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Describe the impact of fads or sudden trends on income statements of businesses.

Describe the impact of fads or sudden trends on income statements of businesses.

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Fads or business trends are sudden or abrupt increase/decrease in sales of a particular product. Due to this the income for the company is likely to show a dramatic increase or decrease in a quarter or in any particular financial year. This increase or decrease in sales would also be accompanied by a sudden decrease/increase in inventory of the products. Moreover there would not be a commensurate increase/decrease in marketing cost and hence profitability is likely to increase/decrease abruptly.

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