Accounting - 2790 Words

—Conceptual 21.Which of the following is not considered cash for financial reporting purposes? a.Petty cash funds and change funds b.Money orders, certified checks, and personal checks c.Coin, currency, and available funds d.Postdated checks and I.O.U. s 22.Which of the following is considered cash? a.Certificates of deposit (CDs) b.Money market checking accounts c.Money market savings certificates d.Postdated checks 23.Travel advances should be reported as a.supplies. b.cash because they represent the equivalent of money. c.investments. d.none of these. 24.Which of the following items should not be included in the Cash caption on the balance sheet? a.Coins and currency in the cash register b.Checks from other†¦show more content†¦a.Charging bad debts with a percentage of sales under the allowance method. b.Charging bad debts with an amount derived from a percentage of accounts receivable under the allowance method. c.Charging bad debts with an amount derived from aging accounts receivable under the allowance method. d.Charging bad debts as accounts are written off as uncollectible. 36.Which of the following methods of determining annual bad debt expense best achieves the matching concept? a.Percentage of sales b.Percentage of ending accounts receivable c.Percentage of average accounts receivable d.Direct write-off 37.Which of the following is a generally accepted method of determining the amount of the adjustment to bad debt expense? a.A percentage of sales adjusted for the balance in the allowance b.A percentage of sales not adjusted for the balance in the allowance c.A percentage of accounts receivable not adjusted for the balance in the allowance d.An amount derived from aging accounts receivable and not adjusted for the balance in the allowance 38.The advantage of relating a company s bad debt expense to its outstanding accounts receivable is that this approach a.gives a reasonably correct statement of receivables in the balance sheet. b.best relates bad debt expense to the period of sale. c.is the only generally accepted method for valuing accounts receivable. d.makes estimates of uncollectible accounts unnecessary. 39.At the beginning of 2006, FinneyShow MoreRelatedAccounting1024 Words   |  5 PagesQuestion 1:   * Proficient-level:   * There are several important functions performed in an organization, among which accounting is one of them. Define the accounting function and discuss how it differs from double-entry bookkeeping. Answer: According to the Dictionary of Accounting Terms, Accounting is defined as a one step process of recording, measuring, interpreting and communicating financial data by preparing financial statements in order to reflect financial condition and operatingRead MoreAccounting753 Words   |  4 PagesCampbellsville University School of Business and Economics SYLLABUS Course Title: ACC 601 Managerial Accounting Semester/Dates: Graduate Term 1: August 29, 2011 – October 23, 2011 (Traditional MBA) Meetings: Thursday (6:00 PM – 10:00 PM), AD 25 Faculty: Dr. Sunny Onyiri Office: AD 29-b Phone: (502) 365 4424 Read MoreAccounting Analysis On Management Accounting Essay1210 Words   |  5 PagesManagement Accounting Introduction: Management accounting technique is the procedure of understanding, analyzing, exam, calculating, deciphers, and transfers the verbal data to chase of company objectives. The section of bookkeeping is called as cost accounting. The difference between the financial and managerial bookkeeping data is the goal at assist the administrators inside the corporation to create choice as per their situations. Even as economic bookkeeping is intended at giving data to gatheringRead MoreFinancial Accounting And Managerial Accounting1613 Words   |  7 PagesIntroduction: Both financial accounting and managerial accounting provide important information about the business process. On the one hand, financial accounting provides only financial information to its internal users and external users. On the other hand, managerial accounting basically communicates about financial and non-financial information with internal users such as managers, employees and owners of the company. In other words, manag erial accounting provides information to managers who directRead MoreAccounting7049 Words   |  29 PagesAcct 340-Midterm