A vast number of companies declare bankruptcy, simply because of uneven cash flow (Hall, 2010). For example, due to many problem plus cash flow issues General Motors went bankrupt (More, 2009). Break-even analysis is an approach that estimates the amount of sales or revenue created that is essential to cover the cost of the initial investment in the launch of the strategy. It is used to decide when the business can cover all its expenses and start making a profit (Bakhru, 2005). Taylor and Sparkes (1977) discuss the importance of sensitivity analysis in strategic evaluation.
It is apparent that the number of employees presently catering for customers is not sufficient and except the organization outsources its customer’s service department to a reputable company, there will not be a meaningful improvement in the near future. The outsourcing procedure is simple; every telephone call that has to do with flight booking should be handled by another organization who will in turn direct all completed transactions to the ABC Travel Services. This method will drastically reduce the workload that obviously seems incapacitates the organization’s employees. Besides outsourcing the customer service department, the organization should as a matter of urgency provide effective training for employees to increase their efficiency on their present assignment. This is a key factor to improving the quality of service delivery to
On the other hand, merchants will be under constant pressure. They will need to sell their goods quick otherwise they will lose money as the price they will charge for their services will drop over time. But if there is something we learned in these years is that central banks and governments do not care much about consumers or merchants, what they care the most is DEBT!!. In a deflationary environment, debt will become a real burden as it will only get bigger over time. Because our economies are based on debt, you can imagine what will be the consequences of
to the holder which is measured in terms of the general price level (P). 2. Bonds are defined as claim to a time stream of payments that are fixed in nominal units. 3. Equities refers to the claim to a time stream of payments that are fixed in real units.
This is the main point of similarity among Capital Asset Pricing Model and the Capital Market line. Basically, the Capital Asset Pricing Model (CAPM) is significant part of the portfolio theory, which discusses capital market line and security market line. Thus, the CAPM is served as base for both CML and SML. On the other hand, there exists point of difference at several points when we talk about the CAPM and CML. First, Capital Market Line is line which is used for the rate of return that depends upon the risk free return rate and risk level for a particular portfolio.
REPORT SUMMARY: Situation Analysis • AWC Inc., a medium scale family business, is facing fierce competition due to slow down in economy and construction market which has already wiped out one third of its 37 competitors from the market. • AWC has introduced a superior product which has high demand and would help them in sustaining in market which is running as low as 3% profit margin, and would increase sales and profit which is 0.13% for 1990. They can’t increase labour or overhead costs neither can cut down labour force. • AWC either needs a second shift which incurs annual costs or a second welding line which is one time investment sand saves on personnel and additional inventory management costs. • Environmental regulations have become
It focuses on the sources and uses of cash through operating, investing and financing activities. Activities that result in the receipt of cash are cash inflows, and activities that result from the spending of cash are cash outflows. SEE APENDIX III STATEMENT OF FINANCIAL POSITION also known as the balance sheet presents the financial position of an entity at a given date. It is comprised of three main components: Assets, Liabilities, and Equity. Statement of financial position helps users of financial statements to assess the financial soundness of an entity in terms of liquidity risk, financial risk, credit risk and business risk.
It also creates more poverty among the less fortunate, and their families, because they are unable to find a job they are unable to support their families as well. Unfortunately not everyone has the funds to invest in all these technological advances. While technology may be benefiting the richer people, these circumstances highly affect those from lower classes. Professor Jeffrey D. Sachs argues the following on his discussion of the benefit on economic growth and technology. “The world is living through one of the greatest technological revolutions in history: the digitization of communications, manufacturing, computing, synthetic biology, nanotechnology and much more.
Load shedding is indeed a major issue in Pakistan especially considering that “many Pakistanis still face up to 22 hours of loadshedding a day” (Stacey) This is indeed quite a large time period for loadshedding to occur for the Pakistani people, and makes one wonder how this is the case. Apparently, load shedding is directly caused due to power companies not delivering an adequate amount of electricity due to high demand and limited supply. Both government and citizen, should actively work together with electricity companies in order to come up with a resolution to the large shortage of supply, and deliver demand to its customers. Assessing the damage, loadshedding is doing to the country is indeed no small feat, as the increasing number of people being put out of work directly correlates to the
The current squeeze on cash and credit is threatening the survival of many businesses all over the world generally and Nigeria in particular; as it is considered the sources of company’s working assets and liabilities. The aftermath of this credit crunch is drastic reduction in production and sales, leading to massive retrenchment of workers and liquidation of many organizations. Unfortunately, not every company is able to find external financing easily. Where it is available, the cost of borrowing may be expensive, resulting in poorer bottom line. In view of this, liquidity management (working capital management) has become one of the most important issues in the organizations where many executives strive to identify the basic working capital drivers and the appropriate level of working capital.