AFM 241- Midterm Exam Guide - Comprehensive Notes for the exam ( 38 pages long!)

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM241
• Professor: Theophanis Stratopoulos

Document Summary

Sustainable competitive advantage is one that competitors can"t imitate or replicate. Temporary competitive advantage is one that soon competitors can replicate. From relative standpoint, firm"s competitive position can be classified as competitive advantage, competitive parity, or competitive disadvantage. Business strategies: specific actions firms take to neutralize threats or exploit opportunities by leverage their resources and capabilities in order to gain a competitive advantage within market or industry. Corporate strategies: firm actions that aim to gain a competitive advantage across several markets or industries. Firm performance the driving force and goal of business strategy. Financial ratios are measure of past and don"t: ratios efficiency, cost, profitability measure leverage (efficiency), cost, and profitability. Both have pros and cons; economic is hard to measure but good theory, accounting lack theory but very calculable. Economic value added (eva), market value added, return on invested capital, and. Tobin"s q are hybrid measures: tobin"s q common.