A number of areas could be the reason for the decrease in sales in year 8 including the economy which could have led to outside sponsorships being decreased. However CBI is continuing to plan for growth in a 3.2 % increase that is greater than could be a reality and a concern for such percentage. There is no historical data to show that a plan is in place to achieve this additional sales increase and coming off a hard economic year, it is concerning that this achievable. The Selling, General and Administrative Budget is another area to review for concerns in the budget planning area. Advertising is budgeted at a flat percentage of 2% of gross profit or $28,412 for year 9 and this has remained consistent for each of the previous 3 years.
Whilst this is good for the company these figures are only predictions and may not happen in real time. Without the injection of £22,000 at the beginning of the year the business wouldn’t have seen profits of £9,560 in December. This could lead to future problems in the business as profits may decrease and capital expenditures may rise plus the payment of interest from the loan. Over a time period of 2 to 3 years the company could see a significant fall in profits without the aid of external sources of income such as another loan. •
The article further discusses a new marketing campaign they will be starting in 2011. This article is important to management because Miller Coors LLC revenue has been declining and the Chief Marketing officer has recognized this and is attempting to increase future income by capitalizing at the time when beer sales are at its highest. This is also important for management because they have recognized they need new product development strategies as well as diversification. General Analysis The current management trend is that management recognizes that they still have a high market standing, however their sales are down, and they must be innovative, to be a leader in introducing new products. Peter and Donnelly (2009), state” some of the most successful business organizations are here today because many years ago they offered the right product at the right time to a rapidly growing market (p.6)”.
The rate Chan suggests is double the historical rate which throws Chan’s ethics into scrutiny. It appears that Chan hopes to depress profits through a larger expense although Chan should be concerned as to whether or not the receivables will be collected since the recession is a concern. The computer has only been in use less than half the year. I don’t believe its cost is being allocated properly at all. An amortization rate of 40% (for so short a period of use) seems very much full of determination in depressing profits and creating more expenses to minimize payouts to Baaz.
What steps do you recommend the company take? Base your forecasts on the 1996 performance. • Finance it through debt; it has so little and is a big company by this point. But don’t take too much, still achieve a DPO reduction so that the debt is minimal • No, it will not be possible. • Would need to reduce working capital by $260M • Would need to increase gross margins by 328bps • If growth is so important, then a price raise would likely slow that.
Cost of Sales / Payables = Cost of sales Trade Payables Investment Ratios. -EPS: Artic PLC had to invest more from 2012 to 2014 to generate more income. By 2014 the company had more profits to distribute to its shareholders having as a result the decrease of the EPS on the last year, however in 2014 the company kept some of its profits and reduced its dividend to 17 cents per share because it must pay its
This decrease is due to the increased cost of raw materials, fuel and electricity. Salada Foods also tired to stimulate sales in the sluggish economy which resulted in an increased in promotion and selling expenses of 18%. The net profit attributable to shareholders was $81. Million compared to 2008 figure of $108.1 million, this lead to an earnings per stock unit of $0.78 cents. Unlike 2010, the year 2011 was a fairly good year for Salada Foods Jamaica as they came out of the economic downturn.
Given that there is not a significant growth in the worldwide and in the relative industry; we predict that the demand of shipping capacity is more likely to stagnant. Also, as is shown in the article, Linn anticipated that the exports of iron ore and coal are not likely to take off until 2003, which give us a view that the imports of iron ore and coal would remain constant over the next two years. Since that 85% of the cargo carried by the ship is iron and coal, we are able to conclude that the demand will stay at a similar level of 2000. Based on the supply and demand outlook, we can assume that the hire rate for capesizes will most likely decrease, while the supply of shipping capacity is likely to increase and demand will be stagnate. 2.
Manufacturing is another sector that causes the negative growth in GDP; it has decreased by 1.5% than the year before. Now UK is facing a tough situation because the economy is not going to have a significant growth in these years and UK will be in downturn (BBC, 2013). 2.1.2 Influences Nevertheless, a GDP increase has occurred in the third quarter 2012 which was mainly because of the London Olympic Games (Thompson, 2012); it affected the retail industry, performed in an increase of sales and tobacco revenues (London South East, 2012). 2.2 Unemployment Unemployment rate refers to the number of unemployed people as a percentage of the total labour force. Generally, a booming economy will bring a decrease of unemployment rate as more labour is used to meet extra demand (Sloman, 2008).
The main reasons for the fall in these categories were the premium pricing strategies for these drinks and low purchasing power of the customers. The market in developed countries is at a saturation point whereas in developing countries there is a steady growth in sales. A poor economy and market maturity led to the decline in sales in US in the year 2008 and 2009 by 2.1% and 3.1% respectively (Gamble, 2010). Economic Factors in Beverage Industry The projected growth of the beverage industry is estimated to rise from $1.58 trillion in 2009 to $1.78 trillion in 2014 mainly because of companies’ expansion into new geographic markets which include developing countries that show a higher growth in the sales of these alternative beverages (Gamble, 2010). These alternative beverages tend to carry higher prices