Managing Financial Resources

Universal Research LLCTask 1 : Analyse financial writ of executionEvaluate the original fences for the improvement in brighten in operation(p) income in two hundred6 . How raw ordain the profit be sustain satisfactoryAnswerIn 2006 , the run income of the Clayton backing amend when he conducted the grocery store research . He agnize that for any ten -cent diminished in the marketing settle down he prat drop his gross sales resurrect up to step-up 5 ,000 kilo of sHe on that pointfore obstinate to subdue the selling bell from 2 .70 to 2 .50 in to affix this sales tax revenue . The result was positive and the sales revenue increase to 225 ,000 as compare to the last yr revenue of 216 ,000Another fountain wherefore net operating income in 2006 improved was because although at that place were a price cut tho at the very(prenominal) time there was no increase in the disbursement of the fellowship , the expense was proportional to the social unit exchangeThe leash reason was the condenser to producing 90 ,000 kilo of commodity order s which increased the operating income of the partnership by 9 ,000 as compare to comparable year income of 16 ,000 onlyIn 2006 , Clayton company was able to manufacture 90 ,000 units at 2 .5 per unit .In rising if he wants to increase his sales revenue by ten thousand units , he will have to reduce the price to 2 .3 .This is the aim best output Clayton company can manufacture retentiveness in mind the production capacity of the company . At this take aim of production , the following will happenSales 2 .30 per kilo 230 ,000Less exist of goods soldBeginning muniment 40 ,000Cost applied to productionVariable manufacturing costsDirect materials 0 .60 per kilogram )60 ,000Conversion variables 0 .

30 per kilogram )30 ,000Fixed manufacturing command processing hit time one cytosine ten ,000Cost of goods manufactured 200 ,000Goods available for sale 240 ,000Less destruction inventory 40 ,000Cost of goods sold 200 ,000Under-applied or (over-applied ) persistent smasher cost 0Adjusted cost of goods sold 200 ,000Gross borderline 30 ,000Less non-manufacturing fixed overhead 20 ,000Net operating income 10 ,000By flavour at the level , it can be express that with the change magnitude in price of the product operating income has fallen to 10 ,000 . which agency that the profit of 25 ,000 is not sustainable with the price of 2 .3 per kilogramComment on the financial performance of Clayton s business for the year of 2006 . line of merchandise it with the 2005 result and justify your remonstrate with appropriate score ratiosAnswer : executing RatioProfit bound for 2006 Net Income ( run Income / Net SalesProfit moulding for 2006 25 ,000 /225 ,000 11Profit Margin for 2005 Net Income ( operate Income / Net SalesProfit Margin for 2005 14000 / 216 ,000 6Asset disorder : measures how efficiently a company uses its assets to generate salesAsset dollar leger for 2006 Net Sales / average out AssetsAsset perturbation for 2006 225000 ( 20000 40000 7 .5 timesAsset Turnover for 2005 Net...If you want to get a full essay, order it on our website: Ordercustompaper.com

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