Ask Experts Questions for FREE Help !
Ask
    eaustin's Avatar
    eaustin Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Mar 9, 2009, 11:11 PM
    Vertical Analysis
    The cost of sales expense and the selling, advertising and general administration expenses of a company steadily increases over a five year period, what affect will this have on net earnings and why?
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
    Ultra Member
    		  
    #2

    Mar 10, 2009, 02:23 AM

    The whole of the trading account and the
    Profit and loss account have to be viewed
    As an integral situation.
    Starting by calling the SALES 100%.

    Every item should be then analysed in relation
    To the Sales Percentage.

    We derive the Cost of Sales Percentage.
    This will then give us the GROSS MARGIN
    Percentage.
    This has great significance.
    From this all the other expenses have to be met.
    If successful one would finish up with a NET PROFIT. Also expressed as a prcentage.

    All thse figures should be compared with their equivalent budgeted figures.
    It would help also if some recognition is made in these analysis as to the competitive firms
    And also the industry as a whole.
    An increase over a period over one of the expenses does not necessarily spell doom.
    Savings can be made in the other expenses.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Vertical tragus [ 1 Answers ]

Is their anyone out there that has a vertical tragus piercing?I have my tragus done but want the otherside done vertically.what is the healing process?

Vertical Support? [ 1 Answers ]

I need to make some changes to a 4" drain pipe in the basement of my house. This pipe connects to a toilet on the 2nd floor and extends out the roof as a vent - straight pipe from basement to roof. Work had been previously done on this pipe, so it extend about a foot below the first floor into...

Vertical Tap Saddle [ 5 Answers ]

Howdy! I'm doing a complete bathroom remodel. I've moved the toilet from one end of the bathroom to the other (about 7 feet away). I have an old cast iron stack/drain that was in the wall behind the toilet (old toilet location). I'd rather not move the stack if I don't have too.. My plan is...

Vertical motion [ 2 Answers ]

Here's the question: A rocket is launched vertically. For the first 6 s it accelerates 150ms-2. a) calculate it's speed at the end of this time, and the distance covered. b) the rocket continues it's flight acted upon only by gravioty. Calculate how long it takes to reach the top of it's...

View more questions Search