The Role Of Become A Profitable Business

• Net profit margin has been negative and no major patterns over the 9 year period on net profit since the trend of the industry is based mostly on economic factors, and whether or not they secure contracts. Due to high percentage of COGS they are only left with a net profit of $980 or

Profitability ratios are functions of both the industry and a company’s position within the industry. The boundaries are set by the operating characteristics of the industry, within these boundaries profitability ratios are determined by a player’s relative position. Gross profit margin should stay constant or increase because cost of goods sold should be a constant percentage of sales or should decrease as the company’s price increases and/or volume discounts. Gross profit margin was slightly favorable stable at 28%. The horizontal analysis information showed that sales had been averagely increased by 26% from 2001 to 2003.However the operating cost had been averagely increased by 27%.

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.

They should provide discounts to retailers, which will provide better margins and more services in order to influence purchaser at the point of sale. One price for all retailers avoids channel conflict. Track retailer behavior to provide varying volumes of sales call. Adopt ways to improve relationship on one to one basis. Also, think of education on retail front. Sales people are the key figures for selling their products they should motivate them, by providing incentives, rebates commissions etc the sales people should make surprise visits, as a customer to see how their products are being displayed and to study the customer's behavior towards their products. They should provide the retailers with physical space for better inventory management, loss of sales were accounted, because there was no replenishment.

Management should note that the level of activity was above what had been planned for the month. This led to an expected increase in profits of $1,100. However, the individual items on the report should not receive much management attention. The favorable variance for revenue and the unfavorable variances for expenses are entirely caused by the increase in activity.

The most noticeable growth in this section is seen in sales from 2002 to 2003. These sales have increased from 3.7% in 2001-02 to 23.5% in 2002-03 after the expansion of the store. This truly helps the company to a positive way when seeing such drastic changes. Net earnings have almost doubled and gross profit was on the rise as well, which is also a positive trend for the company that will not go unnoticed. This indicates a positive correlation and increases in profitability.

There is an general increase of sales when the income statement is provided. “The income statement reports the revenues and expenses for a specific time period.” (Weygandt, J. Kieso, D. Kimmel, P. 2008) The format of an income statement is listed with revenues first then expenses. Net loss is when the expenses exceed the revenue and net income is

A person can see from the analysis that both companies had a fewer profits in 2005 over 2004. The increase of operation expenses was the cause of low net profits. Both companies need to rethink their operating cost to decrease their expenses which in return can help increase their profit margin.

In its first year of operation, the company produced 10,000 units but was able to sell only 9,000 units. In its second year, the company needed to get rid of excess inventory (the extra 1,000 units produced but not sold in 2011), so it cut back production to 8,000 units. Required a. Calculate profit for both years using full costing. b. Note that profit has declined in 2012. Is company performance actually worse in 2012 compared to 2011?

5) Increase of Sales Promotions - by encouraging the staff to get involved with these promotions, this will bring many financial benefits to the organisation.

They need to continue their efforts to build relationships with their customers and with their employees. Their employees truly are they key to their success because they interact with the consumers daily and help set the vibe for the store.

As suggested earlier, Denver Department Stores has been experiencing declining sales over a period of a few months, though the actual reason why this is happening is unknown.  A general consensus of the employees is that there have been fewer customers recently, however, management has placed the blame on the employees for not working hard enough to make a sale.  Initially, as sales began to decline, employees were somewhat social, and appear to have spent more time speaking with customers.  To remedy the issue of falling sales revenue, management has implemented a tally card system to encourage the employees to work harder at making sales.

The writer has a career as a Supplier Development Engineer in the Automotive Industry. The products produced include interior and exterior door handles and exterior mirrors. Although there are other automotive supplier’s who produce the same products, generally there are only a handful of these suppliers. Therefore, understanding the market for the products produced affects production on a supply and demand level. Changes in the economy in 2009 affected the production levels of our products. Vehicles were not selling, especially the larger SUV’s and truck platforms. Due to the decrease in demand, it created a surplus in the quantity of product on-hand. What did not occur, however, is a change in the price of the products. The product prices remained constant. What did change was the number of employees, which was reduced by 25% as well as a reduction in salaries for all employees. These reductions compensated for the pricing of the products not changing.

To help Maria, one solution would be to profit share, which can be a decent framework to remunerate and inspire high level workers. Plus, if your workers owned your business themselves, they would have an altogether different viewpoint in regards to the business than they presumably do as hourly or salaried workers. As skiers and snowboarders, we possess the tools to enter a community or mountain environment that can instantly feel like home, even if it is very far away and has its own distinct character. (Santella et al., 2013, p .35) That is how Maria wanted her stores to feel like:

Also, the gross profit had a lower increase(+9.67%), that means the cost of sales increased more than the revenue increase in term of percentage. There was a 13.16% rose in net operating expense as both selling and distribution costs and administrative expenses increased. One of the reasons why net operating expense increased because the firm had a programme of reinvesting for organic growth which supply chain, IT and store portfolio had improved. The rose of the net operating expense lead to a 2.13% drop in the operating