Question
https://youtu.be/0qJ0lmx4HYA After you have watched the video, please answers the following questions: 1) It states in the video that Uprising Food has a profit margin
https://youtu.be/0qJ0lmx4HYA
After you have watched the video, please answers the following questions:
1) It states in the video that Uprising Food has a profit margin of about $3.60 per loaf yet the company reported a net loss of $1,000,000 last year. How is this possible? What costs would affect the company's bottom line net income that wouldn't be taken into consideration when determining the profit per loaf?
2) This video, like a lot of Shark Tank videos, uses the phrase "to scale" This essentially means that the company believes that if it can increase its sales volume, the company will become more profitable. How is this possible? What effect would increasing the scale of production have on the company's fixed costs? What effect would scaling production have on variable costs?
3) Customer acquisition costs (CAC) are a very real expense for a business. In simplest form, CAC is marketing & advertising costs divided by new customer sales during the period. In other words, the amount of marketing costs that a company pays to obtain one new customer. What measures of income (gross profit, operating income, EBIT, net income) would CAC effect and which ones wouldn't it affect? Hint: this may help you answer the first question.
4) Enough fancy accounting talk. What do you think of the product in this video and what do you think this company is really worth 16+ million dollars?
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