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PROFIT ANALYSIS, What is Break-even point ? - Coggle Diagram
PROFIT ANALYSIS
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PROFIT PLANNING
WHAT IS PROFIT PLANNING?
A firm faces an unpredictable demand for its products. Barring the basic requirements of life and other essential commodities, consumer preferences of commodities are highly subjective and the firm may not be able to predict the demand precisely and firm faces this uncertainty,
Secondly, the firm has to face competition from the rival producers. The competition may be price-competition or product competition or it may be both. Product competition is more important till it reaches a stage of maturity.
Thirdly, in a period of continuous rising prices, no firm can be certain of its own cost structure, as it cannot have control over the price of raw materials and wages and transport cost, as well as tax to be paid.This is another certainity
Fourthly, improvements and change in technological development may make a firm's product obsolete and push the firm out of business, unless, the firm adopts the new technology
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