Swan Valley Farm Business Report.
Revenue on sale
Swan Valley Farm business entity should make precise decisions as per the variance report analyzed.
Trends: according to the economic trends on the sale of dried apricots the highest revenue is achieved by the company by selling apricots with 20 tons and furthermore 20 tons has the highest probability of purchase occurrence by the Kellogg’s food store. Also using the historical share prices, the Swan Valley Farm business is able to predict the stream of future revenues on the sale of 30 ton variety. The company should base their decision on trend analysis of the revenue and cost of production before they sign the contract with the growers. General food store has higher demand and revenue compared with Kellogg’s hence a major customer in the supply. Given that the two companies i.e. Kellogg’s and General Food are operating in the same asset-liabilities level the Swan Valley Farm will tend to prefer signing a contract with the growers on investment portfolio to produce 20 tons and 30 tons of dried apricots. This is because from the revenue analysis it’s indicates that it has high chance of probability of demand by the Kellogg’s and General Food company since despite its increase in cost of production it still has the highest return on equity compared with compared with of 10 tons and 20 tons only. The company should put more consideration on the return on equity ratio, since its need an investment that can earn them highest return. Also on consideration of short run and long run results Swan Valley seems to be a stable company i.e. has not reached its maximum profit level hence room for production increase. This means in the short run will be having stable profit, return on asset and high profit margin.
Cost of production
Production cost is not a critical decision since it’s a dependent factor on the