You were hired by the Widget manufacturing company, and since you recently graduated with a degree in logistics and supply chain management, your boss is hoping that you can h
You were hired by the Widget manufacturing company, and since you recently graduated with a degree in logistics and supply chain management, your boss is hoping that you can help answer some questions that the president of the company has been asking.
The Income Statement and Balance Sheet for 2019 were provided to you, along with shipping and warehouse costs for 2018 and 2019.
Create a Professional Video Presentation
With the provided information and the list of questions below, produce a 3-5 minute professional video presentation to present to the company president. Use ‘Studio’ with PowerPoint® slides to create your presentation. Review the information on the Presentation Guide for assistance.
2018 and 2019 Shipping and Warehouse Costs
|
|
2018 Units Shipped |
2018 Warehouse cost |
2019 Units Shipped |
2019 Warehouse Cost |
|
Chicago |
16,540 |
$ 156,830 |
17,562 |
$ 178,000 |
|
New York |
7,562 |
$ 63,417 |
8,562 |
$ 65,263 |
|
Atlanta |
27,506 |
$ 246,315 |
28,263 |
$ 265,856 |
|
Denver |
15,685 |
$ 151,975 |
16,585 |
$ 176,000 |
|
Tampa |
15,621 |
$ 150,623 |
15,562 |
$ 152,365 |
|
San Antonio |
12,658 |
$ 136,856 |
12,563 |
$ 145,256 |
|
Bakersfield |
9,526 |
$ 72,632 |
10,125 |
$ 78,526 |
|
Seattle |
11,526 |
$ 119,563 |
10,956 |
$ 120,636 |
Income Statement 2019
|
Sales |
|
|
$ 3,958,555 |
|
Cost of goods sold |
|
|
$ 925,632 |
|
Gross Margin |
|
|
$ 3,032,923 |
|
Transportation cost |
$ 658,562 |
|
|
|
Warehousing cost |
$ 725,632 |
|
|
|
Inventory carrying cost |
$ 577,456 |
|
|
|
Other operating costs |
$ 356,265 |
|
|
|
Total operating cost |
|
|
$ 2,317,915 |
|
Earnings before interest and taxes |
|
|
$ 715,008 |
|
Interest |
|
|
$ 111,000 |
|
Taxes |
|
|
$ 72,000 |
|
Net Income |
|
|
$ 532,008 |
Balance Sheet 2019
|
Assets |
|
|
|
Cash |
|
$ 708,562 |
|
Accounts Receivable |
|
$ 362,235 |
|
Inventory |
|
$ 1,592,356 |
|
Total Current Assets |
|
$ 2,663,153 |
|
Net Fixed Assets |
|
$ 823,653 |
|
Total Assets |
|
$ 3,486,806 |
|
|
|
|
|
Liabilities |
|
|
|
Current Liabilities |
|
$ 1,726,333 |
|
Long-term Debt |
|
$ 423,365 |
|
Total Liabilities |
|
$ 2,149,698 |
|
Shareholders’ Equity |
|
$ 1,456,235 |
|
Total Liabilities and Equity |
|
$ 3,605,933 |
Questions to be addressed
1. What is the cost per unit shipped for each of the warehouses and highlight the warehouse with the best performance for 2018 and for 2019?
2. What is the difference in cost per unit for each of the warehouses and make sure to highlight the warehouse with the best and worst performance for each year?
3. Show the percentage difference in cost per unit for each of the warehouses and highlight the warehouse with the best and worst performance for each year.
4. Your boss told you that your company needs to close one warehouse so you need to recommend to the president which warehouse should be closed based on performance and justify.
5. Use the Income Statement and Balance Sheet and complete a Strategic Profit Model for the company to show the president.
6. What would have been the effect on ROA for 2019 if Transportation cost had been reduced by 10%? Produce an updated Strategic Profit Model for the company?
Notes
· To calculate the Total Expenses add total operating cost + Interest + Taxes
· Net Profit Margin and ROA should be in %
· Other Current Assets = Cash
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