True/False 1. Insofar as it’s often stated that “one person’s debt is another pe

Question

True/False

1. Insofar as it’s often stated that “one person’s debt is another person’s asset”, it’s fair to assume that assets and debts should be viewed as equals (i.e. having the same value).

Short Answer

2. Men’s Clothing retailer Joseph A. Bank has recently suffered a "decline in traffic" as the firm transitioned away from the Buy-One-Get-Two-Free campaign. Comparable store sales are expected to collapse 20-25%. This has smashed the stocks to its lowest since August 2012.

What has Jospeh A. Bank failed at when it decided to end its discount program?

3 The current Baltic Dry Index is telling us what?

4. Identify one company engaging in forward integration and one in backward integration.

Explanation / Answer

1. Insofar as it’s often stated that “one person’s debt is another person’s asset”, it’s fair to assume that assets and debts should be viewed as equals (i.e. having the same value).

True.

The division of assets and debts is supposed to be an equitable division, in that both parties are supposed to receive an approximately equal share of the community assets. This does not mean that each party receives one-half of the value of each asset. Rather, the total value of all the assets each receives should be approximately equal.

2. Men’s Clothing retailer Joseph A. Bank has recently suffered a "decline in traffic" as the firm transitioned away from the Buy-One-Get-Two-Free campaign. Comparable store sales are expected to collapse 20-25%. This has smashed the stocks to its lowest since August 2012.

What has Jospeh A. Bank failed at when it decided to end its discount program?

Ans - Joseph A. Bank has failed at deciding the time of ending the discount program. It might be the time at bwhen its competitors were giving the discounts and it 's not.

3 The current Baltic Dry Index is telling us what?

The Baltic Dry Index measures how much it costs to ship "dry" commodities around the world - raw materials like grain and steel.

The index is frequently used as a "canary in the mine" for the state of the global economy and how well international trade is performing. If the price is low, it suggests trade is slowing.

Back in November, the Baltic Dry Index dropped below 500 for the first time in recorded history, and it has kept falling ever since. On Wednesday morning (20 Jan 2016) it fell to just 369, its lowest ever level.

So, the current BDI states that the international trade is slowing.

As the Baltic Dry has crashed, ships are becoming less and less profitable, causing many shipping firms, and those holding their debts, big issues. According to statistics service Statista, there are now more than 50,000 merchant ships in the world right now.

4. Identify one company engaging in forward integration and one in backward integration.

Ans -

Forward Integration :-

Forward integration is a strategy in which companies expand their activities to control the direct distribution of their products. This might be required, if companies would potentially benefit from handling e.g. the shipping of own products directly to customers, or the retail selling of own brands in brand stores.

American Apparel

American Apparel is the classic example of a company that employs forward integration through controlling every aspect of distribution of its products. AA manages every form of distribution in-house, including the high rent, high-profile retail stores, its wholesale operation selling clothing to screen printers and boutiques and the online store that sells throughout the United States and internationally. Warehousing and distribution is also managed internally from the company’s Los Angeles factory.

Backward Integration :-

Backward integration can involve a purchase of suppliers in order to reduce supplier dependency with regard to e.g. timely deliveries, quality concerns, innovation ability etc.

Amazon.com

Amazon.com backward vertically integrated when it became not only a bookseller but a book publisher. As a bookseller, Amazon.com buys books from various suppliers, such as publishing companies. By becoming a publisher itself, it has integrated into its business the role of supplier and can sell books that its own publishing company publishes.

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