Cartwright Lumber Case

Regarding the supply assumptions, sales volume had been built up largely on the basis of successful price competitions and they made possible by careful control of operating expenses and by quantity purchases of materials at substantial discounts. Much of the moldings, sash and door products, which constituted significant items of sales, were used for repair work. The bank also noted the rapid increase in Cartwright Lumber’s accounts and notes payable in the past. The usual terms of purchase in the trade provided for a discount of 2% for payments made within 10 days of the invocate date. Accounts were due in 30 days at the invoice price, but suppliers ordinarily did not object if payments lagged somewhat behind the due date. During the last two years, the Cartwright company had taken few purchase discounts because of this shortage of funds arising from his purchase of …show more content…
We need to know that one firm or investitor can’t be in profit for the first year of doing business and investment, because he invesments in his own firm there is no profit, so it means that he/she or firm is on loss. After that one year firm can gain money,everything the had invest, they can earn. Also they can can become multinational and famous firm and operate units in many countries. Here is important our view of economic profit, so if we want that business is on profit, we need to make it affordable and interesting to the customers, investitors, something that is not seen yet, the business will grow and market will be more productive for us. This economic profit and owner should be in a positive profit, where she or he made purchasing the organization surpasses his next best option, and when he pays of the advance that he will take from the bank. For the owner's of the firm is the most important to keeping firm on the good market and to conutine to keep both profits in the same sense for the benefit of the