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Explain the significance of unit cost for pricing decisions

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Reference no: EM132097106

Managing Financial Resources and Decisions Assignment -

Learning Outcomes -

  • Be able to make financial decisions based on financial information.
  • Be able to evaluate the financial performance of a business.

BreadTalk Group Limited Case Study -

Task 1 - Assume that the following income and expenses are excerpted from one of the branches of BreadTalk in Singapore. Prepare a cash budget for the month of March 2017 and analyse the liquidity position of that branch and suggest appropriate financial measures..

Transaction details -

1. All sales at the branch are on cash basis only; the Marketing manager has estimated weekly sales in the month of March 2017 to be $6500.

2. Supplies for the branch are bought on credit the suppliers give 2 months credit. Details of Purchase are as follows:

Jan 2017 - $4200

Feb 2017 - $4250

March 2017 - $4350

3. Monthly rental for the shop is $8250, and paid on 5th of every month.

4. Three full time bakers work in the branch and all three are paid per month $2200 each and two part time cashiers are paid $650 each.

5. Advertising and promotion expenses per month are estimated to be $1000 per month.

Task 2 - Explain the significance of unit cost for pricing decisions? How can BreadTalk calculate its unit cost for freshly baked buns and how would it affect its pricing?

Task 3 - Assume that you have been appointed as the Investment Manager for BreadTalk's expansion in the UK market. Explain how would you evaluate the business proposal based on the following information?

Investment details - The management's objective is to recover the cost within the next three years and see whether the project would be a viable project.  

Initial Investment

SGD 2 Million, cost of capital 10%

Year

(Outflow)/Inflow

0

(2000000)

1

600000

2

700000

3

700000

Task 4 - a) Discuss the main financial statements such as Trading Account, Profit and Loss Account and Balance Sheet.

b) Explain how the financial statements of a Doctor's Partnership firm would differ as compared to BreadTalk Group.

Task 5 - Calculate the following financial ratios and compare and analyse the performance of BreadTalk group for the financial year's 2014 and 2015.

  • Current Asset ratio.
  • Acid Test ratio.
  • Return on Capital Employed.
  • Gross Profit ratio.
  • Stock Turnover ratio.
  • Capital gearing ratio.

Attachment:- Case Study.rar

Reference no: EM132097106

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Reviews

len2097106

8/27/2018 3:28:36 AM

Assignment should be strictly submitted by the submission due date. Grade will be capped to PASS for the late submission (within 2 weeks from the due date) of assignment. Assignment submission after 2 weeks from the due date will not be accepted. If there are 'serious Adverse Circumstances' that have affected your assignment submission before the submission due date, you must communicate to the Assessor/HOD together with appropriate evidence.

len2097106

8/27/2018 3:28:30 AM

This assignment briefing document should be included at the beginning of your assignment report. Times New Roman and Calibri are the allowed fonts. Font size for paragraphs should be 12, and for headings 14. 1.5 line spacing within the paragraphs and 2 line spacing for paragraphs. Every Task must start in a separate page. ln-text referencing and a reference list must be included in your report. Follow the Harvard referencing standard. Every assignment should be the student's own individual work. Assignment results will be in the form of grades with assessor comments.

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