WEngageU is a specialist jeweller that designs, makes and sells high end engagement and wedding rings. The company specialises in making diamond rings to select, upmarket clientele. WEngageU plan to expand into making eternity rings that will sell for R75 000 each. They predict the variable cost to amount to R45 000 per unit and fixed costs at R90 000. For the financial year 2021, their current assets amounted to R13.2 million and current liabilities were R6.55 million. Non-current assets were R20.5 million and non-current liabilities were R3 million. Identify and explain which one of Porter’s four generic strategies apply to WEngageU. Conduct a breakeven analysis to determine the number of eternity rings the company must sell in order to break even. Calculate the current ratio for WEngageU. Interpret your findings.
WEngageU is a specialist jeweller that designs, makes and sells high end engagement and wedding rings. The company specialises in making diamond rings to select, upmarket clientele.
WEngageU plan to expand into making eternity rings that will sell for R75 000 each. They predict the variable cost to amount to R45 000 per unit and fixed costs at R90 000.
For the financial year 2021, their current assets amounted to R13.2 million and current liabilities were R6.55 million. Non-current assets were R20.5 million and non-current liabilities were R3 million.
Identify and explain which one of Porter’s four generic strategies apply to WEngageU.
Conduct a breakeven analysis to determine the number of eternity rings the company must sell in order to break even.
Calculate the
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