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How Factoring Can Inexpensively Increase Your Company's Bottom Line ...

Comparing Income Statements: YEAR 1
before factoring
YEAR 2
WITH factoring
Revenues
(sales)
$1,000,000
(100%)
$4,000,000
(100%)
Cost of Goods Sold 700,000
(70%)
2,800,000
(70%)
Gross Profit 300,000
(30%)
1,200,000
(30%)
LESS    
Variable Expenses 150,000
(15%)
600,000
(15%)
Fixed Expenses 100,000* 100,000*
Total Expenses 250,000
(25%)
840,000
(21%)
Net Profit 50,000
(5%)
360,000
(9%)
 

In the above strategy, profits increase by OVER 700% and the costs as a percent of total revenue actually fell. Best of all, your customer base will grow. 

* Fixed expenses do not change regardless of sales.

 

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