Appendix B Profitability Analysis Solutions to Questions B-1 Absolute profitability measures the impact on overall profits of adding or dropping a particular segment‚ such as a product or customer‚ without making any other changes. B-2 Relative profitability involves ranking segments‚ each of which may be absolutely profitable‚ for the purpose of making trade-offs among the segments. Such trade-offs are necessary when a constraint exists. Otherwise‚ they are not necessary. B-3 Every business
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Airline Profitability in NIGERA In a 2008 interview with VIA Magazine‚ Richard Branson‚ founder of Virgin Airways‚ said‚ “I’ve always said the easiest way to become a millionaire is to start out a billionaire then go into the airline business.” The airline business has been somewhat of a mixed bag; that is until 2010 when airlines were at their most profitable. According to the Wall Street Journal‚ since 1978 airlines have experienced lagging profits‚ but in 2010 they posted half year profits
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FINANCIAL STATEMENTS Accrual-based approach – revenues are recorded at the point of sale and costs when they are incurred‚ not necessarily when a firm receives or pays out cash Cash flow approach – used by financial professionals to focus attention on current and prospective inflows and outflows of cash 1. Balance sheet a. Assets Cash and Cash Equivalents Marketable securities Accounts receivable Inventories Net property‚ plant and equipment Intangible assets b. Liabilities Accounts
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Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are sold quickly and at relatively low cost. The term FMCGs refers to those retail goods that are generally replaced or fully used up over a short period of days‚ weeks‚ or months‚ and within one year. This contrasts with durable goods or major appliances such as kitchen appliances‚ which are generally replaced over a period of several years. FMCG have a short shelf life‚ either as a result of high consumer demand
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expense a good indicator of the cost of using those buildings and equipment? Compare that situation to a company with new buildings and equipment where there will be large amounts of depreciation expense. The remainder of our explanation of financial ratios and financial statement analysis will use information from the following income statement: Example Corporation Income Statement For the year ended December 31‚ 2011 | | Sales (all on credit) | $500‚000 | Cost of Goods Sold | 380
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Topic Gateway Series Customer profitability analysis Customer profitability analysis Topic Gateway Series No. 55 1 Prepared by Jasmin Harvey and Technical Information Service January 2009 Topic Gateway Series Customer profitability analysis About Topic Gateways Topic Gateways are intended as a refresher or introduction to topics of interest to CIMA members. They include a basic definition‚ a brief overview and a fuller explanation of practical application. Finally they
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sources used A hotel is an establishment that provides lodging paid on a short-term basis. The provision of basic accommodation‚ in times past‚ consisting only of a room with a bed‚ a cupboard‚ a small table and a washstand has largely been replaced by rooms with modern facilities‚ including en-suite bathrooms and air conditioning or climate control. Additional common features found in hotel rooms are a telephone‚ an alarm clock‚ a television‚ a safe‚
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ANALYSIS OF FINANCIAL STATEMENTS Financial statement analysis is the study of relationships between the elements of the same statement or different financial statements and the trend of these elements. The purpose of financial statement analysis is to determine the meaning and significance of the data contained in the statements so that a forecast may be made of the prospects for future earnings‚ expected dividends and the ability of the business to pay interest and debt as it matures. Financial
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International Accounting 1. What industry is Disney in ? 2. Does Disney make money ? (IS) 3. Trend of 3 years 4. Makes Money ? YES : How much ? (IS) – Gross Margin and Net Income Margin – Ratio Analysis 5. Liquidity (Cashflow/BS) 6. How is Disney doing compare to competitors ? 7. ROE and ROA (IS/BS) 8. Future Prospects 9. Pricing Strategy 10. Marketing Strategy I. Return on Investment Return on Equity (ROE):
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140 SU 3: Profitability Analysis and Analytical Issues QUESTIONS 3.1 Profitability Ratios Questions 1 and 2 are based on the following information. The financial statements for Dividendosaurus‚ Inc.‚ for the current year are as follows: Balance Sheet Cash Accounts receivable Inventory Net fixed assets Total $100 200 50 600 $950 Accounts payable Long-term debt Capital stock Retained earnings Total $140 300 260 250 $950 1. Dividendosaurus has return on assets
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