CULTIVATING ENTREPRENEURIAL AND BUSINESS SKILLS

Bust/Depression; Bull Share Market; Bear Share Market; Stable/Moderate Expansion/Recovery; Boom/Growth; Contraction/Recession; Bust/Depression High Growth; Medium Growth; Stable/Maturity; Low Growth Share price growth; Commodity growth; Commodity drawdown; Share price drawdown

During the recession phase of the economy During the depression phase of the economy During the growth phase of the economy During the recovery phase of the economy

High inflation, low economic growth and medium unemployment High inflation, low economic growth and high unemployment High inflation, medium economic growth and high unemployment High inflation, strong economic growth and medium unemployment

Jerome Powell Ben Shalom Bernanke Joe Biden Wladimir Poetin

The great depression of 1929 The dot com crisis of 2000 The financial crisis of 2008 The Covid pandemic of 2020

Japan America as measured by the S&P 500 index Germany South Africa

Japan America as measured by the S&P 500 index Germany South Africa

Finance Manufacturing Mining Government

There is a direct correlation between the banking sector’s performance and economic events Industry problems, such as the collapse of Saambou, resulted in a significant fall in the average share price in the banking sector There is an inverse correlation between the economic cycle and the average share price in the banking sector, with the banking sector performing well during the recession cycle The Covid pandemic wiped out nearly 6 years of the banking sector’s average share performance in a few months

During the recession phase in the economic cycle companies would often grow too fast and take on too many projects, and thus fail to manage investor expectations Total customers as of today = Customers already had + New customers per month – Customer attrition per month Supply and demand management refers to balancing internal business dynamics with external market forces in the context of a changing economic cycle Supply and demand dynamics will not always be aligned, as supply and demand often change at different time intervals

Leads to customer conversion increase by 10% + Products per customer increase by 10% + Selling price increase by 10% = Total turnover increase of 30% Leads to customer conversion increase by 10% + Products per customer increase by 10% + Selling price increase by 10% = Total turnover increase of 10% Leads to customer conversion increase by 10% + Products per customer increase by 10% + Selling price increase by 10% = Total turnover increase of 25% Leads to customer conversion increase by 10% + Products per customer increase by 10% + Selling price increase by 10% = Total turnover increase of 33.1%

Retail companies generally have high Net Profit Margins, as the companies can add relatively large margins to basic food items Retail companies generally have lower Return on Asset ratios than Return on Equity ratios, as the Return on Equity ratios are leveraged upwards The Net Profit Margin within a retail company gives an indication of how profitable the company’s core business of buying and selling goods is The Operating Profit Margin cannot be calculated for retail companies, as the gross profit is determined by the Cost of Sales

Liquidation Value plus Book Value Total Equity minus Total Liabilities Value of Assets minus Value of Liabilities Intellectuel Assets plus Intangible Assets

1 – B; 2 – A; 3 – C 1 – C; 2 – B; 3 – A 1 – A; 2 – C; 3 – B 1 – B; 2 – C; 3 – A

Firm Infrastructure; Marketing and Sales; Human Resource Management Technology Development; Procurement; Inbound Logistics Operations; Human Resource Management; Procurement Inbound Logistics; Operations; Outbound Logistics

Product Development Bargaining Power of Customers Rivalry among Existing Firms Potential new Entrants

Cash has a higher risk of manipulation than accounting profits, and thus needs to be managed more efficiently Supplier relationships can be damaged if a business is unable to honour their short-term commitments due to a lack of available cash Cash is often needed for growth and expansion, and thus excess cash need to be created and managed efficiently Working capital management policies can determine how much cash is tied up in inventory of trade debtors

Cash from equity and debt + Capital expansion projects and capital assets + Cash flow from main activities Cash flow from operating activities – Cash flow from investment activities + Cash flow from finance activities Cash flow from the company’s core focus – Cash flow from equity and debt + Cash flow from capital assets Cash flow from working capital management – Cash received from trade debtors + Cash paid to trade creditors

All industries should be measured against the rule of thumb of 2:1 for the current ratio and 1:1 for the quick ratio The current ratio and quick ratio for high-risk businesses within the industry are often much higher than the industry average Since the retail industry is perceived as a low-risk industry, the average current ratio and quick ratio are higher than in other industries The average current ratio in the retail industry is lower than in other industries, due to the fast inventory turnover and high volume of cash transactions

By applying risk management principles, a company can eliminate all internal and external risks An investor willing to take on a higher risk can always expect a higher return, since high risk equals high return Upside risk refers to the possibility of things working out better than expected, and expansion projects often have an upside risk and a downside risk Downside risk refers to possible adverse events, and is the only risk that a company should consider during expansion projects

1 – B; 2 – C; 3 – A 1 – A; 2 – B; 3 – C 1 – C; 2 – B; 3 – A 1 – A; 2 – C; 3 – B

Human Capital refers to aspects such as the skills and experience of employees Social Capital refers to aspects such as relationships with stakeholders Manufactured Capital refers to aspects such as land, water and eco-systems Intellectual Capital refers to aspects such as software and other intangible assets