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Accounting Theory KITCHENS2GO - Analysis Term Paper

This gives an indication of the firm's profit margin with regard to its competitors. Operating expenses may also be examined, not only overall but by type of spending. For instance, is the company adequately staffed during peak cycles? Overstaffed during slow cycles? Is some spending preventable or reducible? One type of expense that is often examined more closely is administrative expense. Administrative expense is largely fixed and generally not directly attributable to generating sales. There are standard measures by industry for appropriate ranges. Exceptions may include start up costs or capital upgrades.

Lastly, inventory turnover is important to this type of business. Inventory that sits on the shelf too long indicates...

Banks have a fiduciary responsibility to monitor the progress and health of its investments, just as a business owner has to his or her own business. Ideally, the two will work together to identify ways to increase the success of the organization. Without strategic planning, accurate records, risk assessment and monitoring and evaluation these goals would be imminently harder to achieve and harder for the lender to assess.

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