profit margin which is 5.48% in 2006 and decreases gradually in the following years to 1.08% in 2008. This is because the increment of cost of sales, EPM is profiting only 1.08% for every dollar of product sold in 2008. Besides that, the inventory turnover ratio is used to measure the inventory management efficiency of a business. It is an activity/ efficiency ratio and it measures how many times per period, a business sells and replaces its inventory
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32%, which is quite high compared to other industries, which makes sense given their high plant and equipment percentage. This tells us most of their financing comes from borrowings, making this a highly leveraged industry. Also, their inventory turnover ratio of 2.3 correlates with their low inventory percentage of 3%, which essentially tells us, they are not incurring many costs of goods sold. Moreover, the profit margin here is at .09, which is higher than most of the other industries, and it
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(PGP30340); Arjun (PGP30186); Abhishek (PGP29368) ===================================================================================== Q9: How would you model a new objective (in addition to cost minimization) that the all-India average inventory turnover ratio for the Plant-to-Depot pipeline is above a minimum target value? Suggest a suitable extension/ modification of the MILP model proposed in the class. a= subscript which represents SKU’s b= subscript representing factory c = subscript representing
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Footnote:/ Bottom of the slide: Substance: How the numbers were computed? Sales are recognized at the “point of sale,” which occurs when merchandise is taken in an “over-the-counter” transaction or upon receipt by a customer in a shipped transaction, such as through the Internet and catalog channels. Revenue associated with gift cards and merchandise credits is recognized upon redemption. Sales are reported net of returns, sales tax and other similar taxes. Shipping and handling fees billed to customers
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Overview Clarkson Lumber Company is a classic example of a privately held company that has experienced a rapid growth in sales and has reached a point where it is facing a shortage of cash to sustain the expected growth in sales in the following years. The owner, Keith Clarkson, bought out his partner’s interest in the company in 1994 for $200,000. His partner, Henry Holtz, took a note for the $200,000 with an interest rate of 11% and was repayable in the semi-annual installments of $50,000 beginning
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General Mills (NYSE: GIS) is not just a cereal maker, it is one of the largest packaged food producers in the world. Starting as a successful flour mill near the Mississippi River, it has grown to own some of the most recognizable brands, including Cheerios, Wheaties, Progresso Soup, Hamburger Helper, and Fruit Roll-Ups. Some of its #1 and #2 market-leading brands are Better Crocker, Gold Medal, Green Giant, Pillsbury, and Yoplait. General Mills operates in more than 130 countries worldwide and
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Chapter 10, Practice Examination 2, Question 3 1. Identify five (5) business factors and provide an explanation of each factor’s impact on risk of material misstatement. Also identify the account most affected | |Business factor |Explanation of impact |Account | |(a) |Debt covenants |Possibility of accounts (current |Current asset | | |
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generated less cash over the year than it needs to pay off short-term liabilities as at the year end. This may signal a need to raise money to meet liabilities. * Inventory risk. The inventory turnover ratio dropped from 8.5 in the first quarter of 1998 to a low of 2.9 in the first quarter 2000. A low turnover is usually a bad sign because products tend to deteriorate as they sit in a warehouse. It shows that the company wasn’t managing its sales growth well. * Financial structure risk. At the
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Acer Incorporated Financial Statement Analysis Project Company History: Acer Incorporated was called "the region's most impressive technology company" in a 1996 article in The Economist. The company also ranks among the world's ten biggest manufacturers of individual components like keyboards, monitors, and CD-ROM drives, and is America's ninth-largest personal computer producer. By 1995, the company was producing four million PCs annually, 25 percent of them OEMs (products sold under other
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controlling expenses, the effect of low assets utilization would be minimized. It is important for the business to utilize its assets, increase its turnover, and recover receivables in time in order to remain in business. If Reeds can do this, the bank will feel more comfortable with increasing its line of credit. If company cannot raise the asset turnover by increasing sales, then they would need to reduce their inventory by selling it quickly; this could be done by having sales to generate cash as
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