ProblemThe manager of the company X would like to check the evolution of Profit rate for 2successive months.In order to adopt concrete improvement solutions, he wants to know:Exactly how much the profit rate changed during the 2 successive monthsThe manager wants to know the exact causes of this change and the extent to whichthey have led to declining profit ratioMore exactly he wants to know how and what are the influences of revenues, expensesand turnover on the change of this ratioRp=Profit / Turnover *100 = (Revenues-Expenses)/Turnover *100Revenues: R1=10,000 lei, R0= 11,000 leiExpenses: El= 8,000 lei, E0= 7,000 leiTurnover: T1= 6,000 lei , TO =5000 leiProfit ratio: Rp1=33% Rp0=80%

Profit ratio refers to the financial ratio that is helpful in estimating the financial position of…

Answered: Problem The manager of the company X…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter15: Lean Accounting And Productivity Measurement

Section: Chapter Questions

Problem 16E

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Which of the following is most likely true concerning the stability and trend of earnings? 1. require at leaset 5 years of historical data to be meaningful 2. are not factored in the analysis of revenues 3. depend on the trend of a dingle industry 4. are key factors when calculating cost of sales
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Balance Sheet Beginning Balance Ending Balance Assets $ 131,000 334,000 579,000 786,000 401,000 255,000 $ 2,486,000 $ 126,000 480,000 483,000 781,000 435,000 251,000 $ 2,556,000 Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity $381,000 1,020,000 1,085,000 $ 2,486,000 $ 347,000 1,020,000 1,189,000 $ 2,556,000 Total liabilities and stockholders' equity Joel de Paris, Incorporated Income Statement $ 4,255,000 3,489,100 765,900 Sales Operating expenses Net operating income Interest and taxes: $ 116,000 199,000 Interest expense Тах еxpense 315,000 $ 450,900 Net income The company paid dividends of $346,900 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%.
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