"7"

A supermarket decides that it will open as normal on Christmas Day.



Generally speaking,as a consumer, I strongly anticipate that there are lots of shops or malls opening on Christmas Day with attractive decoration.However what will it influence the company?There are three sides which should be taken into considerations.

Consumers:

In most western countries,Christmas Day has the same treatment with Spring Festival in China,people are definitely hang out with family or friends celebrating this paramount day.A majority of consumers wish to shopping with friends and enjoying the Christmas atmosphere during shopping.Therefore,the demand on this special day will increase with an unexpected rate.Consumers will expend more than in normal days.



Company:

As I said before,the demand on Christmas Day will be inelastic and increased sharply,it is an vital opportunity for most of the companies to open as normal in order to meet the high demand,as a consequence,getting more revenue during the day.High percentage of the businesses survived only because they take well advantage of the particularly high demand in certain days,and become competitive among thousand businesses,at the same time because of the high demand,most of the companies reduce the prices of the products in this certain days as a strategy to have more quantity sold.Probably,they sell the products which is out-of date but will receive a good result,because of the demand for the products and high profits.In the real world,on Christmas day, most of the businesses prefer opening rather than closing.



LABOUR:
Labour is the greatest and the most valuable assets in the company.In this case,assume the business opens on Christmas Day,they should pay labours extra money,because they work more extra time on Christmas Day,which they are not supported to do.If the company is not following the law,they may be sued by the trade union.However,labours may feel lonely and demotivated,it leads to the low productivity but sales may not increase and cost is high but the company have to pay the extra money may be more than working days to the labours even though the productivity is low,therefore the company should think about it or taking other choices,such as employ part-time labours but the problem for them is hard to training them in a shot time period.

8 short tips

1.liquidity:the ability to convert an asset into cash without loss or delay.

2.Gearing: focuses on long-term liquidity and shows whether a firm`s capital structure is likely to be able to continue to meet interest payment and to repay,long- term borrowing

EQUITY:funds provided to set up the business,fund expansion and purchase fixed assets



3.DEBTORS COLLECTION PERIOD=debtors/sales *365

4.creditors payment period =creditors/purchase*365

5.average stock:is the average amount of stock stores in the warehouse

stock turn:it is the cycle of the stock by a period of time


6.ROCE(return on capital employed:is a measure of the value of the profit over resources used by business

return on capital employed:operating profit/capital employed

7.GP (gross profit):the revenue minus costs of sales.The gross profits shows how efficiently a business is converting its raw materials or stock into finished products.

8.NP(net profit): net profit is calculated by subtracting a company's total expenses from total revenue thus showing what the company has earned (or lost) in a given period of time (usually one year). also called net income or net earnings.