Review Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Which of the following is NOT a process associated with an accounting information system? |a. |auditing existing data | |b. |collecting and recording data | |c. |providing informationRead MoreAccounting Theory And Management Accounting2580 Words   |  11 PagesThough forms of managerial accounting practices can be traced back decades, centuries even, management accounting used to be regarded as a financial tool, advantageous for the financial managers. However, over the past three decades views on management accounting have changed. As Kaplan (1994) states management accounting theory has experienced a revolution in both theory and practice with the development of new innovations. Through advances in information technology, more competitive markets andRead MoreAccounting Analysis : Management Accounting2168 Words   |  9 Pages MANAGEMENT ACCOUNTING Author’s Name Course Name Professor’s Name Due Date MANAGEMENT ACCOUNTING Accounting is a way of measuring a business s financial performance through maintaining records and analyzing them. Financial accounting system produces reports that are generally intended for external stakeholders to evaluate a business. Management accounting is used to provide internal information that management uses in order to assess performance toward goals and objectives. FinancialRead MoreAccounting Scandals And Enron Accounting Scandal1596 Words   |  7 Pages Introduction: In this research paper I will be examining accounting scandals, specifically the Enron Accounting Scandal. First, I will be exploring the history of Enron. Then I will be going into further depth on what accounting issues Enron faced and then I will be explaining what a derivative is. Finally yet importantly, I will consider the different types of Accounting Fraud following a conclusion. Accounting Scandals are born due to collective greed and corporate arrogance. InRead MoreManagerial Accounting Is A Discipline Within The Accounting1541 Words   |  7 PagesManagerial accounting is a discipline within the accounting community that focuses on providing valuable information to the leaders of their organization. The importance of the community relies on its ability to provide information that is not readily found in traditional financial statements developed in the accounting department for reporting to outside agencies. Activity-based management utilizes information developed u sing activity-based costing (ABC) to accurately determine product costs.Read MoreAccounting Practices And The Field Of Accounting1393 Words   |  6 PagesIntroduction to the authoritative resources in the field of Accounting In the era of technological advances, access to information of any subject is abundant. With this vast array of information to tap into, the credibility of the material presented becomes questionable. But throughout history, there are sources of material that have been highly regarded. These sources include Scholarly peer reviewed journals, Trade publications, and information presented by respected institutions or organizations

Compare And Contrast Marcus Aurelius And Benjamin Franklin

Marcus Aurelius and Benjamin Franklin are two men who during their time were dedicated to improving themselves. Though these two men lived in different time periods under different circumstances, it can be seen that they both endeavored to cultivate virtues within themselves. Additionally, the pair shared many virtues as well as the belief that everything one does should be virtuous and one should always use their reason. Along with the knowledge that no one is perfect and one can never actually achieve perfection. All in all, they both offer a set of virtues that they lived by to try and better themselves in order to live happier lives and what sets them apart is the way they implemented their virtues. Marcus Aurelius was a Roman†¦show more content†¦His method for implementing these virtues is by continuously subjecting himself to a mental interrogation where he asks himself what he is doing with his life, in order to know what kind of person he is becoming inside. Overall , Aurelius uses his journal to reflect as well as, giving himself a list of characteristics that he wants to live up to. Benjamin Franklin a founding father, inventor, and author among many other things wrote an autobiography