QUESTION 2 Sweets plc is a long-established sweets and confectionery manufacturer. All products are manufactured in the UK, but sales are made worldwide. It is a growing but competitive market. Given below are extracts from their financial statements, Revenue Cost of sales Gross profit Profit and Loss statement for the year ended 31st December 2020 £m 6,441 (3,096) 3,345 Distribution costs Marketing and selling costs Administrative expenses Operating profit Profit/loss on sale of fixed assets Investment income Interest payable Profit/(loss) before taxation Taxation Profit for the year 2021 £m 6,738 (3.235) 3,503 (437) (1,324) (937) 805 19 22 (226) 620 (189) 431 (422) (1,274) (950) 699 (5) 26 (181) 539 (173) 366
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Required:
a. Calculate the following ratios for Sweets plc for 2021 and 2020, showing the formulas and workings:
4- Net profit margin
5- Asset turnover
6- Stock holding days
7- Debtors collection period
8- Current ratio
9- Gearing ratio
10- Interest cover
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Solved in 3 steps
- Customer profitability, customer-cost hierarchy. Enviro-Tech has only two retail and two wholesale customers. Information relating to each customer for 2017 follows (in thousands): Wholesale Customers Retail Customers North America South America Wholesaler Wholesaler Green Energy Global Power Revenues at list prices Discounts from list prices Cost of goods sold Delivery costs Order processing costs $375,000 25,800 $590,000 $175,000 $130,000 47,200 8,400 590 285,000 510,000 144,000 95,000 2,230 2,180 4,550 6,710 2,145 3,820 5,980 1,130 Cost of sales visit 6,300 2,620 2,620 1,575 Enviro-Tech's annual distribution-channel costs are $33 million for wholesale customers and $12 million for retail customers. The company's annual corporate-sustaining costs, such as salary for top management and general- administration costs are $48 million. There is no cause-and-effect or benefits-received relationship between any cost- allocation base and corporate-sustaining costs. That is, Enviro-Tech could…Some financial data for each of three firms are as follows: 1. JEFFERSON JAKE'S LAWN CHAIRS SARASOTA SKY LIGHTS WHOLESALE Average selling price per unit Average variable cost per unit Units sold S 97.77 $ 32.00 $ 875.00 $ 87.00 $ 17.38 $400.00 18,770 $120,350 2,800 $850,000 11,000 $89,500 Fixed costs What is the profit for each company at the indicated sales volume? a. What is the break-even point in units for each company? b. What is the degree of operating leverage for each company at the indicated sales volume? с. If sales were to decline, which firm would suffer the largest relative decline in profitability? d.Santana Rey expects second quarter 2022 net income of Business Solutions's line of computer furniture to be the same as the first quarter's net income (reported below) without any changes in strategy. Sales were 136 desk units (sales price of $1,250) and 76 chairs (sales price of $500). BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement* For Quarter Ended March 31, 2022 Sales Cost of goods sold* Gross profit Selling, general, and administrative expenses Sales commissions (10%) Advertising expenses General and administrative expenses Net income *Reflects activity only related to the computer furniture segment. † Sales: (136 × $1,250) + (76 × $500) = $208,000. ‡ Cost of goods sold: (136 × $750) + (76 × $250) = $121,000. Santana believes that sales will total 180 desks and 129 chairs for the next quarter if selling prices are reduced to $1,150 for desks and $450 for chairs and advertising expenses are increased to $14,880 for the quarter. Product costs per unit and…
- D Question 1 Examine the following income statement. What is the value of NMC? (Round your answer to the nearest dollar. Do not enter the dollar symbol.) Table 1. Hypothetical Income Statement Item Total Sales Revenue Cost of Goods Sold Parts & Materials $2,500,000 Direct Labor $1,000,000 Gross Profit Margin Marketing Expenses Salesforce Expenses $1,500,000 Sales Commissions $500,000 Trade and Media Advertising $300,000 Point-Of-Sale Materials $100,000 Coop Ad Allowances $500,000 Shipping Expenses $800,000 Manufacturing Overhead General & Administrative Expenses Administrative Overhead $250,000 Executive Salaries & Benefits $400,000 Operating Profit Dollar Amount $12,079,499 $3,500,000 $6,500,000 $3,700,000 $800,000 $650,000 $1,350,000Here are data regarding Acme Company, which is a merchandising company: Net operating income Variable selling expenses Cost of goods sold Fixed administrative expenses Fixed selling expenses Variable administrative expenses What are the company's sales? O $453,000 O $430,000 $ 23,000 $ 25,000 $310,000 $ 50,000 $ 40,000 $5,000O Problem Set: Module 4 1. EX.06.01 2. PR.06.02A ALGO 3. BE.06.02.ALGO 4. BE.06.03.ALGO cengagenow.com ● Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $188 per unit during the current year. Its income statement is as follows: Sales Cost of goods sold Gross profit Expenses: Selling expenses Administrative expenses Total expenses Cost of goods sold Selling expenses Administrative expenses Total variable costs Total fixed costs $16,000,000 10,600,000 Operating income The division of costs between variable and fixed is as follows: Fixed Unit variable cost Unit contribution margin + 40 Variable 70% 75% 50% $188,000,000 (101,000,000) $87,000,000 (26,600,000) $60,400,000 Management is considering a plant expansion program for the following year that will permit an increase of $11,280,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs. Required: 1. Determine the…
- Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Target Corporation (TGT) is one of the largest value-priced general merchandisers operating in the United States. Target sells through nearly 1,800 brick-and-mortar stores and through the Internet. Amazon and Target compete for customers across a wide variety of products, including media, general merchandise, apparel, and consumer electronics. Cost of goods sold and inventory information from a recent annual report are provided for both companies as follows (in millions): a. Compute the inventory turnover for both companies. Round all calculations to one decimal place. b. Compute the number of days sales in inventory for both companies. Use 365 days and round all calculations to one decimal place. c. Which company has the better inventory efficiency? d. What might explain the difference in inventory efficiency between the two companies?Use this a pivot table to calcuate the number of total sales revenue, total profit and average profit margin for each product category: Product Category Sum of Quantity Sum of Equipment Cost Sum of Sale Amount Bar Equipment 510 11504.3726 31277.3 Commercial Appliances 730 143395.992 218123.25 Concession Equipment 352 155565.7424 240188.6 Fryers 1874 44151.6007 73716.1 Ovens and Ranges 605 491640.5884 645171.45 Refrigerators and Coolers 457 457926.0049 675414.5 Warmers 395 431708.5537 467847.3 Grand Total 4923 1735892.855 2351738.5Please send answer in chart format Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income AverageInvested Assets Electronics $ 39,840,000 $ 2,988,000 $ 16,600,000 Sporting goods 25,200,000 2,142,000 12,600,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?
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