stable and predictable. They have a long life cycle. The competition in the market is fierce due to this stability in demand that results in low profit margins. On the other hand‚ innovative products are the ones that have clearly unpredictable demands. They may have very short life cycle because of the imitators. But luckily their profit margin is higher compared to the functional products. The supply chain management for the innovative products should clearly be different from the functional products
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entered the rapid growth stage. Chapter 2 2. [Financial Ratios and Performance] Following is financial information for three ventures: Venture XX Venture ZZ Venture YY After-tax Profit Margins 5% 15% 25% Asset Turnover 2.0 times 1.0 times 3.0 times A. Calculate the return on assets for each firm.
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company may use cost-volume-profit analysis as a ways target their income. To calculate the required sales level‚ the targeted income is added to fixed costs‚ and the total is divided by the contribution margin ratio to determine required sales dollars‚ or the total is divided by contribution margin per unit to determine the required sales level in
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Bridgestone Behavioral Health Center: Cost-Volume-Profit (CVP) Analysis INTRODUCTION In June of the current year Dr. Thomas Russell‚ Executive Director‚ and Susan Smyth‚ Accountant‚ at the Bridgestone Behavioral Health Center were discussing the necessity of gaining a better understanding of how to monitor the Center’s operating and financial performance. Located in Cleveland‚ Ohio‚ Bridgestone provides prevention‚ intervention‚ and treatment services for individuals with substance abuse problems
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contribution margin. If you were able to provide us with the unknown information need pertaining to traceable fixed costs‚ we could better advise you on which product is most profitable and any products you may need to consider dropping. Explanation of Procedures Our team evaluated the information that you provided to us using a cost volume profit analysis. The main tool in evaluating the provided information was the breakeven analysis. We started by determining the contribution margin for each
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Questions 1. If Symonds Electronics Inc. were to raise all of the required capital by issuing debt‚ what would the impact be on the firm’s shareholders? The impact on shareholders can be analyzed by calculating the EPS and ROE of the firm under the alternative scenarios as follows: All Debt With $5‚000‚000 Expansion Current Growth in Revenues Revenues EBIT Interest EBT EBT*(1-T) # of shares EPS Debt Equity Debt/Equity Ratio Return on Equity 15‚000‚000 2‚250‚000 0 2‚250‚000 1‚350‚000 1‚000‚000 1.35
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The relationship between cost volume and profit is shown by cost-volume-profit analysis. it is an analytical tool for analyzing the relationship among cost‚ price‚ profit‚ sales and production volume. Mainly there are three element in cost-volume-profit analysis. It is highly essential for the management to have the complete knowledge about the inter relationship among the cost‚ volume and profit. for this purpose cost-volume-profit analysis can be regarded as a sophisticated method or analytical
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dollars) = Fixed cost/contribution margin ratio $7‚287.03 $7‚620.20 $11‚655.34 Break-even point in units (sale ticket) = Break-even point in dollar/Sales per tickets 4535 5000 7506 Margin of Safety = (Budgeted sales - Break-even point sales)/Budgeted sales 15.10% 5.95% -8.82% (Table 1. All the related data can be found in exhibit a.) Both the break-even point in dollars and the break-even point in units increase a lot‚ and the margin of safety drops down to negative
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International Trade Finance Assignment-1 Evaluation of Viability of the Transaction of Export of “Mobile Evaluation of Viability of the Transaction of Export of “Mobile Cases” To India from China Submitted To - Submitted By- Fernando Montero Sandeep Singh Buttar (000312846) Amanpreet Kaur (000313147)
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management team. In calculating the company’s net profit margins it becomes clearer that expenses are too high. Figure 2 indicates that margins have been consistently low ranging between 7% and 8.5% since 2002. It also shows that the margin decreased last year which is a negative trend that must be considered when analyzing financial health and future growth potential. Net profit margin 9.00% 8.50% 8.00% 7.50% Net profit margin 7.00% 6.50% 6.00% 2002 2003 2004 2005 2006 Figure
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