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Respond to - One of the most commonly known business examples is a Car dealership, As vehicles are things that depreciate inevitably with the pass
Respond to - One of the most commonly known business examples is a Car dealership, As vehicles are things that depreciate inevitably with the pass of the time. Buying cars to stock a dealership can be risky if management doesn't take into account how fast they need to sell the cars before they depreciate then they end up not getting any inflow or in the worst case they end up with loses. Taking as an example my car, Nissan Sentra 2018, I bought it in 2022, at that time the car was 4 years old, low milage and good conditions, the price was around $22000. Now I have owned it for 2 years. Today's price on the market for a vehicle like mine is around $13000, meaning that the car has depreciated 40.91%. Dealerships need to be mindful of the time before buying stock but also when it is time to sell stock to another dealership in order to obtain an inflow from that stock. Financial strategies are different for different businesses depending on their necessities. For a car dealership I would suggest conducting TVM analysis, risk assessments, inventory tracking, budgeting and expense tracking, conduct probability and statistics assessments to
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