What happens to companies when current purchasing power increases?
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First of all, Let's gaze at the definition of "Current Purchasing Power" :--
A form of accounting that measures profit after allowing for the maintenance of the purchasing power of the shareholders' capital. The Retail Price Index is used to adjust for general price changes to ensure that the shareholders' capital maintains the same monetary purchasing power.
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Moving on with the answer of your question:--
Inflation is the number-one enemy of economy-wide purchasing power. Inflation is the process whereby prices slowly rise throughout all sectors in an economy, effectively reducing the purchasing power of fixed assets and current income levels.
This way, the effective reduction in the purchasing power of fixed assets and current income levels leads to the loss of a company in such a production.
A form of accounting that measures profit after allowing for the maintenance of the purchasing power of the shareholders' capital. The Retail Price Index is used to adjust for general price changes to ensure that the shareholders' capital maintains the same monetary purchasing power.
___________________________
Moving on with the answer of your question:--
Inflation is the number-one enemy of economy-wide purchasing power. Inflation is the process whereby prices slowly rise throughout all sectors in an economy, effectively reducing the purchasing power of fixed assets and current income levels.
This way, the effective reduction in the purchasing power of fixed assets and current income levels leads to the loss of a company in such a production.
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