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Why do firms carry inventory?
Firms carry inventory to ensure they can meet customer demand without delays, which helps maintain customer satisfaction and loyalty. Additionally, inventory acts as a buffer against supply chain disruptions and fluctuations in demand, allowing for smoother operations. It can also help take advantage of bulk purchasing discounts and manage production schedules more effectively. Overall, carrying inventory is a strategic decision that balances costs with the need for responsiveness in the market.
What are some of the characteristics of a firm with a long cash cycle?
A firm with a long cash cycle typically experiences extended periods between cash outflows for inventory purchases and cash inflows from sales. This can result from high inventory levels, slow turnover rates, or extended credit terms offered to customers. Such firms may face liquidity challenges, as they need to manage operating expenses while waiting for cash to come in. Additionally, they might need to secure financing to bridge the gap between outflows and inflows.
Is quick ratio a better measure of the firms liquidity than current ratio?
Yes because a quick ratio doesn't include inventory which must be sold before it can be used to pay for the companies current obligations. Of course you have to collect the cash in A/R before it can be used to pay for current obligations too but AR should be able to be converted to Cash much quicker than Inventory. A Cash Ratios, which doesn't include AR or Inventory is an even better measure of a firms liquidity than both the quick and current ratio.
What companies are most likely to suffer cash shortages?
Companies most likely to suffer cash shortages typically include startups with limited revenue streams, businesses in cyclical industries that are sensitive to economic downturns, and those heavily reliant on external financing. Additionally, firms with high overhead costs and slow inventory turnover may face cash flow challenges. Industries like retail and hospitality can also be vulnerable during economic downturns or pandemics, as consumer spending declines.
A perfectly competative firms marginal cost exceeds its marginal revenue at its current output To increase its profit the firm will?
To increase profit the firm will decrease output to a point where MC=MR. This is the Profit Maximisation point
Firms that successfully increase their rates of inventory turnover will among other things?
all of the above
Which firms offer warehouse inventory control software?
Some warehouse inventory control software firms include Fishbowl Inventory, Net Suite, SphereWMS, Giga Trak, Barcoding, Tracker Systems, and Warehousing Activate.
What is reasonable accounts receivable turnover ratio?
Answer:It depends on the industry. For grocery stores, it can be as high as 80. For firms in the manufacturing a number around 5-7 is more common. Accounts receivable turnover for firms in the service industry would be somewhat higher, 7-10.
Advantages of labor turnover?
the firms can dismiss the unwanted employees that are not performing well or fit for their job so as to reduce inefficiency. after this labour turnover the company will be able to start again with new enthusiastic workers who will work hard and willing to increase production. also the managenmt will be able to learn from past experiences and can take necessary actions to improve the firm's standards
Is accumulation of inventories by firms is included in measuring GDP?
no....i think the change in inventory is included but not accumulation..
According to aggregate supply curve what happens as the price level increases?
firms have more of an incentive to increase output
Why and How Firms Internationalize?
expand sales and increase profit
What would happen if there was an increase in the number of firms?
Pushes it out
Which features is significant for market structure?
Significant features for a market structure include the number of firms and their scale, market share of the bigger firms, the nature of costs, extent of product differentiation, turnover of customers, and vertical integration.
What has the author William Korbel written?
William Korbel has written: 'Turnover of retail firms in Kansas' -- subject(s): Business failures, Retail trade
How does an increase in wages affect a firms marginal cost curve?
Bbg
What is the definition of expanding industry?
An industry whose firms earn economic profits and for which an increase in output occurs as new firms enter the industry.
