
Understanding Overtrading and Its Prevention
Authored by Alastair Baird
Business
12th Grade
Used 1+ times

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13 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is overtrading?
Expanding a business too quickly without adequate resources
Investing in too many stocks
Reducing production capacity
Hiring too many employees
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is a common cause of overtrading?
Increasing cash reserves
Reducing stock levels
Making a big capital investment before revenue is generated
Decreasing demand
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a strong indicator of early problems related to overtrading?
High profits
Employee satisfaction
Excessive marketing
Cash shortages and interruptions to cash flow
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
According to Andrew Goodacre, what is critical as businesses expand?
Reducing product prices
Hiring more staff
Cash flow management
Increasing marketing efforts
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What percentage of SMEs in the UK see cash flow issues as a main obstacle?
13%
5%
25%
50%
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What can poor cash flow lead to?
Increased profits
More investment opportunities
Having to borrow money or using a bank overdraft
Higher employee morale
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is one way to avoid overtrading?
Expand rapidly
Increase stock levels
Lease instead of buying equipment
Hire more employees
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