Financial and Economic environment of South Africa Term Paper

Financial and Economic environment of South Africa - Term Paper Example They also have security and safety implications and have effects on the transfer payments. Most ideas, principles and legal concepts used in international transactions often find expression in the legislative acts and policies of nation states. Although many forces besides economic factors help shape world trade, it cannot be denied that the economic component of international relations is the most significant and that generally, a prosperous and stable international business environment. Aspects of returns and risks From the website www.cia.gov, it evident that there are a number of aspects that affect the countries return and risk on investment to a business, some of this include; Ratio analysis used to obtain the company’s financial performance in many key areas. The ratios include the liquidity ratios that point out the easiness of turning assets into cash and they include current ratio which measures the financial power, the quick ratio which concentrates mainly on liquid assets whose value is sure, and working capital which is more of cash flow measure than a ratio. The leverage ratio shows the degree to which the business is dependent on debt financing. The gross margin ratio is the proportion of sales dollar left following the subtraction from the net sales the cost of goods sold. The net profit margin ratio which is the proportion of sales dollars left after subtracting the cost of goods sold and every expense excluding income taxes. Inventory turnover ratio which discloses how well the inventory is being controlled. Accounts receivable turnover ratio which shows how well collection of accounts receivable is being done, if receivables are slow in being transferred to cash liquidity could be damaged (fxTrade, 6). The return on assets ratio which indicates how well profits are being created from the assets employed. The return on investment ratio which is the proportion of return on owner’s funds invested in the business, it also indicates whether the effort put into the business in worthwhile. Information technology is used to process and analyze accounting transaction. The input devices regularly linked with the accounting information systems comprise the typical personal computers or running applications workstations, running applications, devices for scanning, standardized data entry scanning devices, electronic data interchange for electronic communication devices and e-commerce. The basic processing is realized through computer systems variety from individual personal computers to large scale enterprise servers; however the fundamental processing model is the double entry accounting system (Pomeranz & Topik 82). The output content may include any type of financial reports from tax reports to budgets. The use of also management information system which offers human/machine interactive that supports decision making for users both out and in the organization boundaries. This system support daily operated activities of the organization, future and current tactical decisions, and on the complete strategic direction. The financial applications make up the management information system which commonly implemented modules include, the payables, general ledger, receivables, procumbent, inventory, projects, assets and