Acfi3001 Accounting Theory For Inventory Assessment Answers

Questions:

1. What advice can you provide the owners of Streamline on how their business has performed for the month of February, with particular focus on the profitability of the business? Include relevant ratios in your analysis.

2. Provide Streamline with five (5) recommendations, including specific actions, to improve the profitability and efficiency of the business.

3. What additional Saasu reports could Streamline run at the end of month to assist business decision making? Provide details of how the identified reports could assist the business.

Answers:

Introduction

This business report is presented to the business management people so that business performance of Streamline can be measured for the month of March. The main focus of this business report is to evaluate the profitability of company for the particular month. The organization deals in 3 kind of product. Net and gross margin from each of the product has been analysed. The financial ratios calculated for this purpose are gross margin, net profit margin, and inventory turnover ratio. Segmental analysis must also be carried to evaluate the performance of each product type.

Evaluation of Financial Performance

The financial performance of the company for the year 2016 is presented below. The performance of the company is depicted on the income, sale and gross profit realised from its products that are race, train and others.

Name of the Product	Income from Sales	Selling Cost	Gross Profit	Percentage
Race	$1684.80	$476	$ 1208.80	71.74%
Train	$30,404.50	$ 16,077	$ 14327.50	47.12%
Other	$4749	$ 1944	$ 2805	59.06%
Total	$ 36838.30	$ 18497.00	$ 18341.30	49.78%
Other Operating Expenditures	$ 10725.00
Net Profit	$ 7616.30	20.67%

Name of the Product	Selling Cost	Average Inventory	Inventory Turnover Ratio
Race	$476	$ 4664	0.10 times
Train	$ 16,077	$ 1703	9.44 times
Other	$ 1944	$ 2156	0.90 times
Total	$ 18497.00	$ 8523	2.17 times

The above table depicts that train has achieved highest income from sales. The selling cost is also highest for the train and thus it has lower gross profit. The company’s product race has lowest sales in comparison to other products. The selling cost is also lowest for race and thus it has higher gross profit. The other products of the company have higher gross profit in comparison to train despite of lower costs of sales as their selling cost is lower to the train. Therefore, it can be said that a company can achieve higher profitability y reducing their selling cost. There is small difference between the cost of sales and income from sales in case of train and thus it has lower gross profit. On the other hand, there is wide difference between cost of sales and income from sales in case of race and thus it has achieved highest gross profit margin (Kastelein et al., 2015).

Recommendation

On the basis of financial performance of the company, it has been recommended following measures to boost their effectiveness:

The company is realizing higher profit margin from its product race. Thus, it should emphasize on increasing its investment more in the race product as compared to train and its other products (Davis, Marino & Vecchiarini, 2013)

The product train of the company has realized lower gross profit. As such, the management of the company should develop effective strategies, to reduce the cost of sales of train in order to increase its profitability margin

The operational manager of the company is recommended to implement strategies for maximizing the quantity and quality of in order to increase the quantity of sales.

The company has sound liquidity position and thus should minimizes its time period of collection of debt for overcoming the chances of occurrence of bad debts

The selling cost of production has a major impact on the margin of gross profit. Thus, the company should place more focus on reducing its cost of sales for achieving higher profitability.

The company is also suggested to invest more on developing its other products besides only focusing on improving the profitability margins of its race and train products. This is because its other items products is also contributing significantly to its gross profitability (Post & Byron, 2015)

Additional Report

Following Reports can be assessed by the organisation in order to have better evaluation of performance:

Cash Flow Statement: This statement will provide the details of cash inflow and outflow within the organization so that management can put a close monitoring on the cash transactions

Variable expenses report: It will help the management to look after the change in variable expenses over the period of time. It also helps to track the profit margin per unit of product.

Gross Profit Margin as per Sales: This report will guide gross profit left per type of product sold by the organization.

Cash flow as per customer: Cash received from customers helps to check which customer provides remaining balance on time (Park & Jang, 2013)

Conclusion

Overall profitability was good of company but there is scope of improvement that can be done through following above advice.

Reference List

Davis, J. A., Marino, L. D., & Vecchiarini, M. (2013). Exploring the relationship between nursing home financial performance and management entrepreneurial attributes. Adv Health Care Manage, 14, 147-65.

Kastelein, F., van Olphen, S., Steyerberg, E. W., Sikkema, M., Spaander, M. C. W., Looman, C. W. N., ... & Geldof, H. (2015). Surveillance in patients with long-segment Barrett's oesophagus: a cost-effectiveness analysis. Gut, 64(6), 864-871.

Park, K., & Jang, S. S. (2013). Capital structure, free cash flow, diversification and firm performance: A holistic analysis. International Journal of Hospitality Management, 33, 51-63.

Post, C., & Byron, K. (2015). Women on boards and firm financial performance: A meta-analysis. Academy of Management Journal, 58(5), 1546-1571.

Buy Acfi3001 Accounting Theory For Inventory Assessment Answers Online

Talk to our expert to get the help with Acfi3001 Accounting Theory For Inventory Assessment Answers to complete your assessment on time and boost your grades now

The main aim/motive of the management assignment help services is to get connect with a greater number of students, and effectively help, and support them in getting completing their assignments the students also get find this a wonderful opportunity where they could effectively learn more about their topics, as the experts also have the best team members with them in which all the members effectively support each other to get complete their diploma assignments. They complete the assessments of the students in an appropriate manner and deliver them back to the students before the due date of the assignment so that the students could timely submit this, and can score higher marks.Â The experts of the assignment help services at urgenthomework.com are so much skilled, capable, talented, and experienced in their field of programming homework help writing assignments, so, for this, they can effectively write the best economics assignment help services.

Get Online Support for Acfi3001 Accounting Theory For Inventory Assessment Answers Assignment Help Online

Not the Exact Question you were looking for ? Post your question for assignment help and get instant help on your homework and assignment questions from our experts