How long will it be before All-Store starts operating at a loss? How long will it be before All-Store goes bankrupt? How Long Before All-Store Starts Operating at a Loss?

Basic Quantitative Methods

You can use a calculator to complete the calculations. Make sure to show and check all of your work.

Part 1: Your Calculations
Declining Sales
The general manager wants to know what the impact will be on the business if sales continue to decline at the current rate and no action is taken. This can be broken down into two questions:

How long will it be before All-Store starts operating at a loss?
How long will it be before All-Store goes bankrupt?

How Long Before All-Store Starts Operating at a Loss?
When a company makes less money than it spends, this is referred to as operating at a loss. Another way to express this is “the net profit equals zero.”