http://query.nytimes.com/mem/archive-free/pdf?_r=1&res=9A06E4DB113CE733A25755C1A9619C946796D6CF&oref=slogin
Summary: As Banking Facilities develop within the past few years, it is still in question whether the cash discount hasn't outlived its usefulness and should be stopped. A Well-known business man stated that there was no scientific reason for creating cash discounts, it was created largely due to the lack of suffiecient banking facilities. Because of the massive development of the Banking System, the size of the cash discount offer has dropped considerably. The fact that the drop of the discount hasn't seriously affected anyone gives reason to believe that the system should just be done with. The Businesses greatly in favor of the cash discount being demolished seems to be grocery, dry goods, etc. stores. This is due to the fact that they carry too many small accounts because of cash discounts.
Connections: The connection from Chapter 11 to this article is Cash Discounts. A cash dicount is a reduction of the amount that is on a bill if payment is made on or before the date of discount stated on the bill. In this article from the New York Times, the abolishment of cash discounts are being argued upon. The Terms of Sale have also dropped, as they are now 1/3 or 1/2 of what they used to be. This means that what would today be a 2/10,n30 might have been a 6/10n,30. The terms of the cash discounts lowering by fifty to sixty six percent, while still not having much of an effect makes it evident that cancelling cash discounts all together might not make a huge difference.
Reflection: My opinion on cash discounts is that businesses should keep them because they attract customers, and customers will be happy getting them. If anything I believe that businesses should increase the discount given if the payment is made on or before the discount date because it will keep, gain, and help out customers. I also think that Grocery and other food stores should cancel their cash discount systems because there are so many customers and accounts, that they may have a hard time keeping track of cash discounts they offer. In the future maybe they will have an advanced computerized system that will sort out customers and their cash discount when the payments are made, but while most of it is done by man, i believe that only companies that sell more expensive and larger objects should keep the system.
Thursday, October 30, 2008
Wednesday, October 8, 2008
Gas Prices Drop In Indianapolis (Chapter 11 Blog)
Link: http://www.indystar.com/apps/pbcs.dll/article?AID=/20081008/NEWS/810080383/1003/BUSINESS
Summary: The massive increase in price for gas has effected hundreds of millions of people since it started it's rocketing prices in June. The highest point that the gallon price marked in Indianapolis was in the $4.10 range, an appaling difference from the same time a year before, when the price of a gallon was just $2.67. Throughout the United States oil prices dropped slightly on Tuesday, standing at $89 per barrel for the rest of the day. But the price has fallen considerably it's peak of $147 a barrel during July this year. On Tuesday while filling up on gas at Wal-Mart in Avon, Richard Abraham stated "it's about time the price of gasoline reflected that drop". The current price is $3.04, a giant drop from the $4.10 in July.
Connections: This story on the gas price decrease relates to Chapter 11. My reason for believing this is because gas impacts a company's "Automobile Expense", which can end up being a major expense if there is a large number of deliveries or transportation involved. Since Automobile Expenses falls into the Operating Expenses area, the higher it is, the less profit a business earns. During the summer, many businesses have been damaged by high gas prices, which eventually leads to lower Net Income, or possibly Net Loss. Some Businesses that would be greatly impacted by high gas prices would probably be UPS, FedEx, Taxi Companies, and other Delivery Services.
Reflection: During my read on this article on gas prices, i realized that there must be a benefit for the increased cost of gas, as well as a loss. Since gas is a natural resource and we only have a limited amount before it's all gone, it is good that prices went up, because it will give people insight on how they should save gas. Before, maybe someone made 2 trips for grocery shopping, but while gas prices were rocketing, they might have only made 1 trip because they realized that saving gas means saving money. I only hope that people will keep trying to save gas, even though the price of it is dropping.
Summary: The massive increase in price for gas has effected hundreds of millions of people since it started it's rocketing prices in June. The highest point that the gallon price marked in Indianapolis was in the $4.10 range, an appaling difference from the same time a year before, when the price of a gallon was just $2.67. Throughout the United States oil prices dropped slightly on Tuesday, standing at $89 per barrel for the rest of the day. But the price has fallen considerably it's peak of $147 a barrel during July this year. On Tuesday while filling up on gas at Wal-Mart in Avon, Richard Abraham stated "it's about time the price of gasoline reflected that drop". The current price is $3.04, a giant drop from the $4.10 in July.
Connections: This story on the gas price decrease relates to Chapter 11. My reason for believing this is because gas impacts a company's "Automobile Expense", which can end up being a major expense if there is a large number of deliveries or transportation involved. Since Automobile Expenses falls into the Operating Expenses area, the higher it is, the less profit a business earns. During the summer, many businesses have been damaged by high gas prices, which eventually leads to lower Net Income, or possibly Net Loss. Some Businesses that would be greatly impacted by high gas prices would probably be UPS, FedEx, Taxi Companies, and other Delivery Services.
Reflection: During my read on this article on gas prices, i realized that there must be a benefit for the increased cost of gas, as well as a loss. Since gas is a natural resource and we only have a limited amount before it's all gone, it is good that prices went up, because it will give people insight on how they should save gas. Before, maybe someone made 2 trips for grocery shopping, but while gas prices were rocketing, they might have only made 1 trip because they realized that saving gas means saving money. I only hope that people will keep trying to save gas, even though the price of it is dropping.
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