for his son to give an account of his intriguing life. In his autobiography, Franklin made a list of thirteen virtues for his son and others to live by with the purpose of helping them to become a better person and to live a happier life. This list was in a particular order causing him to be mindful of his thoughts and emotions and create careful deliberation before each of his decisions. It should be noted, that he did not attempt to master each virtue at once, but rather, master one in the span of a week and move on to the next. It is through his virtues that he focused on self-development, he was able to laugh at himself and accept the fact that he would never be perfect, because, no one is. His method for implementing his virtues consisted of a daily routin e of asking â€Å"what good will I do today† along with â€Å"what good have I done today.† As a result, he made a

The Advantages and Disadvantages of Lean Six Sigma Example For Students

The Advantages and Disadvantages of Lean Six Sigma While concerns seek for ways to last and besides to stay competitory in a altering planetary environment, they either choose following concern excellence theoretical accounts or uninterrupted betterment doctrines to steer them in the journey of organizational excellence. Thin Six Sigma is a new comprehensiveness in the country of uninterrupted betterment, which constitutes strengths and cardinal focal points of Lean and Six Sigma approaches.The intent of this paperaˆÂ ¦.. Will be addressed in this paper. The remainder of the paper is organized as follows: subdivision 2 provides an penetration on the constructs Lean, Six Sigma and Lean Six Sigma. Then relevant illustrations of Lean Six Sigma in fabrication and service sector will be presented in subdivision 3.The advantages and disadvantages of Lean Six Sigma will be discussed in subdivision 4. Last, an overall review on the topic is done. Outline1 2.Literature reappraisal2 2.1 Thin Approach3 Principles4 Criticism5 2.2 Six Sigma Approach6 Principles7 Criticism8 2.3 Similarities and Differences between Lean and Six Sigma: The point of intersection -overlapping countries ( kume AYekli )9 The intersection point: Similarities-The country of convergence10 Thin Six Sigma11 Principles12 Criticism13 3. Findingss14 4. Discussion15 5. Decision 2.Literature reappraisal The aim of this subdivision is to supply an penetration of the Lean Six Sigma by briefly sketching the constructs behind Thin and Six Sigma, the two ingredients of this blend, along with their strengths and unfavorable judgments. 2.1 Thin Approach Thin fabrication, developed by Toyota Motor Corporation in 1950s, has been adopted and adapted by many companies ( Finch,2006 ) . It so extended into a construct of Lean believing that was introduced by Womack and Jones.The current province of Lean is called Lean endeavor that reaches beyond the store floor and encompasses assorted sections within the administration as a whole ( Papadopoulou and Ozbayrak,2005 ) . Dale ( 2007 ) defines Lean as a manner of thought, dwelling of a set of methods and runing rules to place and extinguish waste in concern procedures ( Dale,2007, p.565 ) . While for Ferguson ( 2007 ) Lean is a alteration that takes an administration from where it presently stands and travel to a coveted province. Briefly, the aim of Lean is to extinguish all types of unneeded waste by pull offing resources depending on clients demands and at the lowest possible costs ( Andersson et al. 2006 ) . In other words, making more with less ( Thomas,2009 ) . Principles There are 5 rules of Lean ; supplying right merchandise or service for the right monetary value and clip to client, designation of value watercourse, smooth flow of procedures, merely client s demand trigger the action and in conclusion continuously better to value watercourse in chase of flawlessness ( Dale,2007 ) . The first measure when implementing Lean is to place value-added and non-value added procedures ( Pepper and Spedding, 2009 ) by Value watercourse function ( VMS ) which is a qualitative analysis tool. Other tools and techniques from the Lean Toolkit such as Single Minute Exchange of Die, 5S, TPM etc. are used in order to accomplish above-named rules. Whereas, it should be noted that utilizing these tools and techniques merely, does non vouch a Lean administration ( Bendell,2006 ) . Criticism In the literature, there are many unfavorable judgment subjects on Lean where the most popular 1s are about its catholicity and societal facets. It has long been argued that Lean is non flexible ( Andersson et al.,2006 ) and non applicable to all environments but merely to high volume-low assortment ( HVLV ) operations. Writers like Arnheiter and Maleyeff ( 2005 ) specify this position as one of the cardinal misconceptions whereas Pepper and Spedding ( 2010 ) refer it as a limited success of Lean in their work. There is a common misconception caused by the misinterpretation of the construct that Thin means laying-off people ( Arnheiter and Maleyeff,2005 ) . However, Flinchbaugh ( 2001 ) , Arnheiter and Maleyeff ( 2005 ) emphasis that Lean does non intend less people but utilizing people in a smarter manner. David Meier ( 2001 ) who is a Senior Lean Manufacturing Consultant, argues that Lean creates a nerve-racking, uncomfortable environment due to sense of urgency while guaranting an immediate response to clients. On the other manus, Papadopoulou and Ozbayrak ( 2005 ) , and Williams et Al. ( 1992 ) take the opposite position. 2.2 Six Sigma Approach Six Sigma, which is developed by Motorola and popularised after the acceptance of General Electric ( Finch,2006 ) aims at value creative activity and bettering the procedure through fluctuation decrease ( Dale et al,2007 ) .Six Sigma inherits rules from TQM ( Arnheiter and Maleyeff, 2005 ) while puting focal point on client satisfaction. In statistical footings, the end is to accomplish a defect rate of 3.4 per million ( Pepper and Spedding,2010 ) . This structured, top-down attack has a positive impact on concern in pecuniary footings since it reduces hazard and costs ( Slack et al. , 2006 ) particularly related with bit and rework. Due to realised benefits, many administrations have adopted Six Sigma today. Principles DMAIC ( Design, Measure, Analysis, Improve and Control ) is the most normally used 5-stage methodological analysis which is employed to accomplish minimal defects and to cut down the fluctuation throughout the procedures in an administration ( Bhuiyan and Baghel,2005 ) . The attack is on project footing and these undertakings are carried out by trained supervisors called Black belts and Green belts ( Bendell,2006 ) . Criticism Six Sigma has long been seen as a statistics-heavy, proficient attack to treat control ( Pepper, Spedding, 2009, p.145 ) . Bendell ( 2006 ) supports this position and criticises Six Sigma due to its inclination towards being a complex attack. The preparation of Black Belts and Green Belts is required in order to be able to utilize statistical tools and manage the undertakings efficaciously. Senapati ( 2004 ) references that these preparations and solutions to jobs can be dearly-won for many concerns. Bendell ( 2006 ) states that there is no formal nexus to policy deployment in Six Sigma. Since Six Sigma undertakings are chosen depending on their cost-effectiveness, it is possible for this cost-down attack dominates the primary client driven focal point. and may switch it to cost-down possible to be dominated by immediate cost down driver ( Bendell,2006 ) . Health And Insurance System EssayThe chief ground to implement LSS attack in Caterpillar Inc. was to derive competitory advantage by discovery betterments. As a consequence of advanced merchandises, their grosss had grown by 80 per centum ( Byrne et al.2007 ) . Another noteworthy illustration would be Xerox Corp. , which was holding jobs with its long filing clip for patents so foremost of all the root causes of holds were identified. To extinguish these non-value added stairss, Xerox Lean Six Sigma squad carried out DMAIC, and came up with a solution which reduced the rhythm clip of 64 yearss and saved $ 400,000 in overall clip ( Xerox Corp. Brochure,2009 ) . National Grid, who is a client of GE Fleet Services in the UK listened to the voice of its clients and applied Lean Six Sigma to cut down the clip spent running ( publishing and pull offing ) order prompts ( Fraser and Fraser,2008 ) .This undertaking is an illustration of a well-applied Lean Six Sigma method in a service sector in footings of accomplishing expected consequences in a timely manner ( Fraser and Fraser,2008 ) . In the work of Kumar et Al. ( 2006 ) , the execution of LSS in a die casting maker is resulted in a important lessening in the figure of defects occurred in the concluding merchandise and an overall nest eggs of around $ 140 000 per twelvemonth. Apart from the success narratives, National Health Service Modernisation Agency ( MA ) in UK, is a well-known failure instance of LSS. In 2004, Six Sigma together with Lean implemented in NHS to better procedures and quality ( Proudlove and Moxham et al. , 2008 ) . Whereas, due to miss of well-designed procedures, deficiency of support and ill-defined nexus between concern scheme, it resulted in failure ( Montero,2010 ) . 