Look at the financial statements excerpted from the Foundation FastTrack and answer the following questions, explaining...

Transcribed Image Text:

Look at the financial statements excerpted from the Foundation FastTrack and answer the following questions, explaining the reasons and justification for your answers. 1) Look at the income statement survey. Notice that Andrews has sales of 74,492,100 and Erie have sales revenue worth $65.2 million. However, Andrews only made a profit of $ 1.1 million but Erie had a profit of $8 million. a. Why is Andrews selling well but making such low profits? (4 points) b. What could Andrews have done differently to achieve higher profits? (4 points) 2) Look at the income statement survey. a. Calculate the contribution margin and the net profit margin (return on sales) for Andrews and Erie. Compare the two companies and analyze the differences in their financial management based on your calculations. (12 points) b. Calculate SGA as a percentage of sales revenue for both Andrews and Erie and analyze the differences in their financial management. (6 points) 3) Why did Andrews take an emergency loan? (4 points) 4) Calculate the ROS for the six companies. Which company is the most profitable? (8 points) 5) Calculate the contribution margins of the 6 companies. Which company has the best contribution margin? Is this good enough? Why or why not? (10 points) 6) Look at the production page of the FastTrack below and explain why the company with the highest contribution margin in question 5 was able to achieve this. (6 points) 7) Calculate the Net Margins for the 6 companies. Which company has the highest Net margin? Is this good enough? Why or why not? (10 points) Income Statement Survey Sales Variable Costs(Labor, Material, Carry) Depreciation SGA(R&D, Promo, Sales, Admin) Other (Fees, Writeoffs, TQM,Bonuses) EBIT Interest(Short term, Long term) Taxes Profit Sharing Net Profit Production Analysis Baker Bold Cake Cent Name Segment Sold tory Able Low Alman High ANew Daze Dabble Dust Eat East Fast Feast Primary Units Inven Low High Low Low Low High Low Low High High 1,246 769 0 1,706 800 1,412 900 偏㎜雪冽。 Unit 1,447 1,321 1,087 390 347 0 321 154 333 823 207 0 0 259 25 201 0 1,027 145 954 225 Revision Date 1/8/2019 3/10/2022 5/28/2022 4/28/2021 7/2/2021 1/6/2022 9/3/2021 1/15/2021 8/12/2021 3/10/2022 5/27/2020 1/8/2020 7/20/2021 7/20/2021 Andrews $74,492 $54,070 $2,617 $11,518 ($9) $6,297 $4,561 $607 $23 $1,106 2.0 19800 1.4 22400 Age Pfmn Size Dec.31 MTBF Coord Coord 5.5 21000 2.4 23000 0.0 0 3.3 18000 1.3 22000 0.0 0 4.3 17000 5.8 1.2 20000 8.1 3.0 16500 2.8 16500 1.5 22000 1.2 22000 7.7 9.7 Price 7.4 12.0 $32.00 9.5 10.0 $45.00 0.0 0.0 $0.00 7.2 10.5 0.0 Baldwin $84,177 $57,655 $3,440 $7,895 $122 6.9 6.2 $15,064 $3,106 10.7 10.3 $4,185 $155 $7,618 13.8 $29.70 9.2 $41.90 13.4 $23.90 10.4 $35.80 13.0 $33.50 9.8 $44.50 0.0 $0.00 13.5 $27.10 12.8 $27.10 9.0 $42.50 9.5 $42.50 Chester $65,961 $39,659 $3,647 $7,320 $99 $15,235 $3,025 $4,273 $159 $7,778 Material Labor Cost Cost $12.35 $9.45 $16.79 $10.13 $0.00 $0.00 $10.76 $8.87 $17.58 $10.11 $7.91 $4.77 $13.49 $9.56 $8.59 $7.59 $8.67 $8.07 Digby $85,112 $53,212 $3,088 $8,821 $455 $19,536 $3,422 $5,640 $209 $10,264 $18.05 $10.09 $17.22 $9.91 Contr. Over- Marg time 22% 0% 34% 18% 0% 0% 2nd Shift Auto & mation Next Round 4.0 4.0 4.0 30% 43% 33% 33% $10.30 $8.82 39% 32% $17.61 $10.47 36% 42% $0.00 $0.00 0% 0% 43% 45% 37% 100% 37% 36% 53% 100% Erie $65,248 $41,471 $3,100 $5,182 $311 $15,184 $2,588 $4,408 $164 $8,023 33% 100% 35% 83% 6.5 4.0 7.5 4.5 6.0 4.0 5.0 6.0 6.0 4.9 4.9 Capacity Next Plant Round Utiliz 1,105 90% 679 117% 200 0% 1,150 142% 700 132% 1,100 144% 650 199% Ferris $84,184 $55,709 $1,955 $8,194 $24 $18,303 $1,977 $5,714 $212 $10,400 1,100 131% 650 141% 500 0% 850 152% 700 199% 600 198% 600 182% Look at the financial statements excerpted from the Foundation FastTrack and answer the following questions, explaining the reasons and justification for your answers. 1) Look at the income statement survey. Notice that Andrews has sales of 74,492,100 and Erie have sales revenue worth $65.2 million. However, Andrews only made a profit of $ 1.1 million but Erie had a profit of $8 million. a. Why is Andrews selling well but making such low profits? (4 points) b. What could Andrews have done differently to achieve higher profits? (4 points) 2) Look at the income statement survey. a. Calculate the contribution margin and the net profit margin (return on sales) for Andrews and Erie. Compare the two companies and analyze the differences in their financial management based on your calculations. (12 points) b. Calculate SGA as a percentage of sales revenue for both Andrews and Erie and analyze the differences in their financial management. (6 points) 3) Why did Andrews take an emergency loan? (4 points) 4) Calculate the ROS for the six companies. Which company is the most profitable? (8 points) 5) Calculate the contribution margins of the 6 companies. Which company has the best contribution margin? Is this good enough? Why or why not? (10 points) 6) Look at the production page of the FastTrack below and explain why the company with the highest contribution margin in question 5 was able to achieve this. (6 points) 7) Calculate the Net Margins for the 6 companies. Which company has the highest Net margin? Is this good enough? Why or why not? (10 points) Income Statement Survey Sales Variable Costs(Labor, Material, Carry) Depreciation SGA(R&D, Promo, Sales, Admin) Other (Fees, Writeoffs, TQM,Bonuses) EBIT Interest(Short term, Long term) Taxes Profit Sharing Net Profit Production Analysis Baker Bold Cake Cent Name Segment Sold tory Able Low Alman High ANew Daze Dabble Dust Eat East Fast Feast Primary Units Inven Low High Low Low Low High Low Low High High 1,246 769 0 1,706 800 1,412 900 偏㎜雪冽。 Unit 1,447 1,321 1,087 390 347 0 321 154 333 823 207 0 0 259 25 201 0 1,027 145 954 225 Revision Date 1/8/2019 3/10/2022 5/28/2022 4/28/2021 7/2/2021 1/6/2022 9/3/2021 1/15/2021 8/12/2021 3/10/2022 5/27/2020 1/8/2020 7/20/2021 7/20/2021 Andrews $74,492 $54,070 $2,617 $11,518 ($9) $6,297 $4,561 $607 $23 $1,106 2.0 19800 1.4 22400 Age Pfmn Size Dec.31 MTBF Coord Coord 5.5 21000 2.4 23000 0.0 0 3.3 18000 1.3 22000 0.0 0 4.3 17000 5.8 1.2 20000 8.1 3.0 16500 2.8 16500 1.5 22000 1.2 22000 7.7 9.7 Price 7.4 12.0 $32.00 9.5 10.0 $45.00 0.0 0.0 $0.00 7.2 10.5 0.0 Baldwin $84,177 $57,655 $3,440 $7,895 $122 6.9 6.2 $15,064 $3,106 10.7 10.3 $4,185 $155 $7,618 13.8 $29.70 9.2 $41.90 13.4 $23.90 10.4 $35.80 13.0 $33.50 9.8 $44.50 0.0 $0.00 13.5 $27.10 12.8 $27.10 9.0 $42.50 9.5 $42.50 Chester $65,961 $39,659 $3,647 $7,320 $99 $15,235 $3,025 $4,273 $159 $7,778 Material Labor Cost Cost $12.35 $9.45 $16.79 $10.13 $0.00 $0.00 $10.76 $8.87 $17.58 $10.11 $7.91 $4.77 $13.49 $9.56 $8.59 $7.59 $8.67 $8.07 Digby $85,112 $53,212 $3,088 $8,821 $455 $19,536 $3,422 $5,640 $209 $10,264 $18.05 $10.09 $17.22 $9.91 Contr. Over- Marg time 22% 0% 34% 18% 0% 0% 2nd Shift Auto & mation Next Round 4.0 4.0 4.0 30% 43% 33% 33% $10.30 $8.82 39% 32% $17.61 $10.47 36% 42% $0.00 $0.00 0% 0% 43% 45% 37% 100% 37% 36% 53% 100% Erie $65,248 $41,471 $3,100 $5,182 $311 $15,184 $2,588 $4,408 $164 $8,023 33% 100% 35% 83% 6.5 4.0 7.5 4.5 6.0 4.0 5.0 6.0 6.0 4.9 4.9 Capacity Next Plant Round Utiliz 1,105 90% 679 117% 200 0% 1,150 142% 700 132% 1,100 144% 650 199% Ferris $84,184 $55,709 $1,955 $8,194 $24 $18,303 $1,977 $5,714 $212 $10,400 1,100 131% 650 141% 500 0% 850 152% 700 199% 600 198% 600 182%

Answer rating: 100% (QA)

4 The money Baldwin spent in manufacturing can be called variable cost bec... View the full answer