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# Financial calculations for fiscal year

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The income statement for ABC's 2012 fiscal year is presented below. ABC manufactures one type of street lamp used on municipal roads.

Sales 2,400,000
Variable cost of goods sold 1,680,000
Variable sales commissions 120,000
Contribution margin 600,000
Selling expense 105,000
Sales commissions expense 48,000
Net income 235,000
Variable costs per unit are £6.

Complete the following:

1. Calculate break-even in pounds.
2. Calculate break-even in units.
3. Calculate break-even in pounds if the sales price increases by 10% and fixed costs increase by £12,000.
4. Calculate break-even in pounds if total sales increases by 10% and fixed costs increase by 10%.
5. Calculate sales (in pounds) to achieve £600,000 after tax. (Note: The tax rate is 40%.)

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#### Solution Summary

This solution would explain the calculation of break even.

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## Calculation and Microsoft Excel Charts of Financial Ratios

Consider the attached LuluLemon Case Study and Compute the following ratios:

a. Profitability Ratios
-Gross profit margin
-Operating profit margin
-Net profit margin
-Return on total Assets
-Return on stockholder's equity
b. Liquidity Ratios
-Current ratio
-Working capital
c. Leverage Ratios
-Debt to assets
-Long-term debt to capital
d. Activity Ratios
-Inventory turnover
-Average collection period
e. Internal cash flow
NOTE: Compute sample ratios for all of the years presented in the sample case, in order to assess how strong is the firm financially. Use the ratio calculations on pages C-61-C-62. Use Excel in Microsoft Office to create tables and figures to present your ratio analysis, along with graphs (figures) to track trends in the financial performance of the organization.

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