As a large company, Kroger receives grants and donations which could have been used to launch ClickList
To launch ClickList the company might have taken out a loan
After that they would eventually could have paid off the loan with the profits from the department
If Kroger were to receive a loan from a supplier for things such as computer systems, trolleys, pallys, baymaxes, etc., they would eventually have to pay it back at low interest and with possible delayed payments
Kroger could have pledged a piece of their company to the loaner to ensure that they got their money back
Capabilities and Character
When applying for a loan the bank would take into consideration their history of credit and their résumé as a functioning company. They would also determine whether or not they are capable of paying off a loan if they were to receive one.
Coverage & Circumstances
If Kroger were to take out a loan the bank would have to review their insurance policy and review their business plan
When taking a loan from the bank, Kroger would have a certain amount of money for a certain amount of time before needing to pay it back
For the start up of ClickList, Kroger would be able to immediately withdraw money creating an immediate foundation without the need to take money out of the pocket of the company.
Accepting credit also has risks that could lead to high interest rates, pay back deadlines that might not be met in time and default loans.
With the amount of money ClickList costs, Kroger would be able to pay off those expenses, have a smaller risk of going over a set limit, and would be supplied with emergency money.
The risks included would result in more payments, higher interest and more difficult disciplines for the more money spent.
Prevention & Control
When hiring, Kroger notifies the soon to be employee that there will be random drug testing and there will be a background check performed before their first day on the job.
New employees get fresh start guides that teach them how to deal with situations, spills, emergencies and more.
Even employees have to take tests every few months to assure that they remember rules and guidelines.
Why I Would Not Be An Entrepreneur
I would not become an entrepreneur because of the risks that they would have to face financially and the amount of pressure and stress they have to be a successful business.
Start Up Costs
One time costs are when the company has made a purchase that is unlikely to occur again
A recurring cost is something that is paid at a set time period several times within the year
My income statement would consist of expenses and profits made within a certain amount of time consisting of my expenses and amounts of money made by customers
Net income - total revenues and gains over expenses and losses
Fixed income - where a borrower or issuer is forced to make payments of fixed interest on a fixed schedule
- Water bill
- Office Supplies
- Employee salaries
- Main building
- Bank accounts
- Long-term Loans
The amount of money that I were to invest out of my own pocket when starting my company is equity. I would use equity to get assets and operate my business.
Cash Flow Statement
The importance of a cash flow statement is to show how much money the company needs to make and when it needs it. Without this the company could go under without warning.
When making a cash flow statement you will need to gather all of your expenses from your start up to now. Subtract start up costs from how much money you had. Determine your monthly income. Lists of inventory costs and how much you plan spending on them for the next month. List all monthly expenses. Determine your cash flow. Find your monthly cash surplus or even deficit.
Break Even Point
This is when the company's revenue is equal to their total costs.
Something that I could purchase that would result in the business breaking even would be a greenhouse