• 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...
    Premium 737 Words 3 Pages
  • Working Capital Mangement
     then the operating cycle will lengthen and the investment in working capital will  increase.  What is OvertradingOvertrading is the term applied to a company which rapidly increase its turnover without having  sufficient capital backing. Overtrading is risky because short‐term finance can be withdrawn relatively  quickly i...
    Premium 2315 Words 3 Pages
  • Working Capital Management
    more working capital would be required. Overtrading and Undertrading The concepts of overtrading and undertrading are connected with the working capital position of the enterprise- In more precise terms with the cash position Overtrading Overtrading involves expanding the scale of operations...
    Premium 1792 Words 7 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...
    Premium 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 ...
    Premium 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...
    Premium 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  ...
    Premium 1506 Words 14 Pages
  • Student
    severe liquidity problem and if company wants higher expansion, soon it will be on verge of collapse. In 2009 company can grow upto 1.942%. Overtrading: Sui-Northern Gas Pipeline Limited | 2009 | 2008 | 1.Stock in Days 365/168,933831,000÷783,362,000=1.69 days | 365/124,155,031,000÷525,37000=1...
    Premium 744 Words 3 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...
    Premium 366 Words 1 Pages
  • Acc 2525
    working capital management can lead to over-capitalization and overtrading. Over-capitalization is when there are excessive stocks, debtors, cash; low return on investments and long-term funds tied up in non-earning short term assets. Overtrading leads to growing debtors and creditors, and if unchecked, ultimately...
    Premium 584 Words 3 Pages
  • Working Capital Management
    possible. Overtrading and undertrading The concepts of overtrading and undertrading are intimately connected with the net working capable position of the business. To be more precise they are connected with the cash position of the business. OVERTRADING: Overtrading means an attempt...
    Premium 10010 Words 43 Pages
  • Marketing
    |4(e) |P.21,22,23,24 | | | |financial planning |Explain overtrading |4(f) | | | | | ...
    Premium 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...
    Premium 594 Words 2 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...
    Premium 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...
    Premium 6138 Words 24 Pages
  • Tuckwell Trading
    2007 and 28 % in 2009.The overtrading of this Tuckwell company is found by, 1) the key sign of overtrading is a small profit margin 2) Although the company has done a high sales in the years 2008 and 2009, they had to borrow cash in huge amounts. 3) Another sign of overtrading is late payments have a seriously...
    Premium 3040 Words 18 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...
    Premium 1133 Words 5 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...
    Premium 645 Words 4 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...
    Premium 970 Words 3 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