Crunk Times, My friend.....Crunk Times

[Flipx99 5,000+ posts]

I believe it stems mostly from companies trying to avoid dealing with the processing fess of using CC's.

No, No, No.

Consider the company...Coach.

While they have their own discount stores, most of what they do is re-selling to Macy's and expensive places like that. Macy's doesn't buy handbags with a credit card. They buy them on a "net" basis...which is more like a line of credit than a credit card with fees and all that.

What you want to see is if the margins are taking a hit...meaning if the company lowering the "net" to shorter days (meaning the buyer would get a larger discount) is hitting the profit margin.

 

[Flipx99 5,000+ posts]

Another possibility is that they are reducing sales to customers who buy on credit.

Let me make this perfectly clear:

When you go down to the grocery store and use your credit card, the company gets the cash immediately. They get a discounted portion of the sale...meaning if the sale was for $100, they get $99 immediately. It is considered a CASH sale. The fact the swiper of the card may not pay his bill for weeks do not matter. The company considers it a cash sale. They are not issuing a line of credit to the customer.

 

[Chevillac 5,000+ posts]

Edit: Dammit

I have seen a fair number of places offering a slight discount if the customer uses cash.

gas stations mostly I see doing this.

 

[DBfan187 5,000+ posts]

http://www.caraudio.com/forum/showthread.php?t=386208

 

[denim 5,000+ posts]

No, No, No.
Consider the company...Coach.

While they have their own discount stores, most of what they do is re-selling to Macy's and expensive places like that. Macy's doesn't buy handbags with a credit card. They buy them on a "net" basis...which is more like a line of credit than a credit card with fees and all that.

What you want to see is if the margins are taking a hit...meaning if the company lowering the "net" to shorter days (meaning the buyer would get a larger discount) is hitting the profit margin.

Sorry, I meant more in general. And don't mention Coach around my wifey!!

 

[denim 5,000+ posts]

gas stations mostly I see doing this.

I think I saw a food store on the eastern shore the other week when I was on the road, and maybe a tint shop too. Not positive. Just remember seeing the signs.

 

[UndercoverPunk 5,000+ posts]

 

[Banana Balls 5,000+ posts]

Now that is crunk!

 

[Tiger Bass 5,000+ posts]

Another possibility is that they are reducing sales to customers who buy on credit.
Let me make this perfectly clear:

When you go down to the grocery store and use your credit card, the company gets the cash immediately. They get a discounted portion of the sale...meaning if the sale was for $100, they get $99 immediately. It is considered a CASH sale. The fact the swiper of the card may not pay his bill for weeks do not matter. The company considers it a cash sale. They are not issuing a line of credit to the customer.

So would a fall in net profit margin but a rise in inventory turnover more likely be from the increasing costs of supplies and a successful investment made the previous two years, increasing their popularity or them discounting their products to move more inventory.

Here is the list of ratios if I haven't listed enough info.

 

[Lugnutz 10+ year member]

I just realized today is the one year anniversary of the historic carnage that graced ca.com.

 

[Lugnutz 10+ year member]

I'd reckon if your sales have increased but your profits have decreased, you have incurred a rise in variable costs or cost of goods sales.

 

[Tiger Bass 5,000+ posts]

I'd reckon if your sales have increased but your profits have decreased, you have incurred a rise in variable costs or cost of goods sales.

Precisely, but is it possible to pinpoint the reason for the profit margin decreasing. Be it from an increase of the price of supplies or the lowering of product price to sell more.

 

[Banana Balls 5,000+ posts]

Precisely, but is it possible to pinpoint the reason for the profit margin decreasing. Be it from an increase of the price of supplies or the lowering of product price to sell more.

Neither. The executives got bonuses.

 

[Lugnutz 10+ year member]

Precisely, but is it possible to pinpoint the reason for the profit margin decreasing. Be it from an increase of the price of supplies or the lowering of product price to sell more.

I reckon if your cost of goods sold increased, that could mean your cost went up and is not reflected in the final sales price so you are paying more for your inventory but are not selling it for more.

 

[Lugnutz 10+ year member]

Neither. The executives got bonuses.

Oh, we're talking about a financial company?