ratio of greatest concern to K Chapman is the net profit ratio. The net profit ratio is defined as the percentage of net profit earned on a period of time‚ (it shows how margin of profitability of the business) in this case the 2007 period. In this current accounting period‚ the net profit ratio is 20.22%. The industry average is 39%. This means there is a difference of 18.78% between K Chapman and the industry average. To improve to net profit ratio of K Chapman‚ the Costs of Goods sold will
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However‚ with growth comes a larger Inventory and a need for updating inventory systems. AS per your request‚ I analyzed your current inventory system and have identified the costs‚ sales‚ markup percentages‚ gross profits‚ and inventory levels. I also have identified your high-profit products and those that may need to be revaluated. We will first address your questions regarding the newly designed inventory analysis designed worksheet. Analysis 1. I identified the items with markups less than
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Dec 8‚ 2013 QUESTION 1: In general terms‚ banking involves the business activity of accepting customer’s deposits at a small cost to the bank and then lending those funds to customers at a cost high enough for the bank to earn a profit. The business of lending is very risky‚ therefore lenders are encouraged to apply the principles of good lending or canons of lending. Though the canons of lending do not prevent the risks associated with lending it does mitigate risks involved.
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For this Case Assignment I will show prepared income statements for E-company utilizing both variable (contribution margin) and traditional (absorption margin) methods. I will also show E-company’s computed contribution margin ratio‚ gross profit ratio and operating (net) income ratios‚ as well as explain the difference and reconcile operating income for the two methods. Additionally‚ I will discuss which method I would recommend to the CFO and why. INCOME STATEMENTS: Variable
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1. Summary of Massey-Ferguson’s 1971-176 Goals‚ Strategy and Risk/Return profile Goals/Strategy: • Focus on small tractors‚ combine harvesters and industrial machinery • Exploit markets outside North America and Western Europe • Dealing directly with governments and public institutions • Central production of diesel engines in UK Risk/Return profile: • Empire Building; engaging in potential negative NPV investments • Expanding potentially unprofitable divisions (ambitious program of expanding
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absorption costing income statement for the last quarter is given below: Thrifty Markets‚ Inc. Income Statement For the Quarter Ended March 31 Uptown Total Store $3‚300‚000 $1‚300‚000 1‚612‚000 689‚000 1‚688‚000 611‚000 Sales Cost of goods sold Gross margin Downtown Westpark Store Store $600‚000 $1‚400‚000 357‚000 566‚000 243‚000 834‚000 Selling and administrative expenses: Selling expenses: Direct advertising General advertising* Sales salaries Delivery salaries Store rent Depreciation of
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the revenue. Gross profit in 2013 is $4315.0 with $4181.0 in 2012‚ followed by $3939.0 in 2011. Net income in the consecutive three years are 5‚ -245‚ 250. There is an dramatic fluctuation appeared. Ratio analysis Year/ratio 2011 2012 2013 Industry average Current ratio 0.90 0.77 0.82 Quick ratio 0.78 0.65 0.70 Gross profit ratio 55.6 51.7 54.6 Receivable turnover ratio 13.59 13.95 12.49 Inventory turnover ratio 18.45 19.25 19.51 Net profit ratio 1.74
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meeting to discuss the findings in the cash budget has given the both of them feeling uneasy on specific details of the cash report budget. Mr. Wayne believes that the gross margin perhaps may shrink to 27.5 percent due to higher purchase price and concerned with the impact that this may have on borrowings. This a logical concern as gross margin shrinks amid higher purchasing prices/cost. As stated in Stewart (1987) pricing is a crucial but often misunderstood aspect of retailing. Questions about pricing
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A charity for profit entity exists‚ and its role is to serve a charitable mission‚ but they are legally for profit. Profit charities basically focus on revenue and runs like a company. Their aim is generating profit for their company. Because it is a charity for profit‚ they have to pay taxes for the profit they made‚ while a nonprofit charity will not be taxed. Charites for profit can be categorized into two different sections. Firstly‚ the benefit corporation charities. They can maximize their
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| Sales |Product cost | |- COGS |DM |-Variable Expenses |DM | |Gross Profit |DL |Contribution Margin |DL | | |VMOH |
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