07 Analyse why 'value of sales' might be a better measure of business size than 'value of output'.

[Sir Afzal Shad]

07 Analyse why 'value of sales' might be a better measure of business size than 'value of output'. [3]
Hint: Sales reflects customer demand > Output could just be unsold stock > Sales revenue shows what customers are actually buying, making it more realistic.

[Fatima ibtehaj]

[KN]he value of sales might be a better measure of business size than the value of output because it reflects the actual revenue a business earns from selling its goods or services, rather than just the amount it produces.
[APP]For example, a car manufacturer might produce 10,000 cars in a year (high output), but if only 6,000 are sold, the value of output will appear large while the business actually earns less revenue. The value of sales, on the other hand, directly shows how successful the business is at turning production into income.
[AN]When sales value is used to measure size, the business can better understand its financial strength and market position. This helps managers make informed decisions about pricing, marketing, and production levels

[Abdullah Baig]

Kn
Value of sales may be a better measure of business size because it shows the actual revenue earned from selling goods or services
App
For example, a smartphone manufacturer may produce thousands of phones in a month but if many remain unsold, the value of output overstates its performance whereas sales value shows how many customers actually bought the phones giving a clearer picture of real business activity
An
Therefore, value of sales provides a more accurate and realistic measure of business size, as it reflects true customer demand and market success rather than just production levels

[Aarib Saad]

(KN)Value of Sales will be a better measure as Value of Sales tells us the actual Demand of the business and it's sales, where as Value Output only tells us the output the business produces only, not what it sells.
(APP)For instance, a farm might have harvested 6 tonnes/hectare of wheat and another might have only harvested 5, but if the second farm sells all of it's output and the first farm only 3, despite having higher output the first farm will be smaller.
(AN)Thus, value of sales will help a business develop a better Cashflow Forecast, leading to better decision making, which will boost the business' ability of maximizing it's revenue and market share, like by setting better prices.

[Hajra]

K: Value of sales might be a better measure of business size because it shows the actual revenue a business earns from customers.
App: For example, a factory may produce 1,000 chairs (high output), but if only 200 are sold, the sales value will be much lower.
An: Sales value reflects real demand for products, shows how much money is flowing into the business, and gives a clearer idea of market share compared to just measuring output.

[shamaim shakeel]

[KN] The value of sales measures the total money a business earns from selling its products, while the value of output only shows what has been produced, not what is actually sold.
[APP] For example, a company like Sony might produce many TVs, but if some remain unsold, its output value will be high but sales value will be lower showing the real size more accurately through sales.
[AN] Using the value of sales is better because it reflects the business’s financial strength and market position, helping managers make better choices about pricing, marketing, and production based on real customer demand.

[EmmanWaseem]

Revenue depends on the value of sales
More Value of sales means more revenue which will reduce the costs and value of output focuses on production
This means that comparing the value of sales is more important than checking with the value of output

[Uqbah hadeed kayani]

[kn] Value of sales might be a better measure of business size because it shows the actual revenue earned from customers.
[app] For example, a car company may produce many vehicles, but only the ones sold generate income.
[an] Sales value reflects real market demand, indicates financial success, and gives a more accurate picture of business performance than unsold output.

[Abdullah Mohsin]

[KN] Value of sales might be a better measure of business size than value of output because sales reflect actual customer demand.
[APP] For example, a furniture manufacturer could produce thousands of chairs (high output), but if many remain unsold, its value of sales will be low. However, another firm selling fewer but more expensive items, like luxury sofas, may record higher sales revenue.
[AN] This shows that sales revenue is more realistic, as it measures what customers are actually buying and the income generated, while output may overstate the size of a business as it includes unsold stock.

[Abdur Rehman khan]

[KN] The value of sales can be a better measure of business size because it reflects how much revenue a business actually earns from customers.
[APP] For example, a factory may produce a large amount of goods (high output), but if many items remain unsold its real activity is lower than it appears.
[AN] This means the value of sales shows how much revenue the business is truly generating allowing better comparison of financial performance across firms which can influence investment decisions, business reputation, and growth opportunities in the market.

[Naveen fatima]

[KN]The value of sales can show how well a business performs compared to others.
[APP]For example, if one car company sells more cars than another, it will have a higher value of sales.
[AN]It shows how much of what is produced is actually sold. A firm might produce many goods but not sell them, making output figures misleading. Sales value also reflects customer demand and real market success, giving a clearer idea of the business’s true size.

[Abdullah Altaf]

[KN] It shows the actual revenue a business earns from selling its goods or services, rather than just the amount it produces.
[APP] For example, a clothing retailer might produce 5,000 shirts, but if only 2,000 are sold, the value of output will seem high, but the actual revenue and business size will be much lower.
[AN] Hence by using this information the business would be able to make better strategic decisions which would improve financial forecasting and resource allocation and also improve business profitability.

[Mustafa Khan]

kn]it is better because value of sales actually shows how much revenue a business is producing rather than just producing output.
app]for example, a bakery A is selling 50 cakes in a day while bakery B is just baking 60 cakes a day. In this situation it is not clear how much bakery B is selling and therefore it cant be measured efficiently.
an]this means the value of sales shows how much revenue the business is truly generating allowing better comparison of financial performance across firms which can influence investment decisions, business reputation, and growth opportunities in the market, which can help the business establish a monopoly.

[M huzaifa jillani]

(KN)
Value of sales measures the total revenue a business earns from selling its goods or services while value of output measures the total goods produced regardless of whether they are sold or not.
(APP )
For example a car manufacturer may produce 1000 cars (output) but if only 600 are sold the value of sales will give a more accurate picture of the business actual performance and market size.
(AN)
Therefore value of sales is a better measure of business size because it reflects customer demand and actual income rather than just production levels which might include unsold stock.

[Aayan Zaidi]

KN: Value of sales shows how much money a business earns from selling goods, while value of output shows how much it produces.
APP: E.g a car factory might make many cars ( high output ) but sell only a few, meaning sales value is low.
AN: So, value of sales is better because it shows actual market demand and business performance, not just production.