Economic analysis of business performance
Economic Analysis of Business Performance
According to the first lecture about introduction, I can see this course will provides knowledge about very important factor of economics, for example, Output, productivity, investment, and so on. I hope I can get some experience after this course such as:
How to measure national income and output in economics that estimate total economic activity in a country or region such as, gross domestic product (GDP), gross national product (GNP), and net national income (NNI) while there are some difficult in collecting data and some product can not be measure.
Understand the relation between productivity and employment and how to measure productivity base on total factor of it and labour.
Understand the role of investment in economics; the cost for research and development; how to measure the performance.
Understand the financial ratios and how it is used in economics.
Review lecture with ability to finding, collecting, analysis, and manager data.
Have ability in analysis, compare, critical, and synthesise economics data.
Improve listening, reading and writing through lectures, seminars, essays, assignments and myself research activities.
Improve communications skill via discussion and presentation.
To summary, when I study Economic Analysis of Business Performance I hope that I can understand deeper about the business finance and some skill that I need for work. Because I am a student from oversea, I want to get knowledge about business and develop my ability in using English as well.
Task 2: Output
What is output? In my opinion, output in economics is the total value of all of the goods and services produced in whole economics. It is easy to measure output if only goods, for example, cars, rice, meat. However, output in economics include product of service industry such as, banking, insurance, so how to measure this kind of output is one of problems. To clear, I chose insurance industry for my writing.
Simply, insurance is a financial service that helps you to protect against future loss, such as accident or stolen. There are many different types of insurance, for instance, life insurance, contents and building insurance or accident, sickness and unemployment. So output of insurance service can be understand are service products that bring to customer. We can also understand that output of insurance service is management of risk because “management of risk is what insurance companies sell” (Jack Triplett and Barry Bosworth, 2003). Beside that, measure this kind of product is one problem. It is not simple as a car manufacturer, counting the number of vehicles that it produced. The output here is the insurance premium times the quantity of risk assumed. The price charged for assuming risk is p = P/R, where p is the price of insurance, P is the premium charged, and R is a measure of risk assumed (Bradford and Logue, 1998)
In my view, output of insurance industry can be measure by total revenue or net income of this industry. In addition, we can see output of insurance through current data report annual (GDP, GNP). However, there are some reasons to believe that output of this service may still be mismeasured, it mean the true figure is different from the current data show. So output levels and output growth are both understated. On the one hand, most of type insurance is long-term business, which involves estimates of future conditions and experience to determine profits. This reason makes counting output in available current price become more difficult. On the other hand, insurance companies also earn money from investment. They collect premiums and the surplus is invested. Therefore, there is a growing consensus that the investment earnings of insurance companies should be added into their industry output.
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