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In a trading company, their product has high demand in market, they have good sales also. But still they are loosing money.!! what could be the reason?

An interviewer asked this Q to me. I answered that, may be proper budgeting is not happening there. Then he agreed, again he asked if the Budgeting also good , then what may be the reason? Pls answer.if you know..i want to knw it

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Question ajoutée par HAMSA SHAFEEK THONIKKADAVATH , Senior Accountant , Emirates Falcon Ind. & Eng. Supplies
Date de publication: 2013/12/03
Abduh mohsen AL-dheleai
par Abduh mohsen AL-dheleai , مدير ادارة الاستمارات النقدية , الهيئة العامة للتأمينات والمعاشات

I am sorry I can't speak english good

amer jayyousi
par amer jayyousi , Business Development Consultant , freelance

It is always cost,Revenue,profit.

Also we must study profit chart,are they really making profits,high revenue doesn't mean profits.

We must study the whole process to determine the cause.

If revenue is increasing and cost are also increasing then we will not make profits.

This is a general question that needs more inputs and information.

Zohaib Usman
par Zohaib Usman , HR trainee , Dorsh Gruppe Gamblin Abu Dhabi

Due to disturbing the Navigation system of plane.

If the elastic product (price increase effect on sales significantly)...

In this case, The first step is to an Eliminate the Non added value cost after we found it directly, then check the Uncontrollable cost (if exists)and discussed with the person concerned in order to remove it.

Finally, if the lose still, we have to check the fixed cost and see how could we cover it by implementing the variable cost approach.

 

  

Ngongha Ivo Aziwoh
par Ngongha Ivo Aziwoh , Regional Director , CADECI plc Cameroon

If sales are increasing along side cost, they will obviously not make profits. Thier expenditures should be rechecked

Syed Shah Hyder Hussain Razvi
par Syed Shah Hyder Hussain Razvi , Finance Manager , Winners International Trading Co. & Subsidiaries

The made budgeting but they didn't control certain expenses during fiscal year this could be one of the reason that they are looding.

mohammed Akl
par mohammed Akl , مدير مشتريات خارجيه , المهيدب للادوات الصحيخ

i think there are some problems such as :

profit margins are not right .

may be there are an exceeded numbers of employers.

may be there are big qty of goods that were spoiled every year.

 

Shiladitya Kishore Debbarma
par Shiladitya Kishore Debbarma , Data Validation Analyst , L S Solutions Inc

It depends on Indirect cost and direct cost. 

Sales = Margin + cost 

so if sales is high  and we are lossing money that means cost is also high

 

Mahmoud Desokey Mohamed
par Mahmoud Desokey Mohamed , Supply Chain Manager , sondos Aldeebaja factory

unefficient costing system which leads to wrong pricing

Muhammad javaid
par Muhammad javaid , Accountant General , Solid House BM Trading Co.

It may be because of the following reasons.

1.overtreading

2.high overhead expences

3.Poor pricing strategy

It may happened because of the following reasons.

a. Overhead Expenses is too high

b. Pricing policies

c. Improper Inventory management.  

d. High selling cost.

.

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