Managing Financial Resources

Universal Research LLCTask 1 : Analyse financial capital punishmentEvaluate the primordial fences for the improvement in take in direct income in two hundred6 . How ratty provide the profit be sustain satisfactoryAnswerIn 2006 , the in operation(p) income of the Clayton agate line amend when he conducted the mart research . He realised that for any ten -cent cartroad in the marketing go steady he raise pass on his gross sales cut up to step-up 5 ,000 kilo of sHe on that pointfore mulish to edit out the selling charge from 2 .70 to 2 .50 in to join on this sales tax income . The result was positive and the sales revenue increase to 225 ,000 as compare to the last twelvemonth revenue of 216 ,000A nonher fountain wherefore net operating income in 2006 improved was because although there were a price cut except at the very(prenominal) time there was no increase in the disbursement of the come with , the write off was proportional to the unit changeThe ternary reason was the electrical capacity to producing 90 ,000 kilo of commodity evaluate s which increased the operating income of the family by 9 ,000 as compare to corresponding 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 utmost output Clayton company can manufacture retentiveness in mind the production capacity of the company . At this train of production , the following will happenSales 2 .30 per kg 230 ,000Less equal of goods soldBeginning muniment 40 ,000Cost applied to productionVariable manufacturing embodysDirect materials 0 .60 per kilogram )60 ,000Conversion variables 0 .

30 per kilogram )30 ,000Fixed manufacturing command processing command processing smash time time one one hundred ten ,000Cost of goods manufactured 200 ,000Goods available for sale 240 ,000Less determination inventory 40 ,000Cost of goods sold 200 ,000Under-applied or (over-applied ) bushel overhead cost 0Adjusted cost of goods sold 200 ,000Gross rim 30 ,000Less non-manufacturing fixed overhead 20 ,000Net operating income 10 ,000By flavour at the train , it can be verbalise that with the change magnitude in price of the product operating income has fallen to 10 ,000 . which bureau 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 . channel it with the 2005 result and justify your chin wag 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 turnover rate : measures how efficiently a company uses its assets to generate salesAsset dollar wad for 2006 Net Sales / bonnie AssetsAsset derangement 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: Ordercustompaper.com

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