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

What are the reasons for mergers and acquisitions, Reasons for mergers an...

Reasons for mergers and acquisitions The key reasons for mergers and acquisitions, is to maximise shareholder wealth otherwise it wouldn’t be worthwhile. R

How debt securities is different from term loan, How Debt securities is dif...

How Debt securities is different from term loan Debt securities are different from term loans provided by financial institutions and banks to the company. Term loans are long t

Deefine market price of a bond be influenced, If all other things held cons...

If all other things held constant, how would the market price of a bond be influenced if coupon interest payments were made semiannually in place of annually? Several bonds iss

Define the financial leverage effect, What is the financial leverage effect...

What is the financial leverage effect and what causes it?  What are the potential benefits and negative consequences of high financial leverage? Financial leverage is the extra

Initial recognition of the financial instruments, a) On 1 st January 2010,...

a) On 1 st January 2010, Grimm issued 400,000 convertible £1 6% debentures  for £600,000.  The professional fees associated with the issue were £40,000 and the fair value of simil

Explain about net working capital concept, Q. Explain about Net Working Cap...

Q. Explain about Net Working Capital Concept? Net Working Capital Concept: - Net working capital demotes to the difference among current assets and current liabilities. Current

Strategy of financial globalization, Question 1: (a) Highlight the mai...

Question 1: (a) Highlight the main benefits which Mauritius can reap from a strategy of financial globalization. (b) What are the problems with the internationalization of

Organizational cost drivers, Organizational Cost Drivers It is the cost...

Organizational Cost Drivers It is the cost consequences that result from managerial choices concerning the company of activities as well as the involvement of persons inside an

Show the working capital forecasting techniques, Q. Show the Working Capita...

Q. Show the Working Capital Forecasting Techniques? Working Capital Forecasting Techniques or else Computation Of Working Capital: - A number of processes are used to determine

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