4. Discussion In visible radiation of the findings and reappraisal of literature, the advantages and disadvantages of LSS will be discussed in this subdivision. It is believed that this integrated attack will convey better consequences when the structured and systematic attack of Six Sigma came together with the legerity of Lean with a focal point of client in the Centre ( Antony et al,2003 ) . Despite some positions reasoning its effectivity, in theory, by incorporating the best of Lean and Six Sigma, the result would be satisfactory or even delicious both from the administration s and the client s point of position that creates a win-win state of affairs. Harmonizing to Arnheiter and Maleyeff ( 2005 ) , if Thin houses adopt Six Sigma rules, costs incurred by faulty merchandises such as rework or bit costs and the related operating expense costs can be reduced. Likewise, when Six Sigma companies adopt Thin rules, faster lead times and bringings can be achieved. Antony et Al. ( 2003 ) outlines four major benefits of implementing LSS as ; going faster and more antiphonal to clients, endeavoring for Six Sigma capableness degree, runing at lowest costs of hapless quality, accomplishing greater flexibleness throughout the concern ( Antony et al.,2003, p.41 ) . Companies that have successfully implemented Lean Six Sigma have gained considerable benefits in footings of increased stockholder value and market portion. Based on the illustrations of several companies given in the Findings subdivision, these benefits are provided in dollars. On the other manus, a recent Bain A ; Co.survey of 184 companies, shows that 80 per centum is dissatisfied with the consequences they got from their Liter attempts because they have non achieved their ends in both pecuniary footings and degree of betterment ( Neuhaus and Guarraia,2007 ) . Because it brought many advantages to prima houses, it does non connote that every effort will be success or that every house is ready for this enterprise. Basu ( 2001 ) outlines the trouble of prolonging a procedure betterment plan even it may be successful in the beginning. Therefore, this state of affairs causes employee layoffs and a lessening in employee morale ( Basu,2001 ) . Despite being a powerful engine for concerns, the necessity of high accomplishments to be able to utilize relevant tools and techniques is seen as one of the failings of LSS ( Montero,2010 ) . This factor is seen as a critical requirement for the successful execution of LSS. Though, the preparation and necessary investing can be dearly-won to some companies. Therefore, this state of affairs may restrict its pertinence. Unless a necessary alteration within the concern is done including cultural facets, mentality of employees together with the full committedness of top direction, the consequence will be a failure. 5. Decision Many concerns in assorted sectors have late started to follow LSS either as a consequence of an external force per unit area or due to unequal consequences achieved with their current methodological analysis applied ( internal demand ) . Benchmarking plays a important function in making a voguish environment in the market where companies follow the giants and seeking to follow the best pattern in order non to be obsolete . Although, this integrating is seen as a craze by some writers and practicians The construct was emerged as a response to market demand. This merge between enterprises Regardless of the uninterrupted betterment scheme that is chosen to follow, there is a common land that no positive consequences can be gained without an equal support, and attending across the concern. There are still some exposed countries of LSS for farther research or no 1 knows what is following.

