Managing Growth Assignment Essay Example | Topics and Well Written Essays - 500 words

Managing Growth Assignment - Essay Example apitalizing on supplier discount and reducing the inventory because most of long-term assets are inflexible and may â€Å"lock in† small companies operations in terms of finance and this has serious consequences on the company’s returns considering their small working capital. Considering that income statement basically looks at revenue, expenses and profit or loss made, balance sheet will assist in tracking changes in sales revenue and expenses along the three phases in a simulation of 10 years and indicate the financial condition of the company in each phase. This will help business managers to explain to the business lenders and every investors interested to have their shares in the company how adapted new mechanisms such as effectiveness of advertising methods to attract new customers, increase in customers discounts such as after-sale services has changed sales and expenses that reciprocate a change in assets and liabilities of the business. This information once put in inventory records will help business lenders and shareowners understand the effects in order to assess the health of the business. Therefore, when the company has a positive financial statement, there is an expectation of increase in working capital resulting from increase in net wort h of the company that attract more business lenders and shareowners who become confident of going deep into their pockets to invest to a company with favorable net worth. This will help to optimize on external credit provided by business lenders and shareowners to expand business operations in order to increase profit which is the core objective of every business enterprise (Scott, 2005). The purpose of considering taking opportunities that will enable a small business to win many new customers, capitalize on suppliers discount and reducing inventory is because these are transactions that often affects the cash flow of a business and are neither reported in the income statement nor balance sheet but are