Also, this increase can be attributed to the competition in the market. For every dollar of sales the company keeps the earning of 5.06%, which is a .16% increase compared to last year. Tire City’s Gross profit margin has been favorably steady through the years with a 42.09% in 1995. This might be due to an increase in selling prices, or a decrease in cost. The long term debt to capital shows that the company has an unfavorable decrease over the past years with a 13% of the debt to capital ratio.
As the economy bounced back, so did Costco and its bottom line. The charts below show Costco’s consistent increase in all ratios and revenues over the past four years. Selected Income Statement Data(In Millions) | 2011 | 2010 | 2009 | 2008 | Total Revenue | 88,915 | 77,946 | 71,422 | 72,483 | Operating Income | 2,439 | 2,077 | 1,777 | 1,969 | Net Income | 1,462 | 1,303 | 1,086 | 1,283 | Diluted Net Income per Share | 3.30 | 2.92 | 2.47 | 2.89 | First thing I want to point out is the Diluted EPS (Net income per share), as you can see, the Diluted EPS follows suit of the other 3 ratios. I included Diluted EPS because it is a better indication than EPS because it shows what their EPS would be if all employee’s turned in their stock
The shareowner’s deficit has decreased over the year substantially. This is very good news for shareholders because they do not want to be in a deficit but in a surplus so that they can being receiving dividend payouts. Concerns that investors and creditors may have just by looking at this statement are that it only shows one year of information. They may require more information to see a real trend over a period of time. Although from 2003 to 2004 was a positive year, before that there could have been negative trends.
Stock is up by +115% on last year, but a 20% rise in sales due to new machinery speeding up production is expected and planned for. The high levels of finished stock need to be available for immediate delivery with a +7 rise in orders on last year. Maintenance and cleaning is up by +135% on last year, with the increase in large machinery, this will be an expense that will have to factored in to ensure smooth production. Overall net profit is down, but machinery is a long term investment and will decrease in expense and generate profit in the next few years. Question 2 (A) The balance sheet will indicate the financial position of a business at any one point of time.
20.53 (45 min) Evaluation of customer service. Current data: Annual sales Average cost of sales as % of sales Sales growth Predictions related to new customer service: Increase in customer satisfaction Software and training costs for new customer service Ongoing operating costs for new customer service Cost savings from reduction of email response service Additional sales growth Without new customer service Sales, $15,000,000 x (1+ 0.04) Cost of sales @60% Gross margin With new customer service Sales, $15,000,000 x (1+ 0.04 + 0.06) $15,000,000 60% 4% 10% $300,000 $400,000 ($100,000) 6% Year 1 $ 15,600,000 9,360,000 $6,240,000 $ 16,500,000 Cost of sales @ 60% 9,900,000 Gross margin 6,600,000
B120 TMA03 Part I Question 1 a) The income statement's purpose is to show the financial position of a business by assessing its incomings and outgoings over a given period of time. The problem that arises from this statement in relation to Designer Labels is that this business has to purchase its merchandise well in advance of each season. This means that there will always be a significant amount held in assets. b) I note that although sales were down in 2012, the figure in comparison isn't such a large drop and the gross profit remains at a similar level to the previous year. I am concerned by the large leap in total expenses for the year 2012 and I see that although the majority of these totals have dropped, the ones that have increased have been by large amounts in the areas of wages and salary, maintenance and depreciation.
In 2006 the fixed cost was at its highest due to a new rent that was larger and more employees. The margin of safety, which is in exhibit 4, was already extremely low in 2003 at 15%. Then it was 6% in 2004 and 7% in 2006. It has decreased and obviously other things in the business need to change like sales per unit to increase it. The next question was if they decreased price by 105 and increased sale tickets to 14,000, if there income would increase.
This measures the risk of investing in a company. In other words, the decline in margin of safety shows that the difference between sales completed and sales needed to break even getting smaller. These changes can be attributed to their total sales amounting to a value less than the breakeven point in sales. 2) If average prices were reduced 10%, and sales tickets were increased to 14,000 the income of the company would increase. However, even with this change in values, the company is still under its breakeven point.
This provided for marketer finance and also the ability to require advantage of early payment discounts that additional reduced operational prices. As a testament to the success of this business model, from 2008 through 2011, Costco was able to increase the amount of warehouses by 15.6%, revenues by 22.6%, and earnings by 14.0%. 2. What are the chief elements of Costco’s current strategy and is it effective? Costco’s key
As a result of the increase of cost of goods sold, income before taxes declines and Walgreen’s pays less income tax than if they were to use the first-in, first-out method. Traditionally, companies using LIFO are valued more highly than those who use FIFO during periods of rising prices. Walgreen’s also offers analysts the LIFO Reserve, which is the difference between what the inventory is using LIFO as opposed to if FIFO was used. As of 2007 and 2008, Walgreen’s inventories would have been greater by $1,067 million $969 million respectively using a FIFO accounting method. Walgreen’s primary competitor, CVS, uses a combination of three inventory methods for each of their different business segments.