The Board Of Directors Of Food For Life

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INTRODUCTION The company Food-For-Life had an annual meeting to review the company’s current objectives which is to achieve the following: • To maintain a profit margin around 24% • To ensure the current strong financial position is maintained • To satisfy the shareholders by maintaining a dividend payout ratio of 40% As members of the financial department at Food-For-Life Limited our goal is to: 1) Review the company’s objectives, 2) Prepare and advise on the company’s 3 year plan and 3) To evaluate the capital investment intended and its added value. In this report you will realize that there was a constant growth and we also realize that there will be a financial problem in the future as sales revenue begin to decline after 2017,…show more content…
All these strategies can be adopted in order to compete with Organic Foods but it all amount to expenses. Since it wants to compete, the operating expenses will then increase; as such revenue will also decrease or increase depending on several factors. If that happens maintaining a profit margin of 24% cannot be achieved in the short term but it can outweigh its competitors in the long run. As you know food for life is maintaining a profit margin of 24% already, and there is no information regarding its investment plans. Secondly, to ensure that the current strong financial position is maintained, is one of the key objectives of a company. If a company such as Food-For-life can maintain this position, it will attract a lot of investors and that will result in its progress in terms of profits but since it wants to outweigh its competitor that is Organic Foods, their financial position could be affected. This is because certain strategies, which were listed above, will involve funding and these funds will come out of the company’s budgets and when such occurs that objective of maintaining their objective would not be achieved. Currently as at 2014, the company has in cash £60 million, which is their current financial position, but if they want to outweigh their competitors they have to
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