in government, changes in government policies, the national budget, the relationship between the value of exports and imports, etc. • The rate of exchange is expressed as a ratio. It shows the value of one unit of currency in terms of another currency

  5. Currency Conversion

  6. DISCOUNTS • A discount is a reduction in the selling price of an item, usually offered as an inducement for quantity buying or for prompt payment. The discount is expressed as a percentage of the list price (the list price is the original price) and what the buyer actually pays is the net price – the list price minus the discount.

  7. COMMISSION • A commission is the amount of money paid to an agent, broker or salesman for buying or selling goods or services. This is expressed as a percentage of the value of the goods/services traded and is called the rate of commission. • To find the commission, we simply multiply the value of the goods/services traded (known as the principal) by the rate of commission

  8. Simple Interest

  9. Compound Interest • If an amount of money is invested and the interest is added to the investment, then the principal increases and so the interest earned gets bigger each year.

  10. DEPRECIATION • Depreciation is a measure of the wearing out, consumption or other loss of value of an asset arising from use, passage of time, or obsolescence through technology or market changes. For example, a car loses value over time and is worth less each year. • This is an important concept in business where certain types of asset need to be accurately valued in order to help determine the overall value of the business. The amount by which an asset depreciates each year may also have important consequences.

  11. DEPRECIATION • Straight-Line Depreciation • Reducing Balance Depreciation

  12. PAY AND TAXATION • Make Up of Pay:

  13. Taxation

  14. Thanks

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