Private business making a loss?

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woodyboy12

Private business making a loss?

my business homework is to

1.Research into an organisation in the PRIVATE sector that has run for a number of years without making profit. (4 marks)

2.Explain how it has been possible for them to run at a loss. (6 marks)

I cant think of one business in the private sector that makes a loss nor could i explain why they are able to stay open.

any help would be appreciated. thank you x

AE N

There are thousands of companies that are running at a loss. Many of them have planned that they will not turn a profit for many years. And have backing from investors who are not expected to have return for some time.

Many companies us a bank to finance operations, but the bank requires that you pay them back...

Good Example, Sirius Satellite Radio., amazon.com...

rod85

I think what you are looking for is what small businesses do at the end of the year for taxes. Basically, at the end the year we zero out the accounts. With the help of an accountant, we figure out all our debts, credits till the very last day of the year, Dec. 31. Rather than have a net profit, any monies will be divided among the partners and be used to pay employee bonuses. Jan. 1 the corporation starts with a new slate. One year we mistakenly had small profit, like $100, and the corporation was taxed on it. We'd rather have that money for us individuals rather than the corporation.

Hope that helps.

Flyboy

Since private companies are not required to publish their financial results most don't and it is not generally possible to find one running at a loss.

The only way a business can continue to operate at a loss is to borrow to finance the business or "burn" though liquid capital. During the dot com craze ten years ago many business operated at a loss until they ran out of seed money. Then they folded and the stockholders were left with worthless paper.

Serge M

Try Ford Motor Company, or its Jaguar subsidiary. They are able to stay in business because they made profits in the past and have sufficient capital and resources. The business may have a large amount of retained earnings from past years.

Frank

Companies can run at a loss because they have money in the bank.

SIMON B

are you doin an all niter tonite?

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