Business Function Essay Example | Topics and Well Written Essays - 1500 words - 1

Business Function - Essay Example In the second category, the enterprise is not registered with the relevant authority as a business. It comprises two types of ventures: This is the oldest, most common, and most basic business type. As the name suggests, this type of enterprise is owned and managed by one person, who is in charge of all operations conducted on behalf of the business. Since it is the easiest to start, it manifests in form of small retailers and utilities like beauty services, photographers, repairs and maintenance, transport, cleaning, etc (Akdeniz, 2013:16). This type of business is inexpensive to start and, as a result, is often supported by the founder’s savings until growth necessitates external funding. In its simplest form, a partnership resembles a sole trader, with the only difference occurring in the sharing of ownership (Gevurtz, 2014:21). All partnerships should have partnership agreements that explain the rights and responsibilities of the various partners involved. In light of this, there are different types of partners, who are all covered by the partnership agreement. For example, there may be dormant, â€Å"sleeping,† or quasi partners, who own a share of the enterprise but are not actively involved in its management (Cornell, 2013:36). Partnerships have unlimited liability, and are common in careers like accountancy, dentistry, medical practice, law, etc. Starting in 2001, there has been a new type of partnership known as a limited liability partnership. This is like a hybrid of a partnership and a limited company, since it has limited liability (like all limited companies) but must be owned by not less than two members (making it a partnership). Limited liability partnerships, also known as LLPs, are formed to aid professional partnerships among doctors, dentists, lawyers, accountants, and others, who are barred from forming limited companies because of constraints imposed by their professional

Comparision of the similarities and differences between Economic Value Research Paper

Comparision of the similarities and differences between Economic Value Added (EVA) and Residual Income as a measure of corporate performance - Research Paper Example The purpose of this paper is to discuss residual income and economic value addded approach in order to compare and contrast their differennces and similarities. EVA is a concept created by the consulting firm Stern Steward & Company (Keys & Azamhuzjaev & Mackey, 2001). EVA is a wealth metric that is commonly referred too as economic profits. In mathematical terms EVA is calculated by taking net operating profits after tax (NOPAT) and reducing NOPAT by your total cost of capital which includes the combination of borrowing and equity costs (Exinfm, 2009). EVA has become a very popular tool in the corporate world. Many multinational corporations have utilized the concept to increase the value of their common stock. After the inception of EVA Coca-Cola stocks rose 200% from 1987 to 1993; another example is CVX whose stock rose from $28 to $75 in a five year span after adopting EVA (Chen & Dodd, 2001). Despite the these sucesss stories there is not enough emperical evidence to support the claim that adopting the managerial practice to optimize EVA is correlated with price increments in stock valuation. EVA is a concept that is relalative new in c omparison with other financial metrics such as earnings per share (EPS) and residual income. The application of EVA and its support and validity may replace EPS in the future an indicator that is included in the income statements of public corporations.