National Fabricators Essay

Although the company did show an increased gross profit of $8,255,000 with $6,358,000 less Net Sales in 2013 versus 2012, that increase is due to the reduction in product Cost of Goods Sold by $14,613,000. Since increases in product price will negatively affect sales, one of management’s primary goals is to keep prices stable. This objective is achieved through implementation of cost cutting programs, investing in more efficient equipment, and automation of more steps in the production process.

So while the company increased its net income, it has done so with diminishing profit margins.

The gross profit margin for CC is right around the industry average. Although the numbers seems to be decent, the costs of goods sold are too high. Next, looking at the operating profit margin, the numbers don’t look as great as they should. The numbers are low compared to the industry average in years 2001, 2004, and 2005. This may indicate that CC should look into their prices and costs. In 2001 the net profit margin was very low compared to the industry average. I am assuming this is due to the major expansion. It is also important to look more deeply into the numbers though because the net profit margin is lower compared to the industry average in all of the years. Once again CC should look into their costs and how efficient they are converting sales into actual profit.

The income over the last three years has been fluctuating.. This tells us the company has an initial growth period. Sales also drop between years 7 and 8 and the gross profit margin decreased as well. This may be due to operating expenses. This leads to the prospect of stable future sales. The stakeholders are continuing to back the company and the company does predict sales will remain stable. The modest increase in sales does not show enough to recover without making adjustments to free capital.

On the other hands, business will do what they can avoid profit loss; this could increase competition. Increase in sales from the

In addition to affecting profits by adjusting useful life and depreciation; key ratios will also be affected. The net profit margin can be influenced both ways to fit the purpose of business strategy. It could be increased to make it seem more profitable, or it can be influenced in a negative way to write off as much expenses as possible – if the year held disappointing results – in order to show next year more positively in comparison.

Increased competition in the market and other environment changes resulting in adverse impacts to financial performance,

A typical Gross profit margin depending on the industry may be 25 to 30%. Nucor’s Gross profit margin ratio indicates that industry is intense and cost of goods is one of the main of factor in profitability. After examining the five year

Q1. Based on the 2004 statement of profit and loss data (Exhibits 1 and 2), do you agree with Water’s decision to keep product 103?

Cost of goods sold in store 3 was 58.5% of sales in 2011 and in 2012 it dropped to 50.3%. This is odd because sales and inventory had increased from 2011 to 2012. When sales increase costs of goods should rise respectively. If a business is becoming more profitable the inventory generally doesn’t increase considerably. This increase in inventory could be due to obsolescence. All of these factors don’t add up to an increase in sales.

In relation to the revenue and profits, MW’s Net Annual Cash Flow is low being negative £1,057,000 before the input of cash at the beginning of the year and foreign exchange differences. The total

In vertical analysis, it is easier to see elements as a percentage of Revenue. Between 2011-12, the portion that cost of sales takes in revenue has increased however, there is a bigger deterioration in distribution cost. In 2011, 9.21% of revenue remains as profit but in 2012 this figure decreases to 8.14%. Despite reduction in costs is one of the strategies of Ted Baker(part 1.4), analysis illustrates that costs increase each year.

This factor of other firms venturing the market with low prices will finally lead the existing firms in industry to incur very big losses and this will force them to adjust, by lowering their

In the U.S. the motor industry employed in 2008 around 880,000 workers that is around 6.6% of the manufacturing workforce and this include workers who put cars together to the workers who assembles the motors for these vehicles, since the turn of the decade the automotive industry has managed to eliminate 435,000 of manufacturing jobs that is equal to 3.3% of all manufacturing jobs that existed in 2008.

cost-of-goods-sold section might be in relation to the sales total. In the case of a merchandising firm,