Consider the financial performance comparisons shown. Provide an analysis (120 t
ID: 2530312 • Letter: C
Question
Consider the financial performance comparisons shown. Provide an analysis (120 to 150 words) to describe the comparisons.
KLM Company
Comparison of financial performance
2012 and 2013
Account
2012
2013
$ Difference
Per Cent
Common Size (per cent of sales income)
2012
2013
Sales Income
$230,000
$320,000
$90,000
39
100
100
Cost of Sales
$115,000
$165,000
$50,000
43
50
51.6
Wage Costs
$30,000
$45,000
$15,000
50
13
14
Transport Costs
$25,000
$35,000
$10,000
40
10.9
10.9
Marketing Costs
$15,000
$20,000
$5,000
33
6.5
6.3
Total Costs
$185,000
$265,000
$80,000
43
80.4
82.8
Profit
$45,000
$55,000
$10,000
22
19.6
17.2
KLM Company
Comparison of financial performance
2012 and 2013
Account
2012
2013
$ Difference
Per Cent
Common Size (per cent of sales income)
2012
2013
Sales Income
$230,000
$320,000
$90,000
39
100
100
Cost of Sales
$115,000
$165,000
$50,000
43
50
51.6
Wage Costs
$30,000
$45,000
$15,000
50
13
14
Transport Costs
$25,000
$35,000
$10,000
40
10.9
10.9
Marketing Costs
$15,000
$20,000
$5,000
33
6.5
6.3
Total Costs
$185,000
$265,000
$80,000
43
80.4
82.8
Profit
$45,000
$55,000
$10,000
22
19.6
17.2
Explanation / Answer
The revenue generating performance of the company is better off in 2013 than it was in 2012 but it has come up at the cost of extra expense. The revenue generating performance of the enterprise has been wonderful with a 39% year on year increase.
The net profit ratio has gone down from 19.6% to 17.2%. This has occurred due to increase in many of the cost.
Cost of sales has went up by 43% compare to only 39% increase in sales. Cost of sales should be taken care of as it forms half of the revenue generated. Also, there has been much increase in the wage cost, which accounts to around 14% of the revenue.
There has been marginal or no increase in transportation and marketing cost which is a good sign.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.