that reduce COGS, SG&A and R&D expenses or by strategies thatincrease value created through differentiation. Onthe other hand, increasing capital turnover can be achieved by pursuing strategies that reduce amount of capital necessary to generate every dollar of sale. As the above figure shows, Inditex was successful in achieving relatively higher level of ROS and capital turnover. Thatisto sa
to turn into exposed receivables.
Some subsidiaries of Xerox throughout Latin America was found to have exposed receivables, andthe reasonfor this could be because ofthese faulty accounting procedures for recognizing rentals as sales. One major problem that could be caused by excess of exposed receivables isthatthe company can face liquidity problems. A drop in account receivables implies
is 0.3. Among three cases, the accountants use 1,650,000lbs, which isthe “most likely” sales projectionand has the highest probability, to calculate the estimate of annual cost of producing 10-in. and 12-in. pipe in-house.
Choosing the “most likely figure” seems to be a good and right decision, but actually it is not. It would be simple and easy to calculate but it has problems that i
to turn into exposed receivables.
Some subsidiaries of Xerox throughout Latin America was found to have exposed receivables, andthe reasonfor this could be because ofthese faulty accounting procedures for recognizing rentals as sales. One major problem that could be caused by excess of exposed receivables isthatthe company can face liquidity problems. A drop in account receivables implies
and growing desire for luxury handbags and quality leather goods, whereas only a few percentage of wealthy consumers are interested in carrying decent handbags a couple of years ago. Furthermore, double-income family also fueled the higher purchasing power so thatthey are willing to spend additional dollars on luxury handbags.
In addition, big-box discounters such as Wal-mart or JC penny play