Evaluate the profitability and sales, Financial Management

Assignment Help:

 a) Stockpiles refers to the accumulated (or excess level of) supply Ford motor vehicles, i.e. too much production given the level of demand. The purpose is to prevent possible shortages in supplies which could harm profitability and sales (although in Ford's case stockpiling is the result of poor stock control).

b) Poor stock control can mean either under-stocking or excessive stockpiling (or even a stock-out). There are drawbacks to both, as outline below:

Over-stocking

Under-stocking

Reduces Ford's liquidity position

Disgruntled and dissatisfied customers

Likely to hinder working capital since finance is tied up in stockpiles

Customers might switch to rival manufacturers' brands

Higher storage costs, e.g. insurance, maintenance and security

Compensation for failure to meet promised delivery dates

Possibility of some stock being damaged or even becoming obsolete (unlikely for cars, but their value could still depreciate)

Higher unit costs due to idle resources (which cost money but do not generate revenue)

 


Related Discussions:- Evaluate the profitability and sales

White knight, A friendly potential acquirer sought through a goal organizat...

A friendly potential acquirer sought through a goal organization threatened by a less welcome suitor.

Show the net operating income approach, Q. Show the Net Operating Income ap...

Q. Show the Net Operating Income approach ? The NOI (Net Operating Income) approach advocates that the cost of equity increases with the increase in the financial leverage. Thi

Components of working capital, Examine the components of working capital & ...

Examine the components of working capital & also explain the concepts of working capital.

State the analytical procedures at the planning stage, State the Analytical...

State the Analytical procedures at the planning stage Auditors must apply analytical procedures at the planning stage to help in understanding the entity's business, in identi

Explain why preferred stock is similar to debt than equity, Question: a...

Question: a. Le Mustang company Ltd is foreseeing a growth rate of 15 per cent per annum in the next three years. It is likely to fall to 12 per cent in the fourth year. Afte

What is purchasing power risk, Q. What is Purchasing Power Risk? Variat...

Q. What is Purchasing Power Risk? Variations in the returns are caused also by the loss of purchasing power of currency. Inflation is the reason behind the loss of purchasing p

Leverage, evaluate the importance of leverage in a small scale company

evaluate the importance of leverage in a small scale company

Forms of regulation, Forms of Regulation There are different forms of r...

Forms of Regulation There are different forms of regulation to regulate market to fulfill certain objectives. These are discussed below: Disclosure Regulation The whole

Estimate the most systematic risk, Yang Su is considering the following inf...

Yang Su is considering the following information on two stocks:                                                                              Rate of Return State of Economy

What do you mean by hedge fund, Q. What do you mean by Hedge Fund? In t...

Q. What do you mean by Hedge Fund? In the easiest strategy a hedge fund borrows Hong Kong dollars (HKD) and then sells them in the market against USD that is they short the HKD

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd