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Simple Business

? Cancelling e xpense ite ms such as reducing employee numbers,
cancelling services, and closing projects or parts of operations.
In general there is little direct control over income . In so me cases income
could be increased with some of the following steps
? Cancelling discounts, subsidies and other benefits provided with
? Increasing prices.
? Advertising and promotions. However, in these cases the results of
the marketing ca mpa ign may not flow through quickly enough to
offset the cost, and cancelling the cost of promo tions may be of
greater benefit that spending funds with the aim of increasing sales.
1.5.2. Growth
While survival involves stabilising cash flow, gro wth involves development
of products, using assets affectively, and profitability.
A stable cash flow is necessary to fund growth and development, however
this does not lead to growth of its own accord.
Profit or loss is the change in the total assets of the business due to business
This does not include changes in assets due to capital transfers, such as
raising or repaying debt.
Capita l transfers make the business enterprise larger or s ma lle r, but do not
reflect a creation or destruction of total value.
Net profit inc ludes the difference between the cash inflo w and cash outflow
over a period of operation.
A change in the value of the business's assets can also occur when the value
of a fixed asset changes.