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Home > QFINANCE Dictionary > Definition of overtrading

Definition of


Operations & Production

when firm increases sales and production too rapidly a situation in which a company increases sales and production too much and too quickly, so that it runs short of cash

overtrading - Related Articles
  • Asset Turnover


    ratios, they vary from industry to industry. As with most numbers, the most meaningful comparisons are made over extended periods of time. Too high a ratio may suggest overtrading: too much sales revenue with too little investment. Conversely, too low a ratio may suggest undertrading and an inefficient


Definitions of ’overtrading’ and meaning of ’overtrading’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’overtrading’ and other financial terms with our online QFINANCE Financial Dictionary.

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