How do expenses affect profit margins?

How do expenses affect profit margins?

Expenses directly reduce profit margins. Higher expenses mean lower profits if revenues remain constant.

Can you give me examples of fixed and variable expenses?

Sure! Fixed expenses include rent and salaries, while variable expenses include materials and utilities.

What strategies can businesses use to manage their expenses?

Businesses can reduce costs by optimizing operations, negotiating with suppliers, and using technology to improve efficiency.

How often should a business review its expenses?

It's advisable to review expenses quarterly to identify trends and make necessary adjustments.

What impact do unexpected expenses have on margins?

Unexpected expenses can significantly squeeze margins, leading to cash flow issues and reduced profitability.