Question

In: Accounting

How may I increase the net profit by $350,000 while factoring in both revenues and expenses?

How may I increase the net profit by $350,000 while factoring in both revenues and expenses?

Solutions

Expert Solution

There are three ways by which the profit can be increased:

  1. Increase the revenue by $350,000, OR
  2. Decrease the expenses by $350,000, OR
  3. Increase the revenue by $175,000 and Decrease the expenses by $175,000. Therefore, net impact will be increased profit of $350,000

Following are the suggested ideas in which revenues can be increased:

  • If in case of manufacturing, consider manufacturing in bulk, therefore reducing the cost of production
  • keep excess cash balance in savings bank account and therefore earn interest from the bank
  • if risk appetite is on the higher side, invest the excess cash balance in the stock market (however, it is suggested to do so, only if there is sufficient knowledge on how to trade in the stock market)
  • prepare budgets and stick to the same in order to control unnecessary expenses, and so that big expenses are planned for in advance
  • consider tax saving investments to reduce the taxation expense
  • reduce expenses by eliminating freebies

ekkarill92 answered 10 months ago
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