Subway Franchising and China Essay Example

Subway: Franchising and China Paper Entering and operating In international markets use contemporary technology to mml mlse counterfeiting. Many flrms build biotech tags, electronic signatures or holograms into their products to differentiate them from fakes. Continuously update technologies and products. The firm that regularly renews Its technology can stay ahead of counterfeiters by offering products that counterfeiters cannot Imitate fast enough. Also differentiate products by emphasising a strong brand name. Customers usually prefer established brands that eature the latest technology. In the long run, the best way to cope with the consequences of Infringement Is to sustain competitiveness through Innovation and constant technological advances. Then, even when licensing violations occur, the firm is protected because the stolen proper rapidly becomes obsolete. Firms also lobby national governments and international organisations for stronger intellectual property laws and more vigilant enforcement, with limited success. Ultimately, when contractual strategies prove undesirable or Ineffective, focal firms may step up to the igher-control entry strategy of acquiring ownership, which accompanies FDI. Closing Case Subway and the challenges of franchising In China subway, the fast-food marketer of submarine sandwiches and salads, has over 32 000 stores in 90 countries and generates over US$12 billion in annual revenues. The franchisJng chain opened its first international restaurant in Bahrain in 1984. Since then, Subway (www. subway. com) has expanded worldwide, and generates about 20 per cent of Its annual revenues abroad. The firm e xpects foreign markets to contribute to much of its future growth. Subway is the third-largest US fast-food chain in China, after McDonalds and KFC. We will write a custom essay sample on Subway: Franchising and China specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Subway: Franchising and China specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Subway: Franchising and China specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Fish and tuna salad sandwiches are the top sellers. By 2006 Subway had opened fewer than 40 stores in China. The franchise had Its share of Inltlal setbacks. Subways master franchisor In Bel]lng. Jim Bryant. lost money to a scheming partner and had to teach the franchising concept to a country that had never heard of it. until recently, there was no word in Chinese for franchise. Cultural problems remain an ongoing challenge. After Bryant opened his first Subway shop, customers stood outside and watched for a few days. When they finally tried to buy a sandwich, they were so confused that Bryant had to print signs explaining how to order. They didnt believe the tuna salad was made from fish because they could not see the head or tail. They didnt like the idea of touching their food , so they would gradually peel off the paper wrapping and eat the sandwich Iike a banana. To make matters worse, few customers liked sandwiches. But Subway-or Sai Bei Wei (Mandarin for tastes better than others)-is forging ahead. Bryant managed to recruit a few highly committed franchisees that he monitors closely to aintain quality. Bryant is now authorised to recruit local entrepreneurs, train them to become franchisees and act as a liaison between them and Subway headquarters. For this work, he receives half of their IJS$IO 000 initial fee and one-third of their 8 per cent royalty fees. Today, there are over 140 Subway stores in China. Other multinational franchisors still face significant challenges in China, particularly in dealing with the Chapter 16 Licensing, franchising and other contractual strategies 485 ambiguous legal environment, finding appropriate partners and identifying the most uitable marketing, financing and logistics strategies. Famous brands such as AW, Dunkin Donuts and Rainforest Cafe have all experienced these issues. Why China for franchising? On the surface, franchising in China is very attractive because of its huge market, long-term growth potential and dramatic rise in disposable income among its rapidly expanding urban population. The market for fast food is estimated at IJS$1 5 billion per year. Chinas urban population, the target market for casual dining, has expanded at a 5 per cent compound annual growth rate over the past several years, a trend expected to continue. Increasingly hectic lifestyles have led to an increase in meals the Chinese eat outside the home. Surveys reveal that Chinese consumers are interested in sampling nonchinese foods. Market researchers have identified several major benefits to franchising in China: law makers, entrepreneurs and consumers. Focal firms must educate government officials, potential franchisees and creditors on the basics of franchising, a process that consumes energy, time and money. A win-win proposition. Restaurants were one of the first industries the government opened to private ownership in the early 1980s. Franchising in China combines the Western know-how of franchisors with the local market knowledge of franchisees. Many Chinese have strong entrepreneurial instincts and are eager to launch their own businesses. Ambiguous legal environment. Franchisors need to examine closely Chinas legal system regarding contracts and intellectual property rights. The Chinese government introduced regulations permitting franchising in 1997. The legal system is evolving and is full of loopholes and ambiguities. Some critical elements are not covered . The situation has led to diverse interpretations