Small bussines Essay Example | Topics and Well Written Essays - 500 words

Small bussines - rise ExampleAs can be seen from Appendix A, the business will have losses for the start-off two years but beginning in the three year profitability will baffle positive and the following years thereafter. However this paper will report only the first common chord years. The higher expenses than revenues in the first two years are understandable as the business is dependable starting. Sales revenues will expand over time with higher sales volume into new locations as the branded products of the business become known. The decreasing expenses starting after two years would come as the business take less expensive locations. This would result to increasing gross monthly margin extra time as can be seen in Appendix B.Increasing sales is observable for the next ternary year period and such behavior should indicate growth of the business for the next three years. The great the revenues the higher would be the changes for better profitability after deducting the expe nse (Bernstein, 1993 Droms, 1990). The profitability of the business is obvious the third year and as reflected in the positive net profit margin of 16.7% after having negative pass judgment for the past two years because of the losses. See Appendix C.Profitability essentially blottos higher revenues than expenses which would mean that the business would naturally incur cost or expenses in running the business but the like should generate higher revenues in exchange of the expenses to indicate profitability of the business.The profit generated by the business is non enough to assure that business will prosper. The business essential be able to pay its maturing obligations on time like the salaries of employees, payment for goods and services to supplies, regular bills for electricity, telephone and other utilities. In other words, it must have sufficient working capital or excess of current assets over its current liabilities at one point in time which can be measure also by l iquid ratios