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Some of the reasons maybe :
A) its ongoing capital investment (in fixed assets / facilities) to take care of future growth is in excess of cash profits and reserves;
B) its working capital requirements arising from growth requires more cash than provided by cash profits;
C) it has huge debt repayment obligations which are a burden on its cash profits;
D) it has large amounts stuck in illiquid and non-moving assets (for e.g. stock which is not moving or debtors / accounts receivables which are not being realised)
What else can I help you with?
Is profitability of the firm important in the short term debt paying ability of a firm?
Yes, profitability is important for a firm's short-term debt paying ability, as it influences cash flow and the capacity to meet immediate financial obligations. A profitable firm typically generates sufficient income, which can be used to cover short-term liabilities. However, liquidity also plays a crucial role; a firm may be profitable yet still face challenges if it lacks sufficient liquid assets. Therefore, while profitability is significant, it should be considered alongside liquidity to assess short-term debt repayment capability effectively.
Why might a firm keep a safety stock?
I firm will and should keep safety stock if the cost of stocking out, is higher then the cost of carrying the inventory. Example, a sporting goods store has a demand of 5 baseball bats per week. Yet, there is a 50% probility that they will sell 6 bats. That cost of not having that bat in stock will cost the store (in the simple example, the cost would be the contribution margin, aka profit from selling that bat). On the other had the store might only sell 5 bats, and have one extra, yet that cost to "carry" the inventory, in most cases is less then the cost of the loss of the sale.
What constitutes a partnership?
A firm is strictly not a person; It is an association of persons and the agreement by which a firm purports to enter into a partnership with an individual or another firm merely makes the partners of that firm individual partners of the larger partnership. A firm as such cannot enter into an agreement as a partner with another firm or individuals. Therefore, when one partnership enters into a partnership agreement with another partnership firm, the partnership is in fact between all the partners of both the firms. The Supreme Court has observed that a partnership agreement creates and defines the relation of partnership and, therefore, identifies the firm. if that conclusion is correct, it is only a further step to hold that each partnership agreement may constitute a distinct and separate partnership and, therefore, a distinct and separate firm. That is not to say that a firm is a corporate entity or enjoys a juristic personality in that sense. The firm name is only a collective name for the individual partners and each partnership is a distinct relationship. The partners may be different and yet the nature of the business may be the same, the business may be different and yet the partnership may be the same. And agreement between partners to carry on a business and to share its profits may be followed by a separate agreement between the same partners to carry on another business and share the profits therein. The intention may be to constitute two separate partnerships and two distinct firms or to extend merely the partnership originally constituted to carry on one business or to carrying on another business. It will depend on the intention of the partners. The intention of the partners will have to be decided with reference to the terms of the agreement and all the surrounding circum- stances including evidence as to interlacing or interlocking of management, finance or other incidentals of the respective businesses. In other words, the same partners can form two different partnerships. The Supreme Court has held that the word 'person' in section 4 of the Partnership Act contemplates only natural or artificial or legal person and a firm is not a person and as such not entitled to enter into a partnership with another firm or H. U. F. or individual. In this view of the matter there can arise no question of registration of a partnership purporting to be between three parties viz. a firm, a H.U.F. and an individual as a firm.
Should you pay tithe on a bank loan?
I do not think so. The idea of tithe could be considered in relation to fruits and harvests. If we distinguish between a fruit and a seed, then a loan is not yet a fruit. It is a seed that is yet to be planted and to bear fruits. It's out of the the fruits that tithes would be paid. Loan is not income. Loan is not even taxed by the governor. I do not see how God would even want to accept tithes out of a loan. A loan is not an earning as yet until it bears fruits.
What is an interest only loan?
A loan where your payments apply only to the interest and nothing towards the principal. There is usually a "balloon" payment required at the end of these loans - that is when the principal is paid ... in full. Some people cannot pay that "balloon" when it comes due, so there are others who will purchase your balloon, and then you pay them interest only on that balloon and have yet another balloon later on. It becomes an endless cycle and very very profitable for those who purchase such balloons.
Is profitability of the firm important in the short term debt paying ability of a firm?
Yes, profitability is important for a firm's short-term debt paying ability, as it influences cash flow and the capacity to meet immediate financial obligations. A profitable firm typically generates sufficient income, which can be used to cover short-term liabilities. However, liquidity also plays a crucial role; a firm may be profitable yet still face challenges if it lacks sufficient liquid assets. Therefore, while profitability is significant, it should be considered alongside liquidity to assess short-term debt repayment capability effectively.
Is a tomato firm?
It depends on how ripe the tomato is; if it is very firm, it is not ripe yet. Perfectly ripe tomatoes are slightly firm but give a bit when squeezed.
How do you have backbone yet be polite and respectful?
be firm in your opinion but not mean
What was the date Egypt gods and goddesses were created?
There is no firm date as of yet.
Why can a firm such as Motorola compete with the Japanese on quality yet other American firm are just not up to the competition?
lvd : why are u asking for answers in the net ? and i know who you are ..
What does it means ponte dress?
It has to do with the way the fabric is knitted. It results in a firm, yet stretchy, fabric for the dress.
Did Buddhism spred through Africa?
Not really. Buddhism has yet to make a firm foothold in much of Africa.
When did Miley Cyrus loose her verginity?
On her wedding night. Which has yet to happen. She is a firm believer in no sex before marriage.
What part of Dna do the marshmallows represent?
They represent the marshmallow shape and soft yet firm formsof the Histone classes of Proteins.
What are the best kinds of couches?
The best kind of couch is one that makes you want to sit in it. The color should be inviting, stain camouflaging, and matching the decor in the intended room. The cushions should be firm yet not too firm.
What is an apple butt?
Small yet plump and round parading buttocks. A apple usually is very firm is accompanied by little to no hip width.
What your organization's procedures for dealing with customer property?
How organizers are able to be firm and yet very affirmative in their field and still able to make a living
