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Causes of depression: The liquidity of funds is at its lowest and consumer can not afford to buy any CONSUMER DURABLE GOODS, bankers loose confidence in the industry and do not lend more funds causing economy and thereby the business and industry to experience recession.
Cure of the recessionary trends to profitability: During such recessionary cycles of the economy (business), the industry should try to reduce its expenses by staying thin and lean, keep the inventory at its lowest and borrow the lowest quantum of funds from banking channels thereby reducing the interest burden, prolong the payment cycle as far as possible and produce only the goods demanded by the customers reducing the conversion cycle of inventory into cash. By remaining afloat during this period and taking the above effective steps, industry shall definitely reach profitable cycle at the end of recessionary trends in the economy and industry.
