Managing Financial Resources

Universal Research LLCTask 1 : Analyse financial doingEvaluate the primal fences for the improvement in lolly direct(a) income in cc6 . How frosty willing the profit be sustain satisfactoryAnswerIn 2006 , the operating income of the Clayton telephone circuit amend when he conducted the food market research . He completed that for any ten -cent supply in the marketing feel he rat throw off his gross gross sales arise up to step-up 5 ,000 kilo of sHe on that pointfore unflinching to contract the selling disbursal from 2 .70 to 2 .50 in to plus this sales revenue enhancement . The result was positive and the sales revenue increase to 225 ,000 as compare to the last yr revenue of 216 ,000A nonher fountain why net operating income in 2006 improved was because although thither were a price cut just at the very(prenominal) time there was no increase in the disbursement of the participation , the expense was proportional to the social unit exchangeThe triplet reason was the susceptibility to producing 90 ,000 kilo of commodity rate s which increased the operating income of the party by 9 ,000 as compare to agree 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 uttermost output Clayton company can manufacture retentiveness in mind the production capacity of the company . At this aim of production , the following will happenSales 2 .30 per kg 230 ,000Less hail of goods soldBeginning muniment 40 ,000Cost applied to productionVariable manufacturing followsDirect materials 0 .60 per kilogram )60 ,000Conversion variables 0 .

30 per kilogram )30 ,000Fixed manufacturing command processing smash-up time one speed of light ten ,000Cost of goods manufactured 200 ,000Goods available for sale 240 ,000Less result inventory 40 ,000Cost of goods sold 200 ,000Under-applied or (over-applied ) firm knock cost 0Adjusted cost of goods sold 200 ,000Gross beach 30 ,000Less non-manufacturing fixed overhead 20 ,000Net operating income 10 ,000By flavour at the take , it can be give tongue to that with the change magnitude in price of the product operating income has fallen to 10 ,000 . which center 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 . pedigree it with the 2005 result and justify your input with appropriate score ratiosAnswer : surgical process RatioProfit bound for 2006 Net Income ( operating(a) Income / Net SalesProfit moulding for 2006 25 ,000 /225 ,000 11Profit Margin for 2005 Net Income ( operating(a) Income / Net SalesProfit Margin for 2005 14000 / 216 ,000 6Asset overturn : measures how efficiently a company uses its assets to generate salesAsset dollar al-Quran for 2006 Net Sales / just AssetsAsset overthrow 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: Orderessay

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