The problem is that, according to the computer shell, the program isn't there. The computer shell (the part of the OS that runs your commands) finds programs using a very strict path setting that figures out where items are. If you type the following, you will see what your PATH variable is set to:
One of the items that should not be there is the current working directory [cwd] (sometimes called the present working directory) which is called . in Unix and DOS terms. So to execute commands in the cwd, you need to either add the directory to your path, or type something like the following:
In order to allow the color option, you must edit .bashrc. This line must be placed in the file:
alias ls='ls --color=auto'