of the legality of franchising in China. Franchisors must be vigilant about protecting trademarks. A local imitator can quickly dilute or damage a trademark a focal firm has built up through much expense and effort. Branding is important to franchising success, but consumers become confused if several similar brands are present. For instance, Starbucks fought a Shanghai coffee shop that had copied its logo and name. The fast-food hamburger chain Merry Holiday uses a yellow colour scheme and emphasises the letter M in its signage, similar to McDonalds. There have been reports about fake Burger King restaurants perating in China. Large franchisors such as KFC and Pizza Hut are struggling to root out counterfeiters. Escalating start-up costs. Ordinarily, entry through franchising is cost-effective. However, various challenges, combined with linguistic and cultural barriers, can increase the up-front investment and resource demands of new entrants in China and delay profitability. Given the shortage of restaurant equipment in China, the franchisor may have to invest in store equipment and lease it to the franchisee, at least until the franchisee can afford to buy it. Franchisors must be patient. McDonalds has been in China since the early 1990s and has devoted substantial resources to building its brand. But few firms have its resources. Minimal entry costs. Because much of the cost of launching a restaurant is borne by local entrepreneurs, franchising minimises the costs to franchisors of entering the market. Rapid expansion. By leveraging the resources of numerous local entrepreneurs, the franchisor can get set up quickly. Franchising is superior to other entry strategies for rapidly establishing many outlets throughout any new market. Brand consistency. Because franchisors are required to adhere strictly to company perating procedures and policies, brand consistency is easier to maintain. Circumvention of legal constraints. Franchising allows the focal firm to avoid trade barriers associated with exporting and FDI, common in China. Challenges of franchising in China Chinas market franchisors: also poses many challenges for Knowledge gap. Despite the likely pool of potential franchisees, realistically, few Chinese have significant knowledge about how to start and operate a business. There is still much confusion about franchising among Perhaps the biggest challenge of launching franchises in China is finding the right artners. It is paradoxical that entrepreneurs with the capital to start a restaurant often lack the business experience or entrepreneurial drive, while entrepreneurs with sufficient drive and expertise often lack the start-up capital. Subways franchise fee of IJS$IO 000 is equivalent to more than two years salary for the average Chinese. China lacks an adequate system of banks and other capital sources for small business, so entrepreneurs often borrow funds from family members and friends to launch business ventures. Fortunately, Chinese banks are increasingly open to franchising. The Bank of China established a comprehensive credit line of IJS$12 million for Kodak franchisees. Entering and operating in international markets Availability and financing of suitable real estate are major considerations as well, particularly for initial showcase stores where location is critical. According to real estate laws enacted in 1990, local and foreign investors are allowed to develop, use and administer real estate. But in many cases, the Chinese government owns real estate that is not available for individuals to purchase. Private property laws are underdeveloped and franchisees occasionally risk eviction. Fortunately, a growing number of malls and shopping centres are good locations for franchised restaurants. The Chinese authorities maintain restrictions on the repatriation of profits to the home country. Strict rules discourage repatriation of the initial investment, making this capital rather illiquid. To avoid this problem, firms make initial capital investments in stages to minimise the risk of not being able to withdraw overinvested funds. Fortunately, China is gradually relaxing its restrictions, and franchisors have been reinvesting their profits back into China to continue to fund the growth of their perations. Reinvesting profits also provides a natural hedge against exchange rate fluctuations. learning from the success of others Experience has shown that new entrants to China often benefit from establishing a presence in Hong Kong and then moving inland towards the southern provinces. Before it was absorbed by mainland China, Hong Kong was one of the worlds leading capitalist economies. It is an excellent pro-business location to gain experience for doing business in China. In other cases, franchisors have launched stores in smaller Chinese cities, gaining xperience there before expanding into more costly competitive urban environments such as Beijing and Shanghai. Adapting offerings to local tastes appears to be a prerequisite. Suppliers and business infrastructure in the country are often lacking. Franchisors spend much money to develop supplier and distribution networks. They may also need to build logistical infrastructure to move inputs from suppliers to individual stores. McDonalds has replicated its supply chain, b ringing its key suppliers, such as potato supplier Simplot, to China. There is no one best approach in China. For instance, TGI Fridays imports roughly three-quarters of its food supplies, which helps it to maintain quality. But heavy importing is expensive and exposes profitability to exchange rate fluctuations.