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1) Look at the income statement survey. Notice that both Erie and Chester have sales revenue close to each other. However, Chester is making
1) Look at the income statement survey. Notice that both Erie and Chester have sales revenue close to each other. However, Chester is making losses of $218 thousand while Erie is making profits over $5.3 million. a. Why is Chester selling well but making losses? (4 points) b. What could Chester have done differently to avoid making negative profits? (4 points) 2) Look at the income statement survey. Calculate the contribution margin, net margin and the profit margin (return on sales) for Chester and Erie. Compare the two companies and analyze the differences in their financial management based on your calculations. (18 points) 3) Why does Andrews have the highest sales in the industry but not the highest profits? (4 points) 4) Calculate the ROS for the six companies. Which company is the most profitable? Is this good enough? Why or why not? (8 points) 5) Calculate the contribution margins of the 6 companies. Which company has the best contribution margin? Is this good enough? Why or why not? (10 points) 6) Look at the production page of the FastTrack below and explain why the company with the highest contribution margin in question 5 was able to achieve this. (6 points) 7) Calculate the Net Margins for the 6 companies. Which company has the highest Net margin? Is this good enough? Why or why not? (10 points) 8)After 2 practice rounds, how do you assess the level of sales of the company you manage compared to the industry average? (6 points) (Hint: how have the company's sales grown over the period of 2 years compared to the industry average?). Since the high tech segment grows at around 20% annually and the low tech segment grows at 10% annually, the average overall industry growth is around 15% every year. After 2 practice rounds, is your company sales revenue higher or lower than the average industry level???
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