Overtrading Essays and Term Papers

  • OVERTRADING

    2.1 Meaning of Overtrading Overtrading basically is a condition in which the resources in particular, the liquid resources of a business are insufficient to maintain the existing level of trading. It mostly happens when companies gear up for expansion of operations so quickly that they live no room...

    788 Words | 3 Pages

  • Overtrading

    WHAT IS OVERTRADING? Overtrading means a situation of operating a business with insufficient long term capital to support the current volume of business. A situation in which a company is growing its sales faster than it can finance them. Overtrading often occurs when companies expand their own operations...

    737 Words | 3 Pages

  • Dsfsgre

    suppliers. Late payment runs the risk of paying interest on overdue accounts, losing suppliers or being refused credit in the future  OVERTRADING Overtrading occurs when business is trying to support too large a volume of trade from too small a working capital base.  Supply of funds failing to...

    681 Words | 4 Pages

  • Working Capital

    net  Danger of Overtrading  Overtrading happens when a  business tries to do too much, too  quickly with too little long­term  capital  Warning: a profitable business can  fail if it runs out of cash tutor2u™  www.tutor2u.net  Overtrading ­ Introduction  •  Overtrading represents an imbalance between the ...

    1532 Words | 10 Pages

  • M2 unit 38

    Causes of cash flow problems Overtrading: Overtrading takes place when a business accepts work and tries to complete it, but finds that it requires greater resources to complete it. It is also when the production cycle is too long. KEN enterprise is overtrading as they have employed extra staff...

    626 Words | 3 Pages

  • course notes

    Danger of Overtrading  Overtrading happens when a  business tries to do too much, too  quickly with too little long­term  capital  Warning: a profitable business can  fail if it runs out of cash tutor2u™  www.tutor2u.net  Overtrading ­ Introduction  •  Overtrading represents an imbalance between the  ...

    1506 Words | 14 Pages

  • Business Studies Growth

    entrepreneur may see themselves as being the 'next Richard Branson'. They may then fall into the trap of overstretching themselves or 'overtrading'. The problem with overtrading is that if you try and produce too much you can only continue to be successful if your goods sell, and also bring in quick cash payment...

    366 Words | 1 Pages

  • Financial Ratio Analysis of Metalrax Plc.

    increasing trade creditor period, Vitec has done very well on balancing its payments and financial funding. In contrast, Metalrax would face an overtrading phenomenon, if it continuously experiences the "plot" discussed in section 7. In general, Vitec's performance and financial status is better than...

    1720 Words | 6 Pages

  • Marketing

    |4(e) |P.21,22,23,24 | | | |financial planning |Explain overtrading |4(f) | | | | | ...

    3127 Words | 24 Pages

  • New Microsoft

    Adam Smith calls "overtrading" which can be caused by pure speculation (buying something with the aim of selling it later at a higher price), overestimation of the true expected return and excessive gearing (low initial cash requirements when buying something). Fourth, the overtrading spreads from one...

    594 Words | 2 Pages

  • Assignment

    inventories or receivables is very high. * Short period of credit taken from suppliers might indicate the volume of payables is too low c) Overtrading occurs when a business is conducting its business operations with inadequate capital. It is also known as under-capitalization. When a business accepts...

    1133 Words | 5 Pages

  • Cuba

    demand may result to accumulation of stock and this will cause increased risk in case the cakes reaches their expiry date before sale. Overtrading: The issue of overtrading may result due the expansion rate, which exerts a lot of pressure on short term finances of the company. This affects the liquidity...

    970 Words | 3 Pages

  • Sources of Finance

    its income and how the money is flowing out of the business. There are some reasons why cash flow problems might occur and these are; Overtrading Overtrading tends to happen in a business which is growing rapidly. Sometimes an entrepreneur will be too keen to chase the new business and handle more...

    4680 Words | 22 Pages

  • Tesco Main Barriers, Gap Analysis

    CONTENTS INTRODUCTION 2 FINANCIAL RATIOS 4 PROFITABILITY RATIOS 5 LIQUIDITY RATIOS 7 ACTIVITY RATIOS 9 INVESTMENT RATIOS 11 OVERTRADING 13 FINANCIAL STATEMENTS 14 BALANCE SHEET 15 FORMATS OF FINANCIAL STATEMENTS 18 CONCLUSION 22 BIBLIOGRAPHY 23 INTRODUCTION In...

    6138 Words | 24 Pages

  • Argenti Trajectories

    to energy & ability of entrepreneur 4. Sales grow; firm need additional capital injections 5. Margins do not fall due to owner’s persuasiveness; overtrading 6. More credit is offered by financial institutions 7. Credit offered by unscrupulous creditor who sells out 8. Instead of consolidating to protect...

    645 Words | 4 Pages

  • Corporate finance final tips

    settle discount b.iv. Factoring 5. Using or not using wacc a. Scalar b. Risk profile = business risk of company c. Capital structure 6. Overtrading a. Increase in sales b. Sales of CA and NCA (no $) c. Delay payment of TP d. Overdraft increase e. Current and quick ratio drop 7. Rating...

    457 Words | 4 Pages

  • PotteryCompanyLtd

    it is of high importance that the suitability of this policy in the given environment is assessed and altered if necessary. Overtrading We can see here that PCL is overtrading, they have taken on a new growth strategy without having sufficient finance in place. The company does not have an acceptable...

    1970 Words | 4 Pages

  • Professional Personal Developement

    business' receivables and how efficiently it uses and controls its assets, how effectively the firm is paying suppliers, and whether the business is overtrading or under trading on its equity (using borrowed funds). D&B uses five key financial business ratios to measure a company’s efficiency: Collection...

    752 Words | 13 Pages

  • Financial Ratio Analysis

    relation to revenue, uneven increase in receivables and increase in accounts payable period and decrease in profit margin are the symptoms of “Overtrading”. In line with the decrease in net profit, earning per share has also drastically reduced to Rs.3.22 (2010) from Rs.2.665 (2012) over preceding...

    2705 Words | 24 Pages

  • Finance

    the firm’s receivables and how efficiently it uses and controls its assets, how effectively the firm is paying suppliers, and whether the firm is overtrading or undertrading on its equity (using borrowed funds). * Profitability Ratios – measure how well a company performs; analyze how profit was earned...

    1279 Words | 5 Pages