Wcr expense ratios, Financial Management

Scenario:  ABC Company sells widgets in three varieties (blue, red, and yellow) but has lost money for the past three years.  Competitive intelligence shows the Company's products are priced 10% above the competition but that competitor prices will increase by at least 8% annually.  Given the Company is mandated by Widget Cost Reform (WCR) to spend a minimum of x% of revenue on cost of goods sold (COGS), what actions would you recommend to the CFO?  What are the key drivers to attaining profitability by 2015?

Please use the peach colored cells for your inputs and formulas in order to reach profitability and still satisfy the minimum WCR Expense Ratios mandated by the WCR regulations.

Facts

  • WCR Expense Ratios (effective January 2012): Blue Widgets 85%, Red Widgets 80% and Yellow Widgets 90%
  • Going forward, Administrative Expense Ratios improve by leveraging growth ... 1.0% for every 10% increase in widget sales for a given widget type

 

Posted Date: 3/9/2013 2:49:22 AM | Location : United States







Related Discussions:- Wcr expense ratios, Assignment Help, Ask Question on Wcr expense ratios, Get Answer, Expert's Help, Wcr expense ratios Discussions

Write discussion on Wcr expense ratios
Your posts are moderated
Related Questions
Q. Importance of Inventory Management 1) Inventory helps in smooth and efficient running of business. 2) Inventory provide service to the customers immediately or at a short

The purpose of this financial analysis is to determine the economic viability during the last five years of the Lance Company and to advise our client on whether the acquisition of

Scenario analysis Your firm, Agrico Products, is considering a tractor that would have a cost of $35,000, would increase pretax operating cash flows before taking account of deprec

Criticism of Profit Maximization Approach: (i) Ambiguous: - One practical complexity with this approach is that the term profit is ambiguous. Different people take dissimilar me

Explain the mechanism which restores the balance of payments equilibrium when it is disturbed under the gold standard. Answer:  The adjustment mechanism within the gold standar

#how to calculate initial investment cash flows ..

1. Of course a swaption will be needed. The major reasons being that Bond A is callable after 3 years and matures in 4 years whereas Bond B matures in 5 years. It is understandable

You have been hired as an economic advisor to the Southeastern Conference. As your first assignment they have asked you to identify three microeconomic and three macroeconomic issu

Reston, Inc., has asked your corporation, Pruro, Inc., for financial assistance. As a long-time customer of Reston, your firm has decided to give that assistance. The question you

Q. Explain about Temporary or Variable Working Capital ? Temporary or else Variable Working Capital - Any amount over and above the permanent level of working capital is called