Question
Please help me to solve the below project with the steps This data extracted from the books of Al-Hoshan industrial company: Description (X) Section (Y)
Please help me to solve the below project with the steps
This data extracted from the books of Al-Hoshan industrial company:
Description | (X) Section | (Y) Section | Total |
Gross profit | 29,000 | 17,000 | 46,000 |
Direct materials | 5,000 | 4,000 | 9,000 |
Direct labor | 7,000 | 8,000 | 15,000 |
Rent | 2,000 | 4,000 | 6,000 |
Advertising | 2,000 | 6,000 | 8,000 |
Others | 4,000 | 3,000 | 7,000 |
Total | 20,000 | 25,000 | 45,000 |
Net profit(loss) | 9,000 | 8,000- | 1,000 |
Cash at bank | 50,000 | ||
Sales | 60,000 | ||
Suppliers | 30,000 | ||
Customers | 25,000 | ||
Capital | 30,000 |
Q1
The company is studying the proposal to dispense with section (Y), If you knows that the facility doesn't want to dispense with the location of section (Y),and $1000 of advertising costs peraining to the facility as a whole, and other expenses of $1000 that serve the general purpose of the facility.
Would you recommend closing this section?
Q2
Extract the following indicators from the previous data, showing an analysis of the results of each indicator:
Liquidity ratio
Return on sales percentage
Average debt collection period
Q3
Based on the information on the feasibility study of this project, the owners of the company want to achieve a profit margin on their capital of at least 25% annually. Do you find that the financial results of the project are satisfactory to them? and what are the tips you advise to manage the company in order to achieve what the owners of the company wish?
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