Who is Avon’s target market? How can it be segmented?

Advertising and transportation forecasted costs should have also decreased but instead, increased. Although an increase in advertising was recommended, the additional costs were not accounted for in the flexible budget. Transportation out is covered by a per unit contract so the decrease in sales should have reflected a decrease in transportation out costs. Both of these costs should have decreased with the decrease in sales like direct materials did. These negative variances indicate the company cannot control costs. This could be caused by a number things: fraud, miscommunication, poor forecasting, unexpected economic changes, etc. Competition Bikes needs

For example, factory production declines from weeks 10-17 because of low margins. Factories cannot produce normally because of the cost constraints facing them. The positive value seen at week 18 means that factories have addressed cost issues hence can meet market demand. A positive trend emerges during week 18 as seen from factory with 1unit and 9units for distributor. The value of -24units from retailers in the same week means that factories can produce but remain cautious about meeting previous production

* Return on assets (ROA) – ROA shows how successful a company is in generating profits on the amount of assets they own. Since assets consist of debt and equity, ROA is a measure of how well a company converts investment dollars into profit. The higher the percentage, the more profit a company is generating per dollar of investment. Similar to ROS, this ratio needs to be looked at compared to the industry as different industries have different requirements that can affect ROA. For example, companies in the airline and mining industries need expensive assets to operate so will have lower ROA’s compared to companies in the pharmaceutical or advertising industries.

The next four variances were favorable ones for the company. Direct materials, direct labor, manufacturing overhead, and variable selling expenses all had favorable variances. This is to be expected as the company sold fewer units than they had projected for. Competition should be spending less on variable expenses when they are producing less than expected.

One such metric used by security departments and many organizations to ensure capitol is allocated in the areas it will do the most good is known as return on investment (ROI). ROI looks at the total amount of capital expenditures for the budgeted item or project. Management can then assess whether the total cost of the system provides the necessary return on investment to justify the expenditure. For example, if a security department was installing a new employee badging system, management would look at the capital cost of the system to assess if it provides the necessary return on investment by preventing unauthorized access and protecting

The Return on Equity ratio is a measure of the efficiency with which a company employs owners’ capital. It

From the calculation (See Appendix I), we get the 3-sigma control limits for the process, i.e. UCL=0.091, LCL=0.014. These control limits indicate that if the error proportion is within the range of [0.014, 0.091], the process is under control; if not, the process is out of control.

The historic average returns from 1950 to 1996 and from 1929 to 1996 are given In Exhibit 3. We chose the latter time period as we considered it would give us a more reliable estimate of the risk-free rate by discounting both the Second World War and the Great Depression. It is necessary to evaluate the expected length of the project and utilize a risk free rate applicable for the same time period. Ameritrade is investing $100 million dollars in technology, which is considered a long-term investment, in order to become the largest brokerage firm. We consider their

ROI for Sample CO. is $350 / $7,196 = 4.8% using net income. If operating Income is used we have $498 / $7,196 = 6.9%. An additional measure used for ROI is the DuPont Model. The DuPont model figures are ($498 / $8,251) * ($8,251 / $7,196) = 6.0% using operating income. These are somewhat low when compared to the average.

Systematic risk is the only relevant measurement, according to CAPM. Undiversified shareholder and bankruptcy can complicate this form of measurement. It means the measurement could not work. In addition to the systematic risk measurement, we could also use the contribution to firm risk measure.

The historical roots on Return on Investments (ROI) have an extensive historical background which involves the Du Pont system. It is significant to illustrate the major history behind the Return on Investments (ROI) and how the Du Pont system started. The purpose of the Return on Investment (ROI) is to evaluate the efficiency of an investment or compare the efficiency of various investments. In addition to (ROI) share the common class of profitability ratios. Several examples will show how Return on Investments (ROI) and the Du Pont system has established life-long formulas to help indicate growth or decline on financial investments.

The Gap Inc. is a global specialty retailer that operates stores selling casual apparel and accessories for men, women, and children (Yahoo Market Guide, 2001). Under the Gap, are the Old Navy and Banana Republic brands (Yahoo Market Guide, 2001).

Companies across the world are determined to compete for the survival of their brands. The magnitude of success of the marketing and advertising strategies of a new or existing product is majorly depended upon the organization itself. As a matter of stated facts when an organization advertises its products in the market they first have to identify the relevant answers of some questions like what is the product aiming at? What benefits will the user seek by this product? How the organization plans to position itself within the market and what differential advantages will the product offer over the competitors. Because the bottom line of all marketing and advertising campaigns, is to provide the suitable collection of benefits to the end users of the product. Successful companies are usually recognized as iconic brands. Success of a

Planning system weaknesses: To begin with, fundamental assumptions, such as new plants, inventory carryovers, packaging trends, etc., which are used for initial sales forecast, are entirely made by corporate headquarters. However, the divisional managers assume full responsibility for the estimates they submitted to the corporate head office. As a result, they have to make efforts to increase the overall accuracy of forecast and avoid making changes in subsequent reviews of the budget. Moreover, each product line uses the same forecasting method. It is ineffective for the company to make accurate budget since factors affecting each product line are different, such as industry trends, customer preferences and so on. Lastly, instead of plant managers, the district sale managers raise the sales budgets. However, the plant managers are held accountable for this budgeted profit number, which is connected with their performance and is not controlled by them.

As indicated by the case study S&P 500 index was use as a measure of the total return for the stock market. Our standard deviation of the total return was used as a one measure of the risk of an individual stock. Also betas for individual stocks are determined by simple linear regression. The variables were: total return for the stock as the dependent variable and independent variable is the total return for the stock. Since the descriptive statistics were a lot, only the necessary data was selected (below table.)