FIN571 Week 4 Individual Assignment – XYZ Company done on june 2015

| October 3, 2018

Analyzing Pro Forma StatementsFIN 571XYZ CompanyThe selected company is a pastry store which goal is to increase the company’s market share by implementing technology through telephones, text-orders, and emails. These processes will help in increasing interactivity. The financial performance of the company for the past years is as follows:Financial PerformanceWith 100 employees manufacturing 6000 output units 5 day a week each month, earning $70 a day the company’s output price is $32 with $2000 as variable input costs.Balance Sheet20132014201520162017Excess Cash: Plug FigureCurrent Assets7,3048034.48837.849721.6210693.8Net Property Plant & Equipment11,41811,41811,41811,41811,418Other Long Term Assets768768768768768Total Assets19,49020,22021,02421,90822,880Current Liabilities6,3016,3016,3016,3016,301Short Term Borrowing: Plug FigureLong Term Debt5,6346028.386450.376901.897385.02Other Liabilities & Preferred1,0361,0361,0361,0361,036Shareholder’s Equity9771006.311036.51067.591099.62Retained Earnings5,5425,8496,2006,6017,058Total Liab. & Shareholder’s Equity19,49020,22021,02421,90822,88020132014201520162017Revenues(6000 @ 32)192,000211,200232,320255,552281,107Variable Costs140,000154,000169,400186,340204,974Fixed Cost40,00044,00048,40053,24058,564Net Profit12,00013,20014,52015,97217,569The total costs are still higher than the revenues earned and with fixed costs considered are much more than the contribution margin. With more analysis the company can compute the actual the impact of the company in the future.Break Even Analysis40000 / (32-30) = 20,000 UnitsTherefore, the company must produce a minimum of 20000 products every month to accomplish break even.To increase production the company must employ skilled and potential worker. Although the current workers are producing 3 products per hour, production must increase. Frequent analysis and training will help to ensuring the company is more productive with quality labor and performance.Accuracy can be determined by observing the record database and tracking information from inventory which include cycle count reports, count lists and inventory transaction history.Scheduled Monthly InventoryMonthPurchased UnitsCost per unitTotal ValueJanuary1000$10$10,000February1000$12$12,000March1000$15$15,000Total3000$37,000Beginning Inventory = 1000 units purchased at $8 each (for a total of 4000 units)Simplified Income Statement (January-March )First-In, First-Out (FIFO)Last-In, First-Out (LIFO)AverageSales = 3000 units @ $20 each$60,000$60,000$60,000Starting Inventory8,0008,0008,000Purchases37,00037,00037,000Finale Inventory (appears on B/S) *See calculation below8,00015,00011,250COGS$37,000$30,000$33,750Expenses10,00010,00010,000Net Income$13,000$20,000$15,600Starting Inventory + Net Purchases – Ending Inventory = Cost of Goods SoldLIFO Final Inventory Cost =1000 units X $8 each = $8,000.Older units are left at the end of inventory as incoming last units are sold first.FIFO Final Inventory Cost = 1000 units X $15 each = $15,000Newer units are left at the end of inventory as stored older units are sold firstAverage Cost Final Inventory = [(1000 x 8) + (1000 x 10) + (1000 x 12) + (1000 x 15)]/4000 units = $11.25 per unit 1000 units X $11.25 each = $11,250Challenges and LeadershipThe main challenge is to raise profit margin and decrease costs with well-organized management staff. Strategies are to design a larger mixer that will produce more products in less time. This process will help in reducing product and labor costs. Purchasing larger freezers during high market demands will help the bakers to keep pre-baked products. Volumetric depositors that produce cakes and sweet merchandises will help the manufacturers in increasing versatility and liquidity in the company (Swaminathan, J. M., & Tayur, S. R. 2003).This process will help profitability ratio to increase and labor cost to considerably minimize. The scope of products must diversify and products must produce with great productivity with more focus on customer satisfaction by delivering flexible and cost effective products (Burns, J. M., 1985).Policy for Quality ManagementProducing customer oriented quality products and ensuring customer satisfaction is the main policy of quality management(.com/author/maggie/”>Lotich, P., 2013). Some of the steps in the process are:· Customers deciding product quality· Upgrading those products which are used more· Developing safe and eco-friendly products· Promoting transparency with responsibility(.com/author/maggie/”>Lotich, P., 2013) ReferencesSwaminathan, J. M., & Tayur, S. R. (2003) Models for supply chains in e-businessManagement Science,49(10), 1387-1406. Retrieved January 12, 2015 from.proquest.com/docview/213235188?accountid=458″>http://search.proquest.com/docview/213235188?accountid=458”,Burns, J. M., (1985) Recognizing the Challenges of Leadership. Retrieved January 12, 2015 from: .ku.edu/en/table-of-contents/leadership/leadership-ideas/leadership-challenges/main”>http://ctb.ku.edu/en/table-of-contents/leadership/leadership-ideas/leadership-challenges/main.com/author/maggie/”>Lotich, P., 2013, 12 Steps to Implementing a Quality Management System, retrieved January 12, 2015, from .com/12-steps-to-implementing-a-quality-management-system/”>http://thethrivingsmallbusiness.com/12-steps-to-implementing-a-quality-management-system/.Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on).Using the sample financial statements, create pro forma statements of five year projections that are clear, concise, and easy to read. Be sure to double check the calculations in your pro forma statements. Make assumptions that support each line item increase or decrease for your forecasted statements.Discuss and interpret the financials in relation to the initiative. Make recommendations on potential discretionary financing needs.Write a 350 – 700 word analysis of the company’s short term and long term financing needs and determine strategies for the company to manage working capital.Click the Assignment Files tab to submit your assignment.

Get a 20 % discount on an order above $ 40
Use the following coupon code:
LOBSTER
Positive SSL