There are reports that say the economy will grow over the next few years (2010), but there is a possibility that they could be wrong and that won’t happen. If the opposite happens and the economy hits a decline, this could really hurt the business of Keystone and many other companies for that matter. On that note, people will start looking to save money and if they can find the same product that this company offers for a cheaper price, they might just do that. The last red flag that I would see when deciding whether to select this client would be the fact that they have recently started extending credit to customers with less than perfect credit (2010). Although this could mean nothing, this could also be the beginning of a downward spiral of bad debt.
At this time they would need to provide cheaper price to attract their consumers and to increase the demand. They would have to reduce the number of staffs as it may become difficult to pay wages. This leads to rise in unemployment. During recession businesses also tries to get loan from the bank and the bank wants to see their financial statements and if they find out that the business is not capable of paying the money back then they won’t lend any money therefore, the business may have to find new way of catching customers attention. For instance, they may be able to start up with a new idea.
They could open late instead of mornings and get rid of slow peak mornings. Also, since they have a certain amount of people starting they could cut back, because they are running slow they don’t need as much people. Next, they can run more specials such as if they buy a certain amount of food or drinks they get a game for free. Lastly, they can raise prices to increase profits. These solutions can cut expense costs, and make more profit, because you aim for the peak period with specials, and with raised prices.
These two stores were in high-crime-rate areas. Company Q should consider, instead of simply cutting losses and closing, creating a more crime-free place for the community and for the stores employees. Not only does closing stores create a higher unemployment percentage in an already high-crime area, but it also takes the profits that should go to the area to neighboring parts. Maybe by tightening up security devices such as cameras and alarms, etc, Company Q could work toward bettering the community and its profits. Besides, if chains closed every time they lost money, there would be a huge loss in just the opening and reopening phases of a business.
More debt will be created at first and possibly in the future depending on how good the new company takes off. Also, the working capital needs to decrease in the first organization that was opened in order for things to work out. If Hoffman decides to merge with another organization can set a company back with projects, revenue, and staffing. Having a new company can bring in new customers, but can also lose customers if they are unaware that a company has merged or if they do not like the company that they had merged with. Other things to think about are the companies’ lines of credit and financial lending.
So grocery stores in poorer neighborhoods stock less milk and more soda, and the relentless advertising from the beverage industry and fast food joints makes sweet drinks an expected part of daily living. (633) This would be especially true for the poor because they have less money to waste, and they would think twice before using money to buy foods or drinks. The lower-price drinks would be more affordable. Increasing the cost of sugary drinks will change people’s opinion and behavior because healthy choices and bad choices will become equal. People always consider the price before the product’s quality so if the prices are the same, they will certainly prefer the quality and healthy choices.
Recession occurs when people involved in business become more cautious and: * Customers cut back on spending, and start to save more * Manufactures and sellers cut back on their orders, produce fewer goods and start to cut back costs in general, including by laying off workers. Availability and cost of credit: People spend more when there is high demand for goods/services. In this case etisalat has the advantage of expanding their business. Many people will want to purchase numbers and different offers provided. A higher sales revenue will occur for etisalat which means the income the company receives from business activities, usually happen from sale of goods and services to customers.
The level to which higher demand increases output and prices depends on the state of the business cycle. Without changing the price level will lead to an increase in demand if the economy is in recession. A fiscal expansion will have more of an effect on prices and less impact on total output if the economy is at full employment. To restore output during a recession the government can run an expansionary fiscal policy helping to restore and to return the unemployed to work. The government can run a budget surplus; this will help to slow the economy when inflation seems to be a larger dilemma than unemployment, leading to a budget balanced on
Willow Company is must reduce its inventory levels and sell inventory at a faster rate to improve the inventory turnover closer to 30 days. Due to the negative cash flow, Willow must explore the opportunity to manage its inventory levels relative to sales. The greater the inventory levels, the higher sales must be, otherwise additional storage and other holding costs will be incurred to cause further deterioration in its cash position. Cash will be invested into unsold inventory that is generating no return while remaining unsold. In addition, there will be the opportunity cost of not having cash available for more useful requirements i.e.
The price of fuel does influence them though, the biggest benefit is the effect on the customers, the lowering of the price of fuel means that people will, in effect, have a small pay rise, this will help KI as this will increase their customer’s disposable income and increase their consumer confidence. KI will always have oil related costs linked to their business as they use energy that is produced from oil and resources that wouldn’t be possible without oil e.g. polymers. The lowering of the oil price will help KI to maximise profits as they will be spending less on things that are oil based. KI may see people coming from further afield as the customers may thing that this drop in fuel price will allow them to live further away from their jobs or travel further to work.