overtrading

Questions: Which financial ratios would you use to identify overtrading?

Carry on like that and you risk overstretching yourself or overtrading.

This will help you avoid overtrading and identify other cashflow problems.

Overtrading often occurs when companies expand their own operations too quickly (aggressively).

A common problem to avoid is overtrading when you take on more orders or business than you can fulfil.

Figures above the upper quartile in a particular industry can indicate overtrading which may lead to financial difficulties.

A merchant, without overtrading, may frequently have occasion for a sum of ready money, even when he has no bills to discount.

Managing your finance is essential for business survival and growth and will help you avoid common problems such as overtrading.

But this creates a temptation for analysts to act as stock sellers and to lure investors into "overtrading".

One wrote: "There are queues of companies who are funded this way waiting to collapse through overtrading and underperforming."

You can avoid overtrading by checking your cash needs using financial tests such as gearing, working capital or the quick ratio tests.

However, beware of overtrading in order to reduce your costs per-deal - you could end up holding too many shares, or eroding your returns.

One way you can help prevent overtrading is by keeping a tight control of the money you have going out of your business to pay for assets.

There have been no defalcations, no illegal conversions, no overtrading for personal commissions, no theft.

The overtrading of some bold projectors in both parts of the United Kingdom was the original cause of this excessive circulation of paper money.

In other cases, issuing of cheques is sometimes delayed, or money due is retained in part, often on cosmetic excuses such as fines for overtrading etc.

In 1955, he was declared bankrupt - something The Times attributed to overtrading - although Thaarup's generosity to his circle may have been a contributory factor.

Overtrading happens when a business accepts work but finds that completing the work (fulfillment) requires more resources (eg people, working capital or net assets) than are available.

According to Pinnacle, one of the pitfalls of trading the OEX is getting caught up in the intraday ticks and overtrading.

Effective debt management and credit control can help you avoid overtrading, by ensuring that you get paid more efficiently and have the cash to pay suppliers and staff.

This occasioned, what it always occasions, a general overtrading in all the parts of Great Britain; and this again occasioned the usual complaint of the scarcity of money, which always follows overtrading.

They point out that, although the side effects would include a sizable restructuring of financial sector activity, this would not occur in ways corrective of the particular forms of financial overtrading that were most conspicuous in contributing to the ongoing financial crisis.

Overtrading Paine Webber Inc. was ordered by the New York Stock Echange last week to pay $900,000 in fines for recommending investments to its retail customers that were often too risky and for buying and selling stocks merely to generate fees.

It is one thing for taxpayers to have to bail out banks for years of reckless overtrading that was on a scale sufficient to bring down the whole financial system, it is quite another to find that, in one bank at least, some of the bad practices went on unchecked after the rescue.