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How is it possible to have high sales and high profits and run out of cash while running a business?
It is quite possible in the case where you have high levels of Accounts receivables and inventory and low levels of accounts payables. A sale is recorded the moment an invoice is raised and shipment deliverd that does not necessarily mean you received cash and goes to acc receivables. Similarly, if you maintain high levels of inventory, lot of your money remains tied up untill the inventory gets sold off. on the contrary, if you have weaker payment terms with your suppliers, you end up paying earlier than your acc recivables convert to cash. Therefore, high sales and high profit does not necessarily mean a good cash position.
What else can I help you with?
Is there sales tax on Business Cards and What is it?
Sales taxes are imposed by state, and sometimes local, governments. Without knowing your location it is not possible to answer your question.
What is the formula for profit percentage?
Profits, as a percentage of total sales is 100*profits/value of sales.profit/cost price x 100
How do the indirect taxes affect the private business?
Indirect taxes causes an increase in prices... But, first we would see the price elasticity of the product, that the business sells. If the price elasticity is high, then, the increase in prices would result in less sales. resulting in low profits. On the other hand, if the price elasticity is low, it would not affect the business much. This is because the product would be in demand and people would be buying it because it costs a small proportion of the income or it is a basic necessity, for example: Bread. For this business, there would be a very small change in sales revenue and hence, profits.
Does the sales discount increase an operating expense account?
No, a sales discount does not increase an operating expense account. Instead, it reduces the revenue recognized from sales, which affects the income statement by lowering total sales. Operating expenses are separate costs related to running the business, such as rent or salaries, and are not directly impacted by sales discounts.
How databases generate sales or profits?
In database each row have some fields or attributes . In a shop database there is a field for sales and using the data of sales field, profit can be calculated.
Why we will do amway business?
Amway is a multi-level marketing business that profits from individual sales. For some, it can be very lucrative.
What is business forecasting?
Business forecasting is basically an estimate of the future developments in a business or organization. This would include sales, expenditures, and profits.
What are the effects of a good economy to business?
Generally, higher sales, lower input costs, and higher profits.
How does business management relate to mathematics?
You might need math to calculate the sales and profits and predict whether or not your business is going to thrive or fail.
What type of education is required for running a business?
There is no one type of education needed for running a business. The better question is what qualities are needed in running a business.....PERSEVERANCE....SALES....NETWORKING...you can usually outsource the accounting, manufacturing.
What is a simple definition of economic recession?
i dont know. i think its 3 months of bad profits and sales within business
Advantages and disadvantages of a business location?
P { margin-bottom: 0.21cm; } Location can make the difference between a good location where an asset and will lead to high levels of sales and profits however a bad location is a liability that adversely affects sales and profits.
What are some samples of business objectives?
Some samples of business objectives could be sales objectives. Sales objectives allow one to gain increased sales volumes. Increasing productivity is another, it allows for better profits. Improving the quality of a product is good business objective, it allows for better quality control and ensures repeat business.
An increase in sales and profits generates the necessary cash required for economic growth?
An increase in sales and profits does not necessarily mean an economy will grow. The economy will only grow if the sales and profits are substantial in size.
What are some ways to measure sales effectiveness?
A great way to measure sales effectiveness is by looking at the profits of an item before and after the sale. This can be done either by hand or by using software designed to assist those in the sales business.
What is economic constraints?
an economic constraint is something that will affect a business for example, customers have stopped spending their disposable income on luxuries because of a recession, so a business will lose sales and profits
How can revenue credit be utilized to maximize profits for a business?
Revenue credit can be used by a business to increase sales and attract more customers. By offering discounts, promotions, or loyalty programs, businesses can encourage customers to spend more and return for future purchases. This can help increase revenue and ultimately maximize profits for the business.
