1 of 3 Assignment (2) BADM 2001 Introduction to Busines Spring 2023 Look at the financial statements excerpted from the Foundation Fast Track and answer the following questions, explaining the reasons and justification for your answers. Investigating Net Profit or losses: review Income Statement and the three profitability margins (CM, NM and ROS) 1) Look at the income statement survey. Notice that both Baldwin and Ferris have sales revenue worth around $46.8 million. However, Baldwin is making losses of $1.3 million while Ferris is making profits over $3 million. a. Why is Baldwin selling well but making losses? (4 points) b. What could Baldwin have done differently to avoid making negative profits? (4 points) 2) Look at the income statement survey. a. Calculate the contribution margin and the profit margin (return on sales) for Baldwin and Ferris. Compare the two companies and analyze the differences in their financial management based on your calculations. (12 points) b. Calculate SGA as a percentage of sales revenue for both Baldwin and Ferris and analyze the differences in their financial management. (6 points) 3) Why does Digby have the highest sales in the industry but not the highest profits? (4 points) Investigating Net Profit or losses: review Income Statement and the three profitability margins (CM, NM and ROS) 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 Fast Track 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 ??? Check fastTrack Round 2 to know !!! Income Statement Income Statement Survey Andrews Baldwin Chester Digby Erie Ferris Sales $34,824 $46.801 534611 $48,623 $41,554 $46,730 Variable Costs Labor Material Camy) $27.296 $42,517 $24,518 $36,813 $31,405 $35,425 Depreciation $1,320 $1,140 $1,128 $1,173 $1,173 $960 SGA/R&D Promo Sales Admin) $6,852 $4,287 $7.227 $6,431 $6,225 $4,676 Other Fees, Writeoffs, TOM,Bonuses) SO $223 $50 $347 $0 $64 EBIT (5646) ($1,366) $1,587 $3.858 $2.750 $5,604 Interest(Short term Long term) 5641 $641 $641 $1,104 $641 $641 Taxes (5450) ($703) $356 $964 $738 $1,737 Profit Sharing 50 50 $14 $36 527 965 Net Proft (5836) (51,305) 9995 $1,754 $1,344 $3,161 FOUNDATIONS FAST TRACK Production Analysis Unit 2nd Shit Auto &mation Capacity Page 3 Primary Units Inven Pinn Sce Materal Labor Cont Over Ned Next Plant Name Segment Sold tory Revision Date Dec 31 MTBF Coord Coord Price Cost Cost Marg time Round Round Utiliz Able Low 1,088 0 1/15/2016 4.1 20000 64 136 $32.00 $14.43 $8.85 22% 25% 40 900 125% Baker Low Bronce 1,671 0 6/26/2016 007/12/2017 23 19000 00 58 14.2 $28.00 $12.83 $11.10 9% 100% 30 950 190% 0000 5000 5000 5000 0% 0% 30 235 0% Cake Low Casper Cool 1,018 0 5m2016 00 0 0 8/10/2017 223 24 17000 00 0.00 2/28/2017 00 0 00 61 138 $34.00 $12.99 $961 29% 17% 30 940 116% 00 $0.00 00 $0.00 50.00 50.00 0% 0% 15 200 0% $0.00 $0.00 0% 0% 10 200 0% Dace Low 1,473 0 8/23/2016 22 15000 58 142 $33.00 $11.63 $10.79 24% 75% 40 800 173% Eat Low 1,259 0 Eclips 0 0 6/26/2016 23 19000 5/25/2017 00 0 58 142 $33.00 $12.83 $10.54 24% 5% 40 800 147% 00 00 $0.00 $0.00 $0.00 0% 0% 10 370 0% Fast Low Fury 1,374 0 127/2016 00 5/18/2017 283 21 18000 53 147 $34.00 $11.45 $10.50 24% 63% 30 800 161% 00 0 0.0 0.0 50.00 $0.00 $0.00 0% 0% 30 300 0%