How do Bad Debts Affect the Profits of Bahrain Duty Free Essay

How do Bad Debts Affect the Profits of Bahrain Duty Free - study ExampleThe company is one of the greatest retail companies situated in the airport of Bahrain and it is worth for each individual to come and spend some time in this award winning duty surplus outlet. The company has been acclaimed interthemely among the airport retail industry backed with an array of awards for the purpose of executing spectacular performance within the retail duty free industry. The company being located centrally among gates 14 and 15 on the departure concourse of the airport the duty free shop in Bahrain duty free provides an extravagant obtain experience to the customers with international brands, prestigious brands and world clear retail section highly known for its diverse types of products and excessively deemed as one of the finest airport facilities shopping all over the globe (Shopping and Eating, Bahrain International Airport). But despite of this reputed stature the company faces hu ge losings and one of the major reasons can be attributed to the incompetent debts affecting the profit margins of the Bahrain Duty Free Complex. I have concentrated on secondary resources for providing relevant answers to the question. However the resources on the bad debt affecting the favourableness of the company is limited although I have made a rigorous search for answering the questions by taking proxies of bad debts as outstanding loans, non performing loans, losses, fall in accounts receivables and several other expose words for relating the same and answering the question. Procedure I have decided to write the topic on the basis of different secondary sources which are given in the following tabular representation. Annual subject 2011, Bahrain Duty Free Annual Report 2010, Bahrain Duty Free Article- UAEs non-performing loans to peak in 2012 Article- UAEs non-performing loans to peak in 2012 Book- Internal Revenue Service Tax Information Publications, The Service, Volume s 1-2 Volume 20001 Loopholes in national legal system Now I will move into the discussion of the paper. A business bad debt is a form of loss which generates from the worthlessness of a debt primarily from two main areas. Firstly it comes from concept or acquiring within the trade or business or secondly is closely colligate with the trade or business when it becomes partly or totally worthless. The bad debt of a corporation is forever and a day business bad debts. A debt is related closely to the trade or business if the primary motive(prenominal) for the purpose of incurring debt is a business reason (Taxpayer Information Publications, 342). Bahrain Duty Free (Duty Free) played dominantly in the market within the time span of 1991 to well-nigh 2000. Then the company encountered a massive set down in the year 2001 with a go under of around 20.9% in the net earnings post 9/11 attacks. Sales declined with an increase in the operating expenses. The company encountered a massive decline of around 8.1% in the net profit in comparison with the previous years. The second half of the year has also not been different for the Bahrain Duty Free. With the outbreak of 9/11 attacks the global aviation industry became crumbled and the ticker East have been no exception. With the declining number of passengers as well as jeopardized global economic conditions which has been exacerbated by the attacks of 9/11 pushed heavily on the line of growth of the company. There has also been a drop of 20.9% drop in the net earnin