Learning Goal: I’m working on a marketing question and need an explanation and answer to help me learn.
In this exercise, students use the SPM Spreadseet (excel) to answer a series of questions.
Value Delivery Networks Assignment #3
Assignment #3 – Financial Analysis Exercise
Initial Markup 65%
Total Cost of Goods Sold 55%
Average Inventory at Cost $360,000
Gross Sales $3,200,000
Total Expenses $600,000
Total Assets $2,800,000
Net Worth/Owner’s Equity $900,000
Note – These are formal assignments and should be written up clearly and concisely. In addition to ANSWERING the question, students must note the “SO WHAT” or strategic TAKE-AWAY of their answer. Where necessary show ALL calculations or provide support.
TO SUBMIT – remove all these instructions and just leave the prompts and your answers, below. Save the file with YOUR name and assignment # (eg: Conran-Assignment 3).
- Do a SPM – attach the SPM model.
- For each of the following – determine (SHOW ALL CALCULATIONS and comment on what these results MEAN):
- Profit Margin
- Asset Turnover
- Inventory Turnover
- Return on Assets
- Return on Net Worth
- If sales increase by 5%, what will be the change in asset turnover?
- If inventory accounts for 60% of total assets and this investment declines by 10%, what will be the change in return on net worth?
- If leverage increases by 50%, what will be the change in return on net worth?
- If cost of goods sold increases by 15%, what will be the change in profit margin?