Thread by @investor_sr33

What happens when a company gets a large order > yearly sales ?

When a large order that exceeds a company's yearly revenue in a short duration, it can have both positive and challenging implications.

Lets look at pros and cons

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Positive Implications:

Revenue Boost: The large order has the potential to significantly increase the company's revenue in a short period of time.

Growth Opportunity:
It presents an opportunity for the company to expand its operations, increase market share, and potentially attract new customers.

Increased Visibility:
Fulfilling a large order can enhance the company's reputation and visibility within the industry.

Challenges to Address:

Capacity and Resources:
Meeting a large order might strain the company's capacity, resources, and production capabilities. Adequate planning and resource allocation are crucial.

Supply Chain Management:
Coordinating the sourcing of raw materials, production, and timely delivery can be challenging, especially with a large-scale order.

Financial Considerations:
Ensuring adequate funding or access to capital is essential to fulfill the order without compromising the company's financial stability.

Risk of Overdependence:
If the company becomes overly reliant on a single large order, it may face risks if the order is delayed, canceled, or if customer demand changes in the future.

It is essential to carefully evaluate the feasibility of fulfilling the order while considering the long-term impact on the company's wealth creation for share holders.

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