By looking at the trading, profit & loss forecast for the year, you can see that things look like they will go reasonably well over the year as it shows a net profit of £15808. You may need to consider the possibility of a rise in fuel prices or the possibility of a fuel shortage in the current climate. This could affect your business by raising the cost of sales. You should look at increasing your revenue figure in order to counteract this. Look at your pricing policy and make changes appropriately.
From 1974-1978 all the major firms saw increased sales and net income but as time progresses and the market stops growing the firms that have best positioned themselves will begin to dominate the competition. An indicator firm success can be found in looking at firm Return On Sales (ROS). ROS = Net Income/Sales Revenue, it is a measure of firm efficiency and firms with higher ROS are demonstrating an ability to control costs and/or charge a higher price for their product(s) as opposed to competition. Lower ROS firms have lower income in relation to revenue and increasing net income is harder. In 1978 Emerson (Beaird-Poulan) and Electrolux (Husqvarna) are the industry leaders in ROS at 7.9%.
The profit percentage of assets varies by industry, but in general, the higher the ROA the better. We can see a good trend over years in the company. Comments: Return on equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity. The formula for ROE is: ROE is more than a measure of profit; it's a measure of efficiency. A rising ROE suggests that a company is increasing its ability to generate profit without needing as much capital.
There will be increase in overhead with the growth, it cannot be considered like a totally new investment. Most of the overhead costs in this scenario are already fixed costs. * Erosion of Jell-O contribution margin? * Yes. I would consider erosion of Jell-o cost as it is significant which is 20% and we have to consider that it is also growing at the same rate as powder market.
If Ms.Wang uses credit sales, she may not be able to pay bills as credit sales take longer to go into the account, this is a disadvantage. The difference of revised figures and original s an increase of cash flow forecast but the purchases increase which is taken out of the profit. The purchases have gone up is because of the retail price index (RPI). In inflation there is something called ‘anticipation inflation’, this is a type of inflation which is described when the economy is doing well, the economy is usually at it’s boom peak. The demand for a product/service goes up so the price of the service goes up.
Ans): Laddering GIC(s) is a proven method of investing (also known as a laddering strategy) it can help you reduce the risk of interest rate fluctuations and increase your portfolio's overall return. Pros will be higher returns, every year 20% of your portfolio will mature and it decreases the cons of non-cashable GIC(s). Cons will be a bit more work and attention needed by the
d) The equilibrium interest rate increases to bring desired investment into equilibrium with the reduced quantity of national saving. e) The equilibrium quantity of investment is reduced via the increase in the interest rate by an amount equal to the increase in government spending. Question 5 (15 marks) a) capital is added. No, MPK does not diminish because it does not decline as more is also acceptable. b) L = 100: L = 110: L = 120: 0. .
When there is a greater disposable personal income this will allow consumption to increase due to the money saved from the lower tax rate. Through consumption increasing this will favour economic because the gross domestic product has increased. When government expenditures are increased it will have a multiplier effect on aggregate demand. Because of the multiplier effect, the government can increase spending by only a small amount to achieve a larger, necessary increase in aggregate demand. By doing so, the economy will be able to attain an equilibrium level of real
Latam with less than 1% net profit margins has less room for execution failure than AAL with 6,66% profit margins considering small miscalculations or mistakes can be amplified in a way that leads to tremendous losses for shareholders. Once the margins reflect the firm’s production function, if margins are low, some actions such as reduce expenses, review the prices and identify the most profitable items to concentrate on achieving higher sales targets for them, could be done to improve the net profit. Asset turnover: This ratio is calculated indicates how efficiently management is able to drive sales from company assets in other words how effectively a company converts its assets into sales. The asset turnover ratio tends to be inversely related to the net profit margin as shown
Under the proposed capital structure change, the value of the firm would increase, which would also increase shareholders’ value. One measure of this improvement is EPS which is currently $0.91 (given in the case), but would jump to $1.34 ($60,570 EBIT divided by the number of new shares outstanding, 45,052), which is a 47.74% increase ([$1.34 - $0.91]/$0.91). Another benefit from the new capital structure plan is an increase in ROE from 0.11 ($53,630 net income divided by $488,363 shareholders’ equity) to 0.21 ($48,496 new net income divided by $229,363 new shareholders’ equity). With respect to the family ownership interest, the 10% stake in the company (which amounts to 5,905 shares [0.1 multiplied by 59,052 shares outstanding]) would rise to over 13% with the new plan (5,905 shares divided by 45,052 new shares outstanding). Even though Blaine is not used to borrowing, this plan does not seem too risky.