CFA 2025: Level 1 corporate Issuers: CFA level 1, #1

Corporate Issuers 2025 CFA level 1

Table of Contents

Learning module 1

Learning Module 2

Learning Module 3

Learning Module 4

Learning module 5

Learning Module 6

Capital Structure

Learning module 7

Business Models

Learning module 1

Organizational Forms, Corporate Issuer Features, and Ownership

1: Compare the organizational forms of businesses

For a group to reach a goal, it needs to be organized. The organization could be a company, a non-profit, the government, or a school. Structures, jobs and duties are what make up organizations. They have a reason for doing what they're doing, goals, and aims. In groups, people use their skills and put in their time to help the group. For teamwork to work, people need to be able to coordinate and talk to each other. Organizations need things like money, technology, and people to work. They follow the rules and laws that are in place. Each group has its own culture and set of beliefs. They need to be able to deal with changes in the world. Groups of people work together to complete tasks, and they have a big effect on society, business, and government.

A business organization is a group of people who work together to give customers goods or services in exchange for money. It can be a business that is run to make money, like a company or a shop. Organizations in business have a set framework and clear goals they want to reach. To do their work, they need things like money, tools, and people to work for them. A business's main goal is to meet the needs and wants of its customers while also making money and getting a profit.

All groups can be split up into smaller parts called subsystems. For instance, a business has sections like manufacturing, sales and marketing, and accounts. It's possible to split each section into even smaller parts. For example, the bookkeeping department has several sub-departments, such as cash, accounts, payables, and ledgers.

Close system/ close organizations: The name closed systems comes from the fact that these systems don't talk to other systems. There isn't much to these methods, and they don't last long. If a business doesn't pay attention to new technologies, competition, and customer wants, it will have a hard time succeeding.

Open system/ Open organizations:  Open organizations do affect their surroundings. They take in information from their surroundings and send it back out into the world. The ones that are useful and important in the real world are these open platforms.

Types of organizations

Commercial Organizations: Companies whose primary goal is to increase their financial wealth are known as commercial organizations. Different legal structures are available for them, such as partnerships, limited liability partnerships, sole proprietorships, and limited liability corporations. In the event of financial trouble and liquidation, owners are better protected by limited liability partnerships and limited businesses. The owners are shielded from personal responsibility and creditors may only seize the company's assets in such a scenario. But partners and sole proprietors are personally liable for all company obligations to an infinite extent.

Commercial organizations are typically classified into different sectors:

Primary vs secondary sector: Resource extraction and processing are at the heart of the primary sector.

In the secondary sector, production is the main emphasis.

Offering products and services is what the tertiary sector looks for.

In some instances, a quaternary sector is distinguished, which includes R&D businesses like pharmaceutical and information technology.

Non-profit organizations: The not-for-profit sector is another category of organizations. Charities, including nonprofit